Financial Report April - June 2016
More than 12% total sales growth, meeting margin guidance
(Stockholm, July 22, 2016) – – – For the three-month period ended June 30, 2016, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the worldwide leader in automotive safety systems – reported consolidated sales of $2,579 million. Quarterly organic sales* grew by 7.7%. The operating margin was 8.2% and the adjusted operating margin* was 8.6% (for non-U.S. GAAP measures see enclosed reconciliation tables).
The expectation at the beginning of the quarter was for organic sales growth of “around 10%” and an adjusted operating margin of “around 8.5%”.
For the third quarter of 2016, the Company expects organic sales to increase by around 6% and an adjusted operating margin of around 7.5%. The expectation for the full year is for organic sales growth of around 7% and an adjusted operating margin of more than 8.5%. The margin revisions are mainly related to costs for stronger than expected order intake. (See the “Outlook” section on the next page for further discussion of organic sales and adjusted operating margin, which are forward-looking non-U.S. GAAP measures).
For Key Figures summary table, please refer to attached file below.
Comments from Jan Carlson, Chairman, President & CEO
"The transformation of Autoliv continues and in the first six months of 2016 we saw continued strong order intake, which is likely to continue. This is a positive development for our future growth and our current long-term outlook now shows that we should surpass our end of decade sales target of 12 billion US dollars.
As preparation for the delivery of our products begins two to three years before start of production and as future growth is accelerating, we have added close to 400 engineering resources during the second quarter. In order to be able to capture the future growth opportunities and maintain our focus on “quality first in everything we do”, we are in addition planning to add more than 1,000 engineering resources in the next twelve months.
Besides the strong developments in passive safety we also saw several positive developments in our electronics business. We secured important customer wins, Autoliv-Nissin Brake Systems had a solid start in its first quarter of operations and in active safety we grew 30% organically.
I am pleased that we are able to capture significant future business and balance further investments for growth with healthy full year operating margins within our long-term target range of 8-9%, while also delivering on our quarterly margin guidance despite slightly lower than expected organic growth, mainly from a lower global light vehicle production.
During the quarter, one of our customers experienced a quality related recall issue with one of our products and we are still investigating the cause. Quality is our first priority and we are working with our customer to resolve this issue in the best possible manner.
We continue 2016 with a clear focus on execution. Quality first, the robustness of our products and focus on operations are more important than ever as we deal with accelerating future business volumes.”
An earnings conference call will be held at 2:00 p.m. (CET) today, July 22. To follow the webcast or to obtain the pin code and phone number, please access www.autoliv.com. The conference slides will be available on our web site as soon as possible following the publication of this earnings report.