Financial Report January – March 2017
Record sales, exceeding margin and growth guidance, (Stockholm, Sweden, April 28, 2017) – For the three-month period ended March 31, 2017, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb), the worldwide leader in automotive safety systems, reported record consolidated sales of $2,608 million. Quarterly organic sales* grew by 4.4%. The reported operating margin was 8.3% while the adjusted operating margin* was 8.4% (for non-U.S. GAAP measures see enclosed reconciliation tables).
The expectation at the beginning of the quarter was for quarterly organic sales to increase by “more than 3%” and an adjusted operating margin of “around 8%”.
For the second quarter of 2017, the Company expects organic sales to increase by around 2% and an adjusted operating margin of around 8.5%. The expectation for the full year remains unchanged with an organic sales growth of around 4% and an adjusted operating margin of around 8.5%. (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 first quarter developed slightly better than expected, with organic sales growth* and adjusted operating margin* both exceeding our expectations from the beginning of the quarter.
In Passive Safety, I am pleased that our share of order intake continued at a high level, further strengthening our future market share and growth expectations. The passive safety industry situation is unchanged from last year and we continue to focus on flawless execution on our high order intake. We continue our engineering efforts but are gradually shifting to a production focus as we prepare to execute on the historically high order intake. Despite the short term strain on the organization in preparing for these deliveries, Passive Safety reached double digit operating margin in the quarter.
In Electronics, we won active safety orders with three OEMs in the quarter, taking the order total for the past twelve months to eight orders with five different OEMs. I am also pleased to say that Autoliv is the main supplier of active safety products to the new Mercedes S-class and that the European premium OEM order win we announced in February is with Volvo Cars. This order means that Autoliv will supply active safety products, including radar and vision algorithms.
We continue to invest in competence and capacity for the future. We have now recruited 982 of the 1,000 engineers we said we intended to recruit between July 2016 and June 2017. About half are in Passive Safety and half in Electronics.
In April, we announced the start of operations for Zenuity, our joint venture with Volvo Cars and platform for developing software for autonomous driving and driver assistance. We already see considerable interest from several OEMs. The Zenuity initiative is part of the journey towards autonomous driving, which requires the fusion of a multitude of technologies and competences, which in turn requires a multitude of co-operations, alliances and other partnerships.
Light vehicle production grew by almost 6% in the quarter, with growth in all regions. However, we currently see some uncertainties relating to light vehicle production growth, including high inventory levels and slower sales momentum, especially in North America and China. We continue to monitor the situation closely and are prepared to take necessary actions.
With quality as our first priority, we continue to execute on our growth and margin opportunities while staying focused on saving more lives and creating value for our stakeholders.”
An earnings conference call will be held at 2:00 p.m. (CET) today, April 28. 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.