Financial Report April - June 2023

Financial highlights Q2 2023

$2,635 million net sales

27% net sales increase

27% organic sales increase*

3.6% operating margin

8.0% adjusted operating margin*

$0.61 EPS, 32% decrease

$1.93 adjusted EPS*, 115% increase

Full year 2023 indications

Around 15% organic sales growth

Around 1% positive FX effect on net sales

Around 8.5%-9.0% adjusted operating margin

Around $900 million operating cash flow

*For non-U.S. GAAP measures see enclosed reconciliation tables.

(Dollars in millions, except per share data)

Q2 2023

Q2 2022

Change

6M 2023

6M 2022

Change

Net sales

$2,635

$2,081

27%

$5,127

$4,206

22%

Operating income

94

124

(24)%

221

258

(15)%

Adjusted operating income1)

212

124

71%

343

192

79%

Operating margin

3.6%

6.0%

(2.4)pp

4.3%

6.1%

(1.8)pp

Adjusted operating margin1)

8.0%

6.0%

2.1pp

6.7%

4.6%

2.1pp

Earnings per share2)

$0.61

$0.91

(32)%

$1.47

$1.85

(20)%

Adjusted earnings per share1,2)

1.93

0.90

115%

2.82

1.36

107%

Operating cash flow

379

(51)

n/a

334

19

1654%

Return on capital employed3)

9.5%

13.1%

(3.6)pp

11.4%

13.8%

(2.4)pp

Adjusted return on capital employed1,3)

21.0%

13.3%

7.7pp

17.4%

10.4%

7.1pp

1) Excluding effects from capacity alignment, antitrust related matters and the Andrews litigation settlement. Non-U.S. GAAP measure, see reconciliation table. 2) Assuming dilution when applicable and net of treasury shares. 3) Annualized operating income and income from equity method investments, relative to average capital employed.

Comments from Mikael Bratt, President & CEO

During the quarter, we took further steps towards our full year indications, that support our medium term targets. First, we achieved new second quarter records for sales, adjusted operating income and operating cash flow since the Veoneer spin-off in 2018. Second, we achieved the price compensations from customers we planned for. Third, to secure our medium and long term competitiveness, we announced the

I am pleased that we delivered an adjusted RoCE of more than 20%. We delivered strong operating and free cash flow in the quarter, driven by an improved adjusted operating income and reversal of the negative working capital effects from the first quarter, in line with our previous indication. This contributed to an improved leverage ratio which supports our share repurchase ambitions.

We saw continued improvement in call-off volatility in the quarter but still higher volatility than pre-pandemic levels. We believe this reflects an improving global supply chain environment for both our customers and suppliers. Except for two isolated supply chain disruptions in Europe and Americas in the quarter, Autoliv’s supply chain showed sequential improvement.

We reiterate our full year indications. Looking to the second half of the year, we expect the adjusted operating margin to be back-end loaded due to normal seasonality between the third and fourth quarters and the expected closing of price negotiations. The steps we took in the second quarter support our confidence in sequentially improving adjusted operating margin which should allow us to deliver a substantial full year increase in operating cash flow and adjusted operating income.

acceleration of our structural cost reductions. Last week, we announced the first step towards the necessary optimization of our cost structure to the market environment. This first step is expected to reduce costs by around $25 million in 2024, increasing to around $55 million in 2025 and to reach around $75 million when fully completed. Further actions will be announced as plans materialize.

We generated an organic growth of 27%, growing 11pp faster than LVP due to successful product launches and price compensation achievements. The strong volume growth combined with price compensations, cost saving activities and lower premium freight costs enabled us to improve adjusted operating income by 71%, despite substantial inflationary pressure and FX headwinds.

Financial Report April - June 2023



Full Year Indication



Full Year Indication

Organic sales growth

Around 15%

Tax rate2)

Around 32%

FX impact on net sales

Around 1% positive

Operating cash flow3)

Around $900 million

Adjusted operating margin1)

Around 8.5%-9%

Capex, net, of sales

Around 6%

1) Excluding effects from capacity alignments, antitrust related matters, the Andrews litigation settlement and other discrete items. 2) Excluding unusual tax items. 3) Excluding unusual items.

Financial Report April - June 2023

Financial Report April - June 2023

Net Sales Development by region

Operating and adjusted operating income and margins

Capex and D&A

Operating and adjusted operating Cash Flow

Return on Capital Employed

Cash Conversion*

Capex, net: Capital Expenditure, net.

D&A: Depreciation and Amortization.

Adj. operating income and margin*: Operating income adjusted for capacity alignments, antitrust related matters and the Andrews litigation settlement. Capacity alignments include non-recurring costs related to our structural efficiency and business cycle management programs.

Operating cash flow excluding EC antitrust payment*: Adjusted for EC antitrust payment of $203 million in 2019.

Cash conversion*: Free cash flow* in relation to net income adjusted for EC antitrust payment in 2019. Free cash flow defined as operating cash flow less capital expenditure, net.

Financial Report April - June 2023

Consolidated sales

Second quarter

Reported

Currency

Organic

(Dollars in millions)

2023

2022

(U.S. GAAP)

effects1)

change*

Airbags, Steering Wheels and Other2)

$1,757

$1,336

32%

(0.2)%

32%

Seatbelt Products and Other2)

878

746

18%

0.5%

17%

Total

$2,635

$2,081

27%

0.0%

27%

Asia

$968

$732

32%

(5.0)%

37%

Whereof:

China

497

363

37%

(5.7)%

43%

Asia excl. China

471

369

28%

(4.3)%

32%

Americas

916

738

24%

3.1%

21%

Europe

751

611

23%

2.3%

21%

Total

$2,635

$2,081

27%

0.0%

27%

1) Effects from currency translations. 2) Including Corporate sales.

Sales by product – Airbags, Steering Wheels and Other

Sales for all major product categories increased organically* in the quarter. The largest contributor to the increase was inflatable curtains and steering wheels, followed by side airbags and passenger airbags.

Sales by product - Seatbelts and Other

The main contributor to Seatbelt products organic sales growth* was Europe, followed by China and Americas.

Sales by region

Our global organic sales* increased by 27% compared to the global LVP increase of 15.5% (according to S&P Global, July 2023). The 11pp outperformance was driven by new product launches and price increases.

Autoliv outperformed LVP by 23pp in China, by 18pp in Asia excl. China, by 7pp in Americas and by 6pp in Europe.

Q2 2023 organic growth*

Americas

Europe

China

Asia excl. China

Global

Autoliv

21%

21%

43%

32%

27%

Main growth drivers

Honda, GM

VW, Stellantis, BMW

Honda, GM, Lixiang

Toyota, Hyundai, Subaru

Honda, Toyota, GM

Main decline drivers

BMW, Ford, VW

Nissan, Renault

Renault, KG Mobility

Q2 2023

Americas

Europe

China

Asia excl. China

Global

LVP (July 2023)

14%

14%

19%

14%

16%

LVP (Apr 2023)

9.6%

8.1%

18%

14%

13%

Financial Report April - June 2023

Consolidated sales

First 6 months

Reported

Currency

Organic

(Dollars in millions)

2023

2022

(U.S. GAAP)

effects1)

change*

Airbags, Steering Wheels and Other2)

$3,430

$2,716

26%

(2.0)%

28%

Seatbelt Products and Other2)

1,698

1,489

14%

(1.5)%

16%

Total

$5,127

$4,206

22%

(1.8)%

24%

Asia

$1,904

$1,589

20%

(6.5)%

26%

Whereof:

China

950

810

17%

(6.6)%

24%

Asia excl. China

954

779

22%

(6.5)%

29%

Americas

1,747

1,431

22%

2.8%

19%

Europe

1,476

1,186

24%

(1.1)%

26%

Total

$5,127

$4,206

22%

(1.8)%

24%

1) Effects from currency translations. 2) Including Corporate sales.

Sales by product – Airbags, Steering Wheels and Other

Sales for all major product categories increased organically* in the quarter. The largest contributor to the increase was inflatable curtains and steering wheels, followed by side airbags and passenger airbags.

Sales by product - Seatbelts and Other

The main contributor to Seatbelt products organic sales growth* was Europe, followed by Americas, Asia excl. China, and China.

Sales by region

Our global organic sales* increased by 24% compared to the global LVP increase of 11.3% (according to S&P Global, July 2023). The 12pp outperformance was driven by new product launches and price increases.

Autoliv outperformed LVP by around 17pp in China, by 15pp in Asia excl. China, by 9pp in Europe, and by 7pp in Americas.

6M 2023 organic growth*

Americas

Europe

China

Asia excl. China

Global

Autoliv

19%

26%

24%

29%

24%

Main growth drivers

Honda, GM, Nissan

VW, Stellantis, Renault

Honda, Lixiang, BYD

Toyota, Hyundai, Subaru

Honda, Toyota, Hyundai

Main decline drivers

Ford, BMW

Mitsubishi

Nissan, Renault, Xpeng

Renault, KG Mobility

Ford, Xpeng

First 6 months 2023

Americas

Europe

China

Asia excl. China

Global

LVP (July 2023)

12%

16%

6.7%

14%

11%

LVP (Jan 2023)

8.3%

6.9%

5.2%

9.3%

7.1%

Financial Report April - June 2023

     Kia EV9

  Hyundai MUFASA

   Zeekr-X

     Nio ES6

   WEY Blue Mountain

   Mercedes E-class

     Ford Mustang

   Toyota Alphard

   VW ID.7

Driver/Passenger Airbags

Seatbelts

Side Airbags

Head/Inflatable Curtain Airbags

Steering Wheel

Knee Airbag

Front Center Airbag

Bag-in-Belt

Pyrotechnical Safety Switch

Pedestrian Airbag

Hood Lifter

Available as EV/PHEV

Financial Report April - June 2023

Condensed income statement

Second quarter

First 6 months

(Dollars in millions, except per share data)

2023

2022

Change

2023

2022

Change

Net sales

$2,635

$2,081

27%

$5,127

$4,206

22%

Cost of sales

(2,188)

(1,755)

25%

(4,301)

(3,591)

20%

Gross profit

$447

$326

37%

$826

$614

34%

S,G&A

(129)

(112)

15%

(261)

(227)

15%

R,D&E, net

(120)

(112)

7.3%

(237)

(219)

8.0%

Amortization of intangibles

(0)

(0)

24%

(1)

(2)

(50)%

Other income (expense), net

(103)

22

n/a

(107)

92

n/a

Operating income

$94

$124

(24)%

$221

$258

(15)%

Adjusted operating income1)

$212

$124

71%

$343

$192

79%

Financial and non-operating items, net

(11)

(7)

65%

(29)

(22)

35%

Income before taxes

$83

$117

(30)%

$191

$237

(19)%

Income taxes

(30)

(38)

(22)%

(64)

(74)

(14)%

Net income

$53

$79

(33)%

$127

$163

(22)%

Earnings per share2)

0.61

0.91

(32)%

1.47

1.85

(20)%

Adjusted earnings per share1,2)

$1.93

$0.90

115%

$2.82

$1.36

107%

Gross margin

17.0%

15.7%

1.3pp

16.1%

14.6%

1.5pp

S,G&A, in relation to sales

(4.9)%

(5.4)%

0.5pp

(5.1)%

(5.4)%

0.3pp

R,D&E, net in relation to sales

(4.6)%

(5.4)%

0.8pp

(4.6)%

(5.2)%

0.6pp

Operating margin

3.6%

6.0%

(2.4)pp

4.3%

6.1%

(1.8)pp

Adjusted operating margin1)

8.0%

6.0%

2.1pp

6.7%

4.6%

2.1pp

Tax Rate

35.8%

32.2%

3.5pp

33.4%

31.3%

2.1pp

Other data

No. of shares at period-end in millions3)

85.4

87.1

(2.0)%

85.4

87.1

(2.0)%

Weighted average no. of shares in millions4)

85.6

87.2

(1.8)%

85.9

87.2

(1.6)%

Weighted average no. of shares in millions, diluted4)

85.8

87.3

(1.8)%

86.0

87.4

(1.6)%

1) Non-U.S. GAAP measure, excluding effects from capacity alignment, antitrust related matters and the Andrews litigation settlement. See reconciliation table. 2) Assuming dilution when applicable and net of treasury shares. 3) Excluding dilution and net of treasury shares. 4) Net of treasury shares.

Second quarter 2023 development

Gross profit increased by $121 million and the gross margin increased by 1.3pp compared to the same quarter 2022. The gross profit increase was primarily driven by price increases, volume growth and lower costs for premium freight. This was partly offset by increased costs for personnel related to volume growth and wage inflation, as well as adverse effects from unfavorable exchange rates and energy costs.

S,G&A costs increased by $17 million compared to the prior year, mainly due to increased costs for personnel and projects. S,G&A costs in relation to sales decreased from 5.4% to 4.9%.

R,D&E, net costs increased by around $8 million compared to the prior year, mainly due to higher costs for personnel. R,D&E, net, in relation to sales decreased from 5.4% to 4.6%.

Other income (expense), net was negative $103 million compared to $22 million in the prior year. The prior year was positively impacted by $21 million from a patent litigation settlement while Q2 2023 was negatively impacted by around $109 million in accruals for capacity alignments.

Operating income decreased by $30 million compared to the same period in 2022, mainly as a consequence of accruals for capacity alignments and the higher costs for S,G&A and R,D&E, net, partly offset by the higher gross profit.

Adjusted operating income* increased by $88 million compared to the prior year, mainly due to higher gross profit, partly offset by the higher costs for S,G&A and R,D&E, net.

Financial and non-operating items, net, was negative $11 million compared to negative $7 million a year earlier, mainly due to increased interest expense as an effect of higher debt and higher interest rates.

Income before taxes decreased by $35 million compared to the prior year, mainly due to the lower operating income.

Tax rate was 35.8% compared to 32.2% in the same period last year. Discrete tax items, net, decreased the tax rate this quarter by 4.5pp. Discrete tax items increased the tax rate by 1.5pp in the same period last year.

Earnings per share, diluted decreased by $0.29 compared to a year earlier. The main drivers were $1.32 from capacity alignments and other adjustments, partly offset by $0.69 from higher adjusted operating income* and $0.35 from taxes.

Financial Report April - June 2023

First six months 2023 development

Gross profit increased by $212 million and the gross margin increased by 1.5pp compared to the same period 2022. The gross profit increase was primarily driven by price increases, volume growth and lower costs for premium freight. This was partly offset by increased costs for personnel related to higher volumes and wage inflation as well as adverse effects from higher costs for raw materials, unfavorable FX effects and higher costs for energy.

S,G&A costs increased by $33 million compared to the prior year, mainly due to increased costs for personnel and projects, partly offset by positive currency translation effects. S,G&A costs in relation to sales decreased from 5.4% to 5.1%.

R,D&E, net costs increased by around $18 million compared to the prior year, mainly due to higher costs for personnel, partly offset by positive currency translation effects. R,D&E, net, in relation to sales decreased from 5.2% to 4.6%.

Other income (expense), net was negative $107 million compared to $92 million in the prior year. The prior year was positively impacted by around an $80 million gain from the sale of a property in Japan and around $20 million from a patent litigation settlement, partly offset by around $10 million in capacity alignment provision for the closure of a plant in South Korea while first half 2023 was negatively impacted by around $112 million in accruals for capacity alignments.

Operating income decreased by $37 million compared to the same period in 2022, mainly as a consequence of the changes in Other income (expense) and the higher costs for S,G&A and R,D&E, net, partly offset by the higher gross profit.

Adjusted operating income* increased by $151 million compared to the prior year, mainly due to higher gross profit, partly offset by the higher costs for S,G&A and R,D&E, net.

Financial and non-operating items, net, was negative $29 million compared to negative $22 million a year earlier, mainly due to increased interest expense as an effect of higher debt and higher interest rates.

Income before taxes decreased by $45 million compared to the prior year, mainly due to the lower operating income and increased interest expense.

Tax rate was 33.4% compared to 31.3% in the same period last year. Discrete tax items, net, decreased the tax rate in this year by 1.5pp. Discrete tax items increased the tax rate by 1.0pp in the same period last year.

Earnings per share, diluted decreased by $0.38 compared to a year earlier. The main drivers were $1.83 from capacity alignments and other adjustments, partly offset by $1.20 from higher adjusted operating income* and $0.29 from taxes.

Financial Report April - June 2023

Selected Balance Sheet items

Second quarter

(Dollars in millions)

2023

2022

Change

Trade working capital1)

$1,292

$1,379

(6.3)%

Trade working capital in relation to sales2)

12.3%

16.6%

(4.3)pp

- Receivables outstanding in relation to sales3)

20.8%

21.4%

(0.6)pp

- Inventory outstanding in relation to sales4)

9.0%

10.8%

(1.9)pp

- Payables outstanding in relation to sales5)

17.5%

15.7%

1.8pp

Cash & cash equivalents

475

327

45%

Gross Debt6)

1,771

1,619

9.4%

Net Debt7)

1,299

1,318

(1.4)%

Capital employed8)

3,856

3,876

(0.5)%

Return on capital employed9)

9.5%

13.1%

(3.6)pp

Total equity

$2,557

$2,558

(0.0)%

Return on total equity10)

8.2%

12.1%

(4.0)pp

Leverage ratio11)

1.3

1.7

(0.4)

1) Outstanding receivables and outstanding inventory less outstanding payables. 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) Short- and long-term interest-bearing debt. 7) Short- and long-term debt less cash and cash equivalents and debt-related derivatives. Non U.S. GAAP measure. See reconciliation table. 8) Total equity and net debt. 9) Annualized operating income and income from equity method investments, relative to average capital employed. 10) Annualized net income relative to average total equity. 11) Net debt adjusted for pension liabilities in relation to EBITDA. Non U.S. GAAP measure. See reconciliation table.

Selected Cash Flow items

Second quarter

First 6 months

(Dollars in millions)

2023

2022

Change

2023

2022

Change

Net income

$53

$79

(33)%

$127

$163

(22)%

Changes in operating working capital

230

(239)

n/a

28

(257)

n/a

Depreciation and amortization

94

90

4.1%

186

186

0.2%

Gain on divestiture of property

-

-

n/a

-

(80)

n/a

Other, net

2

19

(89)%

(8)

7

n/a

Operating cash flow

$379

$(51)

n/a

$334

$19

1654%

Capital expenditure, net

(124)

(139)

(10)%

(267)

(156)

72%

Free cash flow1)

$255

$(190)

n/a

$66

$(137)

n/a

Cash conversion2)

481%

n/a

n/a

52%

n/a

n/a

Shareholder returns

- Dividends paid

(56)

(56)

0.6%

(113)

(112)

1.2%

- Share repurchases

(41)

(22)

83%

(82)

(40)

105%

Cash dividend paid per share

$(0.66)

$(0.64)

2.5%

$(1.32)

$(1.28)

2.8%

Capital expenditures, net in relation to sales

4.7%

6.7%

(1.9)pp

5.2%

3.7%

1.5pp

1) Operating cash flow less Capital expenditures, net. Non U.S. GAAP measure. See enclosed reconciliation table. 2) Free cash flow relative to Net income. Non U.S. GAAP measure. See reconciliation table.

Second quarter 2023 development

Trade working capital* decreased by $87 million compared to the same period last year, where the main drivers were $541 million in higher accounts payable partly offset by $410 million in higher receivables and $44 million in higher inventories. Compared to Q1 2023, trade working capital was reduced by $117 million, driven by $161 million in higher accounts payable and $39 million in lower inventories partly offset by $83 million in higher receivables.

Operating cash flow improved by $430 million to $379 million compared to the same period last year, mainly due to improved adjusted operating income and a reversal of the negative working capital effects from the first quarter 2023.

Capital expenditure, net decreased by $14 million compared to the same period the previous year. Capital expenditure, net in relation to sales was 4.7% vs. 6.7% a year earlier.

Free cash flow* was $255 million, compared to negative $190 million in the same period prior year. The improvement was due to the higher operating cash flow and lower capital expenditure, net.

Financial Report April - June 2023

Cash conversion* defined as free cash flow* in relation to net income, was 481% in the period, positively impacted by significant capacity alignment accruals in the quarter.

Net debt* was $1,299 million as of June 30, 2023, which was $19 million lower than a year earlier.

Liquidity position. As of June 30, 2023, our cash balance was around $0.5 billion, and including committed, unused loan facilities, our liquidity position was around $1.6 billion.

Leverage ratio*. As of June 30, 2023, the Company had a leverage ratio of 1.3x compared to 1.7x as of June 30, 2022, as the net debt* decreased and the 12 months trailing adjusted EBITDA* increased.

Total equity decreased by $1 million compared to June 30, 2022. This was mainly due to $226 million in dividend payment and stock repurchases of $157 million as well as $30 million in adverse currency translation effects, partly offset by $390 million from net income.

First six months 2023 development

Operating cash flow increased by $315 million compared to the same period last year to $334 million, mainly due to higher adjusted operating income and positive working capital effects.

Capital expenditure, net increased by $112 million, mainly due to the impact on the prior year of $95 million from the sale of property, plant and equipment. Capital expenditure, net in relation to sales was 5.2% vs. 3.7% a year earlier.

Free cash flow* was $66 million, compared to negative $137 million in the same period prior year. The improvement was due to the higher operating cash flow partly offset by higher capital expenditure, net.

Cash conversion* defined as free cash flow* in relation to net income, was 52% in the period.

Jun 30

Mar 31

Jun 30

2023

2023

2022

Headcount

71,200

71,300

64,700

Whereof: Direct headcount in manufacturing

52,600

52,700

46,500

                 Indirect headcount

18,600

18,600

18,200

Temporary personnel

11%

11%

9.6%

At June 30, 2023, total headcount increased by 6,500 compared to a year earlier. The indirect workforce increased by 2% while the direct workforce increased by 13%, reflecting that sales grew organically by 27% in the second quarter compared to a year earlier.

Compared to March 31, 2023, total headcount was virtually unchanged. Our headcount reductions announced on July 13, 2023 is not yet reflected in the totals.

Financial Report April - June 2023

Financial Report April - June 2023

Next Report

Autoliv intends to publish the quarterly earnings report for the third quarter of 2023 on Friday, October 20, 2023.

Footnotes

*Non-U.S. GAAP measure, see enclosed reconciliation tables.

Inquiries: Investors and Analysts

Anders Trapp

Vice President Investor Relations

Tel +46 (0)8 5872 0671

Henrik Kaar

Director Investor Relations

Tel +46 (0)8 5872 0614

Inquiries: Media

Gabriella Etemad

Senior Vice President Communications

Tel +46 (0)70 612 6424

Autoliv, Inc. is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on July 21, 2023.

Definitions and SEC Filings

Please refer to www.autoliv.com or to our Annual Report for definitions of terms used in this report. Autoliv’s annual report to stockholders, annual report on Form 10-K, quarterly reports on Form 10Q, proxy statements, management certifications, press releases, current reports on Form 8-K and other documents filed with the SEC can be obtained free of charge from Autoliv at the Company’s address. These documents are also available at the SEC’s website www.sec.gov and at Autoliv’s corporate website www.autoliv.com.

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Financial Report April - June 2023

This report contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. or its management believes or anticipates may occur in the future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “estimates”, “expects”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “may”, “likely”, “might”, “would”, “should”, “could”, or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words. Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation, general economic conditions, including inflation; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; global supply chain disruptions, including port, transportation and distribution delays or interruptions; supply chain disruptions and component shortages specific to the automotive industry or the Company; disruptions and impacts relating to the ongoing war between Russia and Ukraine; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignment, restructuring, cost reduction and efficiency initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in

regulatory conditions; customer bankruptcies, consolidations, or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation, civil judgments or financial penalties and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims and the availability of insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; our ability to meet our sustainability targets, goals and commitments; political conditions; dependence on and relationships with customers and suppliers; the conditions necessary to hit our medium term financial targets; and other risks and uncertainties identified under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q and any amendments thereto. For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.

Financial Report April - June 2023

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

Second quarter

First 6 months

Latest 12

Full Year

2023

2022

2023

2022

months

2022

Airbags, Steering Wheels and Other1)

$1,757

$1,336

$3,430

$2,716

$6,520

$5,807

Seatbelt products and Other1)

878

746

1,698

1,489

3,244

3,035

Total net sales

$2,635

$2,081

$5,127

$4,206

$9,764

$8,842

Cost of sales

(2,188)

(1,755)

(4,301)

(3,591)

(8,156)

(7,446)

Gross profit

$447

$326

$826

$614

$1,608

$1,396

Selling, general & administrative expenses

(129)

(112)

(261)

(227)

(471)

(437)

Research, development & engineering expenses, net

(120)

(112)

(237)

(219)

(408)

(390)

Amortization of intangibles

(0)

(0)

(1)

(2)

(2)

(3)

Other income (expense), net

(103)

22

(107)

92

(106)

93

Operating income

$94

$124

$221

$258

$621

$659

Income from equity method investments

1

1

2

2

4

3

Interest income

6

1

8

2

12

6

Interest expense

(25)

(13)

(45)

(26)

(79)

(60)

Other non-operating items, net

7

5

5

1

(1)

(5)

Income before income taxes

$83

$117

$191

$237

$558

$603

Income taxes

(30)

(38)

(64)

(74)

(168)

(178)

Net income

$53

$79

$127

$163

$390

$425

Less: Net income attributable to non-controlling interest

0

0

1

1

1

2

Net income attributable to controlling interest

$53

$79

$127

$162

$388

$423

Earnings per share2)

$0.61

$0.91

$1.47

$1.85

$4.48

$4.85

1) Including Corporate sales. 2) Assuming dilution when applicable and net of treasury shares.

Financial Report April - June 2023

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Dollars in millions, unaudited)

2023

2023

2022

2022

2022

Assets

Cash & cash equivalents

$475

$713

$594

$483

$327

Receivables, net

2,189

2,106

1,907

1,893

1,779

Inventories, net

947

986

969

924

903

Prepaid expenses

166

166

160

218

185

Other current assets

120

90

84

69

91

Total current assets

$3,898

$4,061

$3,714

$3,587

$3,285

Property, plant & equipment, net

2,047

2,045

1,960

1,795

1,806

Operating leases right-of-use assets

149

169

160

116

120

Goodwill

1,375

1,376

1,375

1,364

1,373

Intangible assets, net

6

7

7

5

6

Investments and other non-current assets

484

528

502

467

439

Total assets

$7,959

$8,185

$7,717

$7,334

$7,030

Liabilities and equity

Short-term debt

$481

$577

$711

$692

$559

Accounts payable

1,844

1,683

1,693

1,503

1,303

Accrued expenses

1,122

969

915

965

944

Operating lease liabilities - current

35

41

39

35

37

Other current liabilities

274

258

283

263

218

Total current liabilities

$3,756

$3,529

$3,642

$3,458

$3,061

Long-term debt

1,290

1,601

1,054

1,037

1,060

Pension liability

152

159

154

149

155

Operating lease liabilities - non-current

113

127

119

81

83

Other non-current liabilities

91

128

121

118

113

Total non-current liabilities

$1,645

$2,015

$1,450

$1,385

$1,410

Total parent shareholders’ equity

2,545

2,627

2,613

2,478

2,544

Non-controlling interest

13

14

13

13

15

Total equity

$2,557

$2,641

$2,626

$2,491

$2,558

Total liabilities and equity

$7,959

$8,185

$7,717

$7,334

$7,030

Financial Report April - June 2023

Second quarter

First 6 months

Latest 12

Full Year

(Dollars in millions, unaudited)

2023

2022

2023

2022

months

2022

Net income

$53

$79

$127

$163

$390

$425

Depreciation and amortization

94

90

186

186

363

363

Gain on divestiture of property

-

-

-

(80)

-

(80)

Other, net

2

19

(8)

7

(69)

(54)

Changes in operating working capital, net

230

(239)

28

(257)

344

58

Net cash provided by (used in) operating activities

$379

$(51)

$334

$19

$1,028

$713

Expenditures for property, plant and equipment

(125)

(142)

(268)

(254)

(600)

(585)

Proceeds from sale of property, plant and equipment

1

3

1

98

3

101

Net cash used in investing activities

$(124)

$(139)

$(267)

$(156)

$(596)

$(485)

Net cash before financing1)

$255

$(190)

$66

$(137)

$431

$228

Net increase (decrease) in short term debt

140

(287)

5

(277)

449

167

Decrease in short-term part of long-term debt

(533)

(302)

(533)

(302)

(533)

(302)

Net increase (decrease) in long-term debt

23

279

556

269

232

(55)

Dividends paid

(56)

(56)

(113)

(112)

(226)

(224)

Share repurchases

(41)

(22)

(82)

(40)

(157)

(115)

Common stock options exercised

0

0

0

0

0

0

Dividend paid to non-controlling interests

(1)

-

(1)

-

(2)

(2)

Net cash used in financing activities

$(468)

$(388)

$(168)

$(462)

$(236)

$(531)

Effect of exchange rate changes on cash

(24)

(33)

(17)

(43)

(47)

(73)

(Decrease) increase in cash and cash equivalents

$(238)

$(611)

$(119)

$(642)

$148

$(375)

Cash and cash equivalents at period-start

713

938

594

969

327

969

Cash and cash equivalents at period-end

$475

$327

$475

$327

$475

$594

1) Non-U.S. GAAP measure comprised of "Net cash provided by operating activities" and "Net cash used in investing activities". See reconciliation table.

Financial Report April - June 2023

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Dollars in millions)

2023

2023

2022

2022

2022

Receivables, net

$2,189

$2,106

$1,907

$1,893

$1,779

Inventories, net

947

986

969

924

903

Accounts payable

(1,844)

(1,683)

(1,693)

(1,503)

(1,303)

Trade Working capital

$1,292

$1,409

$1,183

$1,314

$1,379

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Dollars in millions)

2023

2023

2022

2022

2022

Short-term debt

$481

$577

$711

$692

$559

Long-term debt

1,290

1,601

1,054

1,037

1,060

Total debt

$1,771

$2,179

$1,766

$1,729

$1,619

Cash & cash equivalents

(475)

(713)

(594)

(483)

(327)

Debt issuance cost/Debt-related derivatives, net

4

12

12

42

26

Net debt

$1,299

$1,477

$1,184

$1,288

$1,318

Dec 31

Dec 31

Dec 31

Dec 31

(Dollars in millions)

2021

2020

2019

2018

Short-term debt

$346

$302

$368

$621

Long-term debt

1,662

2,110

1,726

1,609

Total debt

$2,008

$2,411

$2,094

$2,230

Cash & cash equivalents

(969)

(1,178)

(445)

(616)

Debt issuance cost/Debt-related derivatives, net

13

(19)

0

5

Net debt

$1,052

$1,214

$1,650

$1,619

Financial Report April - June 2023

Jun 30

Mar 31

Jun 30

(Dollars in millions)

2023

2023

2022

Net debt1)

$1,299

$1,477

$1,318

Pension liabilities

152

159

155

Debt per the Policy

$1,451

$1,636

$1,473

Net income2)

$390

$416

$338

Income taxes2)

168

176

143

Interest expense, net2, 3)

67

60

51

Other non-operating items, net2)

1

4

2

Income from equity method investments2)

(4)

(4)

(3)

Depreciation and amortization of intangibles2)

363

359

381

Adjustments2), 4)

127

10

(59)

EBITDA per the Policy (Adjusted EBITDA)

$1,112

$1,021

$854

Leverage ratio

1.3

1.6

1.7

1) Short- and long-term debt less cash and cash equivalents and debt-related derivatives. 2) Latest 12 months. 3) Interest expense including cost for extinguishment of debt, if any, less interest income. 4) Capacity alignments, antitrust related matters and the Andrews litigation settlement. See items Affecting Comparability below.

Financial Report April - June 2023

Second quarter

First 6 months

Latest 12

Full Year

(Dollars in millions)

2023

2022

2023

2022

months

2022

Net income

$53

$79

$127

$163

$390

$425

Changes in operating working capital

230

(239)

28

(257)

344

58

Depreciation and amortization

94

90

186

186

363

363

Gain on divestiture of property

-

-

-

(80)

-

(80)

Other, net

2

19

(8)

7

(69)

(54)

Operating cash flow

$379

$(51)

$334

$19

$1,028

$713

Capital expenditure, net

(124)

(139)

(267)

(156)

(596)

(485)

Free cash flow1)

$255

$(190)

$66

$(137)

$431

$228

Net cash before financing

$255

$(190)

$66

$(137)

$431

$228

Cash conversion2)

481%

n/a

52%

n/a

111%

54%

1) Operating cash flow less Capital expenditures, net. 2) Free cash flow relative to Net income.

Full year

Full year

Full year

Full year

(Dollars in millions)

2021

2020

2019

20181)

Net income

$437

$188

$463

$184

Changes in operating assets and liabilities

(63)

277

47

(229)

Depreciation and amortization

394

371

351

397

Other, net2)

(15)

13

(220)

239

Operating cash flow

$754

$849

$641

$591

EC antitrust payment

-

-

(203)

-

Operating cash flow excl antitrust

$754

$849

$844

$591

Capital expenditure, net

(454)

(340)

(476)

(555)

Free cash flow3)

$300

$509

$165

$36

Free cash flow excl antitrust payment4)

$300

$509

$368

$36

Acquisitions of businesses and other, net

-

-

-

(73)

Net cash before financing

$300

$509

$165

$(37)

Cash conversion5)

69%

270%

36%

20%

Cash conversion excl antitrust6)

69%

270%

79%

20%

1) Including Discontinued Operations. 2) Including EC antitrust non-cash provision 2018 and EC antitrust payment 2019. 3) Operating cash flow less Capital expenditures, net. 4) For 2019, Operating cashflow excluding EC antitrust payment less Capital expenditures, net. 5) Free cash flow relative to Net income. 6) For 2019, Free cash flow excluding EC antitrust payment relative to Net income.

Financial Report April - June 2023

Second quarter 2023

Second quarter 2022

(Dollars in millions, except per share data)

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Operating income

$94

$118

$212

$124

$0

$124

Operating margin

3.6%

4.5%