Q1 2024 Autoliv Inc Earnings Call

April 26, 2024

<unk> VP Investor Relations.

conditions. We will then remain available to respond to your questions and as usual the sites are available on outly.com.

Anders Trapp: 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, how our strong balance sheet and asset return rates support the continued high level of shareholder returns. They will outline the expected sequential margin improvement in 2024 towards our targets, 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-US GAAP measures.

Anders Trapp: 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, how our strong balance sheet and asset return rates support the continued high level of shareholder returns. They will outline the expected sequential margin improvement in 2024 towards our targets, 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-US GAAP measures.

During today's earnings call vehicle and forensic will among other things provide an overview of our strong sales earnings and cash flow development in the quarter.

Turning to the next slide.

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

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

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

During the presentation we will reference some non-new GAAP measures .

The reconciliations of historical use gap to non-use GAAP measures are disclosed in our quarterly earnings release, which is available on Outleave.com and in the 10-Q that will be filed with the FCC. Lastly, I should mention that this call is intended to conclude at 3 p.m. Central European time, so please follow a limit of two questions per person.

And we will also as usual will 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 <unk> dot 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.

I will now hand over to our CEO , Mikael Brat.

During the presentation, we will reference some non us GAAP measures the reconciliations of historical U S. GAAP to non US GAAP measures are disclosed in our quarterly earnings release, which is available on <unk> com and in the 10-Q that will be filed with the SEC Lastly, I should mention that this call is intended to conclude at.

Thank you, Anders. Looking on the next slide.

I want to express my appreciation to the entire Autoliv team for their unvivering dedication to achieve our goals and for delivering another strong quarter in a challenging environment.

Anders Trapp: The reconciliations of historical US GAAP to non-GAAP measures are disclosed in our quarterly earnings release, which is available on autoliv.com, and in the 10-Q that will be filed with the SEC. Lastly, I should mention that this call is intended to conclude at 3:00 PM Central European Time, so please follow a limit of two questions per person. I will now hand over to our CEO, Mikael Bratt.

Three P M Central European time, so please follow a limit of two questions per person.

In the first quarter, global light vehicle production declined year over year by around 1% according to SMP Global. We saw no improvement in call of volatility compared to fourth quarter 2023.

I will now hand over to our CEO, Mike Brown.

Thank you Anders looking on the next slide.

Mikael Bratt: Thank you, Anders. Looking on the next slide. 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 Q1, global light vehicle production declined year over year by around 1% according to S&P Global. We saw no improvement in call off volatility compared to Q4 2023. Despite somewhat weaker than expected light vehicle production, we achieved our margin indication for Q1, 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. The strong growth was mainly a result of product launches last year.

I want to express my appreciation to the entire outlet team for their unwavering dedication to achieve our goals and for delivering another strong quarter in a challenging environment.

Despite somewhat weaker and 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 grow by 5% outperforming light vehicle production significantly, especially in India, South Korea and Japan.

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.

The strong growth was mainly a result of product launches last year.

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.

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% year-over-year increase in adjusted operating profit.

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

The debt leverage was virtually unchanged versus Q4, 2023, despite share repurchases of 160 million U.S. dollars in the quarter.

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

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

Mikael Bratt: We generated a 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% year over year increase in adjusted operating profit. The debt leverage was virtually unchanged versus Q4 2023, despite share repurchases of $160 million in the quarter. Under the current stock repurchase program, we have repurchased and canceled 6.5 million shares for close to $630 million. We are making progress towards our previously announced intention of reducing our indirect workforce by up to 2,000 people. We expect savings of around $50 million in 2024 from these initiatives.

Under the current stock repurchase program, we have repurched and cancelled 6.5 million shares for close to 630 million US dollars.

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

We are making progress towards our previously announced intention of reducing our indirect workforce by up to 2,000 people. We expect savings of around 50 million in 2024 from these initiatives.

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

Under the current stock repurchasing repurchase program, we have repurchased and canceled.

We are reconfirming the full year 2024 guidance, which sets a strong base towards continued high level of shareholder returns and our adjusted operating margin target of around 12%.

Six 5 million shares for close to $613 million.

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

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

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

Now looking at the sustainability highlights on the next slide.

We are reconfirming, the full year, 2024 guidance, which sets a strong base towards continued high level of shareholder returns and our adjusted operating margin target of around 12%.

Sustainability is fundamental part of our business strategy. It is an important driver for market differentiation and stakeholder value creation.

Mikael Bratt: We are reconfirming the full year 2024 guidance, which sets a strong base towards continued high level of shareholder returns and our adjusted operating margin target of around 12%. However, the heightened seasonality of earnings of prior years is likely to be repeated in 2024. Now looking at the sustainability highlights on the next slide. Sustainability is 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. For example, during Q1, we successfully issued a second green bond using Autoliv's sustainability financing framework aligned with the ICMA Green Bond principles. The bond drew significant interest from debt investors, reflecting the strong support for Autoliv's climate and sustainability agenda.

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

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

For example, during the first quarter we successfully issued a second green bond using out-leaves sustainability financing framework aligned with the ICMA green bond principles.

Now looking at the sustainability highlights on the next slide.

Sustainability.

Ability is fundamental part of our business strategy.

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

The bond drew significant interest from debt investor, reflecting the strong support for auto leaves, climate and sustainability agenda.

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

Following AutoLives First partnership in 2021 with SSAB, a fossil-free steel,

For example.

During the first quarter, we successfully issued our second green bond using outlives sustainability financing framework aligned with the <unk> Green bond principles.

We are now introducing two additional collaborations for carbon reduced steel with Arverdi and Tissen Group. The aim is to reduce greenhouse gas emissions in our products by utilizing low emission steel and increase use of recycled material.

The bond drew significant interest from depth investor.

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

Following our two lives first partnership in 2021 with <unk>.

In addition to renewable electricity instruments, many out-delives sites are increasing the use of on-site solar energy generation capacity.

Mikael Bratt: Following Autoliv's first partnership in 2021 with SSAB, a fossil-free steel, we are now introducing two additional collaborations for carbon-reduced steel with ArcelorMittal and thyssenkrupp. The aim is to reduce greenhouse gas emissions in our products by utilizing low emission steel and increase 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 operations. We are partnering with BASF to introduce a new type of design for recycling PU foam for steering wheel rims. This new type of foam will enable simplified and scalable recycling. Looking on our cost improvements on the next slide. We continue to generate broad-based improvements in key areas over the last 12 months.

Fossil free steel.

We are now introducing two additional collaborations with carbon reduced theme.

On this slide you can see one of the new solar parks in Utah US supporting our operations.

Our Nevada day.

And to Semgroup.

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

We are partnering with BISF to introduce a new type of design for recycling PUFO for steering wheel rims.

In addition to renewable electricity instruments, mainly alchemy <unk> science are increasing the use of on site.

This new type of foam will enable simplified and scalable recycling.

Looking on our cost improvements on the next slide.

A lot of energy generation capacity.

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

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

We are partnering with BSF to introduce a new type of design for recycling.

Our direct labour productivity continues to trend up, supported by the implementation of our strategic initiatives, including optimization and digitalization.

<unk> for steering wheel ramps.

This new type of phone will enable simplified and scalable recycling.

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

Looking on our cost improvements on the next slide.

Yeah.

Our gross margin decreased due to the seasonality of a strong fourth quarter, but improved by 170 basis points compared to the previous year.

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

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

Mikael Bratt: Our direct labor productivity continues to trend up, supported by the implementation of our strategic initiatives, including optimization and digitalization. Year over year, we have reduced our direct production personnel despite higher volumes. Our gross margin declined from the seasonality of the strong Q4, but improved by 170 basis points year over year. The improvement was mainly the result of the higher direct labor efficiency and reductions within the indirect workforce, volume growth, and customer compensation negotiated 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.

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

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

volume growth and customer compensation negotiated last year.

Our gross margin decline from the seasonality of our strong from the seasonal strong fourth quarter, but improved by 170 basis points year over year.

As a result of our structural efficiency initiatives, the positive trend for our D&E and SGNA in relation to sales has continued.

declining by 60 basis points since Q1, 2023.

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

Combined with the gross margin improvements,

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

Volume growth and customer compensation negotiated last year.

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

As a result of our structural efficiency initiatives.

Positive trend for <unk> and SG&A in relation to sales as continued <expletive>.

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

Declining by 60 basis points since Q1 2023.

Combined with the gross margin improvement.

The sales increased and our cost reduction activities led to a substantial improvement in adjusted operating income, increasing by more than 50% to 199 million US dollars from 130 million last year.

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

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

Mikael Bratt: Looking now on financials in more detail on the next slide. Sales in Q1 increased by 5% year over year, despite lower light vehicle production, a negative regional light vehicle production mix, and unfavorable currency translation effects. The sales increased and our cost reduction activities led to a substantial improvement in adjusted operating income, increasing by more than 50% to $199 million from $130 million last year. The adjusted operating margin was 7.6% in the quarter, an increase by 230 basis points for the same period last year. 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.

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 adjusted operating margin was 7.6% in the quarter.

an increase by 230 basis points for the same period last year.

This sales increase and our cost reduction activities led to a substantial improvement in adjusted operating income increasing by more than 50% to $199 million from $130 million last year.

Operating cash flow was 122 million US dollars, which was 168 million higher than in the same period last year as a result of improved working capital effect versus last year.

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

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

An increase by 230 basis points for the same period last year.

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 intent of reducing our indirect headcount by up to 2000.

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 effect.

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.

Versus last year.

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

Mikael Bratt: Looking now on 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 2,000. 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 2024, we expect to cash out approximately $85 million related to these initiatives. At the end of Q1, 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.

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 head count by up to 2000.

For 2024, we expect to cash out approximately 85 million related to these initiatives.

At the end of first quarter, our indirect headcount had declined by around thousand or by more than 5% since a year ago, with the majority of the decrease within production overhead, especially in best-cost countries.

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.

We are already seeing a positive impact on direct labour productivity as a result of our initiative to reduce the direct workforce by the equivalent of up to 6,000.

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

At the end of first quarter, our indirect head count has declined by around <unk> thousand.

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

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

Our consolidated net sales increased by more than 2.6 billion, a new record for the first quarter.

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.

This was approximately 120 million higher than a year earlier, driven by price.

Mikael Bratt: 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 6,000. Looking now on 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 Q1. 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 currencies. Currency translation effects reduced sales by $12 million or by 0.5%. Looking on the regional sales split. Asia accounted for 37%, Americas for 34%, and Europe for 29%.

volume and product mix partly offset by lower light vehicle production, a negative geographical light vehicle production mix and currencies.

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

Our consolidated net sales increased by more than two 6 billion a new record for the first quarter.

currency translation effects reduce sales by 12 million or by 0.5%.

Looking on the regional sales split.

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

Asia accounted for 37%, America's for 34% and Europe for 29%.

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

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 certain vehicle models.

Negative geographical light vehicle production mix and currencies.

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

Looking on the regional sales split.

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

Asia accounted for 37% Americas, 434%.

Europe with 29%.

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

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

Mikael Bratt: 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 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, Q1 light vehicle production decreased by 1% year-over-year. 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 in Japan, and with global OEMs in China.

According to SMP Global, first quarter light weak reproduction decreased by 1% year of year.

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

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

with most of the lower than expected production coming in Japan and with global OEMs in China.

Yeah.

I am very pleased that our organic sales growth outperformed global light vehicle production significantly as.

We estimate that the geographical light vehicle production mix had 140 basis points negative impact on our outperformance.

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.

In the quarter we outperformed global light vehicle production by more than 6 percentage points, with strong performance especially in the rest of Asia and in Japan.

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

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

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 for side airbags.

We estimate that the geographical light vehicle production mix and the 140 basis points negative impact on our outperformance.

Mikael Bratt: We estimate that the geographical light vehicle production mix had 140 basis points negative impact on our outperformance. In the quarter, we outperformed global light vehicle production by more than 6 percentage points, with strong performance, especially in the rest of Asia and in Japan. The strong outperformance in rest of Asia was mainly driven by India, where sales outperformed light vehicle production by 20 basis points due to higher installation rates for side airbags. In comparison, the modest outperformance in China was mainly a result of unfavorable customer mix following strong light vehicle production growth for lower safety content vehicles. On the next slide. 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.

In comparison, the modest outperformance in China was mainly a result of unfavorable customer mix, following strong light vehicle production growth for lower safety content vehicles.

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.

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

On the next slide.

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.

Basis points due to higher installation rates for side airbags.

In comparison, the modest outperformance in China was mainly a result of unfavorable customer mix. Following strong light vehicle production growth will lower safety content vehicles.

Despite some changes to model launch plans by some customers, the trend towards electrification continues, although at a somewhat slower pace.

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

On the next slide.

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.

The models shown here have an out-olive content per vehicle from around 130 to over 400 US dollars.

In terms of out-to-live sales potential, the BMW 5 series touring, launch is the most significant, followed by the Subaru forester.

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

Mikael Bratt: Despite some changes to model launch plans by some customers, the trend towards electrification continues, although at a somewhat slower pace. On this slide, 7 models are being made available as electrical versions. The models shown here have an Autoliv content per vehicle from around $130 to over $400. 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 Airbag on three of these models, more advanced seat belts, pedestrian protection airbags, and hood lifters. Another interesting launch is the Tata Punch EV that illustrate 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.

Somewhat slower pace.

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

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

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

More advanced seatbelts and pedestrian protection airbags and hoodlifters.

Another interesting launch is the Tata Punch EV that illustrates the trend towards more sophisticated safety systems and higher safety content in India.

In terms of our two lead sales potential.

<unk> W. Five series touring launch is the most significant followed by the Subaru Forester.

I will now hand it over to our CFO , Frederick Westin, who will talk you through the financials on the next slide.

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

Thank you, Mikael. These slide highlights are key figures for the first quarter of 2024 compared to the first quarter of 2023.

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

Another interesting launch is the Tata punch EV that illustrate.

Our net sales were 2.6 billion. This was a 5% increase.

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

Growth profit increased by 64 million or by 17% to 443 million, while the gross margin increased by 1.7 percentage points to 16.9%.

I will now hand, it over to our CFO.

<unk>, who will talk you through the financials on the next slide.

The adjusted operating income increased from 131 million to 199 million, the adjusted operating margin increased by 230 basis points to 7.6%.

Thank you Mikael.

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

Fredrik Westin: Thank you, Mikael. This slide highlights our key figures for Q1 2024 compared to Q1 2023. Our net sales were $2.6 billion. This was a 5% increase. Gross profit increased by $64 million or by 17% to $443 million, while the gross margin increased by 1.7 percentage points to 16.9%. The adjusted operating income increased from $131 million to $199 million, and the adjusted operating margin increased by 230 basis points to 7.6%. Non-GAAP adjustments amounted to $5 million from capacity alignments and antitrust-related matters. Adjusted earnings per share diluted increased by $0.68, where the main drivers were $0.54 from higher operating income and $0.10 from lower income taxes.

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

Non-gap adjustments amounted to 5 million from capacity alignments and antitrust related matters.

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

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 taxes.

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

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

Or adjusted return on capital employed and return on equity increased to 20 and 21% respectively.

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

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 US dollars stock repurchase program.

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

Adjusted earnings per share diluted increased by 68 cents were the main drivers were 54 from higher operating income and 10 cents from lower income taxes.

Looking now on the adjusted operating in Cambridge on the next slide.

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

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 adjusted return on capital employed and return on equity increased to 20% and 21%, respectively. We paid a dividend of $0.68 per share in the quarter and repurchased and retired 1.4 million shares for around $160 million under our $1.5 billion stock repurchase program. Looking now on the adjusted operating income bridge on the next slide. In Q1 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.

We paid a dividend of 68 per share in the quarter and repurchased and retired one 4 million shares.

Our operations were positively impacted by cost-saving activities, higher volumes and commercial recoveries, partly offset by headwinds from general cost inflation.

Around 160 million U S dollars.

Under our $1 $5 billion stock repurchase program.

The net currency effect was 8 million negative, as we continued to see negative effect mainly from the strengthening of the Mexican peso and the weakening of the Japanese yen and Korean one, but partly offset by positive impact from the Turkish lira.

Looking now on 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.

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

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

Costs for SG&E and RDNET combined was 4 million lower despite labor cost inflation.

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.

In relation to sales, SG&E and RD&E net combined declined by 60 basis points.

Fredrik Westin: The net currency effect was -$8 million, 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 positive impact from the Turkish lira. The impact from raw materials and out of period cost compensation were negligible. Costs for SG&A and RD&E net combined was $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 was, on the higher sales, substantially above our normal 20% to 30% range. Looking now on the cash flow more in detail on the next slide.

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% range.

Partly offset by positive impact from the Turkish lira.

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

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

Costs for SG&A and <unk> combined.

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.

Was $4 million lower despite labor cost inflation.

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

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

Capital expenditures net decreased to 140 million from 143 million last year.

On the higher sales was substantially above our normal 10% to 30% range.

In relation to sales, it was 5.4% this year, down from 5.7% last year.

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

Yeah.

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

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: For Q1 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. 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 flow. 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 slide.

The last 12-month cash conversion defined as free cash flow in relation to net income was 108%.

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

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

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

During the first quarter, trade working capital increased by 104 million, driven by 123 million lower accounts payables, partly offset by 15 million lower inventories, and by 4 million in lower receivables.

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

The lower inventories and receivables were mainly due to lower sales than in the fourth quarter of last year.

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

Compared to the same period last year, trade working capital decreased from 14.1% to 12.8% in relation to sales.

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

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 nowhere receivables.

Our capital efficiency program aims to improve working capital by 800 million and to date we have achieved around 500 million.

Fredrik Westin: During Q1, trade working capital increased by $104 million, driven by $123 million lower accounts payables, partly offset by $50 million in lower inventories, and by $4 million in lower receivables. The lower inventories and receivables were mainly due to lower sales than in Q4 of last year. 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 million. Improvement in receivables, and especially in inventories, are lagging due to the high order volatility and hence planning challenges that cause inefficiencies. Over the coming years, we expect the inventories to improve significantly in tandem with reduced order volatility.

Improvements in receivables and especially in inventories are lagging due to the high call of volatility and hence planning challenges that cause inefficiencies.

The lower inventory and receivables were mainly due to lower sales than in the fourth quarter of last year.

Over the coming years, we expect the inventories to improve significantly in tandem with reduced coal of volatility.

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

Now looking on our leverage ratio on the next slide.

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

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

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

I am particularly pleased with our leverage ratio, which improved compared to a year ago, despite investing in our footprints and returning 700 million US dollars to shareholders.

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

The debt leverage ratio at the end of March, 2024, was 1.3 times, up 0.1 time from last quarter.

Now looking on our leverage ratio on the next items.

Fredrik Westin: Now looking on 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 employed. I am particularly pleased with our leverage ratio, which improved compared to a year ago, despite investing in our footprints and returning $700 million to shareholders. The debt leverage ratio at the end of March 2024 was 1.3 times, up 0.1 times from last quarter. Compared to Q4 2023, our net debt increased by $184 million, while the twelve-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.

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

Compared to the fourth quarter of 2023, our net debt increased by 184 million, while the 12-month trading adjusted EBTA improved by 72 million.

I am, particularly pleased with our leverage ratio, which in which improved compared to a year ago. Despite investing in our footprint and returning $700 million U S dollars to shareholders.

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.

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

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

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

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

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

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

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

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

Over the years <unk> has shown its ability to generate solid cash flow and periods with varying market environments.

Over the last five years, we have reduced the net debt significantly while returning 1.5 billion US dollars directly to shareholders.

Fredrik Westin: 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% to 3% in relation to the average share price. 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. Over the last 5 years, we have reduced the 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.

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

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.

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

During the last 12 months, we have returned around $700 million to shareholders.

Since we initiated the current stock repurchase program in 2022, we have reduced the number of outstanding shares by more than 7%.

Through both dividends and share buybacks, a new record for the company.

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 six 5 million shares for a total of close to $630 million U S dollars as part of the current stock repurchase program.

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 ratio.

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

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

Since we initiated the current stock repurchase program in 2022, we have reduced the number of outstanding shares by more than 7%.

Fredrik Westin: Since we initiated the current stock repurchase program in 2022, we have reduced the number of outstanding shares by more than 7%. 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 ratio. We always strive to balance what is best for our shareholders, both short and long term. Now looking on our efficient balance sheet that supports our shareholder returns on the next slide. A strong balance sheet and good return on capital employed is fundamental for long-term shareholder value creation. 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%.

A strong balance sheet and good return on capital employed is fundamental for long-term shareholder value creation.

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.

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%.

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

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.

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

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

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

Thank you, Frederick. On to the next slide.

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

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%.

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.

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.

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

With that I'll hand, it back to you make it.

Thank you for your rig onto the next slide.

Dry-prane mix developments vary by region as certain markets face somewhat slower EV growth rates while other areas continue to see a rather high demand for EVs.

Mikael Bratt: Thank you, Fredrik. On to the next slide. Despite still elevated interest rates, the 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. Drivetrain 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. S&P Global expects Q2 global light vehicle production to increase by close to 3%, while they see H2 declining almost 2% compared to last year. Light vehicle production in China continues to be supported by strong EV demand and export activity.

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

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

S&P Global expects second quarter global light vehicle production to increase by close to 3% while they see second half of the year declining almost 2% compared to last year.

Additional volume increases primarily in China, and North America.

Drivetrain mix developments varied by region as certain market faced somewhat slower EBIT growth rates, while other areas continue to see that older high demand for Evs.

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 on demand, resilience, less impact from supply chain issues and increasing inventory levels of new vehicles.

S&P Global expect second quarter Global light vehicle production to increase by close to 30% when does the second half of the year declining almost 2% compared to last year.

The light vehicle production forecast for Europe has increased slightly to minus two, mainly due to stronger than expected actuals in the first quarter.

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

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.

Based on SMP 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.

Mikael Bratt: The outlook for North American light vehicle production for 2024 was revised higher to 14.6 million units on demand resilience, less impact from supply chain issues, and increasing inventory levels of new vehicles. The light vehicle production forecast for Europe has increased slightly to -2%, mainly due to stronger than expected actuals in Q1. 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 on 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 compensations. We continue to face inflationary pressure, especially labor costs.

Now looking on the business outlook on the next slide.

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

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.

Based on S&P, globals forecast and our own analysis, our 'twenty to 'twenty four guidance, it's been on a global light vehicle production decline of around 1% for the full year.

We continue to face inflationary pressure, especially labour costs, and we expect compensation for what is in access of what we can offset through normal productivity measures.

Now looking on 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 and more stable light vehicle production structural and strategic initiatives cost control and customer.

The discussions with our customers are progressing according to plan.

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

Customer compensations.

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

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.

Looking at our 2024 financial guidance on the next slide.

Mikael Bratt: We expect compensation for what is the, 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 compensations will gradually, throughout the year, offset cost inflation. 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 is expected to increase by around 5%. No net currency translation effects are expected on sales. The guidance for adjusted operating margin is around 10.5%.

These discussions with our customers are progressing according to plan.

This slide shows our full year 2024 guidance, which excludes effects from capacity alignment, antitrust related matters and other discrete items.

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

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

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

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

Looking at our 2024 financial guidance on the next slide.

Known as kerosy translation effects are expected on sales.

Okay.

The guidance for adjusted operating modem is around 10.5%.

This slide shows our full year, 2024 guidance, which excludes effects from capacity alignment antitrust related matters and other discrete items.

Operating cash flow is expected to be around 1.2 billion US dollars.

Our full year guidance is based on our global light vehicle production decline of around 1%.

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

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

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

No net currency translation effects are expected on sales.

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

Looking on 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.

Operating cash flow is expected to be around $1 2 billion U S dollars.

Mikael Bratt: Operating cash flow is expected to be around $1.2 billion. Our positive cash flow trend should allow for continued high shareholder returns. We project a tax rate of around 28%, in line with our previous indications of 25% to 30% as the new normal tax rate. Looking on 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 Nadia.

Our positive cash flow trends should allow for continued high shareholder returns.

We've received a tax rate of around 28% in line with our previous indications of 25% to 30% as the new normal tax rate.

Looking on the next slide.

Yeah.

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

And now we're going to take our first question. And it comes from the land of Colin Langan from Wells Fargo. Your line is open, please ask the question.

I now hand, it back to not yet thanks.

Oh, thanks for taking my questions. You know, it seems like your recovery seemed 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 the year?

Thank you so much Dara participants as a reminder, if you wish to ask a question. Please press star one bond telephone keypad and wait for my name to be announced to Richard a question. Please press star one again, Mr. Bob will compile the cane narrow studies will take a few moments.

Operator: Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one 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 the line of Colin Langan from Wells Fargo. Your line is open. Please ask your question.

Okay.

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

Thank you for your question there and I think I've

Go ahead. Your line is open please ask your question.

mentioned it many times before here and that is the fact that I would say

Oh, thanks for taking my questions.

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.

It seems like your recovery seem to be trending well in Q1, but there've 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. Just there are a lot more pushback is we're starting the year.

Colin Langan: Oh, thanks for taking my questions. You know, it seems like your recovery seemed 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 the year?

Thank you for your question.

We have also mentioned it's very detailed negotiations because it's fact-based and evidence-based discussion here. And as we've indicated for you here on the first quarter, we are progressing according to plan and yeah, I think we have

And I think.

Mikael Bratt: Thank you for your question there. I think I've 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 on how to identify a fair compensation here. We have also mentioned it's a very detailed negotiations because it's fact-based and evidence-based discussion here. As we've indicated for you here on Q1, we are progressing according to plan. Yeah, I think we have good discussions with our customers on the way forward here.

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

It has never been easy to.

To negotiate these these claims however, I think that.

Good discussions with our customers on the way forward here. But of course it is tedious work to go through.

Over the last two years here, we have found a way of working together with our customers and how to identify a fair compensation here and.

Got it. I think one of the other factors of getting to the 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 there's still room there to improve?

We are also imagine instead of a detail.

Negotiations because its a fact based and evidence based discussion.

A discussion here and.

That's why we indicated four four for you here on the first quarter, we are progressing according to plan and yes, I think we have.

Compared to one year ago, of course we see improvements and we saw gradual improvement during 2023. We ended the year of around 90% accuracy when it comes to the call-off.

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

Mikael Bratt: Of course, it is tedious work to go through.

Got it I think one of the other factors are getting to the 12% was.

And now in Q1 we don't see any sequential improvement. So we are still at around 90% here. However, what we see is, of course, that is not the same customers that has the same challenges. So it varies a little bit between the customers, but in large, it's very much the same as we had in Q4.

Colin Langan: Got it. I think one of the other factors of getting to the 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 are there still, you know, room there to improve?

The lack of call offs on schedules I mean, how is that trending is that getting closer to back to historical norms are there. So you know from there to improve.

Okay.

I had two one year ago of course, we see improvements and we saw a gradual improvement during 2023, we ended the year over round, 90% ish accuracy when it comes to the call offs and.

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

And the 90% compares to like with a 90%.

78%

historically. I mean before the pandemic and what we judge as normal is more the 98 to 100% accuracy interval.

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

And at 90% and tier however, what we see is of course that is not the same customers that have the same challenge. So it varies a little bit between the customers but in large.

All right. Thanks for taking my question.

Thank you. Thank you.

Now we're going to take our next question.

Just give us a moment.

And the next question comes line of Matthias Holmberg from D&B markets. Your line is open. Please ask your question.

It's very much the same as we had in Q4.

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 intervals.

Thank you and good afternoon morning. I'm a bit curious on the margin guidance here

Colin Langan: The 90% compares to, like, was it 98% historically?

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

given that you come in stronger than expected in the first quarter and still leave

Got it all right. Thanks for taking my questions.

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 beat was material enough to warrant raised guidance for the full year? Thank you.

Thank you. Thank you.

Colin Langan: Got it. All right. Thanks for taking my question.

Now we're going to take our next question.

Mikael Bratt: Thank you.

Operator: Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Mattias Holmberg from DNB Markets. Your line is open. Please ask your question.

Could you give us an amendment.

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

Yeah, thanks for the question. We had a bit weak at top line here in the first quarter than expected, but that was offset by the better cost control and also some of the cost reduction activities coming through faster than we had planned.

Thank you and good afternoon good morning.

A bit curious on the margin guidance here.

Mattias Holmberg: Thank you, and good afternoon or morning. A bit curious on the margin guidance here. Given that you come in stronger than expected in the Q1 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 beat was material enough to warrant raised guidance for the full year? Thank you.

Given that you come in stronger than expected in the first quarter and still leave the full year guidance intact and does that imply that the year will be less backend loaded.

But that does not really change the picture for the full year in terms of how the are expected cost savings. And so for the full year, I think we had a good start of 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.

Where 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.

Yeah. Thanks for the question Kevin.

But we could top line here in the first quarter than expected, but that was offset by better cost control and also.

Mikael Bratt: Yeah, thanks for the question. Yeah, we had a bit weaker top line here in Q1 than expected, but that was offset by the better cost control and also some of the cost reduction activities coming through faster than we had planned. That does not really change the picture for the full year in terms of how our expected cost savings. For the full year, I think we had a good start of 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.

Fredrik Westin: Yeah, thanks for the question. Yeah, we had a bit weaker top line here in Q1 than expected, but that was offset by the better cost control and also some of the cost reduction activities coming through faster than we had planned. That does not really change the picture for the full year in terms of how our expected cost savings. For the full year, I think we had a good start of 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.

Thank you.

I have another question on the facing 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?

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 how that one.

Our expected cost savings.

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

when you expect to see your outperformance or should we assume that you know the 5 or 6% that your organic growth guidance implies will be quite evenly spread throughout the year

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

Thank you.

I have another question on hum facing or fewer market outperformance for the year, given what seems to be some some delays you mentioned here electric vehicles in particular does that change in any anyway.

Mattias Holmberg: 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 5% or 6% that your organic growth guidance implies will be quite evenly spread throughout the year?

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

When do you expect to see your outperformance or should we assume that the <unk>.

Or 6% that your organic growth guidance in place will be quite evenly spread throughout the year.

the neutrality when it comes to our products and the the drive line connection here we expect the limited if any impact from from this of course that is some some

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

Mikael Bratt: We have not indicated really 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 very limited, if any, impact from this. Of course, there is some work needed to be done to reschedule and replan. In terms of the overall launch and outperformance, no impact from that, or very limited.

I think when you see the.

work needed to be done into the rescheduleary plan, but in terms of overall launch and outperformance, no impact from that. We're very limited.

Changing 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.

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?

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

We expect the.

We don't guide rheumatois on a quarterly basis, but I mean overall we expect Romathius to have a smaller impact

Limited if any impact from from this of course studies.

Some work needed to be done into the rescheduled Larry plan, but in terms of the overall launch and outperformance.

for the full year. We see improvements on 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.

No impact on that or very limited.

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.

Mattias 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 Q2?

Thank you and have a nice weekend.

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

Thank you. Same to you.

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

Thank you.

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

Now we're going to take our next question and it comes to land of Dan Levy from Buckley's. Your line is open. Please ask your question.

For the full year, we see.

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

Well

On the on the textile side mainly.

Hi, good morning, thank you for taking the questions.

And also we would expect to have increases on electronic components, so, but more or less a fairly neutral development for the full year.

I just wanted to get into the pricing cadence for the year. Maybe you could just comment. I think the comments you just provided implied that the 1Q margin strength was driven by better cost control.

Thank you and have a nice weekend.

Thank you I'm, saying to you.

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

Thank you.

Mikael Bratt: Thank you. Same to you.

Now that we can take our next question.

Mattias Holmberg: Thank you.

But maybe you could just provide some comments on how the pricing benefits factored into the 1Q strength. Was anything pulled forward or was that as planned?

And it comes from the line of Dan Levy from Barclays. Your line is open. Please ask your question.

Operator: Thank you. Now we're going to take our next question, and it comes through the line of Dan Levy from Barclays. Your line is open. Please ask your question.

Yeah.

Hi.

Good morning, Thank you for taking the questions.

Dan Levy: Hi. Good morning. Thank you for taking the questions. 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 Q1 margin strength was driven by better cost controls. Maybe you could just provide some comments on how the pricing benefits factored into the Q1 strength. Was anything pulled forward, or was that as planned?

Just wanted to get into the pricing cadence for the year, maybe you could just comment there I think.

I mean, we had commercial recoveries also in the first quarter in line with our expectations. And as we have said here, that we are expecting a gradual improvement on the compensation for the inflationary headwinds throughout the year. So we do expect higher commercial recoveries in the second quarter, sequentially.

The comment that you just provided implied that.

The <unk> that.

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

And then 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's Q2 and Q3, the gap between those two quarters could be a bit narrower this year than last year.

Okay.

I think we had commercial recoveries also in the first quarter in line with our expectations.

Mikael Bratt: I mean, we had commercial recoveries in Q1 in line with our expectations. As we have said here, we are expecting a gradual improvement on the compensation for the inflationary headwinds throughout the year. We do expect a higher commercial recoveries in Q2 sequentially here. Then 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. That's Q2 and Q3, the gap between those two quarters could be a bit narrower this year than last year. That's, I think, as much as we can say of how we expect the cadence here of the pricing to come through.

Fredrik Westin: I mean, we had commercial recoveries in Q1 in line with our expectations. As we have said here, we are expecting a gradual improvement on the compensation for the inflationary headwinds throughout the year. We do expect a higher commercial recoveries in Q2 sequentially here. Then 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. That's Q2 and Q3, the gap between those two quarters could be a bit narrower this year than last year. That's, I think, as much as we can say of how we expect the cadence here of the pricing to come through.

And as.

As we have said here that we are expecting a gradual improvement on the compensation for the inflationary headwinds.

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

Throughout the year, so we do expect.

Higher commercial recoveries.

Great. Thank you. And then a second question is just on some of the outgrowth dynamics. And maybe just two parts of this. One, maybe you could just provide a comment on

In the second quarter sequentially here.

And but then also we said that we don't expect to have an identical quarterly pattern as we had last year with a step up.

And every quarter.

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

That's Q2 and Q3 the gap between those two quarters could be a bit narrower this year than last year.

But that's I think that's as much as we can say of how we expect the cadence you're off the pricing to come through.

India 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 you. So maybe you could just talk about what's going on in India and the sustainability of growth.

Great. Thank you.

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

Dan Levy: Great. Thank you. And then a second question is just on some of the outgrowth dynamics, and maybe just two parts of 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 India sales growth of 27%, which I think now would basically contribute to even though it's a small base of sales, that's like a whole point of outgrowth for you. 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?

of those results. Is that going to be a meaningful contributor to growth in the future for you?

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. It fails that's like a whole point of outgrowth for you to make.

Very good, thank you. No, I think what you see here is a reflection of our market position in the different countries. I mean, we have a market leading position in China where we working with a broad-based customer.

You could just talk about what's going on in India and the sustainability.

portfolio there and obviously we are on

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

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.

Thank you.

No I think what you see here is a reflection of our of our.

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

Market position in the different countries I mean, we we have a market leading position in China, where we're working with a broad based customer.

India is a very interesting market for us. Also there we have

a local presence and we have

<unk>.

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

Portfolio, there and obviously we are on a.

The main Chinese.

Oems here.

Have been with working with them for a long time.

which is then an increased focus on content and safety regulations in China. And we, sorry, in India and we see that now is coming through.

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

As we move forward here.

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

In China, we have, or India, we have a very strong position as well here and a market leading position.

Our local presence and we have the last couple of years also invested in our <unk>.

Mikael Bratt: 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 in and safety regulations in China. Sorry, in India, and we see that now is coming through. In China, we have Sorry, India, we have a very strong position as well here and a market-leading position. We look very positively on both these countries and India for sure is taking significant steps to increase the required rules and regulations around the required safety components in their vehicle.

Footprint there too.

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 vehicle. And today India has grown to become around 4% of our turnover, global turnover. So quite meaningful market here and we expect that to grow and very positively viewing that. opportunity.

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 regulations in China, and we also are in India, and we see that now is coming through one in China, we have.

Also India have been very strong.

Our position as well here in our market leading position so.

We look very positively on both of these countries and <unk>.

Great. Thank you.

India for sure is taking significant steps to increase the required rules and regulation that surround the required safety components in their vehicles.

Thank you.

Now we're going to take our next question.

And the next question comes to line of Bjorn Anderson from Dansky Bank. Your line is open, please ask your question.

Today, India has grown to become round, 4%, though our turnover.

Mikael Bratt: Today, India has grown to become around 4% of our turnover, global turnover. So quite meaningful market here and we expect that to grow and very positively viewing that opportunity.

Thank you. On India again, can you, I mean, 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 that according to your backlog to continue to grow in the next few years?

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

Opportunity.

Great. Thank you.

Thank you.

Hampus Engellau: Great. Thank you.

Dan Levy: Great. Thank you.

Matt will then take over next question.

Operator: Thank you. Now we're going to take our next question. The next question comes from the line of Björn Andersson from Danske Bank. Your line is open. Please ask your question.

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

We are really in the 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...

Thank you Ed on India again, now can you I mean, you have had a higher market shares in your backlog for quite some time.

Björn Andersson: Yeah, thank you. On India again. I mean, you have had higher market shares in your backlog for quite some time. Where are you now in terms of market shares in India? Do you still expect that, according to your backlog, to continue to grow in the next few years?

Björn Enarson: Yeah, thank you. On India again. I mean, you have had higher market shares in your backlog for quite some time. Where are you now in terms of market shares in India? Do you still expect that, according to your backlog, to continue to grow in the next few years?

Where are you now in terms of market shares in India and do you still expect that according to your backlog to continue to grow in the next few years.

investments in China last couple of years where we have renewed our footprint and we have also added capacity and virtually integrated more into the Indian market so we have now an inflator plant in India which we didn't have before for example in order to to also respond to the increased demands coming in India here.

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

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

That's of course, something that we are.

Intend to defend and grow and as I mentioned before here we have made.

So, yeah, I feel we are well positioned here to continue to grow with Indian market.

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

Capacity there clearly. And then a second thing on EV, I mean, what's your take on why EV in certain markets is...

<unk>, we have also added a.

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

growing less or less popular. I mean, I guess, and you repeat that you're quite agnostic to the drive line, but still, what's your take on that?

I think it's a wide range of reasons in certain markets. It's very specific to each market. In some markets, there have been incentives that have disappeared. It's also been more expensive to invest in an electric vehicle than a regular vehicle. And now, with the overall economic pressure on households being higher, people may not be able to afford it. Additionally, there are challenges in certain markets when it comes to...

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

Capacity is currently.

The second thing on E V. I mean, what's your take on why yeah yeah.

Björn Andersson: Capacity is there clearly.

Björn Enarson: Capacity is there clearly.

Mikael Bratt: Yeah.

Björn Andersson: A second thing on EV. I mean, what's your take on why EV in certain markets is growing less or less popular? I mean, I guess, and you repeat that you're quite agnostic to the driveline, but still, what's your take on that?

Björn Enarson: A second thing on EV. I mean, what's your take on why EV in certain markets is growing less or less popular? I mean, I guess, and you repeat that you're quite agnostic to the driveline, but still, what's your take on that?

Even in certain markets.

Theyre growing less so less popular.

I guess and you repeat that you are quite agnostic for the driveline, but stable.

What's your take on that.

No I think it's.

Huge range all of Reis.

Mikael Bratt: I think it's a huge range of reasons in certain markets. I mean, it's very individual for the market, I should say, rather. I mean, in some markets there has been incentives which has disappeared. It has also been more costly to invest in an EV than a regular vehicle. Of course now if the overall economic pressure on household is higher, maybe you are not prepared to make that investment, et cetera. Also I think there is some challenges in certain markets when it comes to charging capacity and availability, et cetera. Of course there is a lot of things that influence the respective markets. I would say that the trend for increasing EVs is here to stay.

Since the start tomorrow, just I mean, it's very individual for the market I should say Roger.

charging capacity and availability etc so of course there is a lot of things that influence the respective markets but I would say that the trend for increasing EV is here to stay so it's more I would rather see a bump on the road

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

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.

Okay, thank you.

Thank you.

Now we're going to take our next question.

Charging a capacity and availability etcetera. So of course, there is a there's a lot of things that are influenced their respective markets, but I would say that the trend for increasing evs is here to stay so it's more of a royalty a bump on.

And the next question comes line of Michael Jacks from Bank of America. Your line is open, please ask your question.

Hi, thank you. Good afternoon, Mikhail Frederick. 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 does 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?

The road.

Mikael Bratt: I would rather see a bump on the road.

Okay. Thank you.

Mikael Bratt: I would rather see a bump on the road.

Thank you. Thank you.

Björn Andersson: Okay. Thank you.

Björn Enarson: Okay. Thank you.

Now we're going to take our next question.

Operator: Thank you.

Mikael Bratt: Thank you.

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

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

Yeah, I think when you look at our

Hi, Thank you and good afternoon, Mikael Fredrik. Thank you for the presentation.

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 over our sales in China.

Michael Jacks: Hi. Thank you. Good afternoon, Mikael, Fredrik. Thank you for the presentation. My first question, just going back on China, with the exception of Chery, your business there was more influenced by the activities of foreign OEMs in Q1. Could you just remind us where does 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?

First question just going back on China.

Caption of sharing new business, there was more influenced by the activities the foreign Oems in Q1.

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.

In Q1, we are at 30% and we expect the full year to increase to 40% pace here. So, yeah, continued increase sales from Chinese OAM as I continue to take market share and grow as well here. So well positioned with our customers there.

Yes, I think when you look at our.

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

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%, and we expect the full year to increase to 40% pace here. Yeah, continued increased sales from Chinese OEM as they continue to take market share and grow as well here. Well-positioned with our customers there.

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

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 of accuracy in Q1, is that being driven now by volatility on easy platforms or are there still some other supply chain tensions around which you might be able to elaborate on?

Chinese OEM to continue to grow over and over.

Our sales to China.

In Q1, we are at 30% and we expect the full year to increase to 40% pace. So yeah continued increased sales from Chinese Oems. They continue to do to take market share and grow as well here, so well positioned with our.

Customers there.

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 platforms or are they still some other supply chain tensions around which you might be able to elaborate on.

Michael Jacks: Yeah, that's quite a big step change. Thank you. 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?

logistics flows here and ship accuracy and so on. I think some areas you have some labor, a challenge with high turnover and lack of workforce. So it varies broadly between the different customers, I would say, and their respective supply chains.

No I think it's very much a mix of supply chain issues mainly.

Mikael Bratt: No, I think it's very much a mix of supply chain issues, mainly. I think you can find a whole range here from still challenging logistics in the world's logistics flows here and ship accuracy and so on. Some areas you have some labor challenge with high turnover and lack of workforce. It varies broadly between the different customers, I would say, and their respective supply chains.

And I think you can't find a whole range here from still challenging logistics.

That's helpful color. Thank you.

Thank you. Thank you. Thank you.

In the world.

Uh huh.

Logistics flows here and sheep sheep accuracy and so on.

And the next question comes line of Hampus Engelau from Handel's Bank and your line is open. Please ask a question.

I know some some area. So you have some labor constraints.

The challenge with high turnover and lack of workforce so.

Thank you very much. Two questions for me. First question is on the six percent point outgrowth on the

Broadly between the different.

Customers, I would say and their respective supply chains.

Q1 numbers if you could maybe add some limit clabor, how much is to like market share, content growth and if there's also an element of price there.

That's helpful color. Thank you.

Thank you. Thank you. Thank you.

Michael Jacks: That's helpful color. Thank you.

And the second question is on orders. I know I'm not going to really order for, but just to get a sense on your fair share of activity in Q1, even if you don't want to comment on market share, et cetera.

Now we're going to take our next question.

Mikael Bratt: Thank you.

Hampus Engellau: Thank you.

Fredrik Westin: Thank you.

Operator: Thank you. Now we're going to take our next question. The next question comes from the line of Hampus Engellau from Handelsbanken. Your line is open. Please ask your question.

And the next question comes from the line of <unk> <unk> Handelsbanken. Your line is open. Please ask your question.

Thank you very much two questions for me.

Yeah.

Thank you. No, I think I mean on the outperformance side I mean it's the of course content growth and 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 the

First question is on the six percentage points outgrowth from the <unk>.

Hampus Engellau: Thank you very much. Two questions for me. First question is on the 6 percentage points outgrowth from the Q1 numbers. If you could maybe add some little flavor of how much is due to, like, market share, content growth, and if there's also an element of price there. Second question is on orders. I know you're not gonna reveal the orders. Just to get a sense on your fair share of activity in Q1, even if you don't want to comment on market shares, et cetera. Thanks.

Q1 numbers, if you could maybe I'm from limit flavor.

Much like market share content growth and if there is one element of price there.

And second question is.

This is on orders I never understood.

Really the one before but just to get the cellphone or newer.

important contributor here is the market share growth as we we launched the new new platforms here. So I would say mainly you know

All the activity in Q1, even if you don't want to comment on market shares et cetera. Thanks.

Thank you.

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

Mikael Bratt: Yeah. Thank you. No, I think, I mean, on the outperformance side, I mean, it's, of course, content growth that we have talked about when it comes to content per vehicle here, which is in the range of 1 to 2 percentage points. And then, pricing is a part of it, but then of course, the important contributor here is the market share growth as we launch the new platforms here. I would say mainly, you know, 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.

CPV and market

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.

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.

And then.

Pricing is a part of it but then of course the.

Contributor here is the market share growth as we launched the new <unk> platforms here.

When it comes to new orders, I would say that Q1 was a relatively slow quarter in terms of customer awards. This was in line with our expectations and there were no surprises.

So I would say mainly.

CPD and market.

Share growth here as we look at the quarter here, but also for the full year pricing has decided to come sequentially contributing yet.

strange there but I feel that we continue to gain orders to defend the market share that we are in here and supporting our way forward here in a good way.

Right.

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

Details on it but do you have the components there.

Mikael Bratt: We don't break down the exact details on it, but you have the components there. When it comes to the new order intake, I would say Q1 has been relatively low quarter in terms of award activities from our customers. That was also according to plan, so nothing strange there. I feel that we continue to gain orders to defend the market share that we are in here and supporting our way forward here in a good way. Backfilling the order book in a good way here.

back feeling the order book in a good way here.

Through new order intake I would say in Q1 has been.

Thank you.

Relatively low.

Thank you. Thank you.

Quarter in terms of the award activities from our customers and that's what source.

Now we're going to take over the next question.

According to plan, so nothing strange VR, but I feel that we continue to.

And the next question comes to line of Jaram Nathan from Adawa Capital Markets America. Your line is open, please ask your question.

Gain a gain orders to defend the market share that we are in here in supporting our.

Hi, thanks for the opportunity. So I just wanted to kind of dig a little further from the last question. You know, if I look at your EBITWalk, 74 million and compared to, it almost seems like the incremental margins is close, is above 50%. Now, does that imply, that did me imply that your, the recoveries was

Way forward here in the good way so.

Doug filling the order book in a good way here.

Thank you.

Thank you. Thank you.

Agnieszka Vilela: Thank you.

Hampus Engellau: Thank you.

Yes.

Now we're going to take over next question.

Operator: Thank you.

Mikael Bratt: Thank you.

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

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

was probably a bigger portion or your cost saving in the activities are kind of kicking in So you know just just like how should we think of incremental margins going forward?

Hi, Thanks for thanks for the opportunity.

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: Hi. Thanks for the opportunity. 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 is above 50%. Now, does that imply that it mean imply that your the recoveries was probably a bigger portion or your cost savings and initiatives are kind of kicking in? You know, just for like, how should we think of incremental margins going forward? Yeah, I had one more question.

Yeah, and I had one more question.

Yeah, no, I think the high operating leverage was a combination of a couple of factors. And of course, organic growth is one factor, but then it is mainly the contribution here with the cost reductions.

And compared to it almost seems like the incremental margins.

<unk> is above 50% now does that imply that credit.

Imply that youre the recoveries.

We've done on both 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 the direct labor for activity. Those are mainly the factors why we get to such an high operation leverage and much less driven by pricing.

What's probably a bigger portion of your cost savings.

Activities are kind of kicking in.

So just.

How should we think of incremental margins going forward.

Yeah, and I had one more question.

Yeah, No I think the the high operating leverage was.

Mikael Bratt: Yeah, no, I think the high operating leverage was a combination of a couple of factors. Of course, the organic growth is one factor. 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 Q1 and also the very good advancement we have on the direct labor productivity. Those are mainly the factors why we get to such a high operating leverage, and much less driven by pricing. We had slightly lower premium freight costs in this quarter related to the better call-off stability from our customers when you compare it year-over-year.

Fredrik Westin: Yeah, no, I think the high operating leverage was a combination of a couple of factors. Of course, the organic growth is one factor. 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 Q1 and also the very good advancement we have on the direct labor productivity. Those are mainly the factors why we get to such a high operating leverage, and much less driven by pricing. We had slightly lower premium freight costs in this quarter related to the better call-off stability from our customers when you compare it year-over-year.

A combination of a couple of factors and of course, the organic growth is one factor, but then it is mainly the contribution here with the cost reductions.

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

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.

Okay, thanks. And just on, you know, when you look at the region, 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 to South Korea, especially into the U.S., I'm guessing those are higher-contented vehicles. So have you done some analysis on how much is, you know, how much is exports helping you in terms of content?

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.

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 that's really the answer.

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

Mikael Bratt: It's really the underlying operational performance that is driving the leverage.

Fredrik Westin: It's really the underlying operational performance that is driving the leverage.

Okay, Thanks, and just on.

When I when you look at the regions the regional mix and reasonable 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 U S.

I mean, we have a structure and outside of the approach where we sell to our customers in the regions where we produce.

Jairam Nathan: Okay. Okay, thanks. Just on, you know, when you look at the regions, 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 content vehicles. Have you done some analysis on how much, you know, exports is helping you in terms of content?

And of course our customers can then then return export their vehicles to different parts of the oil, but it doesn't really change our

Yeah.

I'm guessing those are higher contented vehicles.

Have you done some analysis on how much how much is.

supply chain to our customers here. So we look at where is the vehicle produced and that's the basis. And I don't see that we are going to change that. I think these regional pros and decentralized operational responsibility is serving as well. And yeah, it's something we're going to continue to build on.

How much is exported helping.

And helping you in terms of content.

I mean, we have.

Yeah.

Structure on.

Mikael Bratt: I mean, we have a structure and I would say an approach where we sell to our customers in the regions where we produce. Of course, our customers can then in turn re-export their vehicles to different parts of the world. It doesn't really change our supply chain to our customers here. We look at where is the vehicle produced, and that's the basis. I don't see that we are going to change that. I think this regional approach and yeah, it's something we're going to continue to build on.

Coach or we sell to our customers in the regions, where we produce then of course, our customers, Canada and then to return export their vehicles to different.

Okay, thank you.

Thank you.

Causal role, 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.

Now we're going to take over the next question.

And the next question comes to the line of Agneshka Villela from Nordeaux. Your line is open, please ask your question.

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

Perfect, thank you. I have two questions. So my first question is again on the out-of-period compensations.

These were quite significant in both Q2, 2022 and 23. I think you reached some 30 million

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

Okay. Thank you.

each of these quarters. So the question is will the Q2 this year be as important quarter for you to close negotiations and receiving payments? Also do you hope to recover the similar level of compensations?

Thank you.

Jairam Nathan: Okay. Thank you.

Now we're going to take our next question.

Operator: Thank you. Now we're going to take our next question. The next question comes to line of Agnieszka Vilela from Nordea. Your line is open. Please ask your question.

And the next question comes from the line of <unk> <unk> from Nordea. Your line is open. Please ask your question.

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 some 30 million each of these quarters. So the question really is will the Q2, the CRB as important quarter for you.

Thank you.

Typically, when we have these negotiations, our ambition is to get compensation for, say, 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.

Agnieszka Vilela: Perfect. Thank you. I have two questions. My first question is, again on the out of period compensations. These were quite significant in both Q2, 2022 and 2023. I think, you reached some $30 million each of these quarters. The question really is, will the Q2 this year be as important quarter for you to close negotiations and receiving payments? And also, do you hope to recover the similar level of compensations?

But how much exactly that will be remains to be seen our focus is to get the right height on the compensation and

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

Yeah, that is more important to us. So yeah, we'll come back here in the second quarter of how much retroactivity in that pricing that we negotiate in the second quarter will then be shown.

Hum.

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 reach activity back to January 1st with the negotiations we close here in the second quarter, but.

Mikael Bratt: You know, typically when we have these negotiations, our ambition is to get compensation for, say, the full year. We would expect that there should be some retroactivity back to January first, with the negotiations we closed here in the Q2. How much exactly that will be remains to be seen. Our focus is to get the right, say, rate on the compensation. Yeah, that is more important to us. Yeah, we'll come back here in the Q2 of how much retroactivity in that pricing that we negotiate in the Q2 will then be shown.

Fredrik Westin: You know, typically when we have these negotiations, our ambition is to get compensation for, say, the full year. We would expect that there should be some retroactivity back to January first, with the negotiations we closed here in the Q2. How much exactly that will be remains to be seen. Our focus is to get the right, say, rate on the compensation. Yeah, that is more important to us. Yeah, we'll come back here in the Q2 of how much retroactivity in that pricing that we negotiate in the Q2 will then be shown.

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

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

I mean, as I already indicated before, we have closed negotiations and part of negotiations already here in the first quarter. But also, the majority is still outstanding and then those are the ones who are targeting here to close in the second and third quarter of the year.

On the compensation.

And.

That is more important to us.

So yes, we'll come back here in the second quarter of how much of each activity and the pricing that we negotiated in the second quarter was on Vishal.

Vishal.

But it is an ongoing process and it's not always like you close all at once. You also can take it in steps and we have already secured some of the pricing effects in the first quarter.

Alright, then just to follow up on that Ah you're already closing the negotiations or are they still proceeding into Q2.

Agnieszka Vilela: All right. Just to follow up on that, are you already closing the negotiations or are they still proceeding into Q2?

Perfect, thank you. And then my second question is on the R&D expenses. R&D to sales were at about 4% this quarter and that's obviously a good improvement from

I already indicated before we have closed the.

Mikael Bratt: I mean, as I already indicated before, we have closed negotiations or part of negotiations already here in the Q1. Also, I mean, the majority is still outstanding, and then those are the ones we're targeting here to close in the Q2 or Q3 of the year. It is an ongoing process, and it's not always likely to close all at once. You also can take it in steps and we have already secured some of the pricing effects here in the Q1.

Fredrik Westin: I mean, as I already indicated before, we have closed negotiations or part of negotiations already here in the Q1. Also, I mean, the majority is still outstanding, and then those are the ones we're targeting here to close in the Q2 or Q3 of the year. It is an ongoing process, and it's not always likely to close all at once. You also can take it in steps and we have already secured some of the pricing effects here in the Q1.

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

So but also the majority are still outstanding and then those are the ones who were targeting were to close in the second or third quarter of the year, but it is an ongoing process and it's not always like a close all at once you also can take it in steps and one that.

If we look at the recent years being it at 5 to 6%, so could you please remind us what's driving the R&D cost efficiency? And also I think you're writing 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.

We have already secured some of the pricing effect here in the first quarter.

Perfect. Thank you and then my second question is on the R&D expenses and R&D to sales.

Yeah, I mean, we have already, even in the 12% margin target, we, and then the way to get there back in 2019, we said that we were striving for a better already efficiency, and then that's, I think, what you're seeing coming through here now.

Agnieszka Vilela: Perfect. Thank you. My second question is on the R&D expenses. R&D to sales were at about 4% this quarter, and that's obviously a good improvement from if we look at the recent years being it's at 5% to 6%. Could you please remind us what's driving the R&D cost efficiency? Also, I think you're right in the report that specifically in Q1 you had some maybe extra engineering income. If you could give us a bit more color on that.

It's 4% this quarter and that's obviously up.

Good improvement from.

If we look at the recent theaters being it's a 5% to 6% so could you just.

In relation to the 2000 headcount reduction target on the indirect side, there's also a part of that allocated to RD&E and also some of those savings we do see come through already now as well.

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.

Then in this

The engineering income part is always a 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 come through also impacting RD&E costs positively.

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

The 12% margin target.

Mikael Bratt: I mean, we have already you know, even in the 12% margin target, and then the way to get there, back in 2019, we said that we were striving for a better RD&E efficiency. That's, I think, what you're seeing coming through here now. In relation also to the 2,000 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 come through already now as well, yeah. Then in this, the engineering income part is always a bit. It can fall in one quarter or the next quarter. So that can always impact a little bit between, say, Q1 and Q3.

Fredrik Westin: I mean, we have already you know, even in the 12% margin target, and then the way to get there, back in 2019, we said that we were striving for a better RD&E efficiency. That's, I think, what you're seeing coming through here now. In relation also to the 2,000 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 come through already now as well, yeah. Then in this, the engineering income part is always a bit. It can fall in one quarter or the next quarter. So that can always impact a little bit between, say, Q1 and Q3.

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

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

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

Then in.

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

Thank you.

Thank you. Thank you.

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

Now we're going to take our next question.

And then you know that we see.

Just give us a moment.

Seasonally have a stronger recovery quarter in the fourth quarter.

And the next question comes line of Russ McDonald's from Morgan Stanley . Your line is open, please ask your question.

Mikael Bratt: You know that we seasonally have a stronger recovery quarter in the Q4. I wouldn't say that there was anything special here on the recovery side in the Q1. It's more again that the cost control and also headcount reductions we see coming through also impacting RD&E costs positively.

Fredrik Westin: You know that we seasonally have a stronger recovery quarter in the Q4. I wouldn't say that there was anything special here on the recovery side in the Q1. It's more again that the cost control and also headcount reductions we see coming through also impacting RD&E costs positively.

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.

Hi there, yes, thanks for taking my questions. Just to come back to India once more and link 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 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?

Thank you.

Thank you thank.

Thank you.

Agnieszka Vilela: Thank you.

Mikael Bratt: Thank you.

Fredrik Westin: Thank you.

Operator: Thank you. Now we're gonna take our next question. Just give us a moment. The next question comes from the line of Russ McDonald from Morgan Stanley. Your line is open. Please ask your question.

Now we're going to take over next question.

Just give us a moment.

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

Yeah, 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, $270 per vehicle here.

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.

Russ McDonald: Hi there. Yes, thanks for taking my questions. Just to come back to India, once more, and link 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 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.

Ross MacDonald: Hi there. Yes, thanks for taking my questions. Just to come back to India, once more, and link 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 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.

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.

in the next coming year or so.

That's great. So quite a rapid increase here and as I said it's driven also very much around the legislation and you may recall that last year here there was intention to put in legislations on certain

Yeah.

Thank you.

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

Mikael Bratt: Yeah. 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. We expect it to quite rapidly grow to $150 to $170 per vehicle here in the next coming year or so.

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

a number of airbags in a vehicle, which later was retracted, but I would say the majority of the OEMs decided still to carry on with that ambition. So you see this increase coming through one of those that's an important contributor to the 150 to 170 dollars.

In the next coming year or so.

That's great Brian Faith increase here and as I said, it's driven also very much around.

Russ McDonald: That's great. Thank you.

Ross MacDonald: That's great. Thank you.

Mikael Bratt: Quite rapidly.

Russ McDonald: And then perhaps-

Ross MacDonald: And then perhaps-

Mikael Bratt: Increase here. As I said, it's driven also very much around the legislation. You may recall that last year here there was intention to put in legislation on certain number of airbags in a vehicle, which later was retracted. I would say the majority of the OEMs decided still to carry on with that ambition. You see this increase coming through, and of course that's an important contributor to the $150 to $170.

The legislations and.

Excellent, yeah, so some of that very strong growth, I guess, would be expected to continue with the market share and the DPV.

Sure.

You may recall at.

Last year here that was our intention to put in legislations on.

Expansion. That's great. Thank you. The second question is on North America and mixed trends in North America. There's obviously a big debate around to stretch 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 Order Bank, perhaps from large SUV into smaller SUVs or crossovers are

Certain.

A number of airbags in a vehicle with Slater was retracted, but I will say the minority of the Oems decided still too.

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.

Excellent yeah. So some of that very strong growth I guess would you expect it to continue with the market share.

any trends like that. Thank you.

Russ McDonald: Excellent. Yeah. Some of that very strong growth, I guess, would be expected to continue with the market share and the-

Ross MacDonald: Excellent. Yeah. Some of that very strong growth, I guess, would be expected to continue with the market share and the-

I mean, we see what you're referring to here as well, but in our own numbers and in our dialogues with the class, we don't really seeing that. And we don't expect that to have any real impact on ourselves here also as.

In a country that's great. Thank you and the 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 <unk>.

Mikael Bratt: Yeah

Russ McDonald: ... CPV expansion. That's great. Thank you. The second question is on North America and mix 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 book, perhaps from large SUVs into smaller SUVs or crossovers or any trends like that. Thank you.

Ross MacDonald: ... CPV expansion. That's great. Thank you. The second question is on North America and mix 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 book, perhaps from large SUVs into smaller SUVs or crossovers or any trends like that. Thank you.

Once again, the diversity here in terms of our portfolio will support us in any transitions like that. So, no, not really a concern from our side here.

Bank, perhaps from large suvs into smaller Suvs or crossovers here anytime.

Thank you.

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.

Mikael Bratt: I mean, we see what you're referring to here as well. In our own numbers and in our dialogues with customers, we don't really see that, and we don't expect that to have any real impact on ourselves here also as once again, the diversity here in terms of our portfolio will support us in any transitions like that. No, not really a concern from our side here.

Thank you.

Now we're going to take over the next question.

And we don't expect that to have any.

And the next question comes to Lahn of Jason Getz from Mizuka Security. Your line is open, please ask your question.

Any impact on ourselves here owes us once again the diversity here in terms of our portfolio.

Hey guys, thanks for let me ask the question. 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 wondering more near-term how that's trending. Is that starting to stabilize? Are we still seeing increases on a, you know, sequential basis?

Will support us in any transition like that.

So no not really a concern from our side here.

Thank you.

Russ McDonald: Thank you.

Ross MacDonald: Thank you.

Now we're going to take the next question.

Operator: Thank you. Now we're gonna take our next question. The next question comes from the line of Jason Getz from Mizuho Securities. Your line is open. Please ask your question.

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

Okay.

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

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

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.

component. On the labor cost side, the majority or the vast majority is behind us. I mean, that's already happened in the first quarter of the year. There might be some

Speaker 14: Hey, guys. Thanks for letting me ask you a question. 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 kinda year on year, but wondering more near term, how that's trending. Is that starting to stabilize, or are we still seeing increases on a, you know, sequential basis?

Jason Getz: Hey, guys. Thanks for letting me ask you a question. 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 kinda year on year, but wondering more near term, how that's trending. Is that starting to stabilize, or are we still seeing increases on a, you know, sequential basis?

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

a few further labor cost increases that we can expect in higher inflation countries, but that should not have a significant impact. So labor costs to large extent is behind us with what's happened in the first quarter, but we still expect some on the purchase material from our suppliers.

Sequential basis.

There will be still some sequential increase is mainly on our material costs. So all the components that we purchased and then mainly on the labor content of those purchase.

Mikael Bratt: There will be still 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 purchased components. On the labor cost side, the vast majority is behind us, and that all happened in Q1. There might be some, a few further labor cost increases that we can expect in, say, higher inflation countries, but that should not have a significant impact. Labor cost to a large extent is behind us, with what's happened in Q1, but we still expect some on the purchased material from our suppliers.

Fredrik Westin: There will be still 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 purchased components. On the labor cost side, the vast majority is behind us, and that all happened in Q1. There might be some, a few further labor cost increases that we can expect in, say, higher inflation countries, but that should not have a significant impact. Labor cost to a large extent is behind us, with what's happened in Q1, but we still expect some on the purchased material from our suppliers.

Components on the labor cost side, the majority or the vast majority is behind us, but that's already happened that it will happen in the.

Gotcha.

And then on

When you look at the 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? How should we think about that moving forward? Yeah.

In the first quarter of the year there might be some a.

A few further.

Labor cost increases that we can expect in say high inflation countries.

But that should not have a significant impact.

Labor cost are largely behind us with what's happened in the first quarter.

But we still expect some on the purchased material from our suppliers.

We don't expect that. I think right now we are at the point where

Got you.

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 .

And then on.

Speaker 14: Got you. On 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?

Jason Getz: Got you. On 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?

When you look at the broader L V piece of the year, how much do you think of that is.

Vehicle inventory build versus true sell through demand.

Do you think we are seeing.

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

In the US we see with historical measurements lower level of inventory but I would say it's in line with what the OEMs have indicated where I would like to be. So,

How should we think about that moving forward.

We don't.

I think right now we are at the point, where it's quiet.

Mikael Bratt: 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 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. Short answer I would say is that no inventory buildup. It's all about the demand from end consumer here.

Calibrated between supply and demand here I think the restocking to launch since then has already happened.

no indications or any plans on you know bringing that the industry inventory up so

I mean in China, we are at normal levels of inventory.

Likewise in Europe.

Short answer, I will say is that no inventory build up, it's all about the demand from end consumer here.

In the U S. We see.

Historical measurements.

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

Gotcha. Thank you.

In line with what.

Thank you.

Oems of.

Indicated what I would like to be so.

No indications oriented plans on.

Bringing the industry inventory up so.

Bye.

So short short answer I would say is that.

Excuse me, Matthias, your line is open.

No inventory buildup, it's all about.

Sorry, can you hear me? Yeah, there you. 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.

Demand from end consumer here.

Got you. Thank you.

Thank you.

Speaker 14: Got you. Thank you.

Jason Getz: Got you. Thank you.

Now we're going to take over next question.

Operator: Thank you. Now we're going to take our next question. The next question comes from the line of Mattias Holmberg from DNB Markets. Line is open, please ask your question. Excuse me, Mattias, your line is open.

Okay.

And the next comes from the line of my Kids home back from Dnb markets. Your line is open. Please ask your question.

Yes.

Bye.

Yeah.

I think we said that we are maybe a bit ahead on the 50 million. We haven't broken it down by quarter.

Excuse me Matthew your line is open.

Sorry can you hear me.

It is coming, I designed the larger part of actually come in the second half of the year because it's so far we've taken out more headcount in the best cost countries than we have in high cost countries.

Yes.

Hello.

Alright, thanks for allowing the quick follow up just if you could 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 are targeting.

Mattias Holmberg: Sorry, can you hear me?

Speaker 14: Yeah, we hear you.

Mikael Bratt: Yeah, we hear you.

Mattias Holmberg: Hello? Oh, yeah, sorry. Thanks for allowing the quick follow-up. Just, if you could, it'd 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 were targeting for the year.

Targeting for the year.

Yes, I think we said that we were maybe a bit ahead on the $50 million, we haven't broken it down by quarter.

Mikael Bratt: Yeah, I think we said that we are maybe a bit ahead on the $50 million. We haven't broken it down by quarter. It is coming by design. The larger part will actually come in the H2 because so far we've taken out more headcount in the best cost countries than we have in high-cost countries. The impact here of Germany, for instance, is coming towards the H2 and even more so next year. It's more the H2 than H1, and we are a little bit ahead of time in the Q1.

Fredrik Westin: Yeah, I think we said that we are maybe a bit ahead on the $50 million. We haven't broken it down by quarter. It is coming by design. The larger part will actually come in the H2 because so far we've taken out more headcount in the best cost countries than we have in high-cost countries. The impact here of Germany, for instance, is coming towards the H2 and even more so next year. It's more the H2 than H1, and we are a little bit ahead of time in the Q1.

It is coming.

Thank you.

By design that the larger part is actually come in the second half of the year because it's so.

Thanks.

Thank you.

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

Dear speakers, I would now like to hand the conference over to Mikhail Brat for any closing remarks.

So I don't expect to hear of Germany.

Germany for instance is coming towards the second half of the of the year and even more so next year huh.

Thank you, Nadia. The world is changing at an accelerating pace and Outto-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.

So it's it's it's fairly.

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

Okay.

Thank you.

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.

Thanks.

Thank you.

Mattias Holmberg: Thank you.

Mikael Bratt: Thanks.

Fredrik Westin: Thanks.

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.

Operator: Thank you. Dear speakers, thank you for the questions. I would now like to hand the conference over to Mikael Bratt for any closing remarks.

Thank you and IBM and the world is changing at an accelerating pace and our <unk> has launched a number of strategic initiatives to meet the needs of our customers to enhance shareholder value and deliver safety solutions for society.

cost compensations and a committed focus on innovation, quality and sustainability, and our most important direct contribution to a sustainable society, saving more lives.

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 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 compensations, and a committed focus on innovation, quality, and sustainability, and our most important direct contribution to a sustainable society, saving more lives. Our Q2 earnings call is scheduled for Friday, 19 July 2024. Thank you everyone for participating in today's call. We sincerely appreciate your continued interest in Autoliv. Until next time, drive safely.

Our second quarter earnings call is scheduled for Friday, July 19th, 2024. Thank you everyone for participating in today's call. We sincerely appreciate your continued interest in Outalise. Until next time, drive safely.

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.

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

Our second quarter earnings call is scheduled for Friday July 19 2024.

Everyone for participating in today's call. We sincerely appreciate your continued interest in outlays until next time drive safely.

Q1 2024 Autoliv Inc Earnings Call

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