Financial Report October - December 2014
Strong EPS growth and improved operating margin
(Stockholm, January 29, 2015) – – – For the three-month period ended December 31, 2014, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the worldwide leader in automotive safety systems – reported consolidated sales of $2,354 million. Quarterly organic sales* (for non-U.S. GAAP measures see enclosed reconciliation table) grew by more than 5%. The adjusted operating margin* was 10.1%.
The expectation at the beginning of the quarter was for organic sales growth of “around 2%” and an adjusted operating margin of “around 9.5%”. The higher than expected sales growth came mainly from strong sales in Europe and North America.
For the first quarter of 2015, the Company expects organic sales to increase by around 3%, and an adjusted operating margin of around 8%. The expectation for the full year is for organic sales growth of more than 6%, and an adjusted operating margin of around 9.5%.
For Key Figures summary table, please refer to attached file below.
Comments from Jan Carlson, Chairman, President & CEO
“We ended 2014 with a quarter in which sales growth as well as operating margin exceeded our expectations. For the full year Autoliv returned a record $811 million to our shareholders through dividends and buy backs. In our active safety business we achieved 45% organic* growth for the year. I am proud of what our 60,000 employees achieved together in 2014.
As of January 1, 2015 we have changed our operating structure and will have two reporting segments – Passive Safety and Electronics. By integrating our passive electronics and active safety businesses into a new segment we take the next step in the company’s development in the broader area of electronics.
Our long-term target is to reach $2 billion in Electronics sales for 2019, out of which around $1 billion will be active safety sales. The trend in the automotive industry towards automation, and ultimately autonomous driving, is stronger than ever and we strive to create long-term growth and value in this developing field. In support of our strategy we will further increase investments in research and development for electronics and plan to hire up to 300 electronics engineers during the year.
In 2015 we anticipate an expansion in overall operating margin despite record investments in both capital and R&D. This is made possible by our continued market leadership in passive safety. Our full year growth rate for active safety will be affected by the fact that new launches will mainly come in the later part of 2015. Our electronics margin is negatively affected by the stronger dollar.
The unprecedented number of recalls during 2014 shows that our strategy of being the quality leader in all aspects of our business is the right and only choice. Related to the situation with airbag inflators in our industry we now have agreements with several OEMs for new supply capacity and are in discussions for more. We see this as a vote of confidence from our customers for our quality track record and reliable inflator technology.
We enter 2015 with a relentless focus on quality. For the year we see good growth prospects together with continued investments in support of our long-term strategy, as well as improving margins.”
An earnings conference call will be held at 2:00 p.m. (CET) today, January 29. 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.