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| Statement |
|---|
| For the fourth quarter, we expect substantial improvements of the adjusted operating margin |
| So, a strong position for us in China altogether there |
| This, together with the higher sales and adverse FX development means that we expect the fourth quarter adjusted operating margin improvement year-over-year of around 1.5 percentage points to 2 percentage points, in line with the previously communicated improvement pattern of around 2 percentage points each quarter throughout 2023 |
| We expect a positive year-over-year sales growth trend to continue into the fourth quarter |
| The strong growth was mainly a result of higher than expected light vehicle production, product launches and customer compensations for inflationary pressure |
| The adjusted operating income was a new record for a third quarter since the Veoneer spin-off |
| We generated a broad-based improvement in key areas, including gross and operating margins both year-over-year and sequentially |
| Our cash flow was strong and the debt leverage remained well within our target range |
| This forms a strong foundation for continued strong development in the years to come that support our midterm targets |
| The light vehicle production in 2023 is now expected to develop slightly better than expected, and we have therefore increased our full year organic sales indications in line with this |
| We expect fourth quarter adjusted operating margin to improve by 1.5 percentage points to 2 percentage points compared to last year, in line with the previously communicated improvement pattern |
| We continue to advance of our structural cost reductions initiatives, and we see an improving position with fast-growing OEMs as well as continued gradual stabilization of supply chains |
| I'm confident that we will deliver a substantial increase in sales, operating cash flow and adjusted operating income in the fourth quarter |
| Year-to-date, we have generated a broad-based improvement in key areas, both year-over-year and sequentially |
| We have continued to see an improvement of supply chain stability throughout the year with reduced customer call-off volatility |
| It was a good track throughout the year |
| We expect continued high year-over-year sales growth, supported by launches, higher light vehicle production and higher prices |
| Our gross margin improved by 270 basis points compared to the first quarter and by 90 basis points from the second quarter |
| Our organic sales grew double-digits, outperforming light vehicle production significantly, especially in Asia |
| Our performance continued to improve substantially in the third quarter |
| Light vehicle production in China continues to show relative strength, owing to both a strong EV demand and export activity, mainly benefiting the domestic OEMs |
| Combined with the gross margin improvements, this led to a substantially improvement in adjusted operating margin |
| The strong sales increase and cost reduction activities led to a substantially through -- substantial improvement in adjusted operating income |
| The main tailwinds include call of stability, leading to direct labor efficiency improvements, savings from the structural initiatives, as outlined earlier, effects from -- effects of continued operational improvements from automation and digitalization, but also favorable raw materials and executing on the strong order book |
| The adjusted operating margin 9.4% in the quarter, an increase by close to 2 percentage points from the same period last year and by over 4 percentage points from the first quarter |
| Considering these potential tailwinds and headwinds, we expect a year-over-year improvement in adjusted operating margin |
| And that has, throughout the year, improved and going in the right direction, including Europe |
| So, we balance these two sides of the business here against each other here to make sure that we have a good cost structure and a flexible cost structure to offset any changes there |
| Our consolidated net sales increased to $2.6 billion, a record for the third quarter |
| It's the first time in a long time here that we see a positive effect on raw materials |
| Statement |
|---|
| I think – as you know, the problem we have here is that even if we have visibility, the pickups is deteriorating |
| But for example, we still see that the semiconductor situation is still a problem for some of our customers |
| Free cash flow was $50 million in Q3, $18 million lower than a year earlier |
| And that is, I would say, purely related to supply issues in our customers' value chain here |
| However, the improvement is somewhat slower than we had expected as it deteriorated somewhat in Europe in Q3 |
| But what we saw in Q3 here in Europe was that it turn to the worse again |
| As we have talked about throughout not only this year, but see some time back here, we have had a challenging situation when it have come to this volatility resulting in stop-and-go in our operations here |
| I mean we do have significant inefficiencies in our operations due to the current significantly lower level of stability |
| The main headwinds include operational headwinds from expected continued inflationary pressure, although smaller than this year, which we expect to lead to a customer compensation catch-up later in the year, just as it was in 2022 and 2023 |
| The latest S&P forecast for the fourth quarter is revised down to minus 7% |
| Operating cash flow was $202 million, which was $30 million lower than the same period last year |
| Receivables and special inventories are lagging due to the high call of volatility and hence planning challenges resulting in inefficiencies |
| Our North American employees are not represented by UAW, but we are indirectly impacted by lost sales and more unpredictable and volatile LVP |
| Near-term production, light vehicle production in North America continues to be impacted by the ongoing UAW strike |
| This was mainly a result of negative translation effects |
| However, in relation to sales, it was down 50 basis points |
| FX impacted the operating profit negatively by $8 million |
| For the third quarter of 2023, our cash flow [Technical Difficulty] decreased by $30 million to $202 million compared to the same period last year, mainly as a result of less favorable working capital effects, partly offset by the higher net income |
| But unfortunately, Europe, it went backwards |
| As per October 19, the per week revenue hit from the assembly plant strike is around $6 million |
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