STOCKHOLM, Jan. 27, 2023 /PRNewswire/ --
(NYSE: ALV) and (SSE: ALIV.sdb)
Q4 2022: Solid performance
Financial highlights Q4 2022
$2,335 million net
sales
10% net sales increase
18% organic sales increase*
9.8% operating margin
10% adjusted operating margin*
$1.80 EPS, a 38% increase
$1.83 adjusted EPS*, a 40%
increase
Full year 2023 indications
Around 15% organic sales growth
Around 1% negative FX effect on net sales
Around 8.5-9.0% adjusted operating margin
Around $900 million operating
cash flow
Key business developments in the fourth quarter of
2022
- Sales increased organically* by 18%, which was 15pp
better than global LVP growth of 2.3% (S&P Global Jan 2023). We outperformed by around 5-23pp in
all regions, mainly due to price increases and new product
launches.
- Profitability improved significantly, driven by
successful execution of price increases, cost reductions and volume
growth. Operating income improved by 32% and operating margin
improved to 9.8% from 8.2% with adjusted operating margin*
improving to 10.0%, despite continued adverse market conditions,
including raw material cost increases, broad inflationary pressure
and volatile LVP. Return on capital employed increased by 5.4pp to
24.3%.
- Operating cash flow improved from $317 million to $462
million, driven by higher net income and positive working
capital effects. Free cash flow* increased to $297 million. Leverage ratio* decreased to 1.4x
from 1.6x in the third quarter. Dividend paid was increased by 2.7%
to $0.66 per share and 0.65 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)
|
Q4
2022
|
Q4
2021
|
Change
|
FY
2022
|
FY
2021
|
Change
|
Net sales
|
$2,335
|
$2,119
|
10 %
|
$8,842
|
$8,230
|
7.4 %
|
Operating
income
|
230
|
174
|
32 %
|
659
|
675
|
(2.3) %
|
Adjusted operating
income1)
|
233
|
177
|
31 %
|
598
|
683
|
(12) %
|
Operating
margin
|
9.8 %
|
8.2 %
|
1.6pp
|
7.5 %
|
8.2 %
|
(0.7)pp
|
Adjusted operating
margin1)
|
10.0 %
|
8.3 %
|
1.6pp
|
6.8 %
|
8.3 %
|
(1.5)pp
|
Earnings per
share2, 3)
|
1.80
|
1.31
|
38 %
|
4.85
|
4.96
|
(2.2) %
|
Adjusted earnings per
share1, 2, 3)
|
1.83
|
1.30
|
40 %
|
4.40
|
5.02
|
(12) %
|
Operating cash
flow
|
$462
|
$317
|
46 %
|
$713
|
$754
|
(5.4) %
|
Return on capital
employed4)
|
24.3 %
|
18.9 %
|
5.4pp
|
17.5 %
|
18.3 %
|
(0.7)pp
|
Adjusted return on
capital employed1, 4)
|
24.9 %
|
19.1 %
|
5.7pp
|
16.0 %
|
18.5 %
|
(2.5)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
The fourth quarter and the full year 2022 were important steps
towards our medium-term targets. In 2022, we faced the worst cost
inflation seen in three decades, which initially significantly
impacted our profitability. Through aggressive price adjustments,
we managed to gradually offset this raw material cost inflation and
profitability was restored towards the end of the year.
In Q4 2022, profitability recovered significantly, with
double-digit adjusted operating margin* and an operating cash flow
of $462 million. This was made
possible through extensive customer discussions initiated early in
2022 that resulted in price increases to compensate for high raw
material cost inflation. A high level of product launches and
relentless cost control also supported our strong performance. Our
organic sales growth outperformed LVP significantly in all regions,
mainly due to price increases and product launches. Our balance
sheet remained strong, and our leverage ratio* improved despite
increased capex, dividends and share repurchases.
We continued to strengthen our position as the market leader in
2022 through our strong sales growth and the solid profitability
and cash flow performance in the second half of the year. Order win
rates for new EV platforms were high, both with new EV makers and
traditional OEMs. We expect an increase in overall product launches
in 2023. This development contributes to building an even stronger
platform for our long-term success. We remain confident in our
ability to reach our medium term adjusted operating margin target
of around 12%, under the framework previously communicated.
The strong 2023 sales growth we foresee, together with the
actions we undertook in 2022, creates a solid base for a
significant improvement in our adjusted operating margin. This is
despite the challenges from inflation impacting our non-raw
material costs such as labor, logistics and energy. We continue to
execute on productivity and cost reduction activities to offset
this, and we have also initiated discussions with our customers on
non-raw material cost inflation. We believe price adjustments will
offset the non-raw material cost inflation, with small positive
effects in the first quarter and gradually larger positive effects
as the year progresses.
Our FY 2023 indication is an organic sales growth of around 15%
and an adjusted operating margin of around 8.5-9%, with Q1 2023
adjusted operating margin around 5%. Our positive cash flow trend
should 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 January 27, 2023.
The following files are available for download:
https://mb.cision.com/Main/751/3704512/1810107.pdf
|
ALV Financial Report Q4
2022
|
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