Financial highlights Q4 2022

$2,335 million net sales

10% net sales increase

18% organic sales increase*

9.8% operating margin

10% adjusted operating margin*

$1.80 EPS, a 38% increase

$1.83 adjusted EPS*, a 40% increase

Full year 2023 indications

Around 15% organic sales growth

Around 1% negative FX effect on net sales

Around 8.5-9.0% adjusted operating margin

Around $900 million operating cash flow

(Dollars in millions, except per share data)

Q4 2022

Q4 2021

Change

FY 2022

FY 2021

Change

Net sales

$2,335

$2,119

10%

$8,842

$8,230

7.4%

Operating income

230

174

32%

659

675

(2.3)%

Adjusted operating income1)

233

177

31%

598

683

(12)%

Operating margin

9.8%

8.2%

1.6pp

7.5%

8.2%

(0.7)pp

Adjusted operating margin1)

10.0%

8.3%

1.6pp

6.8%

8.3%

(1.5)pp

Earnings per share2, 3)

1.80

1.31

38%

4.85

4.96

(2.2)%

Adjusted earnings per share1, 2, 3)

1.83

1.30

40%

4.40

5.02

(12)%

Operating cash flow

$462

$317

46%

$713

$754

(5.4)%

Return on capital employed4)

24.3%

18.9%

5.4pp

17.5%

18.3%

(0.7)pp

Adjusted return on capital employed1, 4)

24.9%

19.1%

5.7pp

16.0%

18.5%

(2.5)pp

1) Excluding costs and gains from capacity alignments. Non-U.S. GAAP measure, see reconciliation table. 2) Assuming dilution when applicable and net of treasury shares. 3) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation. 4) Annualized operating income and income from equity method investments, relative to average capital employed.

Comments from Mikael Bratt, President & CEO

The fourth quarter and the full year 2022 were important steps towards our medium-term targets. In 2022, we faced the worst cost inflation seen in three decades, which initially significantly impacted our profitability. Through aggressive price adjustments, we managed to gradually offset this raw material cost inflation and profitability was restored towards the end of the year.

We expect an increase in overall product launches in 2023. This development contributes to building an even stronger platform for our long-term success. We remain confident in our ability to reach our medium term adjusted operating margin target of around 12%, under the framework previously communicated.

The strong 2023 sales growth we foresee, together with the actions we undertook in 2022, creates a solid base for a significant improvement in our adjusted operating margin. This is despite the challenges from inflation impacting our non-raw material costs such as labor, logistics and energy. We continue to execute on productivity and cost reduction activities to offset this, and we have also initiated discussions with our customers on non-raw material cost inflation. We believe price adjustments will offset the non-raw material cost inflation, with small positive effects in the first quarter and gradually larger positive effects as the year progresses.

Our FY 2023 indication is an organic sales growth of around 15% and an adjusted operating margin of around 8.5-9%, with Q1 2023 adjusted operating margin around 5%. Our positive cash flow trend should allow for increasing shareholder returns.

In Q4 2022, profitability recovered significantly, with double-digit adjusted operating margin* and an operating cash flow of $462 million. This was made possible through extensive customer discussions initiated early in 2022 that resulted in price increases to compensate for high raw material cost inflation. A high level of product launches and relentless cost control also supported our strong performance. Our organic sales growth outperformed LVP significantly in all regions, mainly due to price increases and product launches. Our balance sheet remained strong, and our leverage ratio* improved despite increased capex, dividends and share repurchases.

We continued to strengthen our position as the market leader in 2022 through our strong sales growth and the solid profitability and cash flow performance in the second half of the year. Order win rates for new EV platforms were high, both with new EV makers and traditional OEMs.

Full Year Indication

Full Year Indication

Organic sales growth

Around 15%

Tax rate2)

Around 32%

FX impact on net sales

Around 1% negative

Operating cash flow3)

Around $900 million

Adjusted operating margin1)

Around 8.5-9%

Capex, net, of sales

Around 6%

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 separation of our business segments in 2018. Capacity alignments include non-recurring costs related to our structural efficiency and business cycle management programs.

Operating cash flow excluding EC antitrust payment*: Management estimate for Continuing Operations derived from cash flow including Discontinued Operations in 2018. Adjusted for EC antitrust payment of $203 million in 2019.

Cash conversion*: Free cash flow* in relation to net income adjusted for EC antitrust accrual in 2018 and payment in 2019. Free cash flow defined as operating cash flow less capital expenditure, net.

Consolidated sales

 Fourth quarter

Reported change (U.S. GAAP)

Currency
effects1)

Organic
change*

(Dollars in millions)

2022

2021

Airbags, Steering Wheels and Other2)

$1,581

$1,408

12%

(7.4)%

20%

Seatbelt Products2)

754

711

6.1%

(7.5)%

14%

Total

$2,335

$2,119

10%

(7.4)%

18%

Asia

$977

$958

1.9%

(12)%

14%

Whereof:

China

536

538

(0.4)%

(9.9)%

9.4%

Japan

191

187

1.8%

(19)%

21%

RoA

250

233

7.4%

(10)%

18%

Americas

742

632

17%

1.8%

16%

Europe

616

529

17%

(11)%

27%

Total

$2,335

$2,119

10%

(7.4)%

18%

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

Sales by product – Airbags, Steering Wheels and Other

All major product categories increased organically* in the quarter. The largest contributors to the increase were inflatable curtains and steering wheels, followed by side airbags and passenger airbags.

Sales by product - Seatbelts

The main contributors to Seatbelt products organic growth* were Europe and Americas, followed by Asia excluding China.

Sales by region

Our global organic sales* increased by 18% compared to the global LVP increase of 2.3% (according to S&P Global, Jan 2023). The 15pp outperformance was mainly driven by price

increases and new product launches. Autoliv outperformed LVP by around 23pp in Europe, by around 14pp in China and Japan, by around 9pp in Americas and by around 5pp in rest of Asia.

Q4 2022 organic growth*

Americas

Europe

China

Japan

Rest of Asia

Global

Autoliv

16%

27%

9.4%

21%

18%

18%

Main growth drivers

GM, Hyundai, Honda

VW, Stellantis, Renault

BYD, GM, Geely

Nissan, Subaru, Toyota

Hyundai, Ford, Suzuki

GM, Hyundai, Honda

Main decline drivers

Stellantis, Nissan

Mercedes, Mitsubishi

VW, Nissan, Great Wall

n/a

Mitsubishi, Toyota, Nissan

Great Wall, Nissan

Q4 2022

Americas

Europe

China

Japan

Rest of Asia

Global

LVP (Jan 2023)

6.4%

4.1%

(4.8)%

7.1%

12%

2.3%

LVP (Oct 2022)

9.0%

3.6%

(2.3)%

11%

(0.1)%

2.8%

Consolidated sales

Full year

Reported change
(U.S. GAAP)

Currency
effects1)

Organic
change*

(Dollars in millions)

2022

2021

Airbags, Steering Wheels and Other2)

$5,807

$5,380

7.9%

(5.9)%

14%

Seatbelt Products2)

3,035

2,850

6.5%

(6.4)%

13%

Total

$8,842

$8,230

7.4%

(6.1)%

14%

Asia

$3,521

$3,407

3.3%

(7.9)%

11%

Whereof:

China

1,883

1,766

6.6%

(4.4)%

11%

Japan

686

733

(6.4)%

(16)%

9.2%

RoA

952

908

4.8%

(8.6)%

13%

Americas

2,967

2,535

17%

0.5%

17%

Europe

2,355

2,289

2.9%

(11)%

13%

Total

$8,842

$8,230

7.4%

(6.1)%

14%

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

Sales by product – Airbags, Steering Wheels and Other

The largest contributors to the organic growth* were inflatable curtains and steering wheels, followed by passenger airbags and side airbags.

Sales by product - Seatbelts

The main contributors to the organic growth* were Europe and Americas, followed by Asia excluding China and China.

Sales by region

Our global organic sales* increased by around 14% compared to the LVP increase of around 6.9% (according to S&P Global, Jan 2023). The 6.6pp outperformance was driven by price increases and new product launches, partly offset by negative geographical mix effects.

Autoliv outperformed LVP by around 15pp in Europe, by around 9pp in Japan, by around 7pp in Americas and by around 3pp in China, while we underperformed LVP by around 3pp in rest of Asia.

Full year 2022 organic growth*

Americas

Europe

China

Japan

Rest of Asia

Global

Autoliv

17%

13%

11%

9.2%

13%

14%

Main growth drivers

GM, Ford, Stellantis

VW, Stellantis, Toyota

Toyota, Geely, BYD

Subaru, Mitsubishi, Nissan

Tata, Suzuki, Hyundai

Stellantis, Toyota, Ford

Main decline drivers

Nissan

Nissan, Mitsubishi, Volvo

Great Wall, Hyundai, Mazda

n/a

Nissan, Mitsubishi

Great Wall, Nissan

Full year 2022

Americas

Europe

China

Japan

Rest of Asia

Global

LVP (Jan 2023)

9.4%

(1.3)%

8.3%

(0.2)%

17%

6.9%

LVP (Jan 2022)

16%

18%

1.4%

7.4%

4.2%

8.9%

Lixiang X02

Zeekr 009

ORA Shandianmao

GWM Shanhai Pao

Citroen C4X

Honda Pilot

Honda Accord

Peugeot 408

Dodge Hornet

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

Condensed income statement

Fourth quarter

Full year

(Dollars in millions, except per share data)

2022

2021

Change

2022

2021

Change

Net sales

$2,335

$2,119

10%

$8,842

$8,230

7.4%

Cost of sales

(1,937)

(1,751)

11%

(7,446)

(6,719)

11%

Gross profit

$399

$368

8.3%

$1,396

$1,511

(7.6)%

S,G&A

(105)

(113)

(7.1)%

(437)

(432)

1.2%

R,D&E, net

(65)

(80)

(18)%

(390)

(391)

(0.1)%

Amortization of intangibles

(0)

(3)

(81)%

(3)

(10)

(73)%

Other income (expense), net

2

1

32%

93

(3)

(n/a)

Operating income

$230

$174

32%

$659

$675

(2.3)%

Adjusted operating income1)

$233

$177

31%

$598

$683

(12)%

Financial and non-operating items, net

(16)

(17)

(3.9)%

(56)

(61)

(7.9)%

Income before taxes

$214

$158

36%

$603

$614

(1.8)%

Income taxes

(57)

(42)

35%

(178)

(177)

0.5%

Net income

$156

$115

36%

$425

$437

(2.7)%

Earnings per share2, 3)

1.80

1.31

38%

4.85

4.96

(2.2)%

Adjusted earnings per share1, 2, 3)

$1.83

$1.30

40%

$4.40

$5.02

(12)%

Gross margin

17.1%

17.4%

(0.3)pp

15.8%

18.4%

(2.6)pp

S,G&A, in relation to sales

(4.5)%

(5.3)%

0.8pp

(4.9)%

(5.3)%

0.3pp

R,D&E, net in relation to sales

(2.8)%

(3.8)%

1.0pp

(4.4)%

(4.7)%

0.3pp

Operating margin

9.8%

8.2%

1.6pp

7.5%

8.2%

(0.7)pp

Adjusted operating margin1)

10.0%

8.3%

1.6pp

6.8%

8.3%

(1.5)pp

Tax Rate

26.8%

26.9%

(0.2)pp

29.5%

28.9%

0.7pp

Other data

No. of shares at period-end in millions4)

86.2

87.5

(1.5)%

86.2

87.5

(1.5)%

Weighted average no. of shares in millions4)

86.5

87.4

(1.1)%

87.1

87.5

(0.5)%

Weighted average no. of shares in millions, diluted5)

86.7

87.7

(1.2)%

87.2

87.7

(0.5)%

1) Non-U.S. GAAP measure, excluding costs and gains from capacity alignments. See reconciliation table. 2) Assuming dilution when applicable and net of treasury shares. 3) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation. 4) Excluding dilution and net of treasury shares. 5) Net of treasury shares.

Fourth quarter 2022 development

Gross profit increased by $31 million and the gross margin decreased by 0.3pp compared to the same quarter 2021. The gross profit increase was primarily driven by price increases and volume growth, partly offset by higher costs for raw materials, call off volatility and higher costs for premium freight.

S,G&A costs decreased by $8 million compared to the prior year period, mainly due to positive currency translation effects. S,G&A costs in relation to sales decreased from 5.3% to 4.5%.

R,D&E, net costs decreased by $14 million compared to the prior year period, mainly due to higher engineering income and positive currency translation effects. R,D&E, net, in relation to sales decreased from 3.8% to 2.8%.

Other income (expense), net was close to unchanged compared to the prior year period.

Operating income increased by $55 million compared to the same period in 2021, mainly as a consequence of the higher gross profit and lower costs for S,G&A and R,D&E, net.

Adjusted operating income* increased by $56 million compared to the prior year period, mainly due to higher gross profit and lower costs for S,G&A and R,D&E, net.

Financial and non-operating items, net, was close to unchanged compared to the prior year period.

Income before taxes increased by $56 million compared to the prior year period, mainly due to the higher operating income.

Tax rate was 26.8%, almost unchanged compared to 26.9% in the same period last year. Discrete tax items, net, decreased the tax rate this quarter by 9.1pp. Discrete tax items increased the tax rate by 0.6pp in the same period last year. The increase in underlying tax rate in the fourth quarter 2022 was due to unfavorable country mix.

Earnings per share, diluted increased by $0.49 compared to the prior year period, where the main driver was $0.43 from higher operating income and $0.04 from lower tax cost.

Full year 2022 development

Gross profit decreased by $115 million, and the gross margin decreased by 2.6pp compared to the prior year. The gross profit decrease was primarily driven by adverse effects from higher costs for raw material and premium freight and adverse currency translation effects, partly offset by price increases.

S,G&A costs increased by $5 million compared to the prior year, mainly relating to investments in personnel and IT and improvement projects, partly offset by positive currency translation effects.

R,D&E, net costs were close to unchanged compared to the prior year. R,D&E, net, in relation to sales declined from 4.7% to 4.4%.

Other income (expense), net improved by $96 million compared to the prior year, mainly due to around $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.

Operating income decreased by $16 million compared to the prior year, mainly as a consequence of the lower gross profit, partly offset by the improved Other income (expense).

Adjusted operating income* decreased by $85 million compared to the prior year, mainly due to lower gross profit, partly offset by improved Other income (expense).

Financial and non-operating items, net, improved by $5 million compared to the prior year, mainly due to lower interest net and improved other non-operating items, net.

Income before taxes decreased by $11 million compared to the prior year, mainly due to the lower operating income partly offset by improved financial and non-operating items, net.

Tax rate was 29.5% compared to 28.9% in the same period last year, mainly due to unfavorable country mix. In addition, discrete tax items, net, decreased the tax rate this year by 2.5pp. Discrete tax items, net increased the tax rate last year by 0.6pp.

Earnings per share, diluted decreased by $0.11 compared to a year earlier, where the main driver was $0.19 from lower operating income, partly mitigated by $0.04 from financial items.

Selected Balance Sheet items

Fourth quarter

(Dollars in millions)

2022

2021

Change

Trade working capital 1)

$1,183

$1,332

(11)%

Trade working capital in relation to sales 2)

12.7%

15.7%

(3.1)pp

- Receivables outstanding in relation to sales 3)

20.4%

20.0%

0.4pp

- Inventory outstanding in relation to sales 4)

10.4%

9.2%

1.2pp

- Payables outstanding in relation to sales 5)

18.1%

13.5%

4.6pp

Cash & cash equivalents

594

969

(39)%

Gross Debt 6)

1,766

2,008

(12)%

Net Debt 7)

1,184

1,052

13%

Capital employed 8)

3,810

3,700

3.0%

Return on capital employed 9)

24.3%

18.9%

5.4pp

Total equity

$2,626

$2,648

(0.8)%

Return on total equity 10)

24.5%

17.6%

6.8pp

Leverage ratio 11)

1.4

1.2

20%

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

Fourth quarter

Full year

(Dollars in millions)

2022

2021

Change

2022

2021

Change

Net income

$156

$115

36%

$425

$437

(2.7)%

Changes in operating working capital

226

116

95%

58

(63)

n/a

Depreciation and amortization

90

97

(7.4)%

363

394

(7.9)%

Gain on divestiture of property

 -

-

n/a

(80)

-

n/a

Other, net

(10)

(12)

(15)%

(54)

(15)

n/a

Operating cash flow

$462

$317

46%

$713

$754

(5.4)%

Capital expenditure, net

(165)

(153)

8%

(485)

(454)

6.8%

Free cash flow1)

$297

$164

82%

$228

$300

(24)%

Cash conversion2)

190%

142%

48pp

54%

69%

(15)pp

Shareholder returns

- Dividends paid

(57)

(56)

1.6%

(224)

(165)

36%

- Share repurchases

(55)

 -

n/a

(115)

 -

n/a

Cash dividend paid per share

$(0.66)

$(0.64)

2.7%

$(2.58)

$(1.88)

37%

Capital expenditures, net in relation to sales

7.1%

7.2%

(0.1)pp

5.5%

5.5%

(0.0)pp

1) Operating cash flow less Capital expenditure, 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.

Fourth quarter 2022 development

Operating cash flow increased by $146 million to $462 million compared to the same period last year, mainly due to more positive working capital effects and higher net income.

Capital expenditure, net increased by $12 million compared to the same period last year, mainly due to investments related to footprint and capacity expansions. Capital expenditure, net in relation to sales was close to unchanged at 7.1%.

Free cash flow* was $297 million compared to $164 million the prior year period. The increase was due to the higher operating cash flow, partly offset by the higher capital expenditure, net.

Cash conversion* defined as free cash flow* in relation to net income, was 190% compared to 142% in the same period last year.

Leverage ratio*. As of December 31, 2022, the Company had a leverage ratio of 1.4x compared to 1.2x as of December 31, 2021, as the net debt* increased and the 12 months trailing adjusted EBITDA* decreased.

Full year 2022 development

Trade working capital* was reduced by $150 million compared to the same period last year, where the main driver was related to $549 million in higher accounts payables, partly offset by $208 million in higher receivables and $192 million in higher inventories.

Operating cash flow decreased by $41 million to $713 million compared to last year, mainly due to lower net income excluding the gain on property divestiture, lower depreciation and amortization and adverse effects from changes in deferred income taxes partly offset by positive working capital effects.

Capital expenditure, net increased by $31 million compared to last year, mainly due to increased investments related to footprint and capacity expansions, partly offset by $95 million in proceeds from the sale of property, plant and equipment. Capital expenditure, net in relation to sales was unchanged at 5.5%.

Free cash flow* was $228 million compared to $300 million a year earlier. The decline was due to the lower operating cash flow and higher capital expenditure, net.

Cash conversion* defined as free cash flow* in relation to net income, declined from 69% last year to 54% due to the lower free cash flow.

Net debt* was $1,184 million as of December 31, 2022, which was $132 million higher than a year ago.

Liquidity position. As of December 31, 2022, our cash balance was around $0.6 billion, and including committed, unused loan facilities, our liquidity position was around $1.7 billion.

Total equity decreased by $22 million compared to December 31, 2021, mainly due to dividends paid of $224 million, $136 million in adverse currency translation effects and $115 million from share repurchases, partly offset by $425 million from net income.

Dec 31

Sep 30

Dec 31

2022

2022

2021

Headcount

69,100

67,800

60,600

Whereof: Direct headcount in manufacturing

50,600

49,600

43,000

                 Indirect headcount

18,400

18,300

17,600

Temporary personnel

11%

11%

7.8%

By December 31, 2022, total headcount increased by 8,500 compared to a year earlier. The indirect workforce increased by 4.5% while the direct workforce increased by 18%, reflecting the strong organic sales growth in the fourth quarter of 2022 compared to the same period last year.

Compared to September 30, 2022, total headcount increased by around 1,300, whereof direct workforce increased by around 2% and the indirect workforce increased by around 0.5%.

Next Report

Autoliv intends to publish the quarterly earnings report for the first quarter of 2023 on Friday, April 21, 2023.

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 Ekelund

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 January 27, 2023.

Footnotes

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

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 10-Q, 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.

This report includes content supplied by S&P Global; Copyright © Light Vehicle Production Forecast, January 2022, October 2022 and January 2023. All rights reserved. S&P Global is a global supplier of independent industry information. The permission to use S&P Global copyrighted reports, data and information does not constitute an endorsement or approval by S&P Global of the manner, format, context, content, conclusion, opinion or viewpoint in which S&P Global reports, data and information or its derivations are used or referenced herein.

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; the impacts of the coronavirus (COVID-19) pandemic on the Company’s financial condition, business operations, operating costs, liquidity and competition and on the global economy; changes in and stability of 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, efficiency and strategic initiatives and the market reaction thereto; loss of business

from increased competition; higher raw material, fuel and energy, and other 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 judgements 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.

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

        Fourth quarter

       Full year

2022

2021

2022

2021

Airbags, Steering Wheels and Other1)

$1,581

$1,408

$5,807

$5,380

Seatbelt products

754

711

3,035

2,850

Total net sales

$2,335

$2,119

$8,842

$8,230

Cost of sales

(1,937)

(1,751)

(7,446)

(6,719)

Gross profit

$399

$368

$1,396

$1,511

Selling, general & administrative expenses

(105)

(113)

(437)

(432)

Research, development & engineering expenses, net

(65)

(80)

(390)

(391)

Amortization of intangibles

(0)

(3)

(3)

(10)

Other income (expense), net

2

1

93

(3)

Operating income

$230

$174

$659

$675

Income from equity method investments

1

1

3

3

Interest income

2

1

6

4

Interest expense

(19)

(14)

(60)

(60)

Other non-operating items, net

0

(4)

(5)

(7)

Income before income taxes

$214

$158

$603

$614

Income taxes

(57)

(42)

(178)

(177)

Net income

$156

$115

$425

$437

Less: Net income attributable to non-controlling interest

0

0

2

2

Net income attributable to controlling interest

$156

$115

$423

$435

Earnings per share2, 3)

$1.80

$1.31

$4.85

$4.96

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Dollars in millions, unaudited)

2022

2022

2022

2022

2021

Assets

Cash & cash equivalents

$594

$483

$327

$938

$969

Receivables, net

1,907

1,893

1,779

1,824

1,699

Inventories, net

969

924

903

913

777

Prepaid expenses

160

218

195

170

164

Other current assets

84

69

81

79

65

Total current assets

$3,714

$3,587

$3,285

$3,923

$3,675

Property, plant & equipment, net

1,960

1,795

1,806

1,853

1,855

Operating leases right-of-use assets

160

116

120

126

132

Goodwill

1,375

1,364

1,373

1,384

1,387

Intangible assets, net

7

5

6

7

8

Investments and other non-current

assets

502

467

439

476

481

Total assets

$7,717

$7,334

$7,030

$7,769

$7,537

Liabilities and equity

Short-term debt

$711

$692

$559

$347

$346

Accounts payable

1,693

1,503

1,303

1,385

1,144

Accrued expenses

915

965

944

1,050

996

Operating lease liabilities - current

39

35

37

38

38

Other current liabilities

283

263

218

253

297

Total current liabilities

$3,642

$3,458

$3,061

$3,073

$2,821

Long-term debt

1,054

1,037

1,060

1,647

1,662

Pension liability

154

149

155

172

197

Operating lease liabilities - non-current

119

81

83

87

94

Other non-current liabilities

121

118

113

116

115

Total non-current liabilities

$1,450

$1,385

$1,410

$2,022

$2,067

Total parent shareholders’ equity

2,613

2,478

2,544

2,659

2,633

Non-controlling interest

13

13

15

15

15

Total equity

$2,626

$2,491

$2,558

$2,674

$2,648

Total liabilities and equity

$7,717

$7,334

$7,030

$7,769

$7,537

        Fourth quarter

Full year

(Dollars in millions, unaudited)

2022

2021

2022

2021

Net income

$156

$115

$425

$437

Depreciation and amortization

90

97

363

394

Gain on divestiture of property

 -

-

(80)

-

Other, net

(10)

(12)

(54)

(15)

Changes in operating working capital, net

226

116

58

(63)

Net cash provided by operating activities

$462

$317

$713

$754

Expenditures for property, plant and equipment

(168)

(154)

(585)

(458)

Proceeds from sale of property, plant and equipment

2

1

101

4

Net cash used in investing activities

$(165)

$(153)

$(485)

$(454)

Net cash before financing1)

$297

$164

$228

$300

Decrease (increase) in short term debt

(25)

(9)

167

(11)

Increase (decrease) in short-term part of long-term debt

0

0

(302)

(275)

Decrease long-term debt

(4)

(19)

(55)

(20)

Dividends paid

(57)

(56)

(224)

(165)

Share repurchases

(55)

 -

(115)

 -

Common stock options exercised

0

0

0

3

Dividend paid to non-controlling interests

(1)

(0)

(2)

(1)

Net cash used in financing activities

$(142)

$(84)

$(531)

$(469)

Effect of exchange rate changes on cash

(44)

(14)

(73)

(39)

Increase (decrease) in cash and cash equivalents

$111

$66

$(375)

$(209)

Cash and cash equivalents at period-start

483

904

969

1,178

Cash and cash equivalents at period-end

$594

$969

$594

$969

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Dollars in millions)

2022

2022

2022

2022

2021

Receivables, net

$1,907

$1,893

$1,779

$1,824

$1,699

Inventories, net

969

924

903

913

777

Accounts payable

(1,693)

(1,503)

(1,303)

(1,385)

(1,144)

Trade Working capital

$1,183

$1,314

$1,379

$1,352

$1,332

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Dollars in millions)

2022

2022

2022

2022

2021

Short-term debt

$711

$692

$559

$347

$346

Long-term debt

1,054

1,037

1,060

1,647

1,662

Total debt

$1,766

$1,729

$1,619

$1,994

$2,008

Cash & cash equivalents

(594)

(483)

(327)

(938)

(969)

Debt issuance cost/Debt-related derivatives, net

12

42

26

1

13

Net debt

$1,184

$1,288

$1,318

$1,057

$1,052

Dec 31

Dec 31

Dec 31

(Dollars in millions)

2020

2019

2018

Short-term debt

$302

$368

$621

Long-term debt

2,110

1,726

1,609

Total debt

$2,411

$2,094

$2,230

Cash & cash equivalents

(1,178)

(445)

(616)

Debt issuance cost/Debt-related derivatives, net

(19)

0

5

Net debt

$1,214

$1,650

$1,619

Dec 31

Sep 30

Dec 31

(Dollars in millions)

2022

2022

2021

Net debt1)

$1,184

$1,288

$1,052

Pension liabilities

154

149

197

Debt per the Policy

$1,338

$1,437

$1,248

Net income2)

$425

$384

$437

Income taxes2)

178

163

177

Interest expense, net2, 3)

54

51

57

Other non-operating items, net2)

5

9

7

Income from equity method investments2)

(3)

(4)

(3)

Depreciation and amortization of intangibles2)

363

370

394

Capacity alignments and antitrust related matters2)

(61)

(61)

8

EBITDA per the Policy (Adjusted EBITDA)

$961

$912

$1,077

Leverage ratio

1.4

1.6

1.2

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.

  Fourth quarter

      Full year

(Dollars in millions)

2022

2021

2022

2021

Net income

$156

$115

$425

$437

Changes in operating working capital

226

116

58

(63)

Depreciation and amortization

90

97

363

394

Gain on divestiture of property

 -

-

(80)

-

Other, net

(10)

(12)

(54)

(15)

Operating cash flow

$462

$317

$713

$754

Capital expenditure, net

(165)

(153)

(485)

(454)

Free cash flow1)

$297

$164

$228

$300

Net cash before financing

$297

$164

$228

$300

Cash conversion2)

190%

142%

54%

69%

Full year

Full year

Full year

(Dollars in millions)

2020

2019

20181)

Net income

$188

$463

$184

Changes in operating assets and liabilities

277

47

(229)

Depreciation and amortization

371

351

397

Goodwill impairment charges

 -

 -

 -

Other, net2)

13

(220)

239

Operating cash flow

$849

$641

$591

EC antitrust payment

 -

(203)

 -

Operating cash flow excl antitrust

$849

$844

$591

Capital expenditure, net

(340)

(476)

(555)

Free cash flow3)

$509

$165

$36

Free cash flow excl antitrust payment4)

$509

$368

$36

Acquisitions of businesses and other, net

-

-

(73)

Net cash before financing

$509

$165

$(37)

Cash conversion5)

270%

36%

19%

Cash conversion excl antitrust6)

270%

79%

19%

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

Fourth quarter 2022

Fourth quarter 2021

(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

$230

$3

$233

$174

$3

$177

Operating margin

9.8%

0.1%

10.0%

8.2%

0.1%

8.3%

Income before taxes

214

3

217

158

3

160

Net income attributable to

controlling interest

156

2

158

115

(1)

114

Return on capital employed2)

24.3%

0.6%

24.9%

18.9%

0.3%

19.1%

Return on total equity3)

24.5%

0.7%

25.2%

17.6%

(0.1)%

17.5%

Earnings per share4, 5)

$1.80

$0.02

$1.83

$1.31

$(0.01)

$1.30

1) Costs for capacity alignments. 2) Annualized operating income and income from equity method investments, relative to average capital employed. 3) Annualized income relative to average total equity. 4) Assuming dilution when applicable and net of treasury shares. 5) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation.

Full year 2022

Full year 2021

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Operating income

$659

$(61)

$598

$675

$8

$683

Operating margin

7.5%

(0.7)%

6.8%

8.2%

0.1%

8.3%

Income before taxes

603

(61)

542

614

8

622

Net income attributable to

controlling interest

423

(39)

384

435

5

440

Capital employed

3,810

(39)

3,771

3,700

5

3,705

Return on capital employed2)

17.5%

(1.5)%

16.0%

18.3%

0.2%

18.5%

Return on total equity3)

16.3%

(1.3)%

15.0%

17.1%

0.2%

17.3%

Earnings per share4, 5)

$4.85

$(0.45)

$4.40

$4.96

$0.06

$5.02

1) Costs and gains from capacity alignments. 2) Annualized operating income and income from equity method investments, relative to average capital employed. 3) Annualized income relative to average total equity. 4) Assuming dilution when applicable and net of treasury shares. 5) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation.

Full year 2020

Full year 2019

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Operating income

$382

$99

$482

$726

$49

$774

Operating margin

5.1%

1.4%

6.5%

8.5%

0.6%

9.1%

1) Costs for capacity alignments and antitrust related matters.

Full year 2018

Reported
U.S. GAAP

Adjust-ments1)

Non-U.S.
GAAP

Operating income

$686

$222

$908

Operating margin