Good afternoon ladies and gentlemen. Thank you for standing by and welcome to today's Q2 2019 Autoliv Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. [Operator Instructions] I must also advise you that this conference is being recorded today on Friday, the 19th of July 2019. And I would now like to hand the conference over today your first speaker today, Anders Trapp, Vice President, Investor Relations. Please God, sir.

Thank you, Valerie. Welcome everyone to our second quarter 2019 earnings presentation. Here in Stockholm, we have our President and CEO, Mikael Bratt; our Interim Chief Financial Officer, Christian Hanke; and myself, Anders Trapp, Vice President of Investor Relations. During today's earnings call, our CEO will provide a brief overview of our second quarter results as well as provide an update on our general business and market conditions. Following Mikael, Christian will provide further details and commentary around the second quarter 2019 financial results and outlook for full year 2019. At the end of our presentation, we will remain available to respond to your questions, and as usual, the slides are available through a link on the homepage of our corporate website. On the next page, we have the Safe Harbor statement, which is an integrated part of this presentation and it includes the Q&A that follows. During the presentation, we will reference some non-U.S. GAAP measures. The reconciliations of historical U.S. GAAP to non-U.S. GAAP measures are disclosed in our quarterly press release and the 10-Q that will be filed with the SEC. All figures in this presentation refers to continuing operations, i.e., excluding discontinued operations. Lastly, I should mention that this call is intended to conclude at 3:00 P.M. Central European Time, so please follow a limit of two questions per person. I'll now turn over to our CEO, Mikael Bratt.

Thank you, Anders. Looking now into Q2 2019 highlights on the next slide. The second quarter was another challenging quarter where we had to navigate through severe weaknesses in the global light vehicle markets and higher raw material cost with reduced profitability as a consequence. Considering the deterioration of market conditions, our operations reported solid results. This is a reflection of the team's commitment, discipline and actions launched to mitigate the effects from the lower light vehicle production as well as improving launch-related costs. Sharp decline in light vehicle production was more than offset by continued growth from recent launches. This quarter marks the fifth consecutive quarter of substantially higher organic growth compared to the market. In this quarter, we outperformed light vehicle production by more than nine percentage points. Order intake remain on good level, securing a strong order book and supporting prolonged outperformance of light vehicle production into the future. We note though that the source activities was relatively modest and the minority of expected industry sourcing for this year is planned to take place in the second half of the year. Excluding EC and payments in the quarter, we had a solid operating cash flow, enabling us to exceed last year's level for continuing operations for the first half of the year. I'm generally pleased with how we managed to sharp decline in global LVP by the cost reduction actions well implemented and/or we are planning for. Furthermore, I see both room and need for additional improvement in certain areas. So, what are we doing to address the ongoing market weakness? On top of what we said after the first quarter, we initiated a number of additional cost improvement actions. We have sharpened the purchasing activities. We have reduced launch-related costs versus first quarter, direct workforce headcount…

Thank you, Mikael. Looking now to our financials on the next page. We have our key figures for the second quarter, including negative currency translation effects of around $90 million and organic sales growth of $34 million, our consolidated net sales reached $2.2 billion. Our gross margin declined year-on-year. The net operating leverage on the higher sales was more than offset by higher commodity costs. Additionally, we experienced lower capacity utilization in most regions due to the sharp drop in light vehicle production and costs to support the long-term margin expansion. Adjusting for the impact of the social unrest in Mexico, gross margin improved slightly from the first quarter. Our adjusted operating margin of 8.5% declined year-on-year, mainly due to the lower gross profit and a slightly higher RD&E and SG&A in relation to sales, although there were virtually unchanged in absolute dollar amounts. Our adjusted return on capital employed and return on equity were 20% and 24% respectively. We maintained our quarterly dividend unchanged at $0.62. Looking now on the next slide, our adjusted operating margin of 8.5% was 190 bps lower year-on-year. As illustrated by this chart, the adjusted operating margin was negatively impacted by higher raw material costs of 90 bps, 30 bps from the SG&A and RD&E and by 20 bps from FX effects. The costs related to the first quarter social unrest in Mexico amounted to $3 million in the second quarter. As we explained in the previous earnings call, mature products have higher profitability than recently launched products. So, the sharp decline in the LVP brings down sales of the higher margin mature products, which from the profitability point of view is not fully offset by the growth of the lower margin recently launched products that are in the early phase of the product…

Thank you, Christian. Turning the page, to summarize, I would like to share with you what we are doing to address both the near-term market challenges and the long-term opportunities we see. But first, I want to remind you what we did during the financial crisis in 2008 and 2009 when we accelerated our investments in product development. The result of these investments gave Autoliv a clear competitive advantage when the market rebounded, again and was a key factor behind our market share gains after financial crisis. Now, despite uncertain market development, we are accelerating investments in similar way, building the foundation for top line and margin expansion to shorter to long-term with many focus on efficiency step changes across the whole value chain. We will continue to adjust the direct workforce to the market situation and support our ordinary course of business. While sales remained on similar levels as in the first quarter, we reduced direct headcount by 1,200 in the second quarter. The reduction is expected to support margin improvement in the second half of 2019. We have initiated actions to reduce indirect headcount by approximately 5%. We are closely managing tariffs in place today such as to 232 and 301, while monitoring potential new tariffs by implementing number of actions we expect to be able to mitigate the vast majority of the potential $30 million cost that the new tariffs otherwise would amount to in North America alone. As launch-related issues continued to decline, we can now refocus some of our resources on productivity improvements instead. There is both near and room for improvement in certain areas. One example is in Europe, where the severe decline in the market driven at least partly by new emission legislation and consumer uncertainty regarding drivetrains. Brexit, combined with our footprint,…

Thank you, Mikael. Looking at the next page, we -- this concludes our formal comments for today's earnings call, and we would like to now open up the line for questions. So, I'll now turn it back to Valerie.

Thank you sir. [Operator Instructions] And your first question comes from the line of James Picariello of KeyBanc Capital Markets. Please go ahead, your line in is now open.

Hey, good morning guys. So, just touching on your full year light vehicle production forecast now, it's now down four to six. Looks like you're straying away a bit from IHS, which, I believe, is down -- they're forecasting down 3.7%. See, I just what's driving that? And what you're -- can you just talk about your expectations for the second half by region?

Yes. We -- I think first of all, you should see that the range indicates it's the high uncertainty in the marketplace and it's correct that IHS came down here now with the revision last earlier in the week, and we see of what they indicated here that there is still a very high degree uncertainty when we listen to our own organization here and how they are being updated by our customers here. So, of course, China to start with, there is where we see the biggest downward pressure, and that's what you have seen throughout the year. Europe, likewise, for the same reasons here and we have now started to see somewhat weaker U.S. So, when you look at the totality for the remaining of the year, I think you should see the same type of relation between the different regions here. So, it's not that we -- indicating that we see bigger drop in one of, let's say, Europe or U.S. here than what we have seen. So, in relative terms, it's the same pattern that we have seen in the beginning of this year, but it still continue to week, and I think that's the message from our side here.

Okay. And then just within your revised guidance year for the second half from a margin perspective, can you just help walk through what drives the second half improvement to launch cost go completely away, the Mexico labor issue, 15 basis points in the quarter, maybe that goes away? Yes, maybe just sequentially, how you're thinking about the margin trajectory in the back half and what drives that? Thanks.

Yes. I think, first of all, it's the cost measures that we are implementing and having implemented. You may recall already in the last earnings call, we indicated a number of actions that we were working with. And you can see for example, now that adjustments to the lower volumes in certain plants resulting in reduction of 1,200 people, and we will continue to focus and secure that adjustment continues as we move forward there. And on top of that, we have also added now the target of reducing and adjusting indirect labor force here with around on 5%. So, we are stepping up, you could say, our cost-reduction initiatives in the short-term here We also believe that we will see improved raw material situation here, as we move forward in the coming quarters. And of course, we also have the seasonality where we have a stronger second half -- I would say, especially a stronger Q4 as a part of our normal pattern here. And then you have to confirm what you stated around is with is not with us in the second half and we have also launch cost following the plan where they are gradually being reduced throughout the year. So, we are following that plan. So, I would say that's the probably the main five factors to see an improved second half.

Thanks guys.

Thank you. And your next question comes from the line of Vijay Rakesh of Mizuho. Please go ahead.

HI guys. Just on China. Obviously, you talked about second half looks like maybe flat year-on-year, but any thoughts as you look out into next year, do you think some of these emission headwinds start to go in the rearview mirror and you start to see some growth or there are some fundamental headwinds in China?

Yes. I think to be certain about the development in China for 2020, it's certainly too early. But, I mean, if you look into the second quarter, the emission change that took place basically now of July 1st here will go away here. So, that's challenging factor is not part of 2020. And I think we should remember here also that change that now took place was not known while we're sitting here in April. That was something that were decided by Chinese authority in may here. So that, of course, made the second quarter even more complicated here. But I think the underlying factors that we have described earlier here around the driveline, I mean, in traditional versus electrical vehicles is still there, the overall mobility development in China, especially megacities there. But also the underlying economic development that is right now affected by the trade wars and all of uncertainty connected to that. So, I think there is many factors driving the development in China right now and in what way they will gradually be solved is very, very difficult to say.

Got it. And just one question here in Europe. Any thoughts, how if you see any -- in the back half any headwinds with or Brexit, how do we think that plays out because there's been some manufacturing relocations there. Thanks.

I think the same. I mean, Brexit, we, of course, take all the measures we can to have different -- working according to different scenarios here and you could say, we had a practice on that earlier this spring and now it was moved forward. So, it's continuing with that work. And I think it's also very hard to say where we will end up here, but we definitely see a weakening market here as well.

But I think, Mikael, on the RD&E, we don't believe that, that will have a big impact like -- similar to WLTP. So, I think we'd probably can say that based on what we know.

That's correct. No. And I think that was a question also on the previous quarter here potential impact there, but so far so good, I would say.

Thanks.

Thank you. And your next question comes from the line of Hampus Engallau of Handelsbanken. Please go ahead.

With according to 1,200 people that you've already working contracts for, how much is that due to you are facing out launch process and ramp up? And how much like capacity adjustments? And second question is related to this 5% on the headcount further on. Is it equally spread between U.S., Europe and China? And there is an element temporary contracts or should we expect one-off charges for this? Thanks.

Yes. I think -- thank you, Hampus. On the first question around 1,200 people, I'll say minority of that is connected to capacity adjustments here, but to your point here launch costs start to come down as a result of the improvement activities we are doing can also steer resources towards traditional productivity work even harder and that is being done. But I will say that kind of resource allocation done is more on the indirect side. And the -- then the 5% that we are targeting here is, I will say, a global number, of course, and we are addressing all indirect areas here. Exactly how that will be played out in terms of number per country or region and functions, we can't say it here now. Now, we are working with all the tools in the toolbox here to realize this number here, and we will, of course, also have some one-time charges here, and you have seen some of this charges already being booked now in the second quarter here.

Okay. But will it be of the program what should we expect to like each quarter specific amount or--

I wouldn't like to call it as a program, because this is activities we needed to address as we move forward and drive the productivity in combination, of course, with adjustments to the market development here. And there will be charges depending on which way, so to speak, that we are realizing these targets here. I don't know, Chris, anything to add to that?

No, no. I mean, I think you're absolutely right. I mean we have monitoring the market the way the market is moving. In terms of the indirect labor, we have this local rules and regulations to deal with. So, I mean I think we have recorded we can in the second quarter and it was probably more spillover in the second half of the year.

But it will depends on which means that we at the end of the day ends up. And of course, on the direct workforce that we have a high degree of temporaries that's we have indicated also before. So, we have a fairly -- I mean, we have a good flexibility in that area.

Thank you.

Thank you. Your next question comes from the line of David Leiker of Baird. Please go ahead.

Good afternoon everyone.

Good afternoon.

Hello.

Two questions here. If you look at the slide of quarter two key model launches, that's a great list and it's helpful. Can you -- just wondering if you could add some color to that and give a couple of examples of how your content might have changed one of these vehicles versus the previous version of those?

I think when it comes to the content here, as we pointed out in the presentation here, I think the interesting part is how we see more knee airbags being implemented to the vehicles indicating that -- and I mean, support being what we have described here before as content continue to increase also in the mature markets. And of course, secondly here, we see also new type of cars, new cars and new cars for us. So, if you take the Mazda CX-30, it's a new car for us, the Cadillac XT6 is a new car and the Nissan Sylphy is the new car for us. So, there we have taken a bigger portion of that business. Also, I will say that the Jeep Gladiator is a completely new car. So, in short, you see a lot of new car models coming through here, but we have a high participation in, and content per vehicle is at a very good level and with, I would say, new types of airbags with example of the knee bags.

Okay, great. And then Autoliv has a track record history here of engineering recoveries that tend to be more heavily weighted to Q4 than others. Is there any insight you can give us in terms of how we should be looking at that as it relates to the fourth quarter of this year?

No, I think I can only confirm what I said before here that its seasonality is supporting a stronger second half and especially Q4 and what you are alluding to here around engineering income is one of those, so that's correct.

And you would expect it to be not -- that pattern to be not any different than last year in terms of magnitude?

No. You would see the same pattern, yes.

Okay, great. Thank you.

Thank you.

Thank you. And your next question comes from the line of Joseph Spak of RBC Capital Markets. Please go ahead.

Thanks. And I guess good afternoon over there. First question is, I was wondering can you provide an update on the order intrinsic win rate. I know it had been running about 50%. And then I guess just as you look to the second half and you mentioned you expect more sourcing there, as you start to look at some of those programs, are you seeing any pricing change on some of those new potential programs or more productivity requirements on existing biz in order to secure that business, especially given Joyson's re-growing presence?

When it comes to the share of new orders, we don't give the numbers quarterly here. We only do that on a yearly basis. But we continue to see good order intake even though the activity has been relatively low, but good order intake supporting strong order book here. So, I think that's what I can say in regards to that. Do we see increased price pressure on the tougher market? I would say that, as always, the automotive industry and the supplier business, there is a -- it's a very competitive industry and has always been. And of course, when you look through the industry here, you have seen some more challenging requests from some of the OEMs. But I would say, all in all, we are on a stable situation here. So, I wouldn't say that it's a dramatically changed in that direction, but of course, if you take anecdotally some OEMs there, of course, you can see some pressure. But all in all, I would say, stable, but as always challenging industry.

Sure. Thanks. That's helpful. And then just on the margins. I know you sort of addressed the second half ramp a little bit. I guess it would be helpful if maybe you could either quantify the launch cost benefit or the headcount reduction benefit. But the other thing, in particular, that I was wondering about is, like, you said on slide on that launch costs already improved in this quarter from the first quarter. And if we back out sort of the Mexico headwinds from both quarters, looks like both quarters were around 8.7% more operating margin, so pretty flat on the similar level sales. So, if launch costs really did improve from 2Q to -- or from 1Q to 2Q, what was sort of the offset that kept the margins flat?

No, I think, first of all, you saw the raw material higher than what was in the first quarter, and I think also currency is one that you can consider on the short. So, I think we feel very comfortable that the launch costs and the activities that we're doing to reduce the headwind here is offsetting some of these things. So--

So, like how much of the back half improvement is due to the lower launch costs?

We are not quantifying that. We have never really quantified the launch cost altogether here. But as we have indicated, it has the gradual improvement throughout the year. So, I mean now we are half through year, so I think it's comfortable that we're expecting to be completely out of that this year.

All right. Thank you.

Thank you.

Thank you. And your next question comes from the line of Brian Johnson of Barclays. Please go ahead.

Thank you. This is Jason Stuhldreher on for Brian. I just want to come back to the guidance because -- and I know it's been asked a lot. But if I look at the step-up when you back out sort of the incremental margins from revenue, it still implies about $90 million improvement in performance from 1H to 2H, which is roughly 2% to sales or so. And so I know you want to stay away from quantifying, but I think it would be helpful to understand of that $90 million and that's a rough number, is that -- I mean is it pretty proportional that we're going to see that between headcount savings and then raw material savings? The reason I ask is, if we look at SG&A plus RD&E, that's about 11% of sales, so I think 2% out of that would be fairly aggressive. So, if we could just get sort of 50-50 or one-third, two-thirds between material savings and headcount, is there any color you could provide there at all?

No, I'm sorry about that. I think I have to refer to my comments before here about, let's say, the five main levers here to driving performance improvement or the EBIT improvement here for the second half. And I mean -- of course, the Matamoros effect you have seen in the first quarter here -- first quarter and the second quarter raw material you have there also, but we are saying its improving, we're not saying that it will be eliminated here. So, we will not go into -- quantify these levers here, but--

Okay. That's fine. Okay. And then second question. I -- just to talk about the product mix. I understand there is an element of product mix where your more mature programs were rolling off the higher margin than the new programs. And I just want to touch on this because it's something we've heard from a lot of suppliers. So, I do understand the new programs tend to come on a lower margin and then improve over the life of the program. But that does imply that last year's business should be coming on more profitable this year and that this year we should be seeing an element of performance in that year-over-year walk. So, my question is, do we see that incremental performance this year or this quarter from last year's business becoming incrementally more profitable? Or conversely or are new programs just generally coming on at lower margins? And I guess, to put that more bluntly, in the period of growth over the last three to four years, was the industry or you simply overearning on certain programs and that now on a flat to declining production environment we shouldn't expect that?

Yes, I think you have the wrong assumption therein in your reasoning around the different programs here. It's not so that old are better than the new ones. It's that -- what we are talking about here is in the ramp-up phase of new program, it has a lower profitability or earning as they are maturing through the launch process here. So, as we have come into the -- what we -- what caller referred to that the wave here, meaning the step-up in our market share, we have higher proportion of launch of our total portfolio, which has a short-term negative effect. So, it's not the question about the new program has low profitability altogether. It's a pure timing of -- this is -- the timing of the new programs are indicated here, and that has been true for support of our industry. So, it's nothing new. It's just that we have a higher portion of launch programs versus the mature programs that now is breaking at 7% in the quarter. That's -- it's part of light vehicle production. So, that's the difference.

Okay. Thank you.

Thank you. And your next question comes from the line of Chris McNally of Evercore. Please go ahead, your line is open.

Thanks gentlemen. Good afternoon. Maybe just a follow-up. I appreciate the detail on the type of the headcount reductions. Just maybe it is a simple question. Were they taken during the quarter? Meaning do we get some of the benefit in Q2? I imagine it would take some time for it actually to flow through, so the majority would be in second half. But did we receive any benefit from the headcount specifically in Q2?

Yes, I think, I mean, the 1,200 have gradually been taken -- being reduced throughout the quarter. So, of course, it's not full effect of 1,200 people in the quarter. So that there has been a timing question of that. And then when we go forward here, the 5% as we're talking about on the indirect, it will also have a gradual effect. And it depends on which region and so forth that have a longer lead time to execute on those things. So, it will have a gradual implementation. And of course, as we adjust on the direct workforce, it's the same as we have talked about here in the second quarter. So, that is a timing question.

That makes perfect sense. And then just a broader question. I mean, I think, we've all seen the revisions that continually happen for sort of all suppliers for IHS, and everyone seems to realize it might be a lagging indicator, so they are a little bit more cautious. I mean, as you sit here today, what -- maybe if you could talk by a region or a segment or a mix. I mean, where do you think the incremental upside or downside is? I mean what sort of keeps you up at night in terms of now that we sort of have the updated call in sort of the -- call out sort of back half of the year? What are you watching for the second half for things to get better or worse?

No, I think, I mean, for us, the focus is to be flexible and agile whatever we see coming through from the underlying development here over the market. I think as I said before here, I mean, the uncertainty is so high, hence then thus we are giving a range rather than a round number here. So, we just need to make sure that we are staying alert and make the adjustment as needed.

Okay, much appreciated. Thank you.

Thank you.

Thank you. And your next question comes from the line of Alexandre Raverdy of Kepler. Please go ahead, your line is now open.

Thank you. Good afternoon. I have two questions, please. The first one is on the EBIT bridge for the full year. I remember in Q1 you quantified the raw mat headwind at 60 bps. Is it still what you expect?

On the raw material, we have upped that to 70 bps as a consequence of the raw material increase we had seen here in the second quarter that was slightly higher and also what we expect for the rest of year. So, net-net of that is 70 bps now.

Okay. Thank you. And second question is on the cycle. So I know visibility remains extremely limited, but -- I mean what are your expectation for global production for next year? I know that one of your competitors expect a flat environment between 2019 and 2021. So, at this stage, what's your view? Do you think a rebound next year or will you stay quite cautious?

I think it's too early to call on that now. I think, first of all, we need to see how the second half develops here, and we need to have more visibility in order to dodge that. There is so much moving parts out there that we need to have a resolution on, I think so. Too early to say.

Yes, it makes sense. Thank you.

Thank you.

Thank you. And your next question comes from the line of Jairam Nathan of Daiwa Securities. Please go ahead.

Hi, thank you. Thanks for taking the question. So, I had a question regarding your longer-term efforts on digitalization and automation. So, just peeling back the onion here behind the financial statements, can you talk about some operational metrics you're targeting and -- that you think that you should -- you think that can improve with these?

No, I think we will see if we come back to some KPIs or metrics around that later on. But what we really want to say here is that we see great opportunities throughout the value chain as we move forward and we don't see any reason why we should slow down those efforts. It's rather the opposite here, and the message here is that we're trying to speed them up and gain the benefits earlier here than maybe originally anticipated here. So, we have highly focused agenda on driving productivity going forward here. And this is an area where we see good opportunities, and that's why we wanted to point it out. But it's all that to drive the productivity. So, that's the ultimate metric.

Okay. Thank you.

Thank you.

Thank you. And your next question comes from the line of Rod Lache of Wolfe Research. Please go ahead.

Hey good morning. This is Dan Galves in for Rod. Our question is around kind of the general financial health of the industry after four quarters of lower global production. In a row, there's been some news on financial stress of some local Chinese OEMs. Some of your peers have talked about balance sheet weakness in the Tier 2 base. How do you guys monitor this? Are you seeing any warning signs, and is it impacting your ability to generate productivity improvements through the course of 2019?

I feel that we have a robust purchasing organization -- supply chain management organization into monitoring any risk we may see from our supplier base. I can't say that -- I mean, of course, I understand what you're referring to and what you see. But in our case, I would say, it's not any troublesome situation. There is something we are keeping a close eye on, but we haven't seen any really changed situation there. So, I don't feel very concerned about that from our side, our perspective. But of course, that's something that we are closely monitoring, for sure.

Okay. Thanks. And just one quick one on first half to second half raw materials. Are you expecting improvement in raw material costs versus the first half or just a reduction in the headwind?

It's basically a reduction in headwinds. That's the way you should see it.

Okay. Thanks a lot for taking my questions.

Thank you.

Thank you. And your next question comes from the line of Andrea Abouchacra of One Investments. Please go ahead.

Hi good afternoon. Thanks a lot. I have a quick one regarding model launches. How many launches you had so far in H1 or at least what was the year-over-year increase versus last year? I remember last year Q2 was over 70% growth of number of launches year-over-year. And the second part of the question, how should we think about H2 launches versus H1 in terms of proportion over the total portfolio for Autoliv? Thank you.

No, we have in sequence here a much more stable situation when it comes to the number of launches. But as you can see, we continued to outperform the market as a result of the launches we have and the market shares that we're taking in the different programs here. So -- and, of course, that's the perspective. And I think also when you look at the year-over-year improvement -- increase of launches, we had a step-up of 20% from 17% to 18%, and this year it's much, much lower step-up. It's more -- I would call it flat plus. So, a number of launches.

Right. Would it be the case for H2 as well?

Yes. [Indiscernible] situation.

Okay. Thank you.

Thank you. And your next question comes from the line of Erik Paulsson of Pareto Securities. Please go ahead.

Yes. Hello. You touched upon it a bit already, but is it possible to quantify the number for the cost savings for the reduction of the indirect workforce of the roughly 5%? Is it possible to do that?

We are not giving any details on the respective cost-saving activities that we've lined out here. So, I cannot quantify it for you. Sorry.

Okay. Thank you.

Thank you very much.

Thank you. And your next question comes from the line of Agnieszka Vilela of Nordea. Please go ahead.

Thank you. I have a question on your organic growth performance against the market, and then maybe you could zoom in into some regions specifically. If I look at Americas, for example, you have been outperforming the market by double digits for the next five quarters. Do you think that this outperformance will now diminish in H2? And then also a similar question on Japan where you have been underperforming the market. What makes you believe that you will turn into outperformance in H2? Thank you.

Thank you. Of course, the outperformance prediction that we are giving is based on the order book market share that we -- the order intake market share that has built our order book over the last couple of years. And according to our predictions here is that we should start to see that outperformance starting in Japan towards the end of the year, all in line with how we actually also got the market share gains in the new order intake. So, it follows basically that, but with the 18 to 36 months delay in the implementation time there, as we said. And in Americas, we expected to continue to outperform, but, of course, at significantly lower numbers as we now, you could say, have come through a full year here from when the step-up of launches start. So, you will see lower numbers in -- let's call it, the early launch regions in the second half of the year.

Perfect. Thank you.

Thank you.

Thank you. There are no further questions at this time. Please continue.

Thank you very much, Valerie. This ends today's call. But before we hang up, I would like to say that we will continue to execute on our growing business volumes and our new opportunities. We will never -- we will have a never ending focus on quality and operational excellence. Also, I would like to mention that our third quarter earnings call is scheduled for Friday, October 25th, 2019. And thank you, everyone, for participating in today's call. We sincerely appreciate your continued interest in Autoliv and hope to have you on the next call. Good bye for this time.

Thank you, sir. Ladies and gentlemen, that does conclude your conference for today. Thank you for participating. And you may now disconnect.