And we do not guide for working capital specifically, but you see a very strong operating cash flow guidance here of $1.2 billion. But there is then more opportunity coming later from improving working capital further.
Michael Jacks: That’s very clear. Thank you.
Fredrik Westin: Thanks.
Operator: Thank you. Now we’re going to take our next question. Just a moment, please. And the question comes from Hampus Engellau from Handelsbanken. Your line is open. Please ask your question.
Hampus Engellau: Yeah. Two questions for me. Despite and it’s the good questions, but I’m curious about the drop in Active Seatbelt sales during the quarter minus 11% given the big spread to the LVP that increased by more than 9%. If you don’t have, we can take that later. But that — it’s just by curiosity. I mean, I’m sorry to come back on this cost inflation, because I’m trying to understand the dynamics here. I can definitely see that the OEMs are retroactively compensating you guys for rising costs in the quarters. But on the labor side, could you maybe give us some more detail on how those negations are going, given that those cost savings are quite permanent and sticky and are you guys getting compensated retroactively for these also and well how does the process work? Thanks.
Mikael Bratt: I think on the Active Seatbelts side it’s no drama in into that, of course, you get mixed effects also in specific years where you have maybe some outgoing car models where you have a high level of in this case than Active Seatbelt and my expectation here is that you should see that recovery recovering in the next year here or so. So no drama to that, it’s more of a, yeah, temporary mix effect. And then on the cost compensation here if I understand you right. I mean the nature of OEMs, as you said labor cost increases is sticky and therefore it’s, I mean, it will not come down, I think we can call it. So of course there is an absolute necessity that that inflationary component has to come through. There is no room for anything else and that is what we are doing here and we of course have very detailed supporting documents to when we go to our customers how that’s connected to their specific business and how it’s correlated.
So that’s something we need to go through and I mean we went through that partly already last year when we saw in some cases and in some regions that impact already in 2023. So we expect to do more of that.
Hampus Engellau: Thank you.
Operator: Thank you. Now we’re going to take our next question. Just give us a moment. And our question comes to land of Bjorn Enarson from Danske Bank. Your line is open. Please ask your question.
Bjorn Enarson: Thank you. I have a question also on price. I mean you have been very successful in getting compensation, but also we have seen, I mean, OEMs coming from high profitability, and as I said you mentioned yourself, we need to see inflation coming to the price of the cars, but we’ve also seen price cuts on cars we also seen OEMs reporting lower profitability and accepting perhaps a lower profitability as they are investing in price in a way. Is this a situation that impacts some suppliers in general or how has it been in the past? That’s my first question.
Mikael Bratt: Thank you. Thank you, Bjorn. No. I think, I see what you’re referring to here. But I mean, it — first of all, it has never been easy these negotiations, not even when we saw record profitability at the OEMs. And I think the point from my side here is that that’s nothing to do with their profitability or our possibility. This is inflation that needs to be passed on. It’s not sustainable for us to pay our suppliers unless we can get the pass-through. So that is just something that we are very firm on and needs to continue to be firm on. There is no other way uh than that. Then I think when you look at the price reductions and so on at the towards the end consumers. I think there is of course different reasons for that you see those prices coming down, which probably is more on an individual basis between the OEMs, so I have no comments around that, but we need to focus on our business here, which we are doing, so just to continue to press on there.
Bjorn Enarson: And just to follow up and perhaps in the past we have not really seen a correlation between car prices and your price negotiations. I mean you have your negotiations with the team at your customers and then there are other teams setting the price for on the actual cars or is there a correlation?
Mikael Bratt: No. I mean, not from our perspective it’s no correlation and I think that’s my point here that they need, I mean, each company take care of their business and in our case here we need to get compensation for the inflation in our system, which includes ours.
Bjorn Enarson: Got it. And one more thing, I mean, last year I would like to remember that you had an outlook that was based on an LVP a little bit below what was in the market back then or by S&P and now you’re in in line with that. And last year we also saw this catch up driven sales and now it’s more, as you highlight, more in line with the market. Is there a nervousness on where the market will end up when you are talking to your customers or people in the industry? As we are maybe heading into more of a slowdown or more, more visible this year than last year?
Mikael Bratt: No. I think, I mean, at least from the dialogues we have with our customers on the way forward here, I don’t see any discrepancies to what we refer to here as the minus one from S&P Global in general here. I think there is more of this mix effect between ICE and EVs and — especially in Europe where maybe the EVs is slowing down somewhat, but it’s more a mixed effect there. And for us that is neutral, because as you know, we are well represented in both categories and we are agnostic to the driveline question here, so we don’t see the effect on our end here.
Bjorn Enarson: Sure. Very good. Thank you.
Mikael Bratt: Thank you.
Operator: Thank you. Dear participants due to time we are not taking any further questions. I would like now to hand the conference over to Mikael Bratt for any closing remarks.
Mikael Bratt: Thank you very much, Nadia. I am confident that we will deliver a substantial increase in sales, operating cash flow and adjusted operating income in 2024, while maintaining substantial shareholder return. Our actions are creating both short-term and long-term improvements, and we believe these actions enable us to take important steps towards our targets, while we remain agile and prepare for more adverse market development, should that be necessary. Autoliv continues to focus on our vision of saving more lives, which is our most important direct contribution to a sustainable society. Our first quarter earnings call is scheduled for Friday, April 26, 2024. Thank you everyone for participating in today’s call. We sincerely appreciate your continued interest in Autoliv. Until next time stay safe.
Operator: That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.
