Financial Report April – June 2018
Step-up in growth for a more focused Autoliv
(Stockholm, Sweden, July 27, 2018) – For the three-month period ended June 30, 2018, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb), the worldwide leader in automotive safety systems, reported consolidated sales growth of 11.5% to $2,212 million for Continuing Operations. Quarterly organic sales* grew by 7.3%. Significant geographic organic growth* contributors were China with 18% and Americas with 13%. Seatbelts grew organically* by 11% and airbags by 6%. The reported operating margin was 10.4%. The adjusted operating margin* was 10.4% (for non-U.S. GAAP measures see enclosed reconciliation tables).
For the full year 2018, the indication is for organic sales to increase by around 8% and an adjusted operating margin of more than 11%. (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).
All the results herein present the performance of Autoliv giving effect to the Veoneer, Inc. spin-off, Autoliv’s former Electronics segment. Historical financial results of Veoneer are reflected as discontinued operations, with the exception of cash flows, which are presented on a consolidated basis of both continuing and discontinued operations and net income attributable to a controlling interest (Consolidated Autoliv). The restated historical financial statements reflecting the Veoneer spin-off are unaudited, but have been derived from Autoliv’s historical audited annual reports.
|(Dollars in millions, except per share data)||Q2 2018||Q2 2017||Change|
|Net sales Continuing Operations||$2,211.5||$1,983.9||11.5%|
|Operating income Continuing Operations||$229.1||$219.8||4.2%|
|Operating margin Continuing Operations||10.4%||11.1%||(0.7)pp|
|Adjusted operating margin Continuing Operations 1)||10.4%||10.9%||(0.5)pp|
|Earnings per share Continuing Operations, diluted 2, 3)||$2.20||$1.54||42.9%|
|Adjusted earnings per share Continuing Operations, diluted 1, 2, 3)||$2.22||$1.50||48.0%|
|Operating cash flow on a consolidated basis||$47.4||$179.4||(73.6)%|
|1) Excluding costs for capacity alignments and antitrust related matters. 2) Assuming dilution and net of treasury shares. 3) Participating share awards with right to receive dividend equivalents are (under the two class method) excluded from the EPS calculation.|
Comments from Mikael Bratt, President & CEO
“With the Veoneer spin-off executed successfully, the Autoliv team is now fully focused on our occupant safety products, managing the product launches and delivering value to our stakeholders.
Built on previous years’ strong order intake, the second quarter marked the step-up in organic growth that we have been anticipating. The number of product launches in the second quarter of 2018 increased by 72% compared to a year earlier. In the quarter, the growth markets, China, India, ASEAN and South America, made up 60% of the organic growth*, taking their share of sales from 21% to 24%, with China leading the way by growing organically* by 18%. North America grew by close to 12% organically*.
The product launches are on track, with some delays in ramp-up of certain models and at a somewhat elevated level of launch costs. We had some headwinds from raw material pricing and currency movements in the second quarter, which limited the positive effects from the strong sales growth. Our 2018 full year indication and continued strong order intake supports that we are on track towards our 2020 targets, and we are fully focused on delivering more than $10 billion in sales and around 13% adjusted operating margin in 2020.
Favorable industry fundamentals continued to drive higher global automotive demand and production in the quarter. We carefully monitor the development of issues fundamental to our business such as possible NAFTA renegotiations and various trade barriers on raw materials and automotive products.
With a never-ending focus on quality, innovation and operational excellence, we continue to execute on our growing business volumes and new opportunities in a more focused Autoliv.”
An earnings conference call will be held at 2:00 p.m. (CET) today, July 27. 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.
Inquiries: Investors and Analysts
Vice President Investor Relations
Tel +46 (0)8 58 72 06 71
Director Investor Relations
Tel +46 (0)8 58 72 06 14
Acting Vice President Communications
Tel +46 (0)8 58 72 06 50
This information is information that Autoliv, Inc. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on July 27, 2018.