Autoliv (ALV) 23 Oct 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Autoliv, Inc. Q3 2020 Earnings Call. At this time all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today. hand speaker. over to VP, Anders like Relations Investor now the to conference Trapp, I’d ahead, go Please, sir.

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

At commentary around your end the the a our we presentation, conditions. provide During will as website. After the And available business quarter financials. results, slides third to overview the of today's earnings our respond on provide of available general will call, through of Fredrik our our link well Mikael, our to CEO an as are further usual, remain will and on homepage questions. market provide corporate a brief and update as details

Turning to next the slide.

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

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

I Lastly, that is call to at mention X:XX CET. this conclude PM intended should

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

Thank Anders. you,

Looking now the on into the QX next slide. XXXX highlights

our higher XXXX conditions. precision post but work compared higher delivery foremost production volatile higher priority. am in light with the demand health to of commitment safety recovery and first and and we is pandemic to last incentives, presentation, we manage reported cash and I started acknowledge more than first and safeguarding faster despite a the safety, stable, sales, and supported lockdown. that expected pleased and of result by these is quarter COVID-XX I The initiated hard control, recovery the formal vehicle slow earlier human market a margins flow to grow where actions effects for The crisis, operations. The the quality pandemic profit on inventory strong very our operations forceful their gradually was and Before challenging our LVP our health start would challenging like performance pent-up employees to restocking cost in stronger times. and the and year in

programs. outgrowth. We book execute falling continued LVP our the cost our market sheet. This and To actions efficiency increased am by confident the manage our for third to reduced in of encouraging year for flow strongest our delivering X.X months supports a and of can reduce able operating we X.X close ratio range the global strengthened executing and to strong the earlier. cash the we of are Autoliv first in how structural times. history savings, in positioning personnel over enables towards to were includes X%. that implemented nine prolonged that on a is we develop. situation, year our order material It The and balance quarter XX% intake on I regardless to will and evolving a planned accelerated despite order the leverage cost the target compared reductions expenses This the by have sales to and that period well, CapEx report to

the the see sourcing quarter sourcing low fourth in half with fourth activities We quarter. first quarter. the positive more in the in the planned as expected for the weeks expected, of trend continuing sales year customer However, than was, our

quarter risk unemployment lockdowns and further the for production. light for and outlook on risk temper its the uncertainty, economic of demand consumer impact fourth the However, increasing may the vehicle

slide. on financial the highlights the on now next Looking

the related our matters including as million the margin result quarter. highest to XX cost to in sales free than flow income, X%. flow business of third cost significantly production vehicle alignments, US$XXX a XXXX light past for quarter flow adjusted mainly operating and in XX% of by falling despite QX, net the XX.X%, for XXXX XXX XXXX, increased Adjusted cash a points and margin by highest X.X% antitrust on consolidated years. to and US$XXX million were separation forceful Operating global third by operating Our activities. which increased of segments second more reduction basis compared for of our million levels the is increased US$XXX capacity The record cash cash QX the above the

by sales outperformance by slide. the production more global Looking growing development all vehicle am production. America organically sales X% close our outperformed regions. on had the a next production now in two major better around two development on outperforming solid with to X%, in North points was almost XX%, more light sales vehicle by Sales than in light points. than organically than I vehicle pleased increased which light the percentage by percentage We that organically China,

in mix which continued our production by pandemic percentage less from the such and Despite vehicle several recent decline. vehicle vehicle was light and for line launches X%, the smaller at being this In light from mainly production percentage as organically better vehicle of production VW Europe, and quarters outperformance positive customers by previous the domestic our than outperformed light mix points In Toyota. recent sales with vehicles Asia, with Tesla, was PSA decline. light organic sales affected XX decreased trend Our the coming larger production rest production impacted the points increased the than vehicle Japan, with was vehicles. by negative sales as In Toyota. launches export market three of by

strong North sales South effect inflators replacement negative sales region a percentage In X.X affecting a Japan. points China in the of had increase. sales Korea showed quarter, on mainly the and Within slowing America,

Looking on the slide. next

The the Two EVs quarter. into CPV airbags. fourth US$XXX. high Autoliv with will continue and expect are content models of vehicles high models quarter. any the not pure of volume, the to content higher The launches US$XXX continued powertrain. and on electrified did sort long-term available have trend per more between many We the launches launches slide center knee of supported model of delays the have front experience and number the an major and shown of several during We to we high of remaining trend vehicle by some is be this

For example, airbags Rogue Mach-E will have Autoliv. Nissan from and Ford dual Mustang knee

on Now I Officer, talk Chief about over our will next the Financial will Westin slide. hand the to Fredrik who financials

figures you, Thank third key for quarter. highlights slide This the Mikael. our

by per Reported quarter. in on million to quarter and share net $X to XXXX. the operating dividend Our and productivity The a did increased on and adjusted higher margin operating inefficiencies. return material direct million quarter increased income and compared XX%, $XXX mainly $XXX points $XX a equity $X.XX improved to XX% not pay return increase to by last The increased the $XX XX by basis costs operational earnings million margin and same same the gross adjusted primarily our capital million $XXX compared driven to by gross direct We gross COVID-XX were quarter related X.X% million were XXXX. the due cash profit higher flow The was year. profit. the employed Gross third was billion, despite sales labor for by respectively. and the

Looking bridge slide. the operating adjusted margin now on next the on

points than quarter XXXX. Our higher in the adjusted third operating XXX margin was basis of XX.X%

a payers. engineering with COVID-XX effects result place by by effects year negatively as personnel. of the personnel RD&E the lower cost reduced points. impacted was in for basis cost structural and The of SG&A chart, discipline combined was of operating for by illustrated compared number by XX prior efficiency This materials declined negative strict impacted basis and margin positively more of mainly due our raw impact of cost half cost year negative X% partly net related and $X adjusted effects the lower a basis lower programs, to costs points. the to the points. of different by lower increased from FX the from income. the to or than million offset margin for and operational prior SG&A RD&E compared transactional contributed by improvements As by $X This inefficiencies. during basis from XX points was XX first XXX is effects put year offset million by the operating costs caused the cost currency

activities Additional governance – from approximately support $XX similar in came totaling million. governments and connection furloughing short-term workweeks with

ago. from adjusted on $X.XX Looking XX% the $X.XX $X.XX alignment development. was by capacity we XXXX, have slide, $X.XX operating the $X.XX. items. to behind – earnings to per offset higher The the EPS the financial higher which drivers share to per adjusted around tax, next and from one impact In by from period from income same from year partially reported compared $X.XX QX share increased improved main increase by $X.XX the $X.XX and are The favorable earnings

cash Looking now to flow our the slide. on next

XXXX, cash operating improved and capital. flow quarter operating flow increase third an net last income $XXX working was For of higher in the was compared increase million The a of $XXX cash result year. the to of million,

$XX Our relation suppliers, substantially. Capital XX%, we the amounted and together last year, strict the investments or as which decreased inventory control, were to about the improved sales. positive non-cash delayed from X.X% improvement. overdues for is to effects CapEx drivers million in payables close main with expenditures collaboration reduced with quarter, Compared third to in other items by suspended

million $XXX Our $XXX was year-over-year. an of increase free cash flow million,

ambition consequence the and the A reduction D&A capital items. will XX investments line contribution more sharp of conversion in depreciation than changes market was normalized reduce increase CapEx last over some from level, and in positive with result But XX months in the months our The a As a both time. of was CapEx to CapEx. to between last non-cash XXX%, and our amortization CapEx, gap more in again. however is working as low cash lead

$XXX free flow XX million. a last $XXX almost million flow operating was the almost with of months, Over cash cash

slide. looking the Now next on

In time know is of since was of times It decreased leverage that end X.X while XX. leverage a as The have history of of $XXX the is months net policy. our worth quarter million. you We debt Veoneer a The EBITDA a long result unchanged. $XX noting remained same improved spin-off to XX prudent the times balance last in XXXX. our financial volatile current market the the decreasing by September net quarter increased the million last lowest at focus the at ratio conditions, in from our the of sheet by over debt as X.X

and Our is debt net in improve to the ambition near future. our EBITDA

the However, the as the time. to leverage calculated on last for expect some we ratio remain XX months data, ratio is elevated

and XXXX position facilities was credit on liquidity unused available the had needed. September around $X repaid that you The on October and fully slide remains X, credit in strong. We liquidity see XX. is can facility On our next revolving as billion

We have successfully current refinancing no we challenging cushion liquidity need our environment. the Therefore to for a significant until existing believe of XXXX. debt secured major we business that any have manage in

looking on the slide. Now next

update an the structural have efficiency on We programs.

seen million. be around programs of have estimate expected two the in quarter structural the We to our from the the programs. effects We positive savings efficiency $XX

structural The when the be fully to two have is quarter the mainly until quarter out employees. second The full for are of $XX to with program annualized headcount $XX should XXXX. programs XXXX than cash expect this estimated by and million efficiency reach fourth savings impacting programs during The are of we around half And second and its from to been be Americas implemented, X,XXX program reduced million. the two more effect of spread cost Europe.

of the closure $XX involving expected more in local footprint to is efficiency addition for the Production including negotiations in quarter works further than to Germany. council. with provision Europe end we around programs XXX In made a a mid-XXXX to third subject million structural in plant employees optimization the

further continue We to optimizations. evaluate footprint

next Looking on the slide.

in now impact industry. development the vehicle still due automotive economic have engaging closely outlook light major modest further The continuously improved by vehicle may difficult quarter. to expected lockdowns. the on expectations fourth vehicle a IHS continuing stagnation vehicle uncertainty in China In get lockdowns inventory are in IHS contraction These inventories in pandemic light to the quarter QX We Europe. for North growth monitoring to COVID-XX sales fall vehicle continued quarter. the factors to production depleted low demand fourth to is America of predict to of markets and its the shown six X% year-over-year light support due light supported is the X% production major by comparisons the on into U.S. challenging. In only need and risk show production expected past to light Europe the over with and fourth on have the dropping have production expectations induced The stronger months a the are assumes vehicle some restock the year-over-year effects the expects sales, light level in balanced. more as and production decline this, European quarter is Eastern a Despite inventories. fourth around

full our IHS. to Our and light customer based call-offs year vehicle guidance outlook on according is production

the the on quarter. On in impact slide next we fourth business our have the

for year should As around can quarter and margin the XXXX. see to lower full for sales. main of the fourth tailwinds light both as tailwinds the well book from we unpredictable the headwinds we XXXX, of headwinds believe earlier Related magnitudes The programs. lead strong inflator see are and structural production, have headwinds headwinds to efficiency operational COVID-XX, you order as X%. communicated this executing declining the adjusted quarter include growth from XXXX vehicle an the and include on for fourth operating of replacement tailwinds and the year We main and similar

lockdowns risks fourth and potential Mikael. I now in quarter However its outlook. economic uncertainty will for the and increase on further back impact still to this demand unemployment may hand consumer effect

Fredrik. you, Thank

the next page. on to Moving

capacity This year We production pickup quarter, have summarized launches the out-performance cost sales year percentage light XXXX Backed matters. vehicle by alignment in points. compared prior of full out-performance and supporting antitrust further indication related to X full for a recent a of our around excludes fourth expect we indications.

of to around decline XX% including be our a currency X.X%. effects organic is decline negative expect translation net We XX.X% around sales assumed sales

the is an operating adjusted It around is margin business stability level be expect $XXX X%. relative cash million. that the current prevails. outlook note below flow the expected Operating of XXXX to to of We important that assumes

see Turning summarize of quarter. a the continuing weeks crisis out To We the sales momentum this into the first stronger efforts reflects the company. of positive outcome come as page. QX the our fourth to

potential However solid will organization Anders. us. a continuing further There it visibility. our priority. behind that are realize on risks important and strict is the lockdowns is strategy stability and not manage as a affecting business can still health that first with cash to proud am I have cost this crisis I for that now the employees while execute long-term control hand safety to to and of our we back

Thank you, Mikael.

for we would comments to the We for today's call earnings Turning questions. conclude open the formal page. up our like and line

So, I hand it back to you Nadia.

the gentlemen, begin and the question-and-answer question. Thank [Operator question line you. the Handelsbanken. first Engellau Ladies And comes of from session. we a Instructions] from now Hampus Please ask

much. Thank you Two very questions me. for

on expect question. seasonal engineering with First, seen have QX in question a other slightly income on higher? should my just income being if situation we any engineering first That's that housekeeping we pattern

operating remember more in and here I Second it on operating see leverage? on pattern you then in margin we outlook a leverage. question growth XX% Autoliv pushback some EBIT leverage. of are and that? X.X% questions. in of terms of correctly, you. two is of similar on had to LVPs I my Thank What XXXX I had went that XXXX If the and XXXX the XX% IHS kind mean outperformance sticks the should about up think a Those think operating we provided

get the comes But I and XX% same on is the be rule and course. that to previous think thumb when talked income the the operating When that about think I and have also such. seasonality XXs. scenario than of we time would comments bit you question the making have look more current a the sequentially on circumstances quarters of and same the there it with this expected little with a also first you seen until needs But terms know as year-over-year in that's year. in in that when the any on engineering be the I growth leverage have the there think here also declines more no seasonality-wise mean the engineering it doesn't year. to on it difficult and becomes. into to changes next XX it it rebounds we here you a you course in in you we mean side, it's around say And sharp stronger around When for as we of to same in should you further is actually XXXX with the here the a also what it guided I have these that. to comes magnitude big of I you way XXXX, have we of have out wait be call

focusing the on full remaining right think as then the here. reinstated we I XXXX this So, here for months and we outlook end year the the of are now guidance have

Fair enough. Thank you.

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thank very Yes, much. you

outgrowth reinstated rate strong revenue guidance very your implies in So, a exit XXXX.

you've feel through some seen backend-loaded Any of seeing better. and in a quarter be were fourth always more of that have point shaped but the or in fundamental to said just even fourth timing here? Are better we that view launches acceleration so concentrate potentially they double-digit from the you than read thought? than And initially or strong, quarter sort -- general close is this out will of these just

No, would say generally I not.

the went that's we our that into year what with here. assumptions it's that and base this year outperformance full think we're I around followed reconfirming X%

in delays very have And it in year. We that would have any time. from either really launches volatile the we despite said not here this be also the backend-loaded seen beginning

I a is bit. happening normal there there slides year. a in But say also of and So, ones little that's course, here that or would twos

nothing So, exceptional there.

the for year following is So around the outperformance. and X% that here outlook bottom beating original line it's

then Okay. intake. order around second your question Great. And

in quarter. as it half, decline The was than I flat was would meaningful be the side in you dollar So the more half said third in obviously first you that of fourth year-over-year on terms If a well bit expected guess the the year. quarter little software production. remember in said I it had despite

So bit that be growth your on a for what for putting that together order that could with does your full basis intake the your Is year expectation? profile? And initial consistent versus it feels a it up mean that correct? mid-term quite Is year all XXXX.

Yes.

any given haven't the order We intake for year. guidance specific on

the intend growing terms we we bit activities into assumptions market activities, working in years will the years year years the we that to come think quarters specifically rate we is so here. terms that do XXXX line exact we to is because this of OEM market we the I the book, would share still in order I our outer side. we from said always far Then and the backfilling when we've fluctuate here of to have we intake they little close what as defend come. of in in new order say a But are that as can win a here are straight may and here. continue is in terms And that that as communicated have back specific indicated of what in not course it's outperform to

Great. Thank you.

question. your comes of question James KeyBanc And ask Please your Picariello from you. the next Capital. Thank line from

Hi, guys.

Hi.

question A on XXXX.

lapping offsets to the of unwind are So this next year's right the possible temporary of measures. COVID-related year austerity costs, what some related for

that are that? that And then us structural cost Is margin with the get there on share savings base offsets bridge? can any Just that range top -- incremental of there to to think you company's the company how is cost about what we to come what's should anything mind? layered

it is the to will said bridge will I I based until of XXXX we liquidity. not making company much on XXXX. as out. with, uncertainty on has here we have market to we'll shown it's stops recovery this control as But year, think we to the And leaner would with here I the course our say cost a crisis here possible of Capital through in maps give but that laid focus also the in too the readily every forward. the to that said, effectively sure of But course, we into very we year, terms But we the outer years control I out we effective think early a earlier move part here And here, that, further organization so here also Markets around our manage up, to strategic possible. And is when is more the of on strong comes the the course, sustainable but where and focus managing what we the here carry and the whole harsh also also side, the say move cost fade start what with in make as make mean, to on as in I beginning the as bit in to guidance next of end ongoing. up road ambitions here into can that immediate also inside course. strength when day little that think Day of last leading company a street I still

So deliver agenda under on a of working cases on deck need hands course, circumstances, that, it of to that. find in we around these is around ways but Then full new there to those. some all

up. believe stepping light production our as vehicle a market holds So or be targets. see mid-term We good as that here that we stone end long towards should XXXX

Is timing the any there the savings German the closure quantification related Got plant that to it. around and move?

the we took so around No. we presented what to billion what as XXXX. it roughly -- end that that But much share and production reserve on will in It's employees that's the $XX just XXX around as like relates that. would is here to and we is we

and as review have we communicating we communicate And decisions package We it. when are on here. of a not big forward As you the strategic a have maps. we part road move we footprint know, a when

for that. one have come now communicated But we was here. our long-term area what with more, connection when QX we an we So those if decisions. the to and back strategy in it's of will And

guys. Got it. Thanks

question. question line of Thank from from ask Johnson the you. Brian your Please the next Barclays. And comes

and Two of kind Yes. strategic. probing at takeout keeping One the questions. of more cost second issue

just takeout, comes costs On in base of versus actually million that think of -- because that it's you measure? the But we of fixed if giving how know back, not income improvement a the I you're if cost about operating XXXX look guidance. $XX temporary much that year-over-year implies, kind variable

No.

We haven't broken had normalized mean we in come majority down. the more say think it you into look situation And I halt here. total would the it course when of very come Yes, to it's when we in at workforce of hard the large get will to we back. a flexed here, April very, I I basically number. And a out

we coming back. the Now again, volumes people we're are here, to backfill we also and increasing taking here as get the back need when and that share market and

such for not has would right stable But back So we in majority I that will here. to you effectively in come regard into challenging sure either. when been big have fluctuations. whole for say get a had we situation, the been now it sure quarter But when operation able a more QX, the run

and our cost and control the volume situation -- at for well. same So an time here. That the course have whole also corona the swings strict measurements we efficiency of strict the over extra in control is cash as COVID-XX here

to towards drive on breakdown my answer midterm give here targets. just our referred on you So deck that. that to I think earlier I complete it's it's all And a to hands difficult

Correct.

question. Second

a take that. have Fredrik on

program. an effect million efficiency that structural we about from the $XX seen You've have

also... out. broken then And So that's

Okay.

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that And the to third I structure, cost you now again also assume structure, a it's fairly quarter. normal the think for close can

EV materially electric anything vehicle terms the second And an launches Okay. key you did as airbag flag competitive as there world and/or between seatbelt your that's in a vehicle and light CPV Is two question, in position? your well the variants. similar-sized different BEV of

it I more neutral us. vehicles, course electrical in say and the vehicle. of products important type be would At is point, increasingly noise to starting of so then silent it's increasing positive inside and the to weight more the the same electrical vehicles becomes tend No. quiet for

like So EVs, source very, neutral progress we you battery is a cut to have very switch, additional crash, for -- battery in additional the the so event that coming in into safety also the important. Then is positive which power so product that's where electric feature source us. of a going

And are EV as at difference on competitive competitors you EVs two versus there broader position they any product And in rate up bids in terms have is your or well? three of your – showing traditional win very the strong lines? the the

they're mean, vehicles. into of course also I electrical

well in it type would point as So we position, starting to is our relative the position. as related I products. our that, EVs are say And – market same relation of that to a also represented the in to

you. Thank Okay.

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you. from Markets. RBC Thank Joseph And your from Capital line comes question of your Please next the ask question. Spak

and a X, because year-over-year similar everyone. But I between believe I workforce, you X year-over-year it on was Thank $XX sales I your actually I to quarter, know this direct think you mentioned back want to SEP get performance increased some benefit. of million levels. the

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Yeah.

what carry continued try to have the next extent operations. on in material to still direct should which I we have productivity larger second restrictions which but forward that extent course quarter the with to it's more also COVID-XX component And in spending, we due on extent. it's the other impact also still discretionary but have into quarter, the quarter extent. the from we also of list we – some production into are side, inefficiencies, the that basically we a describe than is think to a the overhead lesser also on then lower the There has to the And then side labor. or a benefiting on to third the bridge a favorable say some from personnel

the Okay. for potential Thank competitor like situation? industry help seatbelt question recall. been facing that you. inflator is news Is out about the a And a you opportunity some there's a the second potentially with then to

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America says year, good, A just year the accelerate typically things. of there you your And outperformance not the you. of more rate providing course if QX but high should that just things I is a a keeping to North regional year, just we would next Europe and backlog new year, for about you're offsets Are in next is potential exit Thank level mind? mix guidance the offsetting want few anything for in. any One as at model headwind? or pretty than kicks be that mention subsequent know, China. revenue could that something be

No.

I no, have I comment. specific think nothing – to

As into I I for said, the go we details don't mean, XXXX.

outperformance. average I also. going believe out, forward we expected year is think, days in rates we laid it's think our mean, early here growth last But have and I what I

a and also. that you regional So, that's reverse of have And standing. still swings year, I you think of this course, seen normalizes that the mathematically when get that in with effect

top I equation. there is would the additional to on of So that, nothing say,

slide basis you Program plus $XX in $XX I And -- what maybe expect plus on correctly? clarify just savings $XX for that these II of and just footprint and to the II basis million the then are and benefit can incremental you what some reading incremental XXXX that hoping of then To just step-up And was improvement QX. million I plan $X reference that million was the Am from from was million maybe points XXX where Okay. XX, you these XX% savings. Program reductions. to Program you any also structural had XXX laid margin get of about original – And points you originally contemplated? out extent can to I

No.

business last through is everything of here journey baseline course opportunities now productivity overall forward part a Then communication of in of the the had ordinary we is see the driving I think and just and as do the the across of terms here going what managing and efficiency is board. year. we course we

here, to if not that I regional asking. right you're if relation your here it incremental of in our -- that understand what is was terms journey to question our in So

a of it's of So it part course.

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our course it's the full I mean, of best to not it's mean, sky, the any the indicated exceptional with have we guidance nothing cloud year on of per is would I on but that QX to terms -- compared describe of other And sky that the in knowledge. as skies are course se. And here, QXs this we I giving in yet. we but COVID-XX, the of raining it's it the have here

impact, with and will have we can but any to know we the is we predict. if everything have this So now see best wait we

right. All Okay. Thank you.

there’s that. And than other nothing

you. Thank

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Hi. Great. question. my for taking Thanks

of there debt the own reinstating be that sales particular or industry your Board dividend? in leverage have allocation? before hear future. of I any your cetera Just debt. to et the thoughts debt capital and or terms that on aim in did to you the here given the net may pace updated in industry net say both the recovery EBITDA macro Do in faster Are looking any you improve whether or here a reduction net near milestones you figures,

no say point specific that would there here. triggering I is

always said I to like pragmatic normal have it's when think that and a to here. is to here here dividend we situation on more how view return our have ambition to

it still very think performance from question what is it's it's result are point date, in on. but industry about question The of early. a I we own think the is where our uncertainty of as still we a a that terms and about too the in for stability COVID-XX, high going later and forward

COVID-XX right to where that's have So now here, through have come but early. we immediate to this when crisis back too come that we are it's we

to of sustainable direct no XXXX COVID. you questions such stemming from have point been Okay. you you of what if XQ the attributed on underlying this operations inefficiencies that there's there several kind a margin of these sort let's costs to looking would bridge. longer the just and improvement then I speak think have say, progress that XXX Thanks. is there, but between that realize And around be basis It at great and vaccine sort now

by now the some the portion think some operations going What model terms quarter measures. and of of virus forward? You wise austerity is be cycle year of you away you would of to in retain do the going third next savings you past your if thought

would it's there. answer get lot question any very there if of think, hypothetical I buts would I I I into ifs details a -- the mean and becomes

-- are yet. So about talking not XXXX that we plus

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you Thank very see. I Okay. much.

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positive. questions correctly yet slightly Two read the quarter was from in If side. down you. I Thank growth organic it my volumes overall were your third

returning what pricing QX QX? topic the mix give between quarter in question factor fourth help QX but outlook? the change to you that Thanks. to and a development. into year-on-year a that much a been could of is there any kind us Then organic is the has So development? muted you or second swing yet on out the growth discussed, What's Clearly QX higher expected happening more for margin big just

second Fred, you… take there. maybe So question Hope you can the

okay. Yes,

So second question you repeat please? the can again, the --

sure. Yes

it year-on-year more margin clearly of development -- QX. in So in a QX indicated about organic flattish flat we've spite mean just but higher -- I saw you in talked growth than we what

what's delta such QX QX? development to big from big into a that So the the shifts extent

sure, I'm ask understand Can different you it a your Sorry, I question. not appreciate.. way? I in

-- different. a okay, bit a that's Well,

and a outlook between on there balance -- also margins negative guess you spite a implies in margins positive full have muted margin more factors I year-on-year balanced for QX. where indicate of the slide You year for development much And the the organic growth.

between QX what's the margin of -- development and the So moves in QX holding back year-on-year. terms what

Okay. Yes.

we the come with with And will them So assumption now more currently we -- more are discretionary predicting lower -- level. is will they run that outlook going into a the come operating into that that volumes say also we the a the a as quarter. have I savings fourth normalized assuming our reduced from spend and mean will we be into say

subsidies. and also the incurred we to received of So in than Then you the benefit we how timing if of net of fourth at costs also the these from benefit smaller a third the we've had -- positive also relative benefit look a recovered because or in subsidies, quarter. have you that will COVID-XX a that quarter what had you was from net some

the then said two at the go still optimal productivity levels. efficient plants So yes, in not and those operating we've will are as are elements we if it's can away. also look at we – And that

So then the leverage such factory and the think those are I you at quarter. main of if the look fourth for the components

Okay. Thanks.

Thank you.

is pricing. And growth then on organic better than Why volumes? the first question on

coming through effect mix a It's there.

to changes pricing. the So there's no

Thank Okay. you.

question your the of from Sascha Jefferies. comes question. Thank Gommel you. ask And from line your Please next

taking Thanks questions. Yes. Good for afternoon. my

The on again. your would be first one margin actually

you historically a you with have think dilution. to phases very that high said ramp-ups a tend in number of margin a bit I of

that quality have Now a your a very the order fit for that we ramp doesn't have book with really book healthy of and high lot a Should order comparison high-volume very see think like as of you sign or we model. up profitability that you here? lot a historic --

No.

I you think work lot a of have when trim to always, as it's system a ramp-up. the

I at as And say think things have have same so so when time you many the you this look quarter going would had we many where had has also not on been here. quarter, a launches at this I before.

that said is we later towards the also year. the As part geared of

QX there than say, mature. through in coming performance lower phase it's the is the that where ramp-up see in you have no But of than -- QX. normal when the more I programs the we a would you have in to changes So, the effect

the terms will through. platforms coming question say through changes coming in that. we I to also book? mix product Do So, there's together that have different and it no order a is hangs how of healthier more about

nothing of is into I that should you So, short-term this QX. think read analysis

inventories, think that my like run second your reduction a interpretation? behavior less then in I reflection you are And customers more you their the that see. bit OEM ship? the that a question, Is can in and efficient right is volatile

quarter is it environment than the coming a Well, Yes. beginning more stable now of of definitely much we out the third at Yes. had the quarter.

operate is we end the the the -- quarter. at inventory efficient there had more better have levels at quarter of the So of much we than beginning to ability a at

that quarter -- year-over-year, improvement. previous rates the both see you but I think can you also if the turnover versus look at inventory there's

the significantly is couple of over last So that improved yes, months.

further think or that it there's level hold where can relatively speaking room, the you And is do think that obviously? you you

still we We moment, believe think in weigh we level. that this the it's have for to healthy say, that a supply are I suppliers not the distressed. the And going think yet, chain. is I have issues

the the on for time a that being, operate healthy is this the So we inventory level that chain. think we entire in supply risk considering

Thank it. much. very Appreciate you

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

hear you me okay? Can Afternoon.

Yeah.

Hi, We there. hear you.

Great. questions just please. two And

might there? in increase come but the of track restrictions CapEx Europe? need think could around we the be sales absolute to about COVID, that are things coming volatility that thinking about back particularly second about down again one, any in would that expectations. as for actually any that are you And helpful you you disruption in you terms XXXX, do said mind? the given now, see right seeing for okay bear to Thanks. anything there delayed bit we should a think obviously I should spending Probably that if thinking you there's Firstly,

you. Thank

coming comment our in I'll impacting the then But, and customers. play into far as what first question or mean, chain to supply I last here I the Fredrik is mean, see over Europe. some CapEx. take say, so we hand our can me nothing Let in you here see on we restrictions to in

So freight and [indiscernible] necessary measurements on come play. maintained active And remain almost force supplier into here here the our have for or that lines example, totake if far any and here but task so very base we would daily here. mean, basis we review, good, our actions to I

so we that So are take well on. good. far prepared so to But,

side, the than third higher investment you and mean we expect fourth now the also that ambition is a mean for quarter, time to guidance second specifically that CapEx will as the On the CapEx X%. continue time should quarter. is level in quarter, come to into to the over XXXX, But to sales right think see the when have for I you specific back I below our get to that. ratio we I

XXXX point? for probably So about not X% think to below this at

will guidance is we I time the when that think give right.

Great, thank you.

We're you and Thank questions. can you not taking continue. any more please

Thank Nadia. you much, very

a solid we map being stepping year improve continue to journey we And operating me and end to to say optimize position our call, in footprint terms our liquidity, before the just say efficiency that from like our stone and a XXXX-XXXX today's will employees. are we dedicated next targets. implement to strategic flexibility on of road I that strength support let So of would

to Our today's Tuesday, earnings you scheduled stay XX, We is in until interest Autoliv fourth thank participating your time and quarter appreciate January call next for call. safe. And XXXX. sincerely in everyone continued

Thank today. for for conference our conclude participating. does That you

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