Autoliv (ALIV) a maker of auto airbags and seat belts, cited “retroactive compensation” as a reason its operating margin improved sequentially despite rising costs. The company established new increased pricing with customers. In many cases, the new pricing is retroactive and covers costs incurred in earlier periods. In all,

Autoliv says it recovered approximately $30 million related to cost increases from earlier periods. The price recoupment is 24.19% of Autoliv’s operating income in the quarter. Notably, the company isn’t finished recovering costs from prior periods. On the latest earnings call, CEO Mikael Bratt suggested additional recoupments will occur in the second half. It’s one reason the company raised guidance:

Autoliv supplies the major automakers. Though it did not name the automakers that paid retroactively, Autoliv does break out organic growth by customer. In the quarter, Autoliv specifically cited Ford (F), Stellantis (STLA), and Volkswagen (VWAPY) as its main growth drivers.

Conversely, Autoliv named Honda (HMC), General Motors (GM), Toyota (T), Mitsubishi (MSBHF), Volvo (VLVLY), and Nissan (NSANY) as its main growth decline drivers.