* Q4 2023: Record sales and strong profitability
* Financial highlights Q4 2023
*
* 18% net sales increase
* 16% organic sales growth*
* 8.6% operating margin
* 12.1% adjusted operating margin*
*
*
* Full year 2024 guidance
* Around 5% organic sales growth
* Around 0% FX effect on net sales
* Around 10.5% adjusted operating margin
* Around
* All change figures in this release compare to the same period of the previous year except when stated otherwise.
* Key business developments in the fourth quarter of 2023
We outperformed in all regions, except
Profitability improved substantially, positively impacted by price increases, organic growth, and our cost reduction activities. Operating income was
Operating cash flow remained strong, at
*For non-
(Dollars in millions, except per share data) Q4 2023 Q4 2022 Change FY 2023 FY 2022 Change
Net sales$2,751 $2,335 18%$10,475 $8,842 18%
Operating income 237 230 3.1% 690 659 4.7%
Adjusted operating income1) 334 233 43% 920 598 54%
Operating margin 8.6% 9.8% (1.2)pp 6.6% 7.5% (0.9)pp
Adjusted operating margin1) 12.1% 10.0% 2.2pp 8.8% 6.8% 2.0pp
Earnings per share2) 2.71 1.80 51% 5.72 4.85 18%
Adjusted earnings per share1,2) 3.74 1.83 105% 8.19 4.40 86%
Operating cash flow$447 $462 (3.4)%$982 $713 38%
Return on capital employed3) 24.4% 24.3% 0.1pp 17.7% 17.5% 0.2pp
Adjusted return on capital employed1,3) 32.9% 24.9% 8.1pp 23.1% 16.0% 7.1pp
1) Excluding effects from capacity alignments, antitrust related matters and for FY 2023 the Andrews litigation settlement. Non-
Comments from
As we indicated throughout the year, we finished 2023 strong. We achieved or exceeded all of our 2023 indications. Sales and adjusted operating income hit new records while operating cash flow remained strong. I am pleased that gross margin improved substantially. 2023 order intake was the highest in the past five years, supporting our around 45% market share position, with a good mix of new and traditional OEMs as well as EV and ICE platforms.
We increased shareholder returns to more than
We outperformed LVP in all regions except
We continue to deliver on our structural cost reductions, with around 75% of the planned indirect workforce reductions detailed and announced. We also see positive effects on direct labor productivity.
Our 2023 performance developed very much as we indicated with heavy cost headwinds early in the year, which led to a weak Q1 2023. However, quarter-by-quarter, our performance improved, driven by customer recoveries, efficiencies, and organic growth leading to a substantial full year profitability improvement. Our sustainability agenda is yielding results with good progress in GHG emissions, renewable electricity use and incident rate.
The seasonality of past years is likely to be repeated in 2024, with an expected Q1 adjusted operating margin of around 7%, followed by gradual quarterly improvements, leading to a full year 2024 adjusted operating margin of around 10.5%. Key drivers for the full year margin progression are continued improvement in call-off stability, outgrowing LVP and benefits from strategic and structural initiatives. The improving results we expect in 2024 should take us one important step closer to our target of around 12% adjusted operating margin.
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The full report (PDF)
https://www.autoliv.com/press/financial-report-october-december-2023-2194737
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