Earnings call transcript Q4 2022

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Anders Trapp

Welcome everyone to our Fourth Quarter and Full Year 2022 Earnings Call.

On this call, we have our President and CEO, Mikael Bratt; and our Chief Financial Officer, Fredrik Westin, and I am Anders Trapp, VP, Investor Relations.

During today's earnings call, Mikael and Fredrik will, among other things, provide an overview of the strong sales and margin development in the fourth quarter, give an update on the price negotiations, outline the expected sequential margin improvement in 2023 and the journey towards our medium-term targets, as well as provide an update on our general business and market conditions.

We will then remain available to respond to your questions, and as usual, the slides are available on autoliv.com.

Turning to the next slide.

Harbor and is follows. includes Safe of integrated the presentation this the have statement, an which part We Q&A that

the in GAAP SEC. reference reconciliations will quarterly with press are presentation, the GAAP on our that During The autoliv.com will available measures. filed and disclosed some in of XX-K non-U.S. to non-U.S. U.S. release GAAP the measures historical we be

is intended European Lastly, to at this I should Central mention XX:XX Time. call that PM conclude

of two limit per person. So, a please questions follow

I now our to CEO, Mikael Bratt. hand over

Mikael Bratt

Thank you, Anders.

medium-term Looking cost in recognize The on adjustments, price believe delivering inflation seen quarter, like steps a the material the gradually targets, reflects to next highest slide. has managed raw our XXXX quarter I fourth that the another the as I'd to year we, which culture. decade. industry for entire important full team through execution our offset and our strong were strong towards

light our safety production In content quarter, higher the of as per and a vehicle significantly, vehicle. fourth organic increases, launches, result growth price product sales outperformed

billion, sales $X.X were the a X% quarter well over headwind. in currency Our despite

quarter We the to also strong increased fourth recovery, adjusted X. margin full achieved to line the for X% profit operating for with in full XX% guidance. year, the our a and year

X.X in lowered a from X.X generated our with improved inflationary and We combined continued pressure cash ratio performance especially our times encouraging of to significant with last call-off year leverage to considering operating quarter volatility. full strong the Our is This flow, continued high fourth challenging that EBITDA quarter. market times indication. be conditions strong customer meeting level

in from quarter, paid and XXX,XXX and third around increase we of an quarter, dividend, the shares. $X.XX repurchased retired per share In X%

million XX we from Additionally, programs. of our stock shares repurchase previous treasury retired

development in confidence targets. mid-term year in half our strengthens our XXXX second The

cash and will shareholder higher expect addition, sheet we balance our flow returns. In positive trend that for allow

slide. the XXXX update now margin of an progression the on next on Looking

reduced implemented and our we efficiency challenging environment. a We in XXXX, production chain. cost supply market cost of especially During hundreds in base projects,

then As low cost level, chart, but from raw started negotiations improve such to illustrated other quarter the in adjusted regarding year as the margin quarter with in severe operating We to material, customers labor to in from in a a fourth inflation very by inflation mainly managed categories, we the freight. our X.X% and also result margin gradually this XX% successful of operating at cost due the as compensation. adjusted first

continuous and improvement high sequential raw on our This the throughout year-end by our We to managed focus our shock strategic organization reflects roadmap material-related strong improvement initiatives. XXXX. this volumes and successfully cost offset

to neglecting without challenge the For XXXX, the non-raw tackle main risks. the material inflation raw is in cost cost material the base

an closely the business for volatile we work inflationary to our in on To price continue LVP sustainable customers a chain model with supply next support to to compensate inflation, disruptions. and secure Looking slide. environment, increases

such category, on to cost price During reached labor on extent, all well XXXX, as, almost related freight. -- agreements material raw and limited for as also OEMs non-raw adjustments a we material with as other

reflected product At end the pricing of the for largely year, materials. level the raw cost

effects offset discussions XXXX inflation, logistics believe in cost positive and material progresses. on inflation labor, material and the year small We have the as effects adjustments the energy. our as first positive initiated gradually with such price of larger non-raw We cost will customers with non-raw quarter

the slide. intake Looking now on the order next on

outlook. was XXXX with currency and technology a value full of rapidly many continued in changing more Our negative headwinds despite platforms. develop LVP environment long-term and last order the line in to lifetime of supporting intake intake growth order for EV the fast-growing new in a OEMs the year with number well, year The

our that intake leading is safety order strong the evidence automotive industry. company is an company past The over the the passive in year

satisfaction, One the key continued improve and indicators, is level. high to at customer has of performance our

mean However, We for that relax. this does costs. we always services, can not strive processes improving and products,

support customer targets. our sales confidence order regarding our strong satisfaction and mid-term Our intake current

the next in slide. the intake XX% order our EV In new rates new in that electric both for makers estimate traditional were win more was future order details higher, XXXX, vehicles. platforms on We and Looking OEMs. with on for order battery of EV intake around XXXX

were proud successful contracts that automakers. new in we winning are We many with

XX% and our year. America last intake, over order New from China, accounted automakers, mainly XX% up of in North for

airbags electrical awards seatbelts zero-gravity We supporting self-driving integrated seats, as in seats and designed won style multiple as markets child new side well for for for vehicles. knee vehicles, specifically India, airbag, like trends industry seatbelts

we As intake years, expect launches increase over to XXXX. an building order even a for success. strong stronger This product overall result our platform development past in an contributes long-term the in of

slide. on next the now Looking financial on the overview

was Our headwind. X.X Adjusted than of operating mainly to X last than higher income. alignment, last as higher $XXX million excluding working capacity of increased in higher points $XXX operational $XXX as The for higher sales was consolidated million. volumes percentage operating on net points earlier period leverage percentage currency $X.X income, the and adjusted higher operating was due a XX% million, quarter, improved $XXX saving XX% net to Operating year, the period which the was a year. well than despite billion costs activities. prices, same million result capital higher cash costs margin higher was from The margin mainly year flow same

to retroactive the than almost contributed in pricing grew sales to with contributed quarter by growth Despite year; last quarter. next million, $XXX sales in sales in detail price compared the and slide. $X million the $XXX on currency approximately on XX% the quarter Organic fourth mix million fourth by now headwind, billion. the increased Looking net $X.X volume more more consolidated with

accounted regional America Asia XX%. on North XX%; for Europe for for Looking the XX%; and sales split,

fourth books. our achieved as organic was very sales expected Global, compared slightly quarter. that the This in LVP the by We in increased as growth were organic to China expected. to than pleased slide. outlined the and in America, production light vehicle our was S&P continued of to lower light sales quarter. next order on I outperformed our This the global we strong growth the growth in execute on vehicle quarter, beginning lower production than North around According year-over-year production Japan am X%

and In numbers, points percentage Based points percentage global light and on vehicle by market the by vehicle XX we America. further in points China latest growth, both around and percentage we Supported share points the well as increases, the CPV light sales as around to by full vehicle production we quarter, and gains X percentage in outperform in by in production quarter Japan; by expect XX price points percentage points; new by outperformed Europe launches, outperformed production X by XX XXXX. light percentage around XX for year. in

the vehicles. that's nine $XXX quarter, models from On relatively key years, are we close the vehicle In per model launches with available high pure from $XXX. had the automotive electrical Autoliv an shown in slide out changes fourth the quarter. have of in on represented, especially see some number a Japan. to we launches, OEMs and the this The content approximately to several seen of and slide, four industry These next new reflect in China as recent models

is Pilot Honda knee trend long-term In and most by vehicle the and Accord important. to launches terms The content are of protection front more active advanced Autoliv redesigned entirely per center sales higher seatbelts pedestrian airbags, Honda supported potential, the airbags, systems.

business provide part is saving an to to society. vision lives, development integral creation, term. driver our our sustainability contribute in will of approach the long of slide. business the strategy helping ensure more for market our our next Looking sustainable and continue for solutions differentiation on world-class is and mission mobility that stakeholder fundamental to to and our Guided thrive by life-saving Sustainability and to value

inclusive focus approach lives; is and short-term saving consisting climate; responsible sustainability areas: each ambitions business, and four of based broad specific workplace; and targets. Our more more on safe

our Global by have for of Our furthermore which operations years. sustainability chain as net is a for for supply and approach carbon our such in neutral international XXXX. to been own emissions well-established in UN Compact aim across the XXXX we We zero signatory be several anchored aim frameworks

suppliers. broader automotive runners These the the commitments of in front place Autoliv among group

examples includes such [indiscernible] to were road cooperate reduction few the As vulnerable Safety in green maximum steel organizations, of partnerships users. A by of include a the positive February commitment, international Fund, We SSAB, our with to Rome part boundaries safety Targets to the with initiative UN of Based XXXX. approved Science targets of suppliers impact. push ensure this and collaboration and the customers

XXXX next the the looking on progress Now at sustainability in slide.

own and initiated our number contribution we activities XXXX, of our sustainability a and Development to ensure Goals During to commitments the UN targets. Sustainable concluded and

We per XX% lives our of material all took we provide vulnerable carried sustainability safe suppliers. of area. increased our renewable our conditions substantially road audits our our example, year of in members including senior areas the in committed expanding decarbonization electricity. to our conducted reach of XXX,XXX program, main steps the Autoliv activities user climate management We working climate use is out to levers. by saving for surveys covering We trained employees. ambition and direct For

over activities, XX improvement reduced by in rate incident continuous our the percentage of result points a As XXXX.

our provide report. in our progress will on coming more sustainability We information annual

will hand through now you will slides. the next to who financials Westin, Fredrik CFO, talk I the our over on

Fredrik Westin

Mikael. you, Thank

the beginning volatile both again was production the year, of to with chain mainly lower XXXX more light the supply turbulent disruptions. vehicle at and due expected than year

million by XX%, adjusted underlying The shares $X.XX. The to to of share upper income of Our increase the and $XXX decreased operating of retired were with million compared margin range X.XX X%. in net $X.XX we the billion, by $XXX reaching the and operating Dividends million. and per guidance per guidance million XX% increasing was was $XXX close of between organically was The share flow sales million. production. light to paid, X.X% between million. latest adjusted to compared were cash $XXX sales and $XXX twice repurchased our X% operating vehicle for $X.X the Earnings

bridge year adjusted the now Looking at next operating the slide. on income full

million saving full operating previous of increased was increases volumes. of as FX organic such labor as was a year, inefficiency This material as cost unchanged effects was our combined despite result $XXX activities SG&A of XXXX, was combined and million. including well by as actions higher positive year which adjusted than materials from For call-off net the price and and costs volatility partly growth. million. and substantially income higher for freight well. This the offset $XXX virtually and premium $XX RD&E for Costs XX% raw lower approximately was

Looking slide. highlights the quarter This our quarter quarterly figures for of the on of to the XXXX next slide fourth fourth on compared performance the key XXXX.

driven XX.X%. The increased higher billion. Our QX Gross declined million, XX% was provisions $X $XXX by savings. capacity light margin by XXXX. net margin cost to than has volatile we was production and gross been million while sales vehicle to and In the for $X.X and alignment the gross This in activities. cost largely were inflation increases made X% compensated profit decrease price quarter, slightly the primarily by

increased flow from margin $XXX operating XX.X%. The and adjusted million. The presentation. $XXX million on from our will the increased flow were where $X.XX, tax operating costs. operating comment the X.X% adjusted was million, to $X.XX income from I higher in provide to $XXX from later by main further cash per The Earnings operating $X.XX increased cash income drivers and adjusted share lower diluted

per employed retired and an $X.XX XX% under for XXX,XXX share XX%, $X.XX last and quarter, to from up and million year repurchased shares our respectively. both on repurchase equity of We from return and on XX%, stock $XX capital increase increased program. the in paid dividend adjusted a Our of return

negative in income slide. XXXX, quarter the the our The impact operating year. on material on the next was operating quarter. income bridge higher of In the now million of quarter changes $XX the price was same Looking million of raw fourth $XXX adjusted than million last adjusted $XX

currency million RD&E exchange profit partly the combined million. effects. timing revaluation $XX This due was effects. positively positive SG&A translation by result operating impacted offset of mainly engineering lower, was positive Foreign net mainly and effects, and of income to by a $X translation negative

positively by our well the higher as impacted Our initiatives, general headwinds from partly inflation. strategic as volatility cost and by operations significant call-off improved were volumes, pricing, offset

excluding substantial despite leverage As from in currency our the a the operational the result, was higher upper end XX% XX% sales, the leverage typical effects, raw headwinds range, to materials. of on

the overview at flow slide. cash on Looking our next

due quarter For operating in by million million, cash to to increased income. mainly higher flow and working XXXX, the of net fourth $XXX performance stronger $XXX capital

continued partly as inefficiencies efficiency During production in inventories. program, decreased $XXX the challenges. part quarter, working offset and the improved trade capital our payables a of capital logistics by due result to a higher million light inventories by The of in result vehicle volatile is

stabilization to from which is eliminate supply requires as of possible, soon customers. as Our patterns the the these chain inefficiencies our call-off and ambition

expenditures to the For X.X%, to same X% increased relation growth the and was the especially as for by virtually it in capacity ongoing In ago. net is quarter, China. related activities year sales, footprint level a capital fourth $XXX to The million. expansion high

cash For year higher earlier. the $XXX flow fourth was than quarter XXXX, of a free $XXX million million,

more net from with was light In year was full somewhat our declined the cash year around down sales we to and in from stable million, flow XXXX, positive million million, XX%. a amounted the For flow of in higher cash $XX flow gradually expect development to year mainly flow CapEx conversion X.X%, inefficiencies. production. line -- due XXXX, relation $XXX $XXX the operating full prior inventory and to income vehicle free to from cash Cash indication cash XXXX.

Now The times trailing end adjusted on the times. was on next the ratio debt previous increased decreased our by and $XX ratio This in as from at leverage leverage $XX X.X our million. December net EBITDA quarter, improvement of looking developments XXXX our the by was X.X million XX-months slide. an the

credit approximately onto facility. Now spread subject and looking the the refinancing To None had cushion diversified we a slide. facilities funding maturity is liquidity liquidity we sources to the the our position coming $X.X profile over minimize quarter, unutilized at the are of end a credit that the of financial cash years. also risks, we committed long-term significant in of billion covenants. At have well next and have

With you that, I Mikael. to hand it back

Mikael Bratt

Thank you, Fredrik.

the XXXX financial slides. at few on Let's look the and environments for market see we next

surrounding of industry fears, is to auto XX January the recessionary due continues supply according to concerns at volatility of part million supply the in increase vehicles and constraints. Large to global Despite Global chain to S&P ongoing levels, or operate X.X% recessionary projected mainly to chain the XXXX, by production XXXX. near

chain X.X% This For is year, mainly an units, of by compared in the X%, to vehicle China. fourth production compared fourth to first is of global quarter, the decline light improve recent quarter than to from versus X COVID-XX last decline by million expected wave more effect supply issues but quarter.

negatively well as the LVP short-term With of the relaxing COVID demand have China, been policy in as impacted.

units, ability close losses China near-term in first North volume recovered by production quarters. expected result, to has the quarter continue produce lowered a As be in In subsequent by be been America to million Europe, not by automakers' to X.X demand. to with and production forecast limited

looking next Now the on slide.

We year. expect a challenging XXXX to be

As our components. large impacts almost In XXXX, materials costs challenge was base. purchased material base, which affecting for twice is our cost material our cost as to related main cost non-raw raw as inflation raw the

products Although indicate. the grade currently steel as in indices has The many as generic our in material commodity we not used of as down such since specific indices XXXX. peaks raw declined steel in costs unchanged much are their reason would that XXXX, the prices assume being materials raw automotive

Additionally, such higher some resin. as for we material see and yarn cost

For is XXXX, inflation, which resulted value-added in through energy costs. directly challenge suppliers' inflation. Already impacts us labor labor to during the XXXX, higher-than-normal tight well as cost America, the related main labor and significantly in North mainly market, as

further foresee we XXXX, in headwinds especially Europe. increases, from wage For

to due cost labor increases energy inflation We costs. from suppliers also higher predict and

utilities Europe. Additionally, we in expect logistics in our costs for and higher operations, mainly

price we non-raw this believe gradually, throughout with cost inflation. inflation. nevertheless initiated the will expect have challenging, year, it will discussions offset customers We We material at aimed new our be offsetting adjustments the but broader

business slide. on outlook Looking the at XXXX next the

supported adjustment. compared control product to sales XXXX, cost adjusted expect significant in and organic operating We by XX% growth, price margin in improvement mainly XXXX a

vehicle higher mix. We XXXX, launches, high regional outperformance per prices, expect sales versus vehicle content continued light production in supported and by increases

We pattern compensations XXXX, further to throughout anticipate than increase the cost our quarterly first X% expect and due improvements and as light inflation supply be the operating cost improvements beginning faster inflation adjusted the the supported non-raw This We offset will LVP, material quarter price vehicle will well gradual cost year, around to the strict in of from the margin optimization chain costs the to and adjustments lower pattern year. to seen trajectory in year the progresses. expected more as quarter is gradually, in as of footprint by similar control, limited positive gradually be the first effects be in with production stability. expected the will and

slide. indications Looking on financial next the at XXXX our

XXXX and costs year excludes capacity related items. matters discrete full gains alignment, other Our and from indication anti-trust

vehicle is line light indication outlook. a in year with of on Global X%, full S&P Our around production assumption growth based

around expect assumed by to sales around effects XX%. organically be We are negative to X%. Currency translation increase

We is million. operating Operating of margin expect expected flow to to adjusted X%. an $XXX cash around around be X.X%

positive increasing flow for allow returns. Our should trend shareholder cash

medium look continue to the progress steering and books. airbags, order the business, our through at mid-term Turning slide seatbelts to execution the expecting our term, towards current are targets. on to strong In wheels, core grow we

growth growth updates important on per expected The growth for and driver continuous book targets and other than for by percentage is regulations materials raw price content grow term driven vehicle crash is Based year excludes per to safety order production medium X ratings. inflationary our average. test government increases, by CPV other vehicle, the and on points costs. of compensation organically more This our any around light

price was momentum on our This outperformance innovation average. increases an we of around our the deliver share-driven disregard are pursuing To growth, production percentage still outperformance the effect points, track maintain on the we adjustments. the market outperformance, are percentage to on ambitious points for growth the price beyond above we program. of we X XX substantially target And vehicle Even is on growth to expect percentage light In by points. if including target. XXXX, X XXXX, outperform growth

looking years, for Now, challenging environment. multiple on the margin the market two slide. cost next in its base past Autoliv has the on improvements a levers reduced significantly In

hundreds and have We implemented supply of projects, in cost production especially chain. efficiency

Our on continued and This production following implementation impact of that material global environment XX% had or XX% on a a at year our that framework. target which adjusted if medium-term price greater adjusted communicated do our the not the confident with We light political initiatives, around if target remain the possible prices. optimization inflation declining operating a should the of million; is situation full business conditions: in reach macroeconomic with and including that based through we XXXX, the XXXX. conditions previously margin have we operating relies stable margin together footprint XXXX, vehicle from XX on digitalization least compensation met strategic negative of headwinds these net offset as margin the raw in we operating are see improves, for and optimization,

roadmap, our Now look Investor to at I XX, with looking journey on the on efficiency. on product, where looking the XXXX, I'm about sharing well you The held slide. June next be at focus Auburn will be of operational strategic center main more our seeing and forward our Day USA. will Michigan forward many event technology to in as Hill, automation as there. you

production; will the to conditions. compared disruptions, challenging In margin and resilient significant the We to year; a outperformance our year risk the but I and challenging quarter have which adjusted confident full that strong operating we continued to enable outlook, manage and us to our throughout chain expect the am sales done leading of supply of experience position, remain light further in more economic conditions Turning XXXX operating our conditions margin, terms to XXXX. should mindful become agility future vehicle closing, summarize deteriorating work -- of we next the slide. challenging gradually improve first improvement a versus

I will to now Anders. hand back

Anders Trapp

Mikael. you, Thank

to for like slide, to would this it concludes call for the Turning to Raf. our next turn open today's comments you, line I formal earnings now the we and questions. back

Operator

The Research. Wolfe proceed our now Instructions] from come sir. your first of question. with to We questions you, question. from Thank Rod Lache [Operator Please are the going line ask

is open. line Your

Rod Lache

my Thanks everybody. Hi, for taking questions.

think, automation R&D little Can you program would basis was over see achievable as XXXX, color footprint Just provide expectation a and digitization $XX $XXX you've two on changes, more and save what XXXX? you also of decline bit by was announced and an on in those, million front achieved that you you far just about in what years, so and should million, firstly, points. that in it XXX there I from

Mikael Bratt

No, support Rod. and I think journey XXXX those you, in it Thank laid strategic roadmaps think on should the years we journey strongly to was of those. here. of originally consistent our part here throughout we would activities our well XXXX say, a that number here out of on couple these secure that I to would actually I of and initiatives been we as it And a majority performing I say to when to that that. have in hold initiatives the comes there are last challenging

The challenging we as on those underlying environment, still that also course, the And well. have But the this here. us comfortable deliver in of way that forward delivering say to have here. I overall here to track would they results thanks disturbing contributed on feeling course, initiatives, we of this are net are for quarter improvements were we result despite

when strategic initiatives I roadmap short, say, on those are we to. it track that story would to long comes So, referred you

Rod Lache

quantification maybe and restructurings but and know full -- only to like from the points that some be of for basis that, to target X%. maybe of provide XXXX engineering quarter year there's -- look I margin positive but high lift those? And I'm for digitization strong there's even in a off XXX some is of Presumably what you'd your mid the from would front fourth just looking in about still you you recoveries, margin, I'm and of you the that. reason it asking seasonal X% range automation, Can typically adjusted is would X.X% these the from at

bridge? reconcile me with little bit that help you of could a maybe So, a

Mikael Bratt

Yes.

of to Fredrik through they back you here see me also said, coming here, hand strategic the as of steps over I mean, have I let there. But a think, we different to are opportunities I will still lot track. area. start of that to we initiatives that with in on I some But said, take for and of we example, course, launches. when progress initiatives. of [part securing them also (ph) when and here, gradual implementing have in we we the to are are initiatives longer it's, our] as footprint here lead journey that we And, new program a have strategic launched, times it have comes automation of many as it that specifically,

a take have that sequential time. they So, development will some calendar

progress, relation opportunities through, are are move So, the take here we we in targets. great as where let I'll still of but as the to components us -- There we bridge course, I went there. the of good details number 'XX always a midterm to forward here. through be but And, Fredrik from you in expect

Fredrik Westin

would then, from don't the for that components our that we extent, and see what by expect, on utilities. mean, you labor here that inflation year, logistics significant inflationary a is our Yes. do versus of smaller we then value-add and the was the that compare headwinds, followed what I the point and to last the excluding I that we're then, laying quite largest pricing then will going additional supply we mean, 'XX, out main on base, main also, course, that But incremental drivers. And also and that see and and neglect we components pricing. part growth the then, see two the actually be carryover the contributors are pricing cost of positive into organic effect the

effects. that we share margin delivering so main then bite market the at look going what also the then component strategic and the and further further, to drive is to building are need incremental inflation that, also continued but that we see and customers, for blocks growth effect with the our And that initiatives activities up through the variable or costs also you beyond then is do If expansion, expect of it through is, offset the either starting activities on launch from reduction the that beyond. the that you volume both improvement further negotiations have will then, course, 'XX,

Rod Lache

and year that labor Okay. Maybe for quantify the just can logistics of the inflation it or full need set energy you you will that to year? by offset? And lastly, you the saying end the are you

Fredrik Westin

what we're that's is labor, would in is We year, utilities. it is of by we highest the expecting and component cost come indicate it the in, mean, or said, on XXXX. we headwinds I as suppliers, terms in and also also the inflationary by that as that, side. lower hence the and the had facing least these that of indicating our a the the due the value-add Overall, headwind there smallest -- less I raw then some the What than on effect in can of how followed to quarter year we're the labor logistics what material we're is and components offset procure, then margin calendar of in components first I somewhat being, component -- the not said, end of I

Rod Lache

you. Thank Okay.

Fredrik Westin

Thanks.

Operator

the We The come line ask Please of our DNB from going proceed question. are Markets. your with to from Holmberg questions next question. Mattias now

Mattias Holmberg

wonder of you. XX% outperformance break light and versus Hello, in thank I down could the if XXXX vehicle you a production bit.

So, XX%, all adds to any in And that to quantify? other are please? is you delta if order don't the you different of target the just the versus or importance can increases the price you parts perhaps that up outperformance quantify, drivers could moving rank X% there want

Fredrik Westin

Sure.

levels LVP also they have XXXX even pricing the the CPV pretty we're market as gains contributor, we incremental to by be expect in an I than XXXX. is it's be followed that expecting, much component both from mean, growth, it So, but I that's then and largest then you and will price. underlying larger in then share said, that And also -- the growth were the largest XXXX, carryover effect the

So only here. not launches have that -- third is that and to be clear, the also the -- then we LVP, but component

Mattias Holmberg

Perfect.

me. for question Second

And program? to buybacks us that aggressive much could On quite do you given just far, believe a so been bit you're the remind the in the buyback better you with conservative is now? position on a utilizing in that more the how of program, left mandate you've become

Mikael Bratt

all, to of our we is program. program that committed are First $X.X billion

We forward mean, have remaining before, regularly when feel of And well to we out that have as [indiscernible], And good timing here. will the 'XX here time. program I said we is that there course, in the way here shareholder what dividend. here time you we from let volumes also the as that we be here of the have we made program. judged know But purchases confident provide have and laid on we'll our two course, 'XX, have time buyback through the I returns years, said to and with as over track able

So, you there, on that I become because breakdown the more [indiscernible]. will can't details give

Operator

our now from with Vijay Group. the line Rakesh from are of question. your next question. going We to Please Mizuho proceed the ask And questions come

open. is Your line

Vijay Rakesh

Fredrik. Hi, Mikael and

Just question. a quick

units, -- talked of XX%? that great parse top-line, share the First, what and the -- you've approximate XX% there I and a 'XX market those good magnitudes would guide, on for all a know quarter is great pricing in embedded be about in that But XX% XXXX. specifically and guide to on the way

Fredrik Westin

number Well, the of well. around first, order market of X%, pricing as magnitude light share as X% around then, then CPV, and and CPV And course, number launches, see production, is I said, vehicle three. two we

I'll it leave market how and you distribute to in the you between the And pricing So XX%. share gains. that you then, rest gives

Vijay Rakesh

Okay.

shift mix shift LVP, And How from -- you see mix that we as into as 'XX? good. do vehicles. on EVs, also trying at look that see to a how saw higher pretty XXXX any had moving showed mid-end? design but Do the I you then, Thanks. of in you back nice changes rate much two Sounds at years kind -- win mix you reversion obviously, benefiting of mean XXXX. just premium see to look any to you

Mikael Bratt

as No, there. there you. said premium expect distribution Thank low-end, between in don't the shifts any dramatic we I and

that closely very of mean, are, pure platforms. a I of be the and to call positively getting the the EV is traditional how more makers working continue let's part we with think here about electrical very it, OEMs to electrical vehicles. what transition also, we feel are I more and EV over we course,

EVs, So, in we momentum. the here positive vehicles book also, you order transition more positive our are as of And products we see it that content know, and a also, requires the in well for is positioned and very time. electrical cases, in as many over sophisticated

So...

Vijay Rakesh

Thanks.

Mikael Bratt

Good development there.

Vijay Rakesh

you. Thank

Operator

proceed Giulio Paribas. your We our Please question. BNP next with line Exane are to come questions ask Pescatore question. going from now of from the The

Giulio Pescatore

I couple of on Hi, my thanks first. China a for have taking question. ones

number of large in last So, and local you one, [indiscernible], business car in launches registered with China of Geely, other is quarters with players in moment to the NIO brands? first What China as at Chinese the few makers: your a percentage international XPeng. compared

Yes, continue approaches How on market you market as question, the do North America share you. China Is second and more is thank there? per then, And it China. it to expect again, Europe the to outgrow gain? or vehicle content

Mikael Bratt

them, define would we say, as OEMs, our I Chinese the of them. sales roughly on is mean, XX%, I China we are think, towards in I Yes,

robust As to you're them many we the of of a we very of think further development be many here, the have upcoming the also growing very continue with them And stating China for outside. and Chinese of for part OEMs they are, a closely mean, OEMs opportunity here outside and lot grow programs I But supplier portfolio. with I to we providing also work interesting also. course, that of correctly the as agreements

our collaboration for on customers positively but in our China look very both So, inside the I China. outside Chinese with also future

Fredrik Westin

build to see XXXX, Asia. and mean, that, maybe China we'd markets of largest And outperformance is actually in for Yes. the terms in on I

Giulio Pescatore

Very clear. you. Thank

Operator

the our now question. The Please with Handelsbanken. going questions proceed from next of Hampus Engellau ask line come from are to question. We your

Hampus Engellau

wage Thank I questions first mean, what would you. know Two type looking (ph) you from the disclose, at. [I to if [indiscernible], question. hear be we're it me. increases interesting but won't] of That's

delivered, Second quarter, have of for if number Thanks. any? were for question Those is, any [indiscernible] been if on you already this contribution you've for [indiscernible] that my been compensated price have have fourth there two contracts you what are type increases that questions. that

Mikael Bratt

Hi, Hampus.

up but there. repeat little question? first you a You Sorry, can breaking bit were your

Hampus Engellau

it's was if you seen a on for you wage organization number like increases Okay. No, much had how in or have in if XX%? average, I year the the asking X%

Mikael Bratt

Labor increases in XXXX or XXXX?

Hampus Engellau

XXXX, of course.

Mikael Bratt

above what have. It's have. normally digit Okay. would it's percent a increase single-digit mid-single normally number versus what number we we Yes, percent would

normal wage So, above inflation.

Hampus Engellau

like Fair you delivered for have enough. cost And then, compensation any did the quarter? contract in

Mikael Bratt

No, disclose level of that we don't detail.

Sorry, Hampus.

Hampus Engellau

Okay. Fair enough.

Operator

Fargo. We're the ask now the line of next from Please come And from our going question. to Colin your question. proceed with Wells questions Langan

Colin Langan

for Great. taking my Thanks questions.

at rate, up is you margin sales, for looking are question, the guiding you're annualize earlier lot. half, the XXXX with the on almost second rate, yet up to the the second half if following second that in line half actually a Just

offsets low So, on are higher What those why the the there? sales? conversion

Fredrik Westin

the anything we're the first I quarterly guidance any don't margin for half. we're giving or but the guiding on second for is think what levels. quarter, And indicating not top-line we're the

sure... I'm not So,

Colin Langan

year into of margin around 'XX, for sales guidance Yes, midpoint your the up it be and yet sorry. If second are year. to was your and is average I next X.X%, at this in half supposed the around X.X%,

So, what in investors point. think offsets we kind of off that jumping lot are the stood where half? of I a a as second the to relative are using

Fredrik Westin

Okay. inflation the that in headwinds the then are -- on seeing we're Well, issue general. major

that then times, several development Cost we expecting to material. more here add But expect raw be suppliers. flat we less inflation not from our the as or value it's the So, we're year-over-year. on indicated

costs then in headwind our utilities labor facing but also that that not main raw this is headwinds extent, the inflation high significant. last and and, operations. as but But year. very labor, and year, I materials from and before in I challenge we a to described that energy as those as limited -- as had logistics they're mainly that is are the we're So indicated, own And cost

Colin Langan

it. Got question. Very to helpful. Actually, relates my it second

impact net the increase expected in and expecting what So, still terms net costs of is the you're price inflationary of for negative year. in a in guidance recoveries the

expecting you QX, by not baked the Maybe there? what's full year. within the to the recovery full You're in get that get full Is recoveries.

Fredrik Westin

first but Yes, improvement compensated would not you XXXX the throughout be net recovered it we in have quarter, gradual we would of and with year. year, that negative, the phasing the then then out and like a then year, a the for coming at see in a and levels different it would fully full be --

Colin Langan

Great. That's helpful. Thank much. very very you

Operator

now going Please are our of from Vilela line proceed Nordea. question. the Agnieszka questions ask to We with your next question. the And from come

Agnieszka Vilela

Perfect. expected guidance, XX%, in first we you to about against And percentage with your outperformance Thank point expected even back revisit XX% production. actually outcome was what end you outperformance for you. car and can the outperformance. If XXXX, get the X

and so you -- product will launches price So momentum obviously on good in quite XXXX. saw also beginning have and and you the HX mentioned we in that

wrong can what So, outperformance XXXX? to explain actual went in just comes your you it when

Mikael Bratt

Yes, when was the the to of regional mix. main beginning last difference year we compare the

Europe created large So, difference. vehicle think that very was is a per the be was down actually being has negative mix, I X%. our XX%, year-over-year a to of it XX% basis and expected markets of been up, main it or that as which that, it one up ended content on regional explanation X% highest And

Agnieszka Vilela

price your Perfect. you. for then, And question expected the XXXX. Thank on trajectory second

in understood somewhat You QX, that I correctly. if price compensations mentioned lower

And price spot raw if if with will materials, in what you also, your tell could us not customers you us mid-XXXX? So, coming tell for you decreases if the expect? really could down just prices expect

Mikael Bratt

of bucket, inflationary we're course, our speak. base, to costs with put our outside are these. about or cost target mean, raw are what saying here we're the another. out parallel full also the working I price to we we in with way don't we compensation one But the own And especially when talking other now that working customers is so all specific here of Yes, material that in

compensation talked the that here, year. Fredrik about throughout for had the gradually, here So what is

to And I down. correlating many so the that see reduction. give with as starting are But that. you our compensation here, customers not here, base. potentially coming gradually as coming supplier material on we But is side index a have note, back on indices, a at here is time, with raw mean, course, mechanism eventually, have same there of on we the see case discussion to when come down. the here going material and seen from our don't And to raw conceptual course, we the is back get in we products But is really same of it our

chain. So, value it's throughout the whole

be way on to be as there. was needs course, on Of the down regulated way way the that it the it eventually will up,

Agnieszka Vilela

Perfect. Thank you.

Operator

your the to from And of question. going come next our from now line Citi. Itay ask question. We're Please Michaeli questions proceed with the

Itay Michaeli

Great. Thanks, everybody.

kind kind today good of to the pursue as the are bit those you insight labor line think and to, when the into for provided you and wanted of the us negotiations? about automakers? have pretty could various largely conversations hope just going? as a And inflation, on or real initial you think how Just be recoveries it complete sight commercial how targets of other consistent you'll across you that Is of give regions to

Mikael Bratt

we a increased new the around base. supply out a said months here. now This discussions new our XX material last to the have all, spending here I for think of It's with customer have cost first in customers. as the been raw our base, territory for part the starting XX a better of territory with is we

of course, have lot been we of a So, here has good as discussion. can made detailed report progress It's it very we discussion. And here.

price raw move been, is all more And discussion it's a where in inflationary course, the extent, higher now we find in for more has at need But recognizing we challenging. scope environment, well, that adjustments. a of historically that potentially work we to regular a the an think to industry least way that territory some because into outside material this around to and I here as calls

that ongoing. So, is

anything we than have has It else because timeline, is a been constructive dialogues discussing of But are course, already the with customers impacted adjustment nature, our what here. price us. not

So, be to agreements that needs is agreed already the updated. around discussion

cost and So, drivers product plant level therefore, cost on have from through these impact we the mentioned it's going here. a as different

So, it's and level. one here. all the is the plant from size It in discussions product fits far on

in and of lot a some delays it. time it's So, therefore work

Itay Michaeli

helpful Thank very you. color. That's

Operator

conference I to time. like for would at Bratt to Mikael questions Please now hand go further Mr. We remarks. ahead. this have no closing back the

Mikael Bratt

Thank Raf. much, very you

culture. would like on relying times, and in Before say continuing we end to company build to we I resilience are today's strong call, that strength our turbulent

creating more position is long-term which the both adverse believe build stronger short-term a an improvements for our and vision our necessary. on be despite society. more challenging agile focus prepared initiative Autoliv most to important to market direct saving and should enable are lives, development even environment. will we We of sustainable and actions us actions remain to macro Our contribution continues these that

Our today's thank Autoliv. for participating safe. Until for Friday, appreciate your interest quarter everyone continued We And XX, is scheduled in next time, call. XXXX. stay in sincerely call you earnings first April

Operator

Thank gentlemen, and this Ladies concludes for today's conference you call. participating.

You may your now disconnect lines.

Autoliv (ALV) 27 Jan 232022 Q4 Earnings call transcript