STOCKHOLM, Oct. 21, 2022 /PRNewswire/ -- (NYSE: ALV) and
(SSE: ALIV.sdb)
Q3 2022: Actions yielding results
Financial highlights Q3 2022
$2,302 net sales
25% net sales increase
32% organic sales increase*
7.4% operating margin
7.5% adjusted operating margin*
$1.21 EPS - 78% increase
$1.23 adjusted EPS* - 68%
increase
Full year 2022 indications
Around 15% organic sales growth
Around 6% negative FX effect on net sales
Upper end of around 6.0%-7.0% adjusted operating margin
Around $700-750 million
operating cash flow
Key business developments in the third quarter of
2022
- Sales increased organically* by 32.5%, which was
3.7pp better than global LVP growth of 28.8% (S&P Global
Oct 2022). We outperformed in all
regions except Rest of Asia,
mainly due to price increases and new product launches. Net sales
of $2,302 million was a new third
quarter record for our passive safety business.
- Profitability improved significantly, driven by
successful execution of price increase negotiations, LVP recovery
and our cost reduction activities. Operating income improved by 72%
and operating margin improved to 7.4% from 5.4% with adjusted
operating margin* improving to 7.5%, despite continued adverse
market conditions including inflationary pressure, volatile LVP and
adverse currency effects. Return on capital employed was 18.0% and
adjusted return on capital employed* was 18.4%.
- Operating cash flow increased to $232 million, driven by higher net income and
positive working capital effects while free cash flow* decreased to
$68 million, impacted by higher
capex. Leverage ratio improved to 1.6x from 1.7x in the second
quarter. A dividend of $0.64 per
share was paid and 0.26 million shares were repurchased in the
quarter.
*For non-U.S. GAAP measures see enclosed reconciliation
tables.
Key Figures
(Dollars in
millions, except per share data)
|
Q3
2022
|
Q3
2021
|
Change
|
9 M
2022
|
9 M
2021
|
Change
|
|
Net sales
|
$2,302
|
$1,847
|
25 %
|
$6,507
|
$6,111
|
6.5 %
|
|
Operating
income
|
171
|
99
|
72 %
|
429
|
500
|
(14) %
|
|
Adjusted operating
income1)
|
173
|
103
|
67 %
|
365
|
506
|
(28) %
|
|
Operating
margin
|
7.4 %
|
5.4 %
|
2.1pp
|
6.6 %
|
8.2 %
|
(1.6)pp
|
|
Adjusted operating
margin1)
|
7.5 %
|
5.6 %
|
1.9pp
|
5.6 %
|
8.3 %
|
(2.7)pp
|
|
Earnings per
share2, 3)
|
1.21
|
0.68
|
78 %
|
3.06
|
3.65
|
(16) %
|
|
Adjusted earnings per
share1, 2, 3)
|
1.23
|
0.73
|
68 %
|
2.58
|
3.72
|
(31) %
|
|
Operating cash
flow
|
$232
|
$188
|
23 %
|
$251
|
$437
|
(43) %
|
|
Return on capital
employed4)
|
18.0 %
|
10.5 %
|
7.5pp
|
15.3 %
|
18.1 %
|
(2.8)pp
|
|
Adjusted return on
capital employed1, 4)
|
18.4 %
|
10.9 %
|
7.5pp
|
13.1 %
|
18.3 %
|
(5.2)pp
|
|
|
1) Excluding costs and
gains from capacity alignments. Non-U.S. GAAP measure, see
reconciliation table.
2) Assuming dilution when applicable and net of treasury
shares.
3) Participating share awards with right to receive dividend
equivalents are (under the two-class method) excluded from the EPS
calculation.
4) Annualized operating income and income from equity method
investments, relative to average capital employed.
|
Comments from Mikael Bratt,
President & CEO
As the market leader, we are building resilience and strength in
turbulent times. We believe these actions enable us to build an
even more competitive position. Despite the challenging macro
environment, our third quarter performance enables us to update our
full year 2022 adjusted operating margin indication towards the
upper end of the 6.0-7.0% range. Our actions initiated earlier in
the year are now delivering results, especially our price
adjustments to compensate for the inflationary pressures and our
cost reduction activities.
I am pleased that we achieved a strong recovery in the third
quarter, delivering record sales for a third quarter and increasing
the adjusted operating margin to 7.5% despite adverse FX effects of
almost 2pp and challenges from inflationary pressure and high
call-off volatility. This is an important step towards our
medium-term targets. We also achieved another strong organic sales
outperformance vs. LVP, despite an unfavorable regional LVP mix
development.
During the quarter, we retained a strong balance sheet, our
operating cash flow recovered compared to recent quarters and our
leverage ratio improved compared to the previous quarter. We have
reached agreements in more than 90% of the raw material related
price adjustment discussions that we initiated earlier this year.
Price adjustment discussions with our customers for cost increases
related to labor, logistics and utilities are
progressing.
We expect continued sequential margin improvement in the fourth
quarter, due to positive seasonal effects, price increases, cost
and headcount activities and somewhat lower volatility in customer
call-offs. The gradual improvement in our performance throughout
the year underlines our confidence in reaching our medium-term
targets. In addition, we expect that our balance sheet and positive
cash flow trend will allow for increasing shareholder
returns.
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 Ekelund
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 21, 2022.
The following files are available for download:
https://mb.cision.com/Main/751/3652554/1641845.pdf
|
ALV Financial Report Q3
2022
|
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