Good morning, everyone. Thank you for joining us today.

We always look forward to talking with our shareholders and we hope to inform you well and answer questions. We also note we have many other stakeholders including many employees on the call and our remarks are addressed to them as well as we disseminate our annual results and commentary through our network.

With me this morning are Pat D’Eramo, Martinrea’s CEO and President; and our Chief Financial Officer, Fred Di Tosto. Today, we will be discussing Martinrea’s results for the quarter and year ended December 31, 2018.

I will make some opening remarks. Pat will make operational and strategic comments and give you his perspective.

Fred will review the financial results. And then I’ll finish with some general closing comments and go over some of the great things that are happening here at Martinrea.

And then we will open the call for questions and we will endeavor to answer them. Our press release with key financial information discussed on a fairly detailed basis has been released.

Our MD&A, AIF and full financials have been filed on SEDAR and should be available. These reports provide a detailed overview of our company, our operations and strategy and our industry and the risks we face.

Given the detail in our press release and filed documents, our formal remarks on the call today will be generally overview in nature. We’re very open to discussing in our remarks and we hope in the Q&A.

Some highlights of the quarter or a year, the state of the industry today, how we are addressing the challenges and progress in our operations. As always, we want you to see how we see the world.

As for our usual disclaimer, I refer you to the disclaimers in our press release and filed documents. Our public record which includes the AIF and MD&A of operating results is available on SEDAR.

You may look at the full disclosure record of the company there. Welcome to 2019, a year which we look forward to with great anticipation.

As we intend to continue to develop and apply our one Martinrea culture in our business with a view to increasing year-over-year revenues, profits and operating margins, continuing to improve our leading safety and quality metrics, delighting our customers, satisfying our employees, performing for our shareholders and leading the way in good corporate citizenship in our communities. Even in a challenging environment in terms of some of the geopolitical trade and economic issues we all face.

In sum, we will continue to perform well as we did in 2018 and in the years before that. And here to tell you all about it is Pat.

Thanks, Rob. Good morning, all.

As you read in our press release, our Q4 adjusted net earnings per share came in at $0.51 within our guidance.Q4 production sales came out within our guidance despite some volume headwinds in China and Europe. We have some tariff effects in the quarter, which we have continued to partially mitigate through government programs both in U.S.

and Canada. Our adjusted operating income margin came in at 7.1% for the fourth quarter, up year-over-year from 7% in Q4 last year.

And we ended at 7.8%, representing continued progress towards our new annual margin targets of 8% for 2019 and 9% for 2020. Q4 is the 17 consecutive quarters of year-over-year record adjusted net earnings performance.

Production sales came in at $841 million. We continue to see pressure on some passenger car sales including vehicles in China and Europe, which were lower than expected.

CUV, SUV and truck sales remained strong. As discussed in our past, our portfolio is weighted toward these vehicles.

Q1 adjusted EPS is projected to be between $0.65 and $0.69, a good quarter from an earnings perspective to start out another expected strong year. We’re likely to see significant amount to any sales related to some large programs in Q1, which will put some pressure on our operating margin percentage.

As tooling sales typically are low to no margin for the company. Production sales for Q1 2019, we estimate will be between $910 million and $950 million up nicely from last year.

This year, we had a lot of launch activity during the back half of 2018, which will continue into the first half of 2019 per our plan. This launch activity as well as the continued cost of tariffs, which did not exist in Q1 of last year and higher interest costs will have some effect on our results though are 2019 and 2020 targets remain intact.

New business wins for Q4, as noted in our press release, came in at approximately $230 million, representing annualized revenue at peak volume, continuing our organic growth story and supporting our $20 billion, $24 billion revenue target. New business wins this past quarter include $190 million from our lightweight structures group including $90 million for FCA the structural components on FCA’a new large SUV, $85 million from BMW for an Aluminium Subframe on the 5 and 7 series, and $15 million in other structural components for Toyota.

In our propulsion systems group, we added another $40 million in new business from Volvo, Ford, Geely, Scania and JLR. Great product wins from a broad range of customers.

As already noted, launch activity remains high in 2019 waited in the first half of the year similar to the second half of 2018. Our aluminum plant in China continues to launch knuckles and control arms for JLR soon followed by an additional suspension component that we will add this year.

The final phase of the same product for JLR and its new European crossover is also in the process of launching in Spain. The GM Silverado, very large program for us, continues to launch well, now focused on the Mexican volume, which started in January and is currently ramping up.

This will be followed by the heavy duty in Michigan and the large SUV in 2020. They’re also preparing to launch of the new Ford Escape later this year, another large program for us.

With our go early approached program launches, this has clearly yielded significant benefits today. Engine launches in both Europe and North America for Volvo, Ford and JLR continue as planned as well as a plethora of fuel break and fill their launches for GM, Ford, FCA and JLR this year, including a significant amount of fluids content on the GM Silverado.

We targeted to exceed $4 billion in sales by 2020 that business has now essentially been secured inclusive of our unprecedented 2018 business winning rate. 2018 was a great year, as we continue our vision of improving shareholder value, providing opportunities for our people, servicing our customer better than ever, and supporting our communities where we do our work.

Our safety continues to improve in 2018 20% in this last year and a staggering 68% since 2014 when we brought safety to the forefront. Quality has improved significantly as well at 38% reduction in customer issues in the same timeframe.

Quality improvements this year also include a number of special customer awards. Year-to-date from our Q1 2018 release to now we have announced approximately $800 million in new business.

Our total sales for 2018 was just under $3.7 billion. Recall the assembly business contract change to a purchase component, consignment model versus Martinrea purchasing the components for GM reducing the sales by approximately $300 million annually.

So the actual product and volume we produce is basically unaffected. We had record earnings in 2018 with adjusted net earnings per share of $2.22, up 16% from a $1.91 in 2017.

Our adjusted operating income margins have increased to 7.8% in 2018, up from 6.4% in 2017, from 5% in 2016, 4.6% in 2015, and 4.1% in 2014. Our operating income margin growth has exceeded most anyone else in our sector over the last four years.

Similarly, we achieved record adjusted EBITDA of $461 million in 2018, up from $401 million in 2017, at 15% increase and we expect to increase free cash flow in 2019. Our balance sheet remains strong with a net debt to adjusted EBITDA ratio of 1.45 to 1.

At the end of 2018 consistent with 2017 despite the significant share repurchase activity and an improved dividend, you may recall we increased our dividend by 50% in early 2018 and we have repurchased 2.5% of our outstanding shares by the end of 2018 and more thereafter. The commercial strategy, lightweight structures and propulsion systems is designed to curious beyond the $4 billion of sales after 2020.

Focused on developing systems solutions including engineering and assembly wherever possible, filling the forthcoming needs of our customers in both design as well as the potential for increased content. We formally introduced this new commercial strategy to our customers during the Auto Show Week in Detroit in January.

The turnout this event was record setting and the feedback was right in line with our expectations. We look forward to more developments on this front in the coming year.

In our industrial business, we continue to make progress as it relates to new business, including the solar industry. As the sun holding product begins to penetrate the market.

We’ve also had some additional product wins from both John Deere and Caterpillar. We will continue to grow this business, which has great margins and a different customer profile.

It can also act as support for our automotive business. Our industrial technology provides a unique resource inside Martinrea to develop prototypes and texturing.

As well as other products to support things like our high frequency delivery system that is being established in our automotive plans. High frequency delivery is quickly becoming an integral part of our new flexible manufacturing technology, giving more and more of our facilities a competitive advantage.

This along with advancing lean manufacturing throughout the company continued to strongly support our margin and EPS improvement. The continued growth of our Martinrea manufacturing system along with our improved margin profile of newer products gives us confidence in our 2019 and 2020 targets of 8% and 9% operating margin.

Our sustainability efforts continue to grow throughout the organization. Many of our locations are now supporting stem activities aim to getting more young women interested in manufacturing.

This includes internships both during and after the school year. Our internal training center, Martinrea Skills University continues to add more activities including leadership training, problem solving and compliance training, good progress for our three-year old school.

Related to the environment, we have targeted some of our plans along with the Auburn Hills Tech Center and the Canadian Corporate Office to be zero landfill by 2020. This and many more sustainability activities are on our 2019 business plan, which we have already begun to deploy, specific goals for specific groups and locations led by key management making in a priority in Martinrea way.

Last, I want to touch on our recent graphene investment in NanoXplore. We are now a 16% investor and have a supply contract with them.

Rob Wildeboer is the new Chairman there, and Rocco Marinaccio one of our executives has moved there as the COO to lead the operation. We can talk more about this transaction, but I’d like to touch on the technology itself.

There’s been a lot of news about graphene lately, so what’s it all about and why is Martinrea is so interested in this new age product. Graphene is a very strong conductive material.

So then that it’s only measured in two directions. Literally harder than diamonds and stronger than steel, 20 times stronger.

It’s more conductive than copper and so thin that it can be fell in a salt water. So it can reduce permeation of gases through some materials.

What’s it look like? How do you use it?

And why haven’t we heard much about it until recently? Graphene is only about 15 years old known the world since about 2004 or so.

Those who found it received a Noble Prize for their efforts. After production, graphene looks like a fine powder or maybe more appropriately graphene powder.

The key to this material is to compound it and mix it with base products, primarily composites for now. And getting the final products, stronger properties, less weight with conductive capability were applicable.

For Martinrea, we were focused on internally using the material in our various composite components in a number of fluids products, as well as composite applications to improve performance. These along with a number of applications are possible.

What makes this product so new or recent in the market is up to now it has been difficult to produce quality product at a good price at high volume. The ability to scale up production in the past was too expensive or impractical.

NanoXplore has developed the capability, produced graphene at high volume and we have decided to use our operational strength, as well as our investment to assist NanoXplore developing their new production facility, as well as helping them install strong operating principles. We strongly believe graphene will be a part of future products giving us a competitive advantage.

We also believe that graphene will infiltrate the automotive industry, as well as other industries and grow NanoXplore, as well as our investment. New materials that are developed and introduced into automotive have made tremendous impacts on our industry, as well as our society as a whole.

We see graphene as potentially one of the most important material developments of the century. It’s going to make people’s lives better.

I have little doubt that you’ll hear more about graphene and a long list of applications, which it will be used for. It’s been another great quarter in 2018 was a great year.

We’re happy with the progress and very proud of the Martinrea team and their tremendous efforts. And I’m looking forward to an even better 2019.

With that, I’ll pass it to Fred.

Thanks, Pat and good Morning. As Pat has already noted, the fourth quarter was another great quarter.

Our best fourth quarter ever from an adjusted EPS and EBITDA perspective. As our press release highlights, Q4 financial results made at 17th consecutive quarters of year-over-year improved record adjusted EPS performance and quite the run reflective of business strategy that is clearly using significant benefits.

We are stronger today and we had been and still have runway to improve. And go with simple, we want to be world class and everything we do and we’re not stop until we are.

Fourth quarter total sales were $926 million representing with 5.4% increase for the fourth quarter of 2017. Production sales for the quarter were $841 million essentially at the midpoint of our previously announced production sales guidance range of $820 million to $860 million and up year-over-year from $810 million reported in Q4 of 2017, despite some challenges in the global production environment.

The higher production sales largely reflects positive foreign exchange translation in the launch or new programs, partially offset by lower production volumes in China, in particular with Ford and lower production volumes with Jaguar, Land Rover in Europe. Overall production volumes in North America continued to be quite strong with lower passenger car volumes being generally offset by higher volumes in CUVs, SUVs and trucks.

For the full year 2018 total sales came in at just under $3.7 billion, generally flattish year-over-year as projected. Looking forward, we continue to expect total sales to be up year-over-year for 2019 and grow it over $4 billion in 2020 based on budgets.

Just positive forward-looking sales trend is reflected in our Q1 2019 guidance, which calls for production sales to be in the range of $910 million to $950 million as Pat has already noted, up from $893 million of production sales in the same period in 2018, a nice start to the year and on an overall basis in line with their budgets. Adjusted net earnings per share in Q4 on a basic and diluted basis was $0.51 per share, also as a midpoint of our published earning guidance range.

$0.51 of adjusted EPS represents a record fourth quarter for us. We did have some adjustments to earnings during the quarter related to the plant closure one of our Canadian facilities due a GM’s decision and closes Oshawa assembly plant later this year.

And a loss on the warrants we hold on our NanoXplore investment, both are further explained in our MD&A. Overall operating income margin for Q4 was 7.1%, representing a year-over-year increase of the only slightly from 7% of the same period last year.

As upfront costs related to the preparation of upcoming to programs and related to new business and the process of being launched and tariffs weighted on the Q4 margin as was expected. Overall operating income margin for the full year 2018 was 7.8% up nicely from 6.4% in 2017 and 5% in 2016.

Our margins have improved in various places, but our North American operations, we’re approximately 80% of our business resides, has shown the most significant improvement over the past few years and in 2018 at 8.4% up from 7% in 2017 and 5.1% in 2016. The positive impacts from operational excellence and mix that is lower margin work rolling off and being replaced with higher margin work had been most visible in North America.

These drivers are expected to continue to be positive factors going forward. Europe is also improved in the past two years, in 2018 at 6.6% up from 5.8% in both 2017 and 2016.

Despite lower than expected production volumes of Jaguar Land Rover as previously noted and a fairly significant launch schedule. We expected European operations to continue to improve as it works to its backlog of business and it was a continued to advance Martinrea lean way manufacturing.

Rest of the World segment has also improved with the past couple of years, but it’s currently weighed down by a significant drop in poor production volumes in China, which has a significant impact on our fluids plant there. Absence of Ford volume situation and a lower than expected volume ramp up with Jaguar Land Rover on new work we are currently launching for them and our aluminum plant in China, our margins in rest of the world would be much further along at this point.

Generally speaking, our overall business in China is still in its early stages of new business coming online in the next couple of years, namely in our aluminum plant. As such Martinrea will evolve over time as the business evolves and grows.

Despite some of these challenges and as Pat as already noted, we continue to feel good about our operating income margin targets for 2019 and 2020. As such, there is no change to our margin outlook.

We continue to expect an overall operating income margin of 8% for 2019 and 9% for 2020. Pat has already touched upon the balance sheet to some extent and Rob will spend some time discussing or thinking around capital allocation.

So I won’t spend much time on the topic other than to reinforce the notion that we are committed to a strong balance sheet, which at the current time in our eyes represent the leverage ratio of around 1.5 times net debt to EBITDA. The recent increase in net debt absent the increase related to foreign exchange translation, due to our share repurchase program and the increased dividend you saw in 2018 is supported by an improving free cash flow profiles starting in the back half of 2019 and heading into 2020.

As you can tell, things are progressing quite nicely. We are executing on our business strategy and continue to consistently deliver a strong operational financial performance.

17 consecutive quarters of year-over-year improved record adjusted EPS performance is clearly indicative of the progress we’ve made as an organization. Thank you.

And I’ll turn it back over to Rob.

Thanks, Fred. Some comments on capital, our industry and culture.

In the last several calls and releases, we talked about our use of capital. Let me give you a brief update on that.

As you can see from our press releases and Pat’s discussion, we want a lot of new business recently with new product awards approaching $1 billion announced since the beginning of 2018. That’s a lot of new business.

Some of it is our new models. Some of it is conquest business.

Of course, we continue to win repeat business too. That implies a few things.

First, our customers are awarding us with new work, because of our product offering and performance in quality, delivery and competitiveness. Second, in terms of capital allocation, investments we have been making in our business have been bearing fruit and further we will continue to invest in our own business.

This will be our priority. There’s clearly tremendous value to it.

We gave our revenue target of over $4 billion in 2022 and with the product wins assuming industry volumes hold that target is clearly achievable. But it is also increasingly clear that will be more organic growth beyond 2020.

With topline growth, given our discipline on financial return hurdle rates, our bottom line will grow to. Note that organic growth, is over an increasingly broad range of customers over many geographies, especially outside Canada and over a broad range of vehicles ice, electric, hybrid, opportunities about that is our primary focus as a use of cash.

Many people ask us about M&A opportunities and we see a lot of what I would call noise. We’re clearly not averse to M&A activity, after all, we’ve done it many times in our past, that apply to build or buy scenario and where it was cheaper and faster to buy than build, we did so, especially given the fact there were cheap assets available.

Although with a lot of fixing to do. We’ve been fixing very well as our margin improvement of tests.

Today, we certainly are willing to look at opportunities, but we feel it, it’s very important to be disciplined and to buy prudently. At the same time, I note that we have invested in and we’ll invest in technologies or products that support our business.

We increased our investment in NanoXplore for example, and we are excited about that as Pat described. In terms of our debt levels, we like and have a strong balance sheet.

This is helpful not just from a funding perspective, but our customers frankly like companies with financial strength. They know we’re there for the long-term.

Believe me, this industry has long memories and customers still don’t like over leveraged suppliers. So we will maintain a strong balance sheet even as we fund our internal growth and make strategic investments.

In terms of returning capital to shareholders, as you recall, we increased our dividend last year and that has represented some increase to return. As well, we filed for a normal course issuer bid at the end of August to purchase up to 5% of our outstanding common shares or just over 4.3 million shares.

To year end, we purchased a little over half of that and we have been buying this year too. We will be at the 5% mark within the next few days.

We promised we would buy back some shares as a good investment of capital, while still funding our growth, taking advantage of investment opportunities and maintaining a strong balance sheet. We have kept our promise.

Over the next several months we will focus on making the needed investments to fund our growth. Our intention at this time is that subject to all the points I just made, we will be renewing our normal course issuer bid in August.

The benefit of course to shareholders is less dilution of earnings and increased earnings per share number and over time support for higher share prices. In terms of the industry, volumes for the most part were fairly flat across our markets.

And the times of robust year-over-year growth, maybe over at least in some place. Nevertheless, volumes are at a very healthy level today in particular in North America where the majority of our business resides.

And our product offerings are essential to our customers. Every vehicle needs structure for safety reasons and we provide that.

Every vehicle benefits from the lightweighting of products that we specialize in, whether an electric vehicle, one propelled by gasoline or diesel or one propelled by something else. Lightweight products reduce emissions, increase distance on a tank of gas or an electric charge, reduced greenhouse gas emission somewhere and so on.

Our new business wins are a testament to the needs of our products include battery trays and propulsion products for electric and hybrid vehicles. Our propulsion systems products are mission critical for this industry.

In some, we believe we are positioned to be in a very good place. In addition to the usual industry challenges in 2018 we dealt with and are continuing to deal with some broader issues.

For example, in the area of trade, we are pleased with the signing and hopefully pending ratification of the USMCA as the updated form of NAFTA is generally termed. We were very busy with a variety of governments and industry participants in the negotiations.

And we believe the signed agreement is a good one with some potential opportunities for North American suppliers such as ourselves because of the North American rules of origin provisions. We had to deal with the imposition of steel and aluminum tariffs by the United States and retaliatory tariffs imposed by Canada.

We are advocating for their removal in 2019 but we do know that the direct impact to us either initially or because of relief sought and obtained is minimal. We believe we have had the opportunity to be part of the conversation and that in a final analysis we will end up with a very healthy North American automotive and automotive parts industry.

In terms of broader tariff and trade discussions involving the United States, China and others, we believe there will eventually be a resolution that works for the industry. Martinrea has a small presence in China, but there is opportunity there if the risks can be addressed.

On a positive note, challenges present opportunities to nimble, entrepreneurial, lean and resilient companies with great people and we believe we have shown an ability to take advantage of opportunities over the years. In 2001, we were not an automotive parts supplier and we became one just before 9/11.

For the next seven years, there were many challenges in the industry as it saw many insolvencies and restructurings and we grew and bought distressed assets at good prices that we needed to fix. Then came the Great Recession, which was not fun, but we came out of that with more assets in a whole footprint.

Since that time in the recovery, we have continued to improve and especially since 2014 when we launched our Martinrea 2.0 initiatives all resulting in the improving financial, safety, quality and other metrics shown by our 2018 results. We get stronger through meeting challenges well, bring it on.

We talk about culture a lot at Martinrea, why? Because it matters.

It matters a lot. It matters to us, but most importantly it matters to our people here at Martinrea.

Just last week we reviewed the results of our employee surveys and 91% of our employees worldwide reported that they know our vision, mission and principles. That is a telling statistic.

The employees were from 45 plants in two major corporate offices in eight countries on four continents and included recent hires and those who have been with us for many years. Our culture is having a profound impact on our company and our people and on us.

So we take it very seriously. Peter Drucker once said, culture eats strategy for breakfast and we think he is right.

So we come to maybe the biggest highlight for us from 2018 and that is our development of culture. Working with our people at the leadership level and in other areas of our company we updated our vision, which has been simplified and shortened to the following.

Making lives better by being the best supplier we can be in the products we make and the services we provide, our people need a why, and that’s a why vision. Our mission was updated to making people’s lives better by delivering outstanding quality products and services to our customers by providing meaningful opportunity, job satisfaction, job security for our people.

By providing superior long-term investment returns to our stakeholders and by being positive contributors to our communities. And our 10 guiding principles remain the same, which you see in all our presentations.

We don’t stop with the vision, mission and 10 guiding principles, not any longer. In 2018 we articulated in a cohesive yet simple way our company culture comprised of entrepreneurship, lean manufacturing principles and the golden rule philosophy core to our 10 guiding principles is demonstrated in a picture, it is included in our AIF and investor presentation.

The company has been entrepreneurial in nature since inception, a company that has embraced characteristics of encouraging executives, general managers and all employees to act and think like an owner, but the stake in the enterprise supporting a can do attitude, promoting an ability and willingness to urgently get things done, acting to avoid unnecessary bureaucracy, developing an ability to learn from mistakes openly and constructively and the trust of working in a team. As a company, we embrace new initiatives every day and we focus on new products, new technologies, new locations and new ways of doing things consistently.

The company also embraces lean thinking as part of it’s culture too. Simply stated the lean thinking way is a focus on eliminating waste in all aspects of the company’s business and operations.

The elimination of waste allows us to take out unnecessary cost, thereby making us competitive. It enables us to see problems, so we can fix in our operations more easily.

It allows us to simplify processes, so that we can have safer, cleaner, more efficient and more sustainable workplaces is a culture of continuous improvement in whatever we do. At the core of our one Martinrea culture is a golden rule of philosophy based on treating others the way we want to be treated with dignity and respect but more also means following our 10 guiding principles in our business and operations and how we deal with our customers, employees, suppliers, stakeholders, which include lenders and shareholders and our communities.

Being lean or being entrepreneurial is not enough. These cultural elements overlap but are tied together with our Golden Rule approach.

We make people’s lives better in what we do and we can only do that with a service oriented approach to our work and our colleagues at work and all those who would deal with in our work. At Martinrea, we believe that our culture is and will be a sustainable competitive advantage for the company over the long-term.

And we believe it has driven the improving financial safety and quality performance over the past several years. This year our EBIT margins will be better than most of our competitors and they are still going up.

That’s in large part because of our culture. We don’t profess to understand the stock market or how investors make their decisions and frankly we’re not sure we were alone in that.

But we do believe one thing, sustainable companies with great cultures will be around for a long time. We believe we have a company poised to excel over the next decade and beyond and we and our people are committed to that.

We thank all our stakeholders for their support. We will continue to do our best for you in 2019 and beyond.

The future is there for us to seize. Now it’s time for questions.

We see we have shareholders, analysts and competitors on the phone, so we may have to be a little careful with our answers, but we will answer what we can. Thank you all for calling.

Hey, good morning, guys.

Good morning, Mark.

First, maybe just you took an impairment charge in the quarter on closing a facility in Ontario. I’m just curious just with known announcement, is there any further actions or restructuring they will need to do?

No. That’s the end of it there.

As I noted in the past, it’s a fairly small facility for us. So we took the full charge in the fourth quarter and I’m not expecting any more there yet.

Okay. And maybe on the $4 billion revenue, it’s about 9% growth, I think versus 2018.

I guess I just have a bit of a challenge to get in there and just given some of the volume headwinds in the industry. So just curious again you’ve touched on it earlier, but the visibility, your assumptions around industry volumes, yes,

So we’re – as we’ve noted in the past, we based our projections on IHS. IHS is projecting fairly flat going to the next couple of years actually, I think the recent updated maybe a slight decline in 2020.

So works, we continue to expect that, we’re seeing that in our releases currently as our opening remarks highlighted. You do have some headwinds in other parts of the world, but overall, our sales are trending in line with expectations.

Okay. And on the margin 8% to 9%, again you sort of touched on it earlier, but I mean, at this point, should we expect most of the improvements come outside North America?

I wouldn’t necessarily say that, I think North America as over the last couple of years improved the most of our regions. And we’ve continued to expect that as our mix of us.

Europe has a fairly robust launch schedule, it has over the last couple of years that’s going to continue. It has improved, but we’re expecting it to improve more so going forward.

And in the rest of the world, at this point I would have expected us to be much further ahead, but given the Ford volumes in China, we’ve got a fairly significant headwind there. We’re dealing with now over time that’ll fix itself and we’re launching new work in our aluminum plant.

So that business there should improve the next couple of years as well as it evolves and grows.

Sure. And you mentioned second half of 2019 sort of being when the free cash that are ramps.

So does that just telling us basically the CapEx is sort of tilted toward the first half of 2019 and that’s still $300 million.

Yes, you’re probably right on that. I think timing of CapEx expense to be very volatile.

We’re expecting some large tooling balances as well, and we’ve seen that the last few quarters. So working capital, it’s crept up.

But overall, the free cash flow, we’re expected to meet the back half of the year and the story mostly hasn’t change for us so.

That’s still $300 million.

Yes. The CapEx are not at the guidance and actually it’s been reinforced by some interim business wins as well.

So we’ve been very clear. We’re not going to shy away from investing in the business, and we’re winning work.

So the $300 million guidance is still intact for 2019. You might see a slight decline in 2020, but again, it would depend on where we are in our business wins.

Maybe just one last one. I believe Rob said that you guys would be close to sort of maxing out the current NCIB very shortly.

If I heard that correctly, I’m just curious, is there any thoughts around you mentioned redoing it, but any thoughts around sort of a increasing the size of that?

Thanks for the question. We actually finished our purchases yesterday.

So we have to settle. So by Monday, we’ll have paid for the full 5%.

I think what we did last year is we basically total look at our budgets and where we were in diversifying our spending. And we said over the next 12 months, we thought it appropriate to buy back about 5% of the total and 10% of public float and so forth.

And that’s based on our CapEx budget and a number of things that we were quoting on. And quite frankly, we want enough work where we’re consistent with that.

I think that we’re probably going to be satisfied with that. We put the – when we put the normal courses for a bit, we felt that we’d be buying it steadily quarter-by-quarter.

And then as you recall in December, I think all auto parts stocks were being pounded because of negative sentiment in the industry. We see who – we saw our stock dipping down actually below a $10.

We said we should continue to buy through the blackout periods. So that’s why we filed the amendment on the normal courses were bid, then when we’ve been in the market basically for the first two months of 2019, and enough has been purchased that we’ve filled the amount.

But that’s where we think we are. And as I said in my remarks, we think that return of capital to shareholders is certainly one of the things that, that will continue to consider and on a balance basis.

Okay. I should probably turn it over, but thanks and a good job.

Yes, thanks for asking everyone’s questions. So that’s good.

You mentioned that during the discussion that there was weakness, if you did see some weakness in terms of your platforms and volumes in Europe with that WLTP related or just specific to the programs you’re exposed to?

Yes, I would say it’s specific to one particular customer, we’re highlighted Jaguar and Land Rover and I think that’s been fairly well publicized at this point that, they’re facing some challenges and they’re actually going through some restructuring. So we’re seeing some volume headwinds with them.

Also in China where we’re launching some work for them and the ramp up has been slower than expected. So it’s more specific to us as opposed to any broader regulatory changes.

Okay. And then while you’re on China, this issue with Ford on the Mondeo, could you please explain what’s going on there?

Why the volumes are down? Is it a ramp issue or a demand issue or what is that?

Well. It depends, I guess on to some extent we ask, but my understanding is there were some issues relative to the dealers and in between Ford and the dealers and how they were managing some of that, which they are have and from what I’m told corrected.

And they expect those volumes to pick back up again. There are also a few vehicles they’ve had of there were a little tired and they’re revamping those as well.

I’m not sure what the launch schedule is, but I think between those two actions, at least in my discussions with Ford, they’re confident that they’ll get back up on the right road. Currently, vehicle basically it is not produced, I’d say for the first quarter of this year and then it picks back up.

Okay. And is just all fluids work for you, Pat?

In the case of this Ford plant, correct. It’s all fluids.

Our aluminum plant has different customer base.

Right, okay. And then lastly, Pat could you just run through on the Escape launch?

What you have on the new Escape versus what you had on the old Escape?

Yes, it’s very similar. We gave up some of the product on the side members.

Some of that was in negotiation with Ford and some of that was by our choice. But we kept, I’d say the core product being the floor pans, the understructure an area that we’re particularly strong at similar to what we make on the DTU.

And then of course, that’s going to launch later this year. And I would tell you our equipment is in, its running and will be ready.

Okay. And the Escape is a big platform for you.

So I’m just wondering like, can you just go through the timing of when the wind down is of the old program and when the windup is for the new one?

Yes, there’s actually it’s in fluctuation right now. So it’s hard for me to tell you that.

There is some delay, but it’s unclear, how delayed its going to be. We’re still targeting this summer.

But as opposed to late spring, early summer, I think it will be later in the summer. But it’s like I said, it’s in flex, so I really – I can’t give you an answer at this point.

It’s not – I will tell you though, it’s not any of our doing. We’re not sure what the issue is or what’s being worked through.

But again we’re ready to go at this point.

And how do you read through a lot for the new one? Do you build an inventory bank?

No, basically what we did, that plans have rather large plant and it had a lot of old service work and it had some old truck work. And what we did is we either ran service out, closed out on some service, moved lines to a supplier who specializes in service parts.

And we made a lot of room on the floor. So we put the new lines in, in parallel with the old.

So they don’t disrupt one another. And basically when the old product is done, we’ll turn on our new flex line, full time and then we’ll remove the old line and make room for new business potentially.

Okay. Okay, great.

Thanks very much.

Thank you.

Hey, good morning.

Good morning.

Can you just circle back on Europe, there’s obviously a lot of moving parts. There’s some regulatory changes happening in that market.

You’re giving a fairly strong view in terms of what you see happening over there. So in terms of your main buckets of business in Europe, you don’t think any of the ongoing changes in that market might have lead to some headwinds on those businesses that you’re involved in?

I think where you’re going to see – there’s actually, I would call it, little bit of confusion for some folks, buyers. I mean, there’s certainly demand about what product to buy due to the diesel situation.

We are seeing products where we make both diesel and petrol engine blocks, let’s say, for the same line where the diesel is dropping and the petrol is going up. So yes, I think if you’re in certain businesses over there, as they move toward hybrids and electrification, certainly I think that would impact some folks.

But we’re fortunate in the fact that we’ve got at least in our engine blocks, both the diesel and petrol in many cases. So that’s one place we’re seeing it.

And of course, as Fred said, while JLR is restructuring and so forth, their volumes have dropped some. So with their new products that they’re launching their crossovers, we anticipate that will correct itself.

And offsetting some of that as long as, we do have new work coming online as well. So some would say that we’re not projecting growth in the European market by any stretch of the imagination.

What our core customers there is facing some headwinds. But we show the new business coming online.

We’ll offset of that and help our margin profile.

We’re really excited about the BMW 7 and 5 Series win in the hollow aluminum sub-frame. That’s a real win for us.

It’s going to be great for BMW and a lot of that capacity is in place. So we’re pretty excited about where that’s headed.

So just to give you a sense, so are our $4 billion in sales in 2020, we anticipate there’ll be higher North American sales then today. We anticipate there will be higher European sales then today, our sales and higher rest of world sales you have today for us.

So it’s not dependent on overall market growth in any of those scenarios.

Okay. And can you remind us, with your main product buckets, you mentioned the engine blocks in Europe that are some other big topic buckets over there?

Yes. We’re heavy in aluminum in that’s kind of a funny thing.

We have a lot of aluminum product in Europe, both in Germany and Spain. So we may transmission cases, we make battery trays or we’ve won some battery trays, I should say, we made a lot of suspension, both solid and hollow.

And that’s in one area of growth, certainly is the aluminum suspension components. Of course, we make engine blocks and one announcement I just made, just one a new engine block from Volvo.

Of course, as you know, Volvo is heading very deeply into hybridization, as well as EV and this is a new block. So there’s certainly a commitment to those products still.

We also make structural components, which we see a lot of growth in, such as shock towers and so forth. And as products are moving more and more toward electrification, the aluminum demand is going up.

And then I think we’re well prepared for it. It’s interesting the electrification or the new energy vehicles, if you will.

The anticipation is China will be first, Europe will be next, and then followed by North America. The wins we’ve had on EVs follow that pattern very well.

So we’re pretty pleased with the wins we’ve had and where we’ve had them in the aluminum space.

Okay. And then for the CapEx number in both 2018 and 2019, can you able to specifically identify some of the bigger buckets that might’ve been embedded in that CapEx?

Yes. Well, the vast majority of it is new program capital.

So I think you have a fairly good cadence of all the programs and there’s been some very large ones T1XX for Maverick engine block. So the vast majority of that is new program, capital tied to our recent wins, expecting the summer pattern in 2019.

And as I noted, depending on our success rate on quotes 2020 has been in flex at this point. But $300 million is a good baseline and we’re planning to try to drop that in 2020 to some extent as well.

One of the important things are our new investment, especially in our welding operations is that, these are – these new flex lines that I keep talking about are multigenerational. So, as we add more and more of those lines on a relative basis as we win work in the next generation or overall investment should drop.

The other thing that just note, referring to new program capital and in the case of our aluminum business, that includes some fairly long-term assets, such as casting machines as this machining centers, things that’ll last two, three, four life cycles if not more in some cases. So we’re building the infrastructure to support a much larger business.

And, we’ve had a lot of success and winning work and we said a couple of years ago that our aluminum book set to double in size in the next five years and generally speaking, we’re on pace for that.

Okay. The $800 million 2018 business, what was that number in 2017?

Do you have that handy?

I don’t have that handy, but off the top of my head, I think it may have been both $400 million.

$400 million.

Yes, it was certainly a lot. I mean, we can clear the confirmed that.

It was less, yeah.

This has been our biggest organic year for sure in our history.

Okay. And, Fred, did you mention a 2019 operating margin number?

The 2019?

Yes.

Yes, 8%.

Yes, our guidance has been change, so north of 8% in 2019, north of 9%...

Okay, thanks a lot.

Thank you.

Good morning. Just following on the operating margin question there, you’ve got a heavy launch schedule in the first half, you mentioned two lane in the first quarter.

And then you’ve got a strong comp in the first half of last year. If I just think about the operating margin cadence, Fred, so I just assume that we should be flat to slightly down in the first half with the expansion in the back half of the year?

Yes, that’s a good way of looking at it. I wouldn’t necessarily say we’d be down in the first half, flat to maybe a bit off.

I think are Q1 suggest that as well. Outside of the tooling, of course, I’m excluding that and the tooling will weigh heavily on the Q1 number.

We’re expecting a very significant tooling sales number in Q1, exclude that, you know, it’d be flat to it in the first half. And then you started seeing the year-over-year comp improve in the back half.

Right. And can you just remind us some of those key launches in the first half of the year?

I know you’re ramping the T1XX, you talked with the JLR program and then the escape maybe spring, summer. What are other notables we should be watching?

There’s a lot of smaller ones that are launching as well. We have Daimler launch going on.

Right now, we have some engine launches, we have a BMW suspension launch in Mexico. I said a plethora fluid launches, because they – I want to say that their launches number between 100 and 200 launches this year, of course there are launches are a bit smaller than a metallics or casting launch.

So it’ll be the biggest year certainly for our aluminum group with the both suspension components. And then they have the Volvo engine launch and they’re continuing the I6 both petrol and diesel launch for JLR.

And then we have some transmission work as well. So it’s just very busy both of this latter half of 2018 as we go into the first half of 2019.

But even though, it drops off halfway through the year, we still continue to have some launches in both metallics and aluminum group.

Understood. If I just switch gears for a moment, going to the steel and aluminum tariffs and then also the international tariffs.

I guess, you provide some color that you have the exposure. Maybe just talk qualitatively or quantitatively, pardon me, what the exposure you have baked in for 2019.

And then also detail some of the government programs that are mitigating these headwinds that you alluded to.

I’ll do the general one and then turn to Fred for specific. So to take North America or Canada in the United States in particular, they each out of steel and aluminum tariffs.

As we’ve said before, most of the steel and aluminum we buy in country, produced in country, sold in country. So that’s the overlying comment.

But there are relief programs in connection with that. So for example, Canada has a relief problem, the relief opportunity and basically the Canadian approach has been – we recognized we’re putting on steel and aluminum tariffs, but we aren’t doing it to raise revenue, surprise, surprise, we’re actually doing it so that we can pass that back to those people that are hurt by the tariffs that we have imposed.

And so that’s the relief program that we have in. So for example, we’ve got that on the steel side similarly the U.S.

as relief program for tariffs coming in for particular industries. We have some very, very good people that have also gotten us relief on that.

So that’s the general approach. And then briefly in connection with timing of that there’s one guy that likes the aluminum tariffs, but he’s the guy that matters.

And I think that they’ll probably be in place, until we get the USMCA ratification, the timing of which will determine on – a few negotiations and so forth. So that’s I think the reality there.

And then briefly with respect to China and the U.S. discussions.

I think you’re reading as much in the paper as we do. I think that there are some effects there, not a ton, But there are some effects on some of the tooling that we get from China and bring here.

And there very often it’s a customer discussion, where we talk to them and say, look, at some point if we’re getting tools here and tools that you’re going to buy, these are the things that in essence pay for us. So in terms of quantum, I’ll turn it over to Fred.

Yes. Just simply – the steel tariffs in North America impacted our fourth quarter by I would say approximately $2 million.

As Rob noted, we’re trying to take advantage of some of these programs. So, we’re expecting that to be somewhat lower on a run rate basis in 2019.

That’s a little unclear on how much lower. But $2 million a quarter at this point is our current run rate with the potential of mitigating that down.

And then as it relates to the Chinese tariffs, production wise, no real impact. As rob noted, basically on the tooling and at the current time we’re in active discussions with the customers to try to offset essentially all that cost.

Sorry. That $2 million, that’s a net number, correct?

Correct.

Okay. And then, sorry, last question, I apologize, I missed in your commentary.

In terms of the new contracts, I got the BMW details, but what was the size of the product and program within that infrastructure segment for the large Chrysler contract?

It’s $190 million.

No, it’s $90 million.

Over $90 million, sorry.

$190 million in total.

So $190 million in total that’s right, BMW was $85 million.

What was the content?

It’s a hollow suspension product for the 7 and 5 Series. Currently they have a solid suspension product that’s assembled.

And so for them it’s a new technology, and we’ve made these types of products before. So we’re pretty – like I said, we’re pretty excited about it.

I mean, just in terms of that, like, this shows the strength of our positioning in the lightweighting side. We go to the customer, and he says, do you want steel, do you want high strength steel, do you want aluminum, do you want soil aluminum, do you want hallow aluminum, there are different price points, et cetera, but we’re very well positioned to have that discussion with the customer.

And when you want something like a hallow suspension product like that that gives credence to what we’ve been saying about our good position.

Great. Just on that note, Rob.

Is the reception to your new sales strategy, is that meeting your expectations?

I think so, Pat.

Yes. I mean, we introduced it, as I said, in January formally to all our customers.

The turnout to our event was better than expected. I’d say significantly better than I expected, which was good news.

And it’s up and running now. So that strategy was really developed to win beyond 2020.

So it’s focused on more content, more design, systems type approach. And I would tell you, we have one of few things and actually in the short timeframe that are aluminum and steel assembled products, but we expect more.

But again, it was targeted as a long-term strategy and so far so good.

Thanks very much.

Thank you.

Good morning. I will have just a couple of questions.

First question, Fred, I guess, with regards to the north of 8% margin expectation for this year, is that inclusive of the big tooling sales you expect in a 1Q or excluding that?

No, it includes tooling sales. Our margin guidance we’ve provided include – it’s based on total sales.

Okay, perfect. My second question, I know it’s partly been answered.

But in terms of CapEx, and I’m referring now beyond 2020. I think you said that $300 million a year is sort of the new base, and over time, it’s going to stabilize as, I guess you add more, more advanced equipment.

How should we think about it? Is it highly correlated to sales growth and eventually it’s going to stabilize or just maybe some qualitative remarks about that.

Yes, it’s hard to answer that. Ultimately, it will depend on how much business we went in.

Today we’re recording predominantly for 2021, 2022. So again, when your share work, that’ll drive the CapEx profile over the next couple of years.

So we’ve kind of talked in three year increments, what I said is, $20 million in 2019 likely similar in 2020. Just based on what I’m seeing in our quoting activity and our win activity, beyond that it’ll really depend on how much work we win.

And Ben, it’s hard to predict the win, but as the footprint develops in aluminum because it’s new capacity as Fred talked about earlier and the new multi-generational lines, once they’re in place, then I think you see the profile change. Now if we continue to win more business than the actual total amount might be similar, but it should be over a greater amount of volume in the future.

Okay, great. And just the last question, Pat, you spoke about graphene and what it is potential.

Can you maybe share some anecdotal if you will thoughts with – when you speak to customers, how much education do potential customers need on graphene? What do they know about it?

I mean, given that this is probably going to be 2021, 2022 and thereafter momentum.

And I think most of our customers are aware of graphene, are aware of that it can make something lighter, that can make something stronger. Mostly in the composites, but that we believe will be other applications down the road.

But it’s also has electrification or conductivity is a better word to use. So it’s sort of a miracle material, right.

But the problem is then that you couldn’t put it in a product because you couldn’t guarantee a supply at a good price, because no one has been able to make quality product at a good price, at a high volume. And Nano came up with a method, which we looked at a long time.

We’ve verified with third-parties and – well, of course they have a machine that runs about 25 tons a year, right now in this first line it will run 4,000. So now once you say to the market, okay, I’ve got supply, you can rely on it.

And it’s enough where you can be engineered into your product. I think you’ll see the material takeoff, it’s sort of a build it and they will come scenario because you can’t put it into product that you can guarantee you have enough of it.

And so you’ve got to have enough of it in order to design it in. And so once this facility is up, I think you’ll see the pull out run the ability for this facility to make enough graphene and we’ll be adding more lines, I should say Nano, will be adding more lines soon after.

But up to this point, there’s hasn’t been enough available to put it in a product at a good price. A few customers have announced putting graphene and some parts I know just a little while ago for us putting in the special version of the hood I believe it was.

And keeping it to low volume, high end cars right now because of the lack of availability. But again, once that becomes more available you’ll see it infiltrate a lot more products.

That’s great. Thank you.

Thank you. Great job.

Congrats on the quarter.

Thanks very much.

Thank you very much for participating in the call and the great questions. We’re obviously very excited about what we’re doing and thank you for listening.

And that’s also to all our employees on the phone. If any of you have further questions or would like to discuss any issues regarding our company, please feel free to contact any of us at the number in the press release.

Thank you very much. Have a fantastic day.