Autoliv(ALV)2023-02-15 16:00Market Share and Growth - The company's passive safety market share increased from 27% in 1997 to 43% in 2022, driven by a steady flow of new technologies and a superior global footprint[16] - The company's sales CAGR for passive safety has been around 5% since 1997, outperforming the market rate of 2.4%[16] - The company has a global market share of 45% in seatbelts and 44% in airbags, driven by advanced technologies and higher installation rates[16] Light Vehicle Production and Market Forecast - Light vehicle production (LVP) is forecasted to grow to 87 million by 2025 from 79 million in 2021, with a compound annual growth rate (CAGR) of 1.6% since 1997[16] - The annual passive safety market is expected to grow from 25 billion in the next three years, with the highest growth rate in steering wheels[16] Content per Vehicle (CPV) and Regional Growth - Content per vehicle (CPV) in Developed Markets is around 200, with expected growth in both regions over the next three years[16] Manufacturing and Production - In 2022, the company manufactured 134 million complete seatbelt systems, 102 million side airbags, 56 million frontal airbags, and 19 million steering wheels[19] - The company's "just-in-time" delivery system is designed to accommodate low inventory levels and rapid stock delivery, with assembly capacity in multiple countries[19] Quality Management - The company's quality initiative "Q5" focuses on five dimensions: products, customers, growth, behavior, and suppliers, aiming for zero defects[20] - All of the company's facilities shipping products to OEMs are certified according to the IATF 16949:2016 international quality management standard[22] Supply Chain and Customer Concentration - Direct materials purchased from external suppliers accounted for 52% of the company's net sales in 2022[25] - The company's top five customers represented 49% of consolidated sales in 2022, while the top ten accounted for 80%[28] - Asian vehicle producers represented 43% of global sales in 2022, with Japanese OEMs accounting for approximately two-thirds of this share[29] Research and Development (R&D) - Gross R&D expenditures in 2022 amounted to 205 million related to customer-funded projects[30] - Net R&D expenditures in 2022 were $390 million, with 79% allocated to projects with customer orders[30] - Autoliv holds over 6,600 patents and patent applications, mainly in seatbelt and airbag technologies[90] Workforce and Diversity - The company's total workforce increased to 69,100 in 2022, up from 60,600 in 2021[34] - Women held 49% of the company's workforce and 18% of senior management positions at the end of 2022[35] - Temporary workforce accounted for 11% of the total workforce in 2022, up from 8% in 2021[34] - 49% of the workforce are women, up from 47%[41] - 18% of senior management positions are held by women, up from 17%[41] - 99% of employees participated in the annual Performance and Development Dialogue (PDD)[41] - 4,100 employees attended at least one training program, down from 4,400[41] Health and Safety - 71% of the company's production facilities were certified according to ISO 45001 by the end of 2022[38] - 71% of Autoliv facilities are certified (OHSAS 18001 or ISO 45001)[41] - Incident rate decreased to 0.32 from 0.41[41] - Severity rate decreased to 3.31 from 5.84[41] Environmental Sustainability - The company aims for carbon neutrality in its own operations by 2030 and net-zero emissions across its supply chain by 2040[24] Financial Risks and Tax Implications - The company faces significant foreign currency risks due to its global operations[86] - Changes in U.S. or foreign tax laws, regulations, or accounting principles could impact the company's income taxes, effective tax rate, and deferred tax assets, with potential adverse effects on operating results and cash flows[98] - The company's effective tax rate is influenced by global earnings mix, currency exchange rates, and the ability of subsidiaries to pay dividends, which may cause fluctuations in the tax rate[98] - Deferred tax assets may not be fully realized if future taxable income is lower than expected due to market conditions or operational changes, adversely affecting income in the adjustment period[99] - The separation of Veoneer could result in significant tax liabilities if the transaction is deemed taxable, despite an opinion from outside counsel suggesting it qualifies as a tax-free reorganization[100] Legal and Regulatory Risks - Autoliv is subject to various government regulations, including environmental and occupational health and safety laws[95] - Potential indemnification obligations to Veoneer or Veoneer's refusal to indemnify the company could materially adversely affect its business, operating results, and financial condition[101] - Warranty, recall, and product liabilities for electronics products manufactured before the internal reorganization remain with the company, requiring indemnification of Veoneer for associated losses[101] - The acquisition of Veoneer by SSW Partners on April 1, 2022, may impact the company's ability to recover amounts from Veoneer under the transaction agreements[101]