Autoliv: Financial Report October - December 2022
Q4 2022: Solid performance
Financial highlights Q4 2022
10% net sales increase
18% organic sales increase*
9.8% operating margin
10% adjusted operating margin*
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
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-
(Dollars in millions, except per share data) |
Q4 2022 |
Q4 2021 |
Change |
FY 2022 |
FY 2021 |
Change |
Net sales |
|
|
10 % |
|
|
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 |
|
|
46 % |
|
|
(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- |
Comments from
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
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
Vice President Investor Relations
Tel +46 (0)8 5872 0671
Director Investor Relations
Tel +46 (0)8 5872 0614
Inquiries: Media
Senior Vice President Communications
Tel +46 (0)70 612 6424
The following files are available for download:
ALV Financial Report Q4 2022 |
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