Autoliv Q4 2022 Earnings Report
Key Takeaways
Autoliv reported solid Q4 2022 results with a 10% increase in net sales and significant improvement in profitability, driven by successful execution of price increases, cost reductions, and volume growth. The company's operating margin improved to 9.8%, and adjusted EPS increased by 40% to $1.83.
Sales increased organically by 18%, outperforming global LVP growth by 15pp.
Profitability improved significantly, driven by successful execution of price increases, cost reductions and volume growth.
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.
Autoliv
Autoliv
Forward Guidance
For full year 2023, Autoliv anticipates organic sales growth of around 15% and an adjusted operating margin of around 8.5-9%.
Positive Outlook
- Organic sales growth of around 15%.
- Positive cash flow trend should allow for increasing shareholder returns.
- 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.
- Order win rates for new EV platforms were high, both with new EV makers and traditional OEMs.
Challenges Ahead
- Around 1% negative FX effect on net sales.
- Tax rate around 32%.
- Challenges from inflation impacting our non-raw material costs such as labor, logistics and energy.
- Supply Chain LVP was limited in Q4 2022 as a result of the global semiconductor shortage and other industry supply chain disruptions.
- Supply chain disruptions led to low customer demand visibility and material changes to customer call-offs with short notice which negatively impacted our production efficiency and profitability in the quarter.