Cooper-Standard Holdings Inc. (CPS) Earnings Call Transcript & Summary

Good afternoon, everybody, and thank you for joining us for this session with Cooper-Standard as part of Deutsche Bank's Global Automotive Conference. My name is Emmanuel Rosner, and I'm the senior U.S. autos analyst at Deutsche Bank. Cooper-Standard is a leading supplier of automobile systems and components, focusing primarily on sealing, fuel and brake delivery and fluid transfer systems. More recently, it's been a pioneer in the use of new super material called Fortrex, which could open new areas of growth. We are very pleased to host Cooper-Standard's Chairman and CEO, Jeff Edwards; and CFO, Jon Banas, for a discussion with us this afternoon. The format for this session will be a fireside chat around some of my prepared questions, but also and mainly questions from all of you on the call. [Operator Instructions] I highly encourage you to do so and to get involved in this discussion. Only I will see your questions, and I will ask them on this call without mentioning your name and/or affiliation. So with that, Jeff, Jonathan, thank you so much for being with us, and let's get right to it.

Can you maybe -- to start off, can you maybe give us an update on the progress of restarting your operations or production in North America and in Europe? What kind of trajectory for capacity utilization have you seen so far?

Yes. Thanks, Emmanuel. This is Jeff Edwards. We're actually very pleased with the restart. I would start with that statement. We originally thought that the month of May, which has been right around 50% of the pre-COVID numbers, we came in just under 40%. But June, so far, we believe that in North America, we will be at 80% in the month of June. In Europe, we believe we'll be at 60%. And in Asia Pacific, for us, that's China, at about 85%. And then the month of July, we think we're looking at 100% in North America, 100% in Asia and 75% in Europe. So really very positive restart, and we're all hoping that it continues.

Yes. That's very encouraging to hear. The -- have the -- any comments on the situation in Mexico? Have plants come back online? How are they tracking the early days of resumed operation?

Yes. We have 10 facilities there, all 10 are up and running. Mexico probably was a week or so behind the United States in its start-up. They were probably a little bit behind the U.S. as well for the shutdown. So I think it would only stand to reason that the level of anxiety in Mexico was higher than it was here in the U.S. when the U.S. announced that it was going to start back up. But I think between the government and its workers, they managed through that. There still is some turmoil, I would describe. But overall, for us anyway, it's been okay. And we haven't had any supply issues in-country or, in our case, with supplying product back here to support our manufacturing plants in the United States and Canada.

Okay. Great. And then I guess one more on around sort of current conditions. Have you seen any delays or cancellation around upcoming launches or new business as a result of COVID?

I think in general terms, the customers are trying to stick to the original launch schedules. I would say we haven't seen anything that's been pushed out more than 6 or 8 weeks to this point. And so all within scope of this year, and I think we'll be fine as we manage it. Most of it has already been made public. So we are -- we have a couple of very large, very important launches this year in the U.S., a couple in China, another one in Europe. So, so far, so good.

And Jeff, I've been told you're a China autos industry expert. Obviously, you spent at least enough of time there. So would love to get your thoughts on the recovery path in China. What trends are you seeing there? It seems to be a fairly strong V-shaped recovery in the past few months. Are certain -- is that sustainable? Are certain segments or OEMs better positioned than others?

Yes. Thanks, Emmanuel. It's a complicated question, and I'll try to do the best I can to simplify the answer. So first of all, I mentioned earlier that our business in China is back to 85% pre-COVID. And we expect it to be back to the normal projections in July. However, that's still down substantially from original expectations a couple of years ago related to the China production numbers. And if you remember then, we were talking about numbers around $28 million. Now we're down to probably $23 million. And then beyond that, we have a situation where there's probably 50 million units of capacity -- OEM capacity in China. Just that -- and we need less than half of it right now. The supply chain also has a similar overcapacity situation going on. So therefore, the government has found themselves in a position that they probably would like to support the industry more. But because of the numbers that I just described to you, it doesn't make a whole lot of sense. I think they believe that there needs to be some attrition over the next few years. There needs to be some stabilization over the next few years. So I wouldn't expect China to be back to 28 million, 29 million units really until probably 2025, best case, is what I think. As it relates to what will be happening, in the meantime, I think you'll see the government continue to invest in infrastructure, I think, for EVs, for autonomous. They're also very engaged with social relief due to the jobs issue related to the pandemic, but also related to the issue that I talked about being the first year in a long time, last year and this year, where the growth projections haven't been realized. So I think the government will continue to invest in jobs. It just won't be necessarily within the automotive space for the next few years. So we think that it will -- if we're lucky, you get 1 million unit increase each year between now and 2025. Probably a stretch, but I'll give you that number. The other thing that's interesting for us in China with the state-owned customers, be it FAW, [ Changan ], Dongfeng and SAIC, we have terrific relationships with all of those companies. We've established a few joint ventures with majority control here recently. So we're very excited about the long-term growth projections in China. It's just the next few years here probably aren't going to be as strong as they were in the previous 10 or 15 years. But still, it's the largest car market in the world today. It'll be the largest car market looking forward, probably for as long as we're having this conversation. So that's how I would sort of end the discussion on China. Still glad to be there. Looking forward to growth coming back to what we used to consider normal, but we're going to have some bumps in the road over the next few years.

So it sounds like you don't expect the government to play a more active part in boosting autos volume.

I don't. I don't think they're going to be providing the type of incentives that people would hope. I think they'll still spend some money. It's going to be in EVs. It's going to be in autonomous driving, in that infrastructure. But as it relates to helping with incentives to drive sales, I don't see that happening, no.

Okay. And I guess for your own China business, it has gone quite hard by the volume downturn. Can you go over what actions you've taken to resize that business? And what kind of profit or margin you're targeting when the environment -- as the environment stabilizes?

Yes. In 2019, we eliminated 5 facilities in that region from our portfolio just to "rightsize" for the next 4 or 5 years as we saw it. So I think we're in good shape with the current footprint. I think we will continue to grow the business each year. It's just not going to be at the revenue level that we thought because we were thinking we were going to be closer to 30 million units next year or the year beyond rather than where we're actually going to be. But we still believe we'll be able to, over the next couple of years, get the business back to high single digit related to the return on sales. And our ultimate goal there is to be a double-digit return on invested capital and double-digit EBITDA after we work our way through the next 3 years here of, I think, some fairly challenging times. But still very committed to the market and look forward to growing with a lot more customers in the future, too.

Okay. Great. Maybe some of the recent -- discussion on some of the recent margin performance. So the first quarter decremental margins were around 35%. How should we think about this going forward, both in terms of second quarter with some pretty dismal volume and in the second half of this year?

Yes. I mean, I'll pass the mic over to Jon, and he can walk you through the bridge there. I think that's probably better.

Sure. Thanks, Jeff. Thanks for the question, Emmanuel. The Q1 clearly was exacerbated by the initial COVID shutdowns in China first; and then later in March, in North America and Europe. So the decremental at 35% or so was a little bit higher than our average variable contribution margin. Historically, we would have expected to see 20% to 25% or so, depending on the region. So clearly, when there was such an abrupt downturn, we weren't able to flex cost as quickly as we would have liked to have seen. And with the complete shutdowns for the month of April and May in North America and Europe, you should expect to see a similar decremental in Q2. Second half, with the production levels that Jeff described earlier, should definitely see improvements going forward. But just given the uncertainty and the volatility with the restart plans and the overall pandemic and how the restarts around the world will happen, we're just being a little bit cautious as far as calling later out into the year at this point.

Okay. That's helpful. And can you go over maybe some of these recent structural actions that you've taken to reduce the cost base and to align to the lower production environment or a lower revenue base?

Sure. I'll keep going there. We did a significant strategic initiative that we just announced a few weeks back, mainly in our European operations, where we reached an agreement to divest our European rubber fluid transfer systems business and the specialty sealing business in Italy. And then likewise, we announced the divestiture of our Indian operations, both our sealing and fuel and brake delivery systems. So in total of 11 plants amongst Europe and India. And really, this is exiting an underperforming business wasn't covering its cost of capital for a variety of reasons. And for us, smaller is better than being bigger and losing profitability. So the combined revenue that we'll see exit the business was about $200 million last year, but negative $14 million at the EBITDA line and burn through $20 million of free cash flow. So really an instantly accretive transaction that will be benefiting both earnings and cash flows once we close it here in the next month or so. We continue to look across the portfolio as well to either fix or exit the underperforming businesses. And so we continue to look around the globe at other areas that might not be covering cost of capital or we just don't have the go-forward scale to compete effectively and use our capital wisely. So we'll continue to review such initiatives. Nothing to announce right now, but just a watchful eye on the overall footprint and the structure for the company.

That's helpful. And then you have a plan to reduce CapEx by along the 30%. I guess, how will you get there? Is it internally driven? Or is it sort of like -- are there some delays -- delayed investments that are happening that will come back?

Emmanuel, this is Jeff. I'll jump back in there. So as we looked at capital going into this year, this is pre-COVID, I want to make sure that we give credit to the teams because we were actually down to reinvestment ratio of 1. We had been averaging around $220-or-so million of CapEx each year. This year was planned to be at $150 million. And per what you just described, we've announced here recently that, that number is going to be reduced by 30%. To answer your question, some of that is delayed launch or launches that were pushed out a little bit. I mentioned a couple of months, 6 to 8 weeks is probably the most that we have seen, but that still allowed us to push some capital. And then others, we just made decisions that instead of spending money on self-help kind of initiatives this year, we would hold back given the uncertainty of the restart and then any concern that Q3, Q4 may be under pressure due to either an economic challenge or Phase II of COVID-19. So we're very confident in the number down 30% from the $150 million, but I want to make sure everybody knows going forward that we still plan a reinvestment ratio of 1 or better for capital going forward. We've built the company. Now it's -- we don't have to spend money in China like we were doing, and we've restructured the businesses. So we're in pretty good shape to spend less capital going forward than we have in the past several years.

Is there a time line you can just give around achieving some of your return on invested capital targets?

Sure. Sure. So we have -- as I mentioned, I think, Jon did, too, in 2019, we started on this path of really getting our business rightsized to a new normal. Our China business, it came down 30% in revenue. We were under pressure with revenue in Europe. And we felt that this year and next year would probably be under pressure in North America, not COVID-19-related, of course, but just sort of at the peak, and there would be some softening. So we started taking significant costs out of the business. We're getting rid of the unprofitable businesses that Jon talked to you about. So we've got a good head-start on it. So this year, we have identified a number of work streams across the business every corner of the world, every corner of the business. We'll have more of that from an execution standpoint left to do next year. And then as it relates to the supply chain and leveraging the scale of our company in helping our suppliers, we'll shrink the number of suppliers we have, but we'll grow those that are remaining. And we expect that's going to deliver, over the next 3 years, a 5% reduction in our raw material costs. So $200-plus million annualized will come out. So by 2022, when we think China starts to rebound in a significant way, the market here in North America, I think it'll be post-election, and you'll see any softening that happens as a result of COVID-19. And then lingering effects next year, '22, will be, I think, a very positive year in this market. And then the same thing in Europe because so goes China tends to, so goes Europe. So for us, '22 is when we think we'll get there. I'm not predicting when that'll happen during '22. But then when you look at '22 through '28, in every one of those markets that I talked to you about, if you look at IHS, if you look at AlixPartners, you look at any of the forecasts that are out there, you'll see that, that stretch of years is showing significant growth year-on-year, and we're going to be ready to really take advantage of that. But we're excited about where we are in terms of cost reductions because we started it so early, and the momentum is there, and we have good visibility on what we want to do. We have a great management team that's energized to get us back to double digits, and that's what we're going to go do.

That's great to hear. Maybe a little bit on your profile, any -- can you just remind us your mix exposure to light trucks and SUVs? How much is -- hires the content per vehicle there for Europe and for passenger cars? And same thing on electrification, what does that do to your content, either on the hybrid or on the battery electric?

Right. So let me -- I'll take the first part of your question here. So as it relates to content per vehicle for Cooper-Standard, it is important. If you think about trucks, SUVs and CUVs, and you think about sealing systems and fuel and brake lines, hoses, the mass of those vehicles is significantly different, much larger than passenger cars. So it only stands to reason within our, in particular fluid business and our sealing business, that the amount of product that we need is significantly more. So therefore, the content is higher. I'll give you some statistics on it in a second. But in addition to the content per vehicle being higher as you think about the growth of trucks, SUVs and crossovers, really, the last few years as well as the projections even forward for the next 5 years, whether you look at China or whether you look at the North American market, there's terrific growth still in that particular segment. So to answer your question in terms of how do we think about the content. So in North America, I'll tell you, the difference between a truck and a crossover SUV versus a passenger car for Cooper is almost 3x as much content. So that's a huge content per vehicle increase for those particular segments. And then if you look at it in China for SUVs and crossovers, it's about 2x more. So again, really good for us. And when you think about the large percentage of these vehicles that are being produced here and then ultimately growing, it's probably just under a 4% compounded annual growth rate in China over the next 5 years. That's truly an important part of our turnaround. The other thing that's important is our customers make money in those vehicles, and therefore, the supply base usually does do versus -- sometimes that's not the case with smaller passenger cars.

Understood. And I guess on the electrification side?

Yes. And so on electrification, just for Cooper, the first thing I would say about our products is they go on every vehicle that's produced. Every vehicle gets a sealing system. And every vehicle, with the exception of electric vehicles, get fuel and brake lines and the hoses to support the powertrain cooling and heating. And so in our case, if you talk about an electric vehicle, let's say it's an all-electric vehicle and you remove the fuel line, but you replace it with hose content that's actually double what it is on a gasoline engine, our content actually goes up. And so there isn't a powertrain that we don't enjoy. It's just the products may look a little different, but our content is very consistent. In the case of electric, it's actually higher. The other thing that I would remind everybody about our sealing systems, especially related to the Fortrex chemistry platform, that product has a terrific acoustic benefit, and it doesn't degrade over time. So you get a much more engineered product versus an EPDM rubber field that will degrade depending on the heat and humidity in temperature ranges that it's exposed to. With our Fortrex product, it doesn't degrade at all. It conforms to the sheet metal in its extended life, just like it does in its showroom early life. And so for electric vehicles, we think that's going to be a great feature. It's also 30% lighter weight. So for electric vehicles, that's important. So we're pretty excited, whether it's the ice or whether it's electric or whether it's a hybrid approach, our products serve across all those powertrains.

Great. Let's think about liquidity a little bit. You had about $450 million in liquidity as of the end of the first quarter. Not sure if you're willing to share an update -- a fresher update. How comfortable are you with this level? And do you need to take any sort of additional nonorganic actions to sort of improve that?

Yes. I'll just -- I'll answer it in a short version, and then Jon can give you the specific numbers. But I would tell you that we're as comfortable as we could be or should be, I guess, in an environment like we're in. If we could predict whether or not there was going to be economic overhang or whether there was going to be a resurgence of COVID-19, if we weren't concerned about either of those, we wouldn't have had the secured bond deal that we just did here recently. Our liquidity was enough coming into the year to really bridge the challenge we were having in Q1 and Q2. But because of that unknown in Q3 and Q4, we wanted the insurance policy, just in case things happened that were well outside of our control. But Jon can walk you through where we are right now on liquidity and what our cash burn has been and how you should think about that going forward. Jon?

Yes. So Emmanuel, currently, with the $242 million approximate net proceeds we got from the secured bond deal that Jeff just described, we're in a great liquidity position. We're acting and running the business as if that cash is out of sight and out of mind. We're really maintaining our focus on preserving liquidity and dialing back any discretionary spending and really taking the actions to defer expenses as long as possible. So we've already talked about the capital expenditure reduction by 30%. And we've also done a lot of other smart things as far as T&E being completely restricted, so no more travel given the pandemic situation. We've canceled or deferred all open requisitions around the globe, unless the roles are absolutely critical to servicing our customers and getting product out the door. And then we've put in place a global salaried workforce payroll deferral. Most folks have taken a 20%, some have taken up to 30%, and our Board of Directors has actually taken 50%. So a significant savings that we're going to benefit from here in the short term to preserve liquidity. And there's a variety of governmental programs around the world that we'll continue to investigate and take advantage of to benefit the balance sheet as well and really just monitor through, like I said, to preserve as much liquidity as possible. As Jeff said, coming into the bond offering last month, our liquidity with our cash on hand and ABL availability looks sufficient to service through the next 12 months, given the restart plans that we've been talking about. And so the additional liquidity that we took on is more of an insurance policy against wave 2 of the pandemic or -- and customer preferences, whereby they're not getting back into vehicle showrooms to buy vehicles based on either economic woes or more pandemic concerns globally. So in a good spot overall, and we continue to maintain that discipline and flexibility on our financial liquidity profile.

Great. That's great color. Maybe another 1 or 2 on the financial side before turning to innovation and then technology. So we spoke a little bit about returning to or getting to your ROIC target, maybe some time in 2022. Just curious how much of it is from lower capital spending and how much is from improving margins. If I wanted to focus just on the margins, can you get back to historical margins? And if so, what would be the biggest bucket to get you there?

Yes. Clearly, the margins of our business is the focus of the work streams in a very intense way. Obviously, the capital spending and getting our fixed costs better aligned with the revenue of the new normal is part of it. But we are very confident that from an SG&A point of view and SGA&E point of view, we can run the business, say, at 6% SG&A and about 3.5% or 3.7% on the engineering side. And we think that in North America, our margins in the high teens is defendable and doable. We think we need to get Europe into the 10%, so call it, the low double digits. And then as China fills up over the next several years, it'll move from the -- what we would look at as aspirationally in the next couple of years, get us back into the high single digits. But clearly, China is better positioned to return to double digits even than Europe and I think probably surpass Europe. We're not predicting that China will be at the level of North America any time soon, but they can certainly achieve double digits. So that's how we think about it in each of the regional buckets. And then as it relates to the different levers, I think we've gone through that. But in addition to the supply chain optimization that we're looking at to take 5% out of the cost of our material, all of the other initiatives are around rightsizing the business and around making sure that we're in the right low-cost locations to service all of our customers and that we're getting paid for our new technology in a way that helps support our growing margins. And then, finally, we're managing our raw material costs, both of our supply base and with our customers so that we avoid these very large peaks and valleys that we've had the last couple of years and keep more of our money that we're saving. We believe that a 1% price down over the course of the next few years is manageable. We did it last year. We'll do that or better this year. So as we're taking costs out, we're able to use that to grow the margins back to where we can cover the cost of capital. And that's really the message to our customers, is you need great ceiling supplier, you need a great fluid supplier. And if you are going to continue to strip the business and don't allow us to cover the cost of capital of these businesses despite the fact that we're getting all kinds of customer awards for our performance, I mean, people aren't going to invest in that type of business. So I think it makes sense, there's too much capacity in Europe in our segment. It needs to go away somehow. The North American capacity, I think, is aligned with the industry. So that makes sense. And I already talked to you about China, 50 million units of OEM capacity. And so I guarantee, there's too much supply capacity there, and that has to be fixed through attrition in order to get the industry healthy in China. So that's not going to happen in a day or a week or even a year. But over the course of the next few years, as we've described, I think we'll be well positioned to achieve the goals. And I know we'll execute, and our job is to figure out how we keep it once we execute on it. Emmanuel, did I lose you?

Sorry, I was on mute. That was great. That was a great color. I have a couple of questions from participating investors around uses of cash and then the recent debt issue. So can you give us any indication how you plan to use your cash flow over the next year or 2? Will you hold on to the cash and essentially -- and do the recent bond deal? Does this recent debt issue have a prepayment penalty? Any color there?

Yes. Emmanuel, it's Jon. I can take that. Really, the -- like I said earlier in my comments, we're acting as if this cash isn't even around. It's not for daily working capital needs. It's really that insurance policy should the pandemic flare up and the restart plans not go according to the predictions that we currently have. So really, it's protecting longer-term viability, protecting all stakeholders. So the existing debt holders, equity holders, employee base and the communities within which we're operating, just maintaining the long-term viability of the company. The debt -- the new debt does have a prepayment penalty. It's non-call for 2 years. So the earliest we could take it out would be June 1, 2022. And then that is at about 50% of the coupon. So at about 106.5%, if we've decided to call at that point. That, frankly, is our goal to take it out as soon as possible because it's just an expensive insurance policy that we wanted to have around to protect the viability of the company, as I just said.

Great. Very, very clear. All right. So maybe to conclude in the last few minutes, I wanted to turn to your product innovation. So as part of your strategy to diversify away from the autos end market, you've done some early traction with Fortrex. Can you just go back over what is special about this new material? And what are the ideal use cases, including outside of automotive?

Absolutely. So I'll start with the Fortrex chemistry platform that was developed originally for our sealing business. Because it's 30% lighter weight, it performs extremely well in all environments. So when you talk about high humidity, heat, cold, anything that EPDM rubber tends to degrade over time, turns white, cracks, fades, obviously, doesn't do its job over the life of the vehicle because it just continues to degrade over time, much like your tire does or any sealing component on your vehicle. We all can relate to going out and buying Armor All and trying to make it look new again. So the Fortrex product really replaces what you and I have always known as our EPDM rubber hoses, an EPDM rubber seals on vehicles and, on top of that, performing much better. So it keeps the -- I'd like to say, keeps the bad stuff on the outside and keeps the good stuff on the inside. It actually helps the acoustics performance of the vehicle because you can have much more of an engineered solution with Fortrex because you're not building it to degrade over time because it doesn't change over time. Aesthetically, you get a beautiful showroom look the entire life. It doesn't crack, it doesn't fade. On top of that, it's 30% lighter weight. So if you're talking about a truck or an SUV, which we discussed earlier being one of the fastest-growing segments. It's certainly the largest segment in our company by far. I mean you can take 8 to 10 pounds out of a vehicle by switching from EPDM seals to Fortrex seals. So that's what created the desire on the part of our automotive customers to put it into products. So to date, we have -- we've got a handful of customers around the world that have put it into their products. The largest and probably the most significant order and production order that we have today is with Ford on the Explorer. We launched that. We launched it last year here. It's a great success. We'll launch it in China later this year. I can't tell you the next significant launch that we'll have, but it's coming up very soon. It's with another very large customer across a significant number of SUV badges, if you will. So we're very excited about it. We will basically double the nameplates this year versus last year in our automotive business. Next year, I think it's a little bit of a flat year, but then we have several more targets the following year. So it's been well received on the automotive side. Switching gears to your other part of your question. Within our Advanced Technology Group, where we have a number of plants that focuses on rubber products for medical, for personal protective equipment, for agriculture, for commercial vehicles, for emergency vehicles, industrial and consumer products; so think sealing, think hoses, think similar products that we produce for automotive but is for nonautomotive business. Think airplane flooring, when you walk into an airplane and you have that rubber floor underneath you in the cabin area where the flight attendants hang out, we do that type of product in this industrial and specialty product group that we have. So very excited about growing that business, a couple of hundred million of revenue. So it's a smaller division, but it gives us a terrific platform in which to grow nonautomotive business. The nonautomotive rubber market, just for those of you that don't know, is a $76 billion market. So it's huge, and that doesn't include tires. And so the Fortrex chemistry platform, we believe, will help us compete and win in the industrial and specialty product market. And then we created a separate division under the Advanced Technology Group called the Applied Material Science business. And within that business, we're basically targeting wiring, cable, building and construction, athletic shoes. And we're working with clients in those spaces to replace the products that they use today to make the products that they sell with this Fortrex chemistry platform. Each one of the chemistry platforms is different, depending on whether you're talking about a wire and cable opportunity; or you're talking about an athletic shoe, insole or outsole; you're talking about rubber roof-type components in the building in construction business. So our engineers are working to meet the specifications with a bunch of those folks. They're in the process of negotiating commercial deals that will resolve either in material licensing as well as sale of our Fortrex compound to those particular new clients. So what we hope is over the long term, that this business continues to grow, grow profitably. During the COVID-19 crisis when all of our automotive plants were down, these plants were operating. So if you think about it in terms of if we add 20% or 30% of the revenue of the company was nonautomotive, then we would weather storms, not predicting any more pandemics in my lifetime. But certainly, we all know what the cycle fluctuation does to automotive multiple. So if we were able to create a business or a division within Cooper that was 30% nonautomotive, and it was the type of business that I've just described to you, we think that is driving value and create a really sustainable portfolio as it could create a -- create more profit, more revenue and ultimately probably resolve in a higher multiple for the company. So we're hoping by middle of the next decade, if you will, that it becomes significant enough that we can actually break out that part of our business from automotive. It will be a while. It will be a few more years before we do that. But we're excited about what our technology has already brought us in automotive. And we're probably more excited about the diversification plan only because we think about it in terms of the value it will create. So that's the answer to your question. Hopefully, I didn't take too long there, Emmanuel.

No. That was perfect. Really great, great overview and exciting opportunity for the future. I think you're -- we're basically just about out of time. So I wanted to thank you both so much, Jeff and Jon, for joining our conference, for giving such thorough and open answers. And really wishing you best of luck with this. I want to thank all the investors as well. Up next, we have Nikola's CEO and CFO set to present at 3:30. And then after that, a fireside discussion with the head of the U.S. auto straight group in Washington to see what the U.S. industry is lobbying for in Washington. So again, thank you so much for the Cooper team. Thank you so much, everybody, for joining us. And stick with us on the next presentation.

Okay. Thanks, Emmanuel. Bye-bye.

Thank you.

Thank you.