Jairam Nathan

Jairam Nathan asked about Autoliv's flexibility to increase its cost reduction efforts if market conditions worsen and inquired about the potential margin and capacity impacts from Japanese OEMs shifting production back to the U.S.

Answer

CEO Mikael Bratt affirmed that the company has high flexibility and 'more levers to pull' for cost reduction if a dramatic market shift occurs. Regarding production shifts by Japanese OEMs, he described it as 'not very dramatic' for Autoliv, citing the company's well-defined processes for platform moves and its supportive global footprint. He added that any meaningful volume impact would take time to materialize.

Jairam Nathan asked about the long-term trend for safety content per vehicle among Chinese local OEMs and questioned if the higher engineering income in Q3 was a pull-forward from Q4.

Answer

CEO Mikael Bratt confirmed a clear upward trend in safety content in China, noting that premium Chinese OEM models now have content levels equal to global OEMs. CFO Fredrik Westin clarified that the Q3 engineering income was not extraordinary and that normal seasonality is still expected for Q4.

Jairam Nathan asked for the key puts and takes for operating margins in fiscal 2026, given that production will align with retail sales.

Answer

Josh Beal, Director of Investor Relations, highlighted tailwinds from lapping the 2025 underproduction in Small Ag and C&F. He also pointed to model year 2026 list price increases of 2-4% as a positive factor to help offset tariffs. CFO Joshua Jepsen added that the company will maintain its focus on driving product and production cost reductions.

Jairam Nathan of Daiwa asked how the company would manage its capital return plan, particularly share repurchases, if an economic downturn becomes more severe or prolonged.

Answer

CFO Jennifer Hamann highlighted the strong start to the year's buyback program, having completed nearly half of the annual $4.0B to $4.5B target in Q1. She reiterated confidence in the full-year range but emphasized that share repurchases are the 'flexible lever' in their capital plan and can be scaled back if the economic environment changes dramatically.

Jairam Nathan asked for an update on the progress of the Moritex acquisition objectives and inquired about the impact of a potential trend in logistics from 'scanning to sensing'.

Answer

CEO Robert Willett expressed that they are very pleased with the Moritex integration, highlighting progress in selling its technology to existing Cognex customers, globalizing its business, and integrating its optics into core products. Regarding 'scanning to sensing,' he noted that while barcodes remain key, there is a growing opportunity to use machine vision for package recognition, a journey Cognex is exploring with its customers.

Jairam Nathan requested an update on Caterpillar's market position and product freshness in China, especially in the context of potential government stimulus.

Answer

Chairman and CEO Jim Umpleby reiterated that China represents less than 5% of the company's total sales and that the market, primarily for excavators above 10-tons, remains very weak. While Caterpillar maintains a significant operational footprint in the country, he stated it is too early to see any impact from recent stimulus measures.