Financial Data and Key Metrics Changes - For the full year, sales decreased by nearly 300million,reflectingsoftnessinkeyareas,particularlyinEVandoff−highwaymarkets[7][21]−AdjustedEBITDAforthefourthquarterwas186 million, with a profit margin of 8%, representing a 170 basis point improvement year-over-year [22] - Full year adjusted EBITDA was 885million,40 million higher than the previous year, with a profit margin of 8.6%, a 60 basis point improvement [23] - Free cash flow improved from a slightly negative position in 2023 to 70millionin2024,withexpectationstotriplein2025[10][34]BusinessLineDataandKeyMetricsChanges−Organicsaleswere135 million lower in Q4 due to lower OEM production of heavy vehicles, while adjusted EBITDA on organic sales was 33millionhigherduetoimprovedcostefficiencies[27]−Thecost−savingprogramcontributed10 million to adjusted EBITDA in Q4, with similar contributions expected for the full year [28][30] - The company anticipates a decline in organic sales of approximately 285millionfor2025,drivenbylowerdemandacrossallendmarkets[37]MarketDataandKeyMetricsChanges−Thelightvehiclemarketisexpectedtoremainflatyear−over−year,consistentwithothersuppliers′expectations[16]−Commercialvehiclemarketsareanticipatedtostabilizetowardstheendoftheyear,withbeneficialimpactsexpectedfrompre−buysassociatedwith2026emissionslegislation[17]−Thebacklogdecreasedto650 million, down about 300millionfromthepreviousyear,primarilyduetolowervolumesonexistingprograms[19][20]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedoncompletingtheoff−highwaydivestiture,withexpectationstoannounceatransactioninearlyQ2[10][11]−AcommitmenttoachievingadjustedEBITDAmarginsof10300 million cost reduction program, which is expected to significantly enhance profitability [120] Other Important Information - The company is targeting a net leverage of around one times through the cycle, aiming for a conservative balance sheet [15] - The impact of foreign currency translation was noted as a headwind, with expectations of approximately $195 million in sales impact for 2025 [38] Q&A Session Summary Question: Update on off-highway divestiture timeline - Management confirmed a robust process with strong interest and expects to sign a transaction in early Q2 [46] Question: Clarification on 2025 guidance and backlog segmentation - The light vehicle outlook is based on specific programs rather than overall market trends, with the majority of backlog in light vehicle driveline parts [49][50] Question: Tax guidance and valuation allowances - Management explained that the volatility in EPS is due to changes in income mix and valuation allowances, with expectations for normalization post-divestiture [54][58] Question: Commercial vehicle market turnaround - Management indicated that improvements in the commercial vehicle sector are expected to begin in Q1, with significant cost savings anticipated [71] Question: Impact of tariffs on pricing strategy - The company intends to pass through any tariff impacts to customers and has formally notified them of this strategy [87][116] Question: Backlog composition and future activity - Management clarified that backlog calculations do not include additional vehicle volume on current programs, focusing instead on new variants [111]
