Forvia SE

Good morning, ladies and gentlemen. Thank you for attending this conference call.

I am with Olivier Durand, Deputy CFO; Marc Maillet and Anne-Sophie Jugean, in charge of investor relations. I will present our sales figure for the third quarter as well as the strategic rationales for our project to acquire the remaining 50% of the JV SAS that we announced on Monday.

The press release was posted this morning at 7:00 a.m. Paris time on our website.

And the slideshow I am now going to comment is also available on our website. You can go through the interlink which is enclosed in the press release.

Slide 2 summarizes our key messages. In another environment that was challenging throughout the year, we posted a strong outperformance of 290 basis points in the first nine months of the year, well within the range of 150 basis points to 350 basis points guided for the full year.

Our sales in Q3 at minus 3.7%, excluding the currency and the Clarion scoping effect, was slightly below worldwide automotive production which stood at 3.1% according to the latest available data. Excluding the peak impact of the Seating end of production, the lower contribution from bolt-on and the GM strike impact, the outperformance in Q3 is broadly in line with the outperformance posted in the two previous year or, if you prefer, 420 basis point, as you can see on the slide, versus 500 basis point previously.

Seating end of production will decrease in the near future, around 2.5% in Q4 2019, around 0.8% in H1 2020 and nothing in the second half. Despite the market degradation throughout the year, our resilience and agility allow us to fully confirm all our financial targets for the year.

During the quarter, we also continued our strategic transformation, as illustrated by the announcement last Monday of our project to acquire the remaining 50% stake of the SAS joint venture. This acquisition will expand our system integration offer to cover all interior modules and strengthen our Just in Time plant network.

After this happy introduction, I can now details Faurecia’s sales over the period. Slide 4 shows our sales figure for the quarter.

As already mentioned, our Q3 sales stood at €4.185 billion, up 4.3% on a reported basis. Sales included a positive scope effect of €256 million due to the consolidation of Clarion.

Clarion was accounted for four months in the quarter, corresponding to June catch-up and the months July to September. Let me remind you that, due to time constraints, Clarion was accounted for only two months, April and May, in the consolidated figures in Q2, hence the catch-up in Q3.

It is worth mentioning that our Q3 sales on – include a limited positive bolt-on effect for €14 million compared to a more significant contribution in the first two quarters of 2019 which represented €164 million in total. Our sales at constant currencies dropped by 3.7%, reflecting poor market conditions; and the following temporary impacts: the negative impact, as expected, of the end of production of Seating programs for an amount of €179 million, representing 4.5% of last year’s sales.

Impact from end of production will reduce in Q4 both in value, and this should amount of slightly more than €100 million; and in percentage of sales, as the base of the first quarter is higher than the base of the third quarter. The negative impact of €23 million from the strike at GM plants in the U.S., representing 0.6% of last year’s sales that started on September 16.

Sales in the quarter also reflected a negative customer mix impact. Both Interiors and Clean Mobility outperformed the market during the quarter, respectively, by 160 basis points and 620 basis points.

I will now review sales for the nine months on Slide 5. Our nine months sales stood at €13.157 billion, up 1.2% on a reported basis.

Sales included a positive scope effect of €407 million due to the consolidation of Clarion since April 1. Our nine months sales were down 3.1% at constant currencies.

They included a positive effect from bolt-on contribution of €178 million. As mentioned in the previous slide, this positive contribution was mostly posted in H1.

They also included a negative effect of €397 million due to the end of production of complete seats products. Both Interiors and Clean Mobility posted a solid outperformance over the period, 380 basis points and 560 basis points, respectively.

Seating slightly underperformed the market mostly due to the negative effects of end of Ps I just mentioned. Overall, Faurecia posted an outperformance of 290 basis points versus worldwide automotive production.

This outperformance is fully in line with our guidance for the full year. I will now review sales by business group and by regions.

Starting on Slide 6 with Seating, which represented 38% of our sales in the quarter. In Q3, sales in Seating amounted to €1.571 billion, down 9.9% on a reported basis.

They included a limited positive currency impact of €12 million. At constant currencies, sales from Seating were down 10.5%, underperforming worldwide automotive productions.

Sales in the quarter were penalized by the temporary negative impact from end of P, end of production, for a combined effect of €179 million or 10.3% of last year’s sales; and by the negative impact from the strikes at GM plants in the U.S. for €8 million or 0.5% of last year’s sales.

Nevertheless, over two years, sales ex currency and excluding Clarion scope effect were broadly stable, outperforming worldwide automotive production by circa 600 basis points. In nine months, sales in Seating were down 6.4% at constant currencies, broadly in line with worldwide automotive production.

They included a positive effect from bolt-on contribution of €106 million from the JV with BYD in Asia. They also included a negative effect of €397 million due to the end of production of complete seat products.

What I would like to mention is that complete seats business are decreasing due to this end of production. On the other hand, metal activity is increasing, and it is a very positive mix for the profitability.

Our strong order book recorded in recent years, with improved product mix including two major frame programs, confirms market gain and solid growth prospects for Seating, starting late 2020 and strongly accelerating from 2021 onwards. As market share gains, I speak of more than €7 billion in order book.

Let’s move on with Slide 7 to our interior business group, which represented 29% of our sales in the quarter. In Q3, sales in Interiors amounted to €1.198 billion, up 1.1% on a reported basis.

They included a positive cost impact of €31 million or 2.6% of last year’s sales. At constant currencies, sales from Interiors were down 1.5%.

That’s 160 basis points above worldwide automotive production. Sales posted growth with PSA in Europe, FCA and Tesla North America as well as Hyundai and Chinese OEMs in Asia.

Nevertheless, the growth did not fully offset challenging market conditions faced by other OEMs. In nine months, sales in Interiors amounted to €3.939 billion, down 2.2% at constant currencies.

They outperformed by 380 basis points worldwide automotive production. Now on Slide 8, Clean Mobility, which represented 27% of our sales in the quarter, in Q3, sales in Clean Mobility amounted to €1.114 billion, up 5.1% on a reported basis.

They included a positive cost impact of €21 million, up 2% of last year’s sales. At constant currencies, sales from Clean Mobility grew by 3.1%.

They posted a strong outperformance of 620 basis points above worldwide automotive production; sales at constant currencies, outperformance in automotive production in all regions mainly driven by sales growth with VW, Ford, GM and Hyundai. In nine months, sales in Clean Mobility amounted to €3.465 billion and were broadly stable compared to last year at constant currencies and posted a solid outperformance of 560 basis points.

Next slide, Slide 9, our new business group Faurecia Clarion Electronics. In H1, sales totaled €302 million – in Q3, sorry.

They included €32 million from Coagent versus €26 million in Q3 2018. €14 million from Parrot Automotive sales consolidated since January 1; €256 million from Clarion, four months in Q4 impacted by lower sales from Nissan and Honda as well as difficult market conditions in China.

Clarion sales also reflected a selectivity according to the five business line priorities. In nine months, FCA sales amounted to €542 million, of which €407 million from Clarion.

Now I will go to the revenue by business group – by region. Starting with Europe on Slide 10, which represented 45% of our sales in the quarter.

In Q3, sales in Europe amounted to €1.875 billion, up 0.9% on a reported basis. They included a limited positive currency impact of €9 million or 0.5% of last year’s sales.

Sales also included a positive scope impact from Clarion consolidation which represented €21 million of sales in the region. At constant currencies, sales in Europe were down 0.7%.

They were penalized by the negative impact from Seating end of production for €30 million, representing minus 1.6% of last year’s sales. Sales growth with PSA and VW; as well as a contribution from Parrot €12 million in the quarter, did not fully offset drop with other OEMs.

In nine months, sales in Europe amounted to €6.406 billion, down 2.9% at constant currencies. Sales at constant currencies outperformed by 90 basis points regional automotive production.

Let’s continue on Slide 11 with North America, which represented 27% of our sales in the quarter. In Q3, sales in the region amounted to €1.134 billion, up 1.8% on a reported basis.

They included a positive currency impact of €48 million or 4.3% of last year’s sales. They also included a positive scope impact from Clarion consolidation which represented €54 million of sales.

At constant currencies, sales in North America were down 7.4%. They were penalized by a significant negative impact from Seating end of production for €91 million, so Daimler M-Class, representing minus 8.2% of last year’s sales; the negative impact from the strike at GM plants for €23 million, representing minus 2.1% of last year’s sales; and by negative customer mix effects.

Conversely, Clean Mobility posted a solid outperformance with double-digit sales growth at constant currencies. In nine months, sales in the region amounted to €3.423 billion, down 6.6% at constant currencies.

The underperformance of 440 basis points versus regional automotive production due to negative impact from Seating end of production for €226 million or minus 6.8% of last year’s sales. Slide 12 about Asia, which represented 23% of our sales in the quarter.

In Q3, sales in the region amounted to €942 million, up 16.8% on a reported basis. They included a significant scope effect from Clarion consolidation, €179 million.

They also included a positive currency impact, €13 million. At constant currencies, sales in Asia were down 7%, underperforming regional automotive production.

In the quarter, sales were penalized by the negative impact from Seating end of production in China for €48 million – €58 million, sorry, representing 7.2% of last year’s sales; and by the negative impact from BYD in China whose sales dropped by €25 million in the quarter or minus 3.1% of last year’s sales. In China sales amounted to €598 million, down at 4.9% on a reported basis and down 9.8% at constant currencies.

They were impacted by the two effects I just mentioned, €83 million total. Sales to Chinese OEMs reached €186 million and represented 31% of sales in the country.

In nine months, sales in the region amounted to €2.659 billion, broadly stable at constant currency and outperforming worldwide automotive production by 780 basis points. Last slide is about South America, which represented 4% of our sales in the quarter.

In Q3, sales in the region amounted to €186 million, broadly stable on a reported basis. They included a negative currency impact of €7 million or minus 3.5% of last year’s sales.

At constant currencies, sales in South America were up by 2.7%, outperforming regional automotive production by 740 basis points. All business groups contributed to sales outperformance in the quarter.

In nine months, sales in the region amounted to €530 million, up 5.7% at constant currencies and outperforming regional automotive production by 920 basis points. On Slide 15, we confirm all our financial targets for the full year.

These targets are confirmed under the updated assumption that worldwide automotive production should be down by close to 6% in 2019 versus 2018. It is worth remembering that when we guided for the full year in February, our initial assumption was that worldwide automotive production should be down by around 1% year-on-year.

This revision from minus 1% to minus 6% represents a drop of nearly 4.5 million vehicles, which is very significant. Despite this market deterioration throughout the year, we fully confirm to deliver sales growth at constant currencies, and excluding Clarion scoping effect, of between 150 basis points and 350 basis points; and operating income including Clarion, of at least 7% of sales and exceeding last year operating income in value.

Net cash flow, including Clarion, of at least €500 million. This confirmation of full year 2019 financial targets in the current environment demonstrates the strong resilience of our business model and financial performance.

On Slide 17, let me comment about the project to acquire the remaining 50% of SAS, which we announced last Monday. SAS is a 50-50 joint venture between Faurecia and Continental founded in 1996, and it has become a key player in complex complete module assembly and logistics.

SAS has a strong recognition from customers; and achieves total sales of €3.8 billion in 2018 of which €633 million of sales are considered as IFRS 15 sales. This project will expand our system integration offer and allow us to cover all interior modules; as well as our new product lines such as displays, electronics, sensor and thermal management.

In addition, it will strengthen our Just in Time network and competencies in system integration and complexity management. Lastly, we will be able to generate significant synergies through manufacturing engineering, logistics, footprint optimization as well in purchasing and SG&A.

This project is fully aligned with our strategy to become a strong leader in cockpit systems integration. On Slide 18, you will find the main characteristics of SAS operations.

As regards regional breakdowns of sales, over 70% are made in Europe, and about 1/4 in North America, while the rest is made in South America. As regard the customer base, SAS has a large base of major international OEMs.

In the coming years, growth should be accelerated through regional and customer diversification, particularly in China, headquartered in Karlsruhe, SAS operates 19 plants in the world, of which 11 in Europe, four in North America and four in South America. In 2018, it employed around 4,000 employees worldwide, of which close to 100 engineers assembled 5.6 million modules last year with 32 assembly lines and managed 45 programs.

Last but not least, SAS has a strong share of the addressable market of cockpit modules, close to 20%, which has been built up over more than 20 years of continued growth. Slide 19 summarized the financial metrics of the acquisition and the next step before finalization.

So far, SAS has been accounted for in our financial accounts by the equity method, and in 2018, the share of net income from associates which was including our accounts amounted to €23.5 million. Sales are expected to show strong growth in 2019 and should reach around €700 million compared to €633 million in 2018.

With an order book showing strong growth potential, sales should exceed €1 billion by 2024, representing a CAGR of around 9%. Expected operating margin in 2019 is around 8%.

Price to be paid to Continental for the 50% stakes amount to €225 million. This is a strategic project; and immediately accretive to Faurecia in operating margin, net income and ROCE.

Prior to the signature of a definitive agreement, this project will be subject to information of employee representative bodies and to the appropriate regulatory approvals, and we expect closing to take place early 2020. As consequence, we’ll consolidate SAS within our Interiors business group as from the beginning of next year.

Thank you for your attention. And before opening the floor to your question, I would like to remind you a very important rendezvous with our Capital Markets Day in Paris on November 26.

In this CMD, we will share with you our strategy updates and medium-term perspectives. Now we can go to the Q&A, Joanne, if you can now share the session.

Hi, good morning. Thank you very much for taking my questions.

The first one is really on Clarion and your latest update on that business. If we look at the run rate of €256 million you've now booked for the four months this summer, when I sort of back it out in terms of the run rate, you were looking at sort of about €750 million for the full year.

Is that something that we should be working with also in the outer-years? Or what are you doing in terms of to re- thrive the sales there?

And can you update us some of the latest cost-cutting measures and efficiency measures that you're planning then? And the second point is on your GM strike, as you – thanks for breaking that out.

What are sort of the measures you take in order to safeguard your profitability when you have that? And is it fair to assume that – given you had two weeks in Q3 and the strike is still ongoing, that we're probably looking at about four weeks in the fourth quarter in terms of an impact for you?

Firstly, thank you for your questions and important ones rather. So Clarion, we are on the full year on a run rate a little above €800 million.

Clarion, two things: There was the IFRS 15 application. So some, I will say, offset were clearly eliminated [indiscernible], but you do have the set only €800 million.

The second big impacts, as I mentioned, is that both Nissan – Chinese markets are clearly very negative, all right? And we are suffering from that.

So you can take the assumptions that this type of figures will continue in the quarter four, quarter one. And probably we'll see some, I will say, risk capital.

Second thing, GM. You're perfectly right.

They are still to work, I will say; well understood, what they announced yesterday, yes. So it will take some days to restart, so probably we will have a higher impact in October, in respect to their impact of $26 million of September, probably $35 million, $40 million down.

Just from that, there will be some recovery. It's difficult to anticipate big recovery, yes.

So probably I will say GM will cost us sales $40 million to $50 million. It's not a case of force majeure.

We have, of course, made downtime when we can, because it's not always obvious, in the States. So we are reducing the impact.

I will say we have an impact. It is inside our guidance.

Sorry to use the expression: It's not material in the go period, but we have an impact.

Perfect. And then maybe just a quick one on your – on this SAS transaction, what drove you to actually decide?

I know you outlined sort of the strategic rationale that you are deciding to own a business outright in this case or decides to actually go on a JV routes because you outlined again also your VW Chattanooga Seating business being a JV. What are sort of your decisions you're making to decide which one you want to go for?

Is it really dependent on what the other party would like to do?

Thank you for the question. It is quite an interesting question.

Chattanooga in the U.S. is a minority JV.

And you know that in U.S. there are some specific tax advantage for the carmakers is supplied by a minority JV.

So we have two in U.S. One is DMS.

The second one is Chattanooga. DMS is more cockpits, in fact.

They have cockpits, a little interior but mainly cockpits. Chattanooga is complete seat.

So we are doing that in line with customer requirements; and clearly in line, according to the partnership we have with our core customers. Going to SAS, in fact, it's a very old story, yes.

When I was in Value and we were involved at that time, to be clear, and clearly we decided not to go, it was a JV decided between, at that time, [indiscernible], this is the S, A; and [indiscernible], gives the last S. It give – at the time, we have both – consulted both.

And right now, it is fifty-fifty again. The JV has a €2 million capital, to give you the success of this JV throughout the time and the big value created for this big cockpit assembly.

After 22, 23 years, we were clearly the big operator. We are managing the commercial side.

We have taken more and more, I will say, footprint in terms of cockpits. Clarion is the definitive, I will say, [indiscernible].

So it was time at the moment to decide to, I will say, take the full ownership and to – well, clearly to leverage as well because we have nice synergies probably. We are estimating 2% of sales.

So it was time. You know that, a JV, you have a time when you have to, I will say, grow the BD [ph] with a partner given moment where one partner has to say, "I will be probably the main – the best shareholder for the future."

I think it was time for us to grow, and we have a fantastic potential to grow. And it was reflected in the €1 billion of [indiscernible] for 2024.

This business, new business, is starting in North America but as well in China. So China, we will have some of the SAS activities in the near future, so we will transform, I will say, again the footprint of this activity.

Perfect. Thank you very much.

Good morning. Thank you for taking my question.

The first one, on Seating, we are now looking at growth coming back in the second half of 2020. So you mentioned late 2020.

If I remember correctly, last year, you mentioned that you expected growth will be around 600 bps and 800 bps for 2020, 2021, so it looks like the recovery in Seating has been postponed a little bit. Am I right in thinking that way?

And what is causing the delay? And second one, on the union strikes in the U.S.

So just because of the structure of these negotiations, the unions are likely to move forward to FCA after they finish with GM. Do you see any risk of disruption coming from there?

And how are you accounting for that in your guidance? Thank you.

Thank you for your questions. Going to Seating: You're right because we have mentioned €7 billion, which is minimum.

We have, I think, more than that, which will we start in between 2020 – late 2020 to 2024. As we announced, we have a big platform, French, with BMW.

We have the – competed for the jeep account. We have another big French platform for German carmakers.

The difficulty, that's some activity, some startup productions are postponed [indiscernible], was postponed. So it is why we have this tax postponement to 2021, expect – what we were expecting from 2020 onwards.

This is not changing the cockpit business, of course. What I have mentioned, it is not competitive paradox.

We're selective. We are selecting.

We have clearly favored French platforms. We are taking market share on French.

We are in growth. [indiscernible] the figures you'll see today, we are in growth in metal [ph] in the fourth quarter and will continue to have growth accelerating in the next months.

And as you know, on [indiscernible], we've said that in different times and at Investor Day of 2013, yes, we are posting more than 8% operating margin. So clearly, whatever the impact of some end of complete seats, margin is clearly boosted by the change of mix.

And through, I will say, the different business, we will regain some market share in complete seats as well, but in the near future we will definitely take the worldwide leader position on metal , on which I can say we are very successful. To comment U.S., complicated, about the social point of view.

You're right. There is a risk about FCA of FCA – about other, sorry, carmakers [indiscernible] FCA is specifically concerned, I cannot mention that.

But anywhere is a potential risk, I cannot comment.

Okay, thank you.

Good morning Michel, Gaetan Toulemonde speaking. Going back to previous question.

Does that mean that the outperformance in 2020 will be less than what you guided for a few months ago in H1 results? At the time, you were guiding for approximately 400 basis point outperformance in 2020 and 2021.

Can you update us a little bit on that? Thank you.

Thank you, Gaetan. We were at a very successful conference in Frankfurt, and I must say that.

So we said that outperformance will be above 100 basis points. It's what we'll see today, to be confirm with different volumes.

I didn't mention that, but I was very surprised by the volumes in China as I said in quarter three, yes. We are more thinking, and we have said that, that it will be a single-digit to double-digit negative.

We are very surprised by the figures coming from SAS to be seen but will happen between Q3 and Q4. We confirm, anyway, and it is in our guidance, that the full year in China will be probably minus 10, looking back that, all right?

That is in our guidance. Saying that, we have to be cautious on 2020.

The customer mix is not favorable. We'll see that in the fourth quarter.

And we have to be – we have to realize because we are not, I will say, cautious with a 100, 150 basis point outperformance, to be confirmed anywhere in February next year.

Okay. That’s pretty clear.

My second question is on the joint venture SAS. If I do my arithmetics correct, I'm not sure about that, I end up with approximately 20% tax rate.

Is it something which is normal for this joint venture and sustainable for the future? Or is – there is a one-off which explained the lower tax rate.

You are going a little too quick, because we are entering and we will see what we will do. We have some tax optimizations.

I already notified that. I cannot totally commit of the 20% for SAS.

What I can say is that at the group level, which is actually more important for us, we can clearly continue to take advantage of some invested cash forward; and clearly to achieve, I will say, tax rates, corporate tax rates, at 25%, even below.

Okay. Okay, perfect.

Thank you.

But FX could add [indiscernible].

Okay, thanks.

Yes good morning. Thank you for taking my questions.

The first one would actually be on your restructuring measures. Can you confirm that you're still targeting the €180 million restructuring charges for the full year and still expect more than €85 million in cost savings in the second half?

And then my second question: Given the weakness in China we see at the moment, do you see the chance to buy out more minorities in your joint ventures and gain full control of the JVs? And then my last question would be particularly on Europe given the upcoming CO2 regulation, and you have been very vocal about uncertainty around production mix.

Do you have any update for us today how you see production mix evolving in the fourth quarter and potentially into the first quarter of 2020? Thank you very much.

Thank you for the questions. I will need one hour, sorry for the jokes Sascha.

So I fully confirm the €100 million half year for restructuring cost. And it is from the cost to be posted this year, something like €120 million for Faurecia alone, yes, we've known that; and close to €60 million for Clarion.

And sorry because I think I did not answers questions for Clarion. We announced the Seating plants.

We have launched a big restructuring, a big reduction of people; and people started to leave in October. The plan in Clarion today, and we have some other opportunities, will overtake €80 million.

And a big part will be captured in – upon right now – probably close to €50 million in the last quarter. And a big part will be as – of course, captured in 2020.

So this €50 million will, of course, contribute to the fact that on cost savings we've got probably at least the amount we posted in the first half. And this is fully, yes, integrated in our guidance As you have seen, we – despite this volumes drop, we confirm month after month our capacity to drive the same profitability as we were thinking at the beginning of the year.

Buyout of minorities in China. Today, we have a certain level of debt.

We have bought Clarion. We are now buying the SAS.

So sorry to say that. We have to be, I will say, very disciplined.

We have to make more integrations. We have to make these two acquisitions pretty successful, so I will say, for the moment, we'll be very reflective on, I will say, other productions.

So one priority is to stabilize, even reduce, the debt level, yes. For Europe, when we see the last quarter program, we have now other programs, of course, we have no signs of a change of mix, which is a source of price offer to be able to build this up.

So we have nothing to say, no signs; no models there [indiscernible]; nothing that we can mention which is for you, I will say, useful.

Great. Thank you very much Michel.

Yes hi, this is Sarth calling from JPMorgan on behalf of Jose Asumendi. A couple of questions from our side.

The first is regarding the joint venture that you bought out from Conti. Now that Conti is out of the picture, how do you plan to source the components that were being produced by Continental?

Will you be sourcing these through in-house production or you will -- sourcing them from other suppliers? And secondly, do you see any other Seating contracts that will reach the end-of-production stage in the coming three to six months?

Thank you.

Firstly, thank you for your. For Seating, no, nothing more, fortunately.

So we will have now, I will say, clearly some base in the near future. Going back, I have still a – not small, not a small impact from Seating end of production in China we were mentioning a little more than €100 million for the last quarter; something like €80 million, eight zero, for H1 or for the first semester.

So we have still a small impact of end of production, but it will be less and less. And the surprise, because this was a little surprise for us, to be honest, is that due to the low activity of Q3, of course, these end of production were more visible.

Sorry for this one-off and for this immediate impact. Going back, Conti's supply: I have mentioned that you have the unreported sales of SAS, €3.3 billion in 2018.

You have the IFRS 15 €660 million. Why?

Because some key subsystems are mandated by customers. And sorry to say that, but the first one is our supply.

It's maintenance, our – so maintenance. We are seeing putting back [indiscernible] million, if I am not mistaken, to SAS as, I will say, some maintenance.

This is not achieved, as that is directly negotiated between the customers, carmakers and ourselves for the same period. So Conti is the same.

So on Conti's supply, there is no change. After that, in the near future, on the cockpit, of course, will be that in some cases we have the location to take some businesses for Clarion, et cetera.

To extend our, I will say, content inside the cockpit. This will happen.

Alright, thank you so much.

Hi, yes good morning Michel. You were quite proactive in closing facilities in the first half of the year to adapt your footprint for the current circumstances.

Were there any major changes in the third quarter? Or would you expect anything for the full year further to – beyond the what you did in the first half?

Thank you Stephen for this question. We continued in the fourth quarter.

I think we have forecasted four plants within that that we have closed, and we'll have some. As you know, to close a plants need a minimum of a time because we have to secure – firstly, we have the restart of production in other plants.

So it is a complete technical site to be carefully built, secured, of course; communication with the customers. Sometimes, acceptance is taking time.

So usually, for Just in Time, it could take three months, four months, as the time. For a process plant, it will take, it will be much more, yes.

So often one year. So it is why some closures have happened.

Some closures will continue to happen as we – and the permanent, I will say, optimization of our footprint will speak of that in our assembly. And we have clearly accelerated this process in the second half of 2018, yes.

So it is why we have this permanent, I will say flow and, of course, positive flow on our cost side.

And were the majority of those foreclosures in the third quarter in China?

I would not want to speak too much in China, but no, the – it was a continuity effect to what we indicated in the first half.

Thank you very much.

No more questions? Okay.

Now firstly, again thank you for your attendance. If you please, don't forget our next rendezvous, the 26 of November in Paris.

We will start at 11:40, I think, to allow all people to come in the morning. And we will finish probably at 12:30 p.m.

in order that people could go back in the same day. So thank you again, and see you very soon in Paris.

Have a good day.