Autoliv, Inc. (NYSE:ALV) Q1 2023 Earnings Conference Call April 21, 2023 8:00 AM ET

Company Participants

Anders Trapp – Vice President-Investor Relations

Mikael Bratt – President and Chief Executive Officer

Fredrik Westin – Chief Financial Officer

Conference Call Participants

Colin Langan – Wells Fargo

Emmanuel Rosner – Deutsche Bank

Rod Lache – Wolfe Research

Philipp Konig – Goldman Sachs

Hampus Engellau – Handelsbanken

Vijay Rakesh – Mizuho Group

Erik Golrang – SEB

Michael Jacks – Bank of America

Mattias Holmberg – DNB

Dan Levy – Barclays

Anders Trapp

Thank you, Rafiya. Welcome everyone to our first quarter 2023 earnings call. On this call, we have our President and CEO, Mikael Bratt; and our Chief Financial Officer, Fredrik Westin, and [indiscernible] I am the, VP of Investor Relations.

During today's earnings call, Mikael and Fredrik will, among other things, provide an overview of the strong sales development in the first quarter, discuss operating leverage and outline the expected sequential margin improvement for 2023, as well as 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 at autoliv.com.

Turning to the next slide, we have the Safe Harbor statement, which is an integrated part of this presentation, and of course, includes the Q&A that follows.

During the presentation, we will reference some non-U.S. GAAP measures. The reconciliations of historical U.S. GAAP to non-U.S. GAAP measures are disclosed in our quarterly press release 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 03:00 PM Central European Time. So, please follow a limit of two questions per person.

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

Mikael Bratt

Thank you, Anders. Looking on the next slide. I would like to start by thanking our employees for a good execution, supporting our strong growth in a challenging environment. The sales performance and strong profit recovery was in line with our earlier communicated expectations. Thanks to a strong ending of the quarter, our organic sales grew by more than 20% outperforming light vehicle production significantly. The strong growth was a result of product launches, higher prices, and higher safety content per vehicle and also supported by a positive regional mix.

Our profit development was as expected considering that market conditions continued to be challenging, especially in Europe with significant inflationary pressure and continued customer pool of volatility. Mainly due to strong sales [indiscernible] adverse working capital development led to negative cash flow in the quarter. We expect a [indiscernible] cash flow trend for the rest of the year. Our leverage ratio increased to 1.6 times to 1.4 times three months ago. In the quarter, we paid $0.66 per share in dividends and repurchased and retired 450,000 shares.