Autoliv (ALV) 21 Apr 232023 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Autoliv First Quarter 2023 Financial Results Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to hand over to your speaker, Mr. Anders Trapp, VP, Investor Relations. ahead. go Please

Officer, Rafaya XXXX [ our everyone our Chief to and Investor [indiscernible], Thank Relations. call. ]. On quarter Financial our and earnings Mikael have Westin; this first and CEO, VP, you, Bratt; Welcome Fredrik call, President we

call, as Fredrik expected operating discuss well today's XXXX an overview outline other the an margin our and will, leverage things, improvement general as quarter, earnings market During the the strong first among update on conditions. provide sequential for of provide sales Mikael and development in business and

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

Turning to next slide. the

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

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

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

So of per X please limit person. questions a follow

over hand Bratt. now I our CEO, to Mikael

you, Anders. Thank

mix. sales by and strong a than per more Looking prices regional grew execution, organic a thanking was our and a content next for our growth XX%, start vehicle our good with our strong line on launches, quarter, a in was supported Thanks growth The to sales by a employees slide. vehicle expectations. the result production I safety by light would of significantly. in ending performance The to challenging the recovery environment. of positive strong and supporting like strong profit higher communicated also higher outperforming product earlier

call-off in expected negative development conditions adverse Mainly quarter. to was be in volatility. working [indiscernible], cash flow and development customer capital due Europe, continued profit continued to considering challenging, strong market growth to inflationary the significant pressure sales with especially as led Our that a

rest the flow trend [indiscernible] expect of for the We cash year.

share increased and quarter, Our and months climate bond investors our XXX,XXX X.Xx, time, us new In retired ratio in green advancement reach to dividends X.Xx to to issued X ago. our at fund same per help repurchased targets. the first We allows that the leverage $X.XX paid we and, shares.

strong a and supporting their our milestone have commitment to We is sustainability a action, in this climate customers in ambitions. achieving

in We vehicle of airbag in will Asia are and increased which as updates already capacity Asia. per regulations crash U.S. increase India, the expanding for year safety We Vietnam, content investing to as years. this standards test in production safety in to and well saw in continued support cushions coming

structurally. to also and to We reduce footprint ways our continue look costs our for improve

we margin development indications The the expect to allow full and a the year first the year. adjusted beginning of should improving at during [indiscernible], the year. continue gradual reach quarter to we us operating This set

looking Now slide. the on operating at for adjusted next the expected margin XXXX progression

For XXXX, improvement of XXXX. adjusted in we the quarter, trajectory by ] quarter to the similar operating margin expect [ gradual a

anticipate We content high ]. affects inflation continued vehicle offset cost adjustments the higher price [ light We growth, expect launches, gradually vehicle sales quarter. year production by in and per the first will throughout supported us income that

increase first improvement Effects are cost further trajectory stability. optimization in production half supply from well be The the vehicle by of light reduction, expected as improvements of and footprint will as positive chain full gradual makes second limited supported the the and a larger deliver allow year. would half confident adjusted of in operating [indiscernible] which me significant improving gradual year significantly us and a income. flow cash the in the year to in performance,

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

percentage earlier record quarter. despite XXX million point than USD by X X.X Price or higher billion, currency increased This for was headwind. USD year mix a million. or contributed XX% sales XXX with USD to the net close a first consolidated $XX volume million Our

the split, was in China vehicle share Europe XX%. accounted and year production vehicle in XX% outlined quarter, decreased all on The sales from organic where as XX% was regions the grew significantly. Looking XX%, next regional ago growth in China, it Americas compared except to for sales light to declined Asia production now our on XX% slide. a We light the

the global our book. was vehicle sales production am to growth that latest very increased quarter. than achieved of S&P According quarter. global X% around by to expectations the Global, vehicle higher vehicle This quarter. points as the pleased vehicle year-over-year on light production numbers, was slightly the I on percentage we our the production light production first strong outperformed This around organic order significantly in in light growth continued in light beginning by in Based outperformed XX quarter. the execute we

last launches, In quarter year, first the percentage the XX around light and X%. content in XX by quarter, production growth. Japan new Despite X% XX market sales points, by quarter points vehicle fourth vehicle supported we increased share gains fell points. and sequentially, the this, Europe outperformed percentage China in Compared to in by our by in by by per

trend We to and percentage we expect expect sales XX around to outperform for full points production by the continue, year these light positive vehicle XXXX.

sales than X.X% alignment million. on period of ] of from the a later same $XX the effect Operating capital Fredrik was increased antitrust-related quarter. next significantly income, operating quarter, as towards cash higher further capacity sales increase the working an detail more mainly margin to of to improvement of million adjusted in year, the components end and financials in on provide same X.X The presentation. adjusted last led year. the will adverse from which [ matters, slide. from percentage substantial period of flow negative strong an which level operating million, was the increase flow now in last million effects including Looking The $XX lower $XXX $XXX cash points was the in

from first launches key see the quarter. model some the On next we slide,

in Europe. changes on automotive this number shown that quarter, recent of In had slide new especially China out pure a These and [ seen as to an models EV. vehicle with reflect to from X have and in models per [indiscernible] XXX in ] relative the close represented content of the we high several Autoliv OEMs The X USD launches, USD approximately the industry XXX. years, product

will the on terms seatbelt Westin, In over the advanced of few the are trend the most hand Autoliv to pedestrian sales potential, vehicle higher long-term per slides. airbag, our protection next front Subaru The CFO, center supported significant. financials who about talk it content by launches more to will airbags. I Fredrik now and is

highlights the XXXX compared slide first to for quarter XXXX. first Thank you, quarter Mikael figures key Bratt. of the This of the

XX% In $XX costs $X X.X%. from income growth million. freight. Our $XXX the by higher increased net gross we million, premium to margin million antitrust-related first The quarter in alignment and primarily The volume XX.X%. the gross increases, quarter, capacity than adjusted adjusted billion, million increased gross of while this sales for provisions $X.X driven operating for to price were The increased The X.X% profit lower was was by operating XXXX. and profit to XX% increase increased $XXX from to made the matters. activities margin

will alignments sales growth We the the go $X.XX the driver main per income. we on the income I through $X.XX explain $XX bridge. cash million. The partly flow limited was was diluted more Earnings quarter, capacity that and do operating recognize leverage when strong from where by offset operating higher adjusted the decreased in $X.XX, negative and from operating share from $X.XX was taxes, by operating

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

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

of was Mexican the higher, $XX mainly to a This SG&A from costs impacted transaction personnel due $XX million for and Costs million. RD&E mainly effects projects. was exchange Foreign negatively profit [indiscernible] combined net and operating result by peso. higher the

Our partly sales our launches freight well volumes, general as of operating operations significant new from impact headwinds improved impacted a as lower cost the relatively low were product initiatives, The [indiscernible] growth the as higher was strong lower the by by pricing inflation. positively strategic quarter offset cost have per initially. premium in leverage

The higher lead as to end year. operational As about the significantly a the very the cash are Mikael typical leverage on we and profitability in now [indiscernible] last higher actions was sales, result, taking the much excluding operating leverage should progresses, range. of leverage, flow previously year currency talked effects, like our low that

now on the Looking the flow next slide. cash on

and higher flow decreased cash million quarter the to net lower of negative income. to $XXX For operating capital $XX due a 'XX, first by million working

receivables. quarter, continued was the as in increased higher to quarter. trade capital During end vehicle inefficiencies high inventories of The from volatile. working higher production be $XXX essentially light materially receivables the did a improve towards by of the sales The result not million,

increased For from to previous in capital quarter, $XXX the million first expenditures the million year's net $XX quarter.

property was The for of $XX sales in first affected year Japan by last quarter million. a the positively

China. CapEx related expansion current especially footprint X.X% from and sale, year capacity increased to in level is a ongoing relation this property of the the growth, The sales X.X% investment to to Excluding in ago. high activities quarter for

negative was earlier. million, first For million $XXX year a lower of cash $XXX flow free quarter than the XXXX,

and Although positive rest net level. our year income development the flow cash expect quarter, more from for a we was cash gradual of the in flow weaker stable first the higher sales temporarily a

operating and indication flow an cash year is is full million of unchanged. Our for $XXX that

several higher ratio This our slide. the was months program. Now as more when on net the the increased the XXXX next was program. increased. leverage to trailing to XXXX are March EBITDA share the previous do end ratio XXXX committed than debt know, we repurchase the development executing our leverage you proportionately XX at looking remain factors of on as X.X X.Xx. The considering quarter than We adjusted And

times, pace not deciding shareholders, considering sheet, our cash the that best many long our outlook, leverage ratio and business debt term. the general also mentioned for when balance of repurchases, the both strive the outlook. rating the is the only are We considering we flow balance we're debt and for have we always short As on

number the road do. reducing is transportation Development our United looking integrated Sustainable Now systems SDGs. for making the Sustainability at we Nations contributes and slide. safer to fatalities directly core of business everything Goals, into the By everyone, next

first During first a a issued The and XXX proceeds investors, exclusively debt including financing ICMA products. decarbonization Principles. framework of Bond to in will green aligned Bond successful Green from coupon leading issuance the resulting we Green first our quarter, using interest million used clean bond the drew green significant bond successfully EUR the sustainable with efficiency of projects, energy, pricing transportation, be renewable a financing of and X.XX%. operations of energy The Autoliv's for

contribute the the can financed society. projects Green by we Bond, we to With sustainable further believe

at looking At committed unutilized diversified ] credit liquidity liquidity With position next had our position end the slide. sources. we $X.X have cash strong billion the the of the financing in a to on sustainable funding and quarter, [ approximately framework, facility. a Now with long-term we

years. with that a also a of are profile stable well out position, BBB in maturity coming strong liquidity balanced financial facilities a ], none Note and that credit positioned environment. profile maturity X.Xx of well to our any S&P We spread [ a operate rating leverage is we subject to covenants. With ratio have outlook, over are the

it hand back Mikael. now to I'll you,

Fredrik. you, Thank

market next of semiconductors, near at at of Due XXXX levels. financial supply have auto environment the constraints to Let's industry or part recessionary outlook look operating slides. large the and on few been for

near-term vehicle semiconductors of the has light somewhat, Global S&P forecast. supply improved the production has As upgraded

tax unchanged. surrounding light global are is global last S&P some XX% improve be quarter, vehicle elevated pricing deteriorating production about Global to to year. Compared now and destocking to first inventories increase [indiscernible] short concerns by second expected quarter, in vehicle For discontinuation expected compared Global. corrected markets to to year's to of term to to new last volatile XXXX, and Chinese the the is at close by conditions, The production the the by credit S&P due volumes Despite leading rules lower introduction market in emission of remains according of to to million dealerships. purchase $XX

in in production is America by X% S&P vehicle increase by than projected Light North XXXX. more to

XXX,XXX inventory revised forecast has outlook figures, units. been has recessionary vehicle the for by half levels, to increasing of for second the light XXXX lower. European production S&P due increased However,

However, vehicle for we demand European remain cautious regarding XXXX.

indication XXXX on Looking at the next slide. financial

gains Our and costs other XXXX are full antitrust-related year indications matters alignment, unchanged discrete exclude items. from and and capacity

production vehicle X%. full light on assumption Our indication of around based year growth is

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

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

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

as our to Turning we looking format on what will team Autoliv's and well and technologies our strategic is events forward to subject as XX I our center the progress executive Hills, medium- forward Investor efficiency seeing products, by Monday, U.S. and operation members innovation I'm making. by many presentations there. opportunities, looking showcased and innovation [ experts. map Day, which wins you our on The am to latest of at day June the of optimization ] a in are of management half with of and at exhibitions will focus seeing in next matter Michigan, road you growth slide. technology world-leading long-term Auburn held our be The be

formal the the questions. Rafaya to line we turn like to call, earnings to for now and slide. comments our I Turning for it [ today's ]. concludes open This would back will next

[Operator line of Langan Instructions] from questions come The Colin from Fargo. the Wells

Any so Just what past, kind trending you've labor in color terms able far of of that's percent of you've update and of of given QX? And to of sort recoveries, on any cost QX in renegotiate. impact QX? in contracts framing in then of there think I in been any the how an the sort

it's are price at it's an comes relation year stage to When say price it it start would but full the impact, it the a say I the is here. adjustments, line point too to [indiscernible] the early in time. an [indiscernible]. we in limited to you would on impact to I expectation I here negotiations, would say that And early indication expectations our give this is with in

for give do a when is So to we're to confidence what it time percentage full making it's support points not need this our at But I to to year connected the say contracts [indiscernible] would progress to the here. like we that here in to comes labor. meaningful

bit. way Got prices remind Because a Can what you quarter, are steel I changed know it. during And you've your the quite structured. risk jumped contracts would just sort of be? have your us the

to renegotiate I the that this, or from prices? are steel that So triggers there outlook there jump believe, any risk in

No, you're right.

areas. We in prices seen steel the have also now have again that turned upwards certain

the actually positive [indiscernible] a ago, a that we're prices -- whereas -- us. means we steel we from that So were have quarter expecting to effect on on

we now the more that year, that expect be full less or the For to flat outlook with we here. have

set we from then that we're a of versus now indicated be and and have any have that We better this significant balance on to this have manage customers not suppliers how should impact profitability able our our up we development.

past, I'm I of Any contracts that like percent have the of that Okay. on renegotiation? something sort trigger the clauses and thought in maybe that. XX% you color said misinterpreting

half are type for more No, a we negotiations an to now And has than now side that that we would materials. roughly of that on the the customer side sales material close -- XX% has raw the to our And part commodities. of larger indexation on setup had steel than raw adjust related other fluctuations. we said of business

are going next Rosner of from question. the questions proceed to We our Deutsche the now with Bank. from line And come Emmanuel

meaningful was currency revenue of It seems Just Slide is a on of a here impact percentage a income, portion side, obviously, much on like last on operating operating few income seems your which a as a only like bridge specific #XX. headwind. large piece smaller but of It percent. question the year fairly -- a fairly a

there think margins over your been better. seems have like meaningfully FX you excluding on Because what's somewhat I the side? can would go that, it So happening just

Yes.

effect showing million. [ parts of it's to each. here $X the we're [indiscernible] the $XX effects close both So $XX currency translational and transactional negative year-over-year million We're of reevaluation then smaller, million also are that, from about ] and

U.S. have the from but Korean on us. negative also against of have dollars. have negative effects, impact a yen Japanese a sequentially, here, And also peso we year-over-year negative so there the view was appreciation of and for the is but still They the negative the still they roughly X/X basis year-over-year U.S. That's won. from transactional a improved impact dollar, U.S. effects dollar, on the

-- that thoughts any the outlook, meaningful full And a the contributor your year? on in Okay. is in

stay do [indiscernible]. indicate [indiscernible]. where We course, payers we, the of No, then we I over to out how favorable X% and the the see here currency expect the pretty do But peso we against develop that then currencies we should revenue on here a in others. the we side, and all from the the negative they are half then pay the also the rates still mean currency should how dollar. of effect have that Asian year, see have the second

get color Okay. operating the I conditions on a And was then in little more hoping bit to from you Europe. characterization of

I think meaningfully like Obviously, few at the quarter. of terms, as maybe you've in challenging. latest the sort than them IHS of things suggests that that's sort least volume like ago better absolute just expected [indiscernible] start qualified months of a at still

So more the just maybe quite expected. you a I describe bit understand just piece. Can -- inflation maybe than volume

of what the about improvement in seeing the schedules in curious choppiness volume. and sequential of Just you're terms

I [indiscernible] said more expect here. as vehicles I XXX,XXX here, Yes, increase mean, we

us And some improved, volatility We the are to reason here. over here. cautious maybe from continue under it's far more behind is has for It we but there. side that see and

say still other before on side here, go out to environment moving in has overall the [indiscernible] that is combination the the we here, course, but with we also labor some factor. would on and direction. a are operate are in it that the But So of the inflationary side. way is And I right environment challenges

line from Wolfe of come Lache Research. And from the Rod the questions

production about talk were obviously revenue. benefited stronger-than-expected would business did, largely and that its side. at I'm variances part new count as at production the rate? itself start Or quarter from any it negative Can stronger-than-expected about you the the talking year? negatives? Firstly, of that historical other actually whether you there are itself the you what if not the it currency? expected Is And versus what developments converted

the leverage -- it's we on be, we that then predominantly, it that to contribution the the margin where expect. you has rates not to of mean, ratio. a share here issues would that already gains. through and ability that in as leverage -- from impact as plants And -- the leverage efficiently on floating top But as there to it's factor volatility the indicate, market have level it's quarter. our still historical are LVP. of that, at I leverage could same the new somewhat we is have a not will or to then want lower pull course, call launches, with also our in And And we No, just impact of at that operate the mentioned, significant the the contributing rate does is we

you're it a volatile, was to it like. sounds bit Okay. more your relative give suggesting But -- that it's expectations, Can us... you

I where come say I had we mean it X%. more we That's is in. No, around indicated volatile expected. than we wouldn't had

very line close much is I also the think or top our to very expectations.

us, no big for there least are the surprises in quarter. at So

Okay.

of do to that internal How low this year full absorbing? to that costs is there Okay. double much drivers digits, much by the margin It improvement the of just by you would which into the Can guidance. late a your bit that the this you more anticipate? year. been recover low Xs implied seemed would get savings need from of give us you've you How insight be little you that

from in top are, I factors sequentially mean we expect also still the line quarter. growth The

main give mentioned. difficult of margin the come the those factors contributing be the And split will contribute be Then improvement price which that to the -- course, it's [indiscernible] a adjustments starting through in third here to now It's already expect factor. X, those that with sequentially. then stabilization to So one negotiate here is able quarter. that to we but the component, are to of I a we second the then and

the what year planned had savings are? than are It originally what X bigger you X automations or Have years objectives defined this for ago. and like you digitization and your sounded those

that now overall specific the yearly is we for -- a that is basically indicating we midterm of I given cost have journey price I haven't here it the the to mean, for for not this then the components now discussed percentage work improvement But adjustments here as starting year, QX improvement improvement number think control X the course, versus a towards are a to basis QX. X improvement And work we're year, X with a that, support and target. and have that inflationary on percentage point of really we before. here. all for continue negotiate guided We leverage percentage then And QX obviously doing with this But we points about points year-over-year. part our are around

our that year, said line we plans that as we And as And also have quarter-by-quarter So the to comes to with the very XXXX in for it expectations. to same sets sequential similar course, XXXX. then much in expect a that we that, good is here, off saw improvement us XXXX. way of and the start a full

the hitting then coming is year. is throughout terms first, and with negotiations the us are beginning combination going productivity inflationary in downs, in the gradually happening trickling our what the price through et while here throughout of also pressure, that the we're is year, In customer, we the they with cetera, year, the have normal in of through seasonality price a

here, we're price instead about of talking the pressure. So inflationary downs

So the the -- is but same. seasonality

the questions Sachs. from from line And Philipp going with next We come are Goldman now of our proceed Koenig to the question.

but and question SG&A up to absolute your in terms Or sort SG&A, My in line that on where sort is X% of on is the may previous in compared know which to including remain you quarter? quarters? you be just I first the quarters. expect of had, stepped the sales top the meaningfully do payments there some onetime the in system, first quite above the that of there of that coming inflation that weighed sort agreements

second And second to maybe my to you get X% guidance volumes quarter, on the is tailwinds. that set is quite even mentioned you mentioned quarter it given then better just in recoveries. of what that we you higher is should If you that that up have about better the obviously, year say of leverage, just second and earlier few first much last now to quarter, color the Is Mikael up point for on an we sort to better on fair a the need the could step think compared there of see the question touched that appreciated? you Any you year. is sort maybe ahead

which the would should around line last and the questions. here terms that not are what I'll percentage to Fredrik there quarters towards second saying on here, we said we year mean, also Also, improvement call a think year here, in quarter, here that X.X% get let's translates in around geared say last QX it to you it's for in I X%. with the I Maybe point how SG&A I of, as developed. to more question the percentage but is X as [indiscernible] throughout you [indiscernible] take pattern guiding first half. the improvement X year. you Thank expect start there. and points And know, we're similar by did

in sequential on give commentary the as the development that to I So come I is can XXXX. regarding think quarters here much

indirect get that year-over-year. the Then And labor our you business up a our cost from right that the the side. spend. both we And the on somewhat then then headcount into top SG&A we course, we moving see the favorable I as X.X%. the XX% That's forward. SG&A to our SG&A also the ambition growth, the aim inflation a but to maybe project-related SG&A had, question, for our is And support has of case by also on leverage our on factor. on future, keep structure, costs. see also support is that component that in is meaning as also that's and side, have But the headcount around here going more grown also possible lean development with on higher mean, one a to quarter, this ratio costs, And line indirect the

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

It if give us customer -- I been your would the stable? during been your the on quarter offs maybe be guys could lumpy have flavor interesting the you they a at has more call or how quarter, during production mean, then and plus going should forward? conservative organic outlook, more And we a that how think about Those have? that currently And on on IHS X% your number Europe are based my outlook, Mikael, is XX% growth that for the questions.

not I volatility has the would improved, normalized yet. Thank No, say it's but actually, meant, I you, that Hampus.

[indiscernible] turn. very supplier the go. supply of last which And in they is we as have And some older semiconductors, have the later using. are to here, redesign resource say there. of [indiscernible]. the could to you going too, activities technology semiconductors, And traditional new to not It some quite much is semiconductors more of size are way also seen and different lot will and here terms connected all compared technology is also fits that position in a still of And and your a their on [indiscernible] OEM on of it's one old of in platforms, still here, there kind couple also better with quarters here, the there a meaning varies that So customers between ones and have versions what you what type to volatility. year on [indiscernible] the more lot in you

that direction. are that's new And should is where also the right capacity. So the in putting semiconductor that expectation space in move it manufacturers in

in work right there, So to more direction. the moving but be done

see think shipping [indiscernible] at that of we the also some have that going can there's in moving that the and issues, time I as where less reported other here. was logistic to same we expectations on volatility forward. move example, should But as are as parts lanes pandemic know we of not have is and reliable as lot we connected disturbances, seen freight schedules it for a

issue. going So are of semiconductor also the on there top others things

So response the on question. I guess that's the first

And question. outlook to short the Europe's yes and answer I guess regarding the -- is your and [indiscernible]

cautiousness a I of X%. our for expressed part before That around Of [indiscernible] course, basis light the there. growth Europe is organic that is the vehicle our around of

to yes, question. second So your

on that, surrounding your what it more you it makes thinking is that, you cautious? in that the see Or maybe base? And general Super. is European all just of and from customer economy

I of But would of much the think very it's I a to course, two. interaction, the customer combination say. it's connected

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

quick Just question. a

the at On when down? slows for if this year, assuming U.S. the I'm on half global LVP, thoughts And what are U.S. like you the second just X.X% you first are. -- wondering half? the what on any slowdown assumptions look Europe

around -- as that our if into weights Global. to of mean little is our from think from we X.X%. you well of on I the are region say, different lower you S&P X% distribution Europe, see maybe that I a tariff with U.S. said, but it much from No, see the number our would what different I not has we affected ties the bit instead exception very

it's in there. already So

differ In doesn't terms too of regional it mix, much.

EV strong LVP the either you from subsidies well? as it side growth. And half back on Yes. drives the any assuming looks like on China, obviously, that Are a through in assuming are they then China China, pretty that

here. and see we I nothing on [indiscernible] it's have No, screen radar here,

Auto you think, high Chinese is here see we in know, ongoing Shanghai Show activity of I week. overall, the And currently this market level as here. a the

are, say, positive we So LVP... and to dynamic the would very market, I Chinese a

Last these side. what's Broadly, products been ballpark because with look tailwind? through XX% the negotiated I go have mentioned negotiations as from there have be you cost inflation the But some way at the know pricing of to cost you what just broadly, pricing of to up. tailwind question. continued the the is a would run pricing 'XX pricing wondering

more than XX%. it's Well,

but more XX%. We number, haven't it's the said than exact

We've and LVP. around we growth, assume in vehicle, said remaining is the think in global the can I content then we X% indication around per and XX% of think as give to the pricing that pricing still as organic contribution. X% components. we the say share I And the can on and market pricing that much from would be from X larger the come gain that's

questions with question. the proceed of to Golrang SEB. come line And our going from now the next are Erik from We

X questions.

follow-up hands, full say first pricing of up stability it's was quarter come. And the comment. X guess more then If and since question visibility on is right? you the The much a to in completely year X% that that's if in there's on out here that year, improving. happen, margin second would lower for first your So the expectations LVP the doesn't much the the how pricing I how be? around

start there. of mean with Let the manage first me and we X course, I question, in the are are second take the Fredrik our to situation hard can aware of guidance, and working we market it. here,

improve. we So of even here, going course, to volatility is it's think though

that have own to that work stability this And of the from that think And to offset way more need added freight. year. have we last support we in course, don't here. to We significant a improving. our constraint that been in I to saw our production you say, we is in an improve such And our would customers had Of premium quarter create course, plans year, our on that environment. I

to a find way environment. such an in we So operate

But our And as Fredrik to own from time. of we continue improving we and to work. optimal and what in improve to the as, this see at we It's move [indiscernible] before, customers that alluded combination not point our stabilizing volatility about we're we year to contain we full terms that here in within don't guidance. framework why any here. here shouldn't be that reason support of ability able see talking our I talking are should about what

comfortable I situation. So feel with the current

the Yes. And need first that to structure refer can And the before earnings the then we side, after increases for we our the first that what is this way year. have the in customer. compensation then fourth need get to here we I that these on mean, cost And cost has back to go from quarter we now happened I said pricing the quarter. think the in negotiations

labor already first -- materialized inflation side. of in inflation the customer quarter X the the in the cost in largest are own is so in those have that from much not operations. As then base nonraw we the came components with inflation and impact supply compensation we've our facing the indicated, material-related so our that And of

has sequentially. So remained flat relatively pricing

So the vast majority of books. the that X% is not yet in

Correct.

seen And that that's I a mean of something ramping contracts from guess then and contracts volumes new time. we've that new And new Okay. or -- always to a over times initially. there volumes being final I couple on need new and question how leverage historically. grow on drag these weaker you the

could quarter in frame So why -- an share like of new new is anything compared is is volumes there you sort this average to that of perspective? how the contracts to something it number a or that much put there or put or

from you Well, have In X%. profitability. lower than I in would LVP, quarter the larger these why been up they have need don't explain think it's to I But launches this what significantly see. initially contribution first typically

that. volumes up are the than a more than more larger launches growth quarter. -- significantly was came of volume that these part And Our that's from it in normalized a

Okay.

So higher lower the how think outperformance -- one should it? the that means always about Is that the that but leverage.

yes. Initially,

with of America. of proceed to our question. going the Bank line next now And from Jacks come are Michael questions We the from

then program? execution your of be between on consider Maybe the the the fair evolution on share from Fredrik's margin and should be it assume there buybacks. cash that on following and comments somewhat year first of one, linear a Would the on deciding when that factors the pace you the relationship through to

you margin said, seasonality leverage don't and can indication maybe it Then I also but flow by quarter. only, to will term have cash cash how also normal means then say, own our per profitability, market together visibility development. think and of -- also course, quarter. the how now that, year. indicating the the the an flow X at our those connected we to we're not -- for as it's look you the be I I and here And will about I the develops to development talk that you -- on in business but generation near progression ratio, the gives also we want which about look the But that's Yes. clearly is think

answer is your So maybe my to question. somewhat, yes,

expecting. now ambitions growth but Right. perhaps than used Understood. And require sales even all risks I guess, very year the to likely well for what production, an of S&P aggregate then clearly we're this OEMs the watching higher downside out LVP to is for unit

perhaps Just to visible that provided your curious is schedules delta the if coming the in production this customers you for have quarters.

It's I downside. is look still for volatility the the is case at is deviation vast mean the of the the majority that see what around I if in production on we -- us. first quarter that

So for of meaning then that revised we our customers. call-offs vast EDI the are ] get [ downwards majority the

an of forward. So that that's indication delta maybe going where [indiscernible]

the So quarter as they then the and the progresses, start back is trend? really quarter high cut then that

very Yes, upside, yes. And the yes. few deviate on

But not at the the same time, phenomenon. new it's

it's outlook. normal So

DNB. come line from Mattias from now our of with are Holmberg next proceed to the We questions the And going question.

fashion. see it look of them going at OEMs, out a if your And philosophical bit A of as if one, we was some cutting the prices basically of perhaps. we customers,

on how prices prices through selling generally hear more can the or at are it sort point? cutting explain when chain. be for So lower And the logic this your meant view light prices of share to value works way importantly, interesting you final if would raise you its to customers perhaps your how vehicles on

business a talking about first than what is components But with industry our customer all, I doing philosophical this not here. here inflationary this is the of think we're anything here. of in question Yes, else

with to request external offset coming we're factors. here So

the inflationary the that before the I get costs, evidence we being think here we customer, have, [indiscernible] in the in we there and we the where say, when hit first, negotiations. same have negative with our fashion impact are let's sequential then to we then compensation going

referring look I what a But them prices side many I have think increased broader extent, there needs a sure of rather chain that we of industry if in such you here to I think think have doubt core at sustainable the you're on the be think to our the I there. value than forecast, actually about are aware value make what is chain to that no the industry. as in compensate done to

customers, my with in we So considering here. our that's the that factor not are discussions

looking and that's at inflationary value the we're chain We the components facts are here, what hitting around negotiating around.

Barclays. next of the to question. going the take come Now our questions And Are from from We Levy line Dan

just to, $XXX specifically, cash movement? the was this capital million front? alluded receivables was swing going about Could but you of the was on the capital just working the we maybe that What quite dynamic, and forward you working that decline. should explain flow slightly negative expect which on I could First, think talk just

quarter first working next Yes. quarter created they from high receivable I as growth at a the an the of unusual normal we do capital December very And But of end sense capital type quarter. whereas up significant quarter starting or it for month this balance the towards also the that sorry. quarter, January of end first profile sales fairly other mean it the was of expect a that in now should pattern, to large within the into components, March, very -- X not was working -- same revert the and bit but the a payables And ago, in say, of receivables. month should also a then the buildup drove normalize then have follow we the increase then the somewhat. that the that inventory

Great. Okay.

Okay.

And in compensate pressures the labor? through dynamics evolving? And has past. just Europe, which the Europe to automakers you So specific And release to and the your of to Maybe labor inflation. with working capital the just And walk about inflation should talked then reverse, in on been flag is specifically, could to tone go conversations how the labor, by region. inflation tenor specifically on didn't what question great. want

Yes.

have I -- the the think just if in also discuss here what would materials. XXXX with making I negotiations those progress think material during easy and our mean, we it's start customers. here that with -- there, to to I said I raw And before we when the never I say are discussions it's non-raw negotiate increases area. price were related in We successful it's

reference more and in and the points as have don't that are raw side, bit plant the it in course, this unique. complicated raw you of to difference side, each Of becomes have the site each space little each type because a material on material country same you meaning

to So the on an of much material very side. it's with through side, detailed same raw the as more [indiscernible] you get need the discussion go you much even more

we So that area. in are progress making

inflation is up I on how data you general, publicly. can -- the hitting in Yes. the the different mean get from no it's all

operate wages been yes, So also I side, say in cost operation, on one very we inflation, -- available, minimum where the than you significantly where indices country significantly But and also for large have look has -- Mexico where that. them course. countries labor they we a have been publicly this that these is Turkey, typically at that increased are we or follow general, a then but of pretty significant impact, the mean can are by have we not there other impacted and to [indiscernible] larger in.

is there dynamic Europe specifically, in some And unique Okay. then Europe?

extent in has and to of some of war freight a on Ukraine course, energy consequence impacted the that. also as here, course, of Europe, in think I

So yes, each and their reasons to so [indiscernible] own has to Europe. region I hope in mean, speak challenges we

them for energy course, from topic has of and and the purchase Europe also that, a base. components on up our but supply larger mean, in I driving much been Yes. price

in So than been other a in more been significantly challenge that has of Europe it has regions.

constraint, end I remarks. President hand the Bratt, time and question-and-answer for will CEO, Mr. closing And Mikael go we now to session the the ahead. Please Due back conference here.

Andrea. you, Thank

that like activities our we company execute say would reduction to [indiscernible] on today's cost culture. on continuing I strong to call, relying are Before end we

ways and build stronger continues on reduce position. most to to to evaluating direct more to society. contribution short-term will our lives, improvements. both enable improve cost and believe us these Autoliv are an saving footprint even our sustainable we vision to long-term additionally, is creating are actions of We structure. our our Our important And focus actions which

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

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

now may disconnect You your lines.