Elettronica
Veoneer : Financial Report January - March 2021
Comments from Jan Carlson , Chairman, President and CEO
Veoneer executed well in the quarter. Disruptions from semiconductor shortages, and our continued build up for growth, added extra costs which we were able to offset by efficiencies gained through our on-going market adjustment initiatives (MAIs). This outcome puts us well on track to achieve our full year outlook first presented in early February. We are also on track to increase our order intake compared to 2020, with our main expected order awards scheduled for the second half of the year.
We took a cautious view to the LVP in the beginning of the quarter which proved to be basically correct. While global LVP growth was only slightly lower than IHS January forecast, the regional mix shifted significantly. LVP in
North America and
Europe which make up more than 75% of Veoneer's sales were down close to 14% and 3% respectively.
China , which made up 28% of the LVP in the quarter, but only 13% of Veoneer sales, was up by 11%, all compared to IHS's expectation from the beginning of the quarter. Our content per vehicle as compared to the LVP is currently more than four times higher in Europe and
North America than in China , therefore this geographic mix shift had a temporary adverse effect on our sales growth and gross margin.
The automotive industry is going through a turbulent period. The COVID-19 pandemic is on-going in most regions, and we continue to put health and safety first. At the same time continued semiconductor supply constraints disrupted deliveries and the global supply chain. In conjunction with these developments the underlying demand for cars continues to be strong. To date we have managed this multifaceted development well, and I am pleased that we, despite the on-going delivery disruptions, are able to reiterate our full year outlook and that the MAI's continue to have positive effects on our cost base. We anticipate that disruptions will continue during the second quarter and then gradually decrease, and as first mentioned in our fourth quarter earnings announcement, we therefore foresee the positive effects on our operating leverage from our sales growth mainly taking effect in the second half of the year.
Our collaboration with Qualcomm is progressing very well and Arriver, our new software business, has now started its operations. The technology development is according to our joint plans and the first Arriver perception and drive policy software is now running on the Qualcomm Snapdragon Ride platform, a true milestone. During the quarter the Polestar 2, which runs the current generation of Arriver software, became the number one car in Euro NCAP's safety test - another proof point that we are on track to create a leading global challenger for Active Safety systems and software.
These developments are the result of the strong execution of the entire Veoneer team and I would like to take this opportunity to thank all of Veoneer's associates for their focus and persistence in these volatile times.
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