Q4 2020 Tata Motors Ltd Hosted by HSBC Securities and Capital Markets (India) Private Ltd Earnings Call

Ladies and gentlemen, good then they come to the stock I will those booking fytwenty only swap installed.

I am I know all participant lines will be in listen only mode.

<unk> is gonna do you believe last question after the presentation can be.

Should you need assistance during the cold EEZE signaling Alfredo but it's all the needle on it that's going forward.

You know this conference is being recorded.

I know I'm, not going and so one can see yogesh otherwise.

Thank you and older units are there.

Thank you so much good evening, everyone funding on behalf of HSBC security that you couldn't you always talked on what those what's needed conference call.

I'm very happy couldn't it used to talk a management team to lead you had been does instead, we certainly see M.D. and he will [laughter] Delta United States feel your line is the baby bond that de groups Yep.

[laughter] begin Marty you wouldn't be a lot.

Hey, good each blogs TV, there's no change.

Mr <unk>, Canada, Phoebe and electric metering business, then along with other members of the Investor Relations things.

So again to the management team, taking time out to me neither gosh the station to some comments from the management led by U.S. well, what do you bought it.

Thank you rich, especially once again, thanks, well look to flip taking the time to join decision.

Let's see let's say some sound that along with your family and loved ones.

So without further Ado you already have to press release has been losing Mr. Dick with you. So they try and be card. The specific slice. It did one face to face and that off to leave it open for questions to the maximum extent possible.

Oh gosh came over the next like the standard Safe Harbor statement.

He knew each other.

Other than that so that you have tried to get the impact well, but 19 on <unk> numbers and do the analytical using elbit system as.

Oh, that's the only.

They started to work.

Yeah.

Okay.

[laughter] highlights for the year.

Actually I feel.

And.

Let's begin with your perspective.

In India, I think the entire it really wasn't where do you wouldn't be a six and frankly since we would need to be a thing.

This is an exciting time I suppose long that's happened.

Nick Hornby, Oh, well, so unveiled in December last year, and though from a gilat perspective are the most exciting launches are you willing but almost a new independent.

The discovery sport got Lucky if its final.

And if he had where she will be walking you spell those looking kids and baby and even the victim mobility constant earlier this year.

And Oh, the product launches, which are quite intense so where does it take place.

I had a series of management actions that you'd be thinking oh, well its towards the charge plus the liberty we charged to charge plus I don't know stepping up I'm looking all five they didnt is working well you know I've been going to withstand off the list.

And of course, the collaboration with BMW could be on both the no yesterday.

I'll start older Ed was I'm almost along with the defended launch.

Including the new infotainment.

On the balance sheet fight dog eat dog, but the but do you support.

Hello locked up and.

In this but I actually do.

End of collagen masri, although difficult situation on the PV business, which is going up a little bit the board.

And Oh somewhere else. So that's one of the smell just trying to sponsorship is going to be a stick with negligible inventory as we enter despite over the coming into the most oh enough over time for the function. All these have been difficult.

They don't go financials.

Exactly you already seen these numbers, let me just color, but keeping that standalone Oh, well you have basis. So we've been younger but breakeven despite a friend of explicitly drop in London.

Living here don't know what Pete Thanks.

And it.

Okay, and the drop off and before I actually before it looks like them to assemble themselves for the exception like them being door to door them find as well.

We have taken what asset write downs on other provisions in the baby business.

And.

So Paulo make big despite all these challenges picking off of your well spoken to free cash flow. Even this quarter was a nuclear dashboard. Despite all the time and just like we see.

So a combination also what soccer looking has a solid second quarter than both elements coming in from Gilat, Oh and continue the issues in India, you do but I.

It get off they are quite significant over there. So I was a fourfold end to end before the big ones and ended up being the medium and heavy commercial vacancy plant on the stock production that we did not being a great deal Oh, Despite almost think <unk> Kim.

Next slide you peanuts combinations of the reasons for what happened.

The follow up you all those things from a volume and mix perspective. That's for you are they in fact studio flight the decline conference.

And contributions from J. Lo applicable.

The biggest contribution coming from Tata Motors Standalone doping almost eight defending the proper looking for some decline but useful.

Oh, the returns of course being higher than won't seasoning, Debbie almost tripled in units by the time to your end [laughter] over the next one [noise].

Oh, They would walk you all of these theme, though the good news is there a lot. Despite all its challenges increases everybody wants to see that well and ER almost the entire spoil can be explained the by the drop in the P.M. standalone them, but oh for reasons that the board many times the Boston.

Well, we want to slide.

He is holding because actually they are NATO, we ended the quarter with a fortune 2000, Forbes all falling nickel for mortgage debt and then add on pop or does it.

6000 falls off lease payments.

Yeah, I thought of 16, a combination of do those two becoming far be it doesn't cool, but due to the back but strong liquidity both in JLR and been Dms.

A lot of 5.6 billion problems and Tata Motors Standalone, Mexico than some of their crops and these debt maturities are very well so oh.

The liquidity remains strong and the debt maturity the metal spread out Oh, it's what you call open a slate and even as we end to me and looking for June.

The liquidity position continues to remain a I think where it as we look into the business coming over the long thought.

[noise], so fuel set of slides on the actions for production going to go there.

As far as Jay lot of that's been the keep Paulo, EM, making daughters.

Todd plus the Liberty is now being increased to 5 billion an increase of one about the minimal at what we are working their way, though it does the 18 months with white twin peaks.

Capex is being rationalized substantially but the good thing to point to help build in India quite where do you want and it's quite ready to plans are being recalibrated I'd give it up on pick things up big ones like.

Let me in India, the Capex is being restaurants by a significant because it doesn't kind of frozen it quite when do you want.

And if I didn't go again being Recalibrated and India will gain is falling out of cash is called spoke billing all six told them total cash improvements that have been launched including Olin chronicles of cost savings is being called <unk>. These are pretty sizable interventions to reduce the cash.

Looking Jerry law and in India, given the fact.

And that's been a is quite waller by likely to be some do fluctuate.

Moving to the actions you're taking on the BT business, Oh, and just pulling all actions that are coming together owe it to make BB. Even sustainably first of course is a follow up for re imagining baby in order to rejuvenate different than sales and.

I'm going off failures to talk about it didn't have fiction.

We also have a food or the most with fresh range of problems with them what are they love it and it will this be going fine, Brian maybe getting them customer preference of this will need to be.

You called out in the March a separate legal entity in order. We can make this does not that long term value creation entity and this will drive from spring application and focus within the business.

And Vietnam building, an efficient cost bases with you to collect you already looks significantly in improving the contribution margins of the business when stepping up even further and reduced fixed cost rather than this business. What are you breakeven and Oh, along those lines, you're thinking exceptional jobs for rationalizing that fitbit and I look what are we can go.

Look I'm finding frozen this business in India, and the aim of this business Vietnam, making it explicit.

Is to become cash wasn't due by a quite went to three through all these steps that are being made opens up a few.

On the corporate actions from a gain of Cds, Oh philosophy of making.

Number one question, but keep coming again and again, the Tata Motors group.

Group is a flagship of the Doctor.

In addition to its almost like support.

And no calling a significant intervention in films or change of strategy to significantly de leverage this business or the entire Tata Motors group.

And a starting point Tupper does all the cash in dimension that we talked about and Jay lot. I'm also along with that would be Jay not becoming sustainably cash positive from a quite when you do onwards white, becoming future already.

These are a big calls that are being taken to ensure that this business remains sustainably constrict your due in the longer.

And would love to lead this with you in terms of Oh, you're thinking about the business strategy going forward.

So let me know tend to go look at Adrian who can take you walk into the June on them, but did you know with you.

Many thanks, good evening, everybody I'm just a few of these calls so it's yeah loss before exceptional items in Texas seem to 93 million last slightly worse in flight 19 of course quarter for.

They did by the impact of coal they'd like to call. A full loss was a full 94 million no 763 million less than the previous quarter for now why 90, you. All know that Q2 Q3 results when much stronger than prior yet and I think that starts to indicate how much impact.

We actually had in the final quarter, we were headed for a pre Kobe score the flow of just over 6% EBIT on a full year basis I just mentioned the EBIT margin improvement actually but it's probably yet 0.1% was a negative EBITDA are actually wasn't 0.5% improvement. This is last year.

As well to 8.7% who took charge late two which is clearly the underpinning of a significant turned around in check your Orlando grows in the last 18 months temporarily of course coded impacted that.

On volumes retails were down 12% I cheap five at Lakepointe seven K revenue was down 5%.

Just on the 23 billion.

Yes, we had a very very weak Q4, just under 10000 retails in Q4 down more than 45000, even some lost you have caught a pool of course is always our strongest school to market dynamics with the U.K. It was significantly impacted from a cash perspective, even after the impact to cope with we would.

Oh gosh positive in Q4 225 million full year negative seven two we don't like that but it was 553 million I was better than the previous yet even after cone cash breakeven isn't I've fallen below 500000 homes sales it was significantly higher.

Before the charge program actually began next slide please.

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Okay. So this is the retail Colo full year 20 by region I think China is the one of course I'm going to London I tell you when did happen will significantly impact in China in Q4, because we all know it started early even China from the Chinese new year to date, if you remember.

We would friendly golden 20% higher year over year in Q2 Q3 in China.

Oh, Yes, I know you see here, we were down 8.9%, which shows the extend into the fall off in February and March but that was kind of an industry industry minus 16.6 cents wholesales, which excludes each at 476000 units, 6.3% then I'm from the whole.

<unk> revenue and that sort of course cash generation perspective, a quota for was the second week is core to the fiscal year. After Q1, it's normally by far the strongest quarter because of those market dynamics, including of course, the biggest selling month in UK is in March so dramatic impact on volume.

Who's in quarter four next page if you would please.

Okay. So this is retailers by name plates on a full year to date, it's about a year over year by name site is shown at the site Sunday to see if I look.

Of course, the U.S. folks, 25% up year over year, even off to cope with high pace was also up here as a young unless 40% so that stand out as well for us. So the Q4 as I mentioned reach out was the only 100.

10000 units you can see the winners and losers on the right time I do the page that next slide if you. Please.

He is the that breaks yea over year before exceptional items. We've done. This one I remind you last year, we lost phases and 58 0.7, because then EBIT margin Iraq to last for they she was the Threenine keeps me before absolute 0.1, well I'll just call. It a few things we told them, mostly previously China JV.

We had her where she is well that we have stabilized the position actually in the JV. So you will see better results going forward.

Before I know JV business in China. The most difficult assessment, we have to do at the end of the it was unbearable not cutting of course, we did have too much due to stock as we stopped we try to use it towards the end of March we ended up with more than 100000 dealer inventory, which is about 25%.

I at least then we wish to have an average [laughter] being around the incremental marketing support in this depressed market place obviously to sell those cool <unk> into the market that's significantly within that increase of next permit I see you see that we also actually have an impact in a U.S. smile.

Okay and residual values, you know substantially all of our U.S. vehicles on the old leases, which come back to us and do they feel particularly the second and residual value not he was very very weak no auction numbers is well know that may have picked up and we believe the assessment. We made at the end of March is still appropriate.

So we didn't talk another $78 million at the end of March for those reductions in marketing support then the good stuff starts kicking in some really good work and manufacturing on material cost. So the structural cost improvements under the charge program, we talk to the long before I think we're really really please.

Continued obviously on a full year basis I'm through Q4, even though substantially that these costs wouldn't have been impacted by coated Oh cool exchange Abi attached to the rights outside the this page what we've attempted to do here, it's cool that specific things that we know what directly as a result to cope with it but I haven't done.

99 million impact in the yen.

Yeah basis, all happened over the last few weeks well just give a sense that where we are tracking just mid 2.42, 0.4% EBIT. Although there was a collapse in sterling is well over the last two weeks, maybe I'm, leaving no to that from that Oh impact assessment, we would talk more buybacks going forward. If we just we recently.

[noise] cash okay. So that kind of full year I've thought was 702 million that was 563 million. That's it that's why 90 Mad to 25 positive in Q4 already Miss mentioned estimated impact right.

The end of much on cash was about 760 million. We affected me Didnt August 16000, plus huge through to the marketplace. We were tracking very very strong in the first 10 weeks of the quota and most about a mile keeps it was repeating the trend of earlier quoted to underscore just raised the price side. So this is Ben.

<unk> very straightforward for us to do and the Big News here is before when we think would it be cash cost as well as well I 20, that's really important that really shows it turned around didn't reassessment was not in the business, which is why we can confidently say post Kobe, we wouldn't get back on track and we will be catch posted in F. Why Twain teach.

To its bother. She is already said next slide if he would play.

Okay. This is the investment it's down significantly versus the previous Usfive hundred 60 minutes, just under 3.3 billion times and all areas of actually reduce no over this period as we've mentioned before this hasn't been done by stumping significant programs. This is being done by diligent sufficiency Kara.

So what you spend there has also been some delays and the launches on defended but not car is ready to go once the deal is ready to actually sell so we're now in place 560 million pounds lighter on investment versus the previous yes. That's the end does the financial updates like I believe just Chetniks playgirl. Please.

Okay quick look at other things happening to US you know this has been an all full time for so many people Jack you a land grow but sadly I've lost three of our employees to coded that's almost seem to really old decided this really good side of it the response of people within this company.

It really has brought to the goods side of the people you Pcbs, we turned out three D printing to 14000 times a week for the first line, we actually you like.

362 constant though says this is our employees why didn't have to help and putting themselves that was the spirit of this place. The reason why I love. This place has been shown over the last several months. They started effect. So that's what we've actually been doing in times, when we've not been able to get back.

Who work next slide if he would please.

Okay. So what have we done to responds to that was good well I've response was really really quick the board and management to Jack you a London, that's more than 46 times from the end of March through to the end of May one hour meetings actions decision based closure plans.

Very quickly.

Because we use that was happening and we would stumped retailing costs to the market place and therefore, we have to slow down production of course, how I'm safety of I'm pleased to be in Ireland, and I've talked about the restart at the moment, we had too much inventory dealers because sales literally stumped more than 40000 retails didnt.

Over the last few weeks, Oh notch managing down their inventories really important 89% about retail no I know folio, partly I will open 58% of which is fully open. So thankfully all other retailers across all the regions I know I'm coming up.

We instigated rigorous cost controls in spending freezes, we call them internally start chambers, we run 155 Star Chambers Cross functional reviews I'm spend over the course of appeared through to the end of May you know everything more than 25000 pens Woods cross reviewed with a full ice check I mean.

I had a dramatic did impact on the cost I'm spending, leaving the business No show you the impacts it started to happen cashed out, but it's horrible period Fallacies mentioned investment. He believes investment target range. This she was around 2.5 billion. We did put some investments and pools that wouldn't be talking in Q2 wells.

<unk> would be releasing those will give you that it was a nice when we talk to you or after the quarter. One results and we have actually give any plans. We closed the schools, we have actually taken the benefits of the UK furlough scheme at one point more than 20000, Jaguar land Rover employees work on furlough Oh no actually.

Okay even.

Even though a lot of those if not a return as we've started to rebuild would cause next slide.

Okay. So this is the stop under the we stopped Paul let's see a unparalleled I wasn't go through them. All you can see them then the only place I love to get started back his counsel Brahma chair inventory accounts Abramovich was higher.

End of March because that leaves a big selling season in UK, particularly for those products and you will know I think the UK and the European regions, if opened up slightly in China, and North America and therefore, the sales writes a nice progress below this isn't demand led production recovery.

Great and outcomes will be close until the point in time, when it's either inventory is reviews on the right 10 side you see the statistics just an 89% then next like if you would please.

Okay, China, China, China. So you see here I think all particularly on the left on side, what you could determine the classic V shape for China. The sales actually from the end of March recovered very very quickly you see that we're now at the end of May more than 4% hi, yeah.

In May 2019, which I'm not too many people weren't predict to just a few short weeks ago, all of actually I ruse ROE couldn't leads to strong closure rates the better not many times you see oppose most people coming into the data ship it seems to come to light vehicles. So we're very very pleased if there were two.

And we've had in China of course, we can predict what's going to happen going forward, but they certainly two to three months. After the Chinese market starts rolling up this is very encouraging because issue for its next slide please I.

I think this is the beautiful defend that coming up I know it isn't sorry that must be afterwards recovery by reach and this is also important okay I've talked about China and the last time outside North America is starting to show there shouldn't be as well our.

Year over year in May for North America was 32% that wasn't launched yet we were predicting the little bit worse than that so obviously, we're looking at mandates closely in June or you can see what I was saying on UK bearing in mind, you know that much number fallaway dramatically over the last 12 days.

We pretty much don't styling, that's really sales to about 90 of much you can see all of the dealers would close some of them starting to open up in May time, I'm watching the dates are very carefully in June in the first 12 days actually quite strong.

Europe exactly the same story, but more dealers were open depending on market.

Let's see easy as well is generally follow your patents similar to Europe was I was a volumes have been unless you can see the absolute numbers 24000 in May June will be bigger so weve steadily cautiously improving our demand levels next page if you would please.

This is the one beautiful defender okay not launched at the deal as you can see the start of sales data at the bottom that you key K and Europe have started we already have molding 22000, Oh, there's we've actually pull unfolds. The defendant 90, because we're making sure that the ones and actually gets in the pro.

Pre launch 1.6 million configurations, we actually have complete configurations.

They could certainly unprecedented in the history of Jack you I'm going to shows the amazing interests that we have actually cod, we will open up the defendant 90. The show to will place later in quotes into and we still believe it's really [laughter] stuff, even though of course is being interrupted and live.

Really really hopeful fourth is great because he's going to do it's just an amazing drive next slide please.

Okay, it's okay and discovery sport the daily data he it clearly has been more impacted.

Cool it really depends on where are these the so these are heavily sold and UK and Europe has you wouldn't know and those are the lead. She was most impacted by closing she is a national not surprisingly. This this is data that's most impacted negatively year over year not much else to say, we're just stuff to watch carefully I do go to the bonds.

Yeah, I do expect you to be much better as I mentioned UK and in fact youre starting strongly in the post two weeks. Since you said, we went up that's results two year over year, but it will still be negative versus last year. Then you pay absent schools are in both of those vehicles or from from 22 ammonia.

Next please [noise].

Charge charge challenge moved to charge plus really strong quarter again, it really wasn't improves by cold, but this was all done by the time, it's starting to impact a investments will allow a working capital big working capital gain year of Yeah. We did hit the 1 billion pound profit target, which I know a few.

Yeah, we're interested in as you felt we had to slow starts in the first off of the yeah. We did say please watch. Please wait please be patient and we've actually delivered the results you've seen in the bridge is well really positive thing its results to come from across the total business and as a result of which further he mentioned we're increasing the.

So I get to 5 billion and I really feel good about that target actually wouldn't surprise me if going forward, we would increase and again in the second half of the ever schools because it comes with we need to watch carefully next please.

So yeah, the four to 5 billion on balance sheet stage Ah Lisanti No next fleet.

All right give me a bit of indication because I know you paid unlike what type of program is it wouldn't <unk> basically they're thinking about this is a 50 50 program you know investments will be lower we've signaled that inventory one of the things we will do everything we will go again on inventory will lean on tower.

Inventories will eliminate the dealer inventory will bring it back down to a level even lower than levels, we had pre conveyed and that's what we've done on the page and other savings one off savings like the furlough scheme from UK government will bring up our onetime nonrecurring cash spend if it's mostly too.

750 million was saying Hey, we got plans for more than 76 million man. The other piece is that sustainable pieces the flow two pieces.

We got three very strong work streams that weve been working on for a few months variable profit net revenue improvements of course, the marketplace has been significantly disturbed so you'll need to be patient with us on that one well maybe a quarter is so that we've got clear plans material cost we've signaled the ignite program.

At the end of January those plans are in place them. When I'm confident that was reductions will start to come through once we bring out 21 month, we've talked in of course of all of this is change on vehicles and will come along it change punch to vehicles. The next which is 21 monthly as to why did you see that coming through as we.

The second know this fiscal year and finally, our overhead costs that people reduction costs and signing in general and admin cost will be significantly lower and that will be really the story I'm not like 10 side of the first half of this year, whereas no such as the processes.

Kicked in and have had a dramatic impact much bigger than the impact to the C. Previously that's it.

Well you can talk to us I know total what the number is I'm definitely comfort and that's gonna grow next page. Please.

All right funding, we went out to get funding over this period of time as well we did complete.

Ill, where the syndicate syndicated bank in China last week, that's the full value 5 billion would then be over three years, we'll take too and I am not and we also completed early on in the process in April and extend to Frac fleet buyback in the UK knows who 63 million as well so to the difficult times you know what I meant.

Relationships and people, who trust and believe in this company I still put pen to put money food. That's a great. Good sign I can give you how they trusted by this external environment next slide please.

Okay. Looking ahead core to one will be significantly impacted.

Of course, we give you an indication of the cash positions April and May 1.5 billion cash flow that is actual data. It overwhelmingly is driven by one time working capital Unwinds, we're not building costs would pay that supply is off I'm. Therefore, what do you have to live.

Unwinding on US you know, we think that's best part of 1.2 billion I'm, not 1.5 billion, which tells you even when volumes that 50% of last year, the underlying cash flow over two months, it's only been 300 million pounds that say dramatic an impact with hopping on this play a the outflow.

Well, that's why 21 quarter, one it's expected to be left to 2 billion pounds in mid two weeks to go you know would definitely on track to be lower than a 2 billion I probably Q1. So let me repeat we have not drawn down at Ross the F. facility.

There's no need at this point in time for us to draw that since you Dan [laughter] adequate liquidity is available with the new funds no cash on hand, including the Aussie F is going off the impact plus outlook full year performance outlook provided when we get better clarity going forward on want that demand is it's a demand.

I had production and wholesale revenue and cash generation. So it would be inappropriate first to second guess that was so much uncertainty still around pay some pickup in the market place people coming to the dealers I would drive in free cash.

Flows, though from Q2 to two full that's the plan and we expect to deliver on that plan I think that maybe my last slide just yet [noise].

[laughter].

Yeah, Yeah. Thank you. Thank you [laughter] second bedroom.

Looking into the Tata Motors domestic business and the and the challenges we faced.

Oh, Hello, Wouldve been films will slow the girls decline of almost 37% Oh in wish them and if you mean declined almost we'll keep the thing or EBITDA, obviously getting impacted significantly because of the oh lapse in demand that people.

And the system stop is now almost NIM. So we don't have any do you get a name change do you need because abusive build up was flat for the second half of the March and you have the long.

So looking forward to picking up that demand as a minute comes through.

And be the old select an all time low long basic inventory.

Overall, I think go from a profitability perspective, the Exceptionals I've already all don't analog selective called <unk> that even though on free cash flow was trending well in March because a lot going back to that can help you had a positive cash or despite everything that may him, but you'll see in terms of number there.

And moving onto the next slide <unk>.

What I go up a woman, who go back Oh gosh them and.

Oh I summarize the performance of taught them what are the things you're quite disappointed that despite the robust in tons on bone blends and actions that have delivered yet unable to compensate for these shocks that I've, just coming one off or the other and look forward to watch.

I mentioned some out in the to navigate this crisis.

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Oh the profit profitability bridge, you know, there's almost entirely won't give me like.

Oh, I was a bit sport to be a six migration, what's happening and ER.

Cost of managed to keep it flat.

So once you are just for the position and I'm wondering what will be ethic and must spend but you'll see and we do expect this to start trending down as we start cutting capex, becoming yes.

Oh, Okay as far as well would all be systems on the EBIT margin is more or less explained the gain by wanting to make the net pricing forward and for the fourth we will most about 500 grows.

Before.

On the cap free cash flow side or the the what part of the free cash flow is the visa receivables and inventory has come down but of course, the those type Waterford, there's a whole operating cash flows not able to fund, though not able to fund the investment without them.

That's one more reason why the follow on the capital production.

No news Tonami, where demand is not likely to be strong has been done.

The forward and backward Walker of almost with all going well.

Because all Oh, lapsing payables and acceptance is very similar to what.

Adrian called out as well.

Well what.

It's been spending just go forward the same number the already scenic rather than the color, but if I couldn't do when it was a 60 to one point I wasn't trying of course and it'd be fundamentally on regulatory spend on products that have already reached advanced stages or lending and everything else will be kept in a b. Instead, we are able to see demand coming through and return on our right to grow.

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[noise] market trends, it's been a good study photos on them and the key categories of medium and heavy commercial vehicles and intermediate like someone should we.

These are.

Hey shares that are coming back up for a long period of time for quite happy with back at the same farm on disappointed with the snow sports so much and wake them pick up segment. There was a one didn't pick minimum therefore the stuff.

Inside the <unk> category does does have significant billion and therefore, that's the reason why the all markets kind of being.

Clearly plan part of worked with the in overthrow good if you can talk about.

In terms of up to pick this up.

Oh, It does look to see a minutes to me and I think you're picking up despite very very clear focus if you're not.

Focused on wholesale we weren't able to retail focus I'm not stepping deliver sustainable.

On the BNN also of the CP business.

Well forward progress.

Oh ought to think.

They've been done.

Probably friends on double digits.

Been impacted by the collapse in the business on the eminent anybody.

And so why do you will be they believe that where they mentioned live as the logging well manage there are clearly the operating leverage hasn't kicked in at all and that was really created the problem that you're speaking well forward.

On the patent nobody can find does despite shopping going on the retail Oh.

Say same system on the under part as well as the distribution on the wholesale market change that held and a from a point of view of the during the course of the you lead in market. She has been in line with lost give up gearboxes thing and this is something that.

Okay, that's been done book, keeping our dealers.

Oh interested in this and ensuring that they don't get into problem because you'd be a state but this is not good enough and this is what.

They should talk about in his section.

<unk>.

And the profitability is fundamentally you're coming out of broken operating leverage as well as Oh, the inventory correction that for yourself.

All contributing to the broken operating leverage the artist contribution margin to study in line with its own wrong Glemba already implemented you don't need volumes to kick in for this business to stock picking up and that's that's a brief the Chinese is looking to it.

The forward.

And what are the audits done some let the work, though Adrian book the board and done so the focus Oh from outside the things here and put it goes and a India business want us to fuel growth that you're offering pick your cash on the secular growth right. The I believe it to litigation unfinished or talk about it briefly on the cost side Weve clearly.

Plant or dispose and planet <unk> costs in the automotive system, both variable and fixed.

And on the cash like the one is about the topic then working capital reduction of almost all of them protocols and also secured funding of what those closed the churn final stages of close on.

That does though overall funding in a situation to talk about in the white.

Let me hand, it over the giddy shows on the line to talk about briefly those feeney challenges that you've seen in the market and how is it going into several customer engagement dish.

Well thanks.

I think before I go to school.

<unk>.

Just a point of information on the market share.

You mentioned, the Google market share.

Medium and heavy then it doesn't isn't like so much resistance.

Equally good or this group because I don't happen forms it could get insufficient.

And if we should you get in and have you can look some because.

Yeah actually.

It should allow student looks like and so, let's say liver with where you'd be.

No because.

He looks cool season. This year, we continued to go to back so I think the electric showed you given his either.

Uh huh.

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I think as he.

Third the b or be but existing there that's going into it I think that's <unk>.

And the first seem to treat this was.

Descriptions into supply chain, especially later on.

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Yeah, and then Scott pick the actually want them into Washington.

So the first [laughter] local business that's in if you plan for.

<unk>.

Then we also because it's a business.

Well all of those channel partners both in domestic market.

Okay.

So this business can you said she supposed to.

A few things, so Q twos and threes essentially show on.

Waikiki.

And so she just wants to be.

Ashland submission cost reduction.

And then I'm sure as you start getting back into the these factories or do we like the ones and then extend them.

<unk>.

So this business.

Has been a very good.

Okay importers heap.

All right that's the that's the Chinese.

All up and that's something that could be videos.

Great.

I got somebody that gives me I think in this year.

Well because some of its Oh God he loves her.

Did you see real thing she will be Lynn.

Even more than a million customers have been engaged during the studios.

<unk>.

Thank you then six per page [laughter] annually superstar, just getting that likely.

Yeah sure.

There's been caught up and get it too.

People, who lives in the business so between nine shows.

What he'd be goes into one of them support.

This is on so it's too I mean, it's all the financing schemes, which are required.

One of the music makers in quite a few segments did the neighborhood.

He was an amendment there.

And when he was talking about women who.

Before you Mike.

It was a good you for <unk>.

Let's see every year olds seaborne.

Eric the six so it sounds like you school like useful.

<unk> as compared to those of you see it seems it means I mean.

Well certainly seems.

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Moving to make those Ah.

You'll just see wouldn't be 1 million floor.

You go much says.

Well, you're more you're going to be considering.

It's important to signal like I'm still there, so it's sort of them and baby.

Focusing on looks like it was like mines and engaging the customer mm.

You can read like thing.

You mentioned stoppage seeding the usage they codes for the emission logo if I didnt.

Yes.

Which is a good thing so if you could have you seen for them and stopping.

You mentioned.

What's on the long because business or more <unk> offices business.

If you see that more than 90. Please go forward.

Yes.

No.

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Sure.

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In addition to this.

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I mean does what studio.

HM two.

The Allscripts and then that's because there were some symbology alerts for the more do see ostrich then.

We have actually be put it was a one deeds.

Excuse me you may begin operations deep impacting cost reduction and this cost reduction program beyond what you did last few years.

Focusing on bodies.

And the limits on the vehicles there.

Yes, and as village other fixed costs so.

Significant.

Well, so oh skirts and we have.

That's true for most thing I won't but.

And so that's sort of London on should we have babies that.

If you use what works it gives him detection.

Oh in terms of literature and I think.

Yeah what degree.

Strong.

I like this for you when do those lives in the suburbs and also the Capex has been reduced.

Sure.

Yes, we do you see is.

Well for what investments in the abuse six condition has also improving the productivity positions.

No. This year as soon as Nick said, you're going to focus on.

But maybe yes, it's a products that used to watch the community.

So to sum.

As of June 34, Mexico sort of leadership.

That's sort of you.

I've been able to on the Capex does anybody but.

Uh huh, so once we get there.

Oh I see movie have bipartisan commensurately.

Oh look we aren't this doctor don't.

I will become a personal though.

Oh, you mean Utica before one and two gets me it was in Moscow soccer.

And the ones that some similar though you have at all he puts and calls on board, which is I mean once you start production.

So be sure.

Pardon me.

Because it seems that it's actually goes.

This year olds attacking this.

So we actually were most posen, sometimes takes the country.

Insurance.

And I'm pretty happy because when you back.

More than 95%, though.

Because I could working which are required.

Turning to something that doesn't <unk>, Louis and as a part of that.

You know for.

Yes its production.

Oh, yeah, they need essentially distancing reserves.

Right.

I mean.

And they check Leds I've been can make are doing.

Pretty good.

Because some movement.

We'll see those haven't is equally.

That's right. It is also strong.

Oh.

Sure Okay.

All these procedures are good.

If you can take that occurred to me.

Also.

So she just wants to be.

I'm going to use it should be.

Community.

Ah So we have ensured that they should have you seen back.

Oh I.

I guess, maybe 'cause it shouldn't you see.

It was.

CNP right now.

They do not want.

All.

Tools.

So many communities are going to block.

Well with channel partners support has been where do I was all across the country, especially on the Muslim soccer.

Richard standards.

Andy.

And.

Well were there.

Then I could lead to think that either so do you kind of actions, which leaves a into book itself would be why does it make sense.

Okay.

In the nation as.

No one.

Yes.

Production from Usix, and maybe that position.

Just like getting but to me and finally I'd be very strong focus on subscription and outcomes and recent actions will give you one shows that you get a superior.

Well if you actually.

Thanks, good issue.

Can you just became one of the BV slides and then kinda stylish almost flat.

Okay.

Yeah, I think about it.

So all that's what is your business is concerned as mentioned by by the gene knowledge, we have a very strong quarter portfolio includes.

Coincided with the somebody my take on the buckets or complete he will discuss trends.

And this provides us an unfortunate.

The beauty business.

No secured its future growth.

Who chose will be too, but they want them. Some team on student will be done both.

To be stronger deals institution, though.

You can see these mines foods are driving higher seems to achieve double digit market share.

On the bulk of these components.

We will be spokesman tend to need to be open. He didnt gosh no onboard stood at two collections in the baby boom no structural protections, maybe because its cost.

Though of course, then experiments can be brought up for you to you've done in a glimpse of what can choose buttons.

So in order to support these milestones and global systematic option. So yeah, we will focus on 16 videos.

Can you imagine the business and up to better <unk> development and feel confident in teacher.

The first one is a emagin incentives and though.

Because he doesn't change I'm mines Goulds thinking.

And that'd be one season booked up this is that drives this busy and though and so.

So of course of booking but the fundamental seems to come under the most.

Children shoes.

That's where there's a very strong focus on people smoke exclusions.

Second one which as you mentioned, maybe but do you do look versus the Simpsons.

HM This initiative you own a focus on driving whom objective was cool and Nick I'll put the building.

By the need to find to be lift systems I'm jumped up its is to ensure that you know, we don't compromise and Susan.

Yeah.

He told one is HM.

Density and though as I mentioned remodel that he competencies and he's just so part of work sodium news and all the focus of this and you should do well.

It would be to ensure that energizing system on a team.

Isn't that keeps them.

And then you are.

Basically too I mean is due diligence. So that you know we keep them up to think so though on a shortage of works and is concerned.

The mix from Israel Mountain.

The Japan, so fun solution.

As you know digital is going to be the keys soon so between solution in the coming to fruition <unk> wasn't a smidgen.

And we'll see that although does just that somebody could the shift towards group and all the customers can get them and though most of its people tend to just keep like some.

And Ah.

This will digital transformation, we should think this focus on delivering enhanced user experience on smoking MTGE.

Well, there's just one which is not something.

It seems so I'm sure all.

Well, there's some great importance I can kind of business and.

Yes condition can be seen as a leader.

And obviously that students. So we have come with some distance understood that they'll be done them, but <unk> senior notes or loves to yours.

Thank you definitely didn't get the transformation to achieve what else, finishing this.

She believes should there was going to focus on the soon.

Loves Muslim de skill.

To be behind them.

Oh, well done lots to do it so the new products that you have no ensemble strategy also focusing on be viewpoint.

And that she has done some submission stronger connects the deepest since I've been listening.

Just wondering if you look at schools.

And it gets affected the besides that.

School has been increasing what a beautiful time and bleach trends are true greensand.

And this will lead to continue working on some of them meet you didn't lose clump of section of the beauty business in the market.

It just didn't listen to do grade teacher.

Oh from this you know.

We didn't even with similar to what each mentioned above cost reduction initiatives is a very steep reduction which have learned a boost to the more bringing scripted improvements immediately cost has been its fixed cost.

Only be somewhat skewed as stupid because it makes him well what do you have been due to the last two years because next maybe by implementing new close to that shouldn't be going so.

Making the decision making foster.

Though also yeah, no significant increases in onstream on social or the intensity of ideation bookshops, So you're pretty confident part, though the switch I guess that here you can I start has maybe been question fix cost reductions Simpson.

Good standing with.

So this is the soon somebody you know what we've done a sudden so you mentioned the PBM.

Business is concerned lucky does it.

Thanks reddish let me know quick doesn't move forward the profession.

That's the only got work sort of smoke <unk> I just go to the fundings like Oh I just find family of Ah you haven't final stages of securing a 4000 proposal, but though funding those and already done because when I get done to speak. It then.

And we'll continue to evaluate other options at an appropriate time and though we believe that folks are leased from a funding perspective <unk>.

<unk>.

Oh, I don't want to spend let's take a minute on that Oh, it's it's a business so that small to me.

<unk> implement thing obviously that your article that do asleep.

And it's going up look like it's looking at its auto improvement plan.

And as even though there's nothing that's gone back for the market situation.

Continues to hold the city market share of about 27 off the thing.

And its place private you meant that it does take interface or I find more of the main problem for them.

Voted on.

And the overall GNP I wonder if I could work on and off books the quality of the assets that you're managing is there. So that's about 5.1 thing.

And most importantly, the cost income ratio because of what 67, but in Lafayette is not a bulk of the one thing and it was bought on further in the coming here does that.

Sufficiently liquid and Vietnam or thing any challenges with an expected getting it monies that as needed and this business in the northern Nevada PBT of 1.940 compared to one for anything girls Loftier an improvement.

Despite the challenges the thing is the ER and busy market on the industry activity.

<unk>.

Oh, so like last but not the least that he does not looking have slight with you are falling off the thing.

One this at this point in time, even suspend outlook going to be get clarity on the Dima Oh, we with the minimum revenues and welcome jailer and here, we do expect you want to be significantly impacted.

But we do expect to see a sustained improvement in cash flow from Q1, but things pick up and Walton damage and Angela.

And therefore, the plan on that but the video all up on de leveraging which I called out earlier and the focus on do not getting cash positive next year and PML from national stuff from the theater.

We believe that to be out on the right track, but obviously the corporate prices means that the level of challenged the all time dealing with has gone up mark before.

Means we need to respond on spoke at the same though looking density and we believe that they intervention that your planned on cashing Pos charge on Capex and <unk> explicit caught up on being able to think you believe you moving that detection and that's an only have further actions. So in this direction given shared with you the pinedale de leveraging its something that I'd want them.

He views it as if they.

Or when does that mean I'll hand, you over the questions.

You'll get shorter.

[noise]. Thank you let us [noise].

Okay can we take question [noise].

Ah Yes sure. Thank you very much even now beginning to question on profession.

Anyone who were just last question, maybe that saw and one on that that's going to anymore.

If you listen we're moving outside of some of the questions at this time.

Bottom line of question you handsets locking question.

Ladies and gentlemen, even made for a moment of other questions or seven.

Last question, but starting one.

The first question is from the line all promote there Oh, yes, yeah.

All right.

Yeah, Hi, ER.

The only Oh two questions one with regard to do stimulus package in its own.

You can go but I'm wondering how would you view them as they have more in line.

<unk> and how you change your line is when you're trying to benefit from the city.

[laughter].

Did you want to cover that when policy.

[noise] I had been if you can go away.

[noise]. So the first question was the first question on TV.

It's not it's difficult to understand progressions his career problems on the span.

So.

[laughter].

I can repeat or basically sitting back or did I stimulus packages being announced or nobody party writing be cocky mark.

What's your view on that they might hold your line is positioned to benefit from the same.

JLR stimulus the stimulus package for won't excuse me.

Things are government for Fourq got your mind, you I wasn't in Europe and other countries.

Oh, the Simona sent them from the countries is countries is quite different.

You know if it comes to understand the nobody ruins, the very first mom and he did you see premium.

Electric vehicles and B.

Page there more printing call. So im just trying to.

Oh you Green.

We can maybe any food.

In addition, behalf C P hips pharmacy into marketplace to we have a very very young.

Multi line.

Our own tends not to context, I guess, it's very loud.

And I see the you changed to the discussion.

Well the author off the minus so it cannot be food to your picture from.

[noise] second question with regard to the PD business Watch speaking just skew was looking back over the timeline for bringing apart.

Uh huh.

Okay. Okay that makes sense. Thanks, yeah, Polys I didn't realize make one are going to immutopics niche. So I think I couldn't respond to it so the but nothing yet in conversations with Macy's Williams and looked at the levels of interest as it exists and an appropriate time, Andrea finding that I like them differently attended the one other reasons.

The Subsidiarization has also to enable us to get up right now in the in the subsidize entity and is very much part of our plan to bake be sustainable over the longer.

Thanks, Good luck.

[laughter].

Thank you.

Next question or something like that that worked a lot from Goldman Sachs. Your store yeah. Thanks, a lot for opportunity on Oh, sorry play a loss on channel to correct.

My first question pertains to the debt calling in cell biology has enough or are there isn't any risk off any of the debt covenants across the group companies getting teach out given what's happening with the financial performance.

And also related to that is basically a the existing financial support where do you guys that getting from the UK government I know how much does it impact <unk> ability to really rightsize. The you calibration given the substantial drop in volumes and substantial scale build up our kind of UK. So if it can oh it does both of them. Please thank you.

Yeah I can come from you don't have any financial covenants that that are on bus or but getting beach because of this so those are well under control.

As part of it you can't government pick those up would be the last one we handle that you kept on things that happen.

And that is something that Ah. We then are you need to get a food, but last year and those have been able to sleep and ER as part of the PUC funding plan for the new one physicians that are they're not as called out earlier isn't physician front to new another I feel stadia and hasn't been something fun.

Right you're going to two.

And ER I think them up land those aren't refinancing that.

Are there, mark, though, especially because the or de leveraging plan has basically been carve out to ensure that riddick dawns 11th of debt.

More sustainable living and ER as I meant something fucked Besides the channel.

And in either direction, that's come up that's the thing is funding I meant on Yahoo, and making to rightsize, our sharpen up the blogs or anything like.

The conversation happening multiple forms on this time gifts that at this point in time, Oh, we wouldn't pick the debt that you believe its comfortable for us in terms of adhering to the requirements Arbs tried to do that so certainly I think these are some discussion stages, if something declines that we shared with you.

And second questions on the Gilat negative working capital enough. At this is one of the few something's that you've got a negative working capital is like and how sustainable it has given the headwinds for the dealer community is also facing and shrinking volumes are right on the increasing complexity of the business. So do you call. It usually you because that's a big source of capital photos.

As interim look I forget the Excast presentation sorry.

What about the level of confidence on the being sustainable practices, even say two to three or five years out.

From the management 11.

So let's be clear that why the negative working capital is actually happening it's happening because we stopped coding vehicles <unk> in the third week of notch for seven weeks.

Therefore, we should we just don't bring in Oh its into a factor is and therefore, we were paying supplies to the previous delivers two months before which we actually and I will no longer building because it will reverse when sometimes open as they have that will reverse once we start bringing parts into our factories and it will reverse splits demand.

They move fully reserved with us once demand lists towards pre coated levels. So it's purely as a result of settling supplier payments for the previous six to eight weeks worth of production not actually building cost from the end of March through to the end of May the restart process.

Page. We showed you showed that most of our plans began coding again, we commenced in the 18th Hello agent Apologies I had my question was shot on the sustainability of the negative working capital Martin, but you get the money from being as upfront and you say youre when does that ideally out how sustainable is in fact itself getting them money from.

That either the upfront because most of it looks to be has joined on a negative working capital cycle that in working capital. So so far classroom and my question is planning to the sustainability of that's in the long adopt.

We work with that we work with funding partners within all of our regions. We've referenced a North America, where we work with chase no. That's a well established model that we actually pull in place just stopped we came out until Oh, no to complete 11 years ago in the integrate crisis. So that is incredibly sustainable that's a modeling it will continue.

On the working capital negative will reverse once we start building costs.

Yeah, Hi, good luck, yeah, sorry, sorry about that.

I didn't have a degree of things things to look at Goldman Sachs increased.

For costs on rendered risk or.

[noise] or interest.

Yeah, Thanks, a lot and best of luck. Thank you.

Thank you.

Thank you.

Before we take the next question, we'd like to inform possible then in order to the management today, because I guess questions from all participants in the conference. Please limit your questions to Dubai.

Should you have follow up questions, maybe a question to rejoin the queue.

The next question was from the line all shut off shelf of you do like you saw it [laughter].

[laughter] when Judy Oh, My first question smoking.

Well I think one on gross margin.

Yes.

The.

Last month.

Thanks, Jamie.

So why or why.

[laughter] well that.

Good morning to go do anything like we've seen or anything like said on commodities up like that.

[music].

Two.

Three thing that's that's come to mind straight away. One of course is a if I think they India business. The mix has been completely out of whack given a medium and heavy commercial is going down so that has been a headwind against us.

Then of course is V. I mean, both here and Angela because of the or B S. Six migration be a sporting actually being taken on the phones unlocking because of those let's talk buckets. The commission and Jay a lot of course, it's going to talk about that as do you a impact coming from a Nick <unk> 80 like you it.

And third of course is so given the entire have Oh, China situation that we had during the course of that you have to get mix from a geography ballistic the also looks like into as far as good luck.

And the combination of the meaning that you do have a challenge on the contribution margin.

And though most other things that you see hope could reverse as they look like.

On commodities, but today.

As we look into the future of no no major inflation expected as part of Oh, just meeting if they wouldn't be hearing good things that you see someone.

Like Odeon Platinum would do you think that the watch or.

But budding that no major commodity inflation coming up.

[laughter].

[laughter] tell me.

Thank you and do it doesn't want all by itself.

Uh huh.

You can call bye.

Good luck.

Uh huh.

It didn't really want to some extent.

Yeah, we're really struggling to hear their questions I'm, sorry that the line clearly isn't very clear. So could you repeat your question. Please yeah. They made actually I think should I blame it there's got to publish the question was 500000 units or cash breakeven stuff come down significantly to find a dozen units all much or the can it go down.

Basis Youre experience.

Well the fish.

But it's going to be it would be much lower in this fiscal year [noise].

So at least another 10% that wasn't that this fiscal year, but you know my my my view is.

Once we actually reappraise wabcos with means we'll be back took place to actually respond to that question right.

But it certainly can and will be less in asked why 21, then the 500000 significantly low.

[laughter].

[laughter].

Thank you.

The next Christmas on the dinosaur Unbooked from your Securities.

Yeah, Hi, Thanks for taking my question a good evening, everyone. So one on Jan I, just wondered on understanding seems to be very sharp decline in average selling price are you in there in this quarter versus previous quarter. So any exceptional going into the revenue every month end of year, meaning how big was the V. I mean for this quarter.

Yeah. So that's too there's two pieces impact in that there's that obviously in Q4, 'cause it actually impacted China Moulton wells in other areas and that's important to us I wanted to see any basis, we had to a significant adjustments to make.

What's the reappraisal on the at the no cutting required to actually sell the 100000 units that we actually had at the end of March we we booked about two percentage point increase since the end before that within the cool attempt.

And the rest was I think I referred to earlier about the incremental residual value risk Weve made in which was $78 million, which is just about just over a percentage points as a result of weakening of residuals and the auction prices in April and May although they did.

Actually strengthen in May we think that 78 million dollar incremental pervasion isn't that right that was the latest assessment, we did towards the end Smith.

The two big pieces within the quarter that dramatically impacted the net revenue.

Sure, Thanks, and have been <unk> or the other question or happens I mean, oh workers or Youre thinking in terms of raising 440 for the company I mean like and what would have dry dock. So.

Just wanted to understand or I mean, like how do you see the funding requirements from Atlantic where do you perspective.

I think to commence tier one if you look at the internal plans for the business very clearly are looking at significant cash generation walked in JLR and and T. M going forward and I think a the trigger for this additionally, the call out on de leverage has also been done.

I think though the key could go called does it look at what are the level of it tomorrow, how far I mean and bases that w. need to decide Oh do we ensure that the business remains a in sustainable levels of it and I can't talk on course angle to the follow up on the Q1 numbers, we believe that neither.

That is unsustainable and therefore, the operational plans have been put in place and ER and then we believe that that's what enough from applying to fuel by ensuring a.

Oh 11 of asked ambition that but we can.

Sure that that's the start coming down and then when he looked at auction subsequent to the entire localism to get the operational performance.

And not just Oh look at it from an equity perspective.

Well the she was not a day what do you should see a it's about sustainability of <unk>.

And they just got was that you need to operate with and or the Dimont truck as walk me up watching.

We believe it stuff that's going to get worse than we need to think about it.

Okay, great. Thanks, so much.

Thank you.

Oh next.

Your next question or something I know hobby missing from Morgan Stanley. Please.

Please go ahead.

Oh, Hi, Pmone tank, probably up because the first question is on China Beep.

Hi, Good talk show beside because people are deemed a comedy.

Oh My God, if you think about dog discounts in the market how was the profitability.

But China.

How would you see the profitability of China, JV going ahead [laughter] Gretchen.

Okay, Let me take that one before your next question. So think about China is to two pieces about business. One is an important model where most of our large your excuse me I view, let's go actually through this recovery through they read of April and May turns out to prices have increased.

And that will not do support has been I, let Louis so not only do we get a bank okay, but yeah. It was the yeah, we actually a the price to the customers paying in the market was slightly higher 1% to 2% no than any pre Kobe periods.

From a JV model, we've done a lot of work hasn't changed with the joint venture over the course of the end of 2000, <unk> and a 2019 calendar, yes that was impacted by coal led you know the plant I actually was the first of all plans to close.

To the end of January but we did I team to juice, the charge plus program to a JV and it was sponsored by upon the Cherry as well. So we know believe we actually I've actually reduced the a the breakeven point and that's going to China operations very very close to the full cats volume for this year. So you will see.

Absolutely and that's all areas just trying to charge coast program. So some manufacturing cost us some structural costs. That's some marketing costs. That's some material costs and also match revenues. So we're working hard to increase the net prices for all of that vehicles I think I've mentioned before that for the full.

I've nameplates and the refresh shows of the previous 12 months, we took a lot of action to reduce the stocking levels and that's all starting to come together. So I can confidently say say on the track Clearone you will see year over year improvement from Q1 and going forward for a JV business.

Great. Thanks for that don't respond.

The second question in fact, I really look supposed to do.

Oh, yeah that that's encouraging.

Second question is when you look at that charge last line for Twentytwenty, one how dependent is it on underlying one deal.

Especially me, though you know sustained improvement target that you have four 750 or yeah that at all what kids.

I like what are you, saying well all then youre picking out for this one in the off again baumbach saving.

Yeah, I'm less less or based on volume then you might think of course elements of the charge procon like Ken material cost would be.

If we take apparent that the tower and produce 500000 constant small do we produced 450000 cars right. So there's a drink directly on n. material cost element of the program, but I did mention I think earlier that particular element to the program will kick in in the second half of this fiscal year, where we do expect volumes.

To the higher the other elements a warranty cost is a big piece of it you know much less volume dependent actually lost about where we sell which cars on the energy when I was getting in speed of think switches to a magically improved over the course, the last 12 months.

As well as the early signals that was starting to see on 22 million vehicles. They are definitely tracking better than the last three natalee is particularly 18 and 19, which is a really great news here for us. It rolls are the road do not allow us to start to show that until the vehicles become mature.

But at the end of quarter, one and certainly quota to tweak continue on this track, we will see improvement on warranty cost performance parts and accessories.

The actually be impacted by volumes of course, as you would expect that reselling some volume there as well other elements like overhead if anything we I'm thinking more aggressive to the store chain, but are those still to cost will likely be lower in the first call for the yeah. They would otherwise have been as weve constrained to the open.

Safely impartial hibernation or we just haven't been building. So you know it's a mixed it's a mixed bag, but the pieces that flow strongly will be the material cost piece or the parts and accessories.

Warranty and the elements that structural cost piece. So you know the programs really well balance actually and I think you would be quite impressed as we go forward and Nicole just.

Great. Thanks, I'll probably for that.

Thank you.

The next question is from the line all.

A couple things from them what else Securities. Please go ahead.

Yeah I thought a this is couple and thanks for the opportunity a bunch of T. I wanted to know what is this sustainable never enough Capex that we should think about both the India and you another business and how much is due to R&D in maintaining their problem.

Yeah, let it didn't talk about the business. So on on digital business outside of India is concerned I think I think the starting point, okay. There's about one of the level of Demanddebate, though that it works and level of affordability that you can have.

Obviously, what we want to ensure that the formic. So then but all these also required tomorrow, but doesn't like so at this point in time, it but we got liberation other epic footballing financials offered a topic.

And ER. This many have booked for the focus they'd be on regulatory compliance and the new product that we intend to launch not much as part of it. So on the garden factory investment, but Oh, yes, David because they tend to have ruling or jigs and fixtures I'm.

That's the Barbara.

The bulk perfectly be all that lived through regulatory and perfect.

Sustainability for does that I think it totally depends on what sort of affordability that you have.

And then a plan for de levers you can obviously look at all options, including partnership ensured that we are managing this in the right away.

Yeah, Andrew on the GNS that you want to forget.

Yes. Thank you well, we thought we'd give me the guidance on the 2.5 billion fall. This year. It just so you are clear on that we do have some of that programs on pause. Obviously, you know the ability to actually work all the programs the way with tempting to work is more difficult. So you should see and you.

We'll expect to see actually off one investment the lower proportionately and the second also yeah. We do expect to lift those pools is if we go through the course of Q2 into Q3, which is the 2.5 billion I mean, the afford to and by the way within that just to repeat there was no significant change okay.

Relation of any of our programs clearly affordability and speed speed haven't development will be judged going forward, we will build out liquidity that's most important.

We are determined to be free cash flow positive right within that as a level of affordable investments and we will moderate the time without actually missing a drum beat on the product. So we'd given previously guidance of up to 4% it will be lower than that will not go later in the I wouldn't tweet figure that speed of liquidity.

Good and affordability and what that means for those programs I'm pools.

And then does happen just to ask them. It doesn't know precisely even running towards getting off to a degree the you're done with the intervention from Boston cash will theater netscaler, because it's not sustainable to just keep in contact you gotta be to cost better do you need to go you got rid of prosperity and the crux of more disciplined bidding for the beat me to strike a week boosting mr. So.

This was not the NOL.

This is more weight doing probably for one of the prices and then once we tighten the belt get our focus is like nothing selfless I'm getting back on track again.

But you need did a fantastic reality.

Yeah. When you fully appreciate that second on defend our you know we have 22000 bookings are these Ah you didn't bookings into politics and could you give some color I didn't know what kind of demand.

You are seeing dad, I mean, let's see bookings or something.

Yeah. So these that leaves a date or old is off of what you have some draw for which have already the pre sold to customers.

We've seen a quite a positive as we often do in early parts of the program mix of those vehicles you know its proportionate across all the regions. So you know there's no one reason <unk> region any stronger them yeah. That's necessarily so we've got a good balance of those say it was a good makes it lets say it was across all regions. We've got.

Well, then sport more than three months full would cover and then in mind, we haven't had one dealer loans yet so we've really so do they sell side. The actual events you know with just the 122, we've actually contained old all orders on the 90 cents, a really really very strong start clearly women.

Unusual environment isn't an unpredictable environment and again I know what keeps saying this but will be much stronger placed in three months to be able to give you. Some direction you may be lucky fall from what we can expect from this product, but very excited over the first feelings.

Great look forward to that tank is so much.

Thank you usually for I phone it's fantastic.

Thank you.

The next question is something that I haven't gotten quite good luck on we'd ask that you saw it.

Oh, Hi tech people, the opportunity or might it plus one city.

I Wonder doing the same where do you tend to be JLR funded.

Well you or whatever.

But it seems better get started using that to invest one thing and debenture phone.

Do you want me to chat that question.

So no.

Hey that question. Thank you.

Okay. So so because of the way right.

At the end of March with many of the distortions in the market.

We actually ended the year with a pension surplus of over 400 million pounds. So I would say that was.

That would.

In park, the result of unusual rates, particularly wide credit spreads at the time and so its credit spreads have normalized I would expect that we see the pension returned to a deficit position as it was before.

So I think that's what I'd say I think that it's a it's a manageable burden at this point in time.

Thanks, Good figure that I know about Bothers me book He became more fingerprint do you would.

Okay.

Okay.

Nothing you.

Even though it does that I've is going in for an asset light strategy I missed selling that doll and other debt equity ratios majors all are trending well.

And therefore, no plans to invest at this point in time.

And then they're going to be self sufficient in their funding requirements by sourcing and selling them assets. Even go west Atlantic there already at about 32000, close and we will bring it.

Although we don't to 23000.

[noise] well then we loved by people last question from icing on the domestic especially if you if I guess you have draw.

Quarter on board.

He bought synthetic spend because I think most of it would be the spring you're going to be ready speaking the standalone business Unblocked report, that's hard to get rid of they like what should you know I know your volumes because it wasn't like somebody.

Have you done, but also what because people working but oh, we wouldn't be viewpoint on that.

But don't your cost we are.

Got any lost who use these corporate.

No.

It won't be thinking that.

Yeah.

We shouldn't forget that as a business that was growing at about almost 40%. The you've done and then drops to 37% or that is a lead times actually need to navigate that kind of so called other there and if you look at person destroying over three years and although that employee cost as opposed to spend all of that you're trending well doll and though our entire focus in Jan.

And then just on a more does it sort of like I said it multiple times, while fixed costs have been tightly managed our intention is to go look at the variable costs and get it right and now with over the collapse and Williams of this magnitude that are coming through there.

I didn't call for lenders have all aspects of booking and then in sporting fixed cost and that for those plans will be put in place to ensure that that'd be the main greater use of breakeven.

You know you know enough platform, it's not it.

It's a personal focus that you're looking on and at that point in time with Oh go up and Wonder if you had one kind of like Victor I know, it's like anything there that you obviously have to predict what are going forward.

[noise] and that's part of the plans with you.

Thank you thanks.

[laughter].

Thank you.

Next question Society Dania from Bank of America before.

Yeah, Hi that I have a question.

But I think what happens to your hedging strategy a into politics that idea not considering that isn't such a shop.

You know declining volumes, hi, how you're thinking about that because somebody had just taking a this for is of course, if you've been kind of get two o'clock on that.

Oh I am sure Ben as they seem to go on this popping up one but let me just at the call on fixed and then handed over to benefit.

Our hedging and the underlying go together.

And though as the kind of volume starts coming off the consistent you keep a review or hedge because it shouldn't be too bad alone and I end up depending on the ranges that we operate.

So this is a dynamic process and it is a very similar to ordering in Minn Kota hedges on that respect and that's why we put it out and take a dog or depending on what are the external demand over there.

So therefore, we do not expect any dramatic noise when they had just because of the once it big underlying let's say just together because the work we have been consistently reporting let me handle what Ben gives you enough to give more color that were done what I'd give it.

Yeah, the only thing I'd I'd also mention.

We we have been more kids just because of all the uncertainty in the world, we have more with Brexit and otherwise we have been more conservative about our hedging levels. So we went into this with lower hedge levels than perhaps we would've been the pass to start with it is the case that we've been dynamically monitor.

The reduction in volumes and we've been proactive in essentially.

Closing the hedges.

It's going as we see any risk of Overhedging involved not hasn't evolved any significant release.

Now as a result of those close outs, just because the wealthy the de designated hedges. It then relative to or to the heavyweights they work internally or that [noise].

Thank you I have one more question.

You guys have taken the cargo from the UK government can you tell us.

What is the amount or what isn't like T amounts that you could have done what is a benefit that you caught if we could just help us quantify that.

So we we expect over the quarter one theory, the monthly amount to be close to 50 million pounds 20000 people with a load at maximum done isn't that reducing in June of course now we have 13000 people. If you used to turn off the I was in the person you probably get to the monthly amount.

Alright, thank you so much.

[laughter] a bit before the or go up one of the next question. It. It's a it's eight o'clock molecule and we had the calls so three ending at this time, but given there's a fair number of questions in queue and or maybe the person additional orlando, but happy to extended by say 15 minutes different book, but all of you and ER as happy.

So you don't get it depending on Oh, you could go into details on that either.

So we're happy to stay here in Q1 other question coming up over next 15 minutes.

Sure. Thank you anymore.

Oh no next questions on the line all after saying in one of the last Friday.

For it.

Yeah. So do you mean Saturn I think maybe.

[laughter].

[laughter].

Oh.

Alright.

Just one.

What does it could be everybody.

Okay.

[noise] Shallish skinny, because especially now.

Maybe just one thing I might face.

Oh.

I think my pitch things regarding.

Yeah.

Oh, yeah, what I'd be Uh huh.

Yeah. Okay. Adrian this is about the Jack white space capacities, and a and believe it is good enough for them.

Yeah, well, it's more about actually supply actually I think for us. So you see the volumes that within allied and as well I 20 16000 units.

I think we referenced on several occasions, you know the demand ebbs and flows with different to incentives from government.

Ralph mentioned dollar earlier, we have we have capacity to scale that number up.

They stopped the battery supply contracts, we have you know so T 40% relatively easily so we don't see any upside or Mrs. All upside losses as a result to potentially scaling up that says governments is going to shift going forward.

I do think rationing [laughter] and maybe there's going to come to me.

Oh. It was born ended up getting the question is is that rough contribution of this product asbestos other products.

Well they propose shouldn't system as you know I think is more expensive than other products. You know wherein holds where the market price holds up you don't know the supply. It can be certainly yes, you know when learning what no supplies on that changing very quickly honest speakers changes to government incentives, but you know at the base isn't.

Nice contribution we actually make hey, you know as a considerable margin.

Yeah and don't forget of course, you know it's also that asset strategy is upon to my CEO to compliance.

You know obviously, that's pretty bad units are the most compliant units and it's a tamira overall portfolio. What's your neighbors now the other sales another name plates as well. So there's two reasons obviously, the the baseball itself and the value of May come the vehicle, but also in AIDS, our compliance suppressant she would.

She is so important to us.

What does that demand.

No.

Yeah, absolutely there's been a huh.

Yeah.

I think I phone sit down I think there's some upside capacity, we could build should the demand be then the demand that's inflows really quite quickly depending on governments approach towards that pulled out of units.

Understood.

[laughter].

Just to add or just some numbers perspective has been looking that's got until though the AI based on the loss of 6000 units and as long as growth right wasn't done no pull them kind of units more than words were lost yeah.

And a and b cell and get them. So we believe that has opportunity here and now with all the behaves and other electric auctions coming through in the car. We believe this is something that's going to reduce the risk profile of the.

Sales and you're not across markets across the board.

Well when I, probably wouldn't do we.

Sure.

[laughter].

Thank you.

Yes.

[laughter].

Yes.

Well, what well since they do.

Well, what do you like.

What do you shop.

No.

[laughter].

Yeah.

Uh huh.

Thank you.

Okay. Then when you want to pick does that in terms of your dollar revenues and the hedges that you have and your hedging rate all of which is that in the enough data to get.

Right.

I apologize algae I couldn't quite understand the question what's the question.

The question is what are the dollar walliams that'd be one of the dollar hedges in absolute they'd be maintain and typical graduate schools we operate.

Hi.

Okay.

Okay.

So what do you have anything.

I mean I need it maybe.

Let's pick stuff.

Well take that.

Right.

Got it somebody.

Has there been the question is what are the revenue hedges.

I didn't want.

Got it what are the revenue had just on the rates that you do it and what are the phone brands and the studies as a supplier rates and the hedge it was a particularly the euro and water will reach they've done it.

I.

Oh Gee, that's a little bit too specific your question I've actually got a I'll need to pull up the notional principal if the hedges and come back I don't know if we could go to another question they'll pull that information up the minimal will respond.

Yeah can you just starting to Switzerland, so when its Oh, I think that comes out and they must congrats.

Well.

And it's great. It's very good and maybe you can never done front I think anything really.

Thank you then we'll come back to your point on this one or once then that's a walk definitely want to RIDEA and I mean, when you go to the next question.

Sure he.

Thank you though.

The next question, it's Phil I mean did I Miss on the other thing.

[laughter], Yes, hi tank for the opportunity.

My question was on you know the fact that you have got back significantly, especially in India and you have taken write downs also with respect to Lincoln.

So what I'll lead off would have been done in terms of until October Bob.

The fact that he fought back into late in the business done I don't want one lunches and improving gross margin. So how does that was going forward.

Okay, maybe shallish you would want to pick this up and say Oh, you're prioritizing your portfolio.

Yes, I'm going to pick it up but you.

So I'm sort of question I think there's going to be no compromise as far as old you know some of the future launches opens and and go back it's pretty much on capturing the significant the visa cubic says comes from the work, which we have completed.

As far as David Nutri local is concerned.

As she will have seemed like a discount of did not only to be gone chill on you can probably make our gross.

Also this transition from B is supposed to be a six completely if you fish and do you know model.

Oh cycling into mid cycle enhancements on so well with the significant changes in <unk>.

Training et cetera. So lot of investment has been made on belief and build that allows us make me you know, England Ics or something.

And then I've new products.

Also in the pipeline this is something material.

Oh, yes, indeed invest Tom just said that it's going to be no significant come from is it sounds like future performance consumed a.

Of course as we roll.

Our profitability, Oh, Oh, gosh emission from the business that the Moses move skin and grew up books amusing.

That is something which is a decision which means you have indicate as we want to come over the city and second environment.

And then we would also help to invest can do the knicks stores simple struggling to Oh changes, which I'm going to come CLO emanating from Kathy.

Hi, Jim as you know, maybe its cheese music city ski and I'd.

So I think we should be pretty much on tracking so you never get to me because that's public yet so no major compromises and spoke we have made.

And then just to amplify the blank further I think or this is not the vehicle happens whatever we need to be clear that at some point I mean, you to get back into product creation more and we don't want these gaps in the portfolio because of that but it is just enough cognizant of the collapse and demand for us to sometimes pick that up in love thing then it's.

But with a bit and get back to normal thing before they start again.

<unk> recon, just keep burning cash.

Okay. Okay. That's helpful. Thank you have the opportunity.

[laughter].

Thank you.

Hey, Balaji, we can go back to that question. If you want to go forward Ben.

So given the there.

Then they've been going again.

Yeah, so okay. So.

The outstanding value of our hedge book in terms of notional principal and recognize that.

We're hedging out.

As far as four or five years on some currency is.

About 3 billion piled on remembering about 8 billion pounds on dollar and then a euro allows 6 billion pounds equivalent and then smaller them out something some other currencies.

So that's a huge amount of hedging in general we're hedging the school 50 thought.

[laughter] 16, and 75% one route and then just sending them 20% drops from there on beyond that so for example, we would be at 55% to 40% two years out so.

That's the policy that we operate.

Hi, good what does that either.

Oh, Hey, I want second.

So.

As an example.

Yeah.

In this year.

The hedge rate on the dollar portfolio is in.

The mid 130 selling to the low 130 after this year.

The hedge rate on.

The euros is.

Is it.

Well.

113.

Ah Onefourteen enough, why 21, and I'm, a little bit lower than that 10 years further out as an example.

And then maybe in the Chinese currency.

Or the average.

And then be the average hedging right. It's in the low nine enough why 21 of that fly 22, but I guess I'd just point out that I'm remembering.

Ah because that's the hedging market doesn't go out as far as we only hedge out two years I'm remembering.

Well.

Okay. Thank you.

Thank you though.

I think it's time for maybe one last question before we move angle.

Sure. We think the last question from that I'm off a sheet engine from a antique broking. Please go ahead.

Yeah. Okay. My question My concern is still good he says.

You have.

And gain market share in last two years school.

Yes, and you said I'll go through 57% and.

When the TV or no.

My LTV, so what's that pretty shouldn't bad I mean, how do you look back to.

So if you read FX for entertainment about 60, 65 cents or that is out expedition and the second part there's on though being six for that segment, how do you ever for that's probably you know even though.

Property, just forgot to except also so how do you see ADMET predictor <unk>.

Jacking up but the Submarket said again.

Right. So I think the first question.

Taking market share and yes, I think like.

This trend.

It's very important to more than you ever get the balance between my pitch.

If you like systems I think in but you could.

Thanks.

Well.

Well that's quite yet.

Well that's sort of.

That said, we have got to get too big.

Picture.

If you like this himself.

HM.

The second question.

I think you have been pretty great in terms of all the U.S. exchange so.

Right.

Like almost two years back then become such a nice is correct.

Yeah.

This nice formats.

So just because if it got plans that actually you did you get more.

<unk>.

And that kind of lightning intensive transition happened I think that range.

We see most can't that range, we have they will come across the whole for something that you would.

In addition to back.

Hello.

HM.

So this is something back because some of it.

And you won't see.

Exports.

Moving to purchase decision, making.

You bet I think there.

Range, you want to see.

Depending upon the take me assays.

For example in medium and heavy commission, because I mean, just slipped from ovens and one of them.

The selling it didn't look so much Americans globally.

She was difficult would you expect anything.

Well for their engines as well as.

So I think what.

[noise], where do they taste.

Sure.

I think that means.

This need.

I Love our communication when shows that you get my picture.

Yeah, I'm, just loves that I've been on but it meant that the sparkle much simpler is because I'm sorry.

As far the you'll see the future because I get that a couple of Cleveland parents, who are also taking that some of the products wouldn't want to be everywhere, but it's so small core severe.

Market would probably shrink so we will be actually get <unk>.

I'm going to be leveraged beginning it that's been support we love the smoke homeownership rate cuts or what's your current than that.

And the ones.

So some put up but the rate goes site.

So I went up for that.

Yeah, and then most of the products, we have created of white spaces broadly, but oh in terms of feature set an all I mean like we have seen and get somebody else. We have lost money new features after they fall Oh for the year Russell So how do we see I've been so.

And we think upstate launching all though by the end. So all the feature set the same thing so that we go to lose out into in terms of the customers.

Which has happened, particularly in Haiti.

Hi.

First one sort of small.

I'm sorry.

Oh the segment.

The goal this year as it did last year, but.

You bet, which equals Lisbon battles.

Many of you then.

Like I missed some of it.

And that's what kind of Penn.

So the good ones in recent that I spoke about.

You bet on small in comparison to come back.

Right.

Well I.

I think because even though do you think this month.

I think that he sees.

And then.

Yes.

Yes actually goes.

<unk>.

I was like anyways.

Yes.

Okay.

[laughter].

The next month and I phone.

Yes.

Range that you have yes.

So starting from gasoline, which.

Yes for pricing.

The CNG.

Yeah.

Pretty strong.

Uh huh.

I think every month.

Yeah.

I mean, it's just.

Yeah sure.

So I.

I think it so it's supposed to them question as I don't so how do you have that's consumed but oh, Muskogee, probably 30 more autocam casual games being.

To do a proper featuring sturdy also work on the features which show odd rule.

We can be relevant given what people use so it's from mild and it'll be doesn't up a probable.

I'm trying our best to.

And showed there goes like and what you're doing all the problems definition it says.

Huh.

We also you know, especially wouldn't talk about how do you think is basically the auction also automatic or that we could mark on deleveraging you know we started with de bundling transmission and this one this has had some cool dealing.

But henceforth as I sit back as a process.

We would definitely our attention on this be.

He showed that though we don't believe comprehensive set of options.

As with most onto features which I thought I live in Oh, that's what do you know segment.

And though if you recall him only the slides, which are presented on support the boat or do you thought because so much from accretion going up the median distance to the scheme of things that people who focus on the seamless.

That though even if it's not something teachers and you know options, which went live phone maybe move to speak to bring it to the market, but in sports you know you improve on should be done.

Oh, you know teaching so these were booked and married to coincide with all the options and futures so altogether or in one launch so like we do.

Okay.

So that wouldn't get them booking point I would say I'm going to Matt Mckee, how do you view.

Mr that she'd be but this will be oh, that's working but looking for.

Sure and lots to your burn.

Thanks.

Let's think might or.

My position not just take it offline if need be I think they're running behind could have you ever lined on another call us them, but certainly if at all or a lot requested this can be taken off plan to come in Africa actually be happy to answer that.

Oh, thank everybody. Thanks, all of your for oil staying on for another 20 minutes or appreciate that and look forward to stay as you can do soon they fit and catches will take care bye. Thank all of it.

Sure.

Thank you very much.

On behalf office.

Thank you for joining us minions and.

I'll just make things.