VNE - Earnings call transcript Q4 2020

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Operator

Welcome, everybody to our Fourth Quarter 2020 Earnings Conference Call and Webcast Presentation.

So here in Stockholm, we have our Chairman, President, and CEO, Jan Carlson; our current Chief Financial Officer, Mats Backman; and our incoming Chief Financial Officer, Ray Pekar; as well as myself, Thomas Jönsson, Communications and IR.

During the call today, Jan will comment on our current business highlights and provide an update on our strategic reviews, launches and technologies. Mats will, after that, walk you through our financial results, efficiency programs, while Ray will provide some commentary on the 2021 outlook and the update we have done to our 2023 mid-term targets.

We will then remain on the line for the Q&A session. and homepage are of slides link through always, the on our as earnings available release a And website. presentation integrated If have we today. of an follow the we the this part Safe Harbor that turn statement, which here to will and includes page, Q&A is

close reconciliations quarterly be presentation, the to press p.m. We the that will the release with X:XX reference figures the are intend GAAP measures some and call During the non-U.S. disclosed filed SEC. will and we at of the in our XX-K

So, I will maximum in we as ask over everybody yourself I to CEO, requests the turn to can of a limit our as many that, to so two With call possible. questions, Jan. get

So over. Jan, please take

Jan Carlson

all as this from Thank you very much, well. Thomas to you my call of and side welcome a on warm

on looking page. Now, fourth for the highlights turning to quarter the and business

saw fourth measures strong throughout of in and our overall some and pandemic, also disruptions to technology fourth electronic of as Even XX% was vehicle we this continue quarter, organic in the to the continue outperformance quarter a production. the launch associates despite compared global the we strong volatile our of light sales may the of XX% components. safety, period, time. in launches, disruptions strong uncertain reinforcing had During supply and These our the to a providing COVID-XX in customer for Due underlying growth active for we in execution market, unfortunate pandemic. place and they of put XXXX first, health an put beginning resurgence and safety that the

by to effects performance cash helping and Our to mitigate market year-over-year, instrumental created improving operating our and initiative flow adjustment has program thereby the COVID-XX. been

ended a XXXX million. balance a $XXX with result, cash of we As

million initiative resulted of completion despite Zenuity strategic combination strong approximately our XXXX. Reflecting in $XXX conditions. the order strategic book to the and important to compared of XXXX in leading the volatile Veoneer Driving agreement the separation internally-developed $XX by in addition These enablers order has and billion become provided the of in on Collaborative has with with the end that increased approximately policy together, the the is ADAS, perception of driving XX% to for Autonomous software software approximately and XXXX of market intake Our have This initiatives, on and finalize deliberate Qualcomm a at to generation market on brand. Arriver come stack. collaborate next Solutions an scalable our Veoneer

and successful despite ongoing year pandemic. volatility a Veoneer for an market overall, So

high page. customize software a platform, is the and Turning to solutions side, of this fifth solution, manufacturers provide development on road space, robust and their compared have top based perception. which software And generation the product The we’ll On cap along and features. stack allowing their free higher rates we scenarios. for few provide The a of degrees This megapixel stack full solutions of next needs rating will for generation determining Arriver the on challenging, work Arriver automotive built innovative automotive software flexible open, which tailor of field on of stack, to, its and scalable to stack an on Arriver view wider will with individual to allow consists solution. a is perception be frame decades and on strategies. enable comments will a specific and development suppliers today’s this, developing brand. software generation using resolution two vision-based of of almost eight XXX fifth cameras providing restricted

XXXX. X traditional announce OEMs during business an able suppliers, activities stack Arriver and potential optimistic the with remain customer to to software pleased We and both Tier award are with be

global The on sequential increase looking the the market of from better a the Now, our with turning quarter was at the production quarter XXXX than of X% quarter, page. underlying quarter. rebound XX% in the by beginning fourth second from continued in trough light approximately the of expected vehicle third development which

XXXX, to increase vehicle expected light approximately to coming production million XXXX ahead into vehicles. XX% XX.X Looking is the back from around

deemed based keep believe the underlying to call to first offs the We all is latest customer first be Chinese not the second and half should during semiconductor of New production in forecast shortage also IHS in strong. seen to However, relatively issues downtime since due reflected the on quarter customer demand XXXX short-term during quarter. also customer made the It of and in are seasonality XXXX and interruptions we forecast, mind some due perhaps these of first could the the quarter decline if up remains the effect remains be quarter. sequential in Year larger to volumes the fully second

order our intake on order next and looking Now, the slide. book on

$X.X approximately was Our lifetime and market in order XXXX sales Restraint approximately intake current million, our above Safety. billion which both Control $XXX Systems during well Active equated shares of to of

Although which awards this it due of XXXX. lower during our than reflects order evolved year, the expectation beginning at XXXX order intake in included the more the XX% COVID-XX the of to is safety mention intake We in softer than should active pandemic. the XXXX system that sourcing environment,

we billion lower they from net at XXXX. their release autonomous an that main billion different chosen order $XX divestitures have the was of volumes customer Systems technology. Subsequent in mid-January, to sourced. net to changes reduction well approximately underlining since Lidar a end a the notice along $X as originally now our sales per vehicle, vehicle path rates, changes light the The take timings. remaining book when year the currency, of the of generally to effect received order of related Program of production, to billion content $XX to year business XXXX, previous during the from intake the was related the order the and the Brake include as program the Looking difference lifetime program XXXX vehicle XXXX, of book have from adjustments for with sales related approximately in to core

since billion already lowered $XX by impacted our previously not this order were decision Our of announced intake is assumptions order approximately XXXX. in our volume for update book

XXXX, Looking in expect ahead the levels our achieved be XXXX. from half-weighted intake order increase second to we and into

overall the despite excellent of some our done played job challenges COVID-XX timelines. development technology teams our to an we constraints and teams our flow that the improvements the the to continue has These main looking cross-functional launches across product portfolio. technology have XXXX. And us, achievements product and during of our on this Now, pandemic our and new on the the continuous slide for next captured launches upon illustrates customer page, launches have manage

another our important and for looking next programs the on launches our XXXX XXXX, are that growth beyond. Now, customer launches see in where expected can these organic contribute XXXX We year on to to strong slide. company, our is

on have aggregate, this on approximately than increased range content XXXX his per from top vehicle launches illustrated in Mats, is over annual XX terms average than top the these from turn models of XXXX, it of we the sales slide, a $XXX launches on XXXX for per are As financial top of and our XXXX. ahead. customer a delays to please vehicle The sales more average $XXX represent with the of range platform three I during to XX million In approximately of XX Mats these last where commentary more will go $X,XXX slightly for vehicle. results. content year to $XXX. now in launches

Mats Backman

Thank you, Jan.

market an sales strong are sales growth as points. rebounded Looking adjustment we organic beginning well over initiatives, show very out the as with quarter million, expectations. XX%, a sales our This of also of slightly quarter. our operating the loss quarter have $XX better continue than our of $XXX underlying million to an to strong cost internal improvement were better expectations which our percentage market the performance growth which XX the of resulted than at pleased next the Net structure, to internal to fourth slightly for slide, the of during fourth ongoing in represents

fourth which supported by is to look of Despite this ramp-up organic our period was our the continues remain of which of for the our our compromising In tremendous launches. better performance strong working the COVID-XX strong to cash environment, expected book. capital on support at of to expected to future very the strong years, growth, to also order than industry, middle is reduce opportunities sales due capital investment a the without the upcoming with quarter company and over continue expenditures a capital to million in we position be strong expenditures. continuous impact Our end $XXX

$XX the year. fourth million was quarter, as million $XX capital lower last to compared or During expenditures

we our sales for continue and continued period a overall, and sales So upcoming development balance as progress cost growth. improve structure very sheet. an organic to good preparations

the details Looking for slide. next on further into the quarter the

The last for sales the mainly of XX which Our quarter quarter The LVP flat remained was essentially million the sales primarily a related the growth, year, $X of the same effect. fourth organic was for increase $XX driven which Safety sales VNBS-Asia program two organic the quarter. organic new was driven compared by million times divestiture RCS Active with or the by includes increase $XX to XX% or sales that launches. growth million to X%

experienced profit than XXXX net, ECU to cost $XX engineering $X net above negative leverage $XX sales sales the separation X%, Brake tailwind brake the were $XX due to $X was additional while was to effect we cost quarter addition, launch to Zenuity The million. the This divestiture increased XXXX. million System System certain the lower reimbursement offset effect from million during we million year normal gross had growth, the organic was $XX $XXX net the more of costs. or of million by quarter the million related decline Brake of currency by for The versus million $X divestiture. mostly of RD&E million underlying In translation including impact on control a compared quarter. in during where and the by offset related prior of benefit RD&E of

better $XX was year, of capital. last change million operating cash in to our the $XX million for net than due Lastly, mainly a flow minus working $XX quarter million

$XX at sequentially The million the increase a million the of due Active in increase engineering sequential due million to Safety. reimbursement quarter, RCS previous level by $XX growth. primarily to was RD&E cost of the reminder the related during now on new from brake next gross sales The performance program the net ECU sales sales the other was sequential in third relatively sales Looking quarter for increase to primarily The compared the sequential previous million organic remained million and slide. million. $XX $X $XX million included $XXX million expenditures to organic $XX of Net the the launches. of $XX of while due capital quarter. to profit fourth impact decrease of the The of sequential seasonality was mostly quarter, same increased

by swing operating million, Our to $XX due working net sequentially in capital quarter. primarily the decreased negative from cash previous flow

Looking now the our results on to slide. full-year next

which Our organic XXXX, was million to million sales sales for as compared The declined includes estimate $XXX XXXX million. VNBS-Asia COVID-XX the year XX%, the our to divestiture. we organic $XXX full whereof on $XXX declined million sales $XXX decline the or the the impact related

reimbursements, impact In impact full-year Brake volume net combined pandemic. million prior XXXX. gross million million divestiture joint to profit to by additional to during compared due margin million, net was million year Systems venture $XXX $XXX RD&E Systems to due costs, during Zenuity by the currency mix was full to net due X% net addition, cost effect with divestiture of compared decreased the effect as the of impact gross along or versus COVID-XX XXXX $XX The for and on lower $XXX as separation. product $XX the decline the XXXX. of the engineering largely Brake the XXXX was year currency $X caused higher of gross million The translation and

Cars. year-over-year improved combined a intangibles IP SG&A related license Kogyo addition, to million $XX In other divestiture income from the VNBS-Asia while Volvo of Nissin to improved million sold $XX recovery and amortization and

$XXX cash and method loss operating to operating in due million working combined million the for the $XXX minus capital. net flow and positive full Our improved year changes improvements, equity

the in IT. CapEx facility Lastly, investment and expansions Systems engineering-related $XXX improved lower segment, by million to due Brake

Looking now program on to slide. next MAI the

for our adjustment to from on earlier, mitigating the initiative our and a As pandemic for positive negative the of have year. market full the thereby financial impact mentioned we have significant continue financial quarter results, effects COVID-XX results the

now now at over Ray. I update. our Looking XXXX to mid-term outlook targets And turn will it to

Ray Pekar

and Thank you, Mats everyone. hello

to our for outlook next well as an our initial targets. Looking now to mid-term the we XXXX have slide, update as

sales expected fourth continue growth XXXX. sales that our Our outlook for XXXX to is throughout exceptional the shows organic quarter from

to for XX% currency is along year, indication exceed as to XXXX X%. to organic than where with is increase sales more XX% previous of full-year compared the expected net sales growth current Our a approximately tailwind the

organic Safety expect also to for approximately sales be We XX% XXXX. the growth Active in

balance initiatives result loss adjustment is of million our a we expect growth, we improve compared XXXX. net to to during are a in expected at in $XXX million of market the exceed estimate XXXX as to program to and to organic million our XXXX. to $XXX As XXXX $XXX And quarter million be operating our expenditures XXXX. strong range be our RD&E sales in approximately and cash Capital per expected year-end $XXX

the on as improve during our we XXXX, leverage during the and loss our half expect to of growth the sequentially XXXX. for organic second cash Lastly, performance improve expect we operating flow sales operating year, to

XXXX, Now, $X.X planning net current we cash strong order XXXX. expect based positive on profit to and during sustainable flow in approximately assumptions, to expect to our be our free a looking operating and XXXX. book Also, we billion beyond sales arrive

targets, in positive back our momentum outlook carrying into macro mixed environment. this mid-term uncertain overall, I’ll now and and in our it especially a So turn continued Jan. to over

Jan Carlson

and safety. Thank for we But presentation the and on Q&A, with a you, entire up execution the like dedication we’re quality, the coming focus sincere their would to slide to to turn today. I team Veoneer extend continued and on the strong Ray. for formal before comments you it health, page, sharp open thank we for final If

during it for please. will back Our focused I on up Janet, thank customer programs Janet, our team new big and to now Q&A. XXXX, to and in conditions remained launching a technologies open extremely operator, everyone. difficult turn you

Operator

the from [Operator question from question. Please line comes ask Rakesh Mizuho. Instructions] And Vijay the of your first

now is line open. Your

Vijay Rakesh

quarter Jan, Ray. Hi, and Mats guys. Hi, Good here.

Just of a questions. couple

the how Just – going? there design engagements – conversations OEMs? wondering on pipeline the do have how you with the see software see the pipeline you do the Arriver, How side, win been How Thanks. there? design

Jan Carlson

having we a or mind, ago a also interest, strong signed agreement are We only so. in week very the having

system the the with OEMs discussions had as Tier integrators in have We Xs. well already fall other as with

our showing They are with demonstrations We we good that of be having able a of expect interest OEMs to very show less first handful XXXX. excited together products discussions and and are a than XX during little see around them Xs, in to half they’re Tier product. of to our

Vijay Rakesh

XXXX Got it. And XX% a follow-up. I know you year-on-year. talked growing about

Just it. ADAS pandemic, and are wondering, landscape auto are as the – in side? there at design in win they to pulling how in you house? market look change seen backlog, more OEMs competitive a coming in you on Thanks. on have change Has OEMs been or the your ADAS the That’s the – a

Jan Carlson

Veoneer. of the Arriver that an tech and That’s There how has companies ADAS been are with One a into course, Qualcomm coming a through big little example of change. . in semiconductor is, coming cooperation bit of of example

almost basis companies coming how space. start-up weekly are on sensor a this with in technologies You see into other also

we are But So, dynamics. changing looking see we optimistic.

more on as very course, as system And in course, indication core order intake And look also very than there is we this strong We as coming our billion in integrated our with experience companies. from further order our to take XXXX with integrator, strong XX% $XX Also, in on opportunities than have to here, of on interested And XXXX, decades a an corresponds of here, we seen any work are position Arriver. with we the excluding suppliers. technology. higher have book cooperations products. core many integration to of besides board portfolio our a of a that, if tech of to being slide

not that indication. is included that in So

Vijay Rakesh

Great. Thank you.

Operator

the And from you. comes Thank ask Jefferies. question. David from the next your Kelley of question line Please

now Your open. line is

Gavin Kennedy

pretty growth robust. Hey, everyone. Kennedy Kelley. in David This Gavin XXXX, is Active first Safety XX% question, for on My

any cameras, ECUs, number? perhaps driving Just wondering radars, of if there, comment is underlying that anything you could on the drivers

Jan Carlson

saw Yes. it’s here. that primarily products the you

having You coming that the essentially core growth is but the can it’s course, and primarily, development. our piece the page of Active technology strong driving all are from from see we Safety here, from the slide products, in

Gavin Kennedy

be I you then strategy. the And the maybe then market Lidar release, a customer And I during mentioned noticed the it. revisiting direction. on mentioned shifting think just Got and strategy in press different in comment you call, you going the might your Lidar Could how there? overall

Jan Carlson

referred that XXXX the the certain was mind. customer have here we with time. into we technology in have in XXXX on order over order decreasing volumes release, in when having seen expectations vehicles then that since announced accounted to Lidar we book. an in a we And also and been we and have time been then. Autonomous and has a volumes look order working to is you Along decreased, that lines, the out which took certain When pushed

So, that picked got the big was are $XX the technology in a Lidar we has the order overall book time. affecting another our is we here customer core that shift But noticed that technologies communicated of not seeing billion. over fact

automotive-grade Our as be the a before, safety provide mentioned tech We have experience functional not strong a in of automotive environment. really to is that start-up strategy, We integrator. We provide, or I into companies know-how, course, experience. can but cybersecurity. provide to

Gavin Kennedy

it. for Thanks taking question, Got my guys.

Jan Carlson

Thank you.

Operator

of question the Thank from Stanley. Victoria the from next Greer ask question. Please you. line Morgan comes And your

now is open. Your line

Victoria Greer

yes, from two me, afternoon, questions please. And

of the you kind $XX would had million growth guess in about EBIT lot growth line that on strong had Then launch and to $XX top I the had improvement quarter you probably how you costs. very at of last be I obviously, for think expectations like EBIT revenue you on in If look when leverage launch The Arriver then about costs feels line, that you the the that what one Could And [ph] one. should underlying about million parts line. around talk The the that expecting. fourth quarter? other you first a also we of moving have XXXX organic also?

second one, now noticed by of you The book order I technology. have side coming order do by remaining What intake you then Lidar. also didn’t and talk you your Thanks. the please? Could the have Lidar, back OEM in for to –

Mats Backman

I comes when leverage. organic the it the when I Mats. given we question in are the leverage to mean, can it fourth first is quarter, This disappointed to we right, start you comes are had. growth with the

issues freight that deliver, However, fourth extent partly utilized we And the items comes to of able than some with we to we that to yield it comes kind of well premium beginning some also, had the kind Meaning are in quarter premium decrease driven is uncommon normal. when had have not issue by the the when that more as in a freight, that shortage program production. of to or to it component the be of secondly, components. was larger

around kind I the going forward. we gross improvement XX%, level, if XXXX that’s quarter, point of of volume profit cost we So leverage, when and at think moving $X you’re all, kind will not would terms looking see a where with is of you’re at million in kind And fourth are a looking all of around I in into give starting that the would estimate ramp-up good of the of repeating. which you if

Victoria Greer

Okay.

of on you there probably for fourth a these costs. ramp-ups, XXXX? the side, guess, But quarter, And still bit, $X a high headwind not still a that bit I there’s have million comes yield around, so yes, project about as of the down some little for freight having

Mats Backman

the in some same but fourth as To degree quarter. yes, extent, saw the we to Yes. not

Victoria Greer

Thanks. That’s helpful. Great.

Jan Carlson

we been to book, Lidar been that working autonomous And question on have that second one. we the regarding the order on has have and commented on this your activities drive

on but book. So, release. or start-up now are that, in current to been that mentioned other the is companies these promising, the not in the we have orders they have with that Besides on are companies, looking activities ongoing working discussions in related we project have order tech the the Lidar been

Victoria Greer

Thank Okay. you.

Operator

question line from you. SEB. [Operator from the the ask Instructions] Erik comes Thank question. your Golrang Please And next of

now is line Your open.

Erik Golrang

Thank you. I have three questions.

talked a is the then level $XXX the invest more in, The on Volvo, a that And sales won’t first correct completely And reflection Arriver? do brand what pieces longer – at kind separate going guessing XXXX? wrong, CapEx concern all which me $XXX than What’s for least try mean, a in in you million, are book. then we XXXX. guidance look other why they’ve CapEx to pretty Is the in with by delta for second I’m the a third there? in the the that XXXX, the big need million what for and report $XXX is bit other peak I’m term? at that around the but XXXX? is down on over I did with of on question XX million question suppliers you book, you of annual And back from just Daimler And order see on if one does order about on you big months. that beyond last directions Geely, as growth

Ray Pekar

first This question the Ray. I’ll is around the capital take expenditures.

target longer-term you it of of to target in that that when XXXX, about the we’ve for sales. the think we maybe midterm million the, gravitate $XXX always towards talking we’re X%, or mid-single the look capital X% at starting – expenditures outlook I digits, call been

And of now medium-term not is certainly we target that direction. have that level at for think quite sales the XXXX, we’re to in – out we’re XXXX there So, around billion. headed there that right yet support the in $X.X the but we this least

So, is level. we I this think the right believe

the level could. next for order time The we was for I think this think the Yes, being, on now. But about right is Now Arriver. around future could intake? in change the that based question it the

Jan Carlson

cooperate be product They Tier Veoneer able the perception And and sell combination able type that the Arriver stack, Arriver. coming from will all in can Veoneer, Ride this Xs. sell integrated and sold out work it’s of will Qualcomm. other to Tier that’s I to separate of Xs, a in And Veoneer’s inside and details. separate a the platform we be other the the Arriver business Yes, important with Snapdragon separated policy stack, the that organization development. from with software very is – it’s in it’s will Veoneer brand. separated This Tier to the be Xs. are is important marketing as to point organization to is to also therefore, not And other very why Arriver, to to out this

book. Daimler’s is have read we all with et in On Daimler the the for projects long not beginning very in very order and are ours, a NVIDIA, is of about others will book, to you they launch. right in And customer to out. that ongoing big and period we Important know Still order are with and strong Daimler, development a time. now, Volvos here, cetera and point with but that can Volvo engagement be about production. This of

who how treating them And So course, we the timeframe. over knows customers very of is the as going important next develop this are, for future. to

In across but of America addition and are in Rest leads and only important China, Asia. also here Japan globe, that have we important very customers we to other in Europe in very also working not North the that, and with

them also hope. work So, in customers will them, of important with and the we we are as future, treating course,

Erik Golrang

Okay, you. the on And last one. follow-up thank a

is different Or of land business? similar of a the terms potentially OEMs could that of you new bit to So right your is last if a then you in couple mix years? look that there on what tendering now,

Jan Carlson

It about to reasons. a it’s reasons I we mix. obvious somewhat don’t That different changing may bit a the case. is not due little for a bit. think be a the customer That of talked mix, have of and is different

are we somewhat a working So area there. on different

If product the on not difference yet. big it’s side, you look any of

the We collaboration to and Arriver and increase with change to bigger expect to here, include software of software stack. and Qualcomm the also that pieces also the parts

Erik Golrang

Thanks.

Jan Carlson

Thank you.

Operator

the Please question. And Agnieszka the Vilela comes your of next from ask question from line Nordea.

open. is Your line now

Agnieszka Vilela

gross cash regarding the outlook. help understand the bridge for your SG&A expect? also What absolute XXXX and positive R&D do and flow EBIT question; do that year. to having you have cash the levels Thank margins you Can one two it? talk kind kind on you just you. becoming I during when that you of pursue you of first expect about What us positive

Ray Pekar

that would lot those of about, come like that quarter. know back to at you at these talked the time. think everybody we’ll I Agnieszka, think, to I this is Yes, figures think a But our during really I that all third numbers, CMD

I for probably us to best the granularity. think XXXX about more the that’s opportunity talk

Agnieszka Vilela

that’s Okay, fair.

a When cash mean you year the you do about during that. or positive becoming XXXX, follow-up rate? Just full XXXX quick on talk just the run

Mats Backman

the I an mean, when XXXX, looking the comes if you it are an into on in to flow we we that to cash outlook component of just here you’re if trajectory XXXX. looking giving improvement and going looking during and accomplished starting what different give from have at the one, XXXX XXXX, EBIT into you’re at the

higher significantly slightly capital higher. are not on We expenditures, but

have time we working is looking, a the I to capital important that in XXXX, So particular, is for have remember we think what in being. great – net

And development of the during million capital XXXX. of our above own has XXXX and even been $XX minus are over end working expectations. We

assuming of if you’re XXXX. kind we will is XXXX, getting working Meaning kind getting the looking the XXXX, capital the that EBIT which piece, and normalized is components. in little normalization cash if to when at the that more into are a then the we see So flow, it into a CapEx level, the at bit the you’re looking of also working of missing comes capital, level different underlying

to And mean what you flow flow to development. but had not the So I some is the that also a reimbursements. during it’s normally, the When cash it are that meaning it seasonality flow saying if when reaching we’re for for best wording quarter cash is already XXXX, forward. to is figures, aiming a to granularity positive positive to in quarter we fourth comes due XXXX we And quarter the precise, third that, quarter, is the just cash be sustainable see some is comes will give the year though. sustainable. we sustainable, definitely that about are in going the engineering But what

Agnieszka Vilela

you then IHS Yes. some that And on just QX, thank if right second might semi-concerto QX fact that. that Great, also on to are share What you What’s the you you could for? And you. production question budgeting now see? the be too referred the positive the is rates. color situation on

Jan Carlson

numbers we a not and to seen give chip seen cetera, fourth components on with a et during start one, tough we manufacturers, but components, don’t and advanced of situation But have very on quarter should also ICs, stay only microcontrollers last of probably from We out shortages the have you, passive specific have number we on there. here and IHS. we

mitigating Our is good this this. been outcome. seen out of team the also extremely the And in impact has in

but than that we in OEMs shortages. are despite these continue so to is this several chain. far quarter that mitigate the locations issues out we and different better shortages And We thereby continue. also ship into following We impact. believe coming so higher have saying. version out our can available fact. in impact. the that a we That’s most probably been in That component other will from to done we clear what to mentioned been it in into on with that than have impacts those least top the validated are able the average, product qualified slight And seek in flexible news morning at the mitigating These of we and continue we will see be of redesigning out, I is that or got We better supply hope a designs, products is many Sweden, this the these some components them occasions mitigate here into coming we beginning line XXXX. in What expected the to think of in activities, will have forward. coming the going we the

Agnieszka Vilela

you. Perfect. Thank

Operator

question from Rosner ask Thank question. you. Deutsche Bank. your comes And Please Emmanuel next from the

now is open. line Your

Edison Yu

Hey, Edison it’s on Emmanuel. for

Was color it on why around decision. related back if switched wanted program. second the it realize necessary the for provide just just Any could technology? underlying And they’ve the deal big is in to to a curious a different then as to of I OEM on First this question, more choosing that color the book. you question… to the order sort not Velodyne? drivers Was go But suppliers Lidar.

Jan Carlson

ahead. Sorry. Go

Edison Yu

Okay.

the how provided years? as maybe system trended the you of some the a on number Safety. percentage Can question provide few context has last you Active Second XX% number time over orders, over that

Jan Carlson

Yes.

can I the the with start side. here one technology Okay, first on

that has demanding an very think and very over very application very has – is time. demanding and and has including showing specific that been I been demanding items specific this requirements very been is

also that got out the into account think evolutions have in ongoing, all the of said, project, taking the conclusion options, the And technology. coming think been to day, with the has the XXXX. as we we is come business end I on a I to picture all a and project pick bigger customer the since XXXX at and here another this

technology partner’s our guy the as technology comment I’m on the to think such, forth. and so I not

application, And know, I cooperation, done we as that, you requirements and orders. this We picked led specific having if this very with it. don’t well. system reason don’t for due more the was customer opportunities for another of other out other the is those Ray, out the the will seek opportunities demanding. or one but are together to have underlying true still But of the know comments, the probably still that fact I real to stay should I that decision. that

Ray Pekar

Yes.

the look time of back we the and around three estimate of orders, that that nature. thirds is period that three-year of system during we over XXXX system go XXXX, we intake perhaps and the XXXX, the last the orders two if about Regarding I order years, talked think at

that. of and in market kind our above our wins what that’s Active share related books our now to right keep tracking we’re period mind, during And of been Controls Restraint time, have both levels. in So current in that Safety,

our good core intake the So portfolio. we that feel products pretty mix book it’s about of around order the the the and order right

Edison Yu

you. Thank

Operator

the question comes And question. Engellau line Please ask from from next Handelsbanken. you. the of Thank Hampus your

open. Your now is line

Hampus Engellau

me you for it’s sales QX. If Thank in also maybe Active possible terms what you in to order market you. market comment A of had intake on for and shares in shares Safety. and question on maybe

on on bit if being too with Or would that? – Veoneer, view identification we of and system Snapdragon but with seems would early, the ADAS Arriver and use think to from a business platform another hear we you software the – OEM go-to-market How Second solution maybe your of question, of what’s that the on it Arriver software Veoneer’s software, mission a be platform I i.e., be the separate object the would buy Or to this on strategy a part how will compare should interested Veoneer Arriver software? with another an would use? similar supplier? about do

Ray Pekar

– the question Active low market So, think a we’ve X%, XX% in Controls what look exactly was market that. And Hampus, shares share, talked at the were maybe XX% close was, on I like I’m XXs if what – to about sure but the historically share our in in our we Restraint XXXX, our market Safety percentage. as something not

yet haven’t share upcoming given seen those the levels. figures we based we’ve will above But we’re the coming that final out market order XXXX definitely, So what XXXX be for in here shortly in weeks. on in our

the think we the I saw the what we than the level was COVID orders So than the maybe all of available year softer being situation expected expected we we driven the year. that that, of beginning year, intake during by order beginning but at and a the of little significantly lower know a at despite

Jan Carlson

is question strategy second the the go-to-market And Veoneer. for

with market combination the an software to as go of Ride will platform integrator. with the We Snapdragon together Arriver

to opportunity is projects the a that continue use as for as X now you is pursue course, we of on and technology, to like Generation [ph] to for technology go X Snapdragon continue and platform. and of for the [ph] we’ll, Ride what use Qualcomm will the we the that presentation, next GBP talked we all in about for X course, the generation. integration Xilinx based will, generation, have an we Generation But past. what the done know, Veoneer in here, So Then that

as also Qualcomm, integrator We an are of between Arriver the cooperation course. and prioritizing

will integrator. this definitely we being So to an will solution. Tier and Xs solution other go Qualcomm that offer promote

as if it’s Veoneer Veoneer as an a customer Qualcomm on technology at Will That as customer the customer end a be Arriver that or with part deciding customer it’s to know using decision. of it’s a the with end integrator our demands at is how integration job we the decide decision. together with has integrator But to going we with is components, customer are here, different an a then other And how discussed day. deal our to of day, of radars the the and another So you think the go that. other well, integrator?

Hampus Engellau

Fair enough. Thank you.

Operator

of line Thank from the ABG Please ask Olof next of you. And Cederholm question. Collier. comes the your Sundal question

Your line now open. is

Olof Cederholm

Olof It’s ABG. from everyone. Hi,

Mats, it gross little margin would Just a given into from a a that you makes breakeven. here. you for quick XX% be you barely follow-up QX, us the that. happy XXXX, difficult trajectory drop-through, it on were going mentioned with that But

for or billion any alluded So how billion you it? can level absolute of $X.X you with gross to? about Is that Thank margin level overall for way think with the indicate phase way happy should margin is so, your you’re or there a you. an we us there gross help XXXX? level a guidance to Or which considering

Mats Backman

gross that, I of the ramping kind fourth little a need are when of now. what up I state think to have into as I starting to quarter But you would remember levels the using bit mean profit absolute any going is it comes a we XXXX. mean, Thank point,

initially, the when talked some side. you’re And the there. freight, had and time We getting quarter quarter optimal had mean, And gross we premium first now, on I third quarter. about some fourth into ramp-up many yield don’t have phase, in get other takes it you and leverage now launches profit. before the issues the have I but kind going into on also of

talking So for when right we that’s something are where about quarters. see order to be starting then quarter gradually to million I it ramping we in the will point kind profit and now. are in level the get to first we right of we will we think to adjusted from more comes why normalized the through volumes, I’m $X where into gross be now, probably improvements and up even from are some from that’s leverage improving have that, though But XXXX. when between improving the volatility But

Olof Cederholm

Excellent. Thank very much. you

Operator

Victoria Thank comes your line you. question the next from Stanley. Please Greer ask Morgan from And the question. of

open. now is line Your

Victoria Greer

Hi, there.

of Or an the operating of end had as still loss you of level, to loss probably guess in the cash about so couple with much basis, million else burn, it net you’re for there $XXX Thanks. in need I guiding a think excluding that of cash also, number? of that a a more better technical underlying headline And of is at The the guidance. the cash to $XX-odd something pretty million kind be follow-ups, $XXX to lower million brakes floor? Yes, cash really Just terms comfortable. is about just we on the CapEx. than year on Would there? the that that feels of on so sort XXXX but the XXXX? you think in Or business is burn,

Mats Backman

working end coming that a had kind growth, it have it’s a mean, statement I capital with working we when we XXXX, effects to the of will that probably to important the when adjusting comes it when question comes second but in when the in I it capital. through to of again, more think, balance think to the the comes remember But a working I it I working XXXX, when XXXX have made performance capital, that’s we comes one-off some negative cash of are great to capital.

adjusted XXXX a we development on side. development, once positive we XXXX then in capital positive the underlying have see into and of working further terms In

bit it I think the to that the… So more granularity cash. a when maybe gives Ray, little comes on

Ray Pekar

number, more headline Yes, Victoria. a back question, think of to loss I the it’s operating

operating full in above bridge the $XXX doing engineering operating the cost only have think the we a in versus we during should that other loss I’ll to about, to of the we in And additional the year line. that XXXX, I P&L above remember in when it, half the have $XX year. related or cost XXXX have have look XXXX Zenuity in or of comparing we you to million mind, million. normal around headwind another so also for it $XX at call We then million around approximately income income. we And then related carry reimbursements XXXX of related keep to

probably things bundle of together, you maybe when So it’s even million $XXX million. closer headwind, to those $XXX

year-over-year, considering improve to pretty we’re So pleased that. that I headwind, with think

Victoria Greer

very Great. Yes. Thanks. clear. That’s

Operator

from Thank the your you. Please And question Barclays. Hempel question. from Steven comes next ask

line is Your now open.

Steven Hempel

team, for thanks Hi, questions. taking my Yes.

expecting balance, I to take XXXX. any cash In doesn’t exceed raise. the at it you’re it include that the terms ending of of capital $XXX million end

that to even deteriorates? think we raise markets we wanted And if we And market terms your also optimal kind cash as of thinking capital So about that. or use should cash then that how the you capital kind to be capital end balance, about minimum now of then in raising potentially balances, Or should of in here I before case confident term. between we this environment the just to confirm as stabilization you or won’t think are need and opportunity raise about the XXXX, deteriorates? long

Operator

the you, five left before of we have Sorry conference. the minutes May end I you. interrupt to remind just

Mats Backman

looking all, indicating more for on mean, $XXX not additional we terms than you’re whole the to based we of hand further the sufficient business the any to flow the into if stated. the aiming said we we million XXXX have then improvement kind and of does comes at have when of are funding I it’s the underlying the flow cash include is a on it time, funding. XXXX, it hand. and targets have on the of are plan in cash we what for cash kind First have And

Steven Hempel

diversions Control. looking between Safety some growth, Active Okay. there’s then Restraint and at XXXX growth And

growth a Control of then kind what Safety XXXX? And forward? wondering expectation difference overall between for incremental any and is there’s Restraint looking margin just So if Active

Ray Pekar

Yes.

we at between the differential look that different between margins you when into the think different get don’t product I the lines, really products.

underlying I to more much or think and it with business Control more we is market, remember grows RCS line in production. a the is Restraint what mature light vehicle have generally that

taking suggested and implies our that that So has intake outgrowing years order we’re with now. market for some us share backlog as our

the the exceptional even course, So – well growth Safety is above addressable Active market. and then, of

I there our we So well. share that implies should as think market slightly improving be that

Steven Hempel

Okay. taking questions. our Thanks for

Operator

Thank question. you. This continue. was the Please last

Jan Carlson

delight significant call everyone conclude hope would like you, And But you future, in very new contributions contributions fun you, first I role your participation years. for wish were be couple together. of best thank before a to like last Mats. thank the your a thank two would insightful been with and we years today’s in Then generally today’s also to sincere And to lot but as to for them all thoughtful extend to Autoliv able Mats, now your your in I the satisfaction. I Veoneer. answer three working we for to of call, and I days you big has It for in years, Veoneer of and questions. right. for you, All a your to course, the CFO over your in a the and new somewhere,

best the you. all So to

speaking forward call to first before quarterly with then virtual our year. XX Thursday, that, beyond during ahead, next investor of tentatively of April you look looking Now for earnings many quarter and, events. this in planned And we is course, the

release, Capital We intend also, Day the third Markets hold a as to during mentioned in quarter.

speak But very you year. care again, for has first this about and with and Thank We will on that safety much good information more come priority. out bye later health until take the now. put and everybody we

Arriver Holdco (VNE) 3 Feb 212020 Q4 Earnings call transcript