Financial Report October - December 2016
Record sales for the quarter and the full year, continued strong order intake
(Stockholm, February 2, 2017) – – – Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the worldwide leader in automotive safety systems – reported record consolidated sales of $10,074 million in 2016 and the Company increased its R,D&E efforts for future growth while indicating 2017 adjusted operating margin in line with its long term target range.
For the three-month period ended December 31, 2016, the Company reported record sales of $2,604 million. Quarterly organic sales* grew by 1.1% (for non-U.S. GAAP measures see enclosed reconciliation tables). The fourth quarter of 2016 included approximately three less working days compared to 2015, decreasing the year-over-year organic growth* by around 5pp. On an equivalent basis the organic growth* was around 6%. Operating margin was 9.2%. The adjusted operating margin* was 9.3%. The expectation at the beginning of the quarter was for quarterly organic sales to be “flat” and an adjusted operating margin of “more than 9%”.
For the first quarter of 2017, the Company expects organic sales to increase by more than 3% and an adjusted operating margin of around 8%. The expectation for the full year is for organic sales growth of around 4% and an adjusted operating margin of around 8.5%. R,D&E investments, net is expected to be at the high end of the 6.5-7.0% of sales range, a significant year-over-year increase. (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 fourth quarter developed largely in line with our expectations. I am particularly pleased with our growth in Asia, where we, for the first time, recorded sales above $1 billion for a quarter.
Regionally, the light vehicle production in China grew by almost 15% in the quarter and we grew particularly well with the domestic OEMs. For the full year, our organic growth* in China was in line with the strong light vehicle production growth. North American light vehicle production grew modestly in the quarter, while our growth was hampered by lower sales of replacement inflators and an unfavorable model mix. European light vehicle production continued to grow from a high level.
In active safety, we are pleased that we recorded double digit sales growth in the quarter for our core products radar and vision, although this was offset by declines in sales of non-core products. The strength of our offering in active safety was reflected in that both our order intake and win rate for active safety products increased substantially for the full year. We are also pleased that we won an Autoliv software based vision contract with a new Europe-based premium OEM. By signing a definitive agreement to form the joint venture Zenuity with Volvo Cars, we are creating a solid platform for developing software for autonomous driving and driver assistance systems. Autoliv-Nissin Brake Systems is expanding its customer base, winning a $1.1 billion total contract value for our new braking system with a Detroit-based OEM on a major platform.
Passive Safety recorded its highest order intake ever in 2016, winning about 50% of available order value for the second consecutive year. We remain confident that we are on the right path to surpass our $12 billion corporate sales target for 2019.
We are pleased that we in 2016 were able to manage unprecedented order intake levels that generate high levels of investments and costs for growth, and still deliver a strong cash flow and an adjusted operating margin within our long term target range. We continue to monitor the overall macro- and industry situation and we are ready to take necessary actions while focusing on executing on our growth strategy with continued quality focus.”
An earnings conference call will be held at 3:00 p.m. (CET) today, February 2. 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.