As you know, actual results may differ materially from these expectations as a result of many factors, examples of which can be found in our company’s Form 10-K and quarterly reports, including our second quarter 2012 Form 10-Q which was filed this morning with the SEC.Lastly, some of our remarks contain non-GAAP financial measures as defined by the SEC. Reconciliations of the non-GAAP financial measures to the most comparable GAAP measures are attached as an appendix to this presentation and to our press release from this morning, both of which are posted on our website. I’ll now turn the call over to Jacques. Jacques Esculier Thank you, Jason. Good morning, good afternoon to everybody and welcome to our Q2 reporting call. We are now actually half way plus this year 2012, and the second quarter proved again that 2012 was a year of uncertainty, what I called during our first call in Q1 a year of transition. When you look at the this Q2, the global reduction of trucks across the world was down 9% year-over-year, actually production levels in Europe and North America were slightly adverse to what we had forecasted and what really surprised us is a very strong decline we have seen in emerging markets, particularly you look at minus 38% production levels in Brazil versus 2011 Q2, minus 23% in China, minus 13% in India. So I would be happy to say that the stronger leadership that WABCO has built around the years in North American markets this time and obviously for the first time negatively impacted our overall growth performance. But as you will see today in this environment WABCO has made actually new records, new quality records in margins, gross profit margin, operating margin and EBIT. So now going to page three and looking at things in little bit more detail.
So looking first at the topline, our revenues were down 4.5% in local currencies versus a year ago. It’s actually down 1% again in local currencies sequentially versus the first quarter of 2012.We generated again record high gross profit margin of 30.8%. Our performance operating income reached $92.8 million which hits to the margin -- record margin again the 14.6%. Our performance EPS ended up by $1.19 per share versus $1.23 a year ago, generating a free cash flow of $56.6 million, leading to a conversion rate of 72% for Q2 and when you look at the first half we also saw a 87% conversion rates. We return the majority of that cash $52 million to shareholders, we do repurchase of 963,000 shares. And although at this stage we are maintaining our full year 2012 guidance. Turning to page four, as we do usually we are full of deep dive a little bit more into sales and markets dynamics. Starting with the channels. Revenues from the OE channel went down 9% year-over-year, 5% sequentially versus Q1 2012, mostly driven again by the strong decline of production in emerging markets. Aftermarket was up only 1%, having to actually compensate a 7% decline in Europe and that’s again mostly when taking Southern Europe. And that was again offset by growth in other parts of the world like Americas, India, China. Sales to joint venture was up 39%, [exceeding] and supporting the growth of our commercial vehicle production in the U.S. Now looking at the evolution of revenues fro WABCO versus the dynamics of the markets in the main regions of our world, starting with Europe, production in Europe was down 7% year-over-year, but up 7% sequentially versus Q1. In the meantime our revenues were down 9% and this 2% underperformance was actually with the two main shorter causes, one is, the fact that last year we were still manufacturing in Europe and economy fell in Europe from pressures that were shift to North America to support one of our old customer, this year we have actually transferred production to North America and those revenues are accounted for now in North America not in Europe anymore. Read the rest of this transcript for free on seekingalpha.com