Q1 2024 Autoliv Inc Earnings Call

Okay.

Yeah.

Operator: Good day, and thank you for standing by. Welcome to the Autoliv first quarter 2024 financial results conference call.

Yes.

Speaker Change: Good day and thank you for standing by welcome to the first quarter of 2020 full financial results Conference call. At this time all participants are in listen only mode. After the speaker's presentation, there will be the question and answer session.

Operator: At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1-1 on your telephone keypad. You will then hear an automated message advising that your hand is raised. To withdraw a question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Anders Trapp. Please go ahead.

Speaker Change: To ask a question during the session you need to press star one bomb on the telephone keypad, you weren't yet and not the magic magic you'd like them to have this race.

Speaker Change: So we drove a question please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your first speaker today on this topic. Please go ahead.

Anders Trapp: Welcome, everyone, to our first quarter 2024 earnings call. On this call, we have our President and Chief Executive Officer, Mikael Bratt, and our Chief Financial Officer, Fredrik Westin, and me, Anders Trapp, VP, Investor Relations. During today's earnings call, Mikael and Fredrik will, among other things, provide an overview of our strong sales, earnings, and cash flow development in the quarter, and how our strong balance sheet and asset return rates support the continued high level of shareholder returns.

Speaker Change: Thank you and I'll deal with.

Speaker Change: Welcome everyone to our first quarter 2024 earnings call on this call, we have our president and Chief Executive Officer.

Speaker Change: And our Chief Financial Officer, the adequacy and me.

Speaker Change: On the sharp VP Investor Relations.

Speaker Change: During today's earnings call Nicholas.

Nicholas: Will among other things provided an overview of our strong sales earnings and cash flow development in the quarter.

Nicholas: Our strong balance sheet and asset return rates supports the continued high level of shareholder returns.

Anders Trapp: They will outline the expected sequential margin improvement in 2024 towards our target. And we will also, as usual, provide an update on our general business and market conditions. We will then remain available to respond to your questions. And, as usual, the slides are available on Autoliv.com. Turning to the next slide, we have the Safe Harbor Statement, which is an integrated part of this presentation and includes the Q&A that follows. During the presentation, we will reference some non-U.S. gap measures.

Nicholas: They will outline the expected sequential margin improvement in 2024 towards our targets.

Nicholas: And we will also as usual provided updates on our general business and market conditions, we will remain available to respond to your questions as usual the slides are available on <unk> dot com.

Nicholas: Turning to the next slide.

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

Nicholas: During the presentation, we will reference some non us GAAP measures.

Anders Trapp: The reconciliations of historical use gap to non-use gap measures are disclosed in our quarterly earnings release, which is available on Autoliv.com and in the 10Q that will be filed with the SEC. Lastly, I should mention that this call is intended to conclude at 3 p.m. Central European time. So please limit your questions to two per person. I will now hand over to our CEO, Mikael Bratt.

Nicholas: The reconciliations of historical U S GAAP to non us GAAP measures are disclosed in our quarterly earnings release, which is available on hopefully to come on in the 10-Q that will be filed with the SEC.

Nicholas: Lastly, I should mention that this call is intended to conclude at three P. M. Central European time. So please follow a limit of two questions per person.

Nicholas: I will now hand over to our CEO Mick.

Mikael Bratt: Thank you, Anders. I want to express my appreciation to the entire Autoliv team for their unwavering dedication to achieve our goals and for delivering another strong quarter in a challenging environment. In the first quarter, global light vehicle production declined year over year by around 1%, according to S&P Global. We saw no improvement in call of volatility compared to fourth quarter 2023.

Mick: Thank you and us looking on the next slide.

Mick: Yeah.

Mick: I want to express my appreciation to the entire outlet team for their unwavering dedication to achieve our goals.

Mick: And for delivering another strong quarter in a challenging environment.

Mick: In the first quarter global light vehicle production declined year over year by around 1%.

Mick: According to S&P global we.

Mick: We saw no improvement in call of volatility compared to fourth quarter 2023.

Mikael Bratt: Despite somewhat weaker than expected light vehicle production, we achieved our margin indication for the first quarter, and we are on track towards our full year guidance. In the quarter, organic sales grew by 5%, outperforming light vehicle production significantly, especially in India, South Korea, and Japan.

Mick: Despite somewhat weaker than expected light vehicle production, we achieved our margin indication for the first quarter and we are on track towards our full year guidance.

Mick: In the quarter organic sales grew by 5% outperforming light vehicle production significantly, especially in India, South Korea and Japan.

Mikael Bratt: The strong growth was mainly a result of product launches last year. We generated broad-based improvement year-over-year in key areas, including gross margin, operating margin, and operating cash flow. This quarter marks the seventh straight quarter with more than 30 percent year-over-year increase in adjusted operating profit. The debt leverage was virtually unchanged versus Q4 2023, despite share repurchases of 160 million US dollars in the court.

Mick: This strong growth was mainly a result of product launches last year.

Mick: We generated a broad based improvement year over year in key areas, including gross margin operating margin and operating cash flow.

Mick: This quarter marks the seventh straight quarter with more than 30% year over year increase in adjusted operating profit.

Mick: The depth leverage was virtually unchanged versus Q4 2023, despite share repurchases of $160 million in the quarter.

Mikael Bratt: Under the current stock repurchase program, we have repurchased and cancelled 6.5 million shares for close to 630 million US dollars. We are making progress towards our previously announced intention of reducing our indirect workforce by up to 2000 people. We expect savings of around 50 million in 2024 from these initiatives. We are reconfirming the full year 2024 guidance, which sets a strong base for continued high levels of shareholder returns and our adjusted operating margin target of around 12 percent. However, the heightened seasonality of earnings of prior years is likely to be repeated in 2024.

Mick: Under the current stock repurchasing repurchase program, we have repurchased and canceled six 5 million shares for close to 630 million U S dollars.

Mick: We are making progress towards our previously announced intention of reducing our indirect workforce by up to 2000 people.

Mick: We expect savings of around 50 million in 2024 from these initiatives.

Mick: We are reconfirming, the full year 'twenty 'twenty, four guidance, which sets a strong base towards continued high level of shareholder returns and our adjusted operating margin.

Mick: <unk> of around 12%.

Mick: However, the heightened seasonality of earnings of prior years is likely to be repeated in 2024.

Mikael Bratt: Now looking at the sustainability highlights on the next slide. Sustainability is a fundamental part of our business strategy. It is an important driver for market differentiation and stakeholder value creation. Guided by our vision of saving more lives, we are driving a number of activities to take significant steps towards our climate commitment.

Mick: Now looking at the sustainability highlights on the next slide.

Mick: Sustainability is fundamental part of our business strategy.

Mick: It is an important driver for market differentiation and stakeholder value creation.

Mick: Guided by our vision of saving more lives, we are driving a number of activities to take significant steps towards our climate commitments.

Mikael Bratt: During the first quarter, we successfully issued a second green bond using Autoliv's sustainability financing framework aligned with the ICMA green bond principle. The bond drew significant interest from debt investors, reflecting the strong support for Autoliv's climate and sustainability agenda. Following Autoliv's first partnership in 2021 with SSAB, Fossil Free Steel, we are now introducing two additional collaborations for carbon-reduced steel with Arverde and ThyssenGrupp.

Mick: For example.

Mick: During the first quarter, we successfully issued our second green bond using outer leaves sustainability financing framework aligned with the economic Green bond principles.

Mick: The bond drew significant interest from depth investor.

Mick: Reflecting the strong support for our lives climate and sustainability agenda.

Mick: Following our lives first partnership in 'twenty to 'twenty, one with S. F. A b a fossil free steel.

Mick: We are now introducing two additional collaborations for carbon reduced theme.

Mick: We are about a day.

Mikael Bratt: The aim is to reduce greenhouse gas emissions in our products by utilizing low emission steel and increased use of recycled material. In addition to renewable electricity instruments, many Autoliv sites are increasing the use of on-site solar energy generation capacity. On this slide, you can see one of the new solar parks in Utah, US, supporting our operation. We are partnering with BISF to introduce a new type of design for recycling PU foam for steering wheel rims. This new type of form will enable simplified and scalable recycling.

Mick: And to Semgroup.

Mick: The aim is to reduce greenhouse gas emissions in our products by utilizing low emission steel and increased use of recycled materials.

Mick: In addition to renewable electricity the instruments, mainly out of these sites are increasing the use of on site solar energy generation capacity.

Mick: On this slide you can see one of the new solar parks in Utah U S supporting our operations.

Mick: We are partnering with b assets to introduce a new type of design for recycling.

Mick: <unk> for steering wheel ramps.

Mick: This new type of phone will enable simplified scalable recycling.

Mikael Bratt: Looking at our cost improvements on the next slide, we continue to generate broad-based improvements in key areas over the last 12 months. Our direct labor productivity continues to trend upward, supported by the implementation of our strategic initiatives, including optimization and digitalization. Furthermore, year over year, we have reduced our direct production personnel, despite higher volumes. Our gross margin declined from the seasonality of a strong from the seasonal strong fourth quarter, but it improved by 170 basis points year over year. The improvement was mainly the result of higher direct labor efficiency and reductions within the indirect work.

Mick: Looking on our cost improvements on the next slide.

Mick: Okay.

Mick: We continue to generate broad based improvements in key areas over the last 12 months.

Mick: Our direct labor productivity continues to trend up supported by the implementation of our strategic initiatives, including optimization and utilization.

Mick: Year over year, we have reduced our direct production personnel despite higher volumes.

Mick: Our gross margin declined from the seasonality of our strong from the seasonally strong fourth quarter, but put improved by 170 basis points year over year.

Mick: The improvement was mainly the result of the higher direct labor efficiency and reductions within the indirect workforce.

Mikael Bratt: Volume growth and customer compensation agreed last year. As a result of our structural efficiency initiatives, the positive trend for RD&E and SG&A in relation to sales has continued, declining by 60 basis points since Q1 2023. Combined with the gross margin improvement, this led to a substantial improvement in adjusted operating margin versus Q1 2023. Looking now at financials in more detail on the next slide.

Mick: Volume growth and customer compensation negotiated last year.

Mick: As a result of our structural efficiency initiatives.

Mick: Positive trend for audio knee and SG&A in relation to sales as continued <expletive>.

Mick: Declining by 60 basis points since Q1 2023.

Mick: Combined with the gross margin improvement.

Mick: This led to a substantial improvement in adjusted operating margin versus Q1 2023.

Mick: Looking now on financials in more detail on the next slide.

Mikael Bratt: Sales in the first quarter increased by 5% year-over-year, despite lower light vehicle production, a negative regional light vehicle production mix, and unfavorable currency translation effects. The increased sales and our cost reduction activities led to a substantial improvement in adjusted operating income, increasing by more than 50 percent to 199 million US dollars from 130 million last year. The adjusted operating margin was 7.6% in the quarter, a total increase of 230 basis points for the same period last year.

Mick: Sales in the first quarter increased by 5% year over year, Despite lower light vehicle production, a negative regional light vehicle production mix and unfavorable currency translation effects.

Mick: These sales increased and our cost reduction activities led to a substantial improvement in adjusted operating income increasing by more than 50% to 199 million U S dollars from 130 million last year.

Mick: The adjusted operating margin was seven 6% in the quarter.

Mick: And increased by 230 basis points for the same period last year.

Mikael Bratt: Operating cash flow was 122 million U.S. dollars, which was 168 million higher than in the same period last year as a result of improved working capital versus last year. Looking now at the structural cost savings activities on the next slide. To secure our medium and long-term competitiveness and to support our financial targets, we launched a cost reduction initiative in mid last year with the intent of reducing our indirect headcount by up to 2000.

Mick: Operating cash flow was $122 million, which was $168 million higher than in the same period last year as a result of improved working capital effects versus last year.

Mick: Looking now on the structural cost savings activities on the next slide.

Mick: To secure our medium and long term competitiveness and to support our financial targets, we launched a cost reduction initiative in mid last year with the intent to read of reducing our indirect head count by up to 2000.

Mikael Bratt: We estimate that the annual cost reduction will amount to around 130 million when fully implemented, with around 50 million already in 2024 and around 100 million expected in 2025. In 2024, we expect to cash out approximately 85 million related to this initiative. At the end of the first quarter, our indirect headcount had declined by around 1,000, or by more than 5% since a year ago, with the majority of the decrease within production overhead, especially in best-cost countries. We are already seeing a positive impact on direct labor productivity as a result of our initiative to reduce the direct workforce by the equivalent of up to 6000.

Mick: We estimate that the annual cost reduction will amount to around 130 million when fully implemented with around $50 million already in 2024 and around 100 million expected in 2025.

For 'twenty to 'twenty, four we expect to cash out approximately 85 million related to these initiatives.

Mick: At the end of first quarter, our indirect head count has declined by around 1000.

Mick: Or by more than 5% since a year ago with the majority of the decrease within production overhead, especially in best cost countries.

Mick: We are already seeing a positive impact on direct labor productivity as a result of our initiative to reduce the direct workforce by the equivalent of up to 6000.

Mikael Bratt: Looking now at our sales growth in more detail on the next slide, our consolidated net sales increased by more than 2.6 billion, a new record for the first quarter. This was approximately 120 million higher than a year earlier, driven by price, volume, and product mix, partly offset by lower light vehicle production, a negative geographical light vehicle production mix, and current. Currency translation effects reduced sales by 12 million or by 0.5%. Looking at the regional sales split, Asia accounted for 37%, America for 34%, and Europe for 29%.

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

Mick: Okay.

Our consolidated net sales increased by more than two 6 billion.

Record for the first quarter.

Mick: This was approximately $120 million higher than a year earlier driven by price.

Mick: Volume and product mix, partly offset by lower light vehicle production.

Mick: Negative geographical nice vehicle production mix and currencies.

Currency translation effects reduced sales by $12 million or by 5%.

Mick: Looking on the regional sales split.

Mick: Asia accounted for 37% Americas, 434% and Europe with 29%.

Mikael Bratt: The lower than usual share of total sales in Asia was a result of the Lunar New Year and low light vehicle production in Japan due to customers having certification issues with certain vehicle models. We outline our organic sales growth compared to light vehicle production on the next slide. I am very pleased that our organic sales growth outperformed global light vehicle production significantly as we continue to execute on our strong order book. According to S&P Global, first quarter light vehicle production decreased by 1% year-over-year.

Mick: The lower than usual share of the total sales in Asia was a result of the lunar new year and low light vehicle production in Japan due to customers, having certification issues with short term vehicle models.

Mick: We outline our organic sales growth compared to light vehicle production on the next slide.

Mick: Yeah.

I am very pleased that our organic sales growth outperformed global light vehicle production significantly as we continue to execute on our strong order book.

Mick: According to S&P global first quarter light vehicle production decreased by 1% year over year.

Mikael Bratt: This was more than one percentage point lower than expectations at the beginning of the quarter, with most of the lower than expected production coming from Japan and from global OEMs in China. We estimate that the geographical light vehicle production mix had a 140 basis points negative impact on our outperformance. In the quarter, we outperformed global light vehicle production by more than six percentage points, with strong performance, especially in the rest of Asia and in Japan.

Mick: This was more than one percentage points lower than expectations at the beginning of the quarter.

Mick: With most of the lower than expected production coming in Japan, and with global Oems in China.

Mick: We estimate that the geographical light vehicle production mix.

Mick: 140 basis points negative impact on our outperformance.

Mick: In the quarter, we outperformed global light vehicle production by more than six percentage points with strong performance, especially in the rest of Asia and India pack.

Mikael Bratt: The strong outperformance in the rest of Asia was mainly driven by India, where sales outperformed light vehicle production by 20%, basis points due to higher installation rates. In comparison, the modest outperformance in China was mainly a result of an unfavorable customer mix, following strong light vehicle production growth for lower safety content vehicles. On the next slide.

The strong outperformance in rest of Asia was mainly driven by India, where sales outperformed light vehicle production by 20.

Mick: Basis points due to higher installation rates for side airbags.

Mick: In comparison.

Mick: The modest outperformance in China was mainly a result of unfavorable customer mix following strong light vehicle production growth for lower safety content vehicles.

Mick: On the next slide.

Mikael Bratt: Although we see some changes to our customers' plans for model launches, especially for EV models, we expect a record number of product launches for 2024. Despite some changes to model launch plans by some customers, the trend toward electrification continues, although at a somewhat slower pace. On this slide, seven models are being made available as electrical versions. The models shown here have an Autoliv content per vehicle from around $130 to over $400.

Mick: Although we see some changes to our customers' plans for model launches, especially for EV models, we expect a record number of product launches for 2024.

Mick: Despite some changes to model launch plans by some customers the trend towards electrification continues although at.

Mick: Somewhat slower pace.

Mick: On this slide seven models are being made available as electrical versions.

Mick: The models shown here have an hour to live content per vehicle from around 130 to over 400 U S dollars.

Mikael Bratt: In terms of Autoliv sales potential, the BMW 5 Series Touring launch is the most significant, followed by the Subaru Forester. The long-term trend to higher content per vehicle is supported by front center airbags on three of these models. More advanced seatbelts and pedestrian protection airbags and hoodlifts. Another interesting launch is the Tata Punch EV that illustrates the trend towards more sophisticated safety systems and higher safety content in India. I will now hand it over to our CFO, Fredrik Westin, who will talk you through the financials on the next slide.

Mick: In terms of our delayed sales potential.

Mick: M. W. Five series touring launch is the most significant followed by the Subaru Forester.

Mick: The long term trend to higher content per vehicle is supported by front center airbags on three of these models.

Mick: More advanced seatbelts, and pedestrian protection airbag and Hood lifters.

Mick: Another interesting launch is the Tata punch EV that illustrate.

Mick: The trend towards more sophisticated safety systems and higher safety content in India.

Speaker Change: I will now hand, it over to our CFO Fredrik Westin, who will talk you through the financials on the next slides.

Fredrik Westin: This slide highlights our key figures for the first quarter of 2024 compared to the first quarter of 2023. Our net sales were $2.6 billion. This was a 5% increase. Gross profit increased by 64 million, or by 17 percent, to 443 million, while the gross margin increased by 1.7 percentage points to 16.9 percent. The adjusted operating income increased from $131 million to $199 million, and the adjusted operating margin increased by 230 basis points to 7.6 percent. Non-GAP adjustments amounted to $5 million for capacity alignments and antitrust-related matters.

Fredrik Westin: Thank you Mikael.

Fredrik Westin: This slide highlights our key figures for the first quarter of 2024 compared to the first quarter of 2023.

Fredrik Westin: Our net sales were $2 6 billion. This was a 5% increase.

Fredrik Westin: Gross profit increased by $64 million or by 17% to $443 million.

Fredrik Westin: The gross margin increased by one seven percentage points to 16, 9%.

Fredrik Westin: The adjusted operating income increased from $131 million to $199 million.

Fredrik Westin: Adjusted operating margin increased by 230 basis points to seven 6%.

Fredrik Westin: non-GAAP adjustments amounted to $5 million from capacity alignments and antitrust related matters.

Fredrik Westin: Adjusted earnings per share diluted increased by 68 cents, where the main drivers were 54 cents from higher operating income and 10 cents from lower income tax. Our adjusted return on capital employed and return on equity increased to 20 and 21 percent, respectively. We paid a dividend of 68 cents per share in the quarter and repurchased and retired 1.4 million shares for around 160 million US dollars under our $1.5 billion stock repurchase program.

Fredrik Westin: Adjusted earnings per share diluted increased by 68 cents were the main drivers were <unk> 54 from higher operating income and 10 cents from lower income taxes.

Fredrik Westin: Our adjusted return on capital employed and return on equity increased to 20 and 21% respectively.

Fredrik Westin: We paid a dividend of 68 per share in the quarter and repurchased and retired one 4 million shares for around $160 million.

Fredrik Westin: Under our $1 $5 billion stock repurchase program.

Fredrik Westin: Looking now at the Adjusted Operating Income Bridge on the next slide, in the first quarter of 2024, our adjusted operating income of $199 million was $68 million higher than the same quarter last year. Our operations were positively impacted by cost-saving activities, higher volumes, and commercial recoveries, partly offset by headwinds from general cost inflation. The net currency effect was 8 million dollars negative, as we continued to see negative effects, mainly from the strengthening of the Mexican peso and the weakening of the Japanese yen and Korean won, but partly offset by a positive impact from the Turkish lira. The impact of raw materials and out-of-period cost compensation was negligible.

Fredrik Westin: Looking now on adjusted operating income bridge on the next slide.

Fredrik Westin: Okay.

Fredrik Westin: In the first quarter of 2024, our adjusted operating income of $199 million was $68 million higher than the same quarter last year.

Fredrik Westin: Our operations were positively impacted by cost saving activities higher volumes and commercial recoveries, partially offset by hand with headwinds from general cost inflation.

Fredrik Westin: The net currency effect was $8 million negative as we continue to see negative effect, mainly from the strengthening of the Mexican peso and the weakening of the Japanese yen and Korean won.

Fredrik Westin: Partly offset by positive impact from the Turkish lira.

Fredrik Westin: The impact from raw materials and out of period period cost compensation were negligible.

Fredrik Westin: Costs for SG&A and RD&E net combined were 4 million lower despite labor cost inflation. In relation to sales, SG&A and RD&E net combined declined by 60 basis points. As a result of our cost-saving activities, the leverage excluding currency effects on the higher sales was substantially above our normal 20 to 30 percent range. Looking now at the cash flow more in detail on the next slide. For the first quarter of 2024, operating cash flow increased by 168 million to 122 million compared to the same period last year, mainly due to improved working capital effects versus last year. Capital expenditures net decreased to 140 million from 143 million last year.

Fredrik Westin: Costs for SG&A and <unk> combined.

Fredrik Westin: Was $4 million lower despite labor cost inflation.

Fredrik Westin: In relation to sales SG&A in <unk> net combined declined by 60 basis points.

Fredrik Westin: As a result of our cost saving activities the leverage excluding currency effects.

Fredrik Westin: On the higher sales was substantially above our normal 20% to 30% range.

Fredrik Westin: Looking now on the cash flow more in detail on the next slide.

Fredrik Westin: Yeah.

Fredrik Westin: For the first quarter of 2020 for operating cash flow increased by $168 million to $122 million compared to the same period last year, mainly due to improved working capital effects versus last year.

Fredrik Westin: Capital expenditures net decreased to $140 million from $143 million last year.

Fredrik Westin: In relation to sales, it was 5.4% this year, down from 5.7% last year. The free cash flow improved by 171 million compared to the same period the prior year, mainly due to the improved operating cash. The last 12 months' cash conversion, defined as free cash flow in relation to net income, was 108%. Now, looking at our trade working capital development on the next. During the first quarter, trade working capital increased by 104 million, driven by 123 million lower accounts payable, partly offset by 15 million in lower inventories and by 4 million in lower receivables. The lower inventories and receivables were mainly due to lower sales than in the fourth quarter of last year.

Fredrik Westin: In relation to sales it was one it was five 4% this year down from five 7% last year.

The free cash flow improved by $171 million compared to the same period. The prior year, mainly due to the improved operating cash flow.

Fredrik Westin: The last 12 months cash conversion defined as free cash flow in relation to net income was 108%.

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

Fredrik Westin: During the first quarter trade working capital increased by $104 million, driven by $123 million lower accounts payables, partly offset by $50 million of lower inventories and by $4 million in lower receivables.

Fredrik Westin: Lower inventories and receivables were mainly due to lower sales than in the fourth quarter of last year.

Fredrik Westin: Compared to the same period last year, trade working capital decreased from 14.1% to 12.8% in relation to sales. Our capital efficiency program aims to improve working capital by 800 million, and to date, we have achieved around 500. Improvements in receivables and especially in inventories are lagging due to the high level of volatility and hence planning challenges that cause inefficiency. Over the coming years, we expect inventories to improve significantly in tandem with a reduced core volatility.

Fredrik Westin: Compared to the same period last year trade working capital decreased from 14, 1% to 12, 8% in relation to sales.

Fredrik Westin: Our capital efficiency program aims to improve working capital by $800 million and to date, we have achieved around $500 million.

Fredrik Westin: Improvements in receivables and especially in inventories are lagging due to the high call of volatility enhanced planning challenges that caused inefficiencies.

Fredrik Westin: Over the coming years, we expect the inventories to improve significantly in tandem with the reduced core of volatility.

Fredrik Westin: Now look at our leverage ratio on the next slide. Our continued focus on balance sheet efficiency is supporting our strong performance for cash flow, cash conversion, and return on capital employment. I am particularly pleased with our leverage ratio, which improved compared to a year ago, despite investing in our footprint and returning 700 million US dollars to shareholders. The debt leverage ratio at the end of March 2024 was 1.3 times, up 0.1 times from last quarter.

Fredrik Westin: Now looking on our leverage ratio on the next items.

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

Fredrik Westin: Particularly pleased with our leverage ratio, which improved which improved compared to a year ago. Despite investing in our footprints and returning $700 million U S dollars to shareholders.

Fredrik Westin: The debt leverage ratio at the end of March 2024 was one three times up 0.1 time from last quarter.

Fredrik Westin: Compared to the fourth quarter of 2023, our net debt increased by $184 million while the 12-month trailing adjusted EBITDA improved by $72 million. We expect that our debt leverage and positive cash flow trend will allow for continued high shareholder returns going forward. Now looking at shareholder returns over the past five years on the next slide. Over the years, Autoliv has shown its ability to generate solid cash flow in periods with varying market environments. We have used both dividend payments and share repurchases to create shareholder value. Historically, the dividend has usually represented a yield of approximately 2-3% in relation to the average share price.

Fredrik Westin: Compared to the fourth quarter 2023, our net debt increased by $184 million, while the 12 months trailing adjusted EBITDA improved by $72 million.

Fredrik Westin: We expect that our debt leverage and positive cash flow trend will allow for continued high shareholder returns going forward.

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

Fredrik Westin: Over the years out to leave has shown its ability to generate solid cash flow and periods with varying market environments.

Fredrik Westin: We have used both dividend payments and share repurchases to create shareholder value.

Fredrik Westin: Historically, the dividend has usually represented a yield of approximately 2% to 3% in relation to the average share price.

Fredrik Westin: During the last 12 months, we have returned around 700 million U.S. dollars to shareholders through both dividends and share buybacks, a new record for the company. In the last five years, we have reduced the net debt significantly while returning 1.5 billion U.S. dollars directly to shareholders. This includes stock repurchases and cancellations of 6.5 million shares for a total of close to 630 million US dollars as part of the current stock repurchase program. Since we initiated the current stock repurchase program in 2022, we have reduced the number of outstanding shares by more than 7%.

Fredrik Westin: During the last 12 months, we have returned around $700 million to shareholders through both dividends and share buybacks, a new record for the company.

Fredrik Westin: Over the last five years, we have reduced our net debt significantly while returning $1 $5 billion directly to shareholders. This includes stock repurchases and cancellations of $6 5 million shares for a total of close to $630 million as part of the current stock repurchase program.

Fredrik Westin: Since we initiated the current stock repurchase program in 'twenty to 'twenty, two we have reduced the number of outstanding shares by more than 7%.

Fredrik Westin: We consider several factors when executing the program, such as our balance sheet, the cash flow outlook, our credit rating, and the general business conditions, and not only the debt leverage rate. We always strive to balance what is best for our shareholders, both short and long term. Now, looking at our efficient balance sheet that supports our shareholder returns on the next. A strong balance sheet and good return on capital employed are fundamental for long-term shareholder value creation.

Fredrik Westin: We consider several factors when executing the program such as our balance sheet and cash flow outlook, our credit rating and the general business conditions and not only the debt leverage ratio.

Fredrik Westin: We always strive to balance what is best for our shareholders, both short and long term.

Fredrik Westin: Now looking on our efficient balance sheet that supports our shareholder returns on the next slide.

Fredrik Westin: Our strong balance sheet and good return on capital employed is fundamental for long term shareholder value creation.

Fredrik Westin: Despite an operating margin impacted by the challenging market environment for the past five years, our return on capital employed has remained strong, averaging around 17%. Our capital turnover rate, meaning our sales in relation to average capital employed, has improved substantially over the past three years and is now significantly above our five-year average. With that, I hand it back to you, Michael.

Fredrik Westin: Despite an operating margin impacted by the challenging market environment for the past five years, our return on capital employed have remained strong averaging around 17%.

Fredrik Westin: Our capital turnover rate, meaning our sales in relation to average capital employed has improved substantially over the past three years and is now significantly above our five year average.

Mikael Bratt: Thank you, Fredrik. Now on to the next slide. Despite still elevated interest rates, global light vehicle production continues to show relative strength. S&P Global's updated forecast for full year 2024 indicates a modest decline of 0.4% instead of 0.8% three months ago. With additional volume increases, primarily in China and North America. Dry plain mix developments vary by region, as certain markets face somewhat slower EV growth rates, while other areas continue to see rather high demand for EVs.

Speaker Change: With that I'll hand, it back to you <unk>.

Speaker Change: Thank you for your rig onto the next slide.

Despite still elevated interest rates the global light vehicle production continues to show relative strength S&P.

Speaker Change: S&P Global's updated forecast for full year 2024 indicates a modest decline of <unk>, 4% instead of 8% three months ago.

Speaker Change: With additional volume increases primarily in China, and North America.

Speaker Change: Drivetrain mix developments varied by region as certain market faced somewhat slower EBIT growth rates, while other areas continue to see.

Speaker Change: Order high demand for Evs.

Mikael Bratt: S&P Global expects second-quarter global light vehicle production to increase by close to 3%, while the second half of the year declines almost 2% compared to last year. Light vehicle production in China continues to be supported by strong EV demand and export activity. The outlook for North American light vehicle production for 2024 was revised higher to 14.6 million units based on demand, resilience, less impact from supply chain issues, and increasing inventory levels of new vehicles.

Speaker Change: S&P Global expect second quarter Global light vehicle production to increase by close to 3% when does the second half of the year declining almost 2% compared to last year.

Speaker Change: Light vehicle production in China continues to be supported by strong EBIT demand and export activity.

Speaker Change: The outlook for North American light vehicle production for 2024 was revised higher to $14 6 million units on demand resilience less impacts from supply chain issues and increasing inventory levels of new vehicles.

Mikael Bratt: The light vehicle production forecast for Europe has increased slightly to minus two, mainly due to stronger than expected actuals in the first quarter. Based on S&P Global's forecast and our own analysis, our 2024 guidance is built on a global light vehicle production decline of around 1% for the full year. Now looking at the business outlook on the next slide, we continue to see significant improvements in Adjusted Operating Margin in 2024 compared to 2023, supported mainly by organic sales growth, a more stable light vehicle production, structural and strategic initiatives, cost control, and customer compensation.

Speaker Change: The light vehicle production forecast for Europe as increased slightly to minus two mainly due to stronger than expected actuals in the first quarter.

Speaker Change: Based on S&P, globals forecast and our own analysis, our 'twenty to 'twenty four guidance is built on our global light vehicle production decline of around 1% for the full year.

Speaker Change: Now looking on the business outlook on the next slide.

Speaker Change: We continue to see significant improvements in adjusted operating margin in 2024 compared to 2023 supported mainly by organic sales growth a more stable light vehicle production structure and strategic initiatives cost control and cost.

Speaker Change: Customer compensations.

Mikael Bratt: We continue to face inflationary pressure, especially labor costs, and we expect compensation for what is in excess of what we can offset through normal productivity measures. The discussions with our customers are progressing according to plan. We anticipate that price adjustments and cost compensation will gradually, throughout the year, offset cost inflation.

Speaker Change: We continue to face inflationary pressure, especially labor costs, and we expect compensation for what is in excess of what we can offset through normal productivity measures.

Speaker Change: These discussions with our customers are progressing according to plan.

Speaker Change: We anticipate that price adjustments and cost compensations will gradually throughout the year offset cost inflation.

Mikael Bratt: We expect the pattern to be similar to the quarterly pattern seen in 2022 and 2023. Looking at our 2024 financial guidance on the next slide. This slide shows our full-year 2024 guidance, which excludes effects from capacity alignment, antitrust-related matters, and other discrete items. Our full-year guidance is based on a global light vehicle production decline of around 1%. Our organic sales are expected to increase by around 5%. No net carousel translation effects are expected on sales.

We expect the pattern to be similar to the quarterly pattern seen in 2022 and 2023.

Speaker Change: Looking at our 2024 financial guidance on the next slide.

Speaker Change: Yeah.

Speaker Change: This slide shows our full year, 2024 guidance, which excludes FX for capacity alignment antitrust related matters and other discrete items.

Speaker Change: Our full year guidance is based on a global light vehicle production decline of around 1%.

Speaker Change: Our organic sales is expected to increase by around 5%.

Speaker Change: Net currency translation effects are expected on sales.

Mikael Bratt: The guidance for adjusted operating modem is around 10.5%. Operating cash flow is expected to be around 1.2 billion US dollars. Our positive cash flow trend should allow for continued high shareholder return. We propose a tax rate of around 28 percent in line with our previous indications of 25 to 30 percent as the new normal tax rate.

Speaker Change: The guidance for adjusted operating margin is around 10, 5%.

Speaker Change: Operating cash flow is expected to be around one 2 billion U S dollars.

Speaker Change: Our positive cash flow trend should allow for continued high shareholder returns.

Speaker Change: We precede a tax rate of around 28% in line with our previous indications of 25% to 30% as the new normal tax rate.

Operator: Looking to the next slide. This concludes our formal comments for today's earnings call, and we would like to open the line for questions from analysts and investors. I now hand it back to Nadja. Thank you so much, dear participants.

Speaker Change: Looking on the next slide.

Speaker Change: This concludes our formal comments for today's earnings call and we would like to open the line for questions from analysts and investors.

Speaker Change: Ill hand, it back to not yet.

Operator: Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. This will take a few moments. Now we're going to take the first question, and it comes from Colin Langan from Wells Fargo. Your line is open; please ask your question.

Speaker Change: Thank you so much damn participants as a reminder, if you wish to ask a question. Please press star one on your telephone keypad and Lake Finance will be announced to Richard a question. Please press star one again.

Mr. Bob will compile the key narrow studies will take a few moments.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: And now we're going to take the first question and this comes from the line of Colin Langan from.

Colin Langan: Wells Fargo. Your line is open please ask your question.

Colin Langan: Oh, thanks for taking my questions. You know, it seems like your recoveries seem to be trending well in Q1, but there have been some concerning headlines. I think at least one automaker has announced some sort of "no more claims" policy. Are you finding it harder to get recoveries from automakers? Is there a lot more pushback as we're starting?

Colin Langan: Oh, thanks for taking my questions.

Colin Langan: It seems like your recovery seem to be trending well in Q1, but has there been some concerning headlines I think at least one automakers' announced I'm sorry, no more claims policy are you finding it harder to get recoveries from automakers. This there are a lot more pushback is we're starting the year.

Mikael Bratt: Thank you for your question there, and I think I have mentioned it many times before here, and that is the fact that I would say it has never been easy to negotiate these claims. However, I think that over the last two years here, we have found a way of working together with our customers and how to identify fair compensation here, and as we have also mentioned, it's a very detailed negotiation because it's a fact-based and evidence-based discussion here, and as we've indicated for you here in the first quarter, we are progressing according to plan, and yeah, I think we have had good discussions with our customers on the But, of course, it is tedious work to go through.

Speaker Change: Thank you for your question.

Speaker Change: And I think.

Speaker Change: Mentioned it many times before here and that is the fact that I would say.

Speaker Change: It's never been easy to.

Speaker Change: And to negotiate these these claims however, I think that.

Speaker Change: Over the last two years here, we have found a way of working together with our customers.

Speaker Change: How to identify a fair compensation here.

Speaker Change: We are also measuring instead of a detail.

<unk>, because it's a fact based and evidence based.

Speaker Change: Discussion here.

Speaker Change: As we have indicated for you here on the first quarter, we are progressing according to plan and yes, I think we have.

Speaker Change: Good good discussions with our customers on the way forward here, but of course, it's a it is a tedious work to.

Mikael Bratt: Got it. I think one of the other factors of getting to 12% was the lack of call-offs on schedules. I mean, how is that trending? Is that getting closer to back to historical norms, or is there still, you know, room there?

Speaker Change: Go through.

Speaker Change: Got it.

Speaker Change: What are the other factors are getting to the 12% was okay.

Speaker Change: Okay.

Speaker Change: Lack of call offs on schedules.

Speaker Change: How is that trending is that getting closer to back to historical norms or is there still.

Speaker Change: From there to improve.

Mikael Bratt: Compared to one year ago, of course, we see improvements, and we saw gradual improvement during 2023. We ended the year over at around 90% accuracy when it comes to the call-offs, and now in Q1, we don't see any sequential improvements, so we are still at around 90% here. However, what we see is, of course, that it's not the same customers that have the same challenges, so it varies a little bit between the customers, but in the larger scheme, it's very much the same as we had in Q4.

Speaker Change: Compared to one year ago.

Speaker Change: Of course, we see improvements and we saw a gradual improvement during 2023, we ended the year older round, 90% ish accuracy when it comes to the call offs and.

Speaker Change: Now in Q1, we said, we don't see any sequential improvement. So we are still around.

Speaker Change: 90% tier however, what we see is of course that is not the same customers that have the same challenge yet so it varies a little bit.

Speaker Change: Between the customers, but in la.

Speaker Change: Sure.

Speaker Change: Very much the same as we had in Q4.

Mikael Bratt: And the 90% comparison. Yeah, sorry. I mean, before the pandemic, and what we judge as normal is more the 98 to 100 percent accuracy interval.

Speaker Change: And the 90% compares to like 98% historically, yes, sorry, I mean before the pandemic and what we are just normal it's more of the 98% to 100% accuracy and towards.

Colin Langan: Got it. Thanks for taking my question. Thank you.

Speaker Change: Got it alright, thanks for taking my questions.

Speaker Change: Thank you. Thank you.

Operator: Now we're going to take our next question. Please give us a moment. And the next question comes from the line of Matthias Holmberg from DMB Markets. Your line is open. Please ask your question.

Speaker Change: Now I will go and take our next question.

Speaker Change: Could you give us amendment.

Speaker Change: And the next question comes from the line of Matthew has come back from Dnb markets. Your line is open. Please ask your question.

Matthias Holmberg: Thank you, and good afternoon, and good morning. I'm a bit curious about the margin guidance here, given that you come in stronger than expected in the first quarter and still leave the full year guidance intact. Does that imply that the year will be less back-end loaded, or is it simply that you don't think that the Q1 bit was material enough to warrant raised guidance for the full year?

Matthew: Thank you and good afternoon good morning.

Matthew: But curious on the margin guidance here.

Matthew: Given that you come in stronger than expected in the first quarter and still leave.

Matthew: Full year guidance intact.

Matthew: Is that imply that the year will be less backend loaded.

Matthew: Or is it simply that you don't think that the Q1 beat was material enough to warrant a raise guidance for the full year. Thank you.

Mikael Bratt: Yeah, thanks for the question. Yeah, we had a bit weaker top line here in the first quarter than expected, but that was offset by better cost control and also some of the cost reduction activities coming through faster than we had planned. But that does not really change the picture for the full year in terms of the expected cost savings. And so for the full year, I think we had a good start to the year, but most of our assumptions here for the full year remain intact. And that's also why we stick to the full-year guidance.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: We had a bit weaker top line here in the first quarter than expected, but that was offset by better cost control and also.

Speaker Change: Some of the cost reduction activities coming through faster than we had planned.

Speaker Change: But that does not really change the picture for the full year in terms of how they.

Speaker Change: Our expected cost savings.

Speaker Change: And so for the full year, but I think we had a good start of the year, but.

Speaker Change: Most of our assumptions here for the full year remain intact and that's also why we stick to our full year guidance.

Matthias Holmberg: All right, thank you. I have another question on the phasing of your market outperformance for the year, given what seems to be some delays you mentioned here, electric vehicles in particular. Does that change in any way when you expect to see your outperformance, or should we assume that, you know, the five or six percent that your organic growth guidance implies will be quite evenly spread throughout the year?

Speaker Change: Thank you.

Speaker Change: I have another question on <unk>.

Speaker Change: The facing of fewer market outperformance for the year, given what seems to be some some delays you mentioned here electric vehicles in particular.

Speaker Change: Does that change in any way.

Speaker Change: When you expect to see your outperformance of or should we assume that the five or 6% that your organic growth guidance implies would it be quite evenly spread throughout the year.

Mikael Bratt: We have not really indicated how it plays out here between the different quarters. I think when you see the change in the launch programs here or the movements between the different platforms, I would say, due to the very diverse portfolio that we have here and the neutrality when it comes to our products and the driveline connection here, we expect a limited, if any, impact from this. Of course, there is some work needed to be done in the rescheduling plan, but in terms of the overall launch and outperformance, it will have no impact.

Speaker Change: We have not indicated really how it plays out here between the different quarters.

Speaker Change:

Speaker Change: I think when you see the.

Speaker Change: The change in the launch programs here or the movements between the different platforms I would say due to the very diverse portfolio that we have here and.

Speaker Change: The neutrality when it comes to our products and the the driveline connection here.

Speaker Change: We expect the <unk>.

Speaker Change: Limited if any impact from from this of course studies.

Speaker Change: Work needed to be done in the rescheduled Larry plan, but in terms of the overall launch.

Speaker Change: And outperformance.

Matthias Holmberg: Thank you. A quick final one just on raw materials, a small headwind in the quarter. Do you have any visibility on where that's tracking for the second quarter?

Speaker Change: No impact on that or very limited.

Speaker Change: Thank you a quick final one just on raw materials, a small headwind in the quarter do you have any visibility on where that's tracking for the second quarter.

Mikael Bratt: We don't guide rheumatism on a quarterly basis, but I mean overall, we expect rheumatism to have a smaller impact for the full year. We see improvements in steel and non-ferrous metals, but that is offset on the textile side mainly, and also we expect to have increases on electronic components, but more or less a fairly neutral development for the full year.

Speaker Change: Yeah, We don't guide raw materials on the quarterly basis, but I mean overall, we expect raw materials to have a smaller impact.

Speaker Change: For the full year, we see.

So improvements on steel and nonferrous metals, but that offsets.

Speaker Change: On the on the textile side lately.

Speaker Change: And also we expect to have increases on electronic components, but more or less say fairly neutral development for the full year.

Matthias Holmberg: Thank you, and have a nice weekend. Thank you. Thank you.

Speaker Change: Thank you and have a nice weekend.

Speaker Change: Thank you Cynthia.

Speaker Change: Thank you.

Operator: Now we're going to take our next question, and it comes from the line of Dan Levy from Buckley. If your line is open, please ask your question.

Speaker Change: Yeah.

Speaker Change: Now that we will take our next question.

Speaker Change: And this comes from the line of Dan Levy from Barclays. Your line is open. Please ask your question.

Dan Levy: Hi, good morning.

Speaker Change: Yeah.

Dan Levy: Thank you for taking the question. I just wanted to get into the pricing cadence for the year. Maybe you could just comment. I think, you know, the comments you just provided implied that the 1Q margin strength was driven by better cost control.

Speaker Change: Hi.

Dan Levy: Good morning, Thank you for taking the questions.

Dan Levy: Just wanted to get in queue, the pricing cadence for the year, maybe you could just comment I think.

Dan Levy: The comment that you just provided implied is that.

Dan Levy: The debt.

Dan Levy: <unk> margin strength was driven by better cost control, but maybe you could just provide some comments on how the pricing benefits factored in Q1 key strength with anything pulled forward or was that as planned.

Mikael Bratt: I mean, we had commercial recoveries also in the first quarter, in line with our expectations. And, as we have said here, we are expecting a gradual improvement in compensation for the inflationary headwinds throughout the year. So we do expect higher commercial recoveries in the second quarter sequentially here. But also, we said that we don't expect to have an identical quarterly pattern as we had last year with a step up in every quarter. But that the gap between those two quarters could be a bit narrower this year than last year. But that's, I think, as much as we can say of it.

Dan Levy: Okay.

Dan Levy: I mean, we had commercial recoveries also in the first quarter in line with our expectations.

Dan Levy: And as.

Dan Levy: As we have said to you that we are expecting a gradual improvement on the compensation for the inflationary headwinds.

Dan Levy: Throughout the year, so we do expect.

Dan Levy: Higher commercial recoveries.

Dan Levy: In the second quarter sequentially here.

Dan Levy: And they'll also have said that we don't expect to have an identical quarterly pattern as we had last year with a step up.

Dan Levy: And every quarter.

Q2 and Q3.

Dan Levy: Gap between those two quarters could be a bit narrower this year than last year.

Speaker Change: But that's I think that's as much as we can say of how we expect the cadence here of the pricing to come through.

Dan Levy: Great, thank you. And then a second question is just on some of the outgrowth dynamics, and maybe just two parts to this. One, maybe you could just provide a comment on, you know, the outgrowth in China, which is a contrast versus, I guess, some of your peers. The other one is, I know we don't spend a lot of time on India, but Indian sales growth of 27%, which I think now, with that basically contributed to, even though it's a small base of sales, that's like a whole point of outgrowth for So maybe you could just talk about what's going on in India and the sustainability of those results. Is that going to be a meaningful contribution?

Speaker Change: Great. Thank you.

Speaker Change: And then the second question is just on some of the outgrowth dynamics and maybe just two parts to this one maybe you could just provide a comment on.

The outgrowth in China, which is a contrast versus I guess some of your peers. The other one is I know, we don't spend a lot of time on India, but India sales growth of 27%, which I think now would that basically contributed to even though it's a small base of sales.

Speaker Change: Our whole point of outgrowth for you. So maybe you could just talk about what's going on in India and the sustainability.

Of those results is that going to be a meaningful contributor to growth in the future for you.

Mikael Bratt: Very good. Thank you.

Mikael Bratt: No, I think what you see here is a reflection of our market position in different countries. I mean, we have a market-leading position in China, where we're working with a broad-based customer portfolio there. And obviously, we are one of the main Chinese OEMs here and have been working with them for a long time. So as they grow, of course, we grow together with them as we move forward here.

Speaker Change: Thank you.

Speaker Change: No I think what you see here is a reflection of our of our market.

Speaker Change: As shown in the different countries I mean, we we have a market leading position in China, where we're working with a broad based customer.

Speaker Change: Uh huh.

Speaker Change: Portfolio, there and obviously we are on.

Speaker Change: The main Chinese.

Speaker Change: Oems here.

I have been working with them for a long time.

Speaker Change: So as they grow of course, we grow together with them.

Mikael Bratt: India is a very interesting market for us. Also, there we have a local presence, and we have in the last couple of years also invested in our footprint there to make sure that we are ready and have the capacity here for what we have been expecting to see, which is then an increased focus on content and safety regulations in India, and we see that now is coming through. In India, we have a very strong position as well here and a market-leading position.

Speaker Change: As we move forward here.

Speaker Change: India is a very interesting market for US are also there we have.

Speaker Change: Our local presence and we have the last couple of years.

Speaker Change: <unk> invested in our footprint there too.

Speaker Change: Make sure that we are ready and have the capacity to hear for what we have been expecting to see.

Which is done an increased focus on content and safety.

Speaker Change: Safety regulations in China, and we also are in India, and we see that now.

Speaker Change: It's coming through in China, we have.

Speaker Change: Also India have been very strong.

Speaker Change: Position us well here in our market leading position so.

Mikael Bratt: So we look very positively on both this country and India, for sure, is taking significant steps to increase the required rules and regulations around the required safety components in their vehicles. And today, India has grown to become around four percent of our turnover, global turnover. So, a quite meaningful market here, and we expect that to grow, and we are very positively viewing that opportunity.

Speaker Change: We look very positively on both of these countries.

Speaker Change: India for sure is taking significant steps to increase the required rules and regulations around the required safety components in their vehicle.

Speaker Change: Today, India has grown to become around 4%, though our turnover.

Speaker Change: Global turnover, so quite meaningful market here, and we expect that to grow very positively viewing that.

Speaker Change: Opportunity.

Bjrn Enarson: Now we're going to take our next question, and the next question comes from Bjrn Enarson from Danske Bank. Your line is open, please ask your question.

Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Matt will then take over next question.

Matt: And our next question comes from the line of Gary Anderson from Basket Bank. Your line is open. Please ask your question.

Bjrn Enarson: Thank you. On India again, you have had higher market shares in your backlog for quite some time, and where are you now in terms of market shares in India, and do you still expect, according to your backlog, that to continue to grow in the next few years?

Gary Anderson: Thank you Ed.

Gary Anderson: On India again can you.

You have had a higher market shares in your backlog for quite some time.

Gary Anderson: Where are you now in terms of market shares in India and <unk>.

Speaker Change: You still expect that.

Speaker Change: According to your backlog to continue to grow in the next few years.

Mikael Bratt: We are really in a market-leading position there, and we have 60% of the Indian market. And that's, of course, something that we intend to defend and grow. And as I mentioned before here, we have made investments in China over the last couple of years, where we have renewed our footprint, and we have also added capacity and integrated more into the Indian market. So we now have an inflator plant in India, which we didn't have before, for example, in order to also respond to the increased demands coming from India here. So, yeah, I feel we are well positioned here to continue to grow with the Indian market.

We are really in a market leading position there and we have 60% of the Indian market.

Speaker Change: That's of course something that we.

Speaker Change: Intend to defend and grow.

Speaker Change: As I mentioned before here we have made.

Speaker Change: Investments in China last couple of years, where we have renewed our.

Speaker Change: Footprint and we have also added.

Speaker Change: Capacity and vertically integrated more into the Indian market. So we have now our inflator planting in India, which we didn't have before for example in order to so also respond to the increased demands coming in in India here.

Speaker Change: Yes, I feel we are well positioned here to continue to grow with the Indian market.

Bjrn Enarson: And then a second thing on EVs. I mean, what's your take on why EVs in certain markets are growing less and less popular? I guess, and you repeat that you're quite agnostic to the driveline, but still, what's your take on that?

Speaker Change: Capacity is that clearly.

Speaker Change: Second thing on EV I mean, what's your take on why yeah yeah.

Speaker Change: In certain markets.

Speaker Change: Growing less so less popular I mean, I guess and you repeat that you are quite agnostic to sort of drive the ironbark state.

Speaker Change: What's your take on that.

Mikael Bratt: I think there is a huge range of reasons in certain markets. I mean, it's very individual for the market, or I should say rather.

Speaker Change: No I think it's a huge range of of <unk>.

Speaker Change: So tomorrow.

Speaker Change: <unk>.

Speaker Change: Individual for the market I should say it order.

Bjrn Enarson: I mean, in some markets, there have been incentives which have disappeared. It has also been more costly to invest in an EV than a regular vehicle, and of course, now that the overall economic pressure on households is higher, maybe you are not prepared to make that investment, etc. And also, I think there are some challenges in certain markets when it comes to charging capacity and availability, etc. So, of course, there are a lot of things that influence the respective markets, but I would say that the trend for increasing EVs is here to stay, so it's more I would rather see a bump on the road. Okay, thank you.

Speaker Change: I mean in some markets there has been incentives which has disappeared.

Speaker Change: It does also being more costly to investing in and even done a regular vehicle and of course now it's the overall economic pressure on household is higher maybe you are not prepared to make that investments et cetera, and then also I think there is some challenges in certain markets when it comes to.

Speaker Change: Charging a capacity and availability etcetera. So of course, there is a lot of things that are.

Influence their respective markets, but I would say that the trend for increasing evs.

Speaker Change: As you have to stay so it's more of a royalty a bump on the road.

Speaker Change: Okay. Thank you.

Operator: Now we're going to take our next question, and the next question comes from Michael Jacks from Bank of America. Your line is open. Please ask your question.

Speaker Change: Thank you. Thank you.

Speaker Change: Now we're going to take our next question.

Speaker Change: And the next question comes from the line of Michael Jacks from Bank of America. Your line is open. Please ask your question.

Michael Jacks: Hi, thank you. Good afternoon, Mikael, and Fredrik. Thank you for the presentation. My first question, just going back on China, with the exception of Sherry, your business there was more influenced by the activities of foreign OEMs in Q1. Could you just remind us where your exposure to domestic OEMs now stands in China and how is that expected to evolve going forward based on what you currently see in your order book?

Michael Jacks: Hi, Thank you good afternoon, Mikael Fredrik. Thank you for the presentation.

Michael Jacks: First question, just going back on China, and with the exception of Sherry Your business. There was more influenced by the activities of foreign Oems in Q1.

Michael Jacks: Could you just remind us what is your exposure to domestic Oems now stand in China, and how is that expected to evolve going forward based on what you currently see in your order book.

Mikael Bratt: Yeah, I think when you look at our presence with the Chinese OEM, I feel very comfortable in the close collaboration we have here. And we expect the share of the Chinese OEM to continue to grow of our sales in China. In Q1, we are at 30 percent, and we expect the full year to increase to 40 percent. So, yeah, continued increased sales from Chinese OEMs as they continue to take market share and grow as well here. So we are very well positioned with our customers there.

Speaker Change: Yes, I think when you look at our.

Speaker Change: Press since with the Chinese OEM I feel very comfortable in the.

Speaker Change: The close collaboration we have here and we expect the share of the <unk>.

Speaker Change: Chinese OEM to continue to grow all of our sales to China.

Speaker Change: In Q1, we are at 30%.

Speaker Change: And we expect the full year to increase to 40% pace. So yes continued increased sales from Chinese OEM as they continue to do to take market share and grow as well here, so well positioned with our customer.

Michael Jacks: Yeah, that's quite a big step change. Thank you. And then my last question, just going back to the lack of improvements in call-off accuracy in Q1, is that being driven now by volatility on EV platforms, or are there still some other supply chain tensions around which you might be able to elaborate on?

Speaker Change: Customers there.

Speaker Change: Yes, that's quite a big step change. Thank you and then my last question just going back to the lack of improvement in call of accuracy. In Q1 is that being driven now by volatility on <unk> platforms or are they still some other supply chain tensions around which you might be able to elaborate on.

Mikael Bratt: I think it's very much a mix of supply chain issues mainly, and I think you can find the whole range here from still challenging logistics in the world, logistics flows here, and ship ship accuracy and so on. And in some areas, you have some labor challenges with high turnover and a lack of workforce. So it varies broadly between the different customers, I would say, and their respective supply. That's helpful.

Speaker Change: No I think it's very much a mix of supply chain issues mainland.

Speaker Change: And I think you can't find a whole range here from a still challenging logistics are in the world.

Speaker Change: Uh huh.

Speaker Change: Logistics flows here on cheap cheap accuracy and so on.

Speaker Change: Okay.

Speaker Change: Some areas you'll have some labor.

Speaker Change: We had a high turnover and lack of workforce so virus broadly between the different.

Speaker Change: Customers, I would say and their respective supply chains.

Michael Jacks: That's helpful, Culler. Thank you. Thank you.

Speaker Change: That's helpful color. Thank you.

Speaker Change: Thank you. Thank you. Thank you.

Speaker Change: Now we're going to take our next question.

Operator: Now we're going to take our next question, and the next question comes from Hampus Engellau from Handelsbanken. Your line is open, please ask your question. Thank you very much.

Speaker Change: And the next question comes from the line of Hospice and the Lau from Handelsbanken. Your line is open. Please ask your question.

Speaker Change: Thank you very much two questions from me.

Speaker Change: First question is on the six percentage points outgrowth from there.

Speaker Change: Q1 numbers, if you could maybe add some limit flavor, how much market share content growth and if there is also an element of price there.

Hampus Engellau: Thank you. No, I think, I mean, on the outperformance side, I mean, it's the, of course, content growth that we have talked about when it comes to content per vehicle here, which is in the range of one to two percentage points. And then pricing is a part of it. But then, of course, the most important contributor here is market share growth as we launch the new platforms here. So I would say mainly, you know.

Speaker Change: And second question.

Speaker Change: On <unk> I know, what I'm just going to.

Speaker Change: I really don't want before but just to get a sense on newer.

Speaker Change: Our all activities in Q1, even if you don't want to comment on market shares et cetera. Thanks.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: No I think I mean on the outperformance side I mean, it's of.

Speaker Change: Of course content growth that we have talked about when it comes to content per vehicle here. It was in the range of one to two percentage points.

Speaker Change: And then.

Speaker Change: Pricing is a part of it but then of course the.

Speaker Change: Portal contributor here is the market share growth as we launched the new <unk> platforms here.

Speaker Change: So I would say mainly.

Mikael Bratt: CPV and market share growth here as we look at the quarter here, but also for the full year. Pricing, as we said, it comes sequentially, contributing throughout the year here, but we also got some in the quarter. But we don't break down the exact details on it, but you have the components there. When it comes to new order intake, I would say Q1 has been a relatively low quarter in terms of award activities from our customers.

Speaker Change: CPD and market.

Speaker Change: Share growth here is as we looked at the quarter here, but also for the full year pricing as we said to come sequentially contributing and it's dropped.

Speaker Change: The year here, but you also got some some in the quarter, but we don't break down the <unk>.

Speaker Change: Details on it but do you have the components there.

Speaker Change: Comes through new order intake I would say Q1 has been.

Speaker Change: Relatively low.

Speaker Change: Quarter in terms of the award activities from our customers and that's what's also according to plan. So nothing strange Dr. But I feel that we continue to.

Mikael Bratt: And that was also according to plan. So, nothing strange there. But I feel that we continue to gain orders to defend the market share that we are in here and support our way forward here in a good way, backfilling the water book in a good way. Thank you.

Speaker Change: Gain a gain.

In order to defend the market share that we are in here in supporting our.

Speaker Change: Way forward here in the good way so.

Speaker Change: Doug filling the order book in a good way here.

Speaker Change: Thank you.

Operator: Now we're going to take our next question, and the next question comes from the line of Jaram Nathan from Odawa Capital Markets America. Your line is open. Please ask your question.

Speaker Change: Thank you. Thank you.

Speaker Change: Yeah.

Speaker Change: Now, we'll go and take our next question.

Speaker Change: And the next question comes from the line of Jairam Nathan from Daiwa Capital Markets America. Your line is open. Please ask your question.

Jaram Nathan: Hi. Thanks for the opportunity.

Jaram Nathan: So, I just wanted to kind of dig a little further on the last question. You know, if I look at your EBIT walk, 74 million, and compared to – it almost seems like the incremental margins are above 50%. Now, does that imply that your recoveries were probably a bigger portion, or your cost-saving activities are kind of kicking in? So, you know, just like how should we think of incremental margins going forward? Yeah, and I had one more question.

Hi, Thanks for thanks for the opportunity.

Jairam Nathan: I just wanted to kind of dig a little further on the last question. If I look at your EBIT walk at $74 million.

Jairam Nathan: And compared to.

Jairam Nathan: It almost seems like the incremental margins.

Jairam Nathan: Is it above 50% now does that imply that credit.

Jairam Nathan: Imply that youre the recoveries.

What's probably a bigger portion of your cost saving activities kind of kicking in.

Jairam Nathan: So just like.

How should we think of incremental margins going forward.

Mikael Bratt: Yeah, no, I think the high operating leverage was a combination of a couple of factors. I mean, of course, organic growth is one factor, but then it is mainly the contribution here with the cost reductions we've done on both the indirect labor side, but also the very good cost control we saw in the first quarter and also the very good advancement we have on direct labor productivity. Those are mainly the factors why we get to such a high operational leverage and are much less driven by price.

Speaker Change: Yeah, and I had one more question.

Speaker Change: Yes, no I think the the high operating leverage was.

Speaker Change: A combination of a couple of factors of course organic growth as well.

Speaker Change: One factor, but then it is mainly the contribution here with the cost reductions.

Speaker Change: We've done on both the indirect labor side.

Speaker Change: But also the very good cost control, we saw in the first quarter and also the.

Speaker Change: Very good advancement, we have all the direct labor productivity.

Those are mainly the factors why we get to such a high operational leverage and much less driven by by pricing.

Mikael Bratt: But then also, we had slightly lower premium freight costs in this quarter related to the better call of stability from our customers when you compare it to year over year. So it's really the underlying operational performance that is driving the level.

Speaker Change: But then also we had slightly lower premium freight cost in this quarter related to the better call of stability from our customers. When you compare it year over year. So it's really the answer.

Speaker Change: The lack of operational performance that is driving down the leverage.

Jaram Nathan: Okay, thanks. And just on, when you look at the regions, the regional mix, and regional performance, have you considered exports? Because you talked about South Korea being strong, and we are seeing a lot of exports out of South Korea, especially into the US. I'm guessing those are higher-contented vehicles. So have you done some analysis on how much exports are helping you in terms of content? I mean, we have...

Okay, Okay, Thanks, and just on.

Speaker Change: When I when you look at the regions the regional mix and reasonable performance have you considered exports because you've talked about South Korea.

Speaker Change: Being strong and we are seeing a lot of exports out of South Korea.

Speaker Change: Especially in the U S.

Speaker Change: Yeah.

Speaker Change: I'm guessing those are higher contented vehicles.

Speaker Change: Have you done some analysis on how much how much is.

Speaker Change: How much is exported helping.

Mikael Bratt: I mean, we have a structure and an approach where we sell to our customers in the regions where we produce, and of course, our customers can then return and export their vehicles to different parts of the world. But it doesn't really change our supply chain to our customers here. So we look at where the vehicle is produced, and that's the basics. And I don't see that we are going to change that. I think this regional approach and decentralized operational responsibility are serving us well. And yeah, it's something we're going to continue to build on.

Speaker Change: Helping you in terms of content.

Speaker Change: I mean, we have.

Speaker Change: Our structure on.

Speaker Change: So we sell to our customers in the regions, where we produce and of course, our customers, Canada and then to return export their vehicles to different <unk>.

Speaker Change: But it doesn't really change our supply chain to our customers here. So we looked at where is the vehicle produced and that's the basis and I don't see that we are going to change that.

Speaker Change: I think these regional approach and decentralized operational responsibilities is serving us well.

Yes, it's something we're going to continue to build on.

Operator: Now we're going to take our next question, and the next question comes from Agnieszka Villela from Nordea. Your line is open. Please ask your question.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: Now, we'll go and take our next question.

Speaker Change: And the next question comes from the line of Kevin.

Kevin: From Nordea. Your line is open please ask your question.

Agnieszka Villela: Perfect, thank you. My first question is, again, on out-of-period compensation. These were quite significant in both Q2 2022 and 2023. I think you reached some 30 million each of these quarters. So, the question really is, will Q2 this year be an important quarter for you to close negotiations and receive payments? Also, do you hope to recover a similar level of compensation?

Kevin: Perfect. Thank you I have two questions. So my first question is again on the out of period Compensations and these are quite significant in both Q2 2022 and 23 I think you reached 30 million each of these quarters. So the question really is will the Q2, the CRB as important quarter for you.

Kevin: To close negotiations on receiving payments and also do you hope to recover at the similar level of compensation.

Mikael Bratt: Typically, when we have these negotiations, our ambition is to get compensation for the full year. So we would expect that there should be some retractivity back to January 1st with the negotiations we close here in the second quarter. But how much exactly that will be remains to be seen. Our focus is to get the right amount of compensation. Yeah, that is more important to us. So, yeah, we'll come back here in the second quarter and see how much retractivity in that pricing that we negotiate in the second quarter will then be shown.

Kevin: Yes.

Kevin: Typically when we have these negotiations our ambition is to get compensation for the full year.

Kevin: So we would expect that there should be some rich activity back to January 1st with our negotiations we close here in the second quarter.

Kevin: But how much exactly that will be remains to be seen our focus is to get the right.

Kevin: On the compensation.

Kevin: And.

That is more important to us.

Kevin: So we'll come back here in the second quarter of how much better activity in that pricing that we negotiated in the second quarter with them.

Agnieszka Villela: All right, and just to follow up on that, are you already closing the negotiations, or are they still proceeding into Q2?

Kevin: Sure.

Speaker Change: Alright, then just to follow up on that.

Speaker Change: Are you already closing the negotiations or are they still proceeding into Q2.

Mikael Bratt: I mean, as I already indicated before, we have closed negotiations and part of the negotiations are already here in the first quarter. So, but the majority is still outstanding.

Speaker Change: I already indicated before we have closed our.

Speaker Change: Negotiations are part of negotiation in order to hit the first quarter.

Speaker Change: So but also the majority are still outstanding and then those are the ones, we're talking to more to close in the second or third quarter of the year, but it is an ongoing process and it's not always likely close all at once you also can take it in steps.

Agnieszka Villela: And those are the ones we're targeting here to close in the second or third quarter of the year. But it is an ongoing process, and it's not always like you close all at once. You can take it in steps. And we have already secured some of the pricing effects here in the first.

Speaker Change: We have already secured some of the pricing effects here in the first quarter.

Mikael Bratt: Perfect, thank you. And then my second question is about the R&D expenses. R&D sales were at about 4% this quarter, and that's obviously a good improvement from If we look at the recent years, it was at 5% to 6%, so could you please remind us what's driving the R&D cost efficiency? And also, I think you're right in the report that specifically in Q1, you had some, possibly, extra engineering income. So if you could give us a bit more color on that, Yeah, I mean, we have already, I mean, even in the

Speaker Change: Perfect. Thank you and then my second question is on the R&D expenses R&D to sales were up about 4% this quarter and that's obviously a good.

Speaker Change: The improvement from.

Speaker Change: If we look at the recent tiers being at 5% to 6%. So could you just.

Speaker Change: Remind us what's driving the R&D cost efficiency and also I think you're right in the report that specifically in Q1, you had some maybe extra engineering income. So if you could give us a bit more color on that.

Agnieszka Villela: Yeah, I mean, even in the 12% margin target and the way to get there back in 2019, we said that we were striving for better RD&E efficiency, and then that's, I think, what you're seeing coming through here now. In relation also to the 2000 headcount reduction target on the indirect side, there's also part of that allocated to RD&E, and also some of those savings we do see coming through already now.

Yes, I mean, we have already even in the.

Speaker Change: 12% margin target.

Speaker Change: And then the way to get there back in 2019, we said that we were striving for a faster ardine efficiency and that's I think what youre seeing coming through here now.

Speaker Change: In addition to the 2000 head count reduction target on the indirect side. There is also a part of that allocated to <unk>.

Speaker Change: And also some of those savings we do see come through already now as well.

Fredrik Westin: Then the engineering income part is always a bit bit; it can fall in one quarter or the next quarter. So that can always impact a little bit between Q1 and Q3. And then you know that we seasonally have a stronger recovery quarter in the fourth quarter. But I wouldn't say that there was anything special here on the recovery side in the first quarter. It's more again that the cost control and also headcount reductions we see coming through are also impacting RD&E costs positively.

Speaker Change: Then in.

Speaker Change: The engineering income part is always a bit it can fall in one quarter or the next quarter.

Speaker Change: That can always impact a little bit between Q1 and Q3.

And then you know that we see.

Speaker Change: Seasonally have a stronger recovery quarter in the fourth quarter.

Speaker Change: But I wouldn't say that there was anything special here on the recovery side of the first quarter. It's more again the cost control and also head count reductions, we see come through also impacting ardine costs positively.

Operator: Now we're going to take our next question. Just give us a moment. And the next question comes from Russ McDonald from Morgan Stanley. Your line is open, please ask your question.

Speaker Change: Thank you.

Speaker Change: Thank you thank.

Speaker Change: Thank you.

Speaker Change: Now we're going to take over next question.

Speaker Change: Just give us a moment.

Speaker Change: And the next question comes from the line of Ross Macdonald from Morgan Stanley. Your line is open. Please ask your question.

Russ McDonald: Hi there. Yes, thanks for taking my questions. Just to come back to India once more, and link to that point about India supporting top-line growth, could you maybe frame how much growth you expect in India from a content preview?

Ross MacDonald: Yes, thanks for taking my questions and just to come back to India, once more and linked to that point around India supporting top line growth could you maybe frame how much growth you expect in India from a content per vehicle perspective in dollar terms you.

Mikael Bratt: Thank you. I mean, today we are around $100 in India, so I mean they are... Significantly below, you could say, the mature markets average here, but we expect it to quite rapidly grow to $150 to $170 per vehicle here. So quite a rapid increase here, and as I said, it's also very much driven by legislation, and you may recall that last year here there was an intention to put in legislation on certain airbags in the vehicle, which later was retracted. But I would say the majority of the OEMs decided to still carry on with that ambition, so you see this increase coming through. And of course, that is an important contributor to the $150-$170.

Ross MacDonald: You mentioned regulatory improvements, but it would be helpful to understand where we're starting from and how you expect that to progress over the next few years.

Yeah.

Speaker Change: Thank you.

Speaker Change: Today, we are around $100 in India. So I mean they are.

Speaker Change: Significantly below you could say the mature markets average here, but we expect it to quite rapidly grow to 150 to 100 and $700 per vehicle here.

Speaker Change: In the next coming year or so.

Speaker Change: That's great.

Speaker Change: The increase here and as I said, it's driven also very much around.

The legislations.

Speaker Change: Sure.

Speaker Change: You may recall it.

Speaker Change: Last year here that was our intention to proteins legislations on.

Speaker Change: And.

Speaker Change: A number of airbags in a vehicle.

Speaker Change: There was a retraction, but I will say the minority of the Oems decided still too.

Speaker Change: Carry on with that ambition, so you'll see this increase coming through and of course, that's an important contributor to the 150 to $270.

Russ McDonald: Excellent. Yeah, so some of that very strong growth, I guess, would be expected to continue with market share and APV. That's great, thank you.

Speaker Change: Excellent yes, so some of that very strong growth I guess would you expect it to continue with the market share in <unk>.

Mikael Bratt: The second question is about North America and mixed trends in North America. There's obviously a big debate around stretched affordability for consumers and whether that will weigh on mix in the future. Just be curious if you're seeing any signs of mix shifting lower in North America, in the order bank, perhaps from large SUVs into smaller SUVs or crossovers or any trends like that. We see what you're referring to.

Speaker Change: Okay. That's.

Speaker Change: That's great. Thank you and second question is on North America mixed trends in North America. There was obviously, a big debate around stretched affordability for consumers and whether that will weigh on mix in the future just be curious if youre seeing any signs of mix shifting lower in North America, and the order bank, perhaps from large.

Speaker Change: <unk> into smaller Suvs or crossovers here.

Speaker Change: Thank you.

Russ McDonald: I mean, we see what you're referring to here as well, but in our own numbers and in our dialogues with customers, we're not really seeing that. And we don't expect that to have any real impact on ourselves here either. Once again, the diversity here, in terms of our portfolio, will support us in any transitions like this. So, no, not really a concern from our side here.

Speaker Change: I mean, we will see what you're referring to here as well, but in our own numbers and in our dialogues with customers don't really seeing that.

Speaker Change: And we don't expect that to have any.

Speaker Change: And the real impact on ourselves here owes us.

Speaker Change: Once again the diversity here in terms of our portfolio.

<unk>.

Speaker Change: Support us in any transition like that.

Speaker Change: So no not really a concern from our side here.

Operator: Now we're going to take our next question, and the next question comes from Jason Getz from Mizuka Securities. Your line is open, please ask your question.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Now we're going to take the next question.

Speaker Change: Yeah.

Speaker Change: And the next question comes from the line of Jason <unk> from Mizuho Securities. Your line is open. Please ask your question.

Jason Getz: When you look at inflationary pressures for this year, how should we think about that moving through the year? I assume the increases are still rising kind of year on year, but I'm wondering more near term how that's trending. Is that starting to stabilize? Are we still seeing increases on a sequential basis?

Jason: Hey, guys. Thanks for letting me ask a question.

Jason: When you look at the inflationary pressures for this year, how should we think about that moving through the year I assume the increases are still rising kind of year on year, but wondering more near term.

Jason: How thats trending is that starting to stabilize or are we still seeing increases on that.

Fredrik Westin: There will still be some sequential increases, and that's mainly on our material costs, so on the components that we purchase, and then mainly on the labor content of those purchases. On the labor cost side, the majority or the vast majority is already behind us. I mean, that already happened in the first quarter of the year. There might be some, a few further labor cost increases that we can expect in the higher inflation countries, but that should not have a significant impact. So labor cost is, to a large extent, behind us with what happened in the first quarter, but we still expect some on the purchase of material from our suppliers.

Jason: Sequential basis.

Jason: There will be still some sequential increases and that's mainly on our material costs. So all the components that we purchased and then mainly on the labor content of those purchased.

Jason: Components on the labor cost side.

Jason: Jordan.

The vast majority is behind us, but that's already happened that it will happen in the in.

Jason: In the first quarter of the year there might be some.

A few further.

Jason: Labor cost increases that we can expect in say higher inflation countries, but that should not have a significant impact.

Jason: So labor cost a lot of incentives behind us with what's happened in the first quarter.

But we still expect some on the purchase materials from our suppliers.

Jason Getz: And then when you look at the, you know, broader LVP for the year, how much do you think of that is vehicle inventory build versus true, you know, sell-through demand? Do you think we're seeing, like, kind of a larger inventory build this year than we have in the past few years? Or how should we think about that moving forward?

Speaker Change: Got you.

Speaker Change: And then on.

Speaker Change: When you look at the broader LDP for the year, how much do you think of that is.

Speaker Change: Vehicle inventory build versus true sell through demand.

Speaker Change: Do you think we are seeing.

Speaker Change: Like kind of a larger inventory build this year than we have in the past few years.

Speaker Change: How should we think about that moving forward.

Fredrik Westin: We don't expect that. I think right now we are at the point where it's quite calibrated between supply and demand here. I think the restocking, to a large extent, has already happened. I mean, in China, we are at normal levels of inventory, likewise, in Europe. In the US, we see with historical measurements a lower level of inventory, but I would say it's in line with what the OEMs have indicated where they would like to be. No indications or any plans on, you know, bringing that industry inventory up. The short, short, answer I would say is that there is no inventory build-up. It's all about the demand from end customers.

Speaker Change #100: We don't.

Speaker Change #101: I think right now we are at the point, where it's quiet.

Speaker Change #101: Calibrated between supply and demand here I think the restocking to large extent tests already happened.

Speaker Change #101: I mean in China, we are at normal levels of inventory.

Speaker Change #101: Likewise in Europe.

Speaker Change #101: In the U S. We see.

Speaker Change #101: Historical measurements.

Lower level of inventory, but I would say it's in.

Speaker Change #101: In line with what.

Speaker Change #101: The Oems of <unk>.

Speaker Change #101: He indicated what I would like to be so.

Speaker Change #101: No indications oriented plans on.

Speaker Change #101: Bringing the industry inventory up so.

Speaker Change #102: So short short answer I would say is that.

Speaker Change #102: No inventory buildup, it's all about.

Jason Getz: Thank you.

Speaker Change #102: Demand from end consumer here.

Operator: Now we're going to take our next question, and the next question comes from the line of Matthias Holmberg from D&B Markets. Your line is open. Please ask your question. Excuse me, Mathias, your line is open.

Speaker Change #103: Got you. Thank you.

Speaker Change #104: Thank you.

Speaker Change #105: Now we will take our next question.

Speaker Change #105: Okay.

Speaker Change #105: And the next question comes from the line of Matt is holding back from Dnb markets. Your line is open. Please ask your question.

Speaker Change #105: Yes.

Matt: Excuse me Martinez your line is open.

Matthias Holmberg: Yeah, there we go. Hello. Oh, yeah. Sorry. Thanks for allowing the quick follow up. Just if you could, it would be very helpful to share any insights on how much cost savings you managed to realize in the quarter in the context of those 50 million you're targeting for the year.

Matt: Sorry can you hear me.

Matt: Yes.

Matt: Hello.

Speaker Change #106: Alright, thanks for allowing the quick follow up just if you could would be very helpful to share any insights on how much cost savings you managed to realize in the quarter in the context of those 50 million your.

Targeting for the year.

Fredrik Westin: Um, we, yeah, I think we said that we were maybe a bit ahead on the 50 million. We haven't broken it down by quarter, but it is coming.

Speaker Change #106: Okay.

Speaker Change #106: Yes.

Speaker Change #107: Yes, I think we said that we are maybe a bit ahead on the $50 million, we haven't broken it down by quarter.

Fredrik Westin: By design, the larger part actually comes in the second half of the year because so far, we've taken out more headcount in the best-cost countries than we have in high-cost countries. So the impact here in Germany, for instance, is coming towards the second half of the year and even more so next year. So it's fairly even, it's more of a second half than first half, and we are a little bit ahead of time in the first quarter.

Speaker Change #108: It is coming.

Speaker Change #108: Our design that the larger contracts to come in the second half of the year because it's so.

Speaker Change #108: So far we've taken out more head count in best cost countries, and we have a high cost countries.

Speaker Change #108: Spiked here of Germany for instance is coming towards the second half of that of the year and even more so next year huh.

Speaker Change #109: So it's early.

Speaker Change #109: It's more second half than first half and we are a little bit ahead of plan in the first quarter.

Operator: Dear Speakers, there are no further questions. I would now like to hand the conference over to Mikael Bratt for any closing remarks.

Speaker Change #109: Yes.

Speaker Change #110: Thank you.

Speaker Change #110: Thanks.

Speaker Change #110: Thank you.

Speaker Change #110: Do you have speakers there are no further questions I would now like to hand, the conference over to Mikael Bratt for any closing remarks.

Mikael Bratt: Thank you, Nadia. The world is changing at an accelerating pace, and Autoliv has launched a number of strategic initiatives to meet the needs of our customers, to enhance shareholder value, and to deliver safety solutions for society. I am confident that we will deliver a substantial increase in sales operating cash flow and adjusted operating income in 2024, supported by footprint optimization, structural cost reductions, cost compensation, and a committed focus on innovation, quality, and sustainability and our most important direct contribution to a sustainable society, saving more lives. Our second quarter earnings call is scheduled for Friday, July 19, 2024. Thank you, everyone, for participating in today's call. We sincerely appreciate your continued interest in Autoliv. Until next time, drive safely.

Thank you.

Mikael Bratt: The world is changing at an accelerating pace and out to leave has launched a number of strategic initiatives to meet the needs of our customers to enhance shareholder value and deliver safety solutions for society.

Mikael Bratt: I'm confident that we will deliver a substantial increase in sales operating cash flow and adjusted operating income in 2024 supported by footprint optimization structural cost reductions cost compensations and a committed focus on innovation quality and sustainability and our most in.

Mikael Bratt: <unk> direct contribution to a sustainable society saving more lives.

Mikael Bratt: Second quarter earnings call is scheduled for Friday July 19 2024.

Speaker Change #112: Thank you everyone for participating in today's call. We sincerely appreciate your continued interest in our <unk> until next time drive safely.

Operator: That does conclude our conference for today. Thank you for your participation. You may now all disconnect.

Speaker Change #112: Yeah.

Speaker Change #113: That does conclude our conference for today. Thank you for your participation you may now disconnect.

Speaker Change #113: Okay.

Speaker Change #113: [music].

Speaker Change #113: Okay.

Speaker Change #113: Yes.

Speaker Change #113: [music].