Slide 1: More Lives Saved – More Life Lived Earnings Call Presentation
More Life Lived More Lives Saved – More Life Lived Earnings Call Presentation 4th Quarter 2023 January 26, 2024 January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 2: Safe Harbor Statement
Safe Harbor Statement* This report contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward- looking statements include those that address activities, events or developments that A
Slide 3: Q4'23 Key Highlights
Q4’23 Key Highlights Record sales and earnings ▪ Stronger than expected Light Vehicle Production (LVP) in China and North America ▪ Achieved or exceeded our full-year guidance − Outperformed LVP significantly in the quarter due to pricing, recent launches and higher safety content − Profitability im
Slide 4: FY'23 Order Intake
FY´23 Order Intake Continued on a high level, supporting growth in coming years Order Intake Lifetime Sales* ▪ Order intake highest since 2018 ▪ Major wins with new automakers, especially with Chinese OEMs ▪ Good mix of new EV and ICE platforms ▪ Sourcing of some business awards shifted to 2024 Life
Slide 5: FY'23 Order Intake Highlights
FY´23 Order Intake Highlights Order intake EVs % of total order intake Multiple awards supporting industry trends and in new markets 50% 40% 30% 20% 10% Integrated Seat Airbag for “Zero Low Carbon Footprint Cushions for Pretensioner Seatbelts for rear 0% 2021 2022 2023 Gravity” inspired car seats Fr
Slide 6: Significant Sequential Cost Improvements since Q1'23
Significant Sequential Cost Improvements since Q1´23 Direct Labor Productivity Index Gross Margin SG&A and RD&E, net Operating Cash flow LTM Sales in relations to Average Headcount % US$ (Millions) and in relations to sales US$ (Millions) 300 11.0% 1,250 120 20% 100 250 10.0% 1,050 18% 80 200 9.0% 8
Slide 7: Q4'23 Financial Overview
Q4’23 Financial Overview Strong sales and profit development Consolidated Sales Adjusted Operating Income* Operating Cash Flow US$ (Millions) US$ (Millions) US$ (Millions) 18% $101 -$15 $334 $462 $2,751 $447 12.1% Adj. $2,335 Op. Margin* $233 10.0% Adj. Op. Margin* Q4’22 Q4’23 Q4’22 Q4’23 Q4’22 Q4’2
Slide 8: Structural Cost Reductions Initiatives
Structural Cost Reductions Initiatives Simplifying our logistics and geographic footprint to significantly lower our cost base Structural Cost Reductions Annual Savings US$ (Millions) ▪ Continue to actively address our cost base to accelerate the journey towards 140 our medium-term targets 120 ▪ All
Slide 9: Q4'23 Sales Growth and Regional Sales Split
Q4’23 Sales Growth and Regional Sales Split Sales Bridge Sales by Region Q4´23 US$ (Millions) % China 22% Americas 31% Asia 41% Japan 8% Rest of Asia Europe 11% 28% 16% Organic growth* (*) Non-US GAAP measure. January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All Right
Slide 10: Q4'23 Organic Sales Growth - Outperforming Global LVP by 7pp
Q4’23 Organic Sales* Growth - Outperforming Global LVP by 7pp Outperformance - Organic growth* vs. LVP** (Percentage points) CHINA EUROPE +10pp -2pp JAPAN +13pp AMERICAS +8pp Rest of ASIA +18pp (*) Non-US GAAP measure (**) Light Vehicle Production (LVP) up to 3.5 tons according to S&P Global @ Janua
Slide 11: FY23 Organic Sales Growth - Outperforming Global LVP by 9pp
FY23 Organic Sales* Growth - Outperforming Global LVP by 9pp Outperformance - Organic growth* vs. LVP** 2023 Global Market Share*** (Percentage points) (Value, Percentage points) EUROPE CHINA +7pp +8pp JAPAN +15pp Autoliv AMERICAS ~45% Others +7pp Rest of ASIA +14pp (*) Non-US GAAP measure (**) Ligh
Slide 12: Q4'23 Key Model Launches
Q4’23 Key Model Launches January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 13: Q4'23 Financial Overview
Q4’23 Financial Overview (US$ Millions unless specified) Q4’23 Q4’22 Sales $2,751 $2,335 Gross Profit $530 19.3% $399 17.1% Adj. Operating Income1 $334 12.1% $233 10.0% Adj. EPS (assuming dilution) $3.74 $1.83 Adj. RoCE1,2 33% 25% Adj. RoE1,2 47% 25% Operating cash flow $447 $462 Dividend paid per s
Slide 14: Q4'23 Adjusted Operating Income Bridge
Q4´23 Adjusted Operating Income* Bridge vs. prior year $101 US$ Millions Operations Primarily driven by: ▪ price increases ▪ cost saving activities ▪ higher volumes Partly offset by substantial inflationary pressure (*) Non-US GAAP excluding effects from capacity alignment and antitrust related matt
Slide 15: FY2023 Financial Overview
FY2023 Financial Overview Adjusted Operating Margin Development 2022 and 20231 % (US$ Millions unless specified) 2023 2022 Sales $10,475 $8,842 Gross Profit $1,822 17.4% $1,396 15.8% 12% Adj. Operating Income1 $920 8.8% $598 6.8% 10% Adj. EPS (assuming dilution) $8.19 $4.40 FY2023 8.8% 8% Adj. RoCE1
Slide 16: FY2023 Adjusted Operating Income Bridge
FY2023 Adjusted Operating Income* Bridge vs. prior year $322 US$ Millions (*) Non-US GAAP excluding effects from capacity alignment, antitrust related matters and the Andrews litigation settlement January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Pu
Slide 17: Cash Flow
Cash Flow Capex and D&A Strong performance from working capital and higher net income (US$ Millions unless Q4´23 Q4’22 2023 2022 2021 specified) Net Income $227 $156 $489 $425 $437 Depreciation & Amortization 97 90 378 363 394 Other, net3 -120 -10 -119 -133 -15 Change in operating WC 243 226 235 58
Slide 18: Trade Working Capital in Relation to Sales
Trade Working Capital in Relation to Sales 35% 30% 25% Since Q1´19 Trade WC has improved by $580M 20% 15% 0 10% 5% 0% Trade working capital Linear (Trade working capital) January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 19: Strong Balance Sheet & Cash flow Supporting Shareholder Returns
Strong Balance Sheet & Cash flow Supporting Shareholder Returns Shareholder Returns US$ Millions Share Repurchases Dividends 352 ~$1.4 billion in direct shareholder returns over the last 5 years 115 217 224 225 165 54 2019 2020 2021 2022 2023 January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast
Slide 20: Debt Leverage Ratio
Debt Leverage Ratio* Net Debt * / EBITDA* Net Debt* and EBITDA* per the Policy Times US$ Millions 2.0 2,000 Net Debt EBITDA 1.5 1.2x 0.5-1.5x 1,500 Long-Term Target: 1.0x Long-Term 1.0 Range 1,000 0.5 0.0 500 Q1´22 Q2´22 Q3´22 Q4´22 Q1´23 Q2´23 Q3´23 Q4´23 Q1´22 Q2´22 Q3´22 Q4´22 Q1´23 Q2´23 Q3´23 Q
Slide 21: Light Vehicle Production Outlook
Light Vehicle Production Outlook Autoliv expects global LVP to decline by ~1 % in 2024 Global Light Vehicle Production* (Million units) 24 -1.9% 23 +2.2% S&P Global: Light Vehicle Production* -3.4% 22 Q1´24 FY´24 +0.2% Region 21 YoY Chg. Million Units Y-o-Y Chg. 20 China 7.1% 27.7 -0.5% Japan -3.2%
Slide 22: 2024 Inflationary Pressure
2024 Inflationary Pressure Cost of items in relation to sales in 2023 Purchased components ▪ Unchanged raw material cost EBIT • Commodity price indices are down since their peaks in early March 2022, Other 8.8% although some are still up year-over-year Freight & pkg • Automotive grade steel prices h
Slide 23: 2024 Business Outlook
2024 Business Outlook Adjusted Operating Margin Development 2022 and 20231 ▪ Expect continued outperformance vs LVP % ▪ Continued inflationary pressure – timing of customer compensations 12% ▪ Anticipated margins improvement from: − Call-off stability – direct labor efficiency 10% − Structural initi
Slide 24: Full Year 2024 Guidance
Full Year 2024 Guidance Full year indication LVP growth Around -1% Organic sales increase1 Around 5% Exchange rates US$/EUR 0.9138 FX Around 0% US$/JPY 147.16 US$/KRW 1295.2 Adjusted Operating margin1 Around 10.5% US$/MXN 17.319 Tax rate2 Around 28% US$/CNY 7.1305 Operating Cash flow3 Around $1.2 bi
Slide 25: Sustainability at Autoliv
Sustainability at Autoliv Saving More Lives Guides the Way Sustainability is an integral part of our business ▪ Our contribution to society is rooted in our core business ▪ Our work contributes to the realization of several UN Sustainable Development Goals ▪ UN Global Compact Signatory ▪ Climate tar
Slide 26: Sustainability Highlights 2023
Sustainability Highlights 2023 ▪ We are at the forefront of “equity in vehicle safety” by broadening test models to include a wider variety of body shapes, age and gender ▪ Continued improvement across health & safety KPIs ▪ Increased the use of renewable electricity, contributing to a decrease in G
Slide 27: Growth Target on Track
Growth Target on Track Average +4 pp growth over LVP excluding price compensations Organic growth over LVP Around +5-6 pp +9 pp 10,475 +7 pp +5 pp 8,842 8,230 7,447 Annual Sales ($ million) 2020 2021 2022 2023 F2024 January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All
Slide 28: Achieving our Adjusted Operating Margin Target
Achieving our Adjusted Operating Margin Target Clear Levers and Conditions Light Vehicle Production* Customer Call-off Accuracy** Cost Recovery Structural Cost Reductions Units (Millions) % US$ (Millions) Annual Savings US$ (Millions) 100 90 100% ▪ Cost pressures mainly from labor, to a 85M Normal 1
Slide 29: Delivering Shareholder Value through our 2024 Business Agenda
Delivering Shareholder Value through our 2024 Business Agenda ▪ Saving More Lives ▪ Health and Safety ▪ End-to-End Quality ▪ Executing our strategic initiatives, footprint optimization, and order book ▪ Mitigate headwinds from cost inflation ▪ Working capital optimization ▪ Increase resource efficie
Slide 30: Saving More Lives
Saving More Lives Saving More Lives January 26, 2024 ALV – Q4-2023 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 31: Q4'23 Product Volumes
Q4´23 Product Volumes Autoliv Quantities Delivered Q4´23 vs. PY** (%) (Millions unless specified) Seatbelts 38.2 9% ▪ Pretensioners (of which) 26.4 13% ▪ Active Seatbelts (of which) 1.1 (11)% Frontal Airbags 16.0 9% ▪ Knee Airbags (of which) 1.8 (2)% Side Airbags 34.3 24% ▪ Chest (Thorax) 18.2 25% ▪
Slide 32: FY23 Product Volumes
FY23 Product Volumes Autoliv Quantities Delivered 2023 vs. PY** (%) (Millions unless specified) Seatbelts 148.3 11% ▪ Pretensioners (of which) 99.5 15% ▪ Active Seatbelts (of which) 4.7 (12)% Frontal Airbags 63.0 12% ▪ Knee Airbags (of which) 7.6 14% Side Airbags 127.0 25% ▪ Chest (Thorax) 67.5 26%