# Autoliv Inc: Form 10-Q for the period ended Sep 30, 2024

- Company: [Autoliv Inc](/companies/alv.md) (CIK 1034670)
- Form: 10-Q
- Filed: 2024-10-18
- Accepted by EDGAR: Oct 18, 2024, 09:23 ET
- Period: 2024-09-30
- Accession: 0000950170-24-115455
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1034670/000095017024115455/alv-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1034670/000095017024115455/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $2.56bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $7.77bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $2.10bn | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $6.40bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-07-01 to 2024-09-30 | $459.0m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-01-01 to 2024-09-30 | $1.38bn | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-07-01 to 2024-09-30 | $96.0m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-01-01 to 2024-09-30 | $325.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $129.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $399.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | $226.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | $626.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $27.0m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $81.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $58.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $149.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $138.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $403.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $1.74 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $4.98 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $1.75 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $4.99 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 79,300,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 80,900,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $639.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $440.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $164.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-09-30 | $415.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $3.87bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $8.31bn | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $4.03bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2024-09-30 | $1.59bn | us-gaap:LongTermDebtNoncurrent |
| Short-term borrowings | at 2024-09-30 | $624.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2024-09-30 | $2.29bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 45,865 characters.

*The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the United States Securities and Exchange Commission (the “SEC”) on February 20, 2024. Unless otherwise noted, all dollar amounts are in millions.*

Autoliv, Inc. (“Autoliv” or the “Company”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden. The Company functions as a holding corporation and owns two principal operating subsidiaries, Autoliv AB and Autoliv ASP, Inc.

Through its operating subsidiaries, Autoliv is a supplier of automotive safety systems with a broad range of product offerings, including modules and components for passenger and driver airbags, side airbags, curtain airbags, seatbelts, steering wheels, and pedestrian protection systems.

Autoliv’s filings with the SEC, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements, and all of our other reports and statements, and amendments thereto, are available free of charge on our corporate website at www.autoliv.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC (generally the same day as the filing).

The primary exchange market for Autoliv’s securities is the New York Stock Exchange ("NYSE") where Autoliv’s common stock trades under the symbol “ALV”. Autoliv’s Swedish Depositary Receipts ("SDRs") are traded on Nasdaq Stockholm’s list for large market cap companies under the symbol “ALIV SDB”. Options in SDRs trade on Nasdaq Stockholm under the name “Autoliv SDB”. Options in Autoliv shares are traded on Nasdaq OMX PHLX and on NYSE Amex Options under the symbol “ALV”.

Autoliv’s fiscal year ends on December 31.

### Non-U.S. GAAP financial measures

Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for “Organic sales”, “Trade working capital”, “Free cash flow”, “Net debt”, “Leverage ratio”, “Adjusted operating income”, “Adjusted operating margin” and “Adjusted earnings per share, diluted” provided below. Management believes that these non-U.S. GAAP financial measures provide supplemental information to investors regarding the performance of the Company’s business and assist investors in analyzing trends in the Company's business. Additional descriptions regarding management’s use of these financial measures are included below. Investors should consider these non-U.S. GAAP financial measures in addition to, rather than as substitutes for, financial reporting measures prepared in accordance with U.S. GAAP. These historical non-U.S. GAAP financial measures have been identified as applicable in each section of this report with a tabular presentation reconciling them to the most directly comparable U.S. GAAP financial measures. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.

### EXECUTIVE OVERVIEW

Light vehicle production was weak in the third quarter, declining by close to 5% globally. This was driven by a combination of inventory reductions, especially in the Americas and a high comparison base, especially in China. In this tough environment, Autoliv managed to outgrow LVP by 4pp, enabling almost unchanged sales and operating income. This is despite a $14 million cost item related to a supplier settlement. We were able to achieve these results mainly due to our cost control, including a continued reduction of our indirect workforce. We accelerated our efficiency improvements contributing to a reduction of direct headcount by 3,100 compared to a year earlier, which is a reduction of 6%.

We are pleased that we outgrew LVP on a global basis following substantial outperformance in Europe and Asia excl. China. Our sales underperformed LVP in China due to a substantial negative market mix, however, our position with Chinese OEMs continue to improve. Based on sales trends and order intake in recent years, we expect further market share gains with domestic Chinese OEMs in the coming years.

Excess inflation compensation negotiations with our customers have developed in line with our expectations with a few negotiations still outstanding.

With the seasonally strong fourth quarter remaining of the year, we reaffirm our guidance of around 9.5-10.0% adjusted operating margin (Non-U.S. GAAP measure) for 2024. We expect to be at the low end of this range, as we now expect full year 2024 organic growth (Non-U.S. GAAP measure) to be 1% instead of previously expected 2% due to the unfavorable market mix development.

Our operating cash flow is on track towards the full year guidance of $1.1 billion and our balance sheet remains strong with a debt leverage of 1.4x (Non-U.S. GAAP measure), which supports our continued commitment to a high level of shareholder returns and our financial targets.

### Financial highlights in the three months period ended September 30, 2024

*Change figures below compare to the same period of the previous year, except when stated otherwise.*

**$2,555** million net sales

**1.6%** net sales decrease

**0.8%** organic sales decline (Non-U.S. GAAP measure, see reconciliation table below)

**8.9%** operating margin

**9.3%** adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below)

**$1.74** EPS, 13% increase

**$1.84** adjusted EPS (Non-U.S. GAAP measure, see reconciliation table below), 12% increase

### Key business developments in the three months period ended September 30, 2024

*Change figures below compare to the same period of the previous year, except when stated otherwise.*

- **Third quarter sales decreased organically** (Non-U.S. GAAP measure, see reconciliation table below) **by 0.8%**, which was 4pp better than global LVP decline of 4.8% (S&P Global Oct 2024). We outperformed in Europe and Asia excl. China, mainly due to high level of product launches and positive pricing. Our sales to domestic Chinese OEMs grew by 18%, which is twice as much as their LVP growth of 8.5%. Despite this, we underperformed in China, due to a substantial negative LVP mix as lower safety content models grew strongly while higher content models declined.
- **Profitability was unchanged** despite a slight net sales decline. This was mainly due to successful execution of cost reductions and commercial recoveries and despite inflationary cost increases and a $14 million cost related to a supplier settlement. Both direct and indirect headcount continued to decrease. Operating income was $226 million and operating margin was 8.9%. Adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) was $237 million and adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below) was 9.3%. Return on capital employed was 22.9% and adjusted return on capital employed (Non-U.S. GAAP measure, see reconciliation table below) was 23.9%.
- **Operating cash flow was $177 million**, as expected, and we are on track towards $1.1 billion for 2024. Free cash flow (Non-U.S. GAAP measure, see reconciliation table below) was $32 million compared to $50 million last year. At 1.4x, the leverage ratio (Non-U.S. GAAP measure, see reconciliation table below) remained within our target range. In the quarter, a dividend of $0.68 per share was paid, and 1.33 million shares were repurchased and retired.

### Business and market condition update for the third quarter 2024

### Supply Chain

In the third quarter, global light vehicle production declined by 4.8% year-over-year (according to S&P Global Oct 2024). Call-off volatility was unchanged compared to a year earlier but improved slightly compared to the second quarter 2024, and it remains at higher than pre-pandemic levels. Low customer demand visibility and changes to customer call-offs with short notice had a negative impact on our production efficiency and profitability in the quarter. We expect call-off volatility in 2024 on average to be slightly lower than it was in 2023 but still remain higher than the pre-pandemic level.

### Inflation

In the third quarter, cost pressure from labor and other items had a negative impact on our profitability, although most of the inflationary cost pressure was offset by price increases and other customer compensations in the quarter. Raw material price changes had a negligible impact on our profitability during the third quarter. We continue to expect raw material prices in 2024 to increase slightly for the full year. We expect continued cost pressure from inflation relating mainly to labor, especially in Europe and the Americas. We continue to execute on productivity and cost reduction activities to offset these cost pressures, and have successfully received inflation compensation from almost all of our customers, with only a few negotiations still outstanding.

### RESULTS OF OPERATIONS

### Overview

The following table shows some of the key ratios management uses internally to analyze the Company's current and future financial performance and core operations as well as to identify trends in the Company’s financial conditions and results of operations. The Company has provided this information to investors to assist in meaningful comparisons of past and present operating results and to assist in highlighting the results of ongoing core operations. These ratios are more fully explained below and should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K and the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

The Company's management uses the Return on capital employed (ROCE) and Return on total equity (ROE) measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business. As used by the Company, ROCE is annualized operating income and income from equity method investments relative to average capital employed. The Company believes ROCE is a useful indicator of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers.

ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. The Company’s management believes that ROE is a useful indicator of how well management creates value for its shareholders through its operating activities and its capital management.

### KEY RATIOS

### (Dollars in millions, except per share data)

|  | Three Months Ended or As of September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Trade working capital1) | 1,307 | 1,303 |
| Trade working capital relative to sales, %2) | 12.8% | 12.5% |
| Receivables outstanding relative to sales, %3) | 21.5% | 21.0% |
| Inventory outstanding relative to sales, %4) | 9.8% | 9.5% |
| Payables outstanding relative to sales, %5) | 18.4% | 17.9% |
| Gross margin, %6) | 18.0% | 17.9% |
| Operating margin, %7) | 8.9% | 8.9% |
| Capital employed8) | 4,085 | 3,861 |
| Net debt9) | 1,787 | 1,375 |
| Return on total equity, %10) | 24.1% | 21.3% |
| Return on capital employed, %11) | 22.9% | 24.2% |
| Headcount at period-end12) | 67,200 | 71,200 |

1\) Outstanding receivables and outstanding inventory less outstanding payables. See calculation of this non-U.S. GAAP measure in the table below.

2\) Outstanding receivables and outstanding inventory less outstanding payables relative to annualized quarterly sales.

3\) Outstanding receivables relative to annualized quarterly sales.

4\) Outstanding inventory relative to annualized quarterly sales.

5\) Outstanding payables relative to annualized quarterly sales.

6\) Gross profit relative to sales.

7\) Operating income relative to sales.

8\) Total equity and net debt.

9\) Net debt adjusted for pension liabilities in relation to EBITDA. See tabular presentation reconciling this non-U.S. GAAP measure to U.S. GAAP below.

10\) Net income relative to average total equity.

11\) Operating income and income from equity method investments, relative to average capital employed.

12\) Employees plus temporary, hourly personnel.

### three months period ended September 30, 2024 COMPARED WITH three months period ended September 30, 2023

### Consolidated Sales Development

#### (dollars in millions)

|  | Three Months Ended September 30, 2024 | 2023 | Reported change | Components of change in net sales Currency effects 1) | Organic 3) |
| --- | ---: | ---: | ---: | ---: | ---: |
| Airbags, Steering Wheels and Other2) | $1,736 | $1,761 | (1.4)% | (0.7)% | (0.7)% |
| Seatbelt products and Other2) | 819 | 835 | (2.0)% | (1.0)% | (1.0)% |
| **Total** | **$2,555** | **$2,596** | **(1.6)%** | **(0.8)%** | **(0.8)%** |
| Americas | $851 | $918 | (7.2)% | (3.5)% | (3.8)% |
| Europe | 700 | 646 | 8.4% | 2.2% | 6.3% |
| China | 495 | 538 | (8.1)% | 1.3% | (9.3)% |
| Asia excl. China | 508 | 495 | 2.7% | (2.1)% | 4.8% |
| **Total** | **$2,555** | **$2,596** | **(1.6)%** | **(0.8)%** | **(0.8)%** |

1\) Effects from currency translations.

2\) Including Corporate sales.

3\) Non-U.S. GAAP measure.

### Sales by product - Airbags, Steering Wheels and Other

Sales declined organically (Non-U.S. GAAP measure, see reconciliation table above) by 0.7% in the quarter. The largest contributor to the decrease was passenger airbags, inflatable curtains, knee airbags and driver airbags, partly offset by growth in steering wheels, inflators and center airbags.

### Sales by product - Seatbelts and Other

Sales for Seatbelt Products and Other declined organically (Non-U.S. GAAP measure, see reconciliation table above) by 1.0% in the quarter. Sales declined organically in China, while it increased in Asia excluding China and the Americas with Europe being virtually unchanged.

### Sales by region

Our global organic sales (Non-U.S. GAAP measure, see reconciliation table above) decreased by 0.8% compared to the global LVP decrease of 4.8% (according to S&P Global, October 2024). The outperformance was mainly driven by new product launches and higher prices, partly offset by negative customer and model mix. Our organic sales growth outperformed LVP growth by 12pp in Europe and by 10pp in Asia excluding China while we underperformed by 0.6pp in the Americas and by 6.4pp in China. LVP growth in China was heavily tilted to domestic OEMs with typically lower safety content. LVP for global OEMs declined by 15% while it increased by 8.5% for domestic OEMs. Autoliv's sales to domestic OEMs increased by 18% in the quarter following a strong order intake with domestic OEMs in recent years. In India, we grew organically by around 17%, while LVP was close to unchanged.

**Third quarter of 2024 organic growth**1)

|  | Americas | Europe | China | Asia excl. China | Global |
| --- | --- | --- | --- | --- | --- |
| Autoliv | (3.8)% | 6.3% | (9.3)% | 4.8% | (0.8)% |
| Main growth drivers | GM, Renault, VW | Mercedes, Renault, Ford | Geely, Chery, BMW | Hyundai, Suzuki, Tata | Geely, Mercedes, Renault |
| Main decline drivers | Stellantis, EV OEM, Nissan | Stellantis, Volvo, Fisker | Lixiang Auto, VW, Honda | Nissan, Mazda | Stellantis, EV OEM, GM |

1\) Non-U.S. GAAP measure.

### Light Vehicle Production Development

#### Change third quarter of 2024 versus third quarter of 2023

|  | Americas | Europe | China | Asia excl. China | Global |
| --- | ---: | ---: | ---: | ---: | ---: |
| LVP1) | (3.2)% | (6.1)% | (2.9)% | (5.3)% | (4.8)% |

1\) Source: S&P Global, October 2024.

### Earnings

*(Dollars in millions, except per share data)*

|  | Three Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Net Sales | $2,555 | $2,596 | (1.6)% |
| Gross profit | 459 | 465 | (1.3)% |
| % of sales | 18.0% | 17.9% | 0.1 pp |
| S, G&A | (129) | (119) | 8.4% |
| % of sales | (5.0)% | (4.6)% | (0.5 )pp |
| R, D&E, net | (96) | (107) | (10)% |
| % of sales | (3.7)% | (4.1)% | 0.4 pp |
| Other income (expense), net | (9) | (8) | 11% |
| Operating income | 226 | 232 | (2.4)% |
| % of sales | 8.9% | 8.9% | (0.1 )pp |
| Adjusted operating income1) | 237 | 243 | (2.3)% |
| % of sales | 9.3% | 9.4% | (0.1 )pp |
| Financial and non-operating items, net | (29) | (30) | (3.7)% |
| Income before taxes | 197 | 201 | (2.2)% |
| Income taxes | (58) | (67) | (13)% |
| Tax rate | 29.6% | 33.4% | (3.8 )pp |
| Net income | 139 | 134 | 3.4% |
| Earnings per share, diluted2) | 1.74 | 1.57 | 11% |
| Adjusted earnings per share, diluted1,2) | 1.84 | 1.66 | 11% |

1\) Non-U.S. GAAP measure, excluding effects from capacity alignments, antitrust related matters and for fiscal year 2023 the Andrews litigation settlement.

2\) Net of treasury shares.

### Third quarter of 2024 financial development

**Gross profit** decreased by $6 million, and the gross margin increased by 0.1pp compared to the same quarter 2023. The gross profit decrease was primarily driven by a $14 million cost increase in direct material related to a settlement and to a lesser extent the lower net sales. This was partly offset by lower costs for mainly premium freight and labor, partly due to improved customer call-off accuracy.

**S,G&A** costs increased by $10 million compared to the prior year, mainly due to higher costs for personnel due to wage inflation while headcount was unchanged. Costs for digitalization, IT projects and licenses also increased, impacted by inflation. S,G&A costs in relation to sales increased from 4.6% to 5.0%.

**R,D&E, net** costs decreased by $11 million compared to the prior year, mainly due to $6 million in higher engineering income. The decrease was also supported to a smaller extent from several items, mainly positive FX translation effects, lower personnel costs and lower costs for samples and prototypes. R,D&E, net, in relation to sales decreased from 4.1% to 3.7%.

**Other income (expense), net** was close to unchanged at negative $9 million, compared to negative $8 million in the same period last year.

**Operating income** decreased by $6 million compared to the same period in 2023, due to the lower gross profit, higher S,G&A costs and other income (expenses) partly offset by lower costs for R,D&E, net, as outlined above.

**Adjusted operating income** (Non-U.S. GAAP measure, see reconciliation table below) decreased by $6 million compared to the prior year, due to the lower gross profit, higher S,G&A costs and other income (expenses) partly offset by lower costs for R,D&E, net, as outlined above.

**Financial and non-operating items, net**, was negative $29 million compared to negative $30 million a year earlier.

**Income before taxes** decreased by $4 million compared to the prior year, mainly due to the lower operating income.

**Tax rate** was 29.6% compared to 33.4% in the same period last year. The lower tax rate was impacted by a favorable country mix compared to the same quarter last year. Discrete tax items, net, decreased the tax rate this quarter by 1.2pp. Discrete tax items, net, increased the tax rate by 0.2pp in the same period last year.

**Earnings per share, diluted** increased by $0.17 compared to a year earlier. The main drivers were $0.12 from lower number of shares and $0.10 from lower taxes, partly offset by $0.05 from lower operating income.

### nine months period ended September 30, 2024 COMPARED WITH nine months period ended September 30, 2023

### Consolidated Sales Development

#### (dollars in millions)

|  | Nine Months Ended September 30, 2024 | 2023 | Reported change | Components of change in net sales Currency effects 1) | Organic 3) |
| --- | ---: | ---: | ---: | ---: | ---: |
| Airbags, Steering Wheels and Other2) | $5,264 | $5,191 | 1.4% | (1.0)% | 2.4% |
| Seatbelt products and Other2) | 2,511 | 2,533 | (0.9)% | (1.2)% | 0.3% |
| **Total** | **$7,774** | **$7,724** | **0.7%** | **(1.1)%** | **1.7%** |
| Americas | $2,637 | $2,665 | (1.0)% | (0.2)% | (0.8)% |
| Europe | 2,231 | 2,122 | 5.2% | 1.4% | 3.7% |
| China | 1,423 | 1,488 | (4.4)% | (2.0)% | (2.3)% |
| Asia excl. China | 1,483 | 1,449 | 2.3% | (5.3)% | 7.7% |
| **Total** | **$7,774** | **$7,724** | **0.7%** | **(1.1)%** | **1.7%** |

1\) Effects from currency translations.

2\) Including Corporate sales.

3\) Non-U.S. GAAP measure.

### Sales by product - Airbags, Steering Wheels and Other

Sales grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 2.4% in the period. The largest contributor to the increase was steering wheels, followed by center airbags, inflatable curtains, side airbags and inflators, partly offset by decreases for passenger airbags and knee airbags.

### Sales by product - Seatbelts and Other

Sales for Seatbelt Products and Other grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 0.3% in the period. Sales increased organically in Asia excluding China, the Americas and Europe while it declined in China.

### Sales by region

Our global organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 1.7% compared to the global LVP decrease of 1.8% (according to S&P Global, October 2024). The 3.5pp outperformance was mainly driven by new product launches and higher prices, partly offset by negative customer and model mix. Our organic sales growth outperformed LVP growth by 12pp in Asia excluding China, by 7.3pp in Europe and by 0.8pp in the Americas, while it underperformed by 4.6pp in China. LVP growth in China was tilted to domestic OEMs with typically lower safety content. Domestic OEM LVP in China grew by 15% while LVP declined by 10% for global OEMs in the first nine months

**First nine months 2024 organic growth**1)

|  | Americas | Europe | China | Asia excl. China | Global |
| --- | --- | --- | --- | --- | --- |
| Autoliv | (0.8)% | 3.7% | (2.3)% | 7.7% | 1.7% |
| Main growth drivers | VW, Toyota, Hyundai | Mercedes, Renault, BMW | Geely, BMW, Chery | Hyundai, Tata, Suzuki | Mercedes, Hyundai, Geely |
| Main decline drivers | Stellantis, EV OEM, Nissan | Stellantis, VW, Volvo | EV OEM, Honda, GM | Nissan, Renault | Stellantis, EV OEM, GM |

1\) Non-U.S. GAAP measure.

### Light Vehicle Production Development

#### Change first nine months of 2024 versus first nine months of 2023

|  | Americas | Europe | China | Asia excl. China | Global |
| --- | ---: | ---: | ---: | ---: | ---: |
| LVP1) | (1.6)% | (3.6)% | 2.3 % | (4.8)% | (1.8)% |

1\) Source: S&P Global, October 2024.

### Earnings

*(Dollars in millions, except per share data)*

|  | Nine Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Net Sales | $7,774 | $7,724 | 0.7% |
| Gross profit | 1,377 | 1,291 | 6.6% |
| % of sales | 17.7% | 16.7% | 1.0 pp |
| S, G&A | (399) | (380) | 4.9% |
| % of sales | (5.1)% | (4.9)% | (0.2 )pp |
| R, D&E, net | (325) | (343) | (5.5)% |
| % of sales | (4.2)% | (4.4)% | 0.3 pp |
| Other income (expense), net | (27) | (115) | (76)% |
| Operating income | 626 | 453 | 38% |
| % of sales | 8.1% | 5.9% | 2.2 pp |
| Adjusted operating income1) | 657 | 586 | 12% |
| % of sales | 8.5% | 7.6% | 0.9 pp |
| Financial and non-operating items, net | (73) | (60) | 21% |
| Income before taxes | 554 | 393 | 41% |
| Income taxes | (149) | (131) | 14% |
| Tax rate | 27.0% | 33.4% | (6.4 )pp |
| Net income | 404 | 262 | 55% |
| Earnings per share, diluted2) | 4.98 | 3.04 | 64% |
| Adjusted earnings per share, diluted1,2) | 5.30 | 4.48 | 18% |

1\) Non-U.S. GAAP measure, excluding effects from capacity alignments, antitrust related matters and for fiscal year 2023 the Andrews litigation settlement.

2\) Net of treasury shares.

### First nine months 2024 financial development

**Gross profit** increased by $85 million, and the gross margin increased by 1.0pp compared to the same period 2023. More than half of the improvement in gross profit was driven by the increase in net sales, but lower costs for labor and premium freight also contributed to the improvement following more stable customer call-offs and headcount reductions.

**S,G&A** costs increased by $18 million compared to the prior year. The main reason for the cost increase was higher costs for personnel, due to the high wage inflation. S,G&A costs in relation to sales increased from 4.9% to 5.1%.

**R,D&E, net** costs decreased by $19 million compared to the prior year. Higher engineering income explain almost the entire improvement. R,D&E, net, in relation to sales decreased from 4.4% to 4.2%.

**Other income (expense), net** was negative $27 million compared to negative $115 million in the same period last year, almost entirely due to lower capacity alignment accruals compared to the same period previous year.

**Operating income** increased by $173 million compared to the same period in 2023, mainly due to the increase in gross profit, and lower capacity alignment accruals, as outlined above.

**Adjusted operating income** (Non-U.S. GAAP measure, see reconciliation table below) increased by $71 million compared to the prior year, mainly due to higher gross profit and lower R,D&E, net partly offset by higher costs for S,G&A, as outlined above.

**Financial and non-operating items, net**, was negative $73 million compared to negative $60 million a year earlier. The change was mainly due to increased interest expense as the result of higher debt and higher interest rates.

**Income before taxes** increased by $161 million compared to the prior year, mainly due to the increase in operating income and financial and non-operating items, net, as outlined above.

**Tax rate** was 27.0% compared to 33.4% in the same period last year. The lower tax rate was impacted by favorable country mix compared to the prior year. Discrete tax items, net, decreased the tax rate this period by 2.8pp. Discrete tax items, net, decreased the tax rate by 0.6pp in the same period last year.

**Earnings per share, diluted** increased by $1.94 compared to a year earlier. The main drivers were $1.67 from higher operating income, $0.29 from lower number of shares and $0.09 from taxes, partly offset by $0.11 from higher financial and non-operating items, net.

### LIQUIDITY AND CAPITAL RESOURCES

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows. The Company’s future contractual obligations have not changed materially from the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.

### Third quarter of 2024 development

**Changes in operating working capital** impacted operating cash flow by $68 million negative, compared to an impact of $36 million negative in the same period the prior year. Almost all of the $68 million impact in the quarter came from increases in inventories due to high customer call off volatility at the end of the quarter and higher receivables, mainly as a result of seasonally higher sales in September.

**Other, net** was $10 million positive compared to $9 million positive in the same period the prior year.

**Operating cash flow** decreased by $25 million to $177 million compared to the same period last year, mainly due to that operating working capital increased by $34 million more than it increased the same period last year, as outlined above.

**Capital expenditure, net** decreased by $6 million compared to the same period the previous year. The level of Capital expenditure, net, in relation to sales was relatively stable at 5.7% versus 5.8% a year earlier. The level is currently above what we expect for the longer term, due to investments in capacity, mainly in Asia, and in footprint optimization, mainly in Europe and the Americas.

**Free cash flow** (Non-U.S. GAAP measure, see calculation table below) was positive $32 million compared to positive $50 million in the same period the prior year. The decrease was due to the lower operating cash flow partly offset by the lower capital expenditure, net.

**Cash conversion** (Non-U.S. GAAP measure, see calculation table below) defined as free cash flow (Non-U.S. GAAP measure) in relation to net income, was 23% in the quarter.

**Trade working capital** (Non-U.S. GAAP measure, see calculation table below) increased by $4 million compared to the same period last year, where the main drivers were $13 million in higher accounts receivables, $24 million in higher accounts payable and $15 million in higher inventories. In relation to sales, trade working capital increased from 12.5% to 12.8%.

**Cash and cash equivalents** as of September 30, 2024 was around $0.4 billion, while committed, unused loan facilities, was around $1.2 billion.

**Net debt** (Non-U.S. GAAP measure, see reconciliation table below) was $1,787 million as of September 30, 2024, which was $412 million higher than a year earlier.

**Total equity** as of September 30, 2024, decreased by $188 million compared to September 30, 2023. This was mainly due to $221 million in dividend payments and stock repurchases including taxes of $608 million, partly offset by $632 million from net income.

**Leverage ratio** (Non-U.S. GAAP measure, see calculation table below). On September 30, 2024, the Company had a leverage ratio of 1.4x compared to 1.3x on September 30, 2023, as the 12 months trailing adjusted EBITDA (Non-U.S. GAAP measure, see reconciliation table below) increased by around $187 million while the net debt per the policy (Non-U.S. GAAP measure, see reconciliation table below) increased by around $407 million.

### First nine months of 2024 development

**Operating cash flow** increased by $104 million compared to the same period last year, to $639 million, mainly due to higher net income, partly offset by more negative effects from increased operating working capital.

**Capital expenditure, net** increased by $12 million. Capital expenditure, net in relation to sales was relatively stable at 5.5% versus 5.4% the prior year period. The level is currently slightly above what we expect for the longer term, due to investments in capacity, mainly in Asia, and in footprint optimization, mainly in Europe and the Americas.

**Free cash flow** (Non-U.S. GAAP measure, see calculation table below) was positive $208 million, compared to positive $117 million in the same period last year. The improvement was due to the higher operating cash flow partly offset by higher capital expenditure, net.

**Cash conversion** (Non-U.S. GAAP measure, see calculation table below) defined as free cash flow (Non-U.S. GAAP measure) in relation to net income, was 52% in the period.

### NON-U.S. GAAP MEASURES

The Company believes that comparability between periods is improved through the exclusion of certain items. To assist investors in understanding the operating performance of Autoliv's business, it is useful to consider certain U.S. GAAP measures exclusive of these items.

With respect to the Andrews litigation settlement, the Company has treated this specific settlement as a non-recurring charge because of the unique nature of the lawsuit, including the facts and legal issues involved.

Accordingly, the tables below reconcile from U.S. GAAP to the equivalent non-U.S. GAAP measure.

### Reconciliation of U.S. GAAP financial measures to “Adjusted operating income”, “Adjusted operating margin” and “Adjusted Earnings per share, diluted”

### (Dollars in millions, except per share data)

|  | Three Months Ended September 30, 2024 Reported U.S. GAAP | Adjustments1) | Non-U.S. GAAP | Three Months Ended September 30, 2023 Reported U.S. GAAP | Adjustments1) | Non-U.S. GAAP |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Operating income | $226 | $11 | $237 | $232 | $11 | $243 |
| Operating margin, % | 8.9% | 0.4% | 9.3% | 8.9% | 0.4% | 9.4% |
| Earnings per share, diluted | $1.74 | $0.10 | $1.84 | $1.57 | $0.09 | $1.66 |

1\) Effects from capacity alignments, antitrust related matters and for fiscal year 2023 the Andrews litigation settlement.

|  | Nine Months Ended September 30, 2024 Reported U.S. GAAP | Adjustments1) | Non-U.S. GAAP | Nine Months Ended September 30, 2023 Reported U.S. GAAP | Adjustments1) | Non-U.S. GAAP |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Operating income | $626 | $31 | $657 | $453 | $133 | $586 |
| Operating margin, % | 8.1% | 0.4% | 8.5% | 5.9% | 1.7% | 7.6% |
| Earnings per share, diluted | $4.98 | $0.32 | $5.30 | $3.04 | $1.44 | $4.48 |

1\) Effects from capacity alignments, antitrust related matters and for fiscal year 2023 the Andrews litigation settlement.

### Items included in Non-U.S. GAAP adjustments

### (Dollars in millions, except per share data)

|  | Three Months Ended September 30, 2024 Millions | Per share | Three Months Ended September 30, 2023 Millions | Per share |
| --- | ---: | ---: | ---: | ---: |
| Capacity alignments | $9 | $0.12 | $10 | $0.12 |
| Andrews litigation settlement | — | — | — | — |
| Antitrust related matters | 2 | 0.02 | 1 | 0.01 |
| **Total adjustments to operating income** | **11** | **0.14** | **11** | **0.13** |
| Tax on non-U.S. GAAP adjustments1) | (3) | (0.04) | (3) | (0.04) |
| **Total adjustments to net income** | **$8** | **$0.10** | **$8** | **$0.09** |

1\) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s).

|  | Nine Months Ended September 30, 2024 Millions | Per share | Nine Months Ended September 30, 2023 Millions | Per share |
| --- | ---: | ---: | ---: | ---: |
| Capacity alignments | $25 | $0.31 | $122 | $1.42 |
| The Andrews litigation settlement | — | — | 8 | 0.09 |
| Antitrust related matters | 6 | 0.07 | 3 | 0.04 |
| **Total adjustments to operating income** | **31** | **0.39** | **133** | **1.55** |
| Tax on non-U.S. GAAP adjustments1) | (5) | (0.06) | (10) | (0.11) |
| **Total adjustments to net income** | **$26** | **$0.32** | **$123** | **$1.44** |

1\) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s).

The Company uses the non-U.S. GAAP measure “Trade working capital,” as defined in the table below, in its communications with investors and for management’s review of the development of the trade working capital cash generation from operations. The reconciling items used to derive this measure are, by contrast, managed as part of the Company’s overall cash and debt management, but they are not part of the responsibilities of day-to-day operations’ management.

### Reconciliation of “Trade working capital”

### (Dollars in millions)

|  | September 30, 2024 | June 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: |
| Total current assets | $3,865 | $3,703 | $3,879 |
| Total current liabilities | (4,034) | (3,785) | (3,851) |
| **Working capital (U.S. GAAP)** | **(169)** | **(83)** | **28** |
| Less: Cash and cash equivalents | (415) | (408) | (475) |
| Prepaid expenses | (172) | (193) | (180) |
| Other current assets | (90) | (76) | (63) |
| Less: Short-term debt | 624 | 455 | 590 |
| Accrued expenses | 1,189 | 1,120 | 1,093 |
| Operating lease liabilities - current | 44 | 41 | 37 |
| Other current liabilities | 297 | 312 | 274 |
| **Trade working capital (non-U.S. GAAP)** | **$1,307** | **$1,169** | **$1,303** |
|  | **September 30, 2024** | **June 30, 2024** | **September 30, 2023** |
| Receivables, net | $2,192 | $2,090 | $2,179 |
| Inventories, net | 997 | 936 | 982 |
| Accounts payable | (1,881) | (1,858) | (1,858) |
| **Trade working capital (non-U.S. GAAP)** | **$1,307** | **$1,169** | **$1,303** |

Management uses the non-U.S GAAP measure "Net debt" to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. The Company, from time to time enters into “debt-related derivatives” (DRDs) as a part of its debt management and as part of efficiently managing the Company’s overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of the Company’s debt, therefore the Company provides this non-U.S. GAAP measure. DRDs are fair value adjustments to the carrying value of the underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values.

### Reconciliation of U.S. GAAP financial measure to “Net debt”

### (Dollars in millions)

|  | September 30, 2024 | June 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: |
| Short-term debt | $624 | $455 | $590 |
| Long-term debt | 1,586 | 1,540 | 1,277 |
| **Total debt** | **2,210** | **1,996** | **1,867** |
| Cash and cash equivalents | (415) | (408) | (475) |
| Debt issuance cost/Debt-related derivatives, net | (9) | (8) | (17) |
| **Net debt** | **$1,787** | **$1,579** | **$1,375** |

The non-U.S. GAAP measure “Net debt” is also used in the non-U.S. GAAP measure “Leverage ratio”. Management uses the non-U.S. GAAP measure “Leverage Ratio” to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. The Company's long-term target for the leverage ratio (sum of net debt plus pension liabilities divided by EBITDA) is 1.0x with the aim to operate within the range of 0.5x to 1.5x. For details and calculation of leverage ratio, refer to the table below.

### Calculation of “Leverage ratio”

### (Dollars in millions)

|  | September 30, 2024 | June 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: |
| Net debt1) | $1,787 | $1,579 | $1,375 |
| Pension liabilities | 147 | 140 | 152 |
| **Debt per the Policy** | **1,934** | **1,720** | **1,527** |
| Net income2) | 632 | 627 | 418 |
| Income taxes 2) | 141 | 150 | 188 |
| Interest expense, net2,3) | 93 | 89 | 75 |
| Other non-operating items, net2) | 4 | 8 | 5 |
| Income from equity method investments2) | (6) | (6) | (4) |
| Depreciation and amortization of intangibles2) | 385 | 384 | 371 |
| Capacity alignments, antitrust related matters and the Andrews litigation settlement2) | 128 | 128 | 136 |
| **EBITDA per the Policy (Adjusted EBITDA)** | **$1,376** | **$1,380** | **$1,189** |
| **Leverage ratio** | **1.4** | **1.2** | **1.3** |

1\) Net debt (non-U.S. GAAP measure) is short- and long-term debt and debt-related derivatives, less cash and cash equivalents.

2\) Latest 12-months.

3\) Interest expense, net including cost for extinguishment of debt, if any, less interest income.

Management uses the non-U.S. GAAP measure “free cash flow” to analyze the amount of cash flow being generated by the Company’s operations after capital expenditure, net. This measure indicates the Company’s cash flow generation level that enables strategic value creation options such as dividends or acquisitions. For details on the calculation of free cash flow, see the table below. Management uses the non-U.S. GAAP measure “cash conversion” to analyze the proportion of net income that is converted into free cash flow. The measure is a tool to evaluate how efficiently the Company utilizes its resources. For details on cash conversion, see the table below.

### Calculation of “Free Cash Flow”

### (Dollars in millions)

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| **Net income** | **$139** | **$134** | **$404** | **$262** |
| Changes in operating working capital | (68) | (36) | (54) | (8) |
| Depreciation and amortization | 97 | 95 | 289 | 281 |
| Other, net | 10 | 9 | 1 | 1 |
| **Operating cash flow** | **177** | **202** | **639** | **535** |
| Capital expenditure, net | (145) | (151) | (431) | (419) |
| Free cash flow1) | **$32** | **$50** | **$208** | **$117** |
| Cash conversion2) | 23% | 37% | 52% | 45% |
| 1) Operating cash flow less Capital expenditures, net. |  |  |  |  |
| 2) Free cash flow relative to Net income. |  |  |  |  |

### Headcount

|  | September 30, 2024 | June 30, 2024 | September 30, 2023 |
| --- | ---: | ---: | ---: |
| Total headcount | 67,200 | 68,700 | 71,200 |
| Whereof: |  |  |  |
| Direct personnel in manufacturing | 49,800 | 51,100 | 52,900 |
| Indirect personnel | 17,400 | 17,500 | 18,200 |
| Temporary personnel | 9% | 9% | 11% |

As of September 30, 2024, total headcount (Full Time Equivalent) decreased by around 4,000, or by 5.6%, compared to a year earlier, despite almost unchanged sales. The indirect workforce decreased by around 800, or by 4.4%, mainly reflecting our structural reduction initiatives. The direct workforce decreased by approximately 3,100, or by 5.9%, partly due to that an improvement in customer call-off accuracy in the third quarter has enabled us to accelerate operating efficiency improvements.

Compared to June 30, 2024, total headcount (FTE) decreased by around 1,500, or by 2.2%. Indirect headcount decreased by around 100, or by 0.6%, while direct headcount decreased by approximately 1,300, or by 2.5%.

### Full year 2024 guidance

Our 2024 guidance is mainly based on our customer call-offs, a full year 2024 global LVP decline of around 3% and the achievement of our targeted cost compensation effects.

| Financial measure | Full year indication |
| --- | --- |
| Organic sales growth | Around 1% |
| Foreign currency impact on net sales | Around 1% negative |
| Adjusted operating margin 1) | Around 9.5-10.0% |
| Tax rate 2) | Around 28% |
| Operating cash flow 3) | Around $1.1 billion |
| Capital expenditures, net % of sales | Around 5.5% |
| 1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. |  |
| 2) Excluding unusual tax items. |  |
| 3) Excluding unusual items. |  |

This report includes content supplied by S&P Global; Copyright © Light Vehicle Production Forecast, October 2024. All rights reserved.

The forward-looking non-U.S. GAAP financial measures above are provided on a non-U.S. GAAP basis. The Company has not provided a U.S. GAAP reconciliation of these measures because items that impact these measures, such as costs and gains related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and the Company is unable to determine the probable significance of the unavailable information.

### Other recent events

### Key launches in the three months period ended September 30, 2024

- **Nio Onvo L60**: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Seatbelts.
- **BMX X3**: Driver/Passenger Airbags, Steering Wheel.
- **Zeekr 7X**: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Seatbelts.
- **Nissan Patrol & Armada**: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Knee Airbag, Front Center Airbag, Seatbelts.
- **Alfa Romeo Junior:** Driver/Passenger Airbags, Side Airbags, Steering Wheel, Seatbelts.
- **Audi A6 e-tron:** Side Airbags, Front Center Airbag, Seatbelts.
- **Changan Avatr 15**: Side Airbags, Head/Inflatable Curtain Airbags, Front Center Airbag, Seatbelts.
- **Audi A5**: Side Airbags, Front Center Airbag, Seatbelts.
- **Tata Curvv**: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Seatbelts.
- **Ford Capri**: Driver/Passenger Airbags, Steering Wheel, Front Center Airbag.
- **Chery Luxeed R7**: Side Airbags, Front Center Airbag, Seatbelts.
- **Mahindra Thar (ROXX)**: Driver/Passenger Airbags, Side Airbags, Seatbelts.

### Other Items

- On September 13, 2024, the Autoliv Board of Directors appointed Ms. Adriana Karaboutis as an independent director to the Autoliv Board of Directors effective immediately. With the addition of Ms. Karaboutis, Autoliv has expanded its Board size from eleven to twelve directors. Ms. Karaboutis most recently served as Group Chief Information and Digital Officer of National Grid PLC, one of the world's largest public utility companies. She previously served as EVP Technology, Business Solutions and Corporate Affairs at Biogen Inc., as well as VP and Global CIO of Dell, Inc. Ms. Karaboutis also has more than 20 years at General Motors and Ford in various international leadership positions. Ms. Karaboutis is appointed for a term expiring at the 2025 Annual General Meeting of Stockholders at which time the Board is expected to contract to eleven members with the retirement of Mr. Hasse Johansson.
- On September 17, 2024, Autoliv announced the appointment of Mr. Fabien Dumont as Executive Vice President & Chief Technology Officer and a member of the Autoliv Executive Management Team. Fabien Dumont previously served as Vice President Engineering in Autoliv China and has been with Autoliv since 1998. In leading the Autoliv China Engineering team, Fabien Dumont has played a vital role in developing innovations and technologies that support the fast-moving Chinese market.
- In Q3 2024, Autoliv repurchased and retired 1.33 million shares of common stock at an average price of $97.80 per share under the Autoliv 2022-2024 stock repurchase program.

## Market risk

As filed, 291 characters.

As of September 30, 2024, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that were provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.

## Controls and procedures

As filed, 1,140 characters.

(a) Evaluation of Disclosure Controls and Procedures

An evaluation has been carried out, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 1,726 characters.

Except for below, as of September 30, 2024, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.

### We may be subject to civil antitrust litigation that could negatively impact our business

The Company may be subject to civil antitrust lawsuits in the future in countries that permit such civil claims, including lawsuits or other actions by our customers. The Company was previously the subject of an investigation by the European Commission (“EC”) regarding possible anti-competitive behavior among certain suppliers to the automotive vehicle industry. The Company paid a fine to resolve these matters in 2019. As a result of the outcome of the EC investigation, we are and we could be, subject to subsequent civil disputes with non-governmental third parties and civil or stockholder litigation stemming from the same facts and circumstances underlying the EC investigation. The Company is currently involved in civil litigation in the UK with respect to alleged anticompetitive behavior that occurred over a decade ago. The ultimate resolution of any dispute, litigation or proceeding through settlement, mediation, judgment or other means requires significant management time and attention and could result in significant expenses as well as unfavorable outcomes that could have a material adverse impact on our customer relationships, business prospects, reputation, operating results, cash flows or financial condition, and our insurance may not mitigate such impact. See Note 17, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report.

Filed Oct 18, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-115455. Last ingested by Listed: Nov 2, 2026, 09:42 ET. No prices; not investment advice.