Autoliv, Inc. (ALV) Earnings Call Transcript & Summary

So a warm welcome to everyone here at the Autoliv Technical Center and to the webcast audience, of course, as well, to the Autoliv 2023 Investor Day here in Auburn Hills, Michigan. As you know, at Autoliv, safety always comes first. So first, some safety information. So there are in the very unlikely event of an emergency, we have emergency exits over there on that side, and you just go out there, take a left and take a right, follow the hallway and you get to the exit of the building very soon. So with safety taken care of, we can go forward. And first, I should mention that all the presentations and slides that we will present here today are already available for download at autoliv.com. So we have prepared a great event for you today. We're really going to talk about our journey towards our targets, of course, and also how changes in regulations and ratings and vehicle designs are big support for our growth opportunities, both near, medium and long term. Obviously, we are Autoliv, so we're going to talk about cost opportunities in our operations, including the opportunities in automation. And finally, we'll also translate what all of this means in terms of financial performance and shareholder returns. We have an agenda, yes. So today's agenda is really Mikael will kick it off in a few minutes, outlining our journey since the CMD in '21 and also, of course, our journey forward towards our target. And then Jordi and Cecilia will talk about the growth opportunities that comes from these changes in ratings, regulations and technologies. And then Megan will follow up and dive deeper into what this means in terms of commercial opportunities. And after a 15-minute break, Magnus will revisit our progress in operational excellence and what we do for the future. And then it's time for Fredrik to sum it all up into your favorite subject, which is what this means in terms of financial performance and shareholder returns. And as always, we have a Q&A. And there will be opportunities to ask questions in 3 different ways. If you are here, of course, you can ask questions here in the room. If you are connected to the webcast, you can ask questions in the chat. And if you are connected to the phone, you can, of course, ask questions on the phone lines. Finally, we will round it off with -- for you people here at ATC. We have a great product display outside here. I'm sure some of you saw it already, a little bit of it. And we're also going to have a deeper dive into our research focus and our circle of life focus. There will be a prerecorded version of the product display that will be webcast for the web audience. And then, of course, we have my favorite slide, the safe harbor statement. It is an integrated part of all presentations today, and it includes the Q&A that follows. During the presentation, we will reference some non-U.S. GAAP measures and the reconciliations of historical U.S. GAAP to non-U.S. GAAP measures are disclosed in our quarterly press releases available on autoliv.com and in the 10-Qs that have been filed with the SEC. But now without any further ado, I hand it over to our President and Chief Executive Officer, Mikael Bratt . Welcome, Mikael.

Thank you, Anders, and a warm welcome from my side as well, both to you here in the room and also for all of you -- those of you that are on our webcast and our phone connections here. So it's a great pleasure to give you an update on our journey towards our midterm targets. And I will start off here with just a brief overview on how we are progressing. And then as Anders laid out here, we will have deep dives throughout the day here from the respective team members here. So let's start here and now and talking about 2023. And as you have seen, we have reconfirmed our guidance for this year. Across the board here, both when it comes to our opportunity to have a strong organic growth for the year. And here, we are talking about 15% on top of LVP growth of around 3% here. So an outperformance then of 12% for the year. We have also talked about a range when it comes to our adjusted operating margin of around 8.5% to 9% with a gradual improvement quarter-over-quarter throughout the year here. And then an operating cash flow of around $900 million. And this, of course, is a stepping stone towards our midterm targets. And also here, we have reconfirmed that we are with all the activities we are doing and also the short-term mitigation to offset the headwinds we have been faced over the last couple of years here, heading towards our midterm targets here. So we are reconfirming those as well here today. And here, we see the light vehicle production plus the 4 percentage points that we have talked about up to 2024. And we are looking at adjusted operating margin of 12% -- around 12%, cash conversion, 80% or higher, and we have then continued focus on a strong balance sheet where we have a leverage ratio of, over time, of 1x. We will, of course, come back to these different buckets throughout the day here, how we are addressing this. You saw last week our announcement here where we are taking proactive steps towards our mid-term targets here and also in line with our strategic road maps that we have laid out since a few years back. And what we addressed here in the structural cost reduction here, we are talking about head count reduction with 2,000 positions within our indirect workforce and you could translate that into the white-collar community and then another 6,000 within the blue-collar environment, the indirect workforce. So all in all, 11% of our current workforce. When we look at the indirect, we are, of course, addressing across the board here. So all levels of the organization are in focus here, and we are emphasizing really to identify new structured ways of working here to continue to flatten the organization, making sure that we reduce the non-added value in order to focus on the added value, meaning individuals that are in positions touching the products, the customers and our deliverables to secure our customer commitments here. We are also focusing on reducing number of sites. And as you saw in the press release here, we are also emphasizing the European footprint here. And the reason for that is basically -- that's where we see that we have bigger opportunities as we have a legacy footprint that needs to take into the next level here of efficiency. And we are -- we don't leave any stones untouched here as well. So it's really a global approach. But we will come back to that in the presentation as well. So the path forward is very clear for us. We are holding on to what we have talked about before here in terms of our ambitions to reach our midterm targets. We are holding on to the activities that we have identified as enablers to get there. And we are also taking further steps here as we need to manage the short-term headwinds that we see in the industry here. We are also seeing great opportunities to continue to develop our business here. So the future mobility that is our addressable market today provides a lot of interesting opportunities when it comes to widen the scope of addressable markets. We have talked to you in the past about the adjacent opportunities here, visualized by the 2-wheelers. But today, we will not focus so much on that. We will have maybe a little bit shorter perspective in time. But that in itself provides a lot of interesting opportunities here. And here, we see new ratings and regulations, driving content per vehicle. We see the need for new innovations to answer to the requirements coming from the electrification of our industry as well as potential autonomous vehicles here as we see that growing further down the road. But already today, the thinking around autonomous vehicles and the future layouts in the vehicles is already here to a large extent. And that I'm really excited about to show you here today, both through the presentations from Cecilia and Jordi here but also later on in the tech show here. So despite the headwinds we have seen over the last couple of years, we see that we have continued to strengthen our position, and we have a strong position as we move forward here. And I think it's no news for you here, the different headwinds we have faced as an industry. And of course, I would say it was all triggered by the pandemic in early 2020. We have done -- unfortunately, faced tragic war in Ukraine, also affecting lately here, the value chains in '22 and onwards. And of course, we also have faced a number of different natural disasters in terms of severe weather, everything from the ice storms in Texas affecting the semiconductor supply to the typhoon in Philippines affecting our own ability when it comes to deliver steering wheels from our plant in the Philippines. And plenty of disruptions then resulting from weather phenomenon on the supply chain during the last couple of years. And this has translated into component shortage, I would say, primarily described through the semiconductor situation, where a number of initiatives have been made to offset this, everything from redesign to working with resourcing and different types of allocations. So not short of headwinds in the last couple of years here. Despite this, we have been able to deliver off our strong order book, and we have outperformed the light vehicle productions throughout the whole period here. And we have gained market shares. In 2018, when we started this journey, we were around 40% -- had a market share of around 40%. And last year, we reported a 43% market share. So we have gradually moved up. And as we also have said and still valid is that we're heading towards around 45%. And we also have gone through and are still working on price negotiations with our customers. 2022 was very much around raw materials. Today, it's the broader scope when it comes to other inflationary consequences, I would say, which we are discussing with our customers here. Of course, this volatile period have been shown in our financial numbers. We see already in 2019, the effects of the volatility coming from the WLTP changes in Europe. We also had social unrest in Mexico here. And then, of course, in 2020, the pandemic put the whole industry at a standstill in the second quarter of 2020. We saw a strong come back towards the second half of 2020 and the beginning of 2021. And then we started to see the consequences of the component shortages, increased volatility, et cetera. But I think what -- the good news here is that the team has managed through in a good way, securing the value chain. And we can also see that we have worked hard to offset the negative consequences of this. And we see here that we have been able to protect our industry-leading margin position here, as you can see to the right here. The main consequences of these last couple of years is really a significant lower light vehicle production globally. And compared to where we were in 2019 and looking forward and also, I would say, in 2021 and looking forward, we had very different scenarios to what we actually are looking at today. So I would say here, we are looking at a difference between 7 million to 10 million vehicles on an annual basis here compared to original plan. Of course, the inflationary cost pressure is visualized here by the steel curve. But I think the magnitude and the breadth of the inflation impact is seen across the board, in all the different categories we are talking about here, but the different variants. But the most challenging, I would say, really short-term challenge is the volatility. And you see here from the graph, and Magnus will come back to this later in his presentation, but the significance of the volatility and the impact it has to run an operation effectively is quite significant here. What it says here is that before the pandemic, we had around 98% pickup rate compared to what the expected volume was and plus/minus 2 percentage points deviation, you could see. During the 2020, '22 here, we went down to 82% of what was requested, actually were picked up. But within this, we had up to 50% volatility between the short-term periods here. So 1 week, we could get the call on a Thursday, saying that next week, we don't need anything because our plant is standing still, and the call came from the customer. Then -- but the following week when we expect to restart, we expect -- we need 50% more than what was originally planned. So that tells you a little bit about the volatility seen in the call-offs and which we need them to make sure that we could deliver upon effectively. So what have we done during this time period here is, of course, to secure the value chain, making sure that we could deliver to our customers what they expected to get from us. So the customer commitment in being a reliable supplier is critical for us. So all hands on deck from the whole team here to secure the customers' delivery even though that is a very volatile situation. Of course, our strategic road maps here, we have hold on to, and we have continued to drive digitalization and optimization in order to secure the productivity over time here, and utilize the new technology. We have continued with footprint optimization. And here, we have worked with optimization, both in terms of making it more effective and efficient, but also securing capacity for the future growth that we see in our order books here. And we have worked hard on the capital efficiency program that we talk to you in 2021 at the Capital Markets Day there. And Fredrik will also come back and give you some details around that. And of course, the price negotiations has been critical. But we are not stopping here. We are continuing with what we already are doing, but we are also actively continuing to address our cost base and what I talked about before with the initiatives that we are building into our operations here that was announced last week. So further optimization and further cost reduction are in our agenda here. So looking forward, we see here continued potential to growth, and that is because we are working hard to make sure that we have products for the future. We are seeing also that we are filling our order books to secure the market share that we are gradually growing into. And we see that we have a very strong position with the new EV platforms. And we see that our order intake are well representing our market share position. So when we add it all up in the portfolio, we see actually that it's slightly stronger than what we have on the total portfolio today. So around 45% when we look at the order intake. So a significant jump, also up from previous year here. We also see that our portfolio, which is, I would say, very diversified both across the different regions, different geographies, but also through the different customer basis here. And when we look at the newer OEMs coming up, especially focusing on the EV platforms, we are well represented there. And we can also see that there, the portion of newer OEMs representing a higher portion of our order intake last year, actually jumped up to 30% from previously 12% of the order intake. So very, very interesting development there. And I would say, well positioned for the transition which the industry are in. And talking about OEMs and our customers here, we have showed you before where our, you could say, market share within the respective customers are at. And we quite frequently get the question, okay, is there any specific percentage points that is difficult to get to or you can't get to. And I think we can see here that in 2022, you saw that we were seeing significant market share within the top 15 OEMs that we have in our customer portfolio. So yes, you see the percentage points here in 2022. And if we then look on how this is translating into 2024, you can see here that we are strengthening the position towards the upper end of this scale. So what it's all about is, of course, to deliver on the customer commitments, meaning quality needs to be -- we need to deliver superior quality to our customers. We need to make sure that we are a robust supplier when it comes to delivering on our projects, leading up to the SOP date of the customer. And then, of course, in our daily deliveries, as I mentioned before, making sure that we fulfill the orders that has -- or the volumes that has been given. And of course, also be price competitive. And I think this shows that we are doing our job in that regard. But with that said, we are not leaning back here. We are really leaning forward here, making sure that we have new innovative products at a cost-effective price from the OEM's perspective, and the robustness in our deliveries. So when we look at the sales increases going forward, the organic growth, I should say, we have talked then about the light vehicle production, plus 4%, leading up to 2024. And when we look at the first years in that period here, '21 to '22, '22 to '23, we have been above that. And of course, here, we also have the price increases included. But also if you exclude the price increases, we see here that we have a good traction to over deliver on these targets. And we also see that content in the vehicles, but also our addressable market here has a great opportunity to grow. And this is just an overview of ratings regulations coming into play in the next couple of years. And Cecilia will take you through this in greater detail later on. But what it says here is really -- which I just would like to highlight here, it is very important that the vulnerable road users that we are addressing and have been emphasizing on since we met at the Capital Markets Day in 2019 is also becoming very visible here in -- from a society point of view. It is, for example, both in Europe, where wearables and protection for motorcyclists is on the map to also higher requirements in China, for example. Looking at India, also a market that is growing rapidly on the airbag side, for example. And here, you may know that we have also invested in more capacity to meet these current demand but also future demand. So a lot of emphasis from the Indian government here to make traffic safer in their country. But also in the mature markets. And here, we see a constant evolution where we need to have more sophisticated products in our vehicles. But also, we see additional functionalities coming in. We haven't talked about the far-side airbag, for example, in the last couple of years here as one example, and that is really getting traction. Also, the more personalized safety solutions on the seat belt side is one area where we now can consider height, weight, age, gender, for example, in the solutions going forward. So a lot of exciting development in this area. And this in combination with the industry trends, where we're talking about connectivity, sustainability, EVs and autonomous, as I mentioned before, driven both by regulations, but also as the markets are growing in terms of economic capabilities, and we have talked to you in the past about how the economic wealth in a country also correlates well with the development of new components. And for us, it's all about making sure that we have the right products for our customers, meeting these mega trends that we see happening here. And you see some examples down here at the end of the -- bottom end of the slide, but you will see it more in detail later on, so I will not dive into any details here and now. Of course, the margin progression, again, towards our midterm targets is critical here, and we are working broadly on that. And a lot of things are happening when it comes to optimizing our capacity across the globe here. And Magnus will, in his presentation, talk to you more about the different steps that we are making. But as you can see from this slide, we have added capacity in Mexico for our steering wheel operation as we're growing. We have India here as one example, with also additional capacity, talking about the airbags I did before. And we are investing in Vietnam for more textile capacity. But at the same time, we are also optimizing our footprint in Japan, and we're making significant investment there to get closer to the customer. So we are closing one plant and building a new one to have the right type of processes close to the customers, as one example. And of course, we're also here working very much with getting from high-cost to the best-cost countries when it comes to, for example, our engineering capacity. So a lot of things going on when it comes to the geographical footprint. Automization, digitalization, as I mentioned before, we are holding on to the strategic road maps that we laid out in 2019, making progress. And you will see later on also here how our coverage of utilizing this new technology inside our own processes here are increasing. And you can see from this chart here also the direct labor efficiency moving in the right direction. Of course, we would like to have seen a little bit higher number. But the volatility I've talked about before, and of course, the significant lower volumes here is, of course, putting its mark on this, but we are clearly moving in the right direction. And as we get stability, we expect to see significant leverage coming from that. So in summary, looking at the financials here, adding up the headwind that we have had and the consequences in our P&L coming from that is well matched with short-term activity as well as our activities on our strategic road maps is healing that position. And Fredrik will also give you the bridge from where we are today to our targets later on. And our focus here is to be a shareholder-friendly company, as you know. And as such, we are focusing a lot on making sure that we can and will return liquidity to our shareholders through the different levers that we have, and that is mainly the direct dividend as well as with buybacks. And as you can see from this chart, we have throughout the last 5 years here, returned more than SEK 1 billion -- sorry, USD 1 billion, and we have then restored our balance sheet. So we are well within the range. Again, and I would say here, great job done in terms of being capital efficient, so we can maintain this. So our focus here, of course, is to maintain a conservative view on our balance sheet because we think that is a very, very important foundation for our future ability to generate shareholder value. So in short, our building blocks are in place for our journey going forward. Of course, a very important foundation of all this is a stable global light vehicle production. And here, we have also said in the past, at least 85 million vehicles. We are also seeing price compensation as a very important part of the foundation. And here, we are making progress, and we made progress last year. When it comes to raw material, this year, as I said, is about the broader perspective of inflation here. So labor, freights, energy, as an example. Then it's our strategic road map initiatives. We talked about footprint, structural initiatives, optimization and digitalization, and with the growth and the outperforming we're expecting to see here should then take us all the way to the 12% operating margin. But we will come back to the details throughout the day here. And I will end here now and come back here at the Q&A and for the closing remarks later on. So I hope you enjoy the day here and looking forward to take any questions later on today. Thank you.

Thank you, Mikael. We will now move on, and I will soon invite Jordi Lombarte, Chief Technology Officer; and Cecilia Sunnevång, Head of Research to the stage, but they will outline our growth opportunities that are firmly rooted in our vision of saving more lives, but also connected to the changes that happens in ratings, regulations and technology So please, Jordi.

Perfect. Thank you. Welcome to all of you. I would like to share with you our growth opportunities that we are generating, how we do it and also how this thing translates in real business cases here. To do that, I would like to share with you 3 -- some points here. One is the Autoliv approach to safety, we call, real life safety. This is generating us the amount of ideas that we can really efficiently save more lives. And this, for us, is really one of the key elements. We will continue also to share with you that the pipeline of safety solutions that we have in our portfolio, some of them are driven by the market trends, by the customers, but also there is other ones that comes from new ways of mobility. This is an area that we are exploring. We also want to put a lot of emphasis, how strong is Autoliv in participating with the regulators and consumer ratings like Euro NCAP, working together. And together, we are shaping what will be the specifications for the future. We believe that when this thing hits the fan in that element that it goes in the regulations is when we see the volumes, the economy of scale, and then this becomes popular, and really, we can save lives at a really good cost. And basically, to do everything that we will share today, I hope that we can transmit our passion for saving lives, because at the end of the day, this is the energy that motivates us to go further. Sometimes people ask me, "hey, a lot of things in a car. Some years ago, there was no airbags, nothing. And now it's -- are we there already?" I mean what can we do more? Actually, if you see the numbers, it is still 1,350,000 people that get -- that die basically around road traffic accidents. Only 30% of this happens inside of the car. The other 70% is either vulnerable road users, motorcycle riders, anything outside. So there is a great opportunity also to improve inside of the car, but also outside of the car. Just a comment. If you look at Asia, Asia, the #1 reason for casualties is actually motorcycles, probably 2-wheelers. And this is an area that you will see later on with Cecilia that we are working very close with some Asian authorities and based on the technology that we can develop to help to solve this problem. I would like to talk about the real life safety. And for that, we visualize what we call the circle of life. And at the end, even the presentation, Cecilia is going to go more deeper on what it means. That basically means that we are looking at how many people are affected by different crashes, by different situations. And with the statistics, we can determine what are the areas where more people get injured. When we understand that, the next step is, okay, now we know that is in this kind of situation. The next step is what are the systems or solutions that we can -- or how people get injured. Then when we understand the root cause, that in this situation, people get injured in a certain way is when we can really develop systems to solve this problem. If we can show the efficiency of these systems, I can tell you that today, when you see all these numbers, society is ready to say, hey, if the industry can bring technology, we can put it in the regulations and make it happen. And this is when we hit the sweet spot here. The second thing that I think is very important in our DNA is that we are scientists. So Cecilia's group even more, that basically, we try to improve systems, safety systems. So at the end of the day, we always end with crash test, you see the dummies, that very specific. This can -- if you want to simplify the equation, you could do products to satisfy the testing. Our approach is we want products that in real life and real life is more what you see in the left that nothing is according in aspect. You can have randomly ways of getting crash accidents. So this is basically in our DNA. And with this, I would like to introduce Cecilia. Basically, she's our Head of Research, and she will give you more insight on how we do this process on generating opportunities and how we interface with the regulations. Thank you.

Thank you, Jordi, and hello, everyone. So I'm going to start with a macro perspective. So we all have common goals. We have the United Nations' Sustainable Development Goals that ensures that we will leave the world in a better shape, hopefully, than what we have today for generations to come. And there are quite ambitious targets that we have to fulfill. And the goal [ 3.6 ] is the one with a 50% reduction of road traffic fatalities. And that means that we have to do something different from what we have done in the past. And luckily now, there are new technologies and the mega trends within technology developments like electrification, connectivity, automation and shared mobility that will help us or enable us to reach those targets, not only the traffic fatality ones, but also the sustainability -- the other sustainability targets. So that's the macro perspective. And then if we look in the automotive industry, there are trends like electrification, we have sustainability, connectivity and autonomous drive, but there are also the big focus areas for most car makers. And the electrification, that means for us that we can design in a different way. You have design freedom that can lead to roomy interior or flexible interior. We also have the sustainability that drive the need for new materials, and new materials can also be coupled to new designs and also new processes. Connectivity, the car -- to travel in a car is not move from A to B anymore. It's going more in the direction that you also need an experience. So software features and function will enable more value to the end user. And the same with autonomous drive. There are safety features, but there are also features that will make your ride more comfortable or convenient and that also have implications and opportunities for Autoliv, for safety and for our solutions. So mainly, there are 3 important factors for our growth: it's the regulations that drive content per vehicle; it's the consumer rating tests that drive the need for new technology; and there is also the customer demand, which is actually the response to the end user demand of this experience in the future vehicles. So I will start going in more into details on the regulations and standards. And this is, as Mikael showed before, divided into the different regions. And as you can see in blue, these are confirmed regulation changes. And then the yellow ones are the anticipated ones where we are working together with the different working groups in order to shape the requirements so that it will result in real life safety. I will point out a few. So first of all, in this year, this was a working group established through the UN and it's a working group on equity and safety, and it's not the kind of equity you are usually used to. It means that we want safety for everyone. So in response to the recent debate on, is cars more safe for males than for females, this is the working group that will take care of safety for everyone, not -- I mean, it should be the same if you are young, elderly, tall, short, what have you. So this is a very important working group because it's global, and it will lead to specific regulation in the coming years. And as you can see and as Mikael pointed out as well, we see standard or regulation updates also for vulnerable road users. So anticipated in the 2025 time frame, there is an update plan for ISO standard for personal protection equipment that includes multicycle inflatable wearables. We also see in China that we're working together with [indiscernible] in understanding how would the regulation for a frontal impact for a motorcycle, what would that look like. And we have, as also pointed out before, in India where we have the 6-airbag mandate and the side airbags, we also see that the regulation for more performance in the side airbag will take place in a couple of years. So these are on the regulation side. If we come back to the customer demand. And as we're talking about the software-defined vehicles where you want an experience. We already see today in the Shanghai Auto Show that you are presented with comfortable seating. So maybe not the driver at this point, but in the passenger seat, there are the comfortable seats where you can recline to a very large degree. We also see a lot of screens where you can engage in other activities than actually driving. And that has also implications on the safety. And we see new designs of steering wheels and also steering on demand because a lot of the time you might have an autopilot that will drive for you, but you are still liable, you are still in control. So based on this customer demand, and it's really the value for the end user, we have to make sure that this is safe because now we see a lot of new technology and how do we really secure that you are constantly safe throughout your journey. And as an example, you can see here that today, we designed for a standard position, and we will probably do so for a long time to come, as Jordi showed because you have simplified test methods. But if you see in the video, there is a real video from a naturalistic field operational test study, people today are already engaging in other tests than driving. And they are already today sitting in a very unconventional manner. So this is just one example that we are working on understanding this and then ensuring that we can keep these occupants safe. And in order to do so, because technology is developing extremely fast, we do have the rating and consumer test protocols. And this is maybe a more quicker way of doing changes to the standards. And again, blue is decided and yellow is anticipated changes. And I would like to start with taking more of a deep dive into the Euro NCAP, which is the most progressive NCAP today. The program, the road map, Euro NCAP 2030 is outlining several different updates in the 4 phases of driving occupant protection, et cetera. And it's really enabling the ADAS functionality, but also ensuring the customers understand them, use them and also that people are safe in the modern vehicles. So what we can see is that in 2026, Euro NCAP is starting to address both variability in occupants and in crash speed, with introducing 3 different crash severities and 3 different dummies. This will be done physically, as today, but also in complement with virtual testing that is also an enabler in order to be able to make or to validate these new systems. This will then develop in 2029, where we will continue to do virtual testing using the [indiscernible] element model of the human, the human body model. And in that time frame, you can anticipate that you can do very many simulations in the different seating configurations with different sizes in different crash severities, et cetera. So that's the evolution of the occupant protection. And then also in 2029, we see truck safety coming in, and that's also dependent on the virtual testing. So truck safety for the opponents, for the truck driver and for vulnerable road users such as pedestrians and cyclists outside of the truck. Also in 2026, there are work ongoing to improve the pedestrian protection. AEB is a fantastic technology, but we still see injuries and fatalities. And now also, there are discussions on how can we better protect the hard surfaces in the car, like the A pillars and that is ongoing work until 2026. So going back to the virtual testing and the human body modeling, the increased adaptivity for size severity, et cetera. That means that it drives the system approach, and it starts with a human. And we at Autoliv, we are experts in human behavior and understanding when you reach the threshold where a human breaks. And this is really the key here because we can have a lot of different fancy technologies. But again, coming back to the basics, we need to make sure that the technology we introduce is not a distraction, and it's not compromising the safety. So in order to understand what we can do and all the opportunities, there are, of course, vehicle structure that is sort of protecting the occupant itself. But then you have the subsystem, the ADAS functionality. You have the brain in the restraint control. We have the restraints, we have the seats and we have the steering. And all of these components are working together in determining the safety in every moment. And we are definitely part of that system, and working together with partners in order to understand how we can improve our solutions. So one example also then when it comes to steering, high-complex steering wheels are here to stay because we do see that all the customers are still focusing on Level 2 and Level 2 plus as the self-driving capabilities is harder and many programs are delayed. So what we see today in the complexity and in the electronic content, we see that this will continue. So we have all the things with the HOD, we have the HMI elements and the light bars and the different haptic responses, et cetera. So we do see the steering wheel still is a very important interface to the driver and also communicating the level of automation to the driver. Another part, as I said also is that in Euro NCAP, we also see the need for driver monitoring, both in order to understand if a driver is present, fit to drive. But also when we talk about adaptivity, we need to know who is in the seat. So on top of all the current electronic content, there is also an opportunity to actually put the camera into the steering wheel. And when we have compared the solutions to the cluster camera, we can see that we have less occlusion if you have the camera in the steering wheel. And we can still have the same accuracy when it comes to the other parameters as well. So showing that more and more electronic content is going into the steering wheel, and we will show more of this in the product exhibition later on. And talking about the occupant monitoring and really understanding who is in the seat, we're also working on our smart seatbelt. So today, we have some functionalities. We have the [ pre-potentiating ], et cetera, but now we have also added sensors, 4 sensors, as you can see in the bottom picture. And with the seatbelt, as you can see in the video, you can detect if the person is correctly buckled and you saw a green light on the monitor. And now when he has the belt under the arm, it's a red indication. You could also see that it can be classified as a midsized male. So with these sensors, we can determine your size, your weight, your position. And this kind of monitoring is less intrusive than a camera, and it's also an excellent redundant sensor, because in the future, when you would have all these systems and you will actually trigger your safety systems based on this information, we have high standards on the functional safety and you will need redundancy to make sure that you are triggering at the right time. With the seatbelt, we can also do vital signs. So we can understand breathing as well as heart rate variability that can be used as an indicator for fatigue or stress. And moving on then in the system approach, when we talk about the comfortable seating, we know that, again, it's market demand. People want to travel very confidently and we have identified what is the biomechanical risks and based on the real life data, again, from the biomechanics, we can design our system solution, which will then go into the different product solutions that can be integrated seamlessly with the seat structure, and that will also be shown in the product exhibition later on. And coming back to -- we've talked a little bit about the different sizes and the different severities that we are looking into. So high severity crashes is still an issue in Europe and U.S. fatalities involving a truck is almost 15%. And that's why we, together with the Swedish Transport Administration and Euro NCAP is looking into truck safety. And of course, it represents a high-severity crash even though this crash test was done in 50 kilometers per hour. So the car was traveling in 50 and the truck was traveling in 50. So if we think about how does a normal restraint system perform in this kind of crash today, as you can see on the top level here, we have a strike through. So the midsized male is going through the airbag hitting the head in the steering wheel, and that's not a good outcome. But again, if we have these, we have the tools, we have the ability, we can work with the seatbelt, with the pressure in the airbag, with the steering column force, with the seat and with the knee airbag -- and we can, as you can see in the bottom, improved the performance so that you can have a good injury outcome also in this crash. But again, so this is the need for adaptive system and with the progression of Euro NCAP, this will be possible. Again, with rating and consumer test, as Jordi also mentioned, we are working with our friends in Malaysia with MIROS. and also with the MyMAP program, where there is already today, the first level of power-2 vehicle safety incentive program. This today, it's more focused on the ABS and also how to make the bike more visible and detectable, but we see the progression of also introducing other technologies on the bike as well as in 2026, starting also to inform about wearables, about different other on-rider solutions. And last year in Malaysia, in the MIROS 10-year anniversary, we demonstrated the bag-on-bike solution to the Minister of Transport. And he also acknowledged that this might be a technology for Asia after the introduction of ABS. And moving further with the on-rider protection, we have worked on developing our own inflatable vest solution. And in the -- the white vest in these 3 videos is the Autoliv solution, included also our own ECU, our detection algorithm and of course, the inflator and the textile. And you can see with -- compared to the competitive -- competitor products, that our vest inflates before the impact. One of the others inflates halfway through the impact, and we have a very quick detection time. This, of course, is a trade-off. You don't want false positives because you can tune it into this specific road case. But we are also doing a lot of data collection with actual riders to make sure that we don't trigger it when it should not be triggered. And this data collection also gives us a lot of insights in how motorcycle riders behave. And that is also opportunities for developing digital solutions, which might also be a good way in developing countries that can help in changing behavior. So based on this data, we can understand from one trip you're -- in the spider web diagram here, for instance, you can see your acceleration, your braking pattern, your leaning angle, your steering, a lot of different parameters. And for each ride, you can make a profile. If you have 100 drives, you take an average and this is your personal riding behavior profile. And based on that, we can actually coach motorcycle riders, tell, in this curve, you could -- you were a bit fast, you could have loosed your grip or whatever. So based on all this data, we can, of course, trigger the bag-on-bike. We can trigger the wearables on the person. We can also do post-crash reporting, and we can do behavioral analysis. Okay. And with that, I hand back to Jordi to go back into details on some of these more specific solutions.

Thank you, Cecilia. I hope -- how much is in the pipeline and it's quite exciting, I think, because there's a lot of opportunities on how to go further on saving lives. And if I may repeat a bit with the example of the motorcycles, how this circle of life that we call it works. Statistics tell us the amount of people, the amount of casualties around the motorcycles. We investigate what kind of crashes are we talking about. And it was perpendicular. You can see here, maybe not in detail, but in -- crashes in India are not the same ones that we see in Germany. So based on that, we estimate what are the cases that we have to go for, the ones that will have more impact on that. Once we select that, in that case, because that was new technology, we have to develop also methods where we can, in a laboratory, visualize how can we improve that situation? How can we prevent these injuries? And this translates also with a set of products. The ones that you see on the screen goes from the airbag on the bike, wearables, even helmet, we are looking what happened in helmets. And this, at the end of the day, when we have the methods, and we can prove it, you can see MIROS is already basically -- some legislators and regulators are saying, hey, technology. We need technology to save these people there. So this circle, we applied in several areas where we want to explore. And this is the engine for bringing some of the innovations. And now I would like to show you some innovations that are already very close to have the SOP and it's just a summary. The first one I would like to talk is the Bernoulli airbag. I think you have seen the announcement this morning. And this is quite of a market first. It's a different way to inflate an airbag. Sorry? It works again. Sorry. And I try to explain how it works with an example. Imagine that I'm an inflator. An inflator is where we have the propellant, when you burn the propellant, it inflates with the gases, the airbag. Well, imagine that I am an inflator. So I'm going to blow and try to inflate my airbag. Two blows inflates something like this. What this technology does is applying Bernoulli principle is basically with one blow, look at what we have. So this technology applied to airbag, imagine the less propellent that we need, but also by the nature of the inflation, we are providing some adaptivity that comes by the [ concept ] by itself. It doesn't need electronics like today where we have dual stage airbags, where we have 2 segments, one for low input -- output, another one for high output. So this is a product that is in the display, and this can be a big saving for the customer on the system wise, because you imagine all the sensors that you can avoid. The second thing I want to share with you is that on top of all these sensors that goes around the steering wheel, hands-on detection, anything that comes from the autonomous driving or semiautonomous, where you need to know who's in control, there is also other features for the experience of the customer right now. This is tiltable steering wheels. And this is one that you have seen because Ford has made it public, that basically encumbers the steering wheel when it's not driving in the table. Sometimes to make the paperwork for industrial delivery vehicles, sometimes for the guy who is driving to have lunch on that, you will see, it's very cool. We have it in the exhibition. Another area that we want to show is that solutions integrated on the seat. When you see the seating positions in a comfort wise to get proper restraints, we are building a set of solutions around the seat. And what you see here on the screen is almost, I will call an invisible retractor because it goes inside of the structure of the existing frame of the seat, it's very well integrated. Another one I want to share, we talked about motorcycles. I think if you have been in previous Capital Market Days, we show that we have the intention to work on that, okay? Now we have an SOP already planned for 2025. And this is -- it's [ glorious ] because we have seen the evolution of airbag in the car. And this is the first step to start seeing this evolution on the motorcycles. Also in the motorcycles, there is another way to protect, which is with wearables. And here, we also are developing the system, the complete system, including the ECU, the telematics, everything that basically we can bring that to a full functioning system in a way that can be scalable. But there's still protection. We show this because this is the kind of the last mile autonomous car, where by definition, it has to go in between people and it has probability that hits some people. But basically, all that has to do with protecting vulnerable road users. It goes from this kind of solution to what we launched last year with Subaru that got the highest ranking on vulnerable road user savings. And now we have a generation in the pipeline to protect bicyclists. And you will see more in the exhibition. And right now, what I would like also is to emphasize this work that the team of Cecilia is doing and the network that we have around the group on participating and working with regulators. This is an example. You see the picture on the left in head office of Autoliv in 2019, and that was the -- when we meet the industry ministry from India that joined us, and we presented the work that we did together. And in this one, it was a series of recommendation. This has translated now in the -- in 2022, in the mandate for 6 airbags per car, which is a significant improvement in safety. And with this, -- maybe the last comment I would like to say is, again, repeat, I think our passion for saving lives, I hope that we have given a bit of energy of what we feel on how we do our development. And I hope that at the end of the meeting, you will be able to see this and you can touch these products. But basically, this is what I'm presenting. Thank you.

Thank you very, very much, Jordi, and thank you very much, Cecilia. I think all of you now are clear on that the drivers behind the content per vehicle growth is not slowing down. They are rather stepping up and the complexity of future safety products is only going to get more and more complex. So -- with that said, it's time for Megan Fisher, Senior Vice President of Sales to outline what this means in terms of commercial opportunities. So welcome, Megan.

Thanks, Anders. So good afternoon, everyone. And I recognize that I'm between you and a break, so I hope I can hold your attention for the next 15 minutes here. Happy to share with you our commercial excellence strategy. And I'm going to start with our current market position and how we see that developing over the next several years, and then spend some time on our growth strategy beyond 2025, and finally, give you a little bit of insight into our global commercial excellence framework and an update on our commercial negotiations with our customers. So jumping into our market position. As Mikael said earlier, we are the clear market leader in safety systems. In 2022, we had a market share of 43%. And our next biggest competitor is less than half of that. So a really strong position to start with. And if you look at our sales split across the different regions that we operate in, we are present in all of the major regions around the world. So we have around approximately 30% of our sales in each Americas and Europe and then approximately 20% of our sales in China and the rest of Asia, including Japan. So it really gives us the right presence around the world in order to support our customers globally. And with that, you can see here our diversified customer mix. So obviously, we have a presence with all of the global OEMs, but also with some of the newer market entrants into the industry as well as some of the local Chinese OEMs that we see really growing in the -- not only the industry and the market in China, but also with plans to expand outside of China. So as we go forward over the next coming years, we expect some shifts in this revenue split where we might see more of the Chinese OEMs and the new market entrants take a bigger role in our sales split overall. Looking at our market share in each of the regions. Here just to highlight, you can see, again, the strong presence that we have in all of the major automotive regions. And when you look at the right bars here that reflect the global market share, you can see that 43% level last year and growing to around 45% in 2024. And I also wanted to note a few of the areas that are the big markets and the growing markets in the world. And if you start with China, we have around 35% market share in China in 2022, and we are growing that to just under 40% by next year. And I think there's increased opportunity in China to grow even further in our market share and also, of course, capitalize on the biggest automotive market in the world. And then if you look at India, again, another growing market for us. You can see a very strong market share that we hold today, which is just under 60% and still growing to around 64% by next year. So with some of the ratings and regulation changes that we see in these areas as well as the size and the growth in the regions themselves, we're in a really good position to capitalize on that going forward. And then just a quick look at our market share in each of the product lines. You can see a strong position across steering wheels, airbags and seatbelts, and we are growing in each of the product lines. So we really have good diversification, not only from a geographical standpoint, a customer standpoint as well as a product line standpoint. And here, you saw this chart earlier in Mikael's presentation, but it shows the top 15 OEMs by their market size. And what I wanted to note here is 8 of the top 15 OEMs, Autoliv has over 50% market share with those global OEMs. And 12 of the top 15 OEMs, we have over 40% market share. So really improving our market share position with all of the top leaders in the industry. And I think this really talks to the trust that we have from the OEMs to allow us to maintain and even improve our market share position with them. But of course, we're not sitting still. We're not here to tell you that we have a great position, and so we're done here. There's a lot more to do. There's a lot of changes in the industry that are going on right now. I mentioned that there's new players coming in from an OEM perspective. And we see in China, the shift from some of the global OEMs losing some market share and more of the local OEMs picking up market share. From a sales perspective, we have a strategy to ensure that we have the right position with these new players in the industry as well as with the Chinese OEMs so that we can have a good position going forward as the market dynamics change. If you look on the left bar chart here, you can see our percent of new order intake with the new market entrants in 2021, which was under 10%. And growing to over 30% out in 2022, and we expect that to continue to grow as a percent of our overall order intake. And on the right, you can see our 2022 order intake in China, where a majority of just over 50% of our order intake was with the local Chinese OEMs. So again, making sure that we're well positioned for the future and the expected transitions that we see in these areas enter into the market. So you can see on the right, just as the overall forecast going from 2022, 11% of vehicles in the market were full battery electric vehicles. And out in 2028 time frame, we expect that to be around 40%. So it's really important that we win business on the right platform so that we can manage this transition. And obviously, that's a forecast, so there can be changes in -- and there will be changes to that forecast. Maybe it accelerates, maybe depending on regulation, could change the other way. So we need to have the right market share across all the propulsion systems. And in -- again, , looking at our new order intake on the left here, we have a significant increase on new order intake for electric vehicles from 2021 to 2022, and we expect that trend to continue, both from the standpoint that the customers are sourcing and planning for more electric platforms. And of course, we have a strategy again to ensure we have the right position going forward. So let me take a few minutes to talk more about our growth strategy beyond 2025. And our growth strategy, we have targeted of 4% to 6% average growth in the period beyond 2025. And our strategy is really built on 3 main pillars. The first being the LVP growth that is forecasted that we expect to come, which I'll show you more in the next slide. So that is contributing around 1% to 2% of our growth in the outer years. And then the content per vehicle growth that has been talked about several times here will contribute 1% to 2%. And then we have new markets with our mobility safety solutions that will also contribute 1% to 2%. So looking at light vehicle production, you can see the trough, obviously, with COVID in 2020 and a steady rebound of light vehicle production from there. In the outer years beyond 2024, we see a CAGR of just over 2%, which will be the contributing factor to the 1% to 2% growth that we expect coming from light vehicle production. And with the market share that we have then that will naturally translate to growth for Autoliv. Then looking at content per vehicle growth. We've talked a lot about these industry shifts and trends that we see. There's electrification, sustainability, and what does that mean for our content per vehicle. You've already heard a few examples, but another example here is with autonomous vehicles and electric vehicles, it allows for more space and different seating configurations. So we have products that we can provide to our customers to provide to the end consumer to deploy airbags from different configurations inside the vehicle and make sure that we can keep the occupant safe in these different seating configurations. But of course, that drives content into the safety systems of the vehicles, and that's a backbone of where we expect some of the growth to come. But to put that in more concrete figures here, you can see on the left in the line chart, the content per vehicle growth trend that we've seen from 2020 to 2024 in all of the different major regions around the world. And you can see the same trend, it's all increasing. So we expect that to continue going forward based on, again, consumer needs, our customer demands as well as the end consumer as well as rating and regulation changes around the world. And then I've just shown here a few examples of where we can already see and forecast the changes of content growth in the market, the first one being in India with increased airbag penetration. So in 2020 -- 2022, we had lateral airbag penetration of just around 10% in India. And based on the current forecast and what we hear from our customers and already are quoting on business we see that increasing to over 70% by 2025. And then in Europe, so a more developed region where we already have high safety content in the vehicles, we see technologies such as HOD, so hands-on detection being -- increasing more than double in the same time period as far as the penetration rate. So really opportunities with consumer demand and different regulations coming from the different areas in which we operate. And then finally, the opportunity that we see in growth markets or new markets, I should say. So there's 4 focused areas that we have in our MSS division and the first one is commercial vehicles. We already have sales in commercial vehicles, but we have opportunity to grow to really expand on our current product expertise and take it to new customers and within this new segment. And of course, there's also a ratings and regulation implication here that will potentially make the market size within commercial vehicles even greater going forward. And then pyro safety solutions is also an area that creates an opportunity as we go through this electrification trend in the industry will create a bigger market, more opportunity and really an opportunity for Autoliv to specifically leverage our expertise in this area. And I'm sorry, the third one is powered two-wheelers. We've talked a lot about that. Jordi mentioned the opportunity and really the need for increased safety for riders on powered 2-wheelers. We are very pleased to announce that we are launching the first airbag that we'll launch in 2025 on a powered 2-wheeler, and we really see significant opportunity to both increase our sales and support our growth strategy, but also really increase safety for the riders on powered 2-wheelers going forward. And last but not least is pedestrian safety. So really addressing the safety risk of the occupants -- or I'm sorry, not occupants, but the people outside of the vehicle, not just inside the vehicle. And this is both with our core customer base today, the OEMs, but also with robotaxis and these last-mile vehicles that we're seeing in different areas of the world. So that is really a summary of our overall growth strategy that we have beyond 2025. And then I just wanted to take a few minutes to give you an update on our commercial excellence framework that we have within Autoliv. A few years ago -- we've talked about operational excellence in Autoliv, but in our industry for many, many years. And a few years ago, we really launched a focus on what commercial excellence. Commercial excellence can be a strong contributor and is a strong contributor to us achieving our targets overall as a company. So we've launched this framework and it really is a basis for us to improve and make sure that we execute upon all of our targets that we have set out in both our sales teams, but also our extended cross-functional teams. The framework has 4 pillars to it, and I'll just walk through a high level of what they mean. So the first pillar is our customers and the market. And this is really focused on ensuring that we have the right strategy within our customer base, but also within each of the markets that we operate in to make sure that we're accounting for the different trends that we see. It's exactly what I talked about earlier with, are we on the right platforms within each of our customers? Are we -- do we have a broad enough customer reach to ensure that we are set up for success in the future. So it's our customer-facing strategy. And the second area of commercial excellence that we have is what we call digitalization and enabling assets. And this is really all about efficiency in the sales organization and in the extended teams that interact with our customers. So ensuring that we have the right tools, data and support processes for our teams in order to execute on their strategy. The third pillar is end-to-end portfolio management. And what this is, is really profitability management across the entire value chain, the entire product life cycle. So not just focusing on when I get an RFQ and what I need to do in order to launch, but really working cross functionally before we even have a product to sell to ensure that we have the right business case, we have the right commercial focus on profitability from that point all the way through launching a product, end of production and even into service life. And then finally, last but not least, is people and performance management. And this is really ensuring that our sales team and a lot of changes that we're talking about in the industry, even over the last couple of years with inflation, it takes a different skill set today than it did -- than it took 2 to 3 years ago, to work with our customers in the right way, to be ahead of these industry trends, and we have the talent management systems and support for our team members to ensure that we're prepared for this transition. At the end of the day, it really is -- the entire program is built around how do we create value for our customers because we know that when we create value for our customers, of course, we will then create value for Autoliv and all of our stakeholders. Okay. And the last slide here is really an update on commercial recoveries. You know that last year, we did a lot of work with our customers to ensure that we got the necessary coverage for the inflationary effects that we see in the industry or in the world, I should say. And most of the focus in 2022 was on raw material recovery. And we were pretty successful. We got most of the raw material covered in 2022, but to a lesser extent, the other inflation that we've seen. We did get some coverage but we were not fully coveraged for things such as utilities, logistics and labor in 2022. This inflationary environment is obviously a new environment for both us and our customers and our customers were not really set up with the right processes and procedures in order to fully compensate us. But going into 2023, our #1 focus in the commercial excellence area or, let's say, in our commercial teams is to ensure that we get the adequate coverage and the full coverage for the external inflationary pressures that we see, that are outside of Autoliv's control. So these negotiations are ongoing. We are in negotiations with every single customer around the world. Obviously, we have a bigger impact with inflation in the Western countries such as Europe and Americas. And these -- the negotiations are quite detailed and can vary in timing and effort, I should say. The customers really request a lot of data, evidence and detail behind all of the commercial recoveries that we're asking for. And we are in negotiations both with each customer, both to provide that data so that we can support their internal processes, but also to ensure that we are negotiating on what is the appropriate level of data and detail that should be provided in this new environment, because it needs to be reasonable and fair as well. We do expect gradual compensation throughout the year from our customers. We had it last year, gradually hitting our financials throughout the year as we get through these negotiations. We have clear targets to achieve them in the most timely and effective manner that we can. And finally, we also have efforts in Europe where we talked about the restructuring and the recent announcements on what we're doing both in Europe and other regions. And specifically in Europe, we are doing an additional review of the overall price structure in that region to ensure that we're adequately compensated and working with the customers to make sure that we have the right price structure in place. So with that said, I just want to leave you with a few closing comments here. First, I hope that you can see and understand that we do have a very strong position, and we are even improving that position going forward in our core areas that we operate in. And we have a growth strategy beyond 2025 that is really built on the foundational principles of light vehicle production growth and content per vehicle growth, and we feel confident in that. And finally, we have a holistic commercial excellence strategy with a high focus on commercial recovery for inflationary compensation that is really put in place to allow us to execute on Autoliv strategic targets. So with that said, I'll hand it back to you, Anders. Thank you for your time.

Very good. Thank you so much, Megan. I think you clearly drove home the point that the automotive world is changing quite fast, both technology and OEMs who are winning and who are growing also with the new OEMs and that we have very strong position to benefit from these changes, and of course, that's quite important. So we are now going to have a break, and we are running a few minutes late. So I say that we reconvene after the break in 10 minutes time, which is at 1:36, it just turned to [indiscernible], so 1:36. [Break]

Excellent. So welcome back after the break. We even gave you 1 extra minute. We'll now move on and focus more on our cost reduction activities. So for that, I welcome Magnus Jarlegren, President of Autoliv Europe, up to stage.

Thank you, Anders. Thanks a lot. Looking forward to share a couple of minutes and the presentation with you about the progress we have done in the operational excellence area. And I will start off with doing a short recap on what I told in 2021on the Capital Markets Day, and it was basically 2 messages that I sent at that point in time. Number one, we have started the progress, and we have a good plan of savings that we are expecting to have going forward, and we are well on the way to capturing those. And message number 2 is really around how do we do that. And 2 things there. On the one hand side, you see the APS development, the Autoliv production system, which is then combined with 3 other things. One is benchmarking across all our plants, making sure that we bring the best of all the plants to the plants that need it and also automation utilization, what you have heard Mikael talk about earlier today. And I will again today reiterate the commitment and also show you where we are on this journey and what has happened. And I think it's fair to say that the last 3 years in the automotive industry and also for us has probably been the most exciting for decades. And Mikael talked about what that meant in terms of volatility. And you have basically the same graph here on the right-hand side, which talks about how we went from a very stable production environment, almost no volatility and very good forecastability, going forward. Meaning that we can set up our production to a very, very stable and smoothly running operations. 2020 to 2022 served us with a completely different situation. So it's not only the average EDI take rate that has changed, but also the width of the volatility, all the way from minus 50% up to plus 10%. And that is also within the week. So it's not that we know that within a month or within 2 months, this will change. It's really calling on for as Mikael mentioned, what we need to change for the next coming Monday. So what does it mean? It really means that it has a significant impact on the production. When we have that short response time to the changing volatility, that really means that we cannot flex the labor to the extent we are willing to do. There's just not enough time to do it properly. Secondly, the pandemic, which we had during this period in time also presented us with a lot of attrition on the labor that we have in our different plants, meaning that when we have that high attrition that we have had, we need to bring in more people. When you bring in more people, you need to make sure that you also then educate them, train them to the standards that we have to secure good quality and productivity, and that definitely influences the productivity negatively. We also mentioned the supply chain earlier. What it means from a production point of view is that we have plants where we have 10% to 15% downtime because we just don't have the material to present at the line, meaning that we are not able to produce. All of those things have been in 2020 to 2022. If you look on '23 quarter 1, the good thing about this story is really that the stability is starting to come back from an operational point of view, not only the take rate is better or 97%, but even more important, the volatility is more in the range of plus/minus 10%, whereas we were on plus 10%, minus 50% the previous 2 years. So we come from a historical norm of driving productivity, where we've been around the range of driving 5%, some years slightly downward, some years slightly lower, but around 5% productivity improvement every year. And you can see that we have more or less been able to at least drive productivity through those years. Maybe we went a bit sideways in 2020, as you can see there. But I'm also happy to see that when the stability is coming back and also underlying performance that we have done during those years here gives us now a position where we are on quarter 3, demonstrating a run rate of around 4%. So not necessarily back to the historical norm, but pretty close to where we have been in the history and also an ability for us to continue on forward. So how have we done this? And I wanted to give you a view on what I also reported on 2 years ago. So what we measure in our plans and what we have been measuring is on the one-hand side maturity. So how well are we deploying out lean principles or production principles. And then on the other hand side, what type of performance does that present as well? Do we get better when we do this? And we started in 2018 on an average bronze level with a rather wide population of plants within the circle you see. And then we have measured this on an annual basis, we actually measure it quarterly, but we have done a pretty good walk up here coming to quarter 1. And what is especially important in this chart here is that we move diagonally, meaning that we improve equally much on the maturity, but then we also get the performance as an effect of that. So we have actually achieved what we committed to do in 2019 where we said that we want to take majority of our plants to benchmark level, which is basically in the -- in between gold and platinum. We have 53% of our plants now on platinum level, which we are very, very proud of. But that means that we have come to sort of the end of the commitment, what we did in 2023. So now what we're doing is really redoing the complete approach for operational excellence. So we are introducing actually 4 different things. On the first-hand side, what you see here on the left, we have significantly increased the rating levels, and we have also pushed our performance more to the financial side. So the ambition level for the plants today previously been rating on gold platinum drops down quite a lot, which basically presents us with a good opportunity to drive a more ambition and more results going forward. So that is one thing. But in addition, we also put a lot more emphasis on safety, and we are also now integrating sustainability, and I will come back to what we're doing on the sustainability side. And then also digitalization. As we have previously kind of reported this separately, this is for now really our operational excellence journey going forward. And as I said, this is a significant increase on ambition level. So if you look on the blue dot on the top there, that roughly presents something around 75%. We have rolled this out now starting quarter 2. It means that the rating we get on our plants right now is in the range of 35%. So you could say that is bad. But for me, that's really another journey again to take once more, which is really what we are after here. So sustainability and digitalization is 2 of the areas where we go quite a lot more aggressive on and raising the ambition level quite a lot. On the left-hand side here, you see our journey towards CO2-free operations in our own operations. And starting from 2020, you can see that the GHG emission intensity, we have been able to reduce to north of 35%, and it's predominantly driven by 2 factors. Number 1 is that we are able to reduce the absolute usage of energy. So basically kilowatts per USD 1 million or per units produced, if you would like. Secondly, we're also doing a pretty aggressive switch here to renewable energy. Both those 2 together present us with this opportunity to reduce the CO2 emission to air. Then on the right-hand side, what you see there is AMRs, so autonomous mobile robots, which is one example of the digitalization. And this one, I brought because it's a good integration between both automation and digitalization. It's basically installed in 14 of our plants right now, 4 more is underway, and we will gradually implement them in more plants going on. And this is a pretty good example because it has several dimensions of opportunities for us. First of all, we can eliminate, to a large extent, the logistics operators. We don't need anyone driving around the material in the plant. Secondly, it's also a significant improvement on the safety and the road traffic safety that we have within our plants, so that also plays back to the safety focus that we're having. In addition, having this system also creates a lot of more stability. So the 10% to 15% I mentioned here earlier on the downtime for the lines is also getting improved in that. Roughly, we have a payback for those installations between 14 to 18 months depending on where you are in the world. So that's one of the examples that we are using. But it's not only numbers and facts, I think it's also people. So I brought 3 of our plant managers around the world here to speak to you. So let's look at that movie. [Presentation]

So what you see there is 3 of our strong plant managers. We have all around 70 around the world that every day do their utmost with what we have in the strategy and realized that on an everyday area. But looking a bit closer to automation, that's something that I've been talking about before. And I'm happy to report that if you look on the different product lines we have here and on the ratio that we can install automated solutions going forward, we have almost doubled the capability that we have in Autoliv compared to where we started the journey. On airbags, it's very much a very good situation when it comes to the inflator area. We have done a lot on the more airbag side of things, taking us from a 25% to 40% capability to install that. Seatbelts, which is slightly different, we have maybe less of those fully flexible lines, but there, we do a lot of automation when it comes to the in-station processes or the stations in the lines, going from a 20% to 35% automation rate. And looking at steering wheels, which is by far, one of the most manual areas we have in Autoliv, we have been able to achieve a lot from basically nothing up to a 30% rate of automation in everything that we're installing. Obviously, we're doing this from 2 dimensions. When you implement that, of course, we try to touch in on all the new programs. So when we invest in new machines, we invest in automated solutions. But at the same time, we're also automating serial production. Then we have more of the process type of automation, what I talked about here in the seatbelt areas, both of those areas are in a play at the same time. So far, if you look on from 2020 to quarter 1 in '23, this is equivalent to around 3,000 head counts in terms of efficiency that we've been able to take out. I think this goes back to the chart that I showed before on the labor minutes per unit, but also what Mikael showed earlier here on the head count in relation to sales. We have ramped up our progress here significantly. You heard almost all of the plant managers here talking about automation in their interviews. So we have around 5,000 people here in play when you look at '23, '24 and '25. Obviously, this is 1 significant part of what you also could read in the press release here previously. But it's not the only component that we are addressing here to reach the 6,000 that we laid out there in that press release. I also wanted to bring something around the footprint, which we have not really talked about in this setting before. And this is -- what you see here on this chart is the publicly-spoken-about efforts that we are doing. And what you can see is really that we have 2 epicenters of activities. We do optimization across the full globe, so to say, but it's really in Asia where we optimize and develop a footprint to capture the growth that we are having in front of us here. And looking at the European, it's more of a consolidation and reduction of the different sites we have. We have around 40% of our plants in the structure of Europe. Hence, what you see there is more consolidations. You see no green dots in that sense, meaning that we build new plants, but we expand the capacity in the existing plants in order to simplify the setup that we are having. But there is no geography left alone, also China now doing some efforts here, but it's really the 2 big areas, it's in Asia for growth and in Europe for savings and optimization. We have been onto this program for a while, and we have invested both in '20 and '21. Also now in '22 and '23, there are a lot of money going out, but we also announced that the savings for that is coming in starting this year, and then it's growing up -- all the way up till 2028. This footprint program is something that we've developed almost 3 years ago, and we have a very good structure for managing our setup here. This is something that we continuously evaluate, and we take the actions and decisions as we go along and we see as it's needed going forward. But that's a big, big effort, undertaking and also a big opportunity for us here going forward. With that said, I also brought another movie to you guys here where we will show 1 of those capacity expansions, which also then talks about how we build a capacity expansion and getting an end-to-end flow, very much exemplifying what we are doing here in Europe. But then also a lot of automation examples from China, which is a really accelerated geography when it comes to developing those different things. So let's look at that one. So the first example we see here is really how we use something that is called operations Avatar. It's a homely developed digital twin of how we look into our plan. So we replicate the facility, and we also replicate all the assets in there. What this enables us to do and what you see here is that we can very clearly simulate our way on getting to a fully capacitized plant, and we know exactly how we want to develop it in order to get the right flow in there. Moving over to airbag. This is from our Lugos plant in Europe, and this is what I talked about before, where we want to show you how we basically do a capacity expansion. To the right here behind the fence, you have the existing plant. And on this side, we have built a new building. And in that building, the whole intention is really to bring the full operations into an end-to-end flow, meaning that we don't need to have any logistics or shipping between plants, and we have everything in 1 space. So this is where we, in European, have the first plant with an integrated billing process. This is where we basically weave the textiles, but then later on, goes to the next one. So the weaved textile goes up on loose, which is then also put into a scoring and coating process. And you see 1P1P here, that stands for 1 product, 1 process. That's the way we standardize across the board, making sure that when we do a change either to the product or the process, we can easily do that change across the full network, making sure that we have the same process for the same products in the different areas. Obviously, when we build a plant like this, we use the best knowledge we have at hand, the latest developed solutions. And when we have this 1 now grown up into the plant we have right now, we have the best practice installed in 1 area, which is then something for the other plants to look into in order to develop. What you can see here is also this autonomous automatic mobile robot. You saw my picture before, but this is one which is roughly this big, which is used in a line. The opportunity with that is it's fully flexible. We can do whatever product that we want in this setup without being constrained of any installations. This is Dave. He talked to you in the movie before. This is an example of what he invited you guys to go and look at if you wanted to. But this is the robots he talks about, basically how we install the cell without literally any operators in this setup. Looking into China, this is a combination between different installation fully lines that are automated and flexible but also different type of in-process automated solutions that we've done. Put your eyes to the numbers on the right, you will see that we are able both to reduce the number of head counts from 30% all the way down to 80%, but you will also see that we're able to reduce the cycle time of the process, which essentially means that we increase the output. For sure, when we automate the equipment and the assets are more expensive, but when we increase the output, the CapEx per unit produced basically stay around flat, which is basically how we finance the automation journey that we are on. So very quick, but some examples of what we're doing from all the world. For us, we have 3 main focus areas here going forward. Number one, and this is what I alluded to in my first slide, short to midterm, we want to take full advantage of the slowly returning stability and also the underlying performance that we have been developing over those years. And we want to see better throughput, output and through that productivity. So that's focus #1. Secondly, we are having a new journey to take. We are launching this new operational excellence approach with 4 dimensions: safety; sustainability; digitalization; and also then the traditional principles but with a significant higher ambition level on that. And then of course, we have built up the capabilities of automation. We're going to continue to develop that capacity in that concept, but it's also now about rolling out all the concepts that we have into the existing production and the new programs coming. So that's the main 3 things that we are focusing here going on. And I thank you very much for this.

So thank you, Magnus, for some great insights in what we have done and what we continue to do to improve our cost effectiveness. I'm sure you all now are eager to hear what all of this that you've heard today really means in terms of financial performance and shareholder return opportunities. So for that, I welcome Fredrik Westin, CFO, up to the stage.

Thank you, Anders. So I will put this in a financial context here now, and I will focus on 5 things. Number one, I will, say, lay out a position of strength that we're operating from that allows us to confirm our financial targets. I will deep -- dive deeper into, in particular, the sales and the profitability development, both in the near term, but also in the longer term. And then I'll also talk about the capital efficiency program that I talked about at the last Capital Markets Day 2019 -- or 2021, sorry. And then I will close off with what that means in terms of capital allocation, so opportunities for shareholder distribution. So let's -- so again, if we look at performance here over the -- we have, yes, continuously outperformed the -- we have an organic sales growth that is 6 percentage points above the underlying light vehicle production over the last 5 years. So a very, very strong top line development, supported by both the content per vehicle growth, also our market share gains that we've been able to secure. The adjusted operating margin, Mikael already alluded to that. It's been a challenging environment. But at the same time, we've been able to keep our return on capital employed at a very stable level, showing also here our focus on capital efficiency and even being able to slightly improve it versus the starting point year of 2018. And this, of course, goes in hand with strong operating cash flow development. So also here, a continuously positive trend. And also here, cash conversion, where we have the target to be above 80%. We have been at higher levels than that if you take the average here over the last 5 years. And this combined has allowed for us to return around $1 billion in returns to our shareholders. And we believe this is a very strong position to operate from. And through that, we again, confirm our financial targets. We have a few of them out there. If we look at the near term here, it's the organic sales growth, where the target is to be 4% above the underlying light vehicle production growth, in the longer term to have an organic sales growth of 4% to 6% from the 2025 onwards. On the margin side, we have the midterm target of 12% -- I'll take the microphone. We have the some target here of 12%. And that goes in hand also with a framework that we have laid out where it is that we need a volume of at least 85 million in light vehicle production -- that we are able to compensate for the inflationary headwinds beyond so to -- what we have been facing after 2021 that we are able to compensate for that, we'll get compensation for that. And then the last component is that we can execute on our strategic road map in a stable environment. And as you saw here also from Magnus before, we are not there yet, but that is, of course, an important prerequisite for us. And I will also talk a little bit about what that actually means for us in terms of margin opportunity. And then we still -- we also confirm the ambition here to have operating margin of around 13% in the long term. So let's look into how this has developed on the sales side here over the last couple of years. So we have the 4% growth over markets that we have communicated in the time frame 2022 to 2024. We are on track, where actually, if you exclude the pricing component, which, of course, has been a significant contributor in 2022 and also in 2023, we are actually slightly ahead of this 4 percentage point growth target. And the growth drivers here are, as we've laid out, the market share gains but also the continuously positive development on the content per vehicle. And as I mentioned, of course, in last year and also this year, a significant pricing component. So here, we are on track. When we look at the adjusted operating margin progression, as I said, it's been a volatile environment to operate in. I think we have maintained a profitability level that is in the top quartile of the industry. And we're also significantly above our peers and competitors. It has been an external market environment, as we've talked about here, especially as Mikael laid out. In 2020, we had basically a complete standstill in parts of the world related to the pandemic that impacted us. Then we had a very strong rebound on volumes in 2020 into 2021, with a very favorable development also in our margin development. That was then unfortunately hindered by the issues on the supply chain, where we saw both volumes being impacted but also the volatility increasing significantly. Then also combined with the increase in raw material prices, this continued into 2022, and then exacerbated by the inflationary pressure. But we have focused on what we can control. So we have grown above market. We have taken market share. We have been very focused on cost reductions and activities internally to drive our strategic agenda and also got the compensation on the raw material side that was required and are now very, very focused on also getting the compensation on the other inflationary components. But if we look more specifically on 2023. So we have said that it will be a gradual improvement of the margin quarter-by-quarter. We started off in the first quarter with a margin level of slightly above 5%. And we expect this now to improve here sequentially. The drivers for this would be that we expect to see the compensations from our customers coming in here starting in the second quarter, but you also need to understand that these negotiations are, by nature, digital in outcome. And as we also laid out or alluded to in the press release last week, there might be shifts between the group. We don't expect this to be a -- the full year should be for the -- in line with expectations. But within the quarters here, there could be some deviations on how they're [indiscernible]. Then we also released on the cost and head count reduction activities, we should also see a further stabilization of volumes. Okay. Let's hope this works better. And yes, and we also have the seasonal effect here of the engineering income that is stronger in the second half of the year than in the first half. So these are the main drivers of the sequential margin improvement that we're expecting. If we look at the full year overall, we now -- we basically expect an improvement of around 2 percentage points, if you take the midpoint of our range of 8.5% to 9%. And we do expect a significant inflationary headwind. So around 3% of our margins should be impacted by what we've also laid out earlier. The inflationary headwinds, both in our supply base, which is the largest component, meaning the development of energy costs and logistics and most importantly, labor cost in our supply -- on our suppliers and how that moves into our cost base, but then also the impact of those same components on our direct costs. This should be around 3% is what we expect, but you also see that we expect to get an offset on about a similar magnitude than in the pricing negotiations that we have at the moment. We had 1 timer, if you want to say it that way last year with the patent infringement that we successfully closed. We don't expect that to be repeated this year. And then we also expect a carryover effect from the price negotiations that we completed last year. I mean they came in, in the second and third quarter of last year. So there's a carryover effect of that into this year. And then we should also see a further stabilization throughout the quarters here that we should have a lower impact from premium freight costs than what we had last year. And then lastly, the contribution here from volume, but you see that, that is a smaller component. So these are the major building blocks that takes us from the 6.8% last year to then the midpoint of the range in this year. If we look at the growth component, so we start with the near term, we're guiding for a 15% organic growth. We have split it out here also by geography. You see that the most significant growth we are expecting in Europe and in Asia, excluding China -- that also goes in hand with -- if you look at the S&P Global forecast, that's also where the LVP growth is expected to be the highest on the underlying LVP. And there's certainly also a pricing component in this growth that we're showing here. China is expected to contract as a market, but we're still expecting to show significant growth also in that market. And the growth drivers are what we've already talked about, it is the content per vehicle growth that we see to be around 3% in this year, a more pronounced market share growth in this year that takes us from the 43% closer to 45 -- around 45% and also very good position here with the domestic Chinese OEMs, whereas traditionally, we have had a higher exposure to the Western OEMs and joint ventures in China. We've been very successful in taking business also with Chinese OEMs to benefit from the significant market shift that is happening right now in the Chinese market. Then long term, it is the combination of 3 components that takes us to the 4% to 6% growth that we are targeting. It is the underlying LVP. Traditionally, that has been between 1% and 2%. And -- if we look at S&P Global, again, is forecasting it up till the time frame of 2030. This is closer to 2%. Then we have the CPV content or the content growth on top of that. That has also been actually closer to 2% in the recent past. But also here, we expect that to continue with all the components that Jordi and Cecilia talked about earlier, in the range of 1% to 2%. And then adding on top of that, the growth of MSS, which will be limited in the initial years and then have a larger contribution as we progress. And it's the bag on bike that we have also talked about that starts in 2025, but that should take some time before that becomes a meaningful contributor. Actually, commercial vehicles, the para safety switches and the pedestrian safety products should add more to our sales in the first couple of years here, and then that will be added on with potential growth from the 2-wheelers. So this is the framework for the organic growth beyond -- or from -- starting in 2025. If we go into the profitability development, to show you that the building blocks of then -- so where we expect to end this year, that should then take us to the around 12% margin target that we have. And it is -- you can understand when you look at what Magnus showed and then the implications for our own operations with the volatility that we're facing, a large -- or a main building block of this margin improvement is stability. So really that we can take better advantage of our historical productivity achievements and also get the efficiency back into operations that we have had historically. We have added a structural initiative component to this with the announcement last week. What we're showing here is the combination of that with the footprint activities that Magnus also showed. So a significant second contributor here from those 2 activities. And then again, a smaller component from sales growth, where this would be where we would end up if we had the volumes above 85 million. And then also a factor here, a contributor from the automation and digitalization road map that we also talked about here. So these are the main building blocks that takes us from where we expect to end up this year then to around 12% margin. Then as I said, I wanted to come back to the capital efficiency and capital management. We did present a framework where we saw an opportunity to improve our working capital by around $800 million. I think we have made great progress on the accounts payable side. This is actually already in line with the target or the ambition that we set ourselves and that we communicated in 2021. So we have achieved more than $500 million improvement and released from the balance sheet through optimizing our payment or payable structures here with our suppliers. So that's on track, and we expect that to also be sustainable at this level. The second largest component we saw from inventory improvements that we could have a more efficient inventory turnover rate in our operations, we're showing a flat development here. But if you compare us to most of our peers, it's actually not a bad development. I mean most other companies actually show quite an increase in this time period. With the stability, say, improving, we believe that many of the initiatives that we have put in place will then also bear, say, real fruits and that we should be able to get significant money here from the balance sheet and improving the inventory levels significantly. And then lastly, we continue to work on the receivables side where so far we've not made so much progress. But I think the $800 million here still remains intact, and we've made great -- or we've advanced greatly here towards that target. Then just a few words on our capital expenditures. So as you understand from the ongoing footprint activities, we are operating at elevated CapEx levels right now. What Magnus showed you before was the net CapEx number, what I'm showing here is the gross CapEx. So I don't have the benefit here in the first quarter of last year from selling the plant in Japan. But you do see here that over the last couple of quarters, the investments that we're making in the footprint, of course, have an impact. And as you also saw from Magnus' slide, we expect that to continue at least for another year. But then we also see with the approach to automation that we're taking that we should be able to get this down to around 5% over time. If you look at the depreciation expense with the top line growth that we've had, it's actually come down quite significantly as a percent of sales despite the high CapEx levels. And then going back into the shareholder return topic here, what does it mean in terms of how much we can and how will we return funds to our shareholders. A main building block in this is our leverage ratio. We have the ambition to be at around 1.0x over time and have a range of between 0.5 and 1.5x. You do see that in the last couple of quarters, we've been operating at the upper level of that range. That also shows you how we control the buybacks and how we look into how we can distribute funds to the shareholders. Of course, with an improvement on the EBITDA level, that also provides for a more capacity to distribute funds to shareholders. And if we look at the speed of doing that in 2023, we are at a higher pace of the buybacks than we were in 2022. And of course, with improved profitability that we expect here sequentially in the quarters, this should also continue to pick up pace. And just to lay out here the key components of this repurchase program, it is -- I mean, the visibility and the evolved material of the operating and free cash flow, it is the credit rating that we want to maintain at a strong investment grade, which goes back to the slide before on the net debt development to the adjusted EBITDA. But then combined with the business and macroeconomic outlook and of course, the share price development. M&A for us has a lower priority, and this is, in essence, the framework under which we can conduct the buyback program. And just as an exercise here, if you look at the 2023 indications, it would add around $900 million in capacity for shareholder returns. If you look at where our net debt to EBITDA, if you put that at 1.5 at the end of the year and translate the other targets that we communicate. So there is significant space here and with a stable environment and then continuing towards the midterm targets, there's further opportunity for this also going forward. So that concludes my presentation. With that, Anders, I think we'll go into the Q&A session.

Yes. We are. Thank you very much, Fredrik, for translating into financials. It's time for the Q&A. So I ask Mikael to join us up here on the stage. And all the other presenters are, of course, also available to respond to any question that you may have. And as I said earlier, there are 3 ways to ask questions. Of course, live here in the room, on the chat, on the webcast and, of course, on the phone lines. So I think we should, of course, start in the room and -- start?

Not sure if this is on. I wanted to ask you 2 questions. First on the -- on these pricing recoveries of 300 basis points that are being negotiated to offset the new inflation, can you give us a sense of how much has been achieved already at this point as we're approaching the middle of the year or how the first half to second half looks? Would you be sort of at a run rate? Your initial guidance kind of had 200 basis points of margin improvement every quarter. So it would be like 5%, 8%, 9.5%, 12%, something like that, if you were to sort of do it evenly. Towards the end of the year, are you sort of fully recovered? And do you still expect to be there because I didn't see any additional impact in your bridge to the midterm targets, which are presumably 2024?

We haven't guided quarter-by-quarter. What we have indicated is that it should have the same profile as we saw last year. Of course, the negotiations is, I would say, ET calendar time as we have very detailed discussions with the customer. And I think we alluded to that already last year when we said raw material, we need to go down component by component, plant by plant. I walked that through. And of course, when we move into non raw material inflation, it becomes even more complicated because then you need to break all these different type of costs down to the plant which we are operating in. So for -- that's also taking time. But with that said, our expectation was still that we should have a similar profile as last year, but we haven't given any details exactly what it looked like. Because it is a very, let's say, digital consequences of a discussion, if it's done let's say, 3 days before the end of the quarter or 2 days after the new quarter has started. So of course, you have some challenges in that. But we are making good progress with our customers and as I said, we are also coming to the customer with really well justified claims. So we feel good about the full year indication here.

The second quarter last year. I mean, don't forget this patent infringement settlement that we had, that was not a run rate based.

Yes. I guess maybe just to clarify, are you anticipating that you will have that more or less in the year by the end of this year? Because I didn't see any carryover effect in your forecast going forward from these pricing. And that's all for pricing. And maybe if you can just elaborate a little bit more on the structural head count -- structural cost savings opportunity. It sounds like it's enormous. We're looking at 8,000 people at, I don't know, even $50,000 a person, this is $400 million -- and on your revenue run rate, that's 400 basis points. Can you give us a sense of how much you're expecting to retain and whether we're actually offsetting that in your forecast because your margin forecast doesn't seem to show that.

Just a quick comment on the head count side. I mean the 8,000 is both blue collar and white collar. So of course, there is a difference in the numbers there. But -- and I think also when you look at what we are looking for here also is connected very much to a structural improvement. So it is very meaningful potential in what we do in there, and that's why we do it also. But it's also because we are making progress here in a lot of the initiatives that are connected to the optimization and digitalization that provides these opportunities also. So -- but we can't give any detailed numbers around that now because we need to have the process in each country where we are taking new steps and follow the procedures.

And especially on the direct side, I mean we have quite a significant part of temporary labor and also a high attrition rate, higher than we would want to have. And of course, that will also help to get this 6,000 head count out, especially on the direct side.

On the pricing, are you seeing...

On the pricing, so what we wanted to show, there might be a pricing component also in the walk from the, let's say, 8.5% to 9% to then 12%, but that depends a lot also on the inflationary development. So should inflation keep high, then of course, there will also be a pricing offset in there. But we aim to basically close the inflationary headwinds that we are facing right now within this year. And that's where there's not a carryover component in there.

It's Richard Hilgert from Morningstar. Thanks for hosting the Investor Day today. Very good, very informative. On the new technology Bernoulli airbags, the press release seemed to highlight that the technology would be [indiscernible] in large airbags where there's a lot of airflow needed. But it seems to me like this is a technology that makes inflation just simply more efficient overall. Would it make sense to replace current airbag inflator technology with this technology in all applications? Or is it just some applications specific?

I think we'll let the expert comment specifically. But let me just say that, I mean, our focus right now is to fill the need from the customer here to have larger airbags but still in an interior where you may have less space as the electrical vehicles, for example, have a potentially smaller dashboard you're further away from the dashboard, so therefore, you need the bigger airbag, but you don't have as much space to put it. So this is really to answer up to those needs. But I mean, it's, of course, a very effective technical solution that we can see other applications use for, but I'll leave it to you.

Yes. So is it true? I mean it's much more efficient than the current ones. But also, we need to understand that each airbag has its own way of working. For example, a curtain is something that you want really fast because basically, from the moment that you detect, you don't have so many milliseconds to deploy. So in these ones, maybe we cannot play with this technology. But for example, in a steering wheel, the space that you have here, we are fighting space's space. Basically, you have seen the latest modules, they are of the size of a cup of tea basically. So it's a technology that has a lot of potential. It's just the beginning, but it has its sweet spot probably in the front of where Mikael has said -- we have bigger volumes to fill -- and actually, there is more airbags also in the rear seat, also normally, they have to fill bigger areas.

Okay. Great. Fredrik, on the CapEx and D&A chart that you showed. We've got D&A coming down quite a bit compared to where CapEx is right now. Before we get CapEx and D&A being down to the numbers that you talked about, will we first see a spike back up in D&A because of the current FX level that we're seeing?

Yes. I mean we expect that the D&A is impacted also by the high CapEx levels that we have right now. I mean they have not all come into depreciation yet because it's the SOPs and the work-in-progress and so on is coming a bit later. But on the other hand, many of these investments are structured investments. So it's new buildings and sites, and they tend to have longer depreciation times. So it should not be a major effect.

It's Dominic O'Brian from Balyasny. I just had 1 question -- or 2 questions, actually. The first 1 would be on the structural cost reductions. The 11% global head count reduction you announced last week, is that incremental to the information you're giving us today? The reason I ask is I guess we had this sort of margin targets presented beforehand, I didn't see anything as radical as this in terms of the head count reduction. I know you've already given us sort of automation savings of $300 million, et cetera. But yes, are the structural cost reductions that we see now incremental to the targets you've just given us? That's the first question.

No. I mean it's a part of our journey towards our mid-term goals, as we have said. And I think it's very much in line with the communication we have also in the past where we have talked about footprint structures. We have also talked about making our different processes more effective. We're not only talking about the plans or so. We are talking about the real end-to-end. And in that work, now we have come to a point also where we see that we can start to execute on some of these initiatives that -- and therefore, we wanted to communicate this last week. And it's also in line with what we have said here that as we have been facing headwinds throughout the last couple of years here, we will do what it takes to get through those headwinds and offset some of these headwinds. Because if we go back to the 2019 Capital Markets Day when we launched these midterm targets, I think we have talked already about the global light vehicle production difference. We have also seen here the inflationary headwinds that we already had actually in '21 on the raw materials side, and we said we will manage through this. And then, of course, it hasn't slowed down with headwinds over the last couple of years. But we feel very comfortable with what we already are doing and then what we are having in our strategic road maps, including then the structural changes here to get to the midterm targets. So it's in line with the overall scope and approach we have towards the midterm target. So it's nothing for them.

So the structural cost productions are essentially a function of the work that you've been doing, you presented in the plan in terms of automation. Okay. Great. And then the second question. Fredrik, you mentioned that this year to keep your leverage ratios towards the high end, you sort of free up $900 million or so of capital. When I just extrapolate it to your medium-term plans will -- is that number $1 billion plus that you probably have every year just to keep leverage ratios flat?

Well, it increases. So it's more than the $900 million. The $900 million is a combination of the free cash flow improvement connected to the $900 million operating cash flow ambition that we have or target that we are having, plus then the slight increase in the leverage ratio. We were slightly below 1.4 at the end of last year. And if you then do this theoretical calculation with 1.5, those are the 2 components. But of course, as the EBITDA continues to increase. And if you then take this 1.5, and also with the 80% cash conversion, yes, it creates further potential .

Colin Langan from Wells Fargo. I think in Q4, you sort of outlined the 12% margin framework. And you -- on that call, I think, said you're on track for 2024 to do 12%. Is that still the case? Or is there more caution around it or did I misinterpret the comments on Q4?

No, I think it's the same answer we have had along the way here. I mean, what needs to be in place there is then the framework as we have talked about. Is that '24 and it is '24. If it's not, it is when it appears, if it's '25 or '26. But I think the bottom line is the building blocks I talked about here. I mean, we need to have a stable situation on the [ whole ops ] and how the outlook for the need from our customer looks like. And then we need to get to the minimum 85% as we have talked about and also then that we are managing through on the price adjustment here. I think the challenge here is to see how the inflationary scenario plays out because -- with the current situation here, we have this, let's call it, seasonality effect of the inflation because similar, as we said last year, I mean, we are getting the effects early in the year. We have any old transits changes with our customers and then gradually coming in through the year and then we keep the balance here. And last year, as we have laid out here today, we not basically what we needed for raw material side. This year, we are working on the other, then the critical point is what happens with inflation because if we have another significant inflationary years, we will have that, let's call it, seasonal effect of the inflation also next year. So I mean, I think that is what we need to get in balance. But I think we'd -- what we have described here today, we, as a management team, have no doubt that we have the ability here to get to the targets with what we are doing, both short term in offsetting the headwinds and with our what we then call the strategic road map initiatives around optimization, for example, the footprint adjustments and so on.

Okay. I mean, in terms of the head count savings, which buckets -- want any framing of the size of that, sort of broad commentary, you've kind of come up with pretty broad estimates. Is that adding certain basis points to the walk to 20% -- to the 12%. And which bucket's going to be looking at that sort of current margin to your 12% target? Is it in several buckets? Or is it in just a structural initiative? Or is it in the automation? Or is it in the labor efficiency, I wasn't sure which area we would try to gauge how big that helped in?

It depends on which category of positions you talk about, it comes in different buckets. And then of course, the overall footprint is also in another bucket. But I mean if you connect it back to your shorter, I would say it's hitting several buckets here. As it comes through.

I mean it's -- it will be -- in a large part of the 2,000 indirect will be above the gross margin line, but it would be production overhead headcount. But we're not excluding SG&A or RD&E from the exercise either. So it will come in, in all buckets in direct labor, indirect above gross margin and then also RD&E and SG&A. But what exactly and then how that we will come back to them later, when we have the specific actions that we communicate.

Okay. Because when I'm thinking about walk, some of it is actually sort of the production schedule volatility, which is out of your control, too. That's part of the labor inefficiency, if I'm understanding that right.

Correct.

Yes. Let's then move over to the other side [ Aaron ] in the room.

Jairam Nathan from Daiwa. Just first on the new airbag, I just wanted to kind of understand how receptive are the OEMs, especially given inflator issues recently to kind of experiment new technology? And if you could talk about that and add a few more.

Well, this technology that we are showing you at this moment, we are collaborating already with some customers, where basically, we are doing the -- what is considered as a system integration, understanding it can be other effects in the car. And this is already quite advanced. So I will say that we are already closing these kind of work with the customers and basically is a lot of expectation from the one that we have decided to share this starting points. Because as a concept, basically, what you are doing is taking the air they have around the car and introduce it in the airbag. So this we have to do many installation checks that inside of the IPs, the instrument panel, that is air or this is not encapsulated in a way that then we have other sites. So this work is showing preliminary very good results, and this is giving a lot of expectations also from our customers, especially in North America. It's where we have the system that is self-adaptative example.

I had another question on the 2023 operating margin walk. So the operating leverage is a pretty small portion of that walk. And it's still, I would say, even if you exclude pricing, probably you're looking at 10% kind of revenue growth. So what's the big driver are there? What are some of the offsets that you're seeing for the operating leverage to be so minimal?

No, it is, say, in the mid range of the 20% to 30% that we're normally guiding for. But the volume contribution is not so great. I mean the organic growth comes from much more of the other components, as I mentioned, I mean, it's pricing, market share, CPV. And the -- on market share, you have that volume -- or volume growth, but a lot of the growth is also not volume related. And that's why that the contribution then from, say, the growth component is not so large. But I think it's also being a bit -- so, if you to compare to the other building blocks, it seems small, but in a normal environment, it would stand out as a much larger contribution. But due to the current environment, it's kind of been, it's [ dwarfed ] it's by the large impacts from the other components.

And of course, you have the effect of that. I mean as we're growing market share and LVP is not -- it's basically pretty stable. Of course, you have more programs and by that's creating more volumes, but you don't have the same effect as you have a LVP growth, you have the same program just jumping up in volume. So of course, there is a little bit of a -- that's probably mix effect in that also.

Doug Dutton from Evercore ISI. Can you just quantify how much the schedule volatility in start-stop production has maybe affected these margins in the past 2 years with all the black swap events that we've seen. It feels like it could be material, maybe 150 basis points. So could you maybe elaborate on that? And when we see that coming back? And how are you thinking about that right now?

Yes. We haven't gone out and quantify it because it's very difficult to, I would say, verify in such a way that you can put it out as a exact number into the market. But I mean, I'd have to say it's a meaningful effect because, I mean, it's, of course, the effect you have in the plant that you need to set their with capacity for a week or potentially more than before coming back because you can't adjust it with a short notice plus that you need the extra resources, when they get back on track. So that, of course, in itself, but it's also putting a lot of challenges in terms of material handling from our supplier side, our supply chain team needs to spend time to manage that. So we don't have too much material coming into the plants, et cetera. We have the tied up capital in inventory side, et cetera. So of course, the instability creates a lot of additional work besides the lack of opportunity to continue to trim your system. So yes, it comes across in many shapes and forms, but it's very difficult to have a public number on it, but it makes a difference for sure. And -- on coming back, as Magnus showed here, I mean, it is gradually improving. But I mean, we are not close to where it was before the pandemic yet. And we still have component challenges in the industry, I would say.

And then just on currency, particularly Mexico and China, still sort of remain a headwind, haven't moved since Q1. How is this incorporated into the '24 guide of 12%? Is that something that's expected to improve over the course of the next few quarters? How is it interpreted in that guide?

Well, we -- at the moment, we talk about FX rates end of, say, Q1 this year. I mean that's what all our projections are based on still there.

I think maybe we should give the people on the phone lines a chance to ask questions also I'm not sure if there are any, but operator, Roberto, do we have any lineup questions from the telephone lines?

There are no questions from the phone at the moment. [Operator Instructions]

All right. So let's -- yes, have been very eager.

Ryan Brinkman from JPMorgan. You showed some really very impressive market share figures, both by region and by customer, which I wanted to ask around including the comment that you have more than 50% share with some customers with maybe opportunity to even grow from there. As I think about some of the reasons why automakers might not want to be over concentrated with a particular supplier, I mean, first and foremost, would seem to be the risk of quality or continuity of supply issues, which don't seem really applicable -- because your execution relative to the competition is maybe the biggest driver of your outsized share. Another reason though could be wanting to foster price competition. So do you see any practical limitations to your share by customer or geography? How much is share growth contributing to your outlook for 4 points of outperformance versus LVP through 2024? And will you expect the contribution to growth from share increase to maybe level out thereafter? Or -- for how long do you think that share gain can continue to be a tailwind to grow?

There was many questions you wonder, but let me try to cover the topic as such. And as I said before here, I mean, the key components to be successful with the customer is that you have the superior quality, robustness in your deliveries and you are price competitive. And you're, of course, not more successful than you lost to the court that you were awarded. So that's, of course, something we always need to lean forward to make sure that we continue to win. But I think, I mean, if you look only till 2024, it's basically already in our order books. So that's not the topic. I mean it's really when you look out in the -- out the years, where the awards are being won right now. And also here, we showed in our order book fulfillment, so to speak, that we are gaining orders here that supports the market share that we are growing into which is around 45% as we said. Beyond that, we don't have a market share target at all as such. But of course, our intention is to defend that market share. I think the only way to do it is what I call customer commitments. And from a customer point of view, I mean if they feel and see this, I don't see any problem why they would continue to have somebody on, let's say, 50%, 60% as long as they have options. Which they have, if you don't have 100%. So I think that's ...

That's very helpful. And then just last question is what amount of the 4 points of outperformance versus LVP through 2024 or outlook for 4 to 6 points of, I think, total growth thereafter, it is driven by the past [ long of ] higher input costs? And how does that maybe compare to your history?

No, we don't giving in a numbers on the price increases here. I mean, of course, in the short term, the price increases has an impact. But when you look further out, I mean, the pricing is building in the current inflation cost increases that we have already. So that's taking care of that. I know it's a part of normal business, I would say. I think that the key drivers for our outperformance here is without a doubt, the market share growth that we are seeing and that we are gradually gaining here. And since 2018 here, we have moved up from $40 to $43 and towards to $45.

But the targets exclude any pricing components from, say, inflationary compensation. And that's what I mean. What we showed was that we are on track. We're actually slightly better, when you exclude the pricing from our sales development, we are slightly better than the 4 percentage points that we are guiding or that we're targeting.

[ Ely ] [indiscernible], [ Berenberg ]. I want to go back to this market share question on the slide that Megan showed working down by region. You gained share globally in Europe, China, even Japan, of your largest market in North America, it's small, but it's a slight decline. And I'm wondering, can you comment on the competitive dynamic here in North America? What accounts for that decline in market share?

I think, I mean, I think last time when we showed is at the CMD, I think we had a small decline in Korea. So, I mean, it's a part of Asia here today. But I think the point here is when you look at each region, I mean, of course, we are defending the market share. We are the market leader in these regions. Then depending on how it plays out to specific years, you can have a small adjustments. I would say, I mean, overall, it's a very competitive industry. No doubt about it. I think we all know how this industry works and what drives it. I think we have an advantage towards our customers here. And I wouldn't read in terms of being competitive here on the categories I talked about before. So I shouldn't read in too much there. I mean, we are the market leader in Americas here and I don't see any reason for change picture. I don't know, Megan, if you have anything you would like to add to that. But...

I think actually, I've been informed that there is a question on the phone line. I think we'll give her a shot. Roberto.

Yes. We have now 1 question from the phone. We are now taking the question Agnieszka Vilela from Nordea.

Perfect. I have 2 questions, if I may. Starting with your restructuring program. Looking historically, your latest programs were down in times when car production was coming down. And your organic growth was more subdued. Now we expect 15% organic growth in 2023 and most likely a drop in 2024. So I just wonder if you could explain how can you practically achieve this kind of massive head count reductions? Is it only about the automation? Or is it something else?

No. I think as I alluded to before, I mean, when it comes to what we call under direct workers, the blue color category here in our plants. I mean it is connected to what we talked about here around optimization and digitalization, but it's also getting back on track, when it comes to the productivity, where we have been faced with the challenges due to the volatility. I mean in 2022, we had a significant -- especially in the beginning of the year, significant effect of premium freights. And one way to balance this and to make it I would say, manageable in a more cost-efficient way was to man up in certain areas here in our plans to deal with the volatility internally in the plants. So of course, that is coming through. We see an opportunity now to get back on track with that in combination with strategic steps that we are taking here. And on the direct, we're indirect workforce. We're also here talking about the different way of setting our operations up. I think I mentioned flattening the organization even further, making more emphasis on the structure connected to touching the products and the customers here. So different way of working, I would say, but also that we are moving forward with our structural opportunities here when it comes to the site setup. And of course, that's one reason why we also put an emphasis on Europe here as we see bigger opportunities there when it comes to the site structures. I hope that answers your question there.

Yes. So it seems like you are now targeting really 1.5x net debt to EBITDA rather than 1x. Is that a correct assumption? And also, when it comes to share repurchases, first of all, did you and the room that you see in your cash right now. Did you accounted for the cost for the restructuring program in your cash flow expectations? And also, would you consider taking on more debt to fund that buy backs. Thanks.

So no, we still have a target of being at 1.0x over as in the long term. But we have this range between 0.5 and 1.5. And then at the moment, we are operating at the upper end of that range. But no change to the long-term target there. We have to come back on what implications of the restructuring needs for the head count reductions, what that explicitly will mean for potentially this year, but then also the upcoming years, when we announced those. But what we presented here today was based on what has been communicated specifically so far.

Any more questions on the phone?

Yes. We have another question from the phone. We are now taking the question. And the question from [ Tony Hughes ] from Point72.

[indiscernible] follow-up. One, can you talk about 35% order intake [ on a ] penetration only at 27% by 2026, when I might start to see some of these programs or authority potentially mean...

We cannot understand the question. The line is very bad, sorry.

I think Tom said this question also on the web chat. So I think I know what he's talking about. So, he wants to know, you have 45% order intake on EV, but EV or our order intake. But the EV penetration is only going to be 27% a couple of years down the line. So does that mean that we're getting larger share on the EV market than on the ICE market? I think, that's the question.

Yes. I think what we have said here is that we have a slightly better market share of the EV platform market, if we call it that, than what we have on the total portfolio. So -- but this is a fast-developing market, you could say. So I mean it's very here -- from here we have to follow this very closely. And as Megan pointed out, that needs to be very focused effort here to make sure that we are on the right platforms as we move forward. But so far, so good, and we are continuing to strengthen our position with the orders we have won so far.

There are also a couple of questions on the chat, including from Tom here about the size, the potential size of the 2-wheeler market. And could the margins be similar to the Light Vehicle business.

We haven't quantified that yet. But what we have said when it comes to the overall MSS effort here is that it should be a positive contribution to our margin development...

Margin accretive. Whilst I'm still on the chat here, there are a couple of questions, one from -- or quite a few actually. One from [ Matea Sonberg DMD ] -- basically asking a long question, but I'll pick that part. How long time do you expect it will take before the industry returns to the normal volatility that we had pre-pandemic, this 2% volatility. Do we have an opinion on that?

I wouldn't [ dare to ] have a forecast on that, but it's moving in the right direction, but we also have -- we see some setbacks on that because we are not where we were before the pandemic in terms of stability throughout the whole value chain. I think one part we didn't spend so much time on throughout the day here, but it was mentioned on one of the slide is labor shortage, and we see that particularly pronounced in Americas and in Eastern Europe. So when we look at our supplier base there, they are fighting hard to secure that. And that's also have some defect. But also in the logistics side, on the logistics side, we see challenges there due to labor shortages in some areas. So we don't have the stability throughout the system yet, and it will probably take some time.

I have another question here from Agnieszka Vilela, Megan, you talked about working with the pricing structure in Europe. Can you elaborate a bit on that, please? Or maybe some of you could? The price structure gap that...

Yes. We can't provide so much detail at this time. We're just starting discussions with customers. But of course, as we look across improving the financials in Europe, we want to ensure that we're getting adequate compensation from our customers for the volatility that Mikael has talked about as well as changes that the customers make volume deteriorations, et cetera. So there is more information to come, but I think we're starting some discussions to ensure that we are adequately compensated for these types of changes in the market.

Okay. Very good. I think we return to the room here with questions.

Michael Jacks from Bank of America. I appreciate your slide on EV-led order intake and the emphasis on the content opportunity here. But it just strikes that every automotive supplier at the moment is speaking about selling more content into EVs. And the real conundrum obviously, is that EV prices need to come down, not go up. Do you think there is potentially a scenario, where content could potentially go in the opposite direction for you -- in passive safety? And then maybe just align to that question, you seem very well represented on order intake with new EV entrants, particularly in China. But the market is clearly getting more competitive and it seems rather unlikely that everybody is going to survive this. So I guess the key question there is what kind of a haircut, if any, are you taking to the intake assumptions there? And are you perhaps a little bit more conservative when allocating production capacity for these?

I think, I mean, in terms of less safety products in the EVs, I don't see that. I think that -- I mean, we have a very important and critical components going into the vehicle. So I think that's not the first you'll start to reduce. But I think the EV price reduction that is needed or expected depending on how you see it, I think will come from certain components that are, I would say, challenged when you look at the difference in price between EV and ICE vehicle. I think there's more focusing on those components [ and ] if you rather start to demount the features of the vehicle. I think that's really where the focus on cost reduction needs to be. So when it comes then to the -- to who will survive, I think, what we are doing here is that we are working with many OEMs. If no. I would say, all relevant OEMs here and well represented both with the new ones and newer ones, I should say, in this space. As well as the traditional ones with EV platforms. So I think, of course, the strategy from our point here is to work broadly with many customers and be attractive for all the OEMs here.

If I could maybe just sneak in one final question. Just on the recent finding by the NHTSA on the ARC Automotive recall. Can you just please clarify if there is any potential positive or negative implications for Autoliv from this even near term through potential provisions or longer term on the positive side through market share gains?

Yes. I could respond to that. I mean what the facts are that there is 1 [ recording ] done by GM. It's about 1 million vehicles. We have no involvement in that at all. Then we know that NHTSA is pushing for further recalls and NHTSA can't make any recalls. It's the OEMs that actually makes the decision to make vehicle. The number from NHTSA has clearly been disputed by ARC, which is an involved company here. And to us, it's very difficult to know at this point in time how this will develop. I mean, of course, it will be a big vehicle, someone needs to manufacture and sell those replacement parts, replacement the inflators. And I think we would be happy to do that if that is the case. But I mean we don't know at this point really how this is going to develop.

Two questions, if I could, Luke Junk, with Baird. First question, you've noted that the commercial recoveries of non-raw material inflation this year includes both costs in your P&L and costs that you're taking from your supply chain I'm wondering if it's possible to help us understand the weighting of those costs that you're looking to recover between what's in your costs and what's coming from the supply base and whether a customer receptivity to that differs or if it's being viewed similar by your customers from a recovery standpoint?

So it's the largest component in that inflationary headwind. That's as much as we've said. So it is significant. And there is an openness from the customers to -- in some cases, these suppliers are customer-directed then it's very easy. But then our argument as well if you accept it on that one, then it should be valid also for the whole setup. So there is an acceptance and openness also to discuss that inflationary headwind for us. And our ambition is definitely to get compensation for the full content.

And then my follow-up question, just wondering if it's possible to put a finer point on the incremental benefit from the head count actions in the 2024 margin walk, just from a timing standpoint, I understand that dollars are something that we're going to talk about later. But just from a timing standpoint, in 2024 relative to the benefits that might accrue as we look to 2025, and beyond given what appears to be some just longer-term nature of some of these actions?

Well, we've said that in the press release last week that we expect that the savings from the structural initiatives for the [ 6,000 plus 2,000 ] that they will be completed by 2025. So you should not expect the full effect in '24, but there will be then, say, fully implemented during 2025. Does that answer your question? Okay.

Dan Levy, Barclays. First question, I wanted to ask about Mobility Safety Solutions some of the new products that you have here, maybe you can give us a flavor of how significant the resource outlay and sometimes we see with suppliers that are supplying to new programs, new customers at the validation expenses can be a drag on margins. So maybe you can give us a sense of how significant the resource outlay is, which you're confident that there won't be maybe execution drags on the margin.

No, I'm pretty comfortable to say that. I mean what we are doing here is really leveraging on what we already are good at. I mean, as you see, I mean, when talking about 2-wheeler, airbags, for example, it's, of course, built on a knowledge we already have. And I mean, with a strong research team, we know a lot about accident, accident patterns for 2-wheelers, et cetera. So we can really leverage on that. I mean we have a very small core team around the MSS business. So it is not any meaningful, I would say, cost connected to those efforts in relation to the overall business of Autoliv here. So really, really cost efficient. And also, once again, what we have said there around MSS is that it should be margin accretive to what we do, both short term and long term.

Great. And then, second is a follow-up on automation. Maybe you can give us a sense, sometimes with automation, there's a risk that you might potentially have quality issues. Quality is at the core of your product offering. So what's the confidence that quality is not being compensated as you ramp on automation? And the second on automation is maybe you can give us a sense of the extent to which customers are what's the pull forward on customers on automation, specifically as it relates to passing along some of these benefits and in return, getting maybe some of the better pricing that you need?

I think, I mean, first of all, quality is absolutely critical for us. So we never do anything that jeopardizes the quality here. [ And as so ] from the plant managers here and especially from the IBC, there. It was a lot of focus on actually making sure that we only -- not only protect any quality, we actually improve the quality by having less variability with automization rather than to have operators doing certain activities there. So it is really to strengthen the quality. And I think that's also a very, very important contributor from the optimization actually to improve the quality. I mean, in terms of passing on any benefits from this, I think that discussion is pretty short, considering the -- their current situation here, where we actually need compensation from the customers for the inflationary pressure. So I don't see that in today's environment.

Are your customers agnostic to the automation? Do they want this?

No, I think, I mean, everything that can improve the quality of the products. And I would say the [ presiability ] of the quality is supported by the customers. I don't see any negative commentary around authorization from our customers when we talk about that.

Okay. We are running a little bit late. I will allow one last question if there is one. It is not. All right, very good. That ends the Q&A session, and it is time for brief concluding remarks from Mikael.

Very good. Thank you all for good questions there. I appreciate the active participation. So let's see -- let's move to conclusions. And let me just wrap-up today's meeting by stating I'll probably need some help here. Here we go. By getting back to 2019 the CMD, when we launched our midterm targets. And in connection with that, CMD, I showed the slide, you may see up in the right-hand corner there, what was the ambitions with Autoliv moving forward. And we said this was our commitment to make sure that we created an even stronger company in the years to come. And I think we are on a good way to achieving this. When it comes to saving more lights, we clearly have moved that forward, and you have seen also in connection with our yearly summary here that we have moved up from the 30,000 lives that we saved in 2018 to 35,000 lives and we are on this journey towards the 100,000 lives saved per year through our product innovation. We have taken the first steps into new markets, and we have talked briefly about the MSS business here, but also in the light vehicle segment, we see a lot of interesting opportunity to address new features in the vehicles here. You have also seen us announcing several cooperation agreements with some of the OEMs for future interior safety products. So I think that's a good sign that we are regarded as a preferred supplier, when it comes to new technology and to drive safety forward. We also, on a good way when it comes to automizing our operations. And you saw from Magnus here that we are taking significant steps in all the different product areas covering many different operational processes, when it comes to implement new technology to support our productivity journey. I think also we can say that we have strengthened our overall position in the market by continued outperformance. And at least this year, you see a significant step up here. And even then, excluding price adjustments here in the short term, the LVP plus 4% is expected to be overachieved. We covered many new products, not least for EVs and vulnerable road users as well as talking about more autonomous vehicles, so you have to have the right products for the future demands from our customers. And we have further integrated sustainability into our business. I think, the strength with Autoliv is, of course, also that our business is sustainability, meaning saving more lives is really in the heart, I would say, on sustainability. And we have also here signed up to the science-based targets and have ambitious targets for both 2030 and 2040. And we have raised our level of profitability. Even though we have faced these headwinds over the last couple of years, I think we can show here today and also in the past here that our relative position here and the foundation laid to achieve our midterm targets is there. And of course, this all together should lead to as we are viewed as the preferred supplier moving forward. But that is always in the center of our attention. And as I said, we are not more successful than our last award. So this is nothing we take lightly on and will continue to maintain in focus. So today, we have also then reconfirmed our midterm target, as you see on the screen here. And I think we have, throughout the day here laid out the different drivers to get here. I think, when it comes to the growth, we see content and [ LVP ] serving as a great foundation for our growth. And we also, on top of that, have the market share increases towards the around 45 percentage points. We have adjusted operating target of around 12%. And for that, we have the different building blocks in place. And the foundation, of course, is what we see here in terms of stabilizing the call-offs and LVP growing into around 85 million vehicles, but more importantly, what we can control, we are controlling and delivering on that as a part of this journey. Cash conversion, critical for our future shareholder return. And here, we are having lot to focus also on the balance sheet and the capital efficiency, as Fredrik has laid out during the day today. And of course, continue to mature that we have a healthy balance sheet in order to cope with challenging times as we just went through, and that has definitely been a strength for us over these last couple of years. So I hope you had got a good overview of where we stand and what we are doing here in our journey to secure the midterm targets. And we have a truly committed team and a focused team to make sure that we come through in this -- in our ambitions here. So thank you very much. I will hand over to Anders here now to give you some details around the tech show here for the rest of the day. So appreciate you all joining and appreciate to see you here in the room, and thank you all joining on the over the webcast here. So thank you very much. Appreciate it.

So thank you, Mikael. So for all of you here at HSC, we have a great product display outside here that you will see. And we also have a deeper dive into the research focus and the circle of life, followed by a very nice barbecue dinner. For the webcast audience, there will be a prerecorded version of the product display, not the barbecue dinner, and that will be broadcast momentarily. So with that, today's live webcast ends. Thank you for your participation.

Hello. My name is Quinn Soderquist, I am the Manager of the Frontal Module Development Group at OTC and Ogden, Utah. I'd like to introduce you to our [ aspirin ] to passenger air bag module. It's a new concept that my team has been working on for a few years. And it's about ready to quote to customers. Pre-TG2 is slaughter for quarter 3 of this year. Aspiration is a way of pulling ambient air into the airbag module, so we get extra gas to fill the airbag. So what happens is the inflator, is at the end of this module, it generates high pressure gas that comes down through these tubes. It comes out of these holes and as it comes out of these holes, it generates a very high suction that is pulling the ambient air out from beneath the airbag module through all these little holes, there's a flap in here that opens up as is pulled through and it fills the airbag with extra gas. And so we are able to fill a 155-liter bag with an inflator that would normally fill only about 100-liter bag because we have all that extra gas come in. The other wonderful thing about this design is as the bag fills and gets pressurizes, the pressure closes off these flaps -- so where you can actually have a self-regulating airbag module that will shut off the aspiration at certain point. The benefit of that, I'll explain here in a moment, this is significant to our customers because we can now fill a much larger airbag of the much smaller single-stage inflator and the single-stage is a benefit because that allows our customers to use 1/3 less for their vehicle qualification testing for FMVSS requirements. The other benefit is since it's self-regulating, we can now meet out of position requirements with that single stage inflator. We no longer need dual-stage inflators to meet the out of position requirement. If there's an occupant in front of the airbag, it automatically shuts off the aspiration technique, and the gas is now a small inflator trying to fill a large bag, which is a much softer deployment. So they benefit overall to the customers is a much lighter airbag module, a lower cost air bag and again, the development is much less for our customers for the FMVSS requirements. The other aspect that I want to focus on is, well, one more comment on the lower cost the cushions right now have to have a lot of low-risk deployment or LRD features in order to meet out of position. Those can all go away with the new airbag module in this concept. Just bringing your attention to some of the videos that we have up here right now. the top video has with aspiration and without aspiration, with is on the right, without is on the left, you can see the left never [ fill pools ]. It's exact same inflator, exact same cushion module, except the aspiration is turned off versus on. This 155-liter bag comes out and is inflated in time in position with a proper amount of pressure to restraining an occupant. The lower video is the sled test with that same 155-liter bag here in the center. And on the right or the left is a current production system 120-liter bag with a dual-stage full output deployment. Again, the aspiration is a very small single-stage inflator. As it comes out, you'll see it restrains both occupants, the exact thing we're able to tune it and match existing systems with the single-stage inflator this far right video just shows you the aspiration function, where the flaps will open, you'll see them start to flutter as gas is being pulled in, soon as the occupant hits it, it [ loads ] and closes off. So that is our new development concept, the Aspira passenger bag module.

Hello. My name is Russ Dans. I'm Engineering Manager for development of airbags here at ATC. And today, I'm going to be explaining the passenger overhead airbag concept. This concept was developed with our CTC counterparts, and they developed it for a single-stage market. The advantage of a passenger overhead airbag is it allows for a slimmer IP styling you can narrow down the IP styling to allow for other features, where normally a passenger airbag would have taken that space in the instrument panel. The other thing you see today is a lot of OEMs are trying to put monitors and screens in front of the occupants. And this allows for that to be more freedom for the stylists. They can put bigger monitors, and we don't have to worry about deploying up and over them, getting between the windshield and that monitor, and we can deploy down from the header and get in front of the monitor and provide a restraint for the occupant. We use a single-stage APG inflator in this system. It's a tubular inflator that allows it to package in the header. And then we have a 2-chamber fill style bag. The first chamber provides the inlet for the gas from the inflator, stability to the windshield and the instrument panel and then allows inlets -- gas inlets to fill the primary restraint cushion, which supports the occupant in a crash event. We have this system in production with Neo today with a slightly modified cushion from this version, it has a couple of little ears on it. We call it a Fox cushion. And we have 6 programs in production today and 2 more slated to launch before the end of the year. And the total system is about a 95-liter system, including the fill tube and the restraint cushion. So that's our overhead airbag concept that we have in today in production, and it provides benefits for our customers in a belt-in-only market situation. Thank you.

Good afternoon. My name is Damon Reynolds and I'm responsible for the global development Seatbelt Restraint System team here for the Americas and we have an array of products on the table, starting with some innovations for packaging on the left and some innovations for noise reduction on the right. Followed by our flagship PPMI retractor. But as we start transitioning from a product-based development to a system restrained development projects, I want to focus around our new seed integrated restraint product that we're getting ready to offer. And there's 3 distinct advantages around this product. The first is in the packaging. It's a slim modular design in a sense, where we can mount in a standard type seating configuration. We can exit from either side to accommodate both the right-hand and the left-hand drive vehicles. And we by mounting in the seat, we can also provide a full restraint system for any type of kinematics, whether it's in a standard seating configuration, all the way to a full recline or a zero gravity type seed in the next-generation autonomous vehicle. And also provide modularity in the system such that we can provide a standard retractor for an entry-level vehicle, all the way up to a full performing PPMI retractor like our flagship product, but within the same package size in the same linear package and manufacturing equipment that gives us a full market advantage moving forward.

Hello. My name is Mike Rowe, Business Development Director for Electronics and Mechatronics here in North America. I want to talk about some of the things that Autoliv has been doing and provide an update. We continue to focus on RFQ-ready opportunities so that we can generate E&M additional sales and start to manage our own business and build up our production capabilities. So we stay engaged by talking with customers, and we also see trends in the marketplace, when we look at the regulatory side of things. Want to talk about 2 trends that we see in the last year. We certainly see that many bodies, safety bodies within North America, like automatic emergency braking, which will have a huge impact for Autoliv products. specifically the pre-pretensioning -- the electronic pre-pretensioning and we also see opportunities for the electronic car sensor. And additionally, we see in North America that advanced driver assistance systems have now been rated by the market place, which could lead to additional regulation and do a lot of policy influence and work on what a driver monitoring system is. So there's a lot of advocacy for a driver monitoring system to contain a camera. And this is certainly for when you're having a hands-free experience we need the camera, but we see privacy concerns with continuing to use the camera for L1 when the driver's hands are reengaged with the wheels, and that is good for Autoliv as a way to promote the capacitive hand sensing. So this is some of the trends we see in the market. Of course, our #1 priority is to get customer feedback, but I work very closely with electronics and mechatronics globally to develop the products that are needed and proud to do that and keep our development team connected to the market and these future technologies and influencing that as best that we can on behalf of Autoliv.

Good afternoon. My name is Stuart Sherry. I'm the North American manager of the Mechatronics team as well as the global mechatronics Director. I want to talk to you today a little bit about the different products we have been going on and also how we work end-to-end Mechatronics. So we're showing you here today is our GM CSAV steering wheel that we started last year and also showed you the internal development with that we did. Unfortunately, the customer has delayed the RFQ, but we are actively working on pursuing that for this year. And just to be very clear, we don't sit idly by when we have a delay like this, and we have spent the last year taking out costs from the ECU. We've reviewed at least $1 million just from the software development alone by using a GM specific operating system. In addition, what I want to show you here is this is our competitors' ECU. This is Autoliv's ECU. As you can see, we've optimized the design to fit around the rim of the steering wheel around the hub and you don't have to worry so much about the packaging like you do with our competitor to stick it right in the 6:00 area here. It gives our customers freedom and styling. We also have better performance from an AHOD perspective. And one of the nice things is that we have an LED bar here that is more optimized for the cost and function that the customer is looking for. We currently only use 2 LEDs where our competitor uses several more.

Okay. So thank you again to continue on to show you some of the demos. This is showing a concept of how a driver monitoring system could look like. This is a mockup showing where potentially a camera can be placed as an integrated part of our steering wheel system solution. Autoliv is not currently providing cameras and infrared systems for doing driver monitoring, but it is something we're paying attention to in the market, knowing this could eventually disrupt the AHOD system that we're doing today. So we're definitely spending time and understanding properly what this integration could look like in a steering wheel. We'll get on to this steering wheel here. This is an example of something that would enable a lot of the features that you see customers asking for, reconfigurable interiors, where you can maybe stow away the steering wheel, they can fold, they can twist. They can just get out of your way, so you have more freedom of design on the interior. One of the great things about this is Autoliv has a lot of engineering capability in many pockets of the world. We currently have a facility in Northern Germany, our ANG location, where they have a ton of expertise and motor design and simulation as well as rapid prototype. So we contacted them to help us on the steering wheel side to design and develop a motor that is very optimized for this application in a very efficient, quick amount of time that works perfectly for the solution. So not only bringing the best products, we're also bringing the best engineering efficiency. And then last thing I want to show you is this steering wheel here. This is a steering wheel that was a concept from Ford. This is going into production this year, which is essentially the tiltable steering wheel. This is really designed for those kind of construction or contract workers, where you need to be pulling off to the side of the road to do some of your reporting, working on your laptop. You can activate this function and then you can place your laptop or other devices on top of the steering wheel. So you can utilize that space efficiently to get the work done that you need to do. And again, this is going into production this year with Ford Motor Company. Thank you.

Hi. My name is Chuck Butler with the mobility Safety Solutions. Today, I'm excited to talk to you about our pyro technique battery disconnect devices. These devices are small devices, but play an important part in protection in the growing market, battery electric vehicle market, where it not only can protect and disconnect the battery in an over a current or short-circuit situation, but also during the crash event. And let me show you how they work. Simply put, using a small power technic charge, an initiator when deployed pressurizes a chamber that pushes a plastic piston through a copper bus bar breaking the circuit. Everything you see in the front row is our low-to-medium voltage, low energy disconnect solutions and they're all in mass production today. Moving to the rear row. We have the PSS 4, a 500-volt system, medium energy system that's in mass production today. And in the market, as the market grows to 800 or even 1,000 volt systems, we have some of the 1,000 volt system options to satisfy those needs. Those are in development, and we expect to see them in 2025. Thank you.