Doug Del Grosso: Yeah, I’ll start out and then Jerome and Mark can make additional comments. I think first and foremost, what I would point to in America’s and in EMEA is it’s still been a very volatile volume market. And as we pointed to in the past, every time volume stabilizes, that means the overall environment is relatively stable. So we get the benefit of volume. But what we get added to that is business performance, because we can really drive productivity in our plants and get incremental variable margin out of the business. So, when we think about on a go forward basis, if we get to some stabilization in volume in those two regions, there’s added benefit there. With regard to China, I would characterize that as a market that’s clearly developing faster than the other markets relative to our product segment.
If we just look at the content per vehicle that’s being driven in China right now, it’s fairly significant to the point where historically it’s operated at a lower level of content per vehicle. And as we go out, a few years in our planning horizon, we’re seeing with, EV adoption and the way Chinese automakers are contenting their vehicle from an interior standpoint, we see significant content add. And then if we look at this whole concept of vertical integration as kind of a final piece in the way we’ve really targeted our new business wins, we’re getting a much better vertical integration profile on our business. Definitely in the Americas, it is really the way China continues, Asia continues to operate and even true, albeit maybe to a lesser degree in Europe.
And as we look at that improved vertical integration, that’s historically been just a better profitability profile on our business and again, just a reminder that vertical integration doesn’t necessarily mean that we’re going to produce all that material, because as I think about our business, one of the things we’re staying true to is kind of the fundamentals of this business can operate with relatively low margins, but if we’re good asset managers, we can generate a lot of cash. So we’re looking, it’s vertical integration in terms of our ability to control the supply chain. So when we kind of look at it from those different parameters, if you will, I think we’re pretty optimistic that stabilization helps us the way our new business comes on and what we’re not winning from supply chain control and then just what’s happening in China with the amount of content being driven into vehicles, we think that’s particularly positive.
So, we should see performance improvements out of all three regions and not just being dependent on Asia to continue to drive the profitability in the business.
Operator: And our last question comes from James Picariello with BNP Paribas. You may ask your question.
James Picariello: Hi. Good morning, everyone and congrats, Doug on the news. Just two housekeeping ones, regarding the equity income outlook, the $20 million year-over-year downside, can you just quantify what portion of that attributes to the Kiper [ph] JV rate? My apologies if I missed that and does that benefit the America segment?
Doug Del Grosso: Yeah, we didn’t provide the breakdown between how much of that’s the Kiper JV versus how much of it is other JVs within the region. At this time, I don’t think we will provide the breakdown of it. I’d say, yeah, we just — as we get further on in the year and we see how the equity income starts to flow in, we’ll start to provide the breakdown, but it will benefit the Americas is how to think of it, yes.
James Picariello: Okay. Understood. And then on the footprint actions, is in that one slide with all the detail packed around the guide. Is the net EBITDA impact $20 million positive or negative to think of it as ’24 bridge?
Doug Del Grosso: Yeah, so it’s a negative $20 million and the largest one on that $20 million, the vast majority of it was in 2023, we had the opportunity to really go through and deconsolidate one of our operations in China. It was a unique opportunity. Looking forward, we had the ability to harvest some cash out of it. It had a de minimis return going forward. So we took advantage of that. It has obviously, a net year-over-year impact on EBITDA for us. But from a cash standpoint, it was the right thing to do. But it does present a year-over-year headwind for us from an EBITDA — consolidated EBITDA standpoint.
James Picariello: Is there an associated revenue impact as well, since you’re deconsolidating it or no?
Doug Del Grosso: Yes, there’s an associated revenue impact, but it’s more than made up by the increasing sales that we see from our other operations in China.
Mark Oswald: Great. And surely it looks like we’re at the bottom of the hour. So with that, we’ll move to conclude the call. If there’s anybody that has additional questions, please feel free to reach out throughout the day. Thank you.
Operator: Thank you. This does conclude today’s call. We thank you for your participation. At this time, you may disconnect your lines.
