Welcome to the Q3 2021 Autoliv, Inc. Earnings Conference Call. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question- and- answer session. I will now hand over to Anders Trapp, Vice President, Investor Relations. Please begin your meeting. Thank you, Martin. Welcome, everyone, to our Third Quarter 2021 Financial Results Earnings Presentation. On this call, we have our President and CEO, Mikael Bratt, and our Chief Financial Officer, Fredrik Westin, and I am Anders Trapp, Vice President of Investor Relations. During today's earnings call, our CEO will provide a brief overview of our third quarter results, as well as provide an update on our general business and market conditions. Following Mikael, Fredrik will provide further details and commentary around the financials. We will then remain available to respond to your questions, and as usual, the slides are available on autoliv.com. Turning to the next slide, we have the safe harbor statement, which is an integrated part of this presentation and includes the Q&A that follows. During the presentation, we will reference some non-US GAAP measures. The reconciliations of historical US GAAP to non-US GAAP measures are available in our SEC regulatory filings available on autoliv.com. Lastly, I should mention that this call is intended to conclude at 3:00 P.M. Central European Time, so please follow a limit of two questions per person. I now hand over to our CEO, Mikael Bratt. Thank you, Anders. Looking on the next slide. First, I'd like to thank our team once again for their unrelenting commitment, particularly in managing the volatility in customer call-offs. Thanks to the team's effort, we were able to supply our customers and achieved solid performance in our plans despite facing a very challenging market. This slide quite well illustrates how dramatic Light Vehicle Production has developed during 2021, especially since July. Supply shortage of semiconductors and other components severely impacted the Light Vehicle Production in the third quarter. It led to a third quarter global LVP decline of 20%, which was 17% lower than what was expected only three months ago, and 12% below Q2, all according to IHS Markit. Markets with high safety content per vehicle were most affected by the dramatic changes. Europe, Americas, and Japan all saw Q3 LVP being 20%-25% lower than what was expected three months ago. The decline in LVP, unpredictable changes in customer call-offs, and high raw material costs resulted in reduced profitability in the quarter, despite strict cost control, including a significant headcount reduction. Looking on the next slide. Given all that, I'm pleased that we continued to strongly outperform the global LVP in the quarter, and with strong order intake for the first nine months of the year. We continue to execute strict measures to mitigate the current adverse business headwinds, including capacity alignment in Europe and in North America. However, as a result of a significantly reduced light vehicle production outlook for the year, we are revising our full-year indications for sales, adjusted operating margin, and operating cash flow. Despite the challenging environment, our cash flow was solid, and our debt leverage ratio remains well within our target range. We paid a dividend of $0.62 per share in the third quarter. Looking now on the financial overview on the next slide. Our consolidated net sales of $1.8 billion was 9% lower than in Q3 2020 due to a 20% decline in LVP. Without our strong sales outperformance, the sales decline would have been almost double. Adjusted operating income, excluding costs for capacity alignment, fell from $206 million to $103 million. The adjusted operating margin was 5.6%. The lower operating margin was a result of lower sales, higher call-off volatility, as well as rising costs for raw materials. Operating cash flow was a solid $188 million despite the challenging environment. Looking now on sales development on the next slide. I am very pleased that our organic sales growth outperformed the global light vehicle production by almost eight percentage points. This was achieved as we continued to execute on our strong order book, and despite the fact that the largest LVP declines were in high content per vehicle markets. We had a very strong outperformance in all regions. In North America, we outperformed by seven percentage points, and in Europe by 16 percentage points. In China, we outperformed by six percentage points in spite of high-end vehicles being more affected by the semiconductor shortage. Although all regions showed outperformance, only one region, rest of Asia, showed organic sales growth year-over-year. Within this region, sales in India and ASEAN grew strongly, with side airbag sales more than doubling compared to last year. Looking on the next slide. In the third quarter, we had the highest number of product launches for a single quarter ever, and we remain on track to launch approximately 750 new products for the full-year. Also a new record for the company. The models shown on this slide have an Autoliv content per vehicle from approximately $160-$700. This is one of the highest content we have on any vehicle model. Six of these vehicles are either EVs or plug-in hybrids, further extending our exposure to this growing market. Last year, sales this market accounted for around 10% of our total sales. We expect an almost doubling of sales to this segment in 2021. The long-term trend to higher content per vehicle is supported by the introduction of front center airbags, knee airbags, and battery cutoff switches. I will now hand over to our CFO, Fredrik Westin, who will talk about the financials on the next few slides. Thank you, Mikael. This slide highlights our key figures for the third quarter of 2021 compared to 2020. Our net sales were $1.85 billion. This was a 9% decrease compared to the same quarter last year, less than half of the 20% decline seen in the global light vehicle production. Gross profit declined by 25% to $301 million, while the gross margin decreased to 16%. The gross margin decrease was primarily driven by the lower sales and higher raw material costs. In the quarter, capacity alignments had $4 million negative impact on the operating profit. The adjusted operating income decreased to $103 million from $206 million. As a result, the adjusted operating margin declined by 4.5 percentage points to 5.6%. The operating cash flow was $188 million. Earnings per share diluted decreased by $0.44, where the main drivers were $1.17 from lower adjusted operating income, partly mitigated by $0.31 from lower costs for capacity alignment and antitrust-related matters, and $0.26 from lower tax. Our adjusted return on capital employed declined to 11%, and the adjusted return on equity to 10%. We declared and paid a quarterly dividend of $0.62 per share in the quarter, the same as in the previous quarter where the dividend was reinstated. Looking now on the adjusted operating margin bridge on the next slide. Our adjusted operating profit of $103 million was 50% lower than the same quarter last year. The impact of raw material price changes was a negative $37 million in the quarter. Foreign exchange impacted the operating profit positively by $4 million, mainly as a result of a weaker U.S. dollar. Support from governments in connection with the pandemic was $10 million in the third quarter last year, while it was not material to our financial results in the third quarter this year. The adjusted operating profit was negatively affected by higher SG&A and RD&E, net of governmental support of $4 million. Lower sales, impact from increased call-off volatility, and cost inflation, mainly related to logistics and utilities, resulted in operational inefficiencies of $56 million in the quarter. Excluding foreign exchange, raw material cost increases, and governmental support, the adjusted operating income leverage was approximately 25% on the organic sales decline. Despite unpredictable customer call-offs, the 25% decremental margin is within our communicated normal range. Looking on the next slide. Through a number of actions, we have mitigated some of the negative effects from the lower sales, the increased call-off volatility, and the cost inflation. These actions include activities such as adjusting production, shortening work week hours, and furloughing personnel. For example, footprint and capacity alignment in Europe, as well as moving overhead functions to best cost countries in Americas. We are also evaluating further footprint adjustments. In total, we have reduced headcounts by over 4,500 since the end of the first quarter, of which 2,500 in the third quarter. However, as you can see on the slide, our strict measures include much more than just headcount and work week hour reductions. Demand planning and forecasting are key for achieving efficient operations. During the quarter, planning of production has been challenging, as many customers have initially placed high orders and then at late stage, substantially reduced them. In Q3, we have frequently seen call-off deviations of around 50%, and in some cases, even higher. In this environment, we cannot only rely on forecasts from our customers for production planning. This means that we need to do our own assessment on weekly volume demand based on customers' behavior over the past months. We include claims for compensation for lost volumes with short notice in the commercial negotiations with our customers. Our supply chain management teams have been working hard to balance inventories to actual demand. Through negotiations and consolidation of the supply base, we successfully mitigated some of the raw material headwinds in the third quarter. We have also delayed and reduced capital expenditure plans where possible. More on the raw material impact on the next slide. Supply and demand imbalances continue to drive prices of raw materials higher. Through successful mitigation actions, the raw material headwinds in the third quarter were slightly lower than expected. New headwinds involving, for example, higher magnesium and resin costs, mean we still expect a full-year operating margin headwind from raw materials of around 130 basis points. Year to date, we have limited the impact with close to zero impact in the first quarter, around $8 million in the second quarter, followed by around $37 million in the third quarter. We have some limited contractual passthroughs to customers. Given this exceptional period of high raw material prices, we believe it is necessary to request compensations from our customers and negotiations are ongoing. It will take time to see the results of these efforts, and we do not expect much impact this year. A more significant recovery is expected in 2022. On to the next slide. For the third quarter of 2021, operating cash flow decreased by $164 million to $188 million compared to the same period last year, mainly due to lower net income and less positive effects from changes in operating working capital. Compared to prior quarter, working capital improved with $35 million, benefiting from a $74 million change in trade working capital. This was mainly a result of a $144 million reduction of receivables, partly offset by $49 million from decreased accounts payables, and $21 million from increased inventories. The increase in inventories was a consequence of the low demand visibility and supply chain challenges. Capital expenditure increased by 46% year-over-year to $112 million. The increase mainly reflects the lower level in the prior year due to the extraordinary measures taken in 2020. Capital expenditure net in relation to sales was 6.0% versus 3.8% a year earlier. Free cash flow was $77 million, impacted by lower operating cash flow and the higher capital expenditure. The cash conversion over the last 12 months was 97%. Now to the next slide. In the past two years, we have managed a very difficult market environment with significant declines in vehicle production and low demand visibility, as well as severe disruptions of global supply chains. Still, we have reduced our net debt by $600 million since mid-2019, and thereby recovered to a balance sheet position that is in line with our target. The leverage ratio is unchanged compared to last quarter at 1.1x at the end of September 2021. This is a significant improvement compared to 2.4x one year ago. In the quarter, our last 12 months EBITDA decreased by $96 million, balanced by the net debt decrease of $42 million. Looking at the Light Vehicle Production development on the next slide. In the near term, the Light Vehicle outlook will mainly be determined by the evolution of the situation around semiconductors. In North America, the industry continues to struggle to meet consumer demand for new vehicles due to the shortage of semiconductors. Inventory of new vehicles in the U.S. ended September below 1 million units, the lowest level seen for at least 35 years. Despite healthy underlying demand trends in Europe, component shortages meant that registrations have not returned to the pre-pandemic level. In China, semiconductor and energy constraints are affecting production, especially for higher end vehicles. Demand is also being impacted by monetary policy and rising concerns about property prices. As a consequence of the supply chain constraints, production is expected to remain volatile in the fourth quarter. There are some indications of moderate improvement in semiconductor availability in Asia and North America, but the visibility remains poor. For the full-year 2021, our assumption is now that global light vehicle production will be flat compared to 2020. Where possible, OEMs will likely continue to prioritize production of vehicles with no or low CO2 levels, as well as larger vehicles. For Autoliv, this trend should support further outperformance versus Light Vehicle Production. Assuming that the component availability improves, we expect the good demand and low inventories to support a recovery in LVP in 2022. I now hand it back to Mikael. Thank you, Fredrik. Turning to the next slide. Our revised full-year 2021 indications exclude cost for capacity alignment. Our full-year indication is based on a flat global light vehicle production compared to 2020. Our previous indication from 17 July 2021, was based on an assumption of 9%-11% LVP growth for 2021. We raise our expectations of sales outperformance versus global LVP from around 7% to around eight percentage points. As a consequence of the lower light vehicle production assumption and higher outperformance, we now expect our organic sales growth to be around 8%. Including positive currency translation effects of around 3%, our net sales increase is expected to be around 11%. We expect an adjusted operating margin of around 8%. Operating cash flow is expected to be around $700 million. Our strategic initiatives are gradually yielding good results, and we are confident of our 2022/2024 targets based on our internal progress and expected light vehicle market recovery in the next few years. Turning the slide. With relentless focus on quality and execution, as well as mitigating near-term headwinds, we also continue to drive forward towards our targets. This and more will be explored at our virtual CMD on 16 November. The event will be virtually only and live-streamed. More details will be made available at the beginning of November. I will now hand it back to Anders. Thank you, Mikael. Turning the page. This concludes our formal comment for today's earnings call, and we would like to open the line for questions. I now hand it back to you, Martin. Thank you. If you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may press zero and two to cancel. There will be a brief pause while questions are being registered. We have a first question. It is from Emmanuel Rosner, Deutsche Bank. Your line is now open. Thank you very much. Hello, everybody. I have two lines of questions. The first one is could you please talk a little bit more about the operating environment you are seeing out there, in particular, what you are seeing so far in the fourth quarter? Your updated guidance suggests some sequential improvement in earnings. Therefore, I am just curious how much things have improved so far sequentially. As part of this question as well, your Light Vehicle Production outlook slide basically speaks about some improvements seen lately in North America. I was curious if you could just elaborate a little bit more about what specifically you are seeing. Thank you for the questions. First of all, we are affected here in the quarter, I would say we're still midst of it, around the semiconductor question here. What we're indicating here is that we see some, I would say, moderate slight improvements, mainly in Asia and the U.S., it's based on, I would say, the feedback and dialogues we have with customers and ultimately the suppliers here as well in the other end here. I just want to state here that the visibility is still poor around that. For us, it's all about making sure that we continue to focus on our internal activities here to mitigate as much as possible of the current situation, which I think we have done successfully in the quarter here. As we have pointed out here, we have managed to deliver to our customer what they have expected, and we have also made the necessary adjustments. That we will continue to do in the months and quarters to come here, of course. I think that as far as we can state really about the environment connected to the semiconductors. The raw material side, we have seen that increasing throughout the year here, and we gave you the sequential development, how it has impacted us. Here the supply chain team has done a great job to fend off as much as possible. I think what we have seen in the quarter also here is that the energy situation has added to the external headwind. When we come to magnesium, and I would say zinc also here, it's very much connected to the energy challenge as well there. It's a very volatile environment there, but focus on what we can do for sure. Low visibility, but we are getting used to it, I would say. This is very helpful. I was actually going to follow up on the raw materials, if I may. It's encouraging to see that you're expecting more recoveries in 2022. If we were to exclude the recoveries just for a second and focus on the growth impacts, based on what you've seen so far with raw materials, would you expect an incremental headwind in 2022 of a similar magnitude of what you see in 2021, or less, or more? That's, again, excluding recoveries. On the magnesium side, it's obviously an important development. Can you just remind us where your exposure is there? Yeah. We are not giving any forecast on and details around 2022 here today. I think, first of all, we need to get through Q4 and come to the next earnings call before we start to talk about that. Of course, the current visibility is not helping in that regard either. We will have to come back on that question later on. The question on the exposure on magnesium, it's predominantly in our steering wheel business. Thank you. The next question is by Hampus Engellau, Handelsbanken. The line is now open for you. Thank you very much. Sorry for coming back on magnesium, would it be possible to maybe add some flavor on risk you see in magnesium shortage given what we're seeing in China? Or is it just a price situation for you guys? That's my first question. Second question is related, if you could also maybe discuss on order intake. I know you want to provide maybe a market share, maybe you could indicate on how things are trending on the orders and your long-term target of having a 45% market share in retail sales. Those are my question. Thank you. Thank you, Hampus. On the magnesium side, I would say so far for us, it's more a question of price. I think it, of course, depends on how the situation in mainly China develops. We all know that the reason why we have price increases in magnesium is that they have reduced production in China as a result of power shortage there in the near term. That is, of course, a topic that we are following very closely to see what alternatives we have, and I would say that right now, I feel that in terms of availability, we have that under control as it looks right now. That's something we follow closely. On the order intake side, as we indicated here, we continue to see a strong new order intake, and it adds to our order book and supports our expected market shares that we have talked about before, around 45%. Good support for that for years to come here. Super. Just one follow-up, maybe you can't answer this, but it would just be interesting to know how crucial magnesium is in the steering wheel business, or could you change that for another metal in the design of the steering wheel? It's crucial. Of course, that is a part of the main structure of the steering wheel. There is alternatives. You don't change alternative materials overnight. There is a lot of requirements to do that together with our customers. That's not a short-term option, really, especially under current circumstances. As I said, we are not there. Fair enough. It's not a concern today. Fair enough. Thank you. The next question is by Colin Langan, Wells Fargo. The line is now also open for you. Thanks for taking my question. The decremental margins on your guidance cut are sort of in the low 20% range, which is actually significantly better than some other suppliers that have recently cut. They've indicated sort of volatility in schedules have made it tough to flex labor. Is that just not structurally an issue for you, or are there other cost savings that are offsetting that? It does seem to be a much better performance. No, I think it's an equally large problem for us. If you look at the development here in the second, the third quarter, where we've had the sequential declining volumes. Also there, if you exclude the raw material cost impact, we've been here in the mid-20% decremental margin range. I think that's also what we then see, as you say yourself here, for the full-year with the guidance that we've now updated here. If you exclude the raw material cost impact. Okay, got it. Then there's been some headlines about recalls around airbags. It doesn't look like there's a charge, so I assume you haven't been directly impacted. Is that impacting the competitive landscape at all? I think in the past, sometimes you've actually had opportunities to sort of help with the recall needs. Is anything changing there? Some of the numbers that are being investigated seem quite large. I think it depends on which recall you refer to. We are connected to one, but we are providing the complete module, but we are not providing the inflator. It's an inflator that is sourced from ZF, and this is connected to the Volvo recall. The net effect of insurance and ZF liabilities here in that recall, we expect no material impact from that. If in the larger scope here of other types of recall with other makes and manufacturers, we don't expect to see any volume impact for us in that then, I would say neutral there. Okay. All right. Thanks for taking my questions. Thank you. The next question is by Agnieszka Vilela, Nordea. The line is now open for you. Thank you. My first question is about the capacity alignment actions that you have now in the U.S. and Europe. Could you please elaborate what you are doing there? Is there any cost or cost savings associated with these actions? The activity that was recorded now in the third quarter, the $4 million net, is related to an initiative in the Americas. We're talking about roughly 100 head count that we are adjusting, and that will all come through here in the fourth quarter. What we're referring to then in terms of the other ongoing activities is the continuation or the finalization of the structural efficiency program number two, which is over 90% completed. There is still a small part left to be concluded here in Europe during the fourth quarter. Also the ongoing footprint activities also in Europe related to Germany and Sweden that we are referring to. As we said, we also continue to evaluate further footprint activities and actions, and then we would communicate them as the time would be appropriate. Perfect. To that point, aren't you afraid that you might maybe be more, or it would be more difficult for you to ramp up the production if we see the recovery in the global car production if you're doing these kind of actions? No, I think the footprint adjustment that Fredrik refers to is, I would say, a combination of short-term needs together with the long-term productivity effort that we are driving. On top of that, we are then doing more short-term initiatives resulting in reduction in headcount and also stoppage days in our plants to offset the, I would say, both the volatility and the lower volumes, and that we believe we can quickly ramp up. We are not taking out any capacity that would limit us from ramping up. It's more effectively usage there that we are working on. We don't see that risk. Yeah. Perfect. Thank you. My second question is about the discussions that you're having with the OEMs about getting compensated for the canceled volumes. How are these discussions proceeding, or do you expect any compensation? Yeah, it is part of larger negotiations that are ongoing. It's of course, raw material is the main component that we are discussing. Also due to the past behavior of the OEMs with keeping call-offs at high levels and then at very short term, canceling them and reducing them quite substantially, we are now discussing then compensation for that. It's not only related to the inefficiencies in production, but also in terms of inventory carrying costs and so on. We have to see how much of that will be successful. It is, as I said, part of larger negotiations that tend to happen towards the end of the year with the customers. It is definitely something that we will seek compensation for here. Perfect. Thank you. The next question is by Erik Golrang, SEB. The line is now open for you. Thanks. Most of my questions have been answered. I'll ask another one on raw material, perhaps a bit differently on in 2022. I appreciate the color you're giving there on expecting more compensation. On a net basis, do you still see a drag from raw materials even with that, or is it now a positive based on that compensation? I think first of all, we have to see how it plays out in 2022 here. As Fredrik said here, there is a discussion ongoing for the current situation. It depends also on how the raw material or the cost development overall will be in a more, let's say, medium to long-term development here. Of course, that's a different discussion that is needed with the customer if that would be a more long-term scenario with significant higher raw materials. I think basically we have to come back to that as we see how it develops here in the next quarters. Of course. Okay it's Thanks. One more specific question on magnesium. Maybe I remember this wrong, but there was a similar situation a number of years back, and if I recall correctly, getting compensation for magnesium was actually a bit more straightforward to you because it was very specific in what components it was and how much it was. Is that a fair recollection of history, or is that just something I'm I don't think you can generalize like that on specifically magnesium here. Of course, what it's about, I would say, is if it's a structural change to the cost in its nature, meaning that it's more long-term, and it's also more critical component in our products, it has a different magnitude in the dialogue than maybe other raw materials and so on. Yeah. It's very difficult to generalize like that. It is case by case with customer by customer situation. Okay. Thank you. The next question is by Joseph Spak, RBC Capital Markets. Thank you very much. The decremental margins quarter-over-quarter were a little bit worse this quarter versus last quarter. I think that probably speaks to some of the volatility you were talking about. As we look at what's implied for fourth quarter sequential over third quarter, again, you're pointing to some improvement here. It's like 15%, which I think is below, historically, what you convert on the upside. Is that sort of the right level we should think about here in the very near term while a lot of this uncertainty remains in the schedules even into the early part of 2022? No, man, the one seasonality factor that we have in the fourth quarter, if you want to look at it sequentially, is that we typically have a higher engineering income in the fourth quarter. That then, of course, impacts that sequential calculation that you just made or referred to. On the other hand, as we are guiding for, we do expect a more significant headwind from raw material price increases in the fourth quarter versus the third quarter. Overall, also sequential volume improvement or also LVP improvement, that should help sequentially. I think those are the main components that you need to consider. Okay. I guess what I'm asking is, even if volume is higher, given there's still a lot of volatility in the schedules, should we expect that you, on your conversion on volume, would be a little bit below what you sort of aim for over the midterm because of that volatility? No, as we say, we expect that the visibility remains low also into the fourth quarter, and that volatility will most likely remain at that similar level. We don't expect any significant change. Okay. The second question is, just on the volume planning based on customer behaviors that you've seen over the past couple of quarters, I think you just sort of alluded, you mentioned you're not adjusting capacity. Would that at all hinder your ability to ramp up faster if your customers decide to do so? Is there enough flexibility in the planning that you'd be able to accommodate customer requests? No, of course. It's a part of the exercise here to make sure that we can flex up when needed. When we talk about here is really about optimizing our own production schedule based on the, let's call it, the net volume over certain time periods here, so we are more effective in that. We can have some stock dates and so on, and run more stable the other days and so on. It's more to optimize our own production schedule based on the experience that we have here now from the volatile call-off situation here. We're looking back and base our forward-looking on that. Thank you for that. The next question is by Mattias Holmberg, DNB. The line is yours. Thank you. One question left from me. If we take a step back and try to look at the bigger picture, in particular on your medium-term targets, I'm just trying to understand if there's anything in the current situation with the short-term volatility that impacts your trajectory or your ability to reach these targets. We're one year further down the road now, and the years of the medium term are starting to get closer. I'm just trying to get your thinking on what's needed in order to get to that level. I think the way we see it here is that we are holding on to all the improvement initiatives that we have lined up to get towards our target, and that is paying off. We see positive results yielding from those activities. I would say that goes on at the same time we manage the short term. We believe also there that as we have stated here in our report here, is that we assume also that the volumes normalize, meaning the LVP volumes normalize in the years to come here. It's true we're one year down the road, but there is still a number of years left within this time horizon where the expectation would be that we have less volatility and I would say also more normalized level of absolute number of vehicles being produced. The combination there makes us, I would say, comfortable in stating that we believe in the targets there could be kept. Absolutely. Great. Thank you. The next question is by Brian Johnson, Barclays. Yeah. Couple questions. First, I just want to, as we think through modeling decrementals with the production volatility, can you help us understand which of your product lines, whether airbags, steering wheels, is fungible and you can kind of keep the factories running smoothly and just send the trucks to different factories? How that feeds through to kind of decremental margins? I'm not sure I really followed your question there. Are you asking for more flavor on how the different product lines are being impacted by the volatility or Yes. How that translates into your overall decrementals. Yeah. I think, we are not breaking it down by product line, as you know. I wouldn't say that one product line is easier than another or one is worse than the other here. I think it's the same challenges here to manage the volatility in the production. Of course, if you go down into certain processes, it may look different here because some is more optimized than others, where you, of course, in an optimized production level, can have maybe more inventory and smoothing it out in that way. I think you can see that also that we have higher inventory as a result of the volatility. I wouldn't point out a specific product line here compared to another in this regard. Okay. Second question is on chips. First, are the chips used in your restraint control systems at all tied up in the whole global chip shortage? Secondly, while I'm talking about chips, would you have any interest in the restraint control electronics business of your former subsidiary? On your last question, I can answer first and say that's nothing we are entertaining. It's not of our interest to look at that. We spun it off a number of years ago, and we spun it off for a reason, and that is still valid. On where we're using our semiconductors, it's for, I would say, most of our product lines here and to various extent. We are not sourcing semiconductors directly ourselves. It's through various Tier 2 suppliers. Of course, we are working very closely with them to support them in the effort of securing semiconductors, and we also have, of course, direct contact with semiconductor suppliers here in that work. So far, I think we have worked very well together to secure semiconductors for our own value chain, and we have been able to deliver to our customers what we have committed to deliver to them there. Good job from our supply chain team here. Okay. Thank you. The next question is by Rod Lache, Wolfe. The line is now open for you. Thanks. I was hoping just to follow up with two points of clarification. People have asked about this. The decremental margins of 25% are quite good, just considering the production volatility. At some point, that volatility will diminish, and you're going to see some increases in production. Would it be reasonable to expect that your incrementals would be better when that happens? Do you have any estimate of what that volatility is costing you? Secondly, there is a lot of scrutiny that's being applied to the inflators of your competitors still, including non-Takata inflators, and I think you referenced the Volvo recall, where that's actually a ZF inflator. Just how are your customers thinking about this, and why wouldn't Autoliv gain in some way from what's happening around you? Maybe I can start to answer the second question, and Fredrik take the first there. I don't comment our competition situation here. Our focus is to always have quality on top of our focus list, so to speak, and we are securing that with our efforts here. We, of course, work with our customers and support them whenever needed. With quality, we believe that proven quality to our customer is the best way to look at business opportunities in the future. On the decremental margin, what we want to highlight is that we have maintained a very strong cost and capital discipline also throughout this year. As we indicated, if you look at our headcount development, down 4,500 since Q1, a further reduction by 2,500 also during the third quarter. I think that shows how disciplined we have been or how focused we have been on this. You also see the SG&A cost coming down sequentially. That is also together with what we do on production overhead is also then the effect of the structural efficiency programs that we implemented and get the benefit from. I think those are the main components of the decremental margin so far, again, if you exclude the raw material headwinds. On the incremental side, of course, we want to achieve then as high a margin as possible going into the volume recovery once that starts to kick in. How that plays out for the next year, we will have to come back to that when we talk about the 2022 guidance. As we also laid out here, we expect then a meaningful progression towards the midterm target as we should then pull through on that incremental volume. Fair enough. Great execution. Thank you. Thanks. As a reminder, if you want to ask a question, please press zero and one. There are no further questions until hand back. Thank you, Martin. While we cannot control short-term market headwinds, we focus on what we can control, including keeping each other safe. Our progress make us confident in our journey towards our targets and our opportunities for shareholder value creation. Our fourth quarter earnings call is scheduled for Friday, 28th January 2022. Thank you, everyone, for participating in today's call. We sincerely appreciate your continued interest in Autoliv. Hope to see you again in November. Until then, stay safe.