Veoneer has announced first quarter financial results which it said were “in line with internal expectations despite supply chain challenges”.

Sales rose 17% year on year to US$419m but operating cash flow was negative $110m.

Outlook  for the full year was unchanged from Q4, 2020 with sales growth expected to exceed 25%.

The operating loss is expected to improve in 2021 from 2020 as order intake this year is expected to increase.

The supplier said sales outperformed global light vehicle production by 4% in Q1 2021 and it expects outperformance in the “mid-teens” for the full year.

It added semiconductor supply shortages had created “industry delivery and cost challenges”.

There were significant regional mix shifts in LVP during the quarter with weaker North America and Europe offset by a stronger China.

Jan Carlson, chairman, president and CEO, said: “Disruptions from semiconductor shortages, and our continued build up for growth, added extra costs which we were able to offset by efficiencies.

“We took a cautious view to the LVP in the beginning of the quarter which proved to be basically correct. While global growth was only slightly lower than the 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’ 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.”

“We anticipate disruptions will continue during the second quarter and then gradually decrease, we therefore foresee the positive effects on our operating [results] from our sales growth mainly taking effect in the second half of the year.”