Autoliv (ALV) 19 Jul 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Autoliv, Inc.

Second Quarter 2024 Financial Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Anders Trapp. ahead. go Please

Officer, Welcome, call. Nadia. and our quarter Chief second Executive Trapp, me Thank Investor VP, this everyone, call, earnings Relations. Financial our and On Mikael President Westin; we XXXX and Officer, Anders you, Bratt; to Fredrik have Chief our

on support things, our asset and earnings second development cash expected call, other of the in conditions. Fredrik market will continued margin business And strong provide outline the our of and overview sequential of update a also, the will, and improvement today's an of rates towards improvement with our They and how general in balance targets business level will flow the Chinese return sheet During OEMs. usual, we among half and our quarter, shareholder domestic Mikael our provide XXXX high as sales, earnings returns. continued an

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

Turning to the next slide.

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

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

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

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

Anders. you, Thank

on Looking slide. the next

the compensation we our claims year-over-year pleased despite in managing net of and pricing. a volatile than I successful more by close settle able execution target QX. expected. majority improved would of production customers of cost thank the I employees and lower quarter with to challenging light like to sequentially am lower most have with driven our to that remaining both through claims sales, been all and and vehicle for reductions cost Profitability

we all indirect our favorably of adjustments. had million and light regions to call-off the to our compared developed what workforce good USD in X,XXX previously no inventory progress in reducing certain vehicle weaker We announced related towards and are We quarter savings XXXX. Sales by June. second XXXX. making XX intention was of to up in due than first This in key saw especially customers production sales volatility improvement quarter lower expected, following with in less

flow temporary. encouraging customer third that is operating our quarter the plans XX% that adjusted impacted operating leverage sales both XX% quarter improvement the it with the shareholder range. the an level pleased quarter. I in of indicating employed. high also margin However, high higher be be ratio an capital of returns XXX end supporting our continued are with leverage for The and million production June of at weakness to normal stronger, Cash X.Xx lower-than-expected should the the to the am return shareholder with USD returns to on in even strong, of a

stable rating outlook. from July addition S&P, a long-term have with of rating XX the added credit credit assigned Moody's ratings credit second a on In to now BaaX as we

strategic AEROHT, XPENG fast-growing Illustrating and signed Chinese light the future a close OEMs, cooperation to while we with our guidance positive agreement pioneer mobility. XXXX to production, on operating Chinese our innovator Although global we XX% commitment cash remain for we balance returns. flow adjusted have mirroring margin development cooperation full our softer on our year innovative of down, level safety high target delivering solutions our flying focused car sheet leading with of adjusted around supports shareholder continued a and vehicle

recent largest according Japan reductions inventory in in certain OEMs. the expected a quarter global on due in the quarter were In OEMs headwinds the S&P light X China. than more to and points development for slide. Europe, for next in Global. the market on weakness production came to focus percentage management Looking reductions beginning than from the the lower The now on vehicle reflect quarter of The the second sales and second in part, China in increasing

As the a call-off and the especially volumes quarter. in continue our the result, top sales on lower high customer the expected lower we volatility, volatility to with XX% and throughout a substantial The a impact was negative when June in beginning June. our experience of earnings, than especially quarter, at higher had together line mix

this we production quarter. customer plans expect third far are the better a as to headwind However, in temporary developing be so

in development detail more We will the about presentation. the in talk market

our slide. the cost now on improvements next on Looking

We continue to generate broad-based areas. improvement in key

productivity labor strategic direct digitalization. trend our Year-over-year, supported and we initiatives, continues including implementation direct production by our reduced automization by up, personnel the X,XXX. to have Our of

compensations. Our the improvement the workforce improved direct margin by basis points mainly The result quarter of higher gross first efficiency, year-over-year. customer the XXX from was reductions within indirect and and the labor

relation consequence sales, sales increased XX in and QX RD&E versus lower-than-expected to points As the XXXX. a SG&A of basis by

increased by flow last USD to The quarter Now on The X.X%, and year basis second affected points was adjusted million the financials quarter on year. from Operating working effects. lower margin operating production last negative and regional lower production a million, detail negative positively more X% unusually operating strong translation $XXX million XXX the on a light XX XXX to reversal second million by cash in of looking by compared USD light sales. which year-over-year year. adjusted XX unfavorable QX was last despite increased next was capital vehicle decreased USD vehicle customer X% Sales for slide. currency by mix. in income the effects, to QX lower

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

product almost was and USD mix. volume effect of partly vehicle by net translation out-of-period was in USD lower sales and $XX million a lower effects year last X.X by lower cost X level This of compensations The offset light period lower billion. that positive USD of than approximately production approximately consolidated million, negative X% with was Our XX cost USD driven a year. level the currency lower Out were Out-of-period currency negative sales translation earlier, negotiated by reduced price second period same quarter first in year the to million our in reflecting retroactive quarter. in mainly related contributed adjustments other compensations inflation quarter. are compensation, price and quarter. million the but the This compensations the this than of XX

Looking on sales regional split. the

and growth the for XX%, accounted to sales We Americas outlined organic on Asia our XX% next for Europe vehicle compared light production for XX%. slide.

had vehicle X% production quarter. year-over-year expected the than Global, points lower production than our worse growth more This vehicle our regions global at than the major quarter. in declined light came beginning in adjusting in than X in organic We quarter impact XXX predicted. sales estimate production on vehicle outperformed was expected by XXX key all that basis the light geographical to was S&P vehicle negative light Despite points basis of as the Our production lower points. sales where this, by inventories, that outperformance. light percentage mix According customer some

Asia in outperform rest launches production The We pricing. to Korea and continued fueled rest and light India. in South Japan, outperformance and vehicle driven Europe, by was of significantly of product by in Asia

of China, brands In earlier in Americas, models we while in In of as with production. declined reduced customers content growing outperformance low with significantly, and our global market Autoliv some the developed percentage customers certain leading to China. underperformance unfavorably key X the strongly, production number -- expect second in underperformed key some third quarter a the third the half have slightly year in the India, we a early For launches of from the strong quarter. points

development there. On the next on we slide, market and a bit closer look the our Chinese

rapidly China been domestic market. production in a with rate to vehicle brands taking producers we We the lead of vehicles domestic high strengthening a road and fast-growing domestic models are With with electric our to the Chinese OEMs. domestic pivot for It position car long Chinese manufacturers. China's rival major global really in the Chinese new seen of market, have the coming towards has

from quarter of Chinese year. of light vehicle the to the result, XX% share this close XX% to of in in Chinese a As grown have around second the OEMs production their XXXX beginning

OEMs. the result XX% sales in order our XXXX, recent to we As business continued Chinese content per safety with difference XXXX beginning and this XXXX. In intake the Due to ago groups is domestic years, China of currently. our fast-growing XXXX group of on on X% expand outperform our large of between the by by 'XX, Chinese in our the by for year track during QX QX Chinese average XXXX. sales domestic OEMs, to around OEMs. two XX% grow CPV versus QX to in CPV ability negative to to the XX% our XX% both Chinese for The a grow for accounted a versus strong vehicle, has production increased from the is expected in vehicle in light to a from and and up have share CPV impact by market They XX% only same global period. This the

such support further Due sales, price OEMs, expectations China. new programs many since on between to light hesitant stagnant reductions. crisis to consumers been has as remains war vehicle replacement end vehicle place incentive to and year. last price competitions taken programs purchase subsidies ICE have implemented Therefore, vehicle for financing Although a for become in vehicles demand have stiff a wide-ranging

remains of on the potential the new tariffs we it have The a Chinese Chinese lately, exports large the In important of However, EU of and the East Middle cars difficult to understand majority that Asia, conventional assess. Africa. ICE of to moderation to on the seen context, this is signs price impact war. exports

to accelerating to China. relocating global capacity China production add However, production Europe we OEMs outside OEMs see and from of Chinese efforts

the our recent on Looking at next slide. launches model

expect some a customers' we we for for XXXX. changes model launches, our of plans number Although continue to see record product launches to

but vehicle continues, an On from around seen in all China. OEMs towards are well our in Chinese slide, models as in have models with Autoliv producing $XXX. from six being per $XXX China. here content trend slide, global The electric as are shown be can made this strong produced of versions. to especially as one China, OEMs electrification these position models available The this with over As reflecting

Huawei center models, five In trend is followed terms Autoliv launch pedestrian to is potential, higher significant, long-term front more by of The CPV between these which SX, and the seatbelts sales collaboration of Nissan lifters. BAIC. protection by hood and most is on a airbags advanced supported Stelato Kicks the the

the highlights saving at vision steps significant looking are Guided by on sustainability commitments. we our more taking towards sustainability lives, slide. the our of next Now

fatalities supports annually. example, saving For the Sustainable Safety collaboration to and to collaborating motorcycle Development enhance UN The of reduce injuries lives UN which traffic road XXX,XXX safety. the Goal aims X.X, Autoliv's Road and and Autoliv are Fund goal

emissions fugitive that completely wheel also responsible Scope X% production. SFX SFX are total out our hexafluoride X for source XXXX. phased around We was steering Autoliv's and sulfur in X used emissions was of of in was largest that

its by over XXXX. I We will to solar to step have renewable further reduce commitment airbag will key gas use the through with Autoliv's Fredrik on and talk electricity will zero net ambition the is XXX% on-site the CFO, Using cushions financials In achieve greenhouse next have capacity. across additional now product continued Autoliv's crucial the slide. electricity, hand contribute polyester. generation our a energy materials range chain emissions to to to though across Westin, and collaboration who you of emissions developed from supply recycled chain increase supply we made partners, renewable recycled instruments increasing towards

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

shares. income net share matters. Our partly $XXX higher margin per or points XX.X%. and $X.XX income from income percentage amounted the and $XXX and million adjusted $XXX were from were by points to offset X.X%. This by the from margin anti-translated by number Non-GAAP taxes where billion. lower increased and $X.XX $X.XX million nonoperating alignments $X.XX to $XX to adjustments X% the The profits while diluted decreased to and from a million increased the by million, items, $XX increased X% by to gross Gross XX increased higher $X.XX capacity was from main basis operating of by X.X the drivers decrease. million operating from adjusted Adjusted operating $X.X net earnings financial sales

a repurchased quarter in were for million. retired a Our XX%, around adjusted on We respectively. per and USD shares of XX% $X.XX paid return capital on share and equity employed and X.X and the return million XXX dividend solid

SG&A the second effect currency the from on The Japanese contribution was we and successful the bridge net now of Road driven and Costs to lira, of Turkish combined growth. no than cost million adjusted Looking by due quarter million and compensation higher higher and by reflecting was the In several reductions operating as operating materials yen. lower The our nature, positive, predominantly Mexican effect million net increase $XX execution income RD&E for cost the the period was negative income temporary was cost due partly cost on $X the $X inflation. adjusted in items of million by lower of was impact compensations. peso of the offset despite negligible. slide. from to raw Safety Out inflation managed Fund level XXXX, of year, $X and the driven SG&A smaller higher. This UN next cost to such fees. was volume legal This last

our normal leverage, on excluding of to As currency organic effects increase range. above was sales XX% a result our the substantially XX% the activities, saving cost operating

more the in on cash Looking detail now flow, slide. the next on

the year, free relation The mainly cash net cash Free X.X% XX cash to to of cash X.X% was to by cash year. million the up last unusually flow. same quarter was last the last lower from XX%. from XXXX, flow flow flow declined declined year. capital last the negative second increased million conversion, million was Capital second expenditures million last $XXX working compared $XX of year, For it by the to operating first relation net the $XX to year, as which sales, quarter In prior by the defined million year. due period in this operating $XXX to effects $XXX strong months quarter income the from compared reversal to affected the

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

During XX.X% lower and accounts same working quarter, $XXX inventory sales the inventories $XXX receivables, XX.X% the to the trade in receivables by decreased The capital lower and capital end million to last $X year, the payables. to by working to second trade in quarter. million, driven lower lower million from sales. towards million due were partly Compared of lower $XX relation period decreased

capital improve efficiency to inefficiencies. volatility, million. high inventories Improvements program we $XXX enhanced working that planning To have capital aims challenges date, Our around to the due lagging $XXX by achieved in million. call-off cause are

coming years, tandem we expect volatility. improve with reduced the in significantly to the inventories a Over call-off

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

return on continued Our our conversion efficiency for employed. capital is strong balance focus cash on sheet supporting and performance cash flow,

to over end X.Xx to compared trailing while footprint improved ratio our quarter a debt leverage first net XXXX, Our shareholders. million. the year $XX by $X of despite $XXX from The million ago months by in the to million EBITDA leverage of by the first quarter June ratio XX end increased Compared improved at debt improved same the the investing and returning quarter. our of adjusted XXXX

for Bank credit purposes. $XXX financial high credit a facility contain debt and matures going that Chartered does into will leverage our provides that Standard for returns be has that can Autoliv XXXX and forward. revolving agreement shareholder positive covenants. general expect not flow continued additional cash entered an revolving any We corporate trend The in for agreement allow used with facility million

over years on looking shareholder returns five at slide. the the next Now past

to Over Autoliv the market has in years, environments. solid flow ability with shown periods generate its cash varying

used share have repurchases a usually the to to shareholder average value. both price. dividend payments to share relation of dividend in We and approximately the X% yield has X% create Historically, represented

around through for $XXX and record million returned buybacks, months, dividend a new share have During the company. XX last we to shareholders the

million to of number initiated USD program. five shares the total the reduced shareholders, always long short repurchase cash of and current years, the business of shares executing credit million as and reduced our close the billion returning We stock our current ratio. by and repurchase cancellations both we net the as program what strive balance leverage have for We not have X%. for outlook, the term. significantly program several only includes our such last directly a our general close best in stock the $X.X is outstanding of XXX to Since to consider part factors XXXX, we stock conditions, shareholders. This flow Over debt to the sheet, while debt when balance rating we repurchases X.X

Now and by that around shareholder the for strong on margin an the Despite fundamental years, our looking balance on balance creation. employed averaging long-term supports five return our XX%. shareholder the efficient good challenging sheet is employed sheet impacted on our remained The on return returns value strong, operating slide. capital market for environment next past has capital

to now average employed our substantially X-year our and rates, sales has years average. improved Our relation in over meaning above is past capital the significantly capital three turnover

you, hand With to that, Mikael. I back it

On Fredrik. next to slide. you, the Thank

Europe, America vehicle the of in light second for falling in to headwinds Japan expected forecast light light X% China vehicle has has very production Global's vehicle on and weak longer the persistent XXXX been quarter, rates on the enter built of full a year quarter is correction. and higher homologation and minus outlook forecast vehicle need weakness vehicle on since is Light percentage continued a factoring the production a minus on the of decline horizon demand. The the inventories half global forecast OEMs. in recent guidance the short-term issues vehicle update The Europe vehicle North April global around of production for points for for particularly demand domestic we updated for over at with our decreased production America. has reductions vehicle last production The year. the down second production and and reduced X.X% third strong a X.X%. is for half vehicle to light As year is for production analysis, X.X% light our due quarter inventory North mainly indicates the inventory the in effects influences, been decline in third third S&P. S&P by region-specific X% a vehicle by in to growing X% consumer decline quarter light XXXX, greater to X in X% light outlook third Based the and sales The China, interest in some own revised

on on business looking the next the slide. Now outlook

the vehicle a around an first in margin X%. XX% We adjusted is to by profitability XX% to light the offset and cost production, stable cost compared by in expected year slightly of materials, year's and is initiatives, be half raw mainly strategic second This higher for the expect driven of by and operating customer This structural to partly half and nylon. steel higher more compensations. increase a significant mainly supported with control

Looking at XXXX year our capacity matters slide. other next XXXX from shows effects guidance financial discrete guidance, slide full This items. which the our antitrust-related alignment, excludes on and

sales, year is a of X%. production global on negative guidance a decline our operating updated operating X% light around has of The margin impact Our full lower production vehicle adjusted based light assumptions flow. cash and vehicle instead on

effects X% is guidance XX%. margin to Operating now sales. for by expected expected to sales cash adjusted billion. organic The X.X around on Our flow is is to now Net increase to be X%. around operating around X.X% expected are minus currency USD translation be

for around tax returns. Our a We rate shareholder XX%. of positive cash allow flow high trend continued should foresee

to and to now the formal next line the I comments call, and This for open on like questions hand Nadia. earnings analysts concludes slide. Looking it today's back from our we would for investors.

Wells it Fargo. first to take [Operator our from Langan Colin now from comes going question, we're line the Instructions] and of And

at peso decremental maybe big Because the why is it little particularly and on I a if with seems close higher to midpoint guidance higher now was thoughts XX% which than thought a is towards a start, last normal. it looks cut, help. the like bit end, Any year headwind the lower the sales, I peso? there look your of to on Just to

So are how actually decrementals helped improve about second you into wouldn't actually thinking the that? that have the half? And

of then always of end Sure. basically Thanks sales is decremental a to Yes. that, area. would the at expect you for materials said, versus slight mean that margin driving LVP question. calculating had that's it's as higher headwind On we development, also the the top we I previously. I the And raw we basically also also would have, we said, from what be that slightly the XX% if XX% what expected range. are then

the have based are things. main what the those So have peso, our included here on guidance we we for. Then

rate a half that the on So how that around the moves difference XX dollar. could of second the here depending at pays be what a we're year, the in that to assuming of than to moment. Yes,

Okay.

the at material higher washed right it? think the help peso by end that So is XX% way the out about and to headwind. raw the all Is is maybe

Yes. Potentially.

overall, to is X% production just then came the down down vehicle X%. X% I it's guidance with rounding, And from think just light

expected quarter. persist? talked of a headwinds, production than in is in lot You I in baked much the it occurred the most mix you mix X% QX. How worse particularly Is XX% that mix being year? a this for of, versus customer about for was of of to headwind I headwind said Or thought you worse already is QX? half guess, second extra X% expected that sort

XX% the to expectations of in compared we're the was how that developed June the our the volumes at referring quarter. to beginning No,

is minus OEMs that say the quarter point and full we're half down mix full half. had So XX, the what I close on X%. year-over-year, April expected for number in whole the for to at mainly were and the our May in deviation expectations. seeing. Then year that year expect the were whereas a June, the the or And basically, OEMs in mean, on the quarter, mix line plus Chinese us or up China this is percentage to we point quarter negative XX. was if percentage for developed And would versus the X whereas in to the for improve they less more the that second negative around XX%. were in based in how effect XX% That's with the X be be you global look sales second first

QX that's we that it But that negative the a how basing to reverse and all be So half. point seen this we're based effect second it's it in plays full should what mix for But had the those again, percentage remains on year. out. trend means assumptions, negative in X

The comes line Hampus the next of Handelsbanken. Engellau question from from

for questions me. Two

light slightly X% a more about I view the on Firstly, by you talk if is we've are bit for That's vehicle Second this on? more little being become compensation you questions. expected more Has than production your your could X% those mean S&P. year, maybe there seen that this when when with two on is the production tougher Europe you question adjustments now cautious on is stocks price customers. and also. my inventory reductions where

course, here and cycle weaker that living see and coming demand a point the negative result On higher business cautious year more slightly our to the There consumer you correctly, of more the first slightly there regarding higher as also effects on here connected Europe. from a cost view rates, S&P overall of said is, et we, view are as than on full of cetera. interest

say, more seeing are other would some, there of we the topics be there parts I what economic-related in may So than world.

we there. slightly conservative So more are

On the compensation, we're there. progress good I making think price

our closed external in and it's mean, of negotiations, evidence evidence-driven well And it's detailed it's on here, chain, has about is our always here, As as it I a a -- would majority we have reported of we or easier say it been here. all very Is value with harder? negotiation. it documented. have I impacts terms customers and think an inflationary I

And we inflation have third on we related So have is an with to found way that year a this. our the I to this customers extensive think yields. work negotiation

So to a way I have here. process we think good manage quite this

it's a as and in have And said have I but negotiations. a by plant component never details setup, of good component by So easy, we it think we lot it's here, those before requires and plant. really

So that continues.

next line the comes Jacks America. of Michael from The Bank question of from

then that timing reported Will broadly My system there this continue up. suppliers out-of-period somewhat speaking this for first headwind of of wage And perhaps more pricing that roll inflation Is on and retroactive start a how headwind is Is that the there to back question on OEMs a to just becoming the if is you're increases unable just here terms some in year's this draw issue? in to recover? Is the effect cumulative going in to again QX? go retroactive Or idea compensation. far repeat to are QX from maybe this especially needing on the pricing. topic this? tenuous, not continues perhaps they're line willing prior risk the

referred than here the really we year. retroactiveness QX higher in year we think got to XXXX that I portion out-of-period connected was to result got this last in we comparison, a the

you here, need So just It's a headwind. it's say that say, not, I wouldn't make that could comparison you in to adjustment.

doesn't it than So less it indicate in or time, before. goes more anything further back been that has

less the So course, is down as and impact. you can about of talk comes the of become being say that, of inflation negotiations an concluded, course, out-of-period less you when

real So a question that's here.

our that supplier year is really we are base -- negotiating. on think this the here I

to overhang It's anything current impact, quarters a or not the the really it's that. year out-of-period So speak. that between like we have so XXXX this in

related then quarter a whereas been have compensation. in point simply of reported I to should we this retroactive that reporting be then just in the year. mean first out-of-period Sorry, clear and quarter from view, reporting is on the second rate the there the we in the since that so negotiated that is year second conversations million, quarter ended to what that was components of the quarter, for up belongs year year number being what this not got this then the of only And this really of million. magnitude a it that because first $X -- run was the $XX retractive last price of we're

of $XX million. So effect the get you a mathematical here

on then this does customers wage by increases XXXX? affect compensation payments, clarify being I that continue to to given affected not some And just lump are Maybe via much guess, over sum is these, part, roll on years? still the settled that second just were required of up in how the

mean, said arriving impacts XXXX. only XXXX, here, as negotiated I right now, I in I in mean, No. before we

a lump to year, was that. XXXX for sum 'XX, our course, of the needs So to the before and lump included, has go to nothing there we that sum current got of quarters in the in compensation. of the when Then, sum customers reported between there with here out-of-period be last here, in do we lump But if this payment we no said as is in course, 'XX impact year. we course, that is the year's is, out-of-period as because

nothing needed to we because QX, a in I as out higher mathematically. year, between lower year, lower I if XXXX. negotiating. but year. a year a not the do said because of This it it were it of here, it negotiate was it here, up last course, year to come this in And is bigger has are last a So has inflation number with base was we shows and had than number down which higher And mean, was as you comparison, and period in last headwind it a that was comparison it's QX headwind a

question next from Erik the of from The comes Golrang SEB. line

the a first call-off I volatility. is have question on

that. there. you a improve to reason on been then the was development I in over to any second improvement What's slide. related the really a year, there And towards just for question the why You -- deterioration expect main that end the illustrated ahead? And the fact, there hasn't past

i.e., high the you and the what market? So stable you so how new How more comes target. target a volume, is the if distance more XX much much of that puts back unexpectedly volatility only or get margin XX% is call-off bps just from

question there. for Thank you the

eventually we should back Of expecting I mean, are to call-off come normal. course, volatility that

towards to going used the the I I think case to be forward. that that, have shouldn't is with the effectively And industry the base. automotive reason work call-off no believe definitely supplier

regions, of of in there maybe losing your are I customers And And see you as OEM different and customer that And or that as inventories, the such. trades adjust around losing close others uncertain some we short there before, you uncertainty in are that need on further it. But here. environment reflecting this may mean course, our course, all you average is. are, sales this different specific economic platform of all market is went an it's away. And in reflection I base. not that a the the a if are out a the still you course, targets, think very pre-pandemic is to across world very variant definitely are regions reasons. out we an for through there, can some industry of share, be with notice reasons very maybe some here

that So more impact that I to some on many why It level to we believe production do returning say, levels. then? absolute reduction, the it's you is because customers at point. here connected say see I could would light the we are Then mean, vehicle the it

much we little are So too Fred, on you volatility But the discounting develop bit. can that a not side here. maybe, if

ability better X.X% here that bridge have then also then volatility the XX% direct were closed from previously point point that we and the our X that No, to to up call-off the what basically margin with X it's percentage target be to said operate the efficiency. where with expect labor percentage year, last improved we gap of we by that

So differently just there's Mikael is we than the that. as on a LVP had a developing nothing bit unchanged here said, expected It's quarter what underlying ago. that

focus answer. just OEMs region positive particular Mikael's then volatility? should that call-off find delta that follow-up to And we a of group in on there Is or on a

No.

I wouldn't varies specific to the think But think And into like when Europe, them. I unique between situation. on any go to comes I OEMs course, depending more it it's of there. situation, regions, it Americas

of Barclays. the question The from next comes line Levy from Dan

They've customer question the to back math, back X%. rough you one well some go only revisions your envelope a piece, we mentioned do exposure. China just some the another We've negative And just the America to if there. of down assuming negatively And you're customer. large OEM of seen then wanted revised with key mix. we're aware revisions that European North the But I heavy customers, of on there.

mix light negative just in that a a X% Maybe negative GOM. X% on the of context more in a context assumption mix seems that. the So you provide of could bit little

can't bigger with the we specific all to as has say a can the very OEM positioned I impact maybe universe comment across I of different are But we this, course, of mean OEMs. well that one you're is, that course, alluding here. well are represented here. it here, generally, because

with And we supported We here have the that here Chinese well a by regional growing significantly OEMs their in as also, alluded and Board. is represented the across the mix also to growth are region. we

a offsetting that related you comments to the -- lot also is of comment the So of had here.

we So to portfolio that a offset have good impact.

That's And also mix is customer within maybe regional what the then talking the China. we're on mix negative that about the and the X%. X we're negative percentage mean, point, there expecting I

your one you to then a follow-up, you in competitive I just the wondering discuss could as if And versus And provide well. and the follow-up improvements maybe you a share that share that, in much market extent Chinese But were some for then you suppliers China. as from bit the domestic China at there. believe How the on possible, as that in how any other point, XX% the a of Understood. you XX% said dynamics is us versus could to China also then from of within local multinationals? aiming I'm multinationals? and color share competition market view of total the outside China domestic

and here. significantly, No, in stands share our defend mean, I than globally want a and OEM more of we we QX or expect position. And don't of XX% strong we mean, to I market we grown to -- in have has continue think the as regionally either the all, grow sales here, said it I our to Chinese target, first China for

we for had So are China. this And also strategy for regional in in obviously, well there. And we China, in and I are mean, a market leader positioned have China, China we long.

in the have also work think also good say, here -- I we industry in our you a in towards to with with competition position how peers China. So

and and well offering landscape industry, players players leadership we here. and here continue to much very seen that players prepared, product of that then well have strong you to very up and is a that change that quite there's regional have a three, here sense competitive able have well think we're with the it's narrow also say, you to the So I three you could portfolio, set for prepared more global in similar same effort there. Globally, think with we operating more offering no But a to we time. continue some also be dramatic market here. the have that are is position for a defend It I our to smaller,

Agnieszka the of Nordea. next The from question comes Vilela line from

I guidance have your a for margin question HX XXXX. on

margin. You good production quite I underlying, XXXX, car with expect a just HX to XXXX. were in XX% you finish at think, to at looking XX% XX.X% And

So and will headwinds HX, could the buckets if raw really maybe especially is, and light question material into this margin headwinds the specify production car you increasing are quantify some be driving HX? in what in improvement that with

Yes, sure.

seeing out XX% we half second half compensations. first and also you development. to then So we're say LVP half. Then presentation, increased first and for rightfully in here on cost especially initiatives, side than a from is the and yes, I what the our mean slightly the also And already expect continued in X% customer control, expect more stable to here compared the XX% in we SG&A higher the structural it, strategic as pointed impact

a headwind the those at more and So the a than from expected raw the or are headwind positives year of beginning slight we bit materials. then

it's target. it when to here really, comes towards are that good up, and improve it So would our the to results sum around the we I activities when development initiatives you XX% all say, here a driving

are negotiation. And price of intended we progress It's on So course, with the making that, good the results. in combination progress. giving

So here. here volume of we've around the course, very is seen vehicle light the absolute that and, also challenges production the much volatility

from, XX% in in say, HX. HX It's just margin a gap to quite seems X% big

be bit So will quantification probably mean, we would of driving I what appreciate a detailed more that?

that mentioned. and talked -- will QX that be I part will, what and latest one just stronger mean, traditionally important we about I cannot It seasonality our we've other the course, -- always mean the have also is one customer compensations, what the it. always three -- of we're never quarters. but a be, I the that we is effect as effect of know, targeting Then of the than how elements that you I is

year. other this -- we're different not any that's year than So that to expecting be

the And line the comes Dossena next from from Wolfe Bruno question of Research.

those reduction well on year, quarter, I indirect I $XX But million the second math opportunity you the year-over-year. of ask give to million the reductions, my you both wanted as trajectory this us believe, sense on million $XX $XX about how added could this a those as exiting the to of but the normal cost the that a price then that cost in said of cost reductions normal these to reductions what of annualized And reductions, be that, we basis follow-up line? improvements the flow straight reductions, cost bottom are headcount direct savings year? an think cost could offsetting offsetting when would to much beyond on versus productivity as

year to planned Yes. million unchanged. our savings implemented. when next are fully this million No, million ramping the I mean it's then initiatives -- and They year $XXX up are structural and $XXX then from still $XX

there's last on already had that. year. So million about no change $XX We

these base, labor direct work our efficiency our And are offset million. annual $XX with price with Those about activities, both on. with activities, LTA, of we with the part vivo is our so supply so reductions the offset toolbox traditional effect we year-over-year the customers. So that are to cost-out and negotiations they and price not typically

reductions. of we on normal is done would this top under So to have offset circumstances price what the

back the And we then mix as calculus And right mid-single-digit of share. price the years. half think about you What's what's the the the a step quotient -- normalized think share are outgrowth? cost it and we going the on market over several changing from half about we the about in and right and market for how thought the forward content already should you've market taken the forward? company's level -- the sort what shift look customer you in outgrowth, you range, if historically, dynamics, consider But consider

in an see terms that content to can, we of But the of see content give be and going the for that on course, gradually. outperformance on in where among indication the continuing India, example, guidance will believe forward. we have the catch-up also adding premium content of is and is like I not say, or course, strongly I mean, but both grow you growing absolute importance, lower also the growing. models specification effect, you where could what

drive there, that's potentially something an what forward is that advanced trend said course, have we less of element. is because here, we see but market also are, we solutions. as growth was a be target have defend. where we share XX% don't around above as that to we It price and going Then, share we So we're have more market will new

outperformance X rather, here Where the that we growth what instead disclosed have we connected to really vehicle guidance production to growth, which and opportunities of that say is area. X X is X And connected we mobility the before, have X. going to is mainly target, forward safety to X content to organic growth. reference is So or light said see X to X solution the business is additional in the we

to said, as focus be ambitions So X. the we on have that on we organic should growth X there more the the

to the for today. I you to like thank speaker, remarks. participants, very hand all conference questions Dear over now much for your Bratt, any closing would Mikael your

you, Nadia. Thank

on say XX% like delivering remain margin on around end the I adjusted we to operating Before would today's call, that focused we target. fully

level We and a sustainability. of high positive structural cost compensations, development our focus and balance quality returns. cost sheet on reductions, innovation, flow continued of to our continue cash The to shareholder supports commitment

until you, earnings quarter sincerely today's scheduled time everyone, for October XX, in participating is next third continued We call appreciate your Autoliv interest Thank call. safely. XXXX. in Friday, for drive Our

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

now Have a all You may day. disconnect. nice