Mikael Bratt: Okay. I mean, there are a lot of components in your question. So, overall, the framework is I think pretty clear. $85 million we say — as it looks right now, 2024, $85 million seems to be in place as an assumption here for 2024. Then when it comes to the other two that we are made whole on the inflation compensation, that will potentially have an impact also on a full year as long as we have inflation and there’s always this catch up effect from when the costs come in until we are compensated for. Again, here, our ambition is to have that also in place for 2024, but that remains to be seen also how inflation develops during the year. Then the last component is on call of stability and here we have a graph in our presentation where it’s clearly not in place going into the year.
I mean, we have seen it kind of temp or stabilizing at around 90% now during the second half of last year. We are not assuming it right now that this will improve significantly during 2024. And then there’s also even if it were to come up to pre-pandemic levels, closer to the 100%, there’s also a time lag of when that accuracy is actually in place until we can also get the efficiency out in our network. So it’s — yeah, it’s trending towards the framework, but for sure 2024 will not be in place and it remains to be seen how much of that number two and three here will come in place during 2024 and then what the impact is for 2025. Looking at the building blocks of how to get from the 8.8% that we had now in 2023 up to the 12%, it’s roughly, you can divide it into three buckets.
One is the structural initiatives and the headcount reductions. The second one is the volatility improvement combined with the labor productivity development. And then the third component is sales growth and our strategic initiatives and it’s roughly, I would say, one-third margin contribution from those three buckets.
Emmanuel Rosner: That is great color. Thank you. So let me just hone in for my second question on the sales growth piece of it. As we look past this year and towards some of your targets. I think we started in the past, you had reported sometimes on your annual win rate and oftentimes they were at like 50% or better. Obviously, your market share, you reported that it’s 45%. What is your — can you comment on the win rate and I guess what is the confidence level in being able to capture additional market share over the next few years beyond the 2024 framework?
Mikael Bratt: Yeah. As you know, we have since last year communicated here around the lifetime revenue on the order intake and I think we had a very good 2023 and the highest in five years here in terms of lifetime revenue. And what we are saying here is that, we reached the 45% market share in 2023, which we have indicated since some years back that that was what we expected us to grow into, and with the order intake and order book we have, we expect to defend this market share. We do not have, I would say, a target or an ambition to set a new level of our market share here. It is really to defend this market share position with healthy business, of course. If we can grow more in a healthy way, of course, we will do it. But it is not the target in itself. So the growth that we expect going forward, the 2% to 4%, as I talked about, and we have announced earlier beyond 2024 is connected to light vehicle production and content with more sophisticated products.
Emmanuel Rosner: Thank you very much.
Mikael Bratt: Thank you.
Operator: Thank you. Now we’re going to take over the next question. Just give us a moment. And the next question comes to line of Michael Jacks from Bank of America Securities. Your line is open. Please ask your question.
Michael Jacks: Hi. Good afternoon. Thanks for taking my questions. First one just on price recoveries. Some other suppliers have struggled to secure compensation for wage inflation and Autoliv has clearly been more successful. Is there anything structural you could point towards that gives you the confidence that you can achieve the same in 2024? And then second question is just on working capital, what is the magnitude of improvement expected in 2024 in relation to the remaining gap of $120 million to the $8 billion reduction target that you have in mind? Thank you.
Mikael Bratt: Thank you. Let me start with the price recovery, and Fredrik will comment on the working capital there. But on the price recovery, I can’t say there’s a structural to it. I think it’s — I mean, of course, I can only comment on what we are doing here and we have now for the last two years have had very constructive dialogues with our customers around the over and above normal cost increases we see in the system here. And I mean we’re starting out with raw materials and there we have also mentioned that we have made some indication, a higher level of indexation to those contracts here also. So I mean it works both ways obviously. So when we see that come down we will also hand that back to our customers.
When it comes to the other components here, it’s a little bit different to its nature, but I think, it’s very important to get compensation for what is the inflationary components here and we — for this year definitely have the labor in focus here. And I mean that’s the nature of inflation, it needs to be passed on into the end consumer here and meaning the price of the car at the end of the day. So we need to push that on, because there is no possibility for us to compensate our suppliers unless we get the pass on here. It’s not sustainable and that’s something we just need to continue to work hard with and we will do that and that’s our focus here going forward as well.
Fredrik Westin: And then, Michael, on your second question, working capital. Yeah, so we reported here that we have achieved around $580 million of the $800 million target that we set ourselves. In the $800 million target, we had also detailed that around $500 million of that would come from improved payables and that we have achieved or even overachieved already to-date. So we don’t expect more to be contributed from that component. So the inventory is challenging right now due to the call of volatility as we show here that it’s kind of stabilizing at still to the poor levels. And as I mentioned, we don’t expect this to improve significantly during 2024. And accordingly, we do not expect that we will be able to do so much on the inventory side either in 2024.
