Stellantis NV (STLA) 2016 Q1 法說會逐字稿

完整原文

使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主

  • Operator

  • Good day, ladies and gentlemen.

  • And welcome to today's Fiat Chrysler automobiles 2016 first-quarter results conference call.

  • For your information, today's conference is being recorded.

  • At this time, I would like to turn the call over to Joe Veltri, Head of Investor Relations, please go ahead.

  • - Director of IR

  • Thank you, Hannah and good day to everyone on today's call and webcast.

  • The earnings release that we issued earlier today along with the presentation material for this call and webcast are now available on FCA's Investor Relations website.

  • As customary, today's call will be hosted by the Group's Chief Executive, Sergio Marchionne; and Richard Palmer, the Group's Chief Financial Officer.

  • After introductory remarks, there will be available to answer your questions.

  • Before we begin, let me remind you that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor statement include on page 2 of today's presentation.

  • As always, the call will be governed by this link which.

  • With that, I like to turn the call over to Richard Palmer.

  • - CFO

  • Thank you, Joe.

  • Good morning or good afternoon to everybody.

  • I'd like to start on page 4 of the deck with the highlights of the quarter.

  • I would characterize it as a strong quarter for FCA, we had an adjusted EBIT margin for the quarter of 5.2%, nearly double our quarterly margins for a year ago.

  • All of our segments were profitable.

  • Our NAFTA margins were up 7.2% and our EMEA margins were up four-fold to nearly 2%.

  • We had good indications from LATAM of the margin improvement following, the continued ramp-up production from our Pernambuco facility we're making good progress in the transition of Asia-Pacific to the localized production of Jeeps.

  • So I think overall, from a margin point of view and a performance point of view, it was a good quarter.

  • We did during the quarter, remove the final parts of the FCA US ring fencing from a debt point of view.

  • So by placing the term loan B amendment, and repaying a part of that term loan B, we've removed all of the restrictions between the ex-Chrysler entities in the ex-Fiat entities regarding dividend distribution, short-term intercompany borrowing, et cetera.

  • Following that, we saw an indication from the rating agency with giving you a one notch upgrade to BB stable.

  • And so I think on the balance sheet we've seen further progress in our simplification of the capital structure.

  • During this quarter -- during the year were looking at the 75th anniversary of the Jeep brand which was founded in 1941 and which continues as FCA to be a significant driver of our performance.

  • We are looking at an expansion to include the India market, becoming, I think, the six country to be producing locally Jeep product.

  • And finally on this page, given the solid financial performance in Q1 we are confirming the full-year guidance that we gave you last quarter.

  • Moving to page 5, some comments on some key product.

  • In the various regions, the Chrysler Pacifica production started at the end of February in NAFTA the vehicle is a really innovative new vehicle for what used to be called the minivan segment.

  • We're looking at the Pacifica as a very new reincarnation of the segment offering.

  • It has unsurpassed fuel economy in the petrol engine, and it will have a PA TV mini van version in the second half of the year it had such strong reception in the marketplace so far, with the press, and industry commentators.

  • We're looking forward to seeing production ramp up in the second quarter.

  • In China, we started production in the Guangzhou plant of our joint venture with [GAC] of the Jeep Renegade.

  • That will be the -- it is the second locally produced Jeep in China for us through the JV, the commercial launch is scheduled for the second quarter.

  • This Jeep will add to the Jeep Cherokee that we already launched locally.

  • Jeep Cherokee sales reached 9,000 a month and continue to grow.

  • So we think that's a good reception for the first vehicle produced out of the JV with GAC for the Jeep brand.

  • This is the third installation of the Renegade, worldwide the first one being in Italy in [Mirafiori] and the second one being in the Pernambuco plant in Brazil, so further globalization of the Jeep brand continuing.

  • And then, on the right-hand side of the page, we started production in late February of the Maserati Levante, this is a very important product for the Maserati brand going into the biggest luxury segment worldwide and, will be available commercially in the second quarter.

  • And finally, the Fiat Mobi, in Brazil.

  • Out of our Betim plant in Brazil is an entrance into a part of the market where we haven't had an offering -- a city car offering in the AB segment to complete our coverage of that segment, and a key vehicle going into the second quarter of the year as well.

  • Moving on to page 6, the financial summary.

  • So you can see shipments were in line with Q1 of last year, at a group level.

  • With increases and EMEA up 12%, and NAFTA up 3%.

  • Offsetting decreases in the LATAM due to the continued depressed market conditions.

  • And a decrease in Asia-Pacific in terms of consolidated shipments due to the transition to the joint venture of the Jeep production.

  • The revenues as a result, were up 4%, slightly better than shipments really driven by mix in NAFTA.

  • Lower passenger car mix, more Jeep, more Ram mix, and Latin America would be ramp-up of Pernambuco.

  • Adjusted EBIT as a result, improved to nearly EUR1.4 billion, double last year's level and with margins of 5.2%, and this drove our adjusted net profit up to EUR528 million.

  • With the strong operating performance, offsetting a slight increase of the net charges between taxes and financial charges due to the higher NAFTA earnings.

  • Net industrial debt was up to EUR6.6 billion from EUR5 billion at year-end, there are two important drivers of that one being FX translation.

  • The details of which will see later and also working capital seasonality which is exacerbated by the shutdown of our Toluca plant -- downtime in our Toluca plant in NAFTA for re-tooling for the new Jeep which will be produced in the second half of the year out of there.

  • Available liquidity was still very strong at over EUR24 billion, in line with year-end.

  • With the second part -- second tranche of our EUR5 billion revolver becoming available following the remover of the ring fencing and also the EUR1.25 billion bond issuance, we had in the quarter, offsetting the operational seasonality and the [EUR2] billion term loan B partial prepayment that we made as we amended the term loan B.

  • Moving to page 7, those are segment contributions to the year-over-year adjusted EBIT.

  • You can see NAFTA -- the doubling of NAFTA margins with the key driver of the improvement in our performance.

  • Also positive performance from Latin America, with the Pernambuco vehicle volumes ramping up.

  • Asia-Pacific showed a negative variance in the quarter, although positive in absolute terms due to the transition of Jeep to the localized production, I mentioned earlier.

  • And our EMEA margin is up nearly 2% for the quarter.

  • Up from 0.5% last year.

  • Moving to page 8, look at the variances in our net industrial debt.

  • The EUR1.5 billion increase in the quarter was driven for EUR400 million by FX translation the strengthening of the Brazilian real on our net-debt position in Brazil and the weakening of the US dollar with our net-cash position in the US driving that translation change.

  • The second big negative impact was working capital, which is a seasonal effect.

  • Which was exacerbated by plant downtime in NAFTA for the Toluca plant, which is preparing for the launch of the new Jeep in the second half of the year.

  • It was also impacted by lower volumes of Chrysler 200, as we rebalance the plan demand for that vehicle coming out of our shop plant.

  • On the positive side, we saw EUR2.8 billion of EBITDA.

  • up nearly [EUR800] million of showing good growth in the operating cash performance.

  • Also, [with] working capital slightly down, year-over-year, driven by reduced investments in Brazil, if we complete the Pernambuco installation.

  • Moving to page 9, the NAFTA segment.

  • Sales -- group sales in the region were up 8%, on the back of improved market share from 12.4% to 12.9%.

  • We continue to be the market leader in Canada.

  • Our US share was up 70 basis points, driven by Jeep being up 17%.

  • Our shipments overall were up 3% driven by Ram and Jeep offsetting lower shipments of 200 and Dart and Journey 500 because of the Toluca downtime.

  • If you look at our adjusted EBIT walk on the bottom of the page, you can see all of the [Ievers] is contributing positively to the improved margin, mix was an important part of the improved margin because of the increased Jeep and Ram volumes.

  • And also, we had some good industrial efficiencies on the purchasing area and [non] repeat of some campaign costs we did have in Q1 of 15.

  • Driving EUR117 million net positive on the industrial costs.

  • Overall [7.2%] margin for the quarter showing a significant improvement from the [3.7%] last time.

  • Moving to the LATAM performance on the subsequent page.

  • The industry in LATAM was down 18%, with Brazil down 28%, our group sales were down more than that as we continue to protect our margin performance in Brazil in particular.

  • We continue to be market leader in Brazil, 180 basis points ahead of our nearest competitor with a share of 18.1%.

  • The Jeep Renegade and the new Fiat Toro pickup out of the Pernambuco installation showed strong performance in their respective segments at 27% and 59% share.

  • Shipments overall where 102,000 vehicles, and about 25% of that came out of Pernambuco which is an important part of the improvement in our profitability, as you can see below.

  • We have positive mix offsetting the negative volume and we have some strong performance in the cost area from purchasing and manufacturing efficiencies.

  • Our SG& A was down last year in Q1 we were launching the Renegade, so some timing on the sales and marketing expenses, helping also the quarter.

  • But overall, I think given the market drop backdrop positive results in Latin America, with the ramp up of Pernambuco under way was a good performance.

  • Asia-Pacific on the next page, it's a little complicated to read year-over-year, because of the continued transition from the import model to the local production in China of the Jeep, as we mentioned earlier.

  • So, if you look at our sales performance, we were down 10% year-over-year.

  • Principally driven by Australia, which was down 50% as we take price actions to offset the weakening of the Australian dollar.

  • However, sales performance in China was basically flat year-over-year.

  • Showing good performance out of the new Cherokee, local production which is running at about 9,000 units of sales per month in March, is 17% year-over-year improvement in Jeep sales overall in the Chinese market.

  • If we look at shipments, they're down from 47,000 to 25,000.

  • If we include shipments coming out of the JVs in the two periods, in reality those shipments would be down from 56,000 to 53,000.

  • So the actual drop is nothing like it significant as I said--this is the switch to the local production being reflected in the financial statement.

  • So if you look at the adjusted EBIT walk below, you can see, volume mix was negative and SG&A was positive in large part those numbers are influenced by the switch to the local production as a mentioned earlier in the JV and you can be the JV performance improving in the other column where we're starting to see improvement in profitability locally.

  • So overall, I think we'll continue to see some continued transitioning in Q2 as we get into the second half of the year with a more stable model based on local production in China.

  • One other impact on the mix was we continued sell off some of the vehicles damaged in the Tianjin Port explosion in Q4, so that also impacted the mix negatively in this quarter.

  • We will have a similar impact in Q2, but then we will have completed the sell-out of those vehicles.

  • Moving to a EMEA, strong performance by EMEA up 10%, with the industry up 8% for passenger car, and our sales up [16%] for passenger car, market share was up 50 basis points with growth in all major markets except for Germany.

  • LCV volumes were up 9% and our share was slightly down, but shipments continue to be strong also in LCV.

  • So if we look at profitability, we went from 0.5% margin to 1.9% margin, driven by volumes in Renegade, Fiat 500X, and the new Fiat Tipo.

  • We also saw strong performance in terms of purchasing efficiencies and manufacturing in the industrial costs driving margins up to nearly EUR100 million of EBIT for the quarter.

  • Moving to page 13, we have Maserati performance.

  • Maserati showed shipments were down 14%.

  • We continue to complete the rebalancing of stock particularly in North America and Europe.

  • This will be completed through Q2, and to be ready for multi year launches in early Q3, and also, the higher volume over Levante coming out of the Italian plant.

  • So I think we continue to be positive about Maserati in the second half of the year, as we launch the new vehicle commercially.

  • Moving onto components on page 14.

  • Overall revenues were down driven by Comau and Teksid, where as Marelli's volumes were up.

  • The EBITDA -- sorry the EBIT was up 26% with margins up to 3.7%.

  • And, Marelli's was showing positive commercial performance with orders up 17% year-over-year for the quarter.

  • Moving to page 15.

  • Our industry Outlook, we aren't changing our industry Outlook at this stage, for the full year.

  • Obviously, a little bit of color on each region, NAFTA I think we saw a relatively strong Q1 better than last year.

  • For the US, [EUR17.5] million [saw] compared to [EUR17.1] million last time, and we are not changing our forecast overall for NAFTA.

  • Asia-Pacific, the industry is in line with our expectations.

  • Latin America, we are not changing our forecast although the first quarter would indicate the low end of the range here at EUR3.6 million driven by Brazil which is running out of EUR2 million saw at the first quarter.

  • Clearly, we need to continue to watch Brazil with the political changes that are underway there, and keep an eye on the market for the rest of the year.

  • But for the minute, we are not changing the forecast.

  • EMEA on the contrary, we saw a saw which is at the high end of this range for the first quarter.

  • Again, we're not changing the forecast that I think European market is showing some good signs for the rest of the year.

  • And then moving to the last page, in terms of guidance.

  • Our guidance is confirmed with net revenues above EUR110 billion, adjusted EBIT of about EUR5 billion, net profit about EUR1.9 billion and our net industrial debt below EUR5 billion.

  • As for our initial guidance NAFTA and EMEA, profitability import improvement continues to be key to the numbers we are guiding to.

  • Latin America, out backed on Maserati, for various reasons we've already touched upon will show more profitability in the second half, than in the first.

  • On net industrial debt, we are confirming despite the negative translation impact in FX in Q1, I think the working capital seasonality will reverse in second quarter and we will see strong generation through the rest of the year to get to our net industrial debt target.

  • I think it's important that over the next couple of years we will have some volatility in working capital beyond normal because of the production realignment that we discussed in the NAFTA facilities.

  • We don't expect that to impact our guidance for the full year 2016.

  • - CEO

  • Thanks, Richard.

  • I just want to make a couple comments before we open it up to Q&A.

  • You may have seen from the flurry of announcements that we have made in terms of the start of productions of various cars around the world, the roll out of Jeep on a global basis continues at a pretty rapid base.

  • We were down in China last week opening the second Jeep plant in China in [Guangzhou].

  • We'll start production of the Renegade there, sometime during the month of --(technical difficulty) -- [open a full blast] basis we are now running the plant in [Changsha], China which makes Fiat but also makes the Cherokee and we are running at about well above initial rates when we expect to sell probably in excess of 100,000 cars there this year.

  • Just with that vehicle, the Pernambuco plant in Latin America is gearing up to produce the [C segment] Jeep.

  • We're also tuning up and running first [bought] instead of a plant in Mexico launch the success of the Compass and the Patriot which will be in the market of the US, in the early part of 2017.

  • The Maserati plans are beginning to come together, we have seen the start of production of the Maserati Levante take which will makes its debut in the US which is expected to be as largest market probably within Q3 of this year.

  • Equally important has been, finally the launch of the Giulia to production for Alfa, so we are beginning now to get all of the powertrain combinations in order throughout the second or third quarter as we prepare to launch the SUV on the Alfa platform which will hopefully will go into production at the end of 2016.

  • We have been incredibly busy as we've announced earlier, to put in place the realignment of the footprint in NAFTA.

  • We have had obviously intense dialogues with our counterparts at UAW about the inclinations on headcount.

  • I confirm now as I have done to them that the realignment of the footprint in NAFTA is actually going to yield an increase in manpower subject to temporary layoff as we disengage from the local production of the Chrysler 200 and the Dodge Dart.

  • There are -- we have other as Richard mentioned, other concerns that we have about the continuing political situation in Brazil, which hopefully will get resolved sometime and about the summer of this year, and we see nothing negative on the horizon.

  • We have most of our plans of being actioned as we had forecast, the Outlook for the year continues to be strong.

  • I think we remain committed as we announced at the beginning of this year to debt reduction on a yearly basis at the end of 2016, 2017, and hopefully to be sitting on cash by 2018.

  • So, we have absolutely no indication that 2018 targets are unachievable.

  • I think we continue to execute with a very clear view of making those numbers.

  • We find the results of the NAFTA encouraging, we will see that progressive improvement in margin generation on NAFTA as we de-emphasize the passenger car side in start rebuilding our position with the American plants in both SUVs and Ram.

  • So on that note, I think we'll give it to Joe take the questions.

  • - Director of IR

  • Thank you, Sergio and Richard.

  • Hannah, I think we're ready to start the Q&A session.

  • Operator

  • (Operator instructions)

  • We will take our first question from, Adam Jonas.

  • Please go ahead, your line is open.

  • - Analyst

  • Thanks, and good afternoon everyone this is Neil Netta standing in for Adam Jonas today.

  • Two questions, first, we continue to see strong results in your component businesses.

  • Particularly Magneti Marelli where the order intake is up 17% year-over-year, it looks like.

  • Are we had a point yet, where these businesses could be sustainable on a standalone basis?

  • - CEO

  • One, they've always been sustainable on a standalone basis.

  • Secondly, I think that the question is to the relevance of Magneti Marelli in the context of our strategic development is something that we have on the table on a continuous basis.

  • We are and we continue to rely on Marelli now to provide a lot technical support in terms of the development of our portfolio.

  • As I indicated in previous occasions, I think, there is a point in time in which I think Marelli will be sufficiently strong and I think FCA will be at a point were it no longer needs to rely on our internal supplier of the quality of Marelli.

  • I don't think we're there yet, and so we continue to nurture that business.

  • I think it's in good shape.

  • I think Pietro has done a tremendous job of realigning that business in the last six months.

  • I think we expect a significant improvement of margin generation.

  • At that point in time, I think will be in a position to take a hard look at this to find out if it makes sense to continue Marelli in the portfolio.

  • But we are far removed from that today.

  • - Analyst

  • Got it.

  • And secondly, Sergio, you made some clear efforts to engage leadership of some of your OEM peers to address the structural challenges the industry faces, and somehow these challenges could be better surmounted through consolidation or collaboration efforts.

  • From the outside at least, it seems like these efforts are not really gathering momentum.

  • But from your perspective, are your invitations into this conversation being dismissed outright, bluntly, and without consideration?

  • Or, and without identifying specific names, have at least some of your efforts help established in open dialogue, or have created on some level an increased awareness or thoughtful and continuing conversation with your peers in any way?

  • - CEO

  • I mean without telling you anything which I consider to be confidential, I know what's there and the lack of visible progress on that topic.

  • I think it will be unfair to characterize the reactions to the pitch of capital junkies as being unproductive.

  • I think there's been some dialogue with people who share the view, and who are not as concerned about the downside risk of the exercise, I think we need to give it more time, I've been clear on the issue that, in the absence of somebody merely embracing the concept that it will take time to develop a relationship and make people feel comfortable with the notion, I am not in a position to say whether this thing is going to yield anything of value going forward or not.

  • The only thing I can tell you, is that it is not as -- . It has been worth the effort I would do it again.

  • But I think equally important, in addition to looking and identifying for people who share your view, I think it was important for us to go through the exercise as a means of identifying the issues, which I think are endemic to this industry.

  • I think the catharsis has been a very good exercise for all of us.

  • Certainly on the inside of the house, it's made our views relatively clear about what we can and cannot do.

  • I think that this re-alignment of the NAFTA portfolio to perfectly honest, was a direct consequence of the fact that we started focusing on the relevant portion of our activities, and abandoned the notion of being able to withstand mediocre performance in some segments, simply because of the fact that there was new to a higher calling of being an automaker.

  • And I think we have all learned I think, inside the house at senior leadership level, and working our way down the structure as to the importance of capital usage.

  • And I think that discipline is going to benefit all of us going forward.

  • Having said this, I remain hopeful that over a relatively reasonable period of time, that this industry will come to grips with this issue and tackle it intelligently.

  • I think we have laid out a road map for that happen.

  • And I remain hopeful that somebody will pick it up with us and get it done.

  • - Analyst

  • Great, thank you.

  • Operator

  • Our next question comes from John Murphy, Bank of America.

  • Please go ahead.

  • - Analyst

  • Good morning, maybe just a follow-up to that question, in the context of the changeover in your capacity, North of the America trucks and crossovers.

  • Just wondering if you can comment where you are in that process?

  • Have you identified all the opportunities?

  • It sounds like the Dart and the 200 are out of your facilities.

  • What can go in to replace those, and if there's more to come down the line?

  • - CEO

  • The realignment of the NAFTA manufacturing footprint was driven by two conditions, and so we ran the optimization exercise with a very clear view of not losing one unit of sales in RAM, and not losing one unit of sales in Jeep.

  • I think it would've been, it would have been inconceivable.

  • When we ran the numbers to accept the solution that would have accepted a downtime in any of the lines are involved in the production of other Jeep or RAM product.

  • So what is going around now, and all the facilities is effectively a tooling effort, and, I will give you a perfect example.

  • The warren truck plant, which is historically one of the oldest plants that we have, within in the fold old Chrysler and now FCA is a plant that would have gone, would've had to go through incredible surgery in order for it to be able to accept a new RAM truck, which is coming out in the beginning of 2018.

  • And we could not lost any of the production that was associated with RAM out of that plant until the new truck came out, because it would've had disastrous consequences.

  • So the realignment of the Sterling Heights plant to accept the new RAM, and effectively starting looking at Warren as an alternative site to expand production of Jeep products, especially in view of our commitment to the development of Wagoneer and Grand Wagoneer going forward, has allowed us to effectively relay out the whole manufacturing footprint, but not losing one unit and allowing for the concurrent production of some of the products that are coming in and some of the ones that are coming out.

  • So I feel pretty good about what we've done.

  • It's painful, and there's a lot of intense activity going on in the US now.

  • But there we will see the whole US manufacturing footprint fully loaded, by the early part of 2018.

  • So, I think in the next 18 months are crucial, but I think all the work is underway now.

  • - Analyst

  • Just to follow up on that, with that including net increase in capacity for you?

  • Or a change in net increase in the bricks and mortar capacity?

  • Just trying to understand.

  • - CEO

  • I think if you count a truck on an equivalent basis to our Chrysler 200, then I think there has been no increase in capacity.

  • - Analyst

  • Okay.

  • - CEO

  • As a matter of fact, it's a net reduction, if you look at the potential unexpressed volumes about the dodge Dart and the Chrysler 200.

  • - Analyst

  • Okay, very helpful.

  • Just on CapEx, the run rate seemed a little light.

  • You are talking about flat year-over-year, which seems a little bit more restrained than maybe some of your comments in the past.

  • I mean, is there a capital efficiency that is coming in here that might be continued as we go out into 2017 into 2018, which might help cash flow a lot more?

  • - CEO

  • No I think the comments I made earlier about the capital efficiency and our desire to keep CapEx under control is going to be visible throughout 2016, 2017, and 2018.

  • I think we have the re-dimensioned our expectations.

  • We're beginning to see the benefit of this.

  • I don't think we are in a position to change guidance for 2016 now, I think we'll give you a better view on 17 next year.

  • But, we'll have to wait until the end of the year.

  • I do think, that because of what we have done we have re-dimensioned capital, we'll have to see what happens going forward.

  • But we do have lower ambitions than we had when we started the plan back in 2014.

  • - Analyst

  • Okay.

  • And then just lastly on ad spending, that was cited as a positive in the quarter.

  • I mean how much is that per vehicle?

  • Could be as much as a couple hundred bucks, easily, per vehicle, if you get more constrained there?

  • And then also, is this pullback just a recognition that the brands are becoming better recognized and you don't need to push them quite as hard?

  • Or what's going on there?

  • - CEO

  • I think we're being incredibly selective about were pumping our money on the advertising side.

  • I think we went in an inordinate effort in the first seven years of our lives to try to get credibility back into the marketplace, and I think advertising was a tool that was used extensively, and effectively I think between 2009 and now.

  • We don't think we need to over commit as we have done in past.

  • I think you'll see more discipline coming through.

  • And I also think of a question of effectiveness in product launches.

  • We have to put a lot of money behind this Pacifica, although it's gone into production.

  • It will receive a lot of attention in May and June as the minivan season starts.

  • And I think will see it the advertising spend will match production introduction, which is pretty intense over the next 2.5 years.

  • But we are going to see, we are going to become more parsimonious when it comes to this.

  • We do not need to be spraying the world with advertising.

  • I think we've made enough noise out there.

  • People know who we are.

  • - Analyst

  • And really just the last question here, retail sales in NAFTA up 8% in the quarter: very impressive.

  • And threes a lot of concern out there amongst the dealers and a lot of industry pundits that retail sales are slowing and fleet is being pumped.

  • What is your take on your ability to keep this retail sales number up, and what you think is going on in the general competitive environment on retail sales?

  • - CEO

  • Just to be clear, I think the people pumping fleet sales, I think one of the things one of the opportunities that we haven in managing our production cycle is to effectively choose when we deliver fleet vehicles to our customers.

  • And I think we choose it based on what we make -- what we expect the retail market to yield in a particular month.

  • And everybody knows January and February are historically not exceptional months in the US market.

  • So I don't look at the relevance of sleet as being an anomalous condition in the early part of this year.

  • It's been normal.

  • The question about whether we think that the market is getting sticky, there's no doubt in my mind that the market is, has gotten tougher.

  • 15 to 16, it is getting much more competitive.

  • But as Richard mentioned, in his comments about the forecast for the year, we do not expect the market to collapse, or substantial shrink, but it is competitive.

  • It is relatively healthy in the areas in which we function well.

  • So Jeep and RAM, I think have done relatively well.

  • It has got our [last stick here] on the passenger car side.

  • I think the call that we've made to exit those business as a producer in the United States, in hindsight, was probably one of the best calls we've made.

  • Unfortunately, that evidence is not available to us back in 2009 and 2010.

  • Had we known this, I think we would have refrain from the investment cycle that we went through.

  • But I also think that has been now become a permanent change in the landscape in the United States.

  • I think you'll see a lot more UVs of a variety of calibers occupying what is historically been a passenger market.

  • And so in that part of the market it's gotten stickier.

  • As we exit, I think will notice that less.

  • But it is not -- it is a price-sensitive market and we need to watch it.

  • - Analyst

  • Great, thank you very much.

  • Operator

  • Our next question is from, Martino De Ambroggi of Equita.

  • Please go ahead.

  • Your line is open.

  • - Analyst

  • Thank you, good morning, good afternoon everybody.

  • One more question on the NAFTA region, actually, the 8%, 9% (inaudible) for the current year is approachable by year-end, the positive result in Q1.

  • And B, since the US market trend remains one of the major concerns.

  • What's the sensitivity, just a (inaudible) number, in case of the decline, maybe not this year, but next year when you will be maybe not hundred percent production realignment would be finalized.

  • But just have an idea of what could be the sensitivity to volumes, taking into account all the possible actions you may take?

  • - CFO

  • In terms of margin for NAFTA for the year, I think the first quarter has been a very positive performance.

  • I think we -- I don't want to give you a target for the full year.

  • I think we're largely we came out at 7% as we had forecast, I think we are going to continue to push very hard, and I think a 7.2% margin is a good start to the year.

  • We will keep you updated as to where we think we will finish the year I think in the next couple of quarters.

  • - CEO

  • Desk I just hope Richard in the analysis.

  • As a relevance of passenger car decreases in the US, so does profitability.

  • I mean, they're totally connected.

  • - CFO

  • And to that point and 2017, as he said, the whole purpose of the realignment is to not lose any production of Jeeps and Rams.

  • So in 2017 I don't think we are going to have a significant impact in terms of profitability as a result of the realignment of the production footprint.

  • - CEO

  • The thing you got a keep in mind, I'm acting as an assistant to Richard.

  • But, one of the things we've always faced in the United States and the production of Jeeps is to make this unfortunate Sophie's choice about whether we sell in the US, or whether we sell overseas.

  • And I think when you look at Wrangler, you look at grand Cherokee production and even the case of the Compass and the Patriot, we have always been faced and certainly in the last probably three or four years especially, we have been forced to make choices about which markets to get allocated product.

  • Even if there were to be a contraction of the US market, in our view, there's unexplored potential in terms of outside US markets especially, where we have not established local productions.

  • So anything which relates to other Cherokee or grand Cherokee eventually, Wagoneer or Wangler, will have additional means of expression in international market, and all the work that we're doing now in terms of establishing networks both in Europe and in Latin America now with the introduction of the renegade following the launch of the Cherokee in China.

  • All these will become relevant markets for US-based production.

  • I'm relatively confident that even if there were to be some of the contractual volumes in NAFTA, they will be able to compensate for that loss by continuing to fuel the international expansion of Jeep at the upper end of the spectrum.

  • - Analyst

  • Okay, thank you.

  • If I may one more question on EMEA.

  • After many quarters, you know positive price effect in Q1, it was slightly negative, is this a compromising achievement of what I believe is up 3% a rate of sales or is it just business as usual?

  • - CFO

  • It is business as usual.

  • And I think we are not compromising our targets for EMEA.

  • I think the 2% margin, 1.9% margin is testimony to the fact that being managed with those margin targets in mind.

  • - Analyst

  • Okay, thank you.

  • - CFO

  • Thanks

  • Operator

  • Next question is from, Thomas Besson of Kepler Cheuvreux.

  • Please go ahead, Sir.

  • - Analyst

  • Thank you, I have a few questions.

  • Can we come back on the US passenger uptick strategy, and on the potential partnership you have been allocating to?

  • And can you as well, mention whether potential compensation to the suppliers of your passenger car range, have been addressed with your Q4 production provisions, or whether these are still negotiated?

  • That's the first question.

  • - CFO

  • Yes so, we basically booked most of the impacts of any issues we see going forward, obviously, we have a significant amount of product changing in NAFTA.

  • And so, I think, we envisaged being able to mitigate most of any potential claims we may be getting from the supply base.

  • In terms of sorry, the other part of your question, I don't.

  • - Analyst

  • The uptick strategy.

  • - CFO

  • And sorry, what?

  • - Analyst

  • The uptick strategy having other automakers build the passenger cars you are no longer making.

  • - CFO

  • As we said before, I think we're open to looking at that with other OEMs.

  • I'm not in a position to comment on anything specific at this stage, but clearly, that is an area where we would see benefits that could accrue to any parties who are interested in having some collaboration in that segment of the market.

  • - Analyst

  • Okay.

  • Going back to the net debt work, you have mentioned in your comments that a large portion of the working capital would reverse in the second quarter.

  • Would this indicate that you believe we should be closer to EUR5 billion net debt at the interim stage, or is it looking too much for the second quarter?

  • - Director of IR

  • I think we're below EUR5 billion by the end of the year.

  • - Analyst

  • Okay.

  • That's the guidance, but at the interim stage, you're not willing to indicate anything with the working capital developments?

  • - Director of IR

  • No, other than the fact that we should be lower than it is now.

  • - Analyst

  • Okay.

  • Great, last question for me, please.

  • The EMEA (inaudible) an increase.

  • You seem to be happy with 3% potential upside.

  • (Inaudible) when we look at some of the competitors, mainly, some of the French.

  • It seems that margins have improved a lot more in month, given your vehicle mix improvement.

  • Could you overshoot in the region, or is that (inaudible)?

  • - Director of IR

  • Lesson I'm always learning with the humility, and I've been watching our French competitors with attention and admiration, and I would try to do my best to emulate them and beat them.

  • - Analyst

  • Great, wonderful.

  • Thank you very much.

  • Operator

  • Our next question comes from Massimo Vecchio, please go ahead, your line is open pics

  • - Analyst

  • Good afternoon, I would like to have an update on the regulatory [reef] in view of the increasing provision that you took last year in the third quarter.

  • We have about the one [meter recall], the Daimler (inaudible), the German transformation.

  • Can you give an update on what you think is the current scenario in the context of your provisions?

  • That's my first question.

  • - Director of IR

  • I was looking over Richard just to make sure that you and I could sleep nights, but I think are adequately provisioned on what's [standing and what you are seeing].

  • A couple of general comments about the regulatory environment and then, we're not getting into details.

  • I think we have been incredible clear over the last number of quarters, about the fact that the regulatory environment has become a lot more stringent, and the requirements, the impositions, that are being made, and I think reasonably so, on automakers are going to increase the cost of doing business for all of us.

  • And it's something that we need to understand.

  • I think we need to understand the accrual rates with which we are provisioning for eventual remediation costs whether they be warranty recalls or otherwise on every unit that we sell.

  • I think we understand -- it is clear that we understand the US environment relatively well, now having lived through for a number of quarters through the type of expectations, and having achieved a meeting of the minds with the administrator and his staff and NHTSA about what is expected going forward.

  • And I think we are beginning to tool ourselves into a tool organization to deal with that environment and adequately answer any safety concerns of a regulator of the marketplace might have.

  • On the European side of it, it is -- I think -- I had a chance to go through the report that was issued last Friday by the commission that was presented by the minister of transport in Germany.

  • It is available now in English anyone who is interested.

  • And I think it makes for a very interesting reading.

  • I cannot disagree with the minister.

  • I think he has pointed out as a result of the work that was carried out by the commission, by the KBA and the ministry itself.

  • They have given the way in which European rules are set up.

  • And the way in which our homologation authority has been subject to devolution under the European arrangement, that it is -- that there needs to be more better coordination across the national bodies about what is that is effectively allowed, is relevant technology in order to meet an emission standard.

  • There is a phenomenal level of confusion about the degrees of freedom that are associated in the interpretation of that rule, what constitutes effectively a sound technical reason for the application and suspension of omission controls in a particular vehicle, because of the fact that there are very strong technical arguments, it would suggest, for the protection of the engine a number of variety of responses are capable of being introduced as part of the software solution that runs of these vehicles.

  • I understand all this.

  • But in the absence of very clear rules, about what those requirements are, and how exceptions to those rules as we have in the United dates, where there is a continuous dialogue with both EPA and car, about what is allowed as an exception for the general zero exception application of the rules.

  • Until those European rules are crafted and agreed amongst the homologation bodies, it's going to be very difficult.

  • And I think a lot of people are looking for sensational answers coming out of this environment and unfortunately, that is not the case.

  • I think that we set up a set of rules or required compliance given a particular cycle, people I think have done our best and we have done our best to meet those standards over time, fully understanding that there were technical limitations associate at full interest in the associated with the power trains that we had used, and that because of the technical limitations that the rule itself allowed for relief.

  • And if that by the way, has changed as a philosophy or it changes in terms of expectation, it is something that needs to be tabled, and I think the industry I, for one, will be more than willing to work with the KBA, the Ministry of transport, or any other homologator, to try to get this issue off the table and get a proper response we find socially satisfactory to everybody.

  • And so, we have started now, it's been a while, we continue to, we have started having a dialogue with the homologating body in Italy, which is fundamentally the one with which we interface.

  • There's meetings going on today between us and the ministry.

  • In Rome, they are dealing with this issue.

  • All of these matters, are matters that need to be tabled alone, which Europe needs to find consensus because the rules are poorly structured.

  • They have been directionally correct.

  • I think from a implementation standpoint they were weak.

  • We are willing to work with the KBA, and we're willing to work with the minister, and not only the Italian minister, but the German minister to try to find a solution to all this going forward.

  • But it is an area which is in flux, and transition, and I think we need to play our a role in providing clarity.

  • I am more than willing to offer FCA as a willing partner to get that done.

  • But there's no doubt that a solution is required.

  • - Analyst

  • Generally speaking, out of like 100 recalls, in how many cases you can charge back your suppliers?

  • In many case, it's a matter that you deal yourself.

  • Is it a reasonable way to look at this issue, or it's only on the car major?

  • - Director of IR

  • No.

  • It is a mixed bag and I do not have the percentage.

  • Because, it depends on two things.

  • One, whether there has been fault or a quality issue in providing the part, and it did not meet standard that we expect.

  • Whether it was their design, and effectively they provided in solution, which proved to be unsatisfactory, or whether was our design, they complied, and we found that our own design was defective.

  • So the answer is on a case-by-case basis we continue to work with our suppliers.

  • I think there is a good understanding in a majority of cases, the great majority of cases is responsibility it is.

  • But I do not have a hard and fast rule to help you with.

  • - Analyst

  • Okay.

  • Last question if I may, on the ring fencing, you have EUR18 billion in the cash equivalent on the balance sheet.

  • Which speed can we expect this to decline over the course of 2016?

  • - Director of IR

  • Richard will give you a rate.

  • Richard and I debate this topic at length.

  • He's going to slow.

  • I like to get him to drop the cash numbers as fast as he can.

  • It's the most unproductive use of cash I've seen in my life.

  • Unless you are the DCB.

  • But for FCA, it's a staggering amount of cash lying around and I think we need to take it down at the speed of light.

  • But I think he has already given indications as to what that number will be by the end of the year.

  • - CFO

  • Yes, I think, we have some bond maturities, and I think are more than likely to reimburse those with cash from the balance sheet.

  • On the other side obviously, we are going to generate cash through the rest of the year.

  • But I think, a number from the 18.4 that we have on the balance sheet at the end of March, the number of around 17 would be a reasonable number at the end of the year.

  • As we talked about before going forward, our target is to get down to around EUR15 million of cash, five overall towards the end of our plan period.

  • So that's where we're headed.

  • But at the moment I think around EUR17 million of cash -- sorry 17 billion EUR17 billion on the cash on the balance sheet makes sense.

  • - Analyst

  • Thank you, very much.

  • Operator

  • We will take our next question from, Monica Bosio, please go ahead.

  • - Analyst

  • Good afternoon everyone, and good morning.

  • I would just a three questions.

  • The first is on LATAM.

  • I remember, maybe I'm wrong, I remember that even the previous conference call, last time was expected to come back at profitable, by the end of the year.

  • Now, it seems that in the first quarter, is a really a bit profitable.

  • So are you more optimistic?

  • Can you give us a guidance on what you are expecting for the next quarters for LATAM

  • - CFO

  • Miss, let me give you an answer on the Latin American issue.

  • I think all of us would love to have a better answer in Brazil.

  • A lot of it depends on the political resolution of the impasse that we are, that Brazil is experiencing right now.

  • I think until the question of leadership gets resolved I think it would be very improper for us to try to make prognostications on the Brazilian market.

  • I think we'll know, hopefully, by the end of the third quarter period.

  • - Analyst

  • Okay.

  • Thank you very much.

  • And the second question is on the, you have partially answered this question.

  • Is about the competitive environment in NAFTA and for Jeep and RAM.

  • How is you are feeling on the pricing?

  • - CFO

  • As competitive as the market is, I think we have noticed a relatively decent amount of price discipline on both the pickups in the UV side.

  • I mean they are the ones that are least prone to competitive pricing or excessive comparative pricing.

  • I think we have seen a lot of comparative pricing in the passenger car side.

  • I mean that's the one that to me is -- I hate to say that we were right in predicting the shrinkage, but there's no doubt that there is an oversupply of nameplates and of willing players in the marketplace, which is driving pricing to levels that we would have found unacceptable in the medium to long-term

  • - Analyst

  • Okay.

  • And the very last question, coming back at an issue of the recalling.

  • Cars yesterday, there was the news of 1.1 million recall cars to modify the parking brake system.

  • I know it's a difficult, but is there a way to quantify potentially impact for this?

  • - Director of IR

  • I think that I'm going to be the answer that Mr. -- hopefully Mr. Palmer will give you, that these have been provisioned as a part of a broader view as to where these cost will be.

  • Just to clear up the issue on this EUR1.1 million recall.

  • We are talking about a software reflash of vehicles.

  • We're not doing any physical changes to the vehicle.

  • We're doing a software reflash to allow for particular conditions if you open the door of the vehicle for the car to automatically go in park.

  • I grew up in North America.

  • To be perfectly honest I don't ever remember a planetary transmission that automatically switched into Park if you open the door.

  • And as a matter of fact when I was much younger, one of the things that I used to have to do is to open the door to backup the car because I couldn't see anything from a very cheap car that I used to drive when I was a young man.

  • I find almost it unbelievable that we are now forcing this transmission to go into Park when the door is open.

  • I mean it's, the rules of engagement we will comply and life will go on.

  • - Analyst

  • Okay.

  • Thank you very much.

  • Very clear.

  • Operator

  • We will take our next question from Alberto Villa, Intermonte SIM.

  • Please go ahead.

  • - Analyst

  • Hi, good afternoon good morning.

  • The first one is on Alfa Romeo.

  • Given the different view that you have got on the NAFTA market demand, is skewed towards SUV and so on.

  • - Director of IR

  • It doesn't impact on premium vehicles.

  • An Alfa is always intended to go into the US as a premium vehicle.

  • And by the way, just to give you some encouragement, my having spent a few days in China now, the last couple weeks has made me a lot more -- a lot more confident about the introduction of Alfa into that market.

  • I think we will do well, I think we will happen, certainly within the planned period that we are talking about.

  • And I think a lot of the concerns that existed above the depth of the Chinese market have been overplayed.

  • I think that Alfa does have a place in that market.

  • I think we will be building cars for that market at the beginning of 2017.

  • And, I think it will do well.

  • I am not concerned about the competitiveness of the US market as it applies to Alfa.

  • That's a different animal altogether pick

  • - Analyst

  • Okay, thank you.

  • That's very clear.

  • The second one on Jeep, is it possible to have an order of magnitude of the impact of Jeep to your revenues and operating profit in the first quarter?

  • - Director of IR

  • No.

  • - Analyst

  • And you will never give indications of specifically for a brand in the future, right?

  • - Director of IR

  • You have answered your own question, you are very good at it.

  • - Analyst

  • The third one is back on consolidation.

  • Apart from the traditional mass-market and the car makers, there's a lot of discussion about the [tack up] players entering the market and potential discussions with you and other players.

  • Can you give us a view on that from your side and what is the potential?

  • - Director of IR

  • Look, our view has historically been that we need to keep a very open mind.

  • We cannot be selective in terms of or exclusive in terms of the arrangements that we make with some of these potential partners.

  • And I think dialogue continues, with people who are interested in exploring their relevance in the automotive world and we will continue to help them find their way out.

  • And time will tell.

  • I think that we need time to find out whether some of these arrangements are commercially relevant to FCA, so hopefully we'll have something within 2016 on that matter publicly.

  • I can't say anything up till now.

  • It's just, whatever's going on is confidential in nature.

  • - Analyst

  • Right.

  • But, not even in terms of understanding what's, the sense of an agreement?

  • - Director of IR

  • I think we will have to wait.

  • - Analyst

  • All right.

  • Okay, thank you.

  • Operator

  • We will take our next question from Patrick Hammond, UBS.

  • - Analyst

  • Yes, thanks good afternoon everyone.

  • Morning.

  • Two questions left for me.

  • First one is regarding your EBIT guidance for the full-year you left it unchanged at least EUR5 billion.

  • Looking at the Q1 run rate, it seems you are more than just well on track to achieve that target and, I would assume that in Europe and in Asia, we should see some positive momentum throughout the year.

  • So, is it just conservatism that you haven't that adjusted for the full-year guidance for EBIT, or is there anything,

  • - Director of IR

  • We have historically never adjusted guidance until the third quarter.

  • - Analyst

  • Okay.

  • Very clear.

  • And the second question, is related to Maserati.

  • Can you talk a bit about the order book for the Levante?

  • You introduced it Geneva a month and a half ago.

  • How it is the order book looking like?

  • - Director of IR

  • Quite strong.

  • That's all I will tell you right now.

  • Mean a vehicle -- I'm not trying to -- maybe I am trying to sell you a car on the phone.

  • I don't know.

  • It is phenomenal vehicle.

  • And I think it's something that was desperately needed in the range.

  • I think you expectations, especially in the United States, are quite high for how well that vehicle will do.

  • And so, right now, I think our objective is that we make sure that we get production right and we get the right and that we go with the right quality before we start shipping cars overseas.

  • We will see some US models at the end some of the models at the end of the third quarter.

  • Beginning of the fourth, hopefully we will be there for the full fall and winter season, and I think the car will do well.

  • I you know, there is no doubt in my mind that there are zero unused capacity in the Levante today in our plant.

  • - Analyst

  • And does it mean by the end of this year we should see Maserati already at the target profitability?

  • - Director of IR

  • I have no idea what target you have in mind, but the answer is that we're not going to comment until we get to the third quarter of this year and see what the brand looks like after we get it rolled out.

  • - Analyst

  • Okay.

  • Thank you very much.

  • Operator

  • They will now take our next question from Charles Winston, Redburn Partners.

  • Please go ahead.

  • - Analyst

  • Yes, hello.

  • Two questions for me, firstly, just your current truck SUV penetration in the states, but 83% or 84% according to a data, as you get your new production footprint forced out, is it possible that (technical difficulties) becomes a 90% plus truck SUV company?

  • In other words, for all intents and purposes the proportion of passenger cars really will have withered to something pretty minimal, or is there a --

  • - Director of IR

  • No, no, and I think you're totally underestimating the relevance of minivans.

  • I don't know where you got your number of 83%.

  • I can't reconcile that with anything I know

  • - Analyst

  • Something for your monthly data

  • - Director of IR

  • Unless you consider the minivan a truck.

  • - Analyst

  • I'm just quoting back to the numbers you published on your website every month between passenger cars and trucks.

  • - Director of IR

  • Right, and trucks includes minivans.

  • That's a completely different application on the concept.

  • So we may be abusing the concept on our website, and for that I apologize.

  • But a minivan is a passenger vehicle, it is not a UV in the traditional sense of the word.

  • - CFO

  • It is possible, if when we finish all this, that the true passenger car side will represent the lesser portion of our portfolio than it does today.

  • - Analyst

  • Okay.

  • But I mean, in terms of significant further shifts from here, possible or have we seen a lots of that shift happen in terms of that?

  • That makes sense.

  • - Director of IR

  • I think you have seen a lot of the shift of the implications of the shift away from traditional passenger cars happen already.

  • I would not be underestimating the impact of the continuance of Dodge as a rear wheel drive architecture environment and the fact that we will continue to grow our position in that segment.

  • That, when you look at overall volumes coming out of NAFTA.

  • It will not represent the large portion our mix.

  • And certainly not in terms of local production, it won't.

  • - Analyst

  • Okay, clear.

  • Second question is just in terms of, if I was to look at your regional bridges and aggregate them, and just look at the headings across the piece, I found interesting the cost, in other words, the reduction in SG&A, and the industrial savings, EUR275 million is the aggregate gain across that block.

  • That's actually the single biggest block of the 679.

  • It is slightly bigger than the price mix across the group.

  • Is that a pace of cost gain that we can expect to see across the year?

  • I recognize this coming from the matter of geographies.

  • I recognize as a SG&A element in there.

  • But is that roughly [200 to 250] per quarter a meaningful figure to continue going forward, or were there some perhaps slightly one-time elements in there?

  • - CFO

  • I think, it's safe to say that we are seeing more traction from the stability in the industrial footprint worldwide and the consolidation of platforms of vehicles that is helping us to perform better in terms of vehicle direct material purchasing costs and efficiencies.

  • So I think, you know, in the past, we've seen the industrial cost number being heavily negative, particularly in NAFTA.

  • I think we're starting to see an inversion in that trend, Charles.

  • I wouldn't want to say that it's going to be 250 times 4. I think it's early in the year to talk about that --

  • - CEO

  • If it's 250 times for we are increasing guidance on this call right now.

  • Over to you buddy.

  • - CFO

  • Like I said, it's early to make any such predictions.

  • I think what it is safe to say, is that we the cost equation becoming a more significant contributor to the real profitability: especially industrial.

  • And then on the SG&A side, as you mentioned, there are some timing differences on launches, which obviously drives timing of the sales and markets investments, so.

  • - Analyst

  • Thank you.

  • Operator

  • Our next question is from, Jose Asumendi, of JPMorgan.

  • Please go ahead.

  • - Analyst

  • Thanks.

  • Two items, first one on pricing.

  • If you place these drivers for gross cost on pricing in North America, and in EMEA, you mentioned also high incentives on your business.

  • Is this related to the product cycle, your specific product cycle, or is it more related to the market?

  • And then the second one on CapEx, I will take it after your answer, please.

  • - Director of IR

  • I think, in NAFTA, we have saw positive overall impact on pricing.

  • So I don't -- I think we did have the benefit of dealer discounts year over year.

  • Because last year we changed that structure in second quarter.

  • So we saw the carrier that.

  • We're continuing to price were possible the marketplace, and despite some negative headwinds on exchange, in particular on Canadian dollar, the number was positive for the quarter.

  • So I think, as we mentioned earlier, there is some more price pressure in the market as a whole.

  • But on truck and on SUV, we are seeing a fair amount of discipline still.

  • So, we are looking at that type of behavior going forward.

  • We're not predicting anything more aggressive in the rest of the year.

  • In terms of EMEA, it's really just the market, Jose.

  • We are not being competitive where necessary.

  • I think there is some impact there year-over-year of some extra price pressure, paricularly in the UK, due to some competitive moves and exchange impacts that we moved on in the second half of last year.

  • So we are seeing that carried forward.

  • But nothing significant to consider the trend moving into the rest of the year.

  • - Analyst

  • Okay.

  • And then on net cash, I just want to come back to the college from [Mr.

  • Mark, QA] on hitting that cash in 2018.

  • The two drivers here, you make more money, or you spend less.

  • And, I mean for me, it is basically spending less.

  • And I just don't understand which special projects you are running right now on the books that you are not going to have an 2017 and 2018 that is basically going to allow you to unleash the cash machine over the next 18 months.

  • Can you give us any color on that?

  • I mean we've seen that starting this quarter CapEx is declining, but what kind of rate can we expect now over the next 18 months?

  • - CFO

  • As I said at the beginning, our CapEx seven guidance for the year is unchanged from Q4 and basically, potentially in line with last year.

  • And then, we will guide 17 when we get there.

  • But, you know, I think as we mentioned earlier, compared to our initial plan, we have rationalized the overall spending.

  • But you know, capital, obviously, is something we're very focused on.

  • We want to get to the net cash position of our target.

  • - Analyst

  • Thank you.

  • - CFO

  • All right, thank you.

  • Operator

  • That will now conclude the question-and-answer session.

  • I would now like to turn the call back to Joe Veltri for any additional or closing remarks it

  • - Director of IR

  • Thank you, Hannah.

  • We like to thank everyone for joining today's call and webcast.

  • As always, my team and I are available to follow up with you with any questions we might have afterwards.

  • Thank you and have a pleasant day.

  • Operator

  • Thank you, sir.

  • Ladies and gentlemen that will conclude today's conference call.