OPmobility SE (OPM) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning. Welcome to the Plastic Omnium Research Center in Brussels for this 2019 CMD, which was postponed for, obviously French-Parisian reasons that everybody could understand. And you -- thank you -- you made it from Paris to Brussels this morning. Thank you. Why Brussels? Obviously, this place is brand new, just opened in September last year, but some history, when we go 10 years backwards, we were in a joint venture with Solvay Chemical Group. At that time, we owned 50-50 Inergy, the leading manufacturer in gasoline tanks, and Solvay was based -- is based in Brussels and has a very big R&D center on the other side of the town. And during those last 10 years, we have maintained our R&D center at the same premises. And now we have decided to move out the 150 -- 130 people, which was PO -- who are PO engineers and PhDs from ex-Solvay to our own premises here. That's why we wanted to show you this place, and that's why we are in Brussels. I would be quite short and present you the first slides of the presentation, and then I will leave the floor to Laurent Favre and Félicie Burelle and the management team. First slide, which is, in my position -- my new position of non-Executive Chairman as per the 1st of Jan, very important is our long-term position as a holding family, the Burelle family owns 85% of the Burelle SA Group, of which I'm Chairman and CEO, and -- which owns 58% of company, Plastic Omnium. This slide tell you that the importance we give in maintaining our independence and majority stake in the different businesses that we own. We want to be majority owners, that's important. And second point, this year, we reached more than 50% of interest directly and indirectly in Plastic Omnium. We have canceled some auto -- some treasury shares from Burelle SA, and we have acquired some shares of Compagnie Plastic Omnium, which put us in a position of owning more than 50% interest in Compagnie Plastic Omnium. And that has happened this year, too, in 2019. This is an important message to convey for the future. Second message, looking backward very quickly, the last 10 years, we have been very flexible, we have been very dynamic and opportunistic in our growth strategy. We have made a lot of important movements. We acquired 50% of Inergy, as mentioned to you, to the Solvay Group. We acquired a subsidiary of ex-Plastal in Spain, in Vigo. We acquired a subsidiary from ex-Plastal in Tulipan, Poland. We acquired the in-house manufacturing of Ford in Detroit, a city near Detroit called Milan. We formed in Russia, a 51% joint venture with the Russian group in Tolyatti, where we are absolute leader in gasoline tank business in Russia. We purchased the extra business of Faurecia. We purchased a Faurecia plant in Changchun. We purchased Swiss Hydrogen in Fribourg, Switzerland, which is manufacturing fuel cells for trucks, cars and boats. We purchased Optimum CPV, a Belgium company, which is the leader in design of -- and processing of manufacturing of high-pressure hydrogen tanks based in Belgium, will be shown to you later on during the day. We purchased a controlling stake in HBPO, we own now 67% of HBPO. And this added turnover is EUR 4.7 billion. And then we divest our -- last part of our signature, traffic signing business after divesting some part of traffic signing already in the years before. We divest Faurecia in France because the EU Commission asked us to divest the France operation. We have to do that. We divest the composite for trucks in France, Mexico, Spain and other country. And we divest in 2018, the whole environment garbage container business to city management, EUR 1.7 billion. So at the end of the day, it's quite a lot of movement we have done in M&A. And we have plus EUR 3 billion net in M&A and an organic growth of EUR 3 billion, which make the EUR 9 billion line that we reached this year. I think it's in economic sales. I think that a proof of opportunistic analysis, but reactivity and dynamism. And I'm sure that the new management team will go on in this direction. We are strong. We are very strong in industrial and innovation, that is our DNA. And we are committed to a long-term growth on -- capitalizing on our fundamentals. That means anticipation and reactivity, technology-oriented, and we will, obviously, grow in technology. Act For All, that's mean inclusiveness, purpose, behavior to minorities. We have always had a very strong [ CSR ] approach. We have been quite discrete in the past, especially in environment, and we will present that more and more in the future years to come, and Laurent Favre is especially keen to give importance to those topics. We will reinforce in our industrial excellency, which is obviously needed after the bad accident that we have had in the States last year. But it is our strength, our industrial excellence recognized by our 97 customers, and -- to go on with active sales and marketing approach and managing our balance sheet, which is going to be the light motive of the next 3 years, balance sheet management in stormy weather where opportunities will come. And to have a strong or very strong balance sheet is not a bad idea to be able to react quickly. And R&D and open innovation, Félicie Burelle has given a lot of importance in the last 2, 3 years on that topic, with partnership and M&A. And she will explain to you the philosophy that she has for the next years with Laurent Favre on those topics. So just to comment my last year of CEO, we are confirming today our other performance of 5-point in respect to the market. But we are always talking about overperformance. We should, one minute, sometime stop at absolute values too as absolute values is maybe sometimes more important than the overperformance of the market. The reality is that for the first half of the year 2019, our turnover has grown by 20%. It's not an overperformance of 5%, it was more than 5%, it was 8% something. But absolute value, turnover growth has been 20% for the first half of the year. And obviously, it will be a 2-digit growth too for the second half of the year. So we will have a 2-digit growth in 2019, which leads to an overperformance. But it's not the overperformance, which is leading to the turnover. I think we should never forget the absolute values. And -- but we confirm our over 5 points overperformance. EBITDA, the guidance was higher than last year. And the confirmed guidance today and estimates today, is around EUR 1 billion. I remember you that last year, we presented and booked EUR 918 million EBITDA. And EUR 1 billion is quite a nice growth too in absolute value in respect to last year, EUR 918 million. Operating results, 6% of sales confirmed today. As you know, we have 2 main activities: one is manufacturing and the other one is assembly and logistics. This 6% of sales is reality composed of 7% in industry and 2.5% in logistic, assembly and development. I won't say that 7% is benchmark, but while 7% is quite good in this industry at that time -- at this era in the automotive industry. And we are confirming that. And we confirm around EUR 300 million free cash flow, around maybe a little more. And this including a one-shot real estate sales of nonindustrial buildings from PO. But well, still, it is quite nice free cash flow, which is exactly in line with the strategy that Laurent Favre will present to you later. And my last slide before handing over to Laurent Favre is a new management team. So to pre-answer probable questions during the day, I always had the intention from my [indiscernible] to hand over the CEO position. I had to change my movement during the movement. And we have moved very quickly, and we have reached with Laurent Favre, an agreement during the year 2019 for him to take the CEO position. And Laurent has been a leader in the supplier automotive business for the last 24 years. And I had multiple choice in front of me, I think he is the best guy for Plastic Omnium, who is very much German-oriented in his customer base on a worldwide basis. Laurent has developed a career in Germany during 23 years. And he has chosen Félicie Burelle as Managing Director to continue our presence in the management. And he will explain to you what position he will decide to develop with Félicie Burelle in the future. And I will be in my nonacting Chairman position. Really pleased to support, protect and incentive this new management team. Thank you. And Laurent, the floor is yours.

Thank you. Thank you very much, Mr. Burelle. And from my side as well, a warm welcome to all of you here in our new R&D center in Belgium in Deltatech R&D center, which is dedicated to new energies. And you will have the opportunity later on to visit the labs and to have a deep dive on what we are doing today here in Brussels and in the future as well. I will present you our strategy, how we do see the market, the short-term, the middle-term, the long-term market development, what we are working on in terms of strategic actions. I will spend a bit more time to be focused on the timeframe 2020 to 2022, to deep dive the actions we work on and what our ambition is in terms of growth. And then I will hand over to Félicie Burelle, and Félicie Burelle will talk much more about the long-term innovation strategy. And at the end, we will have the CEOs of all 3 divisions. They are here today. They will present their technology road map. And they will show you concretely what they are working on to answer to the market needs. Then we will have the Q&A session. And then we will have time to visit the lab and to see concrete innovation we are working on with the team, and we will bring on the market in the next years. That's the agenda for today. Before starting with the market, I wanted also to show you the new executive team of Plastic Omnium, that means beside the changes which were mentioned by Laurent Burelle before with us, Félicie Burelle and myself. We had -- we have also made some changes regarding the heads of the division, starting with Stephane Noel. Stephane Noel is now, since the 1st of January, President and CEO of Intelligent Exterior System. Stephane was previously the President and CEO of Clean Energy System, that means he's a PO guy. And Stephane has been replaced by Christian Kopp, who is here today as well. And Christian is now the President and CEO of Clean Energy System. And he was previously the CEO of Clean Energy System in Asia, Asia being a very important market for us. No change regarding HBPO, Martin Schüler is and will be the President and CEO for the next years. He is here as well, and he is leading HBPO. The rest of the executive team is unchanged. But we have now a very strong team. We have a team with a high ambition to continue the growth strategy of Plastic Omnium. And we have a stable team to start the new year, which is important as well. Our base and the base for our future growth is, for sure, the portfolio we have. And the portfolio, I think it's important to spend a bit time to show you what we are doing and what are the businesses we are in. As you know, and as it was mentioned by Laurent Burelle before, we have a great mix between industries from one side and module assembly from the other side. You see the 3 divisions, all the 3 businesses we have: Intelligent Exterior Systems, Clean Energy System and HBPO. And what is remarkable is that we are #1 worldwide in each business we are in. That is always our ambition, in PO, is everything we do, we want to be #1. And that is the case in the businesses we are in. We have very high market shares worldwide. You see some numbers of parts we are delivering in those divisions. And we are doing that because we have a global footprint, 131 factories and in each division, a very global footprint allowing us to serve our customers on a global base. That means we have a very strong base for our future growth because we are, again, #1 in everything we do. We are a very strong base, which is basically the result of what has been done in the past and what was shortly explained by Laurent Burelle, but what will be also the base for our future growth. We have a very strong track record in term of growth. We have achieved a double-digit growth last year, as Mr. Burelle did mention. We did outperform the market. And for sure, the ambition is to continue in this direction in the next years. We are confident because we have a very strong order book already, and I will show you some concrete numbers later on. And we are confident that we will be able to outperform the automotive production in the next years as well. We have very solid innovation road map, that is what we will show you today. On paper, but also in reality with the products you will be able to see during the tour. And regarding the future, we will continue to transform our company to answer to the market needs, meaning being focused on industrial excellence by investing also in Industry 4.0, which is, for us, a major topic to become even more productive and to increase the efficiency in our factories. We will continue to innovate, and we will speed up all the innovation activities we have already started with a clear target to increase the content by car. We have today a very high market share in everything we do. That means the next step for the growth for us won't be only the volume, it will be much more the content by car. Content by car means more function in our products, and that means more innovation. And that is exactly what we will show you today, how we want to transform our product portfolio to become much more a supplier of function than our new products. That means as well working on our team, transforming the skills, hiring new skills or competencies in order to support this strategy. And the last pillar of the growth strategy, which is very important and which was mentioned by Laurent Burelle before because it's part of the DNA of Plastic Omnium, is a very ambitious CSR policy. And we are not doing that because we are forced to do, we are doing that because we do believe that it will bring a lot of value and attractiveness to the company. That means these are the topics we will work on. And also, the market is, for sure, pretty uncertain. We do see a lot of opportunities for us to continue the profitable growth strategy of Plastic Omnium. Regarding the market development and the short-, middle-term perspective of the market, meaning until 2022, after the strong decrease we have experienced in 2019, the 6% decrease, we do see a further decrease this year in 2020 of 2%. And then we see a flattish market, that means no recovery until 2022. This decrease in 2020 is, first of all, based on what we do experience with our customers on the daily base. And that means we have 131 factories, each factory is working with customers. We see the [ call ] off, we see their program -- production program, and that's why we have decided to put this minus 2% this year. And on top, it is also a management decision to make sure that we will adapt our cost structure, our spends to this scenario. That means that will be the minus 2% this year, and that will be flattish in the following years. That is much more conservative than most of our peers in the automotive industry, but we do consider that as realistic and necessary to anticipate any further movement of the market. Because the market won't rebound in the next years. For us, main topics to work on are anticipation and agility. We will continue to flex our cost, that is our daily job, I would like to say. But we will, even more, adapt our production capacity, and we will continue also to work on our fixed cost. Working on the fixed cost by streamlining, by -- our processes by becoming more digital. That is one topic we will address, but also working in our fixed costs in our factories. At the same time, we will have -- we will do everything to protect and to improve our balance sheet, meaning, starting with the investment. We will cap the investment to a maximum of 6%, which is much lower than what we had in the past. Capping by 6% without, I would say, reducing anything relative to innovation. That means we keep investing a lot on innovation but also on digitalization of our factories. That means a clear target to cap the investment to 6%. We will have a very strict control of our working capital and inventories and for sure, we have already started to do that. And that will improve our balance sheet and reduce our debt and give us also some opportunities for the future. That is the journey to -- for us to react and to anticipate the market development in the next 2 to 3 years. Regarding the long-term market trends, basically, no big change compared to what we have always presented. That means the CASE remain actual, CASE means connected, autonomous, shared and electrified. These are still the trends which are impacting the market for the next years. But we do see a different maturity and speed level, and that is the part you see on the right side of the slide where we do assess how the maturity level of those topics here. The highest maturity is in connected, most of the cars are already connected today. And we are part of that, and you will see that later on in our product road map. The second one is about the electrification of the new energy. And that is clearly the, I would say, the main factor, who is going to influence our strategy in the next year. So that is how to react, how to anticipate the change in the powertrain mix, and I will come back to that later on. Autonomous and shared, they remain important, but with a different speed. That means they will impact us later on the market. Regarding the powertrain mix and coming back to the E from CASE, you see here on the right side of the slide, what is our view, the pure vision for the mix in 2030. And you see the mix between the combustion engine, the hybrid, the pure electrical car. In average, you have all kind of hybrid, the CNG, LPG and the fuel cell. We -- on the left side, you see also the assessment from different expert of the automotive. What we do see is basically that in 2030, 50% of the cars will be electrified, 50%. We see as well that 80% of the cars, they will still have a fuel tank because combustion engine or because hybrid, which is for sure, very important as well for our CES strategy. And Christian Kopp will show you what we are doing on that. We do see that 13% about -- will be purely electric, and 2% will be with the fuel cell technology, 2%, meaning around about 2 million cars will be equipped with the fuel cell technology. That means it will be really the start of the mass production for hydrogen, and we are well prepared for that, and you will see some concrete examples. That is what we do consider as being the realistic scenario, and that is the scenario we are using for our innovation road map. And for our strategy for the next years, this powertrain mix, you can see here on this slide. The CASE has a lot of impact in the way the industry is transforming because CASE means a lot of investment and new technology both for the OEMs, but also for the suppliers. And these are also great opportunities for Plastic Omnium. That means for us, first of all, being focused on industrial performance and solid financials to further improve our balance sheet, to be able to continue and to speed up the innovation process. What we have already started, what Félicie will show you later on, but also to have the possibility to partner with current partners, with new partners and to work on M&A opportunities. That means CASE will change, again, the way we are working. Working with partner will become more important to share innovation, to share risk, and also to be fast on the market because time to market is getting more and more important. We do see that as a great opportunity for further growth for Plastic Omnium, and that is what you will see -- what you'll see later on in the presentation. Coming back to the 2019 or 2020, 2022 journey with the market I have explained before, that means basically a decrease this year and no recovery in the following years. The focus topics for us are pretty clear: It's, first of all, industrial excellence, and I will come back to that later on. It's customer intimacy based on the customer portfolio we have today, and I will also explain what it means to us. It's the financial performance at the end, helping us to further innovate. And it's also the very ambitious CSR policy we have in place, but we will further reinforce in the coming months and years. If we start with the industrial excellence, and here as well, we have a very strong base because we have a very large and global footprint as you can see on the map. You see here where our 131 factories are production facilities. That means we are covering the complete market. We are covering the market needs for all our OEMs, and that is the great base we have regarding industrial excellence. Even more, if you have a look on what we have done during the last 3 years, and that is pretty impressive. In the last 3 years, we have opened 16 factories, 3 factories in Europe, 5 factories in North America, and 8 factories in Asia. But on top of that, we have also opened 3 R&D centers, like the one we are in today in Brussels, but also one in China. That means we are covering the global market in terms of production capacity. We have capacity available, meaning we will be able also to grow in the future without having to invest significantly in our capacity. And on top of that, we have also the right footprint in terms of R&D, covering the complete market in order to prepare the future and to launch the innovation we have in our portfolio. That is the great base we have in Plastic Omnium. We will further invest, for sure, in our factories but not by increasing the capacity because we have capacity available, we will invest in becoming more digital. And that's also a journey Plastic Omnium did start already some years ago, that means Industry 4.0. And that is, for us, a 3-steps approach. The first one is about collecting datas, and we are already collecting a lot of datas in our factories. It is the condition to be able to become digital. Then based on the data we are collecting, it's about using the datas, understanding the datas and optimizing everything which is related to production, starting with the nonquality cost but also the downtime, the maintenance and basically the efficiency of the factories. That is also something we have started. But the clear target, the clear vision is really to move to smart manufacturing, smart meaning auto relegation, optimization and smart scheduling of the factories. That is how we do see the Industry 4.0, that is where we are investing our money in. And you will see a short video right now, showing you what we are already doing in Plastic Omnium factories. [Presentation] As you can see, it's not only about target or strategies but the reality we have in our factories, data collection and using the datas to further improve. The next step will be, as I mentioned before, to develop really smart factories. We have a road map until 2023. In total, we will have invested EUR 200 million in Industry 4.0. And that will bring us, as I mentioned before, more efficiency in our factories. That means less cost, and the competitiveness will increase. But also, it will help us to manage even better inventories, the complete supply chain and to manage our cash also on a more efficient manner. That is the target, and that is the target for us regarding industrial excellence in the next years. If we talk about industrial excellence, we wanted -- I wanted for sure to use the opportunity today to update you on Greer because I think there are many questions about Greer, and the best way to answer the question is to anticipate the questions. And that's why -- Greer. First of all, what is Greer? Greer is a new factory. It's a huge investment. As you can see here, it's high sales. It's about 400 million sales a year. And that's a factory, which is located in South Carolina, and we do produce there exterior parts for BMW premium, X5, X6, X7, that means high-volumes car. And the issues we have faced in Greer middle of 2019, they were the following. First of all, there is a very high diversity of parts we have to produce for our customer there. We are talking about 90,000 different parts we are producing in Greer, which is around about 10x more than in a normal factory. That means the complexity is really high. They have to be delivered just-in-time to the customer. And for sure, the quality requirement is high because it's a premium segment. We have a very complex and integrated production system because it's necessary to manage this complexity, these 90,000 different references we have to produce and to deliver to our customer. And that is a region, South Carolina, where the unemployment is close to 0. Therefore, it's really challenging for the complete industry to find the right skills and to develop the right competencies. And altogether with the ramp-up of the volumes of those programs did cause some troubles in Greer last year, and that is why we have put in place a 3-steps approach as well, I will explain to you right now. The first step was about protecting the customer. Protecting the customer means making sure that the customer, BMW, gets the number of parts and the right quality of the parts they need on a daily basis. That is what we have started middle of last year. That is what we have started middle of last year with a PO task force but also a BMW task force. That means a very cooperation between the customer and ourselves. And that is a successful journey, I have to say because the relationship is good with the customer, which is important for the future. Because all the industrial KPIs are on a good level right now in terms of productivity, in terms of quality and so on, and because the delivery situation is in line with the customer expectation. That is done. The next step is what we have started in December last year, and that was there in December -- the first of December last year with a new task force of Plastic Omnium. That means with the 15 people from Plastic Omnium coming from different factories and different function. The second step, and that will be our journey this year, is about reducing the production cost. So all the costs we have in the factory, that means production cost, headcount to be adapted to the needs but also quality costs and so on. We have a task force of PO. We have also reinforced the local management. We have made also some changes in the local management for sure, and that will be our journey for this year. Middle term, that means for 2021, we want to review our footprint in South Carolina. As you may know, we have a factory in Greer, but we have an old factory in Anderson. We have not only BMW as customer in this region. And we are assessing right now, and we will take a decision in the next months and implement the decision for next year about our middle, long-term footprint strategy in South Carolina. By doing that, we will be able this year to improve the result by EUR 45 million compared to what we had in 2019. And we will be able as well to achieve the breakeven in 2021. We have, for sure, very strong monitoring on what we are doing. Stephane Noel, the CEO and President of the division. And myself, we have a daily reporting from the operation in Greer, just to make sure that everything is going in the right direction. And we have a weekly update on all the actions we are working on to achieve those targets you have seen on the slide, to anticipate further needs for the task force or for the local team. That means Greer, it was an accident, but we are confident with everything we have done already, showing the first progress but also everything we are putting in place that we will massively improve our operation in 2020 and 2021. Now I come back to the more strategic piece. And besides the industrial excellence, one of the major topic we'll work on this year, and in the next years, for sure, is what I mentioned before, that's the customer intimacy. We have more than 90 customers here as well. We have a very good base. And not only a good base because of the number of customers, but because also the kind of customers we are working on. We have a great mix between mass-market OEMs, bringing us volumes, premium OEMs with whom we are working on -- mainly on new technology and innovation, but also Chinese OEMs who have a very high market share in China as you know, close to 50%, therefore, very important for us as China remains a very important market for us in the future. But also new commerce pure EV OEMs, having a different approach and also demonstrating that PO is the right company to work with because we have the right technology for the future. And you see the list of pure EV OEMs we are working on with a lot of newcomers. That is the base we have. And that is the base we will further maintain and develop. And the way to work with the customers will change because the world is changing because of the case I explained before. That means being closer to the customer, having closer partnership will become even more key than in the past for our further growth strategy. But again, here, a very strong base. Because we have a strong customer base and because we have a global footprint, we will be able to outperform the market in 2020, 2021 and 2022 by 5 points. That is our ambition. That is what we do see based on our order book, and I will come back to that later on. And for Q1 2020, we see the first numbers for sure, and it gives us confidence that we will achieve those numbers in the bumpy market we are in. That means clear target ambitions from the complete team, 5-point of outperformance in 2020, 2021 and 2022. What gives us confidence is also the order book we have because 95% of what we need to achieve those numbers is booked already for 2022. That's not only the quantity which is booked, it's also the quality. Because you can see some examples that we are in all segments, which are growing, and which will bring us more value and more turnover and more profit in the next years. It's about China, it's about SUV, it's about pure EV but also in the other segments like in hybrid. That means the targets of 5% outperformance is not only a management target, it is based on the order book we have, which is very solid. Because we have -- and as a summary because we have available capacity in our factories because we are still working. And we'll continue to work on adapting our cost structure to the market development, on the market decrease this year, on the flattish market in the next years and we will further invest in excellence in our factories. Our targets for 2022 are to increase each year, the operating result and the EBITDA in value, to generate at least EUR 200 million free cash flow a year, and for sure then, to reduce the debt. By doing that, we will reinforce our leadership in the market. We are already #1 in everything we do. We will be able to innovate and to continue and to accelerate our road map strategy. And we will be, for sure, also able, if needed, to work on M&A opportunities. Besides those topics I mentioned at the beginning, the CSR policy and Laurent Burelle did it as well. It is really in the DNA of PO, that is something we are already paying a lot of attention on. But we will reinforce also on activities on that because, again, it will contribute a lot to the performance of Plastic Omnium and also to the attractiveness of Plastic Omnium. And I wanted to show you a short video from what we are already doing in our factories. [Presentation] As you can see here as well, it's not only a target, it's reality in all of our factories, all of our locations. That means the CSR policy of PO was already very ambitious. We'll be even more ambitious in the future. There is a huge motivation from the complete team to go in this direction. We have set to ourselves very ambitious targets, it will impact the way we are working, the way we are working with our suppliers. But we are a company with very high ambition and very high values, and that's why we do believe that a strong CSR policy will contribute to pure performance and attractiveness in the next years. I will now hand over to Félicie Burelle. Félicie Burelle will show you what we are doing in terms of innovation for the long-term perspective, to answer to the CASE transformation of the market. Thank you.

Thank you, Laurent. Good morning to all of you. As Laurent Favre just explained you, we are very much focused on today's business and adjusting to the market conditions. But we are also very much dedicated and really enthusiastic about shaping what will be PO's product portfolio of tomorrow. And that's in the context, obviously, of the market transformation of our industry. That is done based on innovation road map that we have in all of our business lines, but it is also done through a very comprehensive now innovation ecosystem that really contributes to support and provide innovation in a different way, which you know now is really mandatory to be able to embark new technology. We saw that at the beginning of the presentation. We said it today, clearly, we are leaders in all of our business lines, very strong position. We still believe, obviously, there is room for growth. We are not present today in each division, in each country and present at all OEMs, so there's room for growth. But definitely, now we really want to focus on increasing, growing our content per vehicle. And that's even more important in the context of a flattish decreasing market. And how will we do that? We clearly believe that the CASE megatrends will be enabler to do so. So more concretely, what does it mean by division? If we look at Intelligent Exterior Systems, clearly, this business is exposed to all of the megatrends, but mainly to the connected and autonomous part of it. Why? Because today, the market demands more interactivity, more connectivity of the car, so the car is able to communicate with its environment. But also more freedom in design, styling, as we see new concept car emerging and the usage of the car itself is changing. And to do so, not only the plastic exterior part is the best carrier, the best support to embark new functionalities like ADAS sensor, lighting and others, but also the plastic material is really the best material to allow the transparency to the wave and thus is the best communication enabler. And that for us is really key, and that's why we strongly believe this business then can be well exposed to those megatrends. On top of that, the business can contribute to the challenge of reducing the CO2 emissions by offering lighter parts, plastics parts are lighter, but also in improving the aerodynamics, the behavior of the car. So at the end of the day, you consume less fuel, and you also improve the range of the car in the case of electric vehicle. Here on this slide, you have an overview of what constitutes today, the bulk, most of the product portfolio of this business, of IES, either in production or in development. So if we take business that are in production today, so we are talking about smart bumpers, but also smart tailgates and also structural parts, composite parts. You can see that in average, [ I see 3 in average ] we bring EUR 800 per car. Now if you look at what we have currently either in [indiscernible], like the roof module here that we are working on for a Californian-based customer. But also if you look at our partnership we have with either Hella on the smart face or Brose on the innovative door, clearly, we can significantly increase our content per car and the average here would be EUR 1,800 per car. So a significant increase for -- which we believe in will enable us to provide strong growth in the medium to long term. Now if we look at Clean Energy System, as we said again today, clearly, we are the leader, producing more than 20 million tanks a year. But we are not only supplying tank system, CES is also a very strong contributor to a greener car as we are offering depolluting system for a large variety of the powertrain mix today, SCR system for diesel, a PHEV system, and also pressurized vessels for hydrogen cars. So with this product portfolio, we also believe we'll be able to seize new business model and a new customer that will emerge in the context of new mobility. Because the new mobility providers will use mainly autonomous and new energies vehicle. More concretely, if you look at this slide, which summarize what is today the bulk of CES product portfolio, you can see that, indeed, we can address most of the powertrain mix today. And this is really the strategy of CES today, is to be able to provide a solution whatever the powertrain mix. You can see that the hydrogen vessel here will allow us to bring significant additional content per car. Also, obviously, here, we are talking -- those quantums are in the face of a very new developing market. So as we foresee that technology and mass-market will make us improve the price to the customer. Last but not least, PO module, so HBPO. Our recently integrated module activity is also very well exposed to the CASE megatrend. Like IES, clearly, the interactivity, the connected part, the autonomous part is really important because as we need to embark more functions, more sensors, more cameras, new technologies. Here, the capacity to assemble and to design more complicated modules is key for HBPO. And you can do that, whatever the powertrain mix, again. So clearly, the new electric vehicle are an opportunity for HBPO. And as I just said, really the strength of HBPO is the design and the capacity of assembling those parts. And really, this has enabled the business to create a strong customer intimacy. And we believe that given the context of those OEM, we need now to better allocate the investment and that's -- asking us for new way to innovate and to construct, to build the car. There's definitely, here, strong opportunities for HBPO to come up with new modules in the future. If we look at what is HBPO offering today, we can actually just highlight what I just mentioned. So the core business of HBPO, as you know, is the front end module. But for some years now, we have entered into the center console business, very recently, the cockpit modules that you will see later on in the showroom. And last year, end of last year, we started producing -- assembling, sorry, our first DC-DC converters. So all in all, very strong product portfolio that makes us very secure in our capacity to increase the content per car. And all of that has been developed through our R&D networks, which is composed, as you can see here on this slide of 24 centers, with 3 very recently opened ones. So the one we are here today, as mentioned by Laurent Burelle, Sigmatech and Omegatech. Omegatech clearly the indicator to the CES activity in China. And Sigmatech, where we hosted our market Investor Day a few years ago. Those R&D centers are really, at the very heart, the core of our innovation today, but we have started 3 years ago to build around that all new innovation ecosystem. We have used that basis. We have gathered all of our network of engineers, but we have also done other very strong and key topics like the partnerships with Brose and Hella. Later on, Stephane Noel will give you a bit more of information on when we are -- where we are at with them. But we are very happy with the progress that we are making with them. On top of that, we have launched a new initiative, an open research lab, which for us is really key. It's how to incubate those projects that today, the business doesn't really know how to embed in its innovation road map. So we will allocate a specific amount of monies to incubate those very advanced ideas and see how we can then push them back to the business. Venture capital, we already talked to you about Aster, which is an investment that we've made -- a commitment that we've made 2 years ago. And very recently, AP Ventures, but I'll come back to that right after. Finally, start-ups still in, I would say, the extension of the venture capital approach. We have made some specific direct investment in Greenerwave, which is focusing on the technology evolution of radars. And TactoTek, which is, as you know, we've already discussed it, integration of electronics within plastics directly. Last but not least, a very important topic that was part of 2019. We had first innovation award, which was an internal one, very successful. It's a way for us to obviously motivate people but also to try to do things differently, and it is something that was very well appreciated and that we have done -- launched again this year. And this [ year ], the new feature also will be to open it to the exterior and have exterior people to contribute to question -- innovation question that we will ask to the external communities. Quick focus on the venture capital. So Aster, you know it, EUR 20 million that we committed 2 years ago, we co-invested with Alstom. So it's EUR 20 million plus EUR 20 million, it's a EUR 40 million fund really dedicated to mobility. And so far, we have made 7 investments in different startups. Most of them are focused on artificial intelligence, but we have also invested in some startups that for instance, are bringing new technologies, new innovation on how to do nondestructive quality testing. And those start-ups have -- are developing currently, proof-of-concept with several businesses internally within PO. Hydrogen, so AP Ventures, a commitment of $30 million that was made back in December. This one for us is really important within the hydrogen road map. We really believe it will enable us to better understand the ecosystem and the evolution of the technology. We clearly believe there should be some main disruptive technology in the future. So it's a good way for us to have this window to this ecosystem. So far, it was -- one investment has been done in the field of electrolysis. But we have a short movie that we can launch, please, so you can better understand what is AP Venture about. [Presentation] So with this new latest addition, we really believe that now we have a comprehensive innovation ecosystem that really helps and complements what is done internally within PO. It is obviously key now to be faster in time to market, in developing -- looking for new ideas, and, obviously, it helps also to share the cost of this innovation. With that, I will leave it to Stephane Noel, that will give you some more details on IES, and its innovation road map.

Thank you, Félicie. Good morning. So after dealing several years with safety part and powertrain in the Clean Energy division, I'm very happy now to lead the Intelligent Exterior System division. So we are #1, we already have a 15% market share and 64 plant. So clearly, there is still some areas where we could grow, especially with Asian customer. But the key future and the growth will be adding more content in our part, making our part more intelligent. And of course, it -- we will grow also by adding new products. And this is exactly what we're going to see in the division road map, a clear road map to answer the CASE needs, especially connectivity and autonomous car. There is 4 pillars. The 3 first, as I said, will be added content. First one, aerodynamics. We will continue to work on reducing weight, improving performance in order to reduce emission. How we going to do that? More and more active part, active shutter, active air dam. Why? Today, one gram of CO2 will cost when it will be higher than the limit EUR 95 per gram to the OEM. So we have a big opportunity to help them to reduce those CO2 emission either also for battery electrical car to improve the autonomy of the car. For the 2 pillars in the middle, I would say, front and rear bumpers. Here again, we will improve safety, we will increase communication. The car will connect with the others. The car will talk to the other. It will also give freedom to the designer to integrate lighting inside both bumpers. Last one, doors, new product. We will talk also about roof, and we will see how partnering with the best will allow Plastic Omnium to put new offer on the market. First one, increasing content per bumper. Clearly, we will add new functionalities, either for connecting the car to the others, and you will see in detail in the showroom, what we are currently doing with Hella, but also answering the need of the OEM to personalize the car. Either for design, it will give us freedom design or also for the end user, connecting into the world and recognizing him. So when we talk added value for a bumper, what are we talking about? Let's start by what we are supplying, more than 20 million bumper per year, the bumper skin. What we could add is lens array, running light, light -- cornering light, lidar, radar, also including plastronic using polycarbonate because this is the only way for lidar and radar to be inside the car to connect with the exterior. So at the end, reduction of the weight, freedom of design and seamless area. So today, we have decided to partner with Hella. Customer have received very well this partnership, and we have been already the first predevelopment with a European OEM for a light and electronic integrated in our bumpers. So it will allow us design flexibility and lightweighting. So well received by the OEM, a first predevelopment. Tailgates. First of all, we will continue to develop our market share. We are already today at more than 30% of market share, and we will double our sales with tailgate in the next 3 years. We are talking about smart tailgate, and this is also something you will see in the showroom, we will add electronic, and we are currently partnering with Hella and Brose for a predevelopment for premium German OEM to supply a complete tailgate module, including door opening. We are talking of also adding new product. So here again, we are partnering with the best, with Brose where the idea is to develop a complete new door concept. That means shaping mirror to reduce [ seeks ], air duct inside the door and seamless window panel. Here, again, it's a [ low ] reduction of cost and also for OEM, reduction of the investment because this complete door could be assembled in one shot at the end of the car assembly. So in order to see how we are working with Hella and Brose, let's have a short movie. [Presentation] So to summarize those 2 partnerships, I think what is the key is a time to market. We need to partner with the best, to acquire the best technology, to be able to put the right product on time to our customer. Last but not least, when we talk about additional product, we talk about roof module. And here, we are talking about autonomous car when lidar, radar, sensor need to be added on the roof. And here, we are in a pre-series, with, I would say, west-based California OEM, where we are -- we will provide a complete structure, including the aluminum rail where the customer will be able to set up all radars and lidars inside. So as a summary on the road map for the Intelligent Exterior System division, first, we will continue to add content in our current product, that means more mechatronic, more radar, more lidar, more sensors. And second part of this road map is to put on the market a new module, like door module, like roof module that will allow to fuel the growth of the next 5 years and further. Now I will hand over to Christian Kopp, who is leading the Clean Energy System division.

Thank you, Stephane. Ladies and gentlemen, good morning. Plastic Omnium Clean Energy Systems. With 22% market share, CES is clearly the world leader in fuel tanks and de-pollution systems. And our road map or our strategy for the years ahead is clear. We are going to continue to grow. We are going to pursue excellence, maximize our positions in order -- on our traditional business in order to fund and accelerate in the hydrogen strategy. So how are we going to do that? Laurent Favre already introduced you the slide, this is our view of the market for 2030. We believe that the market will still continue to grow. And by that 2030, that still 80% of the vehicles on the market will be equipped with a combustion engine and thus with fuel tanks and de-pollution systems. So according to our hypothesis, we foresee that our traditional business will still grow in volumes and in value. I mean, for fuel tanks, I mean, we will continue, obviously, to deliver on some vehicles, I mean, traditional businesses, traditional tanks, but we will also add value because we will -- thanks to our innovative offer on hybrid or PHEVs, we will offer pressurized tanks or intelligent tanks in order to better manage vapor and to offer more sophisticated architectures for our customers. On de-pollution systems, we will continue, I mean to deliver SCR for gas -- for diesel engines, but we will also introduce, and we have gained, I mean , recently, I mean, new orders, water injections for gasoline engines. 13% as what we see will be battery-equipped vehicles. And you see that 6% or 7%, it was detailed in Laurent Favre's slide, will be with New Energy. And this, obviously, or this momentum will be growing in the years after. We believe in hydrogen, and we want to significantly invest and take positions on this market. Why hydrogen? Because we think -- and I think the market thinks also that hydrogen is probably the best solution or the solution to store huge quantities of energy to be transformed into electricity. It solves, I mean, the issues of charging and the issue of storage on the cars. And this is why we want to take positions on this market. And as it was said before, we see the market to be at 2 million vehicles at that date and this is -- will be our focus in terms of passenger cars, in terms of trains, in terms of buses, in terms of trucks. Because in this market, we believe that the dominant technology will be hydrogen. So we have been deploying a clear road map to support this strategy and to offer innovative solutions, I mean, to our customers. And this slide illustrates the 3 major parts or segments that we have on our different product lines, advanced fuel systems, for which, as I said, we are offering, I mean, conventional tanks but also pressurized tanks for hybrid or PHEVs, or TankTronic to offer better solutions, I mean, for OEMs. And initial reduction systems with SCR for diesel and water injection for gasoline. And obviously, I mean, for new energy storage, but also delivery solution for hydrogen. You will see this innovative offer in the tour that we will have after the presentation. And you will be able to identify, I mean, how for those different product portfolio we are offering those innovative solutions. So as Félicie said in her slide in terms of adding content per car, you see that for the different motorizations, we are offering different solutions from conventional fuel tanks to pressurized solutions and to new solutions for hydrogen and gasoline tanks. And on those items, we have also had some recent successes. The market is clearly recognizing us as a technology leader on that aspect. I mean, we have announced last year, I mean, the first orders with a significant OEMs -- German OEMs for buses that we will deliver starting delivery in 2021. And we have also been recognized in terms of technology because we have been the first one to be certified by the TÜV for our 700-bar CNG vessel for cars. We have a lot of activities right now going on with European OEMs and Asian OEMs in order, I mean, to develop expertise contracts and transform that into reality. So you clearly understand -- I mean, the strategy of CES is to continue to grow, to maximize our positions on our traditional business in order to accelerate and develop our positions in the hydrogen business. And I will hand over to Martin for HBPO.

Thank you, Christian. Welcome from my side as well. Good morning, ladies and gentlemen. I think the first slide already shows a big change for those of you who have been part of the presentation last time on the Investor Day. We sold only front-end modules. Today, you see many different modules on the first slide already. Nevertheless, HBPO, we are the market leaders in front-end modules, 18% market share as presented earlier today. And we will still grow in the future. When we look ahead, how we are going to do that. First of all, our assumption is there will be a clear trend towards further modularization in the automotive industry. That means that the number of modules that will be outsourced is growing. That is our assumption. On this picture here on the left, we see the aerodynamics. This is an increased content of the existing front-end modules that we produce since many years. And we see a further trend of implementing active grille shutters to improve the aerodynamics of the vehicles and -- in that area, and I will come back to that later. We have gone since quite some years completely different road of innovation to innovate in aerodynamic devices, making a true difference to what is today's state of the art, and I will come back to that. And this is what we call the Rollo System. Then you see a number of new modules here on that slide, which I will explain in more details also later, but it shows basically our capabilities to transfer the existing know-how of research development, of simulation, of thermal management, of process innovation and assembly, of course, logistics into other areas and into other modules. And with this, we are showing our capabilities of managing the complexity and our process excellence. I will explain now in more detail. Let's stick for a moment on front-end modules or our core business for sure. And this is just one example of what we do when we innovate. We think, okay, what is the market need? What is the demand? And the demand clearly is to produce modules for cleaner cars. Cleaner environment is the clear target of all OEMs and, of course, for the suppliers as us in the same way. So the idea is very simple, but sometimes a simple idea is a good idea. So the idea is to take out the emission of fine dust in the air, while driving a vehicle. Basically, there's a filter integrated into the front of car, into the front-end module that filters all the fine dust and the simple idea is to take away the emission that the car emits. And this is -- that -- this has been studied. And we have validated it in test labs. And now the next step will be to put it into real driving conditions. That is ongoing. Customers are very interested into this idea, and it just shows you another example of what is possible. And we combine it actually in this sample here with a new rollo shutter system, and it would be a good solution for big cities, large cities, where actually there's a risk of a driving ban. And of course, it's in our own interest to [ vote it ]. When we look into solutions, particularly for electrical vehicles, and here, you see on this moving area, the cooling shutter, our rollo shutter system that we have been working on since many years already, we have invented a rollo shutter system in the front of the vehicle. That is a textile -- it is a fabric that opens and closes like a rollo shutter that you have, maybe, at home at your windows. And we have made it suitable for automotive applications. And it contains a lot of advantages. I don't want to go into every detail here, but it specifically is used now in the new electrical vehicle platform of Volkswagen, and the whole system has been unveiled at the Frankfurt Motor Show last year. And then on top of this slide, you see already the second-generation of a rollo that we are working on, which is a horizontal rollo, that means it closes from the outside to the inside or from the inside to the outside. But in this aspect, we can as well -- and we will show that to you in the exhibition later. We can, as well, take care of the air inlet of the brakes, which is an additional benefit that we can bring into this system. And why do we put that on the vehicles? Because it gives you an addition of 8 kilometers driving range for fully electrical vehicle. And that is significant when you know what we talk about in driving range as for now. Okay. Another example where we transfer our competencies to other complex modules here, is a picture of the Porsche Taycan cockpit module that we supply since the start of production in the second half of last year. And we have entered into this part of module for the interior of the vehicle since roughly 2015, when we started the supply of center consoles in vehicles and then step by step by step worked our way into more complex modules and this. And you can have a look at it later on. For sure it's one of the most complex modules that are -- that's on the market. Then another example of successful transfer of existing know-how towards other future-proof modules is this module here. It shows a DC-DC converter module. What is a DC-DC converter? It converts basically 48 volts down to 12 volts. In a vehicle you need those 2 voltages in the car to be more efficient, to have less CO2 emissions in the end because if you operate certain consumers in the vehicle with 48 volt, it has a huge efficiency gain. So this is the device to do that. We have designed the whole thing here, together with a South German premium customer. And it is in the market since November last year. And it will, let's say, ramp up now significantly in the next month, and we'll go across the platforms here. This is a solution for mild hybrids and without unveiling any secret it could be, for sure, a step into further interesting modules on the way of electrification of vehicles. With this snapshot of what we do, I would like to hand it over to Laurent Favre for the conclusion. Thank you.

Thank you, Martin. Before moving to the Q&A session, I wanted to summarize what we have said today and to conclude as well. First of all, regarding the market, I repeat that we do see a further decrease this year of 2%, then a flattish market until 2022. But as we have a very strong order book, and as we are able and we have been able and will be able to manage our costs accordingly, we will outperform the market by 5 points in 2020, 2021, 2022. We will be able, as well, to increase the operating margin and the EBITDA in value each year and also to generate at least EUR 200 million free cash flow each year. By doing that, we will continue and even accelerate our innovation road map, and you have seen today what we are doing in each division. Innovation road map, which is the next step for our growth strategy, meaning to increase the content by car, to integrate more function, more intelligence in our products, which will be for us to journey in the next years to continue the profitable growth story of Plastic Omnium. By doing that as well, we will answer to the long-term market trends the famous CASE, connected, autonomous, shared and electrified. And we will be able, also, to shape the future of mobility. Additionally, a very strong and ambitious CSR policy will contribute as well to make PO more -- even more attractive and to increase our performance. As you have seen today, we are very committed and very confident to play a major role in sustainable mobility. I want to thank you for your attention and to hand over to Mr. Burelle for his conclusion.

Thank you to have listened to us. A last word, I'm very happy to be able today to tell you that I'm proud and enthusiastic about the new leadership team, which has been installed at the helm of the PO management committee. They can count on me as representant of the majority shareholder to support their initiatives in the direction of more technology inclusion and more increased profitability. Yes, they can deliver, they will deliver. Thank you.

We go now to the question-and-answer session. Rodolphe Lapillonne and Adeline Mickeler will join us here. We will have 2 microphones as well in the room, and you can start.

It's Thomas Besson, Kepler Cheuvreux. I will start. Three quick questions, please. First, I'd like to clarify your short-term issue with Greer. Can you just confirm that the EUR 90 million, EUR 45 million impact are effectively still on track? Because I think the method you gave on breakeven in 2021 is not necessarily exactly the same thing as the one-off cost of EUR 90 million and EUR 45 million we were talking about so far. Second question, you gave us a scenario for 2020, 2022, which is relatively bleak, but relatively optimistic view of 2030. So can you just confirm that the view of Plastic Omnium is still the one that was shared with -- by Mr. Burelle before, which is that the automotive industry continues to grow, driven by emerging markets, and that we have not seen big automotive demand yet, so you're still happy with your current structure? It's not just a question of cost, but there will be growth at one point. And third and last, can you talk about financial flexibility? So Mr. Burelle talked about the 58.8% control of overall Plastic Omnium. How much could eventually Plastic Omnium spend if you find the right acquisition? I know there's a lot of unclear questions for the time being, and notably about the adoption of EVs by customers. So let's say, in a couple of years' time when we have more visibility on that, how would you be able to transform or how much could you spend to eventually transform Plastic Omnium into something even different?

I will start with the Greer one and I will ask Félicie to answer the long-term market perspective and Mr. Burelle, if he agrees to talk about the last point. Regarding Greer, we have seen in the presentation before that we do have the ambition to achieve the breakeven in 2021. That means that breakeven is breakeven, as you mentioned before, and to improve by EUR 45 million our financials this year compared to last year. That means, yes, we confirmed the numbers you have mentioned before. We are on track with that. And as I said before, we have a new task force in place since the first of December 2019 to work on all the items making these targets happening, and we have a very strong follow-up of all the actions, Stephane Noel and myself, and we're pretty confident that we will achieve those numbers. Again, EUR 45 million improvement this year and breakeven in 2021.

So maybe on the market, yes, short term we do not see a rebound, but medium to long term, yes, indeed, we believe the market will continue to grow. I think the situation today is pretty different from the market downturn that we have experienced 10 years ago. Ten years ago, we still had China that was pushing the growth. Today, clearly, we don't see -- we see a stabilization, but we don't see a rebound in China. And I think given the tremendous growth that the market experienced, it's normal that it's taking some time for the market to consolidate. But once it is done, we still believe Asia and China included will be a strong contributor to the growth.

And regarding the market, as you know, one of the reason why the market did decline last year and will further decline this year is about all the new regulations happening in most of the regions. The technologies are now available or will be available, all the necessary technology in the next years. The market is not mature enough right now for the end consumer to know what they want to buy as a car, but that will happen in the following years, not on the short notice, but after 2022, 2023. That is our view on the market.

Now your last question. Laurent Favre's strategy as explained to you, presented to you that I support is, first of all, free cash flow and balance sheet management and debt reduction. And I support that -- this strategy. Then the size of growth, possible growth. You know the multiple of EBITDA, the habitual and known multiple of EBITDA, 1, 1.5, 2, 2.5, 3, 3x EBITDA. You know that our forecasted EBITDA is EUR 1 billion. So you put a coefficient of x that you will decide minus the debt which we'll be decreasing and will give you the answer of the size of the potential size. Now first strategy of Laurent Favre is to decrease debt in reality and have significant free cash flow. But I will support initiative which will be presented to me.

Gaetan Toulemonde, Deutsche Bank. Three questions too. I want to come back on the Greer situation. If we start with EUR 90 million losses this year -- last year 2019 and you want to reduce the losses by half, what it's going to look like between the first and the second half? Will the losses roughly equal size between the first and second half or clearly much higher in the first half and much lower in the second half? Can you shake it up a little bit?

I mean, the way to achieve this EUR 45 million improvement is the following, is, first of all, we had a lot of issues by delivering our customer. We don't have, anyway, that means -- issues means exceptional costs. We are not facing and that's for sure already a positive impact from end of December. That means there is a first decrease we do see on a monthly base. The second part -- the other 2 topics are to work on productivity, which means reducing the headcount because as you know as well, we have -- we had more employees than what we needed because of the inefficiencies in the factory. And that will take time. Each month, we will be able to further reduce the headcount. That means that will be, during the 12 months of this year, continuously decrease of the headcount and of the cost of production. And the same will apply to the non-quality cost, that means rework and scrap. That is also here, where we have a very strong road map month by month. What we are doing, what do we want to achieve regarding those numbers to be able to decrease the cost month by month. Therefore, the situation will be better at the end of the year than at the beginning of the year, which will give us the confidence to achieve the breakeven next year. There are some costs which have been reduced already, but that will be a continuous improvement during the year. Therefore, the second half would be better than the first half.

Is it fair to assume that if you break even 2021, you don't need Anderson plant anymore?

It is -- I mentioned before that this year is to be focused on what we do in Greer to do it better. And then to work on the footprint in South Carolina with or without Anderson, depending on the other customers who we work with. That means our ambition is not only to have South Carolina for BMW, but to have South Carolina for the customers in this region. And depending on the scenarios, we will maintain or not the factories in Anderson. That is what we are working on with the team.

That's clear. The second question, when you talk about your growth in the next coming years, which is roughly 5 percentage points growth per annum, can you break it down a little bit between what is bought in part, which is HBPO on one side, and what is production on the other side?

We -- I mean, first of all, we will outperform the market in each division. That is important for us in terms of balancing out portfolio, in terms of managing the risk as well. In the time we are in right now in a very uncertain market, managing the risk and balancing the portfolio is a key for the success as well. Therefore, we will be able to outperform the market in each division. The biggest growth will come from module HBPO. Martin Schüler did show you what we are doing with the new modules like the cockpit you have seen before but also the other modules. And the growth in module will be around about double that what we have in industries. And that means we're outperforming the market everywhere, but the growth in modules will be higher, double around about than the one we have in the industry.

Third question and the last one. When we talk about this year, you're guiding for minus 2% work-hour production, can we zoom a little bit on Europe? Because I'm getting some very conflicting message. Some IHS, for example, expect a very weak H1 and a more stable H2, some OEMs think exactly the opposite. What is your view about Europe specifically, and the breakdown between the first half and the second half order of magnitude?

I mean, we do see the minus 2% on a worldwide base. It will be a higher decrease in Europe than the 2%. That is our assumption. That is what we do see. That means higher than 2%, it's between 3% and 4%. That is what we do assume. And what we see right now, the Q1 will be pretty weak. Therefore, we believe that the first half will be weaker than the second half. That is the assumption. And we do anticipate that, and we'll do adapt our structure costs also in all of our factories in Europe accordingly.

Michael Foundoukidis, ODDO BHF. Just a follow-up on Gaetan's question regarding the growth between the division. You had previously a target of EUR 3 billion revenues from modules in 2021, is it still valid or it has changed? That's the first question.

We have not changed our target for module, and Martin is not willing to change it anyway and is committed to that. Now, it's clearly the target of EUR 3 billion. It is what we want to achieve and it will be a mix of still growing in front-end module, which is our core business. It's a big part of this growth, but the biggest part will come from new modules he has shown before.

But it would mean that the 5 points average outperformance is conservative, right? For the group. I mean, because it would mean around something...

It will mean that if it is more, it's positive.

Okay. And second question regarding content per vehicle, you expect to grow it as almost all suppliers expect to do, but car prices have already increased significantly. So what's your view on where prices for suppliers should decline significantly in the coming years? Or do you expect car prices overall to continue to go up further? What's your view on that?

I mean, I don't believe that the car industry will be able to manage growth if the car prices are increasing. Therefore, the car prices won't increase. That means the target is to integrate new technologies without increasing the prices or even to decrease the prices. And what you have seen today, for example, what Stephane Noel showed us before, the cooperation with Hella is about integrating the [ lighting ] directly in the bumper. That means the function is getting cheaper for the customers. But for us, there is more function in the product we do deliver. That means we will be able to increase the content by car and to support the OEMs to integrate more function with less cost than today. That is clearly the target from the innovation we are working on.

[indiscernible] coming online first. The follow-up -- to the follow-up, you've guided for improvement in operating margins -- in operating profit and EBITDA through 2022. Will margins be able to improve from the 6% you have posted -- you will have posted last year and your profit will grow faster in value than revenues into 2022? Or is the -- is it unlikely given the fact that modules will grow faster than the industrial business?

First of all, as you know, today is the Investor Day related to innovation and not financials. That's the main topic of the day. Nevertheless, we have said that we will increase the margin in value, which is clearly our target. And for sure, the operating margin in module, and it was mentioned by Laurent Burelle at the beginning, is around about 2.5% to 3%. We are the one in industry is at 7% in 2019. That means if this mix is changing, the total margin also will be impacted. But the target increasing the operating margin and the EBITDA in value, that is what we are aiming for.

Sabrina Reeh from UBS. I have one question on growth. You talked about the fact that you want to increase your content per car. And in the past, at the CMD, you've been giving targets for increasing market shares in the different divisions. Could you update us on that, how you see the mix of the growth between market share gains and content per car growth, please?

Félicie.

We do foresee still an increase in market share, for sure. But not -- it won't be as strong as it used to be in the past, but we still target some increase in market share. For instance, at IES, we still have open all the Asian OEMs and the Asian region outside China. We have a pretty balanced customer portfolio across the division, but for instance, at CES, they still have customers to address. So yes, there is room for growth. I do believe that, indeed, the increase in content per car on the module side will have a strong impact. But I mean, it's not something -- I mean, we can -- today, we have measures in what is the missing between market share and purely content per car is not something we have assessed.

It depends on the division as well. And that means in HBPO, clearly, market leader in front-end module, we are becoming -- in the next year to kind of limit of what we can achieve in market share. Therefore, the growth will be around about 1/3 because of more market share and 2/3 more content in HBPO. And the picture is different by division, as Félicie mentioned before.

Okay. And one more question. In the modules business, you said that you're -- and we know that you're #1 market leader in the front-end modules business and in the new areas where you're developing. And what's the competitive scenario there? Are you the ones developing this first, so there is no competition? Could you give some more color on that, please?

I'm not sure I did understand the question.

So in the -- models business in the front-end, you said you're developing more different kinds of models like the roof top models and so on. Is there a different competitive environment in that space?

Yes. I mean, on the cockpit console business, it's already a quite established market. But here, we are winning new projects. While on the roof, on the converter and on other -- potential other new modules we are working on, basically, those are brand new. And that's -- there's a place to take. So I would say it's a mix of both. But obviously, the interior, the cockpit and the console is more trusted already.

And that's a different approach for the customer as well. That means for some customers, it's interesting to combine cockpit and front-end because we achieve certain of critical mass in terms of size of business and then we can be more competitive. And that is one aspect we're working on. And for the rest, is what we said before, is about being part of the case and being part of new energies and then offering new modules like the converter or like the one we're working on top of that.

Akshat from JPMorgan. I was hoping to see a slide on the total Flex 3 program and the cost savings that you're targeting above the planned cost savings at Greer. Are you -- can you just quantify the impact across 2020 and 2021? And what are the main focus reasons for cost savings in Europe, please?

I mean, I repeat, first of all, what we have achieved in 2019. In 2019, we have talked about EUR 100 million cost savings, [ I think ], but that was something which was already communicated to all of you, part being flexibilization and part being reducing the fixed cost. For sure, it has been done. For sure, it will bring benefits to 2020. We will update you more in February about the concrete numbers we are working on. But you can assume that it will be on the same path in the next years to face the further market decrease. And the region which are mostly impacted are the regions where the market is mostly decreasing. But that is something we will update you in February when we will talk about the financials.

Last question? Yes, please.

Just on your 2% LVP decline, you commented on what you're seeing in Europe. Can you maybe give a bit more color on what you're seeing in China? I know you mentioned stabilization, but is that more flat production environment? Or is there still some sort of volatility that you expect in China?

I mean, in China, first of all, I want to highlight that even if China is struggling, we are growing in China in absolute numbers. That is the region where we did outperform the most in 2019, it's important. And that is a market we believe in long term. Because in long term, China will be the biggest contribution for growth, long term. Regarding to 2020, we don't see any recovery in China. We see a 0 negative in China. That means a slightly further decrease in China this year. That is what we are anticipating. That is how we do adapt again our cost, but we will continue to grow in China, that means to outperform the market.

Just out of curiosity, more suppliers that are exposed to some form of powertrain, they at least even on the slide, show what their content opportunity from a pure electric vehicle would be, even if people are skeptical or not. But you are an exception in terms of like on the -- all the slides that you put through, like I didn't see a specific content opportunity that you've highlighted on BEVs. Is that because you think that you will be able to maybe enter a new segment once the BEV market becomes more popular? Or you feel you don't need -- I mean, with still a sizable market being ICE that you don't need an incremental content from the BEV market?

That is for sure something we are monitoring. Because, as I said, in a volatile uncertain market and changing market, balancing out portfolio is also key for the success. We are maybe not communicating about that. But we are, for example, the motor supplier for Tesla. The cockpit you have seen before, you will see later on, is for the Porsche Taycan, which is electrical vehicle. That means we have a high share in newcomers. I have seen -- I have shown before during my presentation, HBPO is working with all the German customers for the new electrical vehicle. That means Volkswagen, Porsche and so on. And we have the same pace in the other division i.e., yes, that means we have today in our order book, and that is what I have shown you before, 12% is about BEV, which does represent how we see the market in 2013. That means we are pretty balanced on that as well.

Thank you for your time. I propose to you a short break to have a coffee, and then we tour the premises, and we will show you a lot of what we have shown to you, you will touch it now and sit. Thank you for your time, and thank you for your visit.