STOCKHOLM, Oct. 20, 2023 /PRNewswire/ -- (NYSE: ALV)
and (SSE: ALIV.sdb)
Q3 2023: Another strong quarter
Financial highlights Q3 2023
$2,596 million net
sales
13% net sales increase
11% organic sales growth*
8.9% operating margin
9.4% adjusted operating margin*
$1.57 EPS, 30% increase
$1.66 adjusted EPS*, 35%
increase
Updated full year 2023 indications
Around 17% 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
All change figures in this release compare to the same
period of the previous year except when stated
otherwise.
Key business developments in the third quarter of
2023
- Sales increased organically* by 11%, which was 7pp
better than global LVP growth of 3.8% (S&P Global October 2023). We outperformed 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 $232
million and operating margin was 8.9%. Adjusted operating
income* improved from $173 million to
$243 million and adjusted operating
margin* increased from 7.5% to 9.4%, despite inflationary pressure
and adverse FX effects. Return on capital employed was 24% and
adjusted return on capital employed* was 25%.
- Operating cash flow remained strong, albeit
declining from $232 million to
$202 million, mainly due to temporary
negative working capital effects. Free cash flow* decreased to
$50 million from $68 million. The leverage ratio* was unchanged at
1.3X compared to the second quarter of 2023. A dividend of
$0.66 per share was paid, and 1.23
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)
|
Q3
2023
|
Q3
2022
|
Change
|
9M
2023
|
9M
2022
|
Change
|
Net sales
|
$2,596
|
$2,302
|
13 %
|
$7,724
|
$6,507
|
19 %
|
Operating
income
|
232
|
171
|
36 %
|
453
|
429
|
5.5 %
|
Adjusted operating
income1)
|
243
|
173
|
40 %
|
586
|
365
|
60 %
|
Operating
margin
|
8.9 %
|
7.4 %
|
1.5pp
|
5.9 %
|
6.6 %
|
(0.7)pp
|
Adjusted operating
margin1)
|
9.4 %
|
7.5 %
|
1.8pp
|
7.6 %
|
5.6 %
|
2.0pp
|
Earnings per
share2)
|
1.57
|
1.21
|
30 %
|
3.04
|
3.06
|
(0.5) %
|
Adjusted earnings per
share1,2)
|
1.66
|
1.23
|
35 %
|
4.48
|
2.58
|
73 %
|
Operating cash
flow
|
$202
|
$232
|
(13) %
|
$535
|
$251
|
114 %
|
Return on capital
employed3)
|
24.2 %
|
18.0 %
|
6.2pp
|
15.6 %
|
15.3 %
|
0.3pp
|
Adjusted return on
capital employed1,3)
|
24.5 %
|
18.4 %
|
6.2pp
|
19.8 %
|
13.1 %
|
6.7pp
|
1) Excluding effects
from capacity alignments, 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
Our performance in the third quarter was very encouraging. Our
organic sales growth continued to significantly outperform LVP and
the adjusted operating income was a new third quarter record since
the spin-off in 2018.
I am pleased that our strong performance in the third quarter
was broad based, with improvements in several key areas - both
year-over-year and sequentially - including gross and operating
margin, labor efficiency and SG&A and RD&E costs in
relation to sales. Cash flow was strong, and the debt leverage
remained well within our target range while maintaining our
dividend and almost tripling the number of shares repurchased
compared to Q2.
We continue to work hard to secure a strong medium- and
long-term competitive position. In the quarter, we detailed a large
part of our structural cost reduction intentions of reducing our
indirect workforce by up to 2,000. In addition, the ongoing
reorganization of our global functions and European operations is
expected to lead to a reduced normalized tax rate. It is also
encouraging for our medium- and long-term potential that we
continue to improve our position in China with the fast-growing domestic OEMs. In
the first nine months, we increased our sales to this group by more
than 50% year over year.
We increase our full year sales indication to reflect that LVP
has developed better than expected, even with the UAW strike in the
U.S. We have continued to see an improvement of supply chain
stability throughout the year, with reduced customer call off
volatility. However, the improvement is slower than we had
expected, as it deteriorated somewhat in Europe in Q3. This, together with the higher
sales and adverse FX development, means that we expect a fourth
quarter adjusted operating margin improvement year-over-year of
around 1.5-2pp, in line with the previously communicated
improvement pattern of around 2pp each quarter throughout 2023.
Our performance in the first nine months and the outlook for the
final quarter of the year makes me confident that we will deliver a
substantial full year increase in sales, operating cash flow and
adjusted operating income. Together with the advancement of our
structural cost reduction activities, the improving position with
fast growing OEMs, the continued gradual improvement of supply
chain stability, and the development of inflation compensation, we
have a solid foundation for a continued strong development in the
years to come, that support our medium-term targets.
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 October 20, 2023.
The following files are available for download:
https://mb.cision.com/Main/751/3857722/2375092.pdf
|
The full report
(PDF)
|
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