STOCKHOLM, July 21, 2023 /PRNewswire/ -- (NYSE: ALV) (SSE:
ALIV.sdb)
Q2 2023: Record second quarter sales
Financial highlights Q2 2023
$2,635 million net
sales
27% net sales increase
27% organic sales increase*
3.6% operating margin
8.0% adjusted operating margin*
$0.61 EPS, 32% decrease
$1.93 adjusted EPS*, 115%
increase
Full year 2023 indications
Around 15% organic sales growth
Around 1% positive FX effect on net sales
Around 8.5%-9.0% adjusted operating margin
Around $900 million operating
cash flow
Key business developments in the second quarter of
2023
- Sales increased organically* by 27%, which was 11pp
better than global LVP growth of 15.5% (S&P Global July 2023). We outperformed significantly in all
regions, mainly due to new product launches and higher
prices.
- Profitability improved substantially, positively impacted
by price increases, organic growth and our cost reduction
activities. Operating income was $94
million and operating margin was 3.6%. Adjusted operating
income* improved from $124 million to
$212 million and adjusted operating
margin* increased from 6.0% to 8.0%, despite inflationary pressure,
adverse FX effects and two isolated supply chain disruptions.
Return on capital employed was 9.5% and adjusted return on capital
employed* was 21.0%.
- Operating cash flow increased from negative $51 million to $379
million, driven mainly by improved adjusted operating income
and positive working capital effects. Free cash flow* increased to
$255 million from negative
$190 million. The leverage ratio*
improved from 1.6x in the first quarter 2023 to 1.3x, impacted by
lower net debt and higher adjusted EBITDA. A dividend of
$0.66 per share was paid, and 0.48
million shares were repurchased and retired in the quarter.
*For non-U.S. GAAP measures see enclosed
reconciliation tables.
Key Figures
(Dollars in
millions, except per share data)
|
Q2
2023
|
Q2
2022
|
Change
|
6M
2023
|
6M
2022
|
Change
|
Net sales
|
$2,635
|
$2,081
|
27 %
|
$5,127
|
$4,206
|
22 %
|
Operating
income
|
94
|
124
|
(24) %
|
221
|
258
|
(15) %
|
Adjusted operating
income1)
|
212
|
124
|
71 %
|
343
|
192
|
79 %
|
Operating
margin
|
3.6 %
|
6.0 %
|
(2.4)pp
|
4.3 %
|
6.1 %
|
(1.8)pp
|
Adjusted operating
margin1)
|
8.0 %
|
6.0 %
|
2.1pp
|
6.7 %
|
4.6 %
|
2.1pp
|
Earnings per
share2)
|
$0.61
|
$0.91
|
(32) %
|
$1.47
|
$1.85
|
(20) %
|
Adjusted earnings per
share1,2)
|
1.93
|
0.90
|
115 %
|
2.82
|
1.36
|
107 %
|
Operating cash
flow
|
379
|
(51)
|
n/a
|
334
|
19
|
1654 %
|
Return on capital
employed3)
|
9.5 %
|
13.1 %
|
(3.6)pp
|
11.4 %
|
13.8 %
|
(2.4)pp
|
Adjusted return on
capital employed1,3)
|
21.0 %
|
13.3 %
|
7.7pp
|
17.4 %
|
10.4 %
|
7.1pp
|
1) Excluding effects
from capacity alignment, antitrust related matters and the Andrews
litigation settlement. Non-U.S. GAAP measure, see reconciliation
table. 2) Assuming dilution when applicable and net of treasury
shares. 3) Annualized operating income and income from equity
method investments, relative to average capital
employed.
|
Comments from Mikael Bratt, President & CEO
During the quarter, we took further steps towards our full year
indications, that support our medium term targets. First, we
achieved new second quarter records for sales, adjusted operating
income and operating cash flow since the Veoneer spin-off in 2018.
Second, we achieved the price compensations from customers we
planned for. Third, to secure our medium and long term
competitiveness, we announced the acceleration of our structural
cost reductions. Last week, we announced the first step towards the
necessary optimization of our cost structure to the market
environment. This first step is expected to reduce costs by around
$25 million in 2024, increasing to
around $55 million in 2025 and to
reach around $75 million when fully
completed. Further actions will be announced as plans
materialize.
We generated an organic growth of 27%, growing 11pp faster than LVP
due to successful product launches and price compensation
achievements. The strong volume growth combined with price
compensations, cost saving activities and lower premium freight
costs enabled us to improve adjusted operating income by 71%,
despite substantial inflationary pressure and FX headwinds.
I am pleased that we delivered an adjusted RoCE of more than 20%.
We delivered strong operating and free cash flow in the quarter,
driven by an improved adjusted operating income and reversal of the
negative working capital effects from the first quarter, in line
with our previous indication. This contributed to an improved
leverage ratio which supports our share repurchase ambitions.
We saw continued improvement in call-off volatility in the quarter
but still higher volatility than pre-pandemic levels. We believe
this reflects an improving global supply chain environment for both
our customers and suppliers. Except for two isolated supply chain
disruptions in Europe and Americas
in the quarter, Autoliv's supply chain showed sequential
improvement.
We reiterate our full year indications. Looking to the second half
of the year, we expect the adjusted operating margin to be back-end
loaded due to normal seasonality between the third and fourth
quarters and the expected closing of price negotiations. The steps
we took in the second quarter support our confidence in
sequentially improving adjusted operating margin which should allow
us to deliver a substantial full year increase in operating cash
flow and adjusted operating income.
Inquiries: Investors and Analysts
Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671
Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614
Inquiries: Media
Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424
Autoliv, Inc. is obliged to make this information public
pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the VP of Investor
Relations set out above, at 12.00 CET on July 21, 2023.
The following files are available for download:
https://mb.cision.com/Main/751/3808240/2200636.pdf
|
The full report
(PDF)
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