Ladies and gentlemen, thank you for standing by, and welcome to the Gates Industrial Corporation Q4 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to your first speaker today, Bill Waelke, Head of Investor Relations. Thank you. Please go ahead.

Thanks Meghan and thank you, everyone for joining us this morning on our fourth quarter 2020 earnings call. I'll briefly cover our non-GAAP and forward-looking language before passing the call over to our CEO, Ivo Jurek, who will be followed by Brooks Mallard, our CFO. Before the market open today, we published our fourth quarter and full year results. A copy of the release is available on our website at investors.Gates.com. Today's call is being webcast and is accompanied by a slide presentation.

Thank you, Bill. Good morning all and thank you for joining us on our fourth quarter earnings call. As we begin, I would like to recognize and thank each of our global Gates associates for their commitment they displayed throughout 2020 working diligently through a very challenging COVID-induced economic environment while staying true to Gates’ core values. Not only did we step up to meet these challenges head on, we also continued to deliver on our mission to drive above market organic growth and expand margins. We accelerated innovation, improved profitability, generated strong cash flow, and strengthened our balance sheet by reducing gross debt. Our fourth quarter results demonstrate the benefits of our transformation and highlight the resilience and strength of our business model as we return to strong year-over-year growth. The improved business activity we saw in the third quarter continued and expanded to all of our regions and both segments. The solid growth performance in the quarter was accelerated nicely by our initiatives. Sales of our newer products performed well continuing their trajectory that has been largely unaffected by the pandemic. The flexible posture we maintained throughout the pandemic allowed us to efficiently navigate the transition back to growth and expand margins in a quarter compared to the prior year despite COVID-related costs and inefficiencies.

Thank you, Ivo. Moving now to Slide 7 and some additional detail on key balance sheet and cash flow items, on an LTM basis, our fourth quarter free cash flow of $242 million represented 118% of our adjusted net income. Our cash flow performance was driven by lower capital spending, lower cash taxes and interest and better working capital performance. As a percentage of annualized Q4 sales, trade working capital decreased by 340 basis points, compared to the same quarter in 2019. While volume accelerated during Q4, we were able to reduce our overall investment in working capital by approximately $16 million net of FX impact. Our return on invested capital was a solid 15% despite the challenging conditions we experienced for most of the year, and represents an improvement of 100 basis points compared to Q3. On Slide 8, we provide detail on our available liquidity and debt maturities. At the end of the fourth quarter, we used cash on the balance sheet to repay $300 million of our US dollar term loan, which will result in approximately 11 million of annual savings and interest expense. After this debt repayment, we continue to maintain ample liquidity with over $900 million of cash and revolving credit lines available at the end of the quarter. We will remain opportunistic with respect to our capital structure, and are committed to continue to reduce our overall gross debt. Net debt in the quarter improved from Q3 to 4.3 times adjusted EBITDA. As our end markets continue to recover and based on our current view of 2021, we expect to be at or near net leverage of three times by the end of this year. Moving now to Slide 9 and a brief summary of our full year performance in 2020, which from an operational perspective was one of the most challenging years the company has experienced and a tale of two halves. Full core revenues declined 8.4% with an 18.1% adjusted EBITDA margin. However, our business recovered strongly after bottoming in Q2. We delivered 2% positive core growth in the second half, and an associated incremental EBITDA margin of 66%. We took relatively limited temporary cost actions to protect both our ability to supply our critical components to our global customer base, and to continue to advance our growth initiatives. While the year was difficult, we executed well and built strong momentum exiting 2020.

Thank you, Brooks. With 2020 behind us, let's move on to 2021. Despite the remaining macroeconomic uncertainty, the end market environment has steadily improved. And our business has strengthened giving us the confidence to introduce a full year outlook for 2021. Based on the broad demand trends we are seeing we expect core revenue to increase in a range of 9% to 14%. We expect our adjusted EBITDA margin to be in the range of 21% to 22%, reflecting significant margin expansion. This is in line with our commitment to deliver elevated incremental margin despite the significant COVID related cost headwinds during our return to growth. CapEx is expected to be in line with a historical average of roughly 3% of sales, ranging from $90 million to $110 million to support both maintenance and growth requirements. We also expect to continue to generate a substantial amount of free cash flow in 2021 in excess of 80% of our adjusted net income. Given the unique dynamics of 2020, we are planning to provide additional detail on the prevailing quarter on a rolling basis. For Q1, we expect our total revenue to be in the range of $810 million to $840 million and our adjusted EBITDA to be in the range of $170 million to $185 million. Now let me move on to Slide 11. The fourth quarter marked an excellent performance and highlighted and anticipated business transformation driven turning point for the business. As evidenced by our guidance, we believe 2021 will be a strong year. We also believe the investment we have made in our portfolio and the work we have done to reposition the business provide us runway, not just in 2021, but well into the future. The diversified nature of our business provides us with exposure to highly attractive end markets, which we have broken down in more detail here on Slide 11. A significant number of these end markets are benefiting from nice secular tailwind. As we have spoken about in the past, we continue to bring in key design wins in industrial automation, logistics and personal mobility applications, to name a few examples. Many of these design wins have been made possible by our new products. As we move forward, we believe our revitalized product portfolio, and investments directed towards targeted commercial initiatives in these attractive end markets provide us with an opportunity to deliver above market growth over the midterm. Moving now to Slide 12 to wrap things up, we delivered results that significantly exceeded our expectations for the quarter. I am very pleased with the momentum we have seen in the business and the execution of our teams globally. With significant progress that we attain on driving structural changes to our business, we maintain that we are in much stronger position today than when we entered this pandemic induced recession.

Certainly, at this time, we would like to take any questions you may have for us today. Our first question is from Andrew Kaplowitz with Citi. Your line is open.

Good morning, everyone. Hope everyone's well.

Good morning Andy.

Good morning.

Can you give us some more color into your 9% to 14% core sales growth guide for the year, because if I look at Q1 maybe 25 at least at the midpoint, you're baking in Q1 that would be the high watermark in terms of quarterly sales for Gates. So is that just conservatism given the short cycle nature of the business? Is there anything else going on? And are you concerned at all about the recent auto production shutdowns that we've seen?

Thank you for the question Andy. Look, we are going to stay away from further breakdown of our guide beyond what we have already provided. But fundamentally, our markets are supportive of our growth initiatives, are performing well. Look, there’s some macro that does remain, but we are quite constructive for the full year.

Easy enough, and then Ivo, maybe you could give us a little more color on the status of all your new product initiatives. I think this is the first time you've quantified the impact of new product growth, both in your quarterly results and now in your forward guide with that mid-single-digit outperformance. So may be give us a little more color into the acceleration you're seeing on the new product front, which segment is actually having more impact if we look at the 9% to 14%, core growth going forward?

Andy, it is reasonably broad based. We have been able to see the acceleration of some of those highlights that we have provided over the last, I want to say five to six quarters. We've seen really nice gains in businesses like personal mobility as an example, which grew over 20% in 2020 despite all of the COVID-related headwinds that we have seen. We have seen a significant amount of design wins in some of the attractive end markets that I've highlighted on Slide 11 that are associated with industrial automation, logistics, and robotics. And we also see a pretty nice set of uptick in demand for our new products in fluid power. I've spoken quite a bit about the MXT and MXG product portfolio revitalization. Those sales exited at frankly the best position that we have seen since those products were introduced in December, and we are very optimistic that as we work with our customers, and they are looking at some of their underlying trends in building their machinery and equipment that they want to launch that is more efficient, lighter, consumes less energy, and provides more uptime. That's really the sweet spot of what the reinvention of our product portfolio brings to those customers. So, it was very broad based. It was across all regions, and it was nicely represented across both of our segments.

Thanks Ivo. I'll turn it over.

Your next question is from Jeff Hammond with KeyBanc Capital Markets. Your line is open.

Hey, good morning, guys.

Good morning.

Good morning.

Just on the inventory levels, it sounds like inventory is still low and you're not really seeing any restock of note or maybe there are some areas. Just talk about what you think or what you're hearing from your customers and what you've kind of built into the guide in terms of any restock happening.

Yeah, I think - thank you for the question first of all, Jeff. Look, I think as I've mentioned in my prepared remarks, we really have not seen any elevation in the channel, particularly in the industrial replacement channel. We have seen that our customers are starting to buy more products. I think that they are feeling more confident about their end market demand and from the data that we look at on a monthly basis. We’ve seen that those purchases are very much in line with the end user demand, so no elevation there. On the automotive replacement side, the market has been performing quite well. We have been able to outperform the market with our results. And I think we are benefiting from operational continuity that we have been able to demonstrate throughout the second half of the year, and we also have not seen a significant or frankly, any elevation in inventories. On the OEM side, as you know Jeff, it becomes a little more tricky. We generally speaking build to what our customer releases look like. But if you take a look at some of the publicly disclosed data from some of the large OEMs, the expectation is that they have seen an inventory decline, not necessarily an inventory rebuild of their equipment, so my sense is that the markets are just in a healing stage, not really at a significant restocking phase.

Okay, that's great. And then just your Slide 11 was really helpful in terms of the end market breakdowns and updates. If you look at that 9% to 14% kind of growth you're building in and you look at the end markets, are there any that are clearly going to be at the top end or outperforming the top end or vice versa, kind of ones you see as bigger laggards within that?

Yeah, look, my sense is that - again, I think I answered it when Andy was at the helm of questioning there. Look, we're very constructive on personal mobility. We have been building a very nice product portfolio there. Differentiation, particularly replacing chain in personal mobility and some of the trends that you are seeing with people staying away from public transportation that bodes well for us, and we expect performance above that guide that we have provided you. We're also very constructive on diversified industrial. There are lots of secular trend wins, and we've spoken quite a bit about the design wins in warehousing, logistics, robotics, some of the ecommerce trends that continue - we all continue to see and benefit from. So we are very constructive on that market segment, and we have a very good presence and we have done lots of work, particularly over the last couple of years. Look, automotive replacement is very strong. We have continued to do a terrific job in growing presence there. I've spoken about our China business in automotive replacement, in particular to exited the - it exited 2020 kind of $100 million run rate and just kind of for a reference, our China team has more than doubled that business in under three years. So we continue to see that there's some positive tailwind in that business as well. So I would say lots of green shoots versus where we were maybe as recently as two quarters ago. And the fact that our view is that the markets are just healing, not really kind of being totally robust yet. We think that all of our segments with the exception of energy resources is going to be a plus in 2021.

Okay, great color Ivo. I'll jump right back in queue.

Your next question is from Damian Karas with UBS. Your line is open.

Hi, good morning, everyone, really nice quarter.

Thank you, Damian. Good morning.

So we have been hearing from some other companies operating in some of the same end markets about supply chain issues. I was just wondering if you could give us any color on what you're seeing and hearing and to what extent if at all, you've maybe accounted for such issues in your guidance for the year?

Yeah sure, when I think about your question, Damien, I kind of think about it in two ways. One is inflation. And we have seen a moderate increase in inflation, raw material inflation in particularly in fourth quarter, but this is something that we have anticipated taking into an account what you see in terms of liquidity and what you see in demand, some of the demand coming back reasonably nicely. And so we have been very actively managing our raw material costs. And we certainly are very confident that we will be able to offset any raw material inflation with actions that we have taken either by new products that are more efficient than using less raw material to perform the same function and/or positive price realization. So that will be on one side. On the other side, look, lots of disruptions associated particularly with logistics. But again, I think that the work that we have done, the transformation that we have driven at Gates particularly with the new plants that came online in 2018 are giving us a great in region for region operating strategy, it gives us multiple sources for raw materials. And certainly we have not seen much in terms of disruption of our supply chain. But I will tell you that if you're trying to get product on the ocean or airship, it's very difficult, as the additional complexity associated with the availability of freight. But I think that that's where our ability to have gotten and lean forward in the transformation process that we have gone through, and giving us the opportunity to be much more in region for region, frankly, with very de minimis amount of TransAtlantic or Trans-Pacific cross shipments, I think positioning as well. And the last point of your question is that we've anticipated inflation, and we've anticipated incremental logistics in our guide.

Okay, got it, that's really helpful. And then I wanted to also ask you about the margin guidance here, 21% to 22% adjusted EBITDA margins. I was wondering how much discretionary cost savings from this past year you expect to come back if any at all, maybe you could just kind of bridge the margin in terms of fixed cost savings, kind of still have yet to hit the P&L. Any of that discretionary costs coming back, potentially and I guess just any other considerations factoring into that margin guide?

Hey, this is Brooks. I'll take that one. So first, on the - just kind of highlight the restructuring. We're still on pace to deliver our run rate of 40 million, by the time we get to the end of '21. We got some savings in '20, we'll get most of the incremental savings in '21 and then we'll still have a little bit leftover that we get in '22. So that's going to help drive the margins. As far as discretionary cost, I would say that we're still seeing more headwind from an efficiency perspective in the factories than we're saving on a discretionary basis on the SG&A line. So you have absenteeism, you have people moving in and out, you have training, you have these different headwinds that we're seeing as we make sure we were able to supply our customers. And so as that starts to alleviate through the year, that'll probably offset the comeback of the discretionary cost. So net-net probably still a little bit of a headwind as we get through COVID. But should start to abate as we get toward the end of the year and we get out of this.

Okay, got it. Thanks a lot. I'll pass it along.

Your next question comes from Jamie Cook with Credit Suisse. Your line is open.

Hi, good morning. I guess my first question. Obviously, the margin guidance is strong for 2021. I'm just wondering how we should think about the margins by segment? At what point does fluid power start to catch up more with the power transmission business, so I guess it's my first question. And then my second question, obviously, you said you'll hit your or you should hit your leverage target of about three times by the end of the year, just sort of thoughts on capital allocation beyond that. Thank you.

Thank you, for your question, Jamie. Look from - margin recovery into fluid power, fluid power is still not reaching the potential of volume that we have seen in 2018. So we still have ways to go and we anticipate that as the volume starts catching up, you're going to start seeing those gross margins to and EBITDA margins to come up nicely in line with what we have been able to accomplish in '18 and beyond. So that's probably the biggest driver Jamie, in terms of seeing that EBITDA margin recover on fluid power. In terms of terms of capital allocation priorities, I would say that our primary focus still is to deleverage our balance sheet. But we're frankly going to remain very opportunistic on growth related set of priorities as well. I think that we are in significantly better position than I think most folks anticipated when we exited Q2. We're very constructive and committed to get to and below three times net leverage. We believe that we will get to three times leverage by end of this year, and that will substantially open up additional flexibility for us well into the future. So we feel quite good where we sit and we believe that everything is on the table.

Thank you.

Your next question is from Jerry Revich with Goldman Sachs. Your line is open.

Hi, good morning, everyone.

Good morning Jerry.

Good morning.

I'm wondering if you folks can talk about where lead times stand today and the levers that you would pull if you had to scale production above the high end of your sales range. So sales continue to - demand continues to improve versus expectations. Can we just talk about the levers we would pull in the footprint today and how that compares to the last cycle?

Yeah, thank you for your question, Jerry. I think that I'll come back to the expansion of our capacity that we've brought online in 2018 and beginning of 2019. That gives us quite a substantial headroom to be able to deliver volume above that year that we have experienced in 2018. We've also been able to create a lot more flexibility in essence, if you remember, Jerry, I've been talking a lot about getting to occasions where we can hire folks and ramp up production more readily. So we have machine capacity in place that will give us a very nice opportunity to deliver whatever volume of - incremental volume that's potentially coming and then we may realize. And lead times, lead times for us still within a reasonable level we anticipated lead times will start stretching a little bit as we are able to support the customers that are coming in with a maybe more robust demand and with the new design wins that we've spoken about, and we have the opportunity and the flexibility to be able to ramp up and support them as that may occur.

And what's interesting is '21, the first year of recovery. Your margin guidance is just a point away from where margins peaked in the last cycle. And I wonder if you talking about if the recovery continues into 2022, can you sustain the level of operating leverage that you're delivering in '21? Or how should we think about potential for new highs in margin if the cycle does continue?

Yeah. So Jerry, I don't want to get over my skis here too far. But look, I think sometimes in 2019, during our Capital Markets Update Day, we've talked about 24% EBITDA margins. And frankly, we don't see any reasons to be committed. We believe that that is certainly in play. And I believe that the quality of our business is such, and the transformation that we have driven both operationally as well as from a portfolio perspective is such that we should be in a situation to be able to come within striking distance of that 24% EBITDA margin.

Okay. I appreciate the discussion. Thanks.

Thank you, Jerry.

Your next question is from Julian Mitchell with Barclays. Your line is open.

Hi, good morning. Maybe just the first question around the margin outlook, so it looks like you're dialing in for the 45%, 50% incremental margins in Q1 and for the year, so just wanted to check that that's roughly the right ballpark? And is the way to think about it, it's about 35%, sort of baseline incremental. And then you're adding on a good chunk of both restructuring savings for the balance. And then what's the sort of medium-term expectation around incremental?

Yeah. Hey, this is Brooks. I'll take that one. So I think you're thinking about it the right way. The one caveat I would put on that is we are seeing some tailwinds from FX. And so we're not going to lever up at the same rate on the FX that's going to be about our normalized EBITDA margins of, of 20%. So you're going to have to separate the core growth out from the FX when you do those calculations. As we go forward based on the profile the business and I think what we've said before is 35% to 40% on the top line leverage on a go forward basis is what we would expect once we get through these restructuring activities that are obviously additive.

Thanks. And then Brooks, maybe the follow up for you as well around the - I don't think cash flow has been touched on yet in the Q&A. So I understand that the CapEx is seeing a decent rebound in '21. Just wondered any more color you could give us around what scale of working capital cash headwind we could expect from that revenue bounce? It seemed like in Q4, the working capital kept to a strict discipline, even when the revenue turning around, but I wanted for the full year '21 and how big the headwinds could be. And should we expect free cash flow dollars to still be up year-on-year and '21 even we have that working cap and CapEx headwind?

Yeah. So I'm going to be careful about predicting the dollars on working capital, because that's going to be pretty tied to how the volume looks in the second half of the year, which is obviously ways out there. And as Ivo said, we don't want to provide any further update on that in terms of other than the guidance that we've given. I will tell you that Q4 this year, our working capital performance was really strong. We know our collections were good. We did a good job managing inventory. Our payables offset a lot of the increase in raw material inventories that we tried to lay in as we're ramping up production. And we had a little bit of help because we're a little bit more mixed over the first-fit business in Q4. And that helps us a little bit on the terms what they are, so we're able to collect a little bit more cash than normal. Obviously, that's probably the single biggest thing when you think about working capital is that when you get back to more normalized mix of products, we will see a little bit of terms creep toward the replacement business. And so that's certainly one of the factors that's going to affect us. And then also as we inflect toward growth there's going to be some investment in working capital. So that's just one of the things that that we're going to have to deal with, right.

Great, thank you.

Your next question is from Deane Dray with RBC Capital Markets. Your line is open.

Good morning, everyone. And thanks, again, for moving to the morning call timeframe. Thanks.

Good morning Deane.

Just to follow up on Julian's question on free cash flow for Brooks, what's on the increase year-over-year in CapEx dollars? Could you talk through some of the projects that those are targeting?

Look Deane, I think that our normalized rate of maintenance CapEx is kind of in that 1% to 1.5%. We also are doing quite a bit of work in Europe on additional IT infrastructure, so that's going to get some CapEx allocation that probably have a good chunk of the increase. And then generally speaking, we have about 1%, 1.5% of growth CapEx and we have done a terrific amount of work over the last three or four years in rebuilding capital structure, putting new equipment. I've talked a lot about our innovation, frankly, is driven by our ability to revitalize our production processes that are unique and differentiated to us that gives us an ability to accelerate our innovation cycle and develop these new products that give us the opportunity to drive growth. And so we will continue to maintain the growth CapEx about 1% and 1.5%. And so that's really kind of the composition. So maybe what's different is a little bit of an investment into IT infrastructure in Europe to help ourselves on the enterprise side.

Yeah, the only thing I would add to that is typically we have more good projects to go after. And so for us, it's all about allocating our time and resources towards the best projects and what's going to deliver the best bang for the buck. 2020 was obviously a one off, so it's really kind of back to normal in terms of the good projects that are going to drive strong cash flow and good IRR for the business.

All right, that's real helpful. And then Ivo, you mentioned that you're seeing higher efficiencies from the new plant investments that you made. How's that translating? Just qualitatively, what are you doing better? Is it your shorter lead times, higher efficiency, more automation, just how are those new plant investments translating into better margins?

I wonder, if you were in our plants Deane, you've just did a very nice summary of that. So obviously, the new plants they are larger in scale. So they give us the opportunity to have much more efficient usage of manufacturing overheads. We have new semi-automated equipment that we have launched in those three - particularly three new facilities that we have built and brought online in '18 and early '19. That gives us the ability, frankly, to be much more flexible with supporting our global customer base and keep our lead times more in check. But I think its overall cost structure that is lower and much more efficient manufacturing infrastructure that we have put in place that give us an ability to scale up more rapidly, and frankly, do it at lower cost.

Great and then just last question for me and Ivo the past couple of quarters you've been real good about highlighting some of the COVID macro trends that are translating into your business, like less use of mass transit, so you see more people getting a second or third car, as well as more investment in personal mobility. And so I'm interested in hearing, when you talk about all these on the diversified industrial part of Slide 11, automation, logistics, robotics, warehouse that from what we're seeing is going to be a big growth opportunity for industrials over the next several years. What are the chances that you're going to be able to have that as one of these separate categories that we would see on Slide 11? How much would they represent today? What kind of growth rate are they expected to see the next year or so just yet those, like what I'll call hyper growth opportunities?

I think that you hit something that I have been trying to on several of these earnings calls hint that and that is that those are macro trends that we are front and center on. There's a couple of very good customers of ours that reported over the last quarter that have market leadership in industrial automation as an example here in the US and very good customer of ours. And we are working very diligently particularly on the chain to build opportunities. You can imagine Deane, the big opportunity here is to drive efficiency, not just because there is more efficient equipment is being launched, and everybody's trying to automate, but you also want to eliminate any potential hazards that industrial chains as a tendency to bring in environmental hazards. We are much lighter and much more efficient, consume less energy. We eliminate a significant amount of problematic chemicals and manufacturing our products. So we see these opportunities as very big for us secular in nature. And look I - my mission in life is to eliminate all industrial chains. And as we have highlighted in the past that's a very large market opportunity for us where we don't necessarily compete with traditional competitors, we are competing with a completely different and unique technology. So to your point, it's a big opportunity for us and we are very constructive about what it may represent for us as we get out of '21 into '22 and '23.

That's real helpful. Thank you.

Thank you, Deane.

Your next question is from Josh Pokrzywinski with Morgan Stanley. Your line is open.

Hi, good morning, guys.

Good morning.

Good morning Josh.

Brooks, you've covered a lot of ground already, but maybe putting together a couple of the questions that were already asked. Yeah, I think at the midpoint of the guidance, you guys are above where you were in 2017. Margins, not quite back to those levels, so maybe a little bit of conservatism. Just putting that together with some of the comments you made about factory efficiency Ivo. I guess, maybe taking that to the next logical step, when you guys get back to 2018 levels, presumably margin should be higher, right? Like that conversion on that extra couple $100 million between those two years sounds like it should be structurally higher between the savings in '22 that Brooks mentioned and that operating leverage. Is that a fair point?

Absolutely Josh, I think that you are thinking about it the right way. And I think, as I've pointed out we don't - certainly we don't believe that we need to de-commit our 24% EBITDA margin target over the midterm here as we get out from completing the transformation that we have driven with this business. I would also point out that we are trying to be realistic about COVID. Although we all I think learning how to operate with COVID. There are a significant amount of inefficiencies that we are still facing. All of the companies around the globe are facing those with folks getting infected not necessarily in your factories or your facilities, but they get infected by on the outside that means that they end up, in quarantine and that drives quite a significant amount of disruptions in your facilities because in general you don't get it a sprinkling of few people across your entire enterprise, you're generally speaking get hit in locations quite well. And it ends up causing a pretty significant disruption. So we anticipate that it's going to be with us, Josh, at least for the first half of 2021 or until we start getting more robust level of vaccinations that we will all able to live with once that occurs, so those are probably the two big points that I would like to make.

Okay, that's helpful. And then just on the first-fit side in automotive, obviously, a lot of activity going on with new startups, new technologies, SPAC every three days and presumably some new customers to go along with that. Ivo, I know you've mentioned that your entitlement on an EV can be just as high or higher than on the first-fit side. But what is the actual pipeline telling you? Or are you kind of living up to that, especially with some of these newer players? Is there any discernible difference there just this kind of the mix changes on the first-fit market here over the next several years?

Yeah sure, really good question Josh, thank you for asking it. But when I think about electrification in mobility in particular, I actually look at it more broadly. I look at it if we were looking at our Slide 11, I look at it from mobility and recreation all the way to on-highway applications. And we see very substantial set of opportunities in - across the span of the universe. We probably I would say, much more prevalent in personal mobility and the recreation space and we see an opportunity to drive growth quite nicely kind of over the midterm double digit level of growth with a degree of consistency facilitated by the fact that it is much easier to electrify a motorcycle, scooter and a bicycle and we already see that and we are the premium - premier player in those applications. I would say that on the automotive side, we have bought Rapro, a couple of years ago, three years ago, and we are seeing good opportunities that we will be executing on as we move forward. And we are winning today programs in on-highway heavy duty truck. So we are quite bullish actually about the opportunities that remain ahead of us. We are well positioned as you know despite the fact that there's an incredible amount of bullishness, we also have to maintain focus on managing our business that we generate revenue and profitability on today. And if I look at places like automotive replacement, we are building a very strong VIO coverage, vehicle in operation coverage on the EVs that are on the market today. We've launched over 25 new products in the last couple of quarters. So we are building that very, very nicely, but it's a very small aged car park that that represents. And we are also focusing on the mild and full hybrids that we maintain will give us the opportunity to generate an incremental set of revenue generation opportunities kind of over the next five to 10 years. So very bullish on electrification, really delighted with the progress we make. And I anticipated sometimes midyear when we will have our Capitals Update Day, again, we will spend quite a bit of time on giving you a really good purview of what truly this opportunity represents for us over the many, many years to come in the future.

Okay, thanks for that Ivo, best of luck.

We have no further questions at this time. I turn the call back to presenters for closing remarks.

Hey, thanks everyone for your time today. Thank you for your interest in the company and we look forward to updating you again on our progress in May.

This concludes today's conference call. You may now disconnect.