Financial Data and Key Metrics Changes - The consolidated net sales for Q3 2022 reached $2.3 billion, a 25% increase compared to Q3 2021, and an 11% increase from Q2 2022 [12][17] - Adjusted operating income rose from $103 million to $173 million, with an adjusted operating margin of 7.5%, up approximately 2 percentage points year-over-year [12][18] - Operating cash flow increased by $43 million to $232 million, primarily due to improved working capital and higher net income [21] Business Line Data and Key Metrics Changes - Organic sales growth was over 32% in Q3 2022, driven by price and volume mix, despite an 8% negative impact from currency translation [13][12] - The sales split by region showed Asia at 42%, North America at 34%, and Europe at 24% [13] Market Data and Key Metrics Changes - Light-vehicle production in Q3 2022 increased by 29% year-over-year, with Autoliv outperforming global production by approximately 4 percentage points [14][15] - In Europe, Autoliv outperformed light-vehicle production by 11 percentage points, while in the Americas and Japan, the outperformance was 7 and 6 percentage points, respectively [15] Company Strategy and Development Direction - The company is focused on negotiating higher prices to offset inflationary pressures and has reached agreements in over 90% of raw material-related price adjustments [10] - A strong emphasis on cost control measures and capital efficiency programs is in place to improve trade working capital and maintain flexibility in operations [11][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential margin improvement in Q4 2022 through price increases and cost reduction activities, despite ongoing market challenges [9][31] - The company anticipates that full-year 2022 global light-vehicle production will grow around 6%, with an organic sales increase of approximately 15% [33] Other Important Information - The leverage ratio improved to 1.6 times, down from 1.7 times in the previous quarter, reflecting a decrease in net debt and an increase in trailing adjusted EBITDA [25] - The company has a liquidity cushion of approximately $1.6 billion, including cash and unutilized credit facilities [25] Q&A Session Summary Question: Pricing agreements and raw material costs - Management clarified that 90% of contracts have been negotiated to include compensation clauses for raw material costs, improving the balance between supplier and customer [36][37] Question: Net working capital and inventory inefficiencies - The company is progressing well with its capital efficiency program, but current market volatility has delayed the expected results in inventory management [38] Question: Q4 margin expectations - Management indicated that Q4 margins would be driven by higher volumes and improved pricing, with less reliance on retroactive pricing adjustments compared to previous quarters [41] Question: FX headwinds and their impact - The company acknowledged a total currency headwind of approximately $42 million in Q3, primarily from the Japanese yen, and expects continued negative impacts in Q4 if current rates persist [48][49] Question: Raw material cost recovery - Management confirmed that while raw material prices are declining, the company still faces significant costs compared to pre-COVID levels, and negotiations for labor and logistics costs are ongoing [71][84] Question: Digitization and automation initiatives - The company is continuing its strategic roadmap for digitalization and optimization, which is expected to contribute positively to performance over time [86]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Autoliv's unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2022, including key financial statements and detailed accounting notes [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section provides the unaudited consolidated statements of income, balance sheets, and cash flows, highlighting key financial performance metrics for the periods presented Consolidated Statements of Income (Unaudited) | (Dollars in millions, except per share data) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $2,302 | $1,847 | $6,507 | $6,111 | | **Gross profit** | $383 | $301 | $998 | $1,143 | | **Operating income** | $171 | $99 | $429 | $500 | | **Net income attributable to controlling interest** | $105 | $60 | $267 | $320 | | **Net earnings per share – diluted** | $1.21 | $0.68 | $3.06 | $3.65 | Condensed Consolidated Balance Sheets (Unaudited) | (Dollars in millions) | As of Sep 30, 2022 | As of Dec 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | $3,587 | $3,675 | | **Total assets** | $7,334 | $7,537 | | **Total current liabilities** | $3,458 | $2,821 | | **Total liabilities** | $4,843 | $4,888 | | **Total equity** | $2,491 | $2,648 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (Dollars in millions) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $251 | $437 | | **Net cash used in investing activities** | ($319) | ($301) | | **Net cash used in financing activities** | ($389) | ($386) | | **Decrease in cash and cash equivalents** | ($486) | ($275) | [Notes to the Financial Statements](index=10&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the basis of financial statement preparation, significant accounting policies, fair value measurements, tax provisions, and contingent liabilities - The company's derivative financial instruments, primarily foreign exchange swaps, are classified as **Level 2** in the fair value hierarchy. The fair value of long-term debt was **$1,011 million**, slightly below its carrying value of **$1,037 million** as of September 30, 2022[28](index=28&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - The effective tax rate for Q3 2022 was **30.8%**, nearly unchanged from **30.9%** in Q3 2021, with the Inflation Reduction Act of 2022 not expected to materially affect results[37](index=37&type=chunk) - The company is appealing a product liability judgment including **$100 million** in punitive damages, having accrued **$19 million** for compensatory damages and pre-judgment interest, with a probable loss and recognized insurance receivables[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) Revenue Disaggregation by Product and Region (Q3 2022) | (Dollars in millions) | Q3 2022 Net Sales | | :--- | :--- | | **By Product** | | | Airbag Products and Other | $1,510 | | Seatbelt Products | $792 | | **By Region** | | | Americas | $794 | | China | $537 | | Europe | $552 | | Japan | $175 | | Rest of Asia | $243 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=21&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition and results of operations, highlighting strong Q3 2022 recovery driven by record sales, improved margins, and organic growth despite ongoing macroeconomic challenges Financial Highlights Q3 2022 (YoY Change) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Net Sales | $2,302M | +25% | | Organic Sales (Non-U.S. GAAP) | - | +32% | | Operating Margin | 7.4% | +2.0 pp | | Adjusted Operating Margin (Non-U.S. GAAP) | 7.5% | +1.9 pp | | EPS | $1.21 | +78% | - The company's organic sales growth of **32.5%** in Q3 2022 outperformed global Light Vehicle Production (LVP) growth of **28.8%** by **3.7 percentage points**, driven by price increases and new product launches[83](index=83&type=chunk)[98](index=98&type=chunk) - The company is updating its full-year 2022 adjusted operating margin indication towards the upper end of the **6.0-7.0%** range, reflecting successful price adjustments and cost control measures[82](index=82&type=chunk) Full Year 2022 Indications | Financial Measure | Full Year Indication | | :--- | :--- | | Organic sales growth | Around 15% | | Adjusted operating margin | Upper end of around 6%-7% | | Operating cash flow | Around $700-750 million | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=34&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company confirms that there have been no material changes to the quantitative and qualitative disclosures about market risk since its Annual Report on Form 10-K for the year ended December 31, 2021 - As of September 30, 2022, there were no material changes to the market risk information previously disclosed in the company's 2021 Form 10-K[144](index=144&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were concluded to be effective as of September 30, 2022 - The CEO and CFO have concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[145](index=145&type=chunk) - There were no changes in the company's internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[145](index=145&type=chunk) [PART II - OTHER INFORMATION](index=35&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section cross-references Note 9 of the financial statements for a summary of ongoing legal proceedings - For a summary of certain ongoing legal proceedings, the report refers to Part I, Item 1, "Financial Statements, Note 9 Contingent Liabilities"[147](index=147&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company highlights that while risk factors are materially unchanged from its 2021 Form 10-K, significant macroeconomic uncertainty, including supply chain disruptions and inflationary pressures, poses heightened risks - The company is currently operating in a period of significant macroeconomic uncertainty, with risks including supply-chain disruptions, COVID-related lockdowns, inflationary pressures, and the war in Ukraine[148](index=148&type=chunk) - The company has experienced exacerbated increases in costs for raw materials, transportation, energy, and commodities, and unsuccessful commercial negotiations to offset these could materially impact business and results of operations[148](index=148&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=35&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's stock repurchase activities for the third quarter of 2022 Stock Repurchases in Q3 2022 | Period | Total Number of Shares Purchased | Average Price Paid per Share (USD) | | :--- | :--- | :--- | | July 1-31, 2022 | 23,895 | $83.71 | | August 1-31, 2022 | 96,980 | $82.50 | | September 1-30, 2022 | 135,463 | $73.85 | - The Board of Directors approved a new stock repurchase program on November 16, 2021, authorizing the company to repurchase up to **$1.5 billion** or **17 million** common shares between January 2022 and the end of 2024[152](index=152&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=36&type=section&id=Other%20Items) This section confirms that there were no defaults on senior securities, no mine safety disclosures, and no other material information to report under Item 5, concluding with a list of exhibits filed with the Form 10-Q - Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information) are noted as not applicable for this reporting period[152](index=152&type=chunk) - Item 6 lists the exhibits filed with the report, including corporate governance documents, debt agreements, and required officer certifications[154](index=154&type=chunk)[155](index=155&type=chunk)

Autoliv, Inc. (NYSE:ALV) Q2 2022 Earnings Conference Call July 22, 2022 8:00 AM ET Company Participants Anders Trapp - Vice President, Investor Relations Mikael Bratt - President and Chief Executive Officer Fredrik Westin - Executive Vice President, Chief Financial Officer Conference Call Participants Mattias Holmberg - DNB Emmanuel Rosner - Deutsche Bank Hampus Engellau - Handelsbanken Colin Langan - Wells Fargo Chris McNally - Evercore Giulio Pescatore - BNP Exane Joseph Spak - RBC Capital Markets Agniesz ...

Autoliv, Inc. (NYSE:ALV) Q1 2022 Earnings Conference Call April 22, 2022 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 Hampus Engellau - Handelsbanken Colin Langan - Wells Fargo Rod Lache - Wolfe Research Vijay Rakesh - Mizuho Joseph Spak - RBC Capital Markets Sascha Gommel - Jefferies Agnieszka Vilela - Nordea Philipp Konig - Goldman Sachs Chris McNa ...