Executive Summary

Record first-quarter net sales of $2.615B (+5.4% organic), outgrowing global LVP by ~6pp; adjusted operating margin 7.6% (+230bps YoY) and adjusted EPS $1.58 (+76% YoY) .
Management reconfirmed FY 2024 guidance: ~5% organic sales growth, ~0% FX impact, ~10.5% adjusted operating margin, ~$1.2B operating cash flow, ~28% tax; capex net ~5.5% of sales .
Q1 performance was aided by cost control and structural savings despite slightly weaker top line; company expects higher commercial recoveries in Q2 and sequential margin improvement through 2024 .
Shareholder returns remained high: paid $0.68 dividend and repurchased ~$160M shares in Q1; leverage 1.3x supports continued buybacks .

What Went Well and What Went Wrong

What Went Well

Strong outgrowth: organic sales +5.4% vs global LVP ~-0.9%; outperformed in Asia ex-China (+8.2%), Europe (+3.7%), Americas (+4.6%), and China (+6.5%) with launches and price carryover .
Cost execution: adjusted operating income +51% to $199M; gross margin +170bps YoY to 16.9%; SG&A and RD&E combined down 60bps of sales YoY, reflecting structural savings .
Management quote: “We achieved our margin indication for the first quarter, and we are on track towards our full year guidance… seventh straight quarter with more than 30% year-over-year increase in adjusted operating profit” .

What Went Wrong

Call-off volatility stalled: accuracy ~90% (vs 98–100% pre-pandemic), no sequential improvement from Q4; continued inefficiencies in supply chain .
Currency headwinds and inflation: net currency -$8M to operating income; wage inflation persisted; raw materials neutral overall Q1 but textiles and electronics rising .
China mix: domestic OEM growth favored lower safety content vehicles, pressuring CPV despite increased exposure to Chinese OEMs .

Financial Results

Quarterly trend (oldest → newest)

Metric	Q3 2023	Q4 2023	Q1 2024
Net Sales ($USD Billions)	$2.596	$2.751	$2.615
EPS Diluted ($)	$1.57	$2.71	$1.52
Adjusted EPS ($)	$1.66	$3.74	$1.58
Gross Margin (%)	17.9%	19.3%	16.9%
Adjusted Operating Margin (%)	9.4%	12.1%	7.6%
Operating Cash Flow ($USD Millions)	$202	$447	$122

YoY Q1 comparison

Metric	Q1 2023	Q1 2024
Net Sales ($USD Billions)	$2.493	$2.615
EPS Diluted ($)	$0.86	$1.52
Adjusted EPS ($)	$0.90	$1.58
Gross Margin (%)	15.2%	16.9%
Adjusted Operating Margin (%)	5.3%	7.6%
Operating Cash Flow ($USD Millions)	-$46	$122

Results vs Wall Street consensus estimates (S&P Global)

Metric	Consensus	Actual
Revenue ($USD Billions)	N/A	$2.615
EPS ($)	N/A	$1.52

Note: S&P Global consensus estimates were unavailable due to data access limits; values could not be retrieved.

Segment breakdown (Q1 2024 vs Q1 2023)

Segment	Q1 2023 ($USD MM)	Q1 2024 ($USD MM)	Organic Change (%)
Airbags, Steering Wheels & Other	$1,673	$1,781	+7.0%
Seatbelt Products & Other	$820	$834	+2.2%
Total	$2,493	$2,615	+5.4%

Regional sales (Q1 2024 vs Q1 2023)

Region	Q1 2023 ($USD MM)	Q1 2024 ($USD MM)	Organic Change (%)
Americas	$831	$893	+4.6%
Europe	$725	$770	+3.7%
China	$453	$460	+6.5%
Asia ex-China	$483	$491	+8.2%

KPIs

KPI	Q1 2024
Leverage Ratio (Net Debt/EBITDA, adj)	1.3x
Net Debt ($USD MM)	$1,562
Cash & Cash Equivalents ($USD MM)	$569
Capex, net / Sales (%)	5.4%
Free Cash Flow ($USD MM)	-$18
Trade Working Capital / Sales (%)	12.8%
Return on Capital Employed (%)	19.7%
Adjusted ROCE (%)	20.2%
Dividend per share (paid)	$0.68

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Sales Growth	FY 2024	Around 5%	Around 5%	Maintained
FX Impact on Net Sales	FY 2024	Around 0%	Around 0%	Maintained
Adjusted Operating Margin	FY 2024	Around 10.5%	Around 10.5%	Maintained
Operating Cash Flow	FY 2024	Around $1.2B	Around $1.2B	Maintained
Tax Rate (normalized)	FY 2024	Around 28%	Around 28%	Maintained
Capex, net / Sales	FY 2024	Around 5.5%	Around 5.5%	Maintained
Dividend	Ongoing	$0.68 paid in Q1	$0.68 paid in Q1	Informational

Earnings Call Themes & Trends

Topic	Q-2 (Q3 2023)	Q-1 (Q4 2023)	Current (Q1 2024)	Trend
Supply chain & call-off accuracy	Gradual improvement; Europe deteriorated; ~90% vs 100% pre-pandemic	Expect lower volatility in 2024 but still above pre-pandemic	No sequential improvement; ~90% vs 98–100% historical	Improving long term, stalled in Q1
Pricing & customer compensation	Progressed; more piece price recovery; some lump sums	Price increases drove margin; recoveries stepped up Q4	In line in Q1; expect higher recoveries Q2; retroactivity possible	Building into Q2
Inflation & raw materials	Labor/logistics headwinds; raw materials slight positive emerging	Continued labor/utility cost pressure	Labor increases mostly behind after Q1; components still rising	Moderating
China OEM mix	Underperformance due to domestic low-content growth	Strong order intake; domestic OEMs ~28% of China sales	Domestic OEM share 30% in Q1, targeting ~40% FY	Increasing domestic exposure
India growth & CPV	Asia ex-China outperformance	—	India now >4% of global sales; CPV ~$100 rising to $150–$170; market share ~60%	Material growth driver
Sustainability & financing	—	Broader sustainability progress	€500M green bond at 3.625%; low-carbon steel partnerships; solar	Active
Working capital & leverage	Leverage 1.3x; OCF $202; target $800M improvement	Leverage 1.2x; OCF $447	Leverage 1.3x; OCF $122; liquidity ~$1.7B	Strong/stable
Structural savings	Announced workforce actions; savings ramp through 2025	75% of planned indirect reductions detailed; margin uplift in Q4	Indirect headcount -1,000 YoY; ~$50M 2024 savings, ~$100M 2025	Ahead of plan

Management Commentary

“Organic sales grew by 5%, outperforming light vehicle production significantly… We generated a broad-based improvement year-over-year in key areas, including gross margin, operating margin and operating cash flow” — Mikael Bratt .
“Adjusted operating income… was $199 million… leverage… substantially above our normal 20% to 30% range” — Fredrik Westin .
“We are reconfirming the full year 2024 guidance… adjusted operating margin target of around 12%” — Mikael Bratt .
“We expect savings of around $50 million in 2024… annual cost reduction ~$130 million when fully implemented” — Mikael Bratt .
“Issued a second green bond… reflecting the strong support for Autoliv’s climate and sustainability agenda” — Mikael Bratt ; detail: €500M at 3.625% .

Q&A Highlights

Pricing cadence: Q1 margin strength driven by cost control; higher commercial recoveries expected in Q2; Q2–Q3 step-up narrower vs last year .
Call-off accuracy: ~90% vs historical 98–100%; no sequential improvement vs Q4; inefficiencies vary by customer, driven by supply chain/logistics and labor issues .
India as growth vector: Sales +27% organically; CPV rising from ~$100 toward $150–$170 near term; Autoliv ~60% market share in India .
China exposure: Domestic OEM share in China ~30% Q1, expected ~40% FY; stronger collaborations across leading Chinese OEMs .
Inflation: Labor cost increases largely implemented in Q1; expect sequential increases on purchased components; raw materials broadly neutral for FY .

Estimates Context

S&P Global consensus estimates for ALV’s Q1 2024 EPS and revenue were unavailable due to data access limits; beats/misses vs Street could not be verified.
Based on reported results and management color, sell-side estimates likely to reflect: higher Q2 pricing recoveries, maintained FY adjusted margin (~10.5%), and stronger structural savings cadence; raw materials/labor inflation assumptions likely to moderate (neutral raw materials for FY, labor largely front-loaded in Q1) .

Key Takeaways for Investors

Sequential margin path intact: Q1 achieved indicated margin despite softer top line; expect higher commercial recoveries in Q2 and continued structural savings — tactical long into Q2 on pricing cadence .
Outgrowth durable: Launches and CPV gains underpin multi-region outperformance vs LVP; India and domestic China OEM penetration are additive .
Cost program delivering early: Indirect workforce -1,000 YoY; savings tracking slightly ahead; supports margin expansion toward the ~12% medium-term target .
Balance sheet supports returns: Leverage 1.3x with robust liquidity (~$1.7B) enables continued buybacks/dividends; shareholder return cadence likely to persist .
Watch call-off normalization: Key swing factor for efficiency remains supply chain stability (still ~90% vs pre-pandemic 98–100%); improvements would be margin-accretive .
China mix risk vs opportunity: Lower-content mix headwind persists, but rising domestic OEM share and collaboration mitigate; monitor CPV trajectory in China .
ESG financing optionality: Successful €500M green bond and low-carbon material partnerships strengthen cost of capital and customer alignment on decarbonization .

Bold operational surprise: Q1 margin strength was achieved via cost control and faster structural savings despite a weaker top line; guidance held at ~10.5% adjusted margin and ~$1.2B OCF for FY 2024 .

AUTOLIV INC (ALV)·Q1 2024 Earnings Summary