ALV - Earnings call 3 2023

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Operator

Good day, and thank you for standing by. Welcome to the Autoliv Third Quarter 2023 Financial Results Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Anders Trapp.

Anders Trapp

Sandra. you, Thank our to XXXX call. earnings Welcome, third everyone, quarter our CEO, Officer, Mikael On Investor Westin; this and and have we Relations. VP, Trapp, Financial call, Bratt; President our Me Anders and Fredrik Chief

and Mikael of we cost overview sales, had call, earnings the strong today's Fredrik among quarter, provide the flow other cash and reduction third will, earnings in an things, development structural During the provide doing competitiveness indications are we conditions. to update as and as updated that long- market medium-term secure general activities and our year our full well and and an on our business

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

next the to Turning slide.

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

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follow Mikael please our now to hand a CEO, I questions limit over person. So per will Bratt. of

Mikael Bratt

Anders. you, Thank

Looking on next slide. the

substantially improve Our performance quarter. the continued to in third

medium-term to and I competitiveness. results to the and for First, third like thank near- their would quarter strengthen further the employees our great our contributions efforts to

Asia. Veoneer both a and The launches inflationary spinoff. light areas, was for for sales year-over-year new improvement including margins digits, sequentially. expected and the production growth double gross especially operating outperforming We strong since grew and compensations organic in pressure. in a income vehicle broad-based customer The Our adjusted a product quarter key record was generated operating a higher result third light mainly production, vehicle than of significantly,

flow target strong, remained within debt and leverage the Our range. well cash was our

almost dividend our maintained and quarter. repurchase tripled the to [indiscernible] second we the While compared

up by indirect intention to progress of towards workforce are reducing our making X,XXX. We our

We of stage, included that Autoliv performance reduction and any any regarding part of customers in of our talk XX% about decision acquired in were ARC the a its Safety of indemnified have cost supplied Autoliv aware geographic our it XXXX. the large footprint inflators The early initial now benefited less too to modules Delphi is organization. Highway issued structural XX inflators optimization Transportation including than Autoliv with to is that new ARC. airbag company's estimate competitor, recall has At to actions, inflators certain this National detailed million airbag not a plan. by after the airbags. included Autoliv assets replacement Administration issues

our customers sales increased of products. replacement course, year prepared therefore light XXXX expected, our vehicle now and expected with than indications to we production are, have to We line in develop with in better slightly support The organic this. is full

expect communicated We X X.X in by improve fourth previously pattern. line to improvement the to year quarter to compared percentage with margin last adjusted operating points

other we sequentially. compensations negotiating sequential our while These changes at looking base address operations third reflect Year-to-date, a rate turn anticipated. XX% also the to significant year-over-year slide. normalized range improvements. a XXXX expect pricing global we are ongoing we tax reorganization of rate On and and quarter, In inflation. sequential our high improvements to Additionally, to than and of our lower onwards in this next the key our from on functions continued expected customers cost both XX%.Now the improvement reduce tax for and to XXXX actively the that to the we European areas, have slide, to generated secure previously broad-based the with highlight cost

labor our implementation strategic digitalization. including initiatives, of the supported by automation efficiency to continues Our trend up,

XX by basis positive in points XXX relation quarter The efficiency to adjusted mainly with and the second [indiscernible]. points a substantially customer continued now basis result improved gross improvements, and Our have labor the gross This by and XXX operating of RD&E to this first for to higher from and margin is quarter. compared the trend in sales, a basis SG&A margin margin. improvement since points led are lined QX. Combined by the

substantially on improvement detail and currency financials due adjusted Looking translation higher now sales operating in increase The Sales to income. on in new the and cost XX%, slide. activities next led by favorable effects. focus, to strong mainly through more a substantial increased reduction prices

Excluding same strong adjusted million operating related period from an was percentage XXX XXX XXX percentage points million first and effects year, by margin, last and was the increased flow effects last last than close increase SEK of year. cash X year. points than from The million which recoveries. Operating of customer in to matters, USD the quarter, main antitrust-related was quarter. which adjusted cash alignment for was X.X% by to year USD to XX% flow unusual The operating over last capacity USD from income by the million, lower period the more same lower flow the cash the timing XX X reason

fifth of on strike in America QX in week. very now The on impact limited. the Looking North strike The North is slide. the UAW America limit in was impact in UAW next the its Autoliv

million In SEK our around Detroit sales UAW, by and for lost Our or employees sales volatile unpredictable sales but we accounted 'XX of XX% estimate supplemented in North half are are XX% India. X in North LVP. of our we and by America October. global and indirectly First sales less that American impacted in We more X are than the lost

around per X is from October the strike hit week the per million. revenue SEK plant assembly XX, As

components possible well ramp-up the is and brands not plan as of it's potential UAW and on build to sales point, the We to as a of strike finished this developed estimate profitability. also have are inventory recovery There some strike full At the action including our the over. the after fourth for difficult impact by the bonds quarter volumes sales the factors, actions. scope, of strike increases quick to unknown products lost support of affected and when strike, but strike many length

full year assumption the not in the Our strike prolonged Global the included that indications beyond are is October UAW based S&P what outlook. on is XXXX

now reducing in indirect Looking secure the XXX a includes reductions to of in our XXXX, reductions volume next and announced slide. on structural competitiveness cost initiatives first when employees. with footprint all centers for states China, office Netherlands. employees fully of in in October reductions by areas. indirect of the and people substantial affect This medium-term operate all X,XXX cash implemented. our and on offices, expected global On focus targets, in including XX, positions plants, United million operations. These around cost we we driving reduction SEK workforce to accelerating SEK are and at an of To cost optimize and X Sweden, in step communicated. financial closure leadership levels. and around will initiatives we XX XX On reduction structure long our to million global Japan, the a [indiscernible] million are the our structural and headcount European planned will XXXX geographic XX how These and The to our technical steps more as our announced the previously support effective continue we X, on July direct particular of costs movement the announced while intend simplify reduction reduce flow.We our a our

our sales next Looking on slide. now detail on more growth in the

price, to for close third the USD XXX first Our a XX% and consolidated retroactive cost quarter. and quarter. This volume or billion, in adjustments and net was driven X the second mainly Out quarters record sales million. by increased of the to negotiated with the compensations higher currencies. and than period USD earlier, third to compensations X.X million price compensations of other period relate that SEK contributed Out are year

percentage the points the OEMs statistics, continued growth next strong quarter, OEMs by by execute growth China very China and sales domestic global was We Europe Looking quarter XX% in This percentage vehicle in the Chinese sales Eastern Global, than most was as on production XX percentage from mainly significantly on order light production percentage performance S&P the The Asia by outperformed coming I beginning year-over-year. sales According production Americas at our outlined to of on OEMs. the that to book. we slide. expected points, percentage am in to growth light XX. increased driven third XX%, pleased production and vehicle light by higher-than-expected in higher Japan to third quarter, by points. X X% by with points. for points in to our the and close X Europe.In global for vehicle X increasing for vehicle outperformed and of in quarter the China fast-growing production organic rest accounted Asia in our We compared the of organic light the around outperformed we XX regional

Our China. in as sales with this group deliver order book XX continue light to points production we close to the vehicle on outperformed strong to

quarter, the number growth the of and key next we have highest With trend per clear. the high the see a the a The an of around into of being quarter.On expect some third X sales slide slide, positive China models X had available In year-over-year fourth We shown this Europe. continue in at over or launches, to version, trend content USD we towards higher, electric $XXX is especially models vehicle product with as quarter. model the electrification from on launches XXX. Autoliv

BMW significant. is In the Autoliv terms sales most of the I-XX launch potential, Series

next launches For I our South the of will hand the in with slides. the China, will on full about now few record Fredrik number year, to and over it who talk Westin, financials expect number high CFO, a we Europe Korea.

Fredrik Westin

Mikael. figures the for the quarter XXXX Thank to third XXXX. our third quarter you, of compared Slide highlights of key

capacity while The was million go to for a earnings the profit increased costs increased items diluted by volume and the driven personnel gross made from quarter, million, sales XXX drivers $X.XX $X.XX related from The SEK points freight. offset costs partly XXX we volume growth, and was where were Adjusted when was SEK X.X%. we $X.XX SEK to increases, XX I by total to the adjusted was alignments.The million, financial by from $XX XX% by points of income, more XXX bridge. material SEK billion. $X.XX, explain operating operating increased for increased SEK margin to in adjusted increased will by taxes. This higher Our increase. offset by operating price adjusted to net sorry, by main X.X million gross to XX million In income NOK operating and million increased through of the were by -- basis primarily the income from operating which or Ag per XX% gross income, share XX.X%. the percentage for premium XXX wage by X.X profit growth and lower increase inflation. This adjustment partly a

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

third income the now our operating on next last the million income quarter XXXX, quarter of operating adjusted same than adjusted year. Looking the the XX million bridge SEK XXX was SEK higher on slide. of In

headwinds of inflation. SEK the million. higher, effects. same impacted lower initiatives material premium compensation X was Costs significant was translation SEK period net well for higher negative improved negatively compensations, and volumes, was the mainly approximately This that last as profit Out-of-period operating by to FX other impacted pricing were was X XX Our positively strategic higher by projects. costs cost RD&E cost and operations from freight customer million from raw and by limited. prices lower than result partly impact million our during for the combined mainly SEK The offset as general personnel due a SG&A cost were year.

in to sales, However, points. it relation basis was XX down

is This any in customers. on typical sales, was the XX% compensation half not currency leverage leverage to the higher excluding As a our of effects, from the result, our despite operational upper inflation XX% on the getting range. leverage

Looking flow now the next cash on slide. the on

mainly compared For partly capital our as XXXX, by the period cash million last less year, SEK due NOK effects, the to higher the mainly XX favorable year NOK same adjusted to by the negative XXX third result operating period working flow same quarter XXX increased income. cash of to decreased flow capital million million, higher net a effects. and by offset million of less operating last compared working SEK XXX Year-to-date, to income to

grew by by higher million, capital third working inventories. NOK quarter, driven During the XX

$XX working million trade Capital on information sales a to SEK the than more a previous year to by to capital has lower relation X.X% provide on flow free million And net to earlier. million expenditures cash was SEK will XXX a million in improved expenditures was flow QX, compared $XXX XX earlier. million in cash We NOK million. Capital Free in year. decreased year-to-date, net XXX later from year slide. [indiscernible] X.X% NOK

XXX around months conversion, Our free in full year operating XX cash an cash million flow XX%. indication SEK Last unchanged. defined income was net flow the of cash to relation of is as

Now looking next the trade on working our on capital development slide.

by the mainly million. reduced XX due capital SEK the to Receivables strikes. offset payables this due have call almost our driven continued XX launched To lower higher During million planning lagging trade million, in million UAW inventories XXX capital by expect significantly all we higher by increased achieved We program resulting the special high and payables with we improve SEK inefficiencies. by and working tandem XX far. by million improve date, partly hence so in million, SEK third efficiency off in aiming challenges the XXXX, capital to The volatility XX higher of do to EUR are receivables. and was XXX call accounts volatility. working to SEK In quarter, and SEK inventories volatility the from inventories,

on Now looking the next leverage on ratio our slide. development

debt a NOK ratio XX leverage unchanged adjusted of million the compared XX higher XXXX and end debt prior This quarter. was higher SEK net the trading XX was Our million months X.Xx, to September of EBITDA. at result

on environments, industry [indiscernible] with such Produced in X% the ability in dividend periods the to challenges Ukraine, dividend usually the its looking slide. Covid repurchases returns several shareholder substantial war relation past difficult has create supply decline solid to the a as generate next has Now flow average on to Autoliv the approximately shown and share vehicle price. and in value. yield light years, of lockdowns, to in market production. represented related chain in share payments shareholder X% cash

a million X debt shareholders. shares directly X.X last our billion years, while of part stock This includes million repurchase program. the of stock for Over total X.X reduced we net current returning to of repurchases XXX the as significantly SEK have SEK

our it for debt sheet, conditions, not several the is We short executing factors cash and term. flow are credit general strive considering always as I'll to rating balance when the Anders. the balance We the such ratio. program business our best outlook, that the now shareholders, leverage our back and hand only for both long

Anders Trapp

Fredrik. Thank you,

Looking at the next slide.

full models to their content by XXX Eastern summer vehicle some due volumes Compared production to from in XXXX growth forecast shutdowns deteriorating increase to Europe, than from compared last higher now seasonality increase is third in X.X% and year. quarter, to supply is higher America X%. in while by production improved over increase content that global third quarter market are basis inventory backlogs July.This driven markets As lower production S&P the vehicle markets, around in elevated forecast now Global have global light the Western sales drivers and surrounding chains stocking in of projected lowered. credit China the vehicle are increase North and Europe concerns by X% to This for is regions, vehicle demand, vehicle expects conditions, fourth points year to light and development. is expected Despite quarter. main normal the by pricing higher many mainly

Production for North America secured to a through the XXX of the vehicle activity, revised is in by impacts negatively strong continues sales impacted extent, to and Thanksgiving. domestic change This announced in average production more in the export content OEMs. is strike. production, forecast. strength, Near-term to the vehicle forecast down vehicle continues quarter EV show China by owing The For minus OEM mainly already July than compared UAW to light Light to both relative strike Europe ongoing the be benefiting X%. points Autoliv, to demand backlogs. actions fourth S&P's by a latest S&P large per includes this production continuation

However, backlogs and demand we the XXXX. see our We abated X%. light and tighter to underlying going due vehicle higher at into on order the to conditions production are global OEMs year full are vehicle based has prices sales set shrinking credit growth around of indication

Now looking at next the adjusted operating in margin progression slide.

cost we headcount For about The and the profitability. fourth reductions substantial compensations we the expect from quarter, We anticipate should operating further that operating support margin. of talked previously, customers. improvements adjusted leverage

launches, high by year-over-year supported prices. expect production growth, higher continued We and higher vehicle light sales

supply with to volatility. year continued improvement see of have an stability the chain call-off customer We reduced throughout

improvement X quarter of that the it slower adjusted than with year-over-year the points margin line in deteriorated somewhat around operating means together of somewhat XXXX. the each with fourth and improvement FX around higher as percentage adverse is percentage QX. quarter improvement development expected we expect sales to X Europe we This, X.X throughout previously However, in had communicated pattern the in points,

at Looking shows matter, alignment, capacity XXXX the discrete indications litigation on This our financial and year items. settlement updated slide indications full next a year and full from slide. other our indications. antitrust-related exclude XXXX gains costs The

full X% around of previous production X%, growth from Our light based assumption in the indication up indication. is on vehicle the year

around flow expected X.X% the As XX%. of indications by is to to increase XX% adjusted positive assumed around XXX growth be The margin X%. operating for instead a are the consequence, Operating translation SEK cash effects our be around expected is around organic to X%. of is sales Currency range organically of earlier around to unchanged million.

shareholder improvements XXXX outlook. October in is the full UAW the to not to return. high should talk on the Note cash is year flow the beyond S&P Global now about allow strike are based over I positive XXXX that included will continued prolonged hand see. it what indications briefly Fredrik that we for assumptions Our trend our and

Fredrik Westin

Turning slide. next to the

just tailwinds effects see savings The on of the The continued of executing stability, leading the and as we headwinds. from direct labor but operational to effects in than a outlined include expect operating order later we headwinds, inflationary include to we potential as although in also operational initiatives, expect raw Considering automation customer structural and smaller it these some from XXXX, compensation strong and a the improvements, materials was from lead year-over-year call which year, improvement pressure, catch-up digitalization, continued headwinds XXXX. headwinds main year, improvements favorable efficiency expected For main this tailwinds tailwinds to from and XXXX margin. and in earlier, book. adjusted

of We target operating be step an important to expect margin. our medium-term XX% XXXX towards adjusted

full As global the which production full levels rests compensation of least light that a EUR come back at that for Mikael. conditions, inflationary hand the And to earnings XXXX call communicated, have with after have release we you, in on I'll medium-term XXXX intend, the back is in our connection January. it back pressure full year. quarter are for million, fourth targets usual, key now XX to volatility few with that pre-pandemic is to indication a we as and We vehicle year

Mikael Bratt

like next investors. formal for On Thank the the line earnings comments our and I hand operator, we now would for analysts slide. today's to from back our you, will and over to questions Sandra. to it call, Fredrik. concludes open This

Operator

Instructions]. [Operator

Emmanuel Relius from Deutsche from comes Bank. question first Our Rosner

Emmanuel Rosner

highlighted around of you've some X XXXX. questions factors into had the going I

call-offs positive. a the customer The first this on mentioning slide one as is you're

have call-offs? about can you of, there incremental just savings? was quarter XXXX, move as don't volume? What you some think a been -- these is think how better into do drives more know, could where in actually just as then Or you've that Europe this you is I we we what bucket And margin Is headcount higher on a if it of result like color ongoing curious there And is give bit an deterioration. do may it seen more a essentially discrete of that stable reduction that sequential you indicated this? So issue? little achieve

Mikael Bratt

Thank you, Emmanuel.

to Fredrik question call second there. start me hand you Let to of your then and through with over take the the last part

Europe improved only see here, operations has, situation and direction, we I we in the here in And this come was is, have in to again. it would issues year, the worse volatility throughout throughout going our that to but had And value purely resulting in talked to that time what we Europe. this Stop-n-Go As the related But challenging a it turn right including here. back our customers' have about say, year, that not in some saw QX in chain when supply have here.

course, customers. some for vary. that the a for the we semiconductor cause of root But could for example, of is that still still our see So problem situation

Europe have reason that at deterioration believe We consumer any this or no in to deterioration comes end from all. situation

at to much reasons wrong very connected otherwise, in we But remember, would the it's the XX% I unfortunately, we in direction went up and you XXX%. see have towards say, average, quarters here basically last for pre-pandemic, I were So, level. the the climbing that, an years had we are But Europe. as as

So, pandemic we far to it before in company region we altogether from are the the the were of comes regardless still there. stability when where

So, Fredrik, maybe...

Fredrik Westin

even Global, year, also a growth. the should some then, S&P will is for bit also that expect be yes, that, at volume look limited So based on if you there we expectation next

that we we're the been the by in and direct of should help And stability. that further call both mentioned, So mean I on supported allow indirect it us the in that is further more that stability. we have the the side the and this is the efficiency structural the to due the margin added importantly, automation back at operate current then XXX% to have significantly on more the that significant the improvement this lower the up used development. digitalization. on do operations to levels component will course, comes doing we've of also move to. and level what But is our third initiatives then side But inefficiencies to of it Mikael or

Emmanuel Rosner

structural second my the then is question about And initiatives. specifically

first earlier when in had for plan the year, a reduction. announced you headcount think I

the reduction. a at think you mentioned had I potential total of X,XXX time headcount

or on announced I of steps, I think X,XXX. the about maybe first the far, announced plans so X,XXX so based think this you

So obviously, lot to a more go.

So, for are, benefit would can but then not announcements that? And what the still in just X,XXX of is the any Or number the of still XXXX? would be that steps, those current be my questions right environment? timing additional beyond

Fredrik Westin

Yes.

we did call is we X that So, talked employees connected about groups. announce also X,XXX, was direct It on before. direct much of split or we but and the just X,XXX side. The X,XXX what then indirect into salaried we X,XXX what very side, to the

So, of to or we the we also should it on is levels to that And that which been then so X,XXX productivity and regular have be yes, stability to the also out progressing. back at, announced operating call X,XXX Then then we the based were X,XXX, people for allow the as come-- us achievements end of of able that on far basis the that. type we will volumes that on the support come have of of which XXX take March with that number, direct. is

that. And the associated of X,XXX, So, we announced savings have X,XXX. the with also,

side. in we So, the can XXXX. there is than than now by the see more down the what been third And far you quarter also headcount half on booked that And cost-wise taken our already. of is we've have more to indirect also half has so of come, employees but on XXX more progressed

are of some place. in yes, those activities already So

Operator

Colin Fargo. now line question from take from next the of Wells will Langan We the

Colin Langan

of renegotiated that part gotten maybe costs piece Is price recovered then pressure is the next just noted the the pushback at would in you headwind can year? last year? a next into versus the to of Or slide, little that be actually of big is what general, we In thinking inflationary you're What the as and inflationary the more other customer into year. what us that about getting you issue? new bit next need start And timing on of it remind already the are the you've recoveries? much getting compensation in how should get

Fredrik Westin

available. your first the macroeconomic have So, we that hand forecast on -- the at use and you same

So, in than should QX, inflation But had from they now, when level this next recovery QX have or will on that we'll after year special delay talk do might the a specifically at historical year. we as we've than as likely they this did that back we that year should most a be XXXX. come we and we expect that earnings averages, But lower have had less more side, higher come inflation expected. call quarter's the think on what down right in indicate than also are that labor to it do has next expect year. And the but what level really has I we but second there Then progressed into not happened. be

we the it's had as here with So more much have this the in recovery what QX as it we then. now And had also the communicated second quarter. piece third developed more sum not back-end than it's price back loaded in in or less as year we expected quarter initially, was that -- lump meaning communicated

Colin Langan

next sums to as year, those And go you pushback concern mean lump you that when have the that again? next into might given a is that go labor inflation the year more automakers get does into But renegotiate are you'll you facing?

Mikael Bratt

I also this think negotiated year. last lump-sums that No, we had already year, we

process we into process for account. I the a annual where an that I take I is thing together customers, would inflationary get we a, say, to with would have, that have compensated here. our think here we And say, components the important how

of inflation. think the I more split fees connected what sum is the So, tie is lump and what for price to related is

move same something nature, be in to the temporary of if should, say, of not could it it's need You forward. as course, level we

each remember So, what what it's also with need a customer. suppliers. we with this have But our is detailed that very is mirroring you negotiation to

amount well. of as our sums fair paid a base lump supplier have we So, to

the very balance any each we for X to business the other cost structure customers a structure to flexible feel we as have be the changes offset costs. me, early against get way for with there. this negotiate we these make here. basis as of sides are inflationary of with course will our comfortable cost environment, a here type But So, long in this to ordinary of I and here an that And good business compensated we sure on

Operator

now from next Mattias DNB question will from of Markets. line We the the take Holmberg

Mattias Holmberg

material like likely clarify I it's going profit to would the a the just tax to on have that forward. net on given rate First, quite impact

to paying am given for tax rate bit past. it than then a had than you in Could you've significantly the the such X XX% that that? year-to-date, little a on going get tax why is also QX? year, also basically I full had you've order a you've the XX% quite in XX% range? So, topic, lower perhaps normalized any new to that Or specify wide see there correct you that the above to XX% you're assume XX% that the bit And forward, more reason range a a and given in wide to

Fredrik Westin

to XX% operations, XX%. very you're taxes significant taking due This and global reorganization around yes, So our ongoing both guidance right. here We functions is year. for important the the of down the ongoing were which of associated a European to restructurings. effective also is this expected cash is this But much very also rate -- this with is to year, reduced it's not in lead in the tax to which

XX% said, affect then rate be tax as not will XX% going onwards. this we we forward, paid to in year. Then do normalized it around from expect, So, the XXXX to the taxes

range this the at the moment. And bad will assumption then of impacting not a taxes the is be XXXX using that onwards. think paid from also I midpoint

Mattias Holmberg

of state should we rate? this terms going steady view as a in And tax permanent forward

Fredrik Westin

Yes, you can.

Mattias Holmberg

for And then question final me.

are would I'm you a in potential just how as You inflators inflators. the of potential situation? here mentioned curious, liable the a that RCS Or recall produced? work recall for ARC company the

Mikael Bratt

ARC to That's a have here, -- our is they their is of from are competitor these us. of as I part exposure. mentioned them. where we that, Then components course, purchased

modules that as any to are has And see connected been portion not far related to we there cases a Autoliv here, this in also that volume customer understand is regard. and the them So, here. as we to

also this in closely, need development recall, clearly have very they we there as not but something to this are following replacement, but course, our of see of a can we we're, here support we customers case So, but where yet. with

Mattias Holmberg

potential you get you that that yourself? a Or ARC? recall compensation do cost from have to cover would believe in could you And

Mikael Bratt

there of is a that situation, on If this course, be ARC's expectations, for is accounts, such sure. our would

Operator

next will Jairam line take of We the now question from Daiwa. from the Nathan

Jairam Nathan

I outperformance slide. was the year go to just wanted LEAP to

regional like a are next half. looks America And how first it year? have the about North the outperformance main Europe reasons we for the And bit should what So, that? quite declined for outperformance the from and think in

Mikael Bratt

No.

course, is share I back respective of And market time, bit can we mix a our can think go in that continuing to certain you this if are you here. about that little you but our talked direction quarter, see have single in number grow in a effects. clearly that is regions volatile, you

So, I to shouldn't too that. read much in

have we to I a yes, here communicated steadily book the moving think think we order support that. backfill activity market good have we XX% And also I share earlier around on. to our towards are level of that

Jairam Nathan

And just the But and debt environment thinking change rate the maybe and and to funding? that on higher given buyback your debt buybacks for levels longer, share levels. the interest debt does on finally,

Mikael Bratt

good with are that would well to buyback the have cash that see believe we program flow forward and don't that we affect I today, think something generating supports this way our being it the here. committed operations we I here,

Operator

Giulio next will We the take from now Exane. the Pescatore question BNP from of line

Giulio Pescatore

to just The you the to first the are just assumptions exactly I'm what strike. understand trying incorporating guidance, on one regards with quickly,

line said week the end And what maybe in including of us drop-through the November? are strike is operating an incorporating also is X.X% currently Is if S&P to to that that revenue can forecasting. end that what that EUR the what you of X that you you the the indication think continue So, give in mean QX? are million leverage margin does that you Does -- I until improvement assumption? November? you expect lost are And on per or of X% until IHS. mean in with you that's in

Fredrik Westin

first your question to answer yes. short the So, is

per So, our right the what is is X the can from million on SEK now, is top November. end of until line. around And impact week it it that we tell

will And drop the change through the of at can what here, on to this be the be it seen remains that course, Of end daily. quarter.

the to see As They up UAW. are that seem the competitors. picked unionized here at of by Mike volumes by before, be we moment, the also mentioned some do not

still environment So, a fluid the throughout need very it's to monitor here that we quarter.

Giulio Pescatore

And a you're in the of end also volumes. the big not assuming pickup a after big strike, pickup

Anders Trapp

to basically how through be I volume again, also volumes recover quarter. fluid it's fourth of Yes, a and here pickup that to very some overall goes in But then into if remains and seen Thanksgiving pickup it the develop. think the then some it

Giulio Pescatore

say Is understand that share just maybe the fair hello replacement first help recall this to if second question in way potential more is, you of you lose the let's terms suffer. to significant, the it to the part the the course, XX% feels recall. stand million competitors the out you It's of And very of course years, that's help [ it's us does quantify on on for here benefit terms Because you might but the effect? in of implication over can can question. materialize. you it than your say regard start to like with Both of and XX of side? that into the say long-term does of us opportunity second it replacement impact if Then of the is EUR ], that opportunity recall potential you recall? part one right? And the to to the go XX pricing fair And that have was

Mikael Bratt

to too speculate that. I think it's in premature

course, not customers work know, of that all and ongoing. ARC and in we NISA there yet, it's As and is that stage with the is

customers too see standing willing early this. numbers So, and it's to we needed, have are support but here. and to any forth to just We wait so by if our about talk and in or potentials start to

Operator

of take Nordea. the now next line Vilela from from Agnieszka will We the question

Agnieszka Vilela

note but probably for one, positive bridge, moderate the that impact time the first still with EBIT starting I raw So, positive. in reported materials, X a from you quarters,

to? maybe cost related And talk you That's your my in could it what question. some first So, about that is see deflation you input? please

Fredrik Westin

we It's positive here Yes. time effect that long see the a a on raw first Correct. time materials. in

means that flat we guided quarter. development should We for positive fourth for also the development stronger have even in the see a an year, full which

do So that yes, down coming us. costs -- for are we see raw material coming prices are or

have So but but increases by we steel far, we textile also still some that prices have should be on until has mainly peaks, been more this structure. nonferrous driven favorable year, moving we are X cost the lag in our this or next X it's has side. time this the manifests on materials, said from before, to especially expect Then for especially we magnesium, been favorable, seen going itself spot where means that also what forward. this year, monthsâ€™ come down that indices between as But

So, monitoring that means, guidance but specifically the with we'll about next we very talk that are more year. closely what for

Agnieszka Vilela

And Or about for on decreases should just how then cost because that. price input think require customers you? to understand it? a we lower your Will follow-up of

Fredrik Westin

the back level also Yes. some pass-through And then clauses price higher We customers customers. to we do a that those have then now. of we give decreases our with expect will of

But way then costs accordingly. also because dilutive when somewhat way the should come down. on prices raw yes, was impact up, have accretive it favorable be So on the margin down, on it that we our should the then adjust margin a material and

Agnieszka Vilela

think, is speak and production their when to mentioned regards the to your And in to also Mikael, Europe car demand you abating shrinking secured into going could in And you production see order backlog, us then color customers my if far backlog Europe second you by that question, provide but so you I XXXX. in planning?

Mikael Bratt

problem pickups here have if the is I the have even think we deteriorating. is that we -- visibility, as you know,

a have challenges the Otherwise, are short-term European it comes perspective we we where So, planning, at when nothing the to looking the market. there I weaker production week. in is overall within think that it's indicating the

happening backlog buildup, think that these that course, is now is normalizing. I all is, after what of of years

and have So, normalization from of we volatility backlog point from earlier. I And we I have to nothing due view, about issues indicating have volume a talked more of say, we supply would the lower we consumer should that think component coming seeing that are that.

So that don't see we anything. otherwise,

Operator

We will now next from Handelsbanken. line from Engellau take the the of Hampus question

Hampus Engellau

from questions me. Two

the safe. How and by, market First, is China a I Mike, the guess, is better could this driven exports bit OEMs with healthy little cars much the and competition you there. more local talk quite about development more China how driven if in maybe it into growth being on in by electric much coming

Mikael Bratt

quite also opportunity OEMs as our with for market ambition great overall with we requests think Chinese breakdown, their for And from innovations China, to the A content safety increasing is the what could what number say countries, for increase OEMs here. yes, the quick new the here see here I collaboration also, I give would quite I don't where growth improve us us growth note And But and by you that. you a for you a together have Chinese here to dynamic driven say, to good there. content. here there. export on Asian OEM said, mainly significantly but Chinese Europe to is to,

in there. So, strong altogether China position a for us

Hampus Engellau

of then left? it are where of process automization How you to much that for the last would digitalization you possible me question for be come how in the on share Maybe is is, you far production, maybe some in process? this have and a and back

Mikael Bratt

Day opportunities still had that our showing here, a lot in I certain think amount fair come in don't we the in have have I Investor of in of a here saw a there, it -- India families of we left. But but now. product here me slide front you

opportunities of continue So, we have plenty this to journey.

think maybe product in are the XX% XX%, potential. of I families, a some in the we of

the But on and see more in Investor room forward. So deck can going capitalize that detail. yes, to slide I plenty optimization in on presentation you refer to digitalization that of the can Day

Operator

will from take of the next Lache question Wolfe the Research. from We now Rod line

Rod Lache

objective basis for points we QX be few about LVP XXX Is maybe And XX a as about your guidance you I typically, due suggests factors. I'd that like thinking to case? Is margin for an average thinking we're XX.X% margin it's above the reiterated at implied is run if understand the stable. recoveries, magnitude to other should your million-unit roughly least margin, think, because at that XX% run as of the what seasonality a that seasonality know if of QX to then that we XX% the rate long we of adjusted rate?

So, you're already that magnitude experiencing is what Could due the quantify instability right S&P there. of inefficiency is to now? you the

Fredrik Westin

seasonality not in different in other year years. than this the So, QX is

points XXX from XXX, seasonally quarter. we The around yes, basis in it's, that to discussions. is back And It we're the structural the Investor that is higher then related year we of that. the we've the then commercial development engineering margin changed the fourth come of walk from has the in the that have said we what rest to still our what is cost increase customers. Day margin up, initiatives before. applies the on So, place is that and recoveries on have the with to Nothing same and think on also putting mostly this then income expect in further at other logic said or earlier I

Rod Lache

might understand. incurring inefficiency? Yes, right give I the burden that us you just just a now Autoliv is that of hoping from sense was I

Anders Trapp

as in regions, Mike backwards all call don't But how especially the very to itself Itâ€™s was the year. we've in QX. that improve. other that said I some unfortunately, has And is throughout It it Europe, very, say, went continued manifests of a in types the it it actually -- saw I inefficiency. and went that then good of different backwards. track do Europe, we in in, our number given before, now. parts But think reliability before, world, a and don't either want here of that to

I That's So, it's why refrain would to like it. a very difficult number. from to give

Rod Lache

that would lastly, recall of with supporting very if in obviously high work for your like you were do happens, way, something happen, level, what process could magnitude take? that how NISA ahead some that what engineering modules. just, the talk earliest happens in accommodate And Could that? suggesting, of guess typically of customers at this a long the to you something advance participate Do is to just the be the replacement your If it makes supporting industry Autoliv customers about would would time? And as sense ask would of the you industry?

Mikael Bratt

engaged process an to adjustment -- that would and the start request quote it's customer with work us with, of be such engineering then activity course, to the and for think I any be details unique portfolio specific here our to and and our from product because it's on side. there done is answer needed difficult The to customer what by needs own depending there.

that that's of I supporting our in situations So But think are a unique customers past the case. we capable shown have recall there. in we quite significant

to be happen that do So, us able as to I here this fairly well. quickly expect if would

Operator

to I would conference the Mikael turn like now to back for Bratt closing remarks.

Mikael Bratt

flow increase fourth operating deliver you, in I'm income that quarter. substantial adjusted will confident in sales, operating Thank and we the cash a Sandra.

and we We of a in of This initiatives, society. years well on come advance cost our our chains. forms foundation supply focus to reductions the support strong continued that lives, fast-growing more vision gradual our sustainable which continues our as as an stabilization development most to contribution structural improving position OEMs see of for continue strong continued a important direct midterm to is Autoliv targets. saving with to

Until next safe. Thank participating earnings your Friday, quarter interest Autoliv. for fourth in for continued Our is call. call you, XXXX. today's January everyone Stay scheduled XX, sincerely appreciate in We time.

Operator

concludes call. Thank for participating. This conference today's you

You now disconnect. may

Autoliv (ALV) 20 Oct 232023 Q3 Earnings call transcript