Financial Report July – September 2018
Continued sales growth momentum
(Stockholm, Sweden, October 26, 2018) – For the three-month period ended September 30, 2018, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb), the worldwide leader in automotive safety systems, reported consolidated sales growth of 4.1% to $2,033 million. Quarterly organic sales* grew by 6.4%, mainly driven by 22% organic sales growth* in Americas. Airbags sales grew organically* by 8% and seatbelts sales grew organically* by 3%. Both the reported and adjusted* operating margin was 9.5%. (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 6% and the adjusted operating margin to be around 10.5%. (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).
The results herein present the performance of Autoliv giving effect to the spin-off of Veoneer, Inc. (“Veoneer”), Autoliv’s former Electronics segment, on June 29, 2018. 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 information reflecting the spin-off are unaudited, but have been derived from Autoliv’s historical audited annual reports.
|(Dollars in millions, except per share data)||Q3 2018||Q3 2017||Change|
|Net sales Continuing Operations||$2,033.0||$1,952.6||4.1%|
|Operating income Continuing Operations||$192.5||$167.2||15.1%|
|Operating margin Continuing Operations||9.5%||8.6%||0.9pp|
|Adjusted operating margin Continuing Operations 1)||9.5%||10.5%||(1.0)pp|
|Earnings per share Continuing Operations, diluted 2, 3)||$1.34||$1.21||10.7%|
|Adjusted earnings per share Continuing Operations, diluted 1, 2, 3)||$1.35||$1.64||(17.7)%|
|Operating cash flow on a consolidated basis||$238.2||$217.9||9.3%|
|1) Excluding costs for capacity alignments, antitrust related matters and separation of our business segments. 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
“Our growth momentum continued in the third quarter. Driven mainly by a large number of product launches in North America, our sales grew organically* by more than 6% despite the decrease in light vehicle production of about 2% according to IHS. We were able to grow faster than light vehicle production in all regions except Rest of Asia, with North America as the main driver with 22% organic* sales growth. The launches are on schedule, with good delivery precision albeit with continued elevated launch related costs, temporarily impacting our profitability progression negatively.
I am pleased that our order intake continued on a high level in the quarter, supporting our growth opportunities for the longer term. Our operating cash flow was solid in the quarter, supporting our full year indication of an operating cash flow for Continuing Operations to be on a similar level as last year.
In the third quarter our industry experienced significant changes in light vehicle production, especially in Europe impacted by WLTP, and in China due to lower consumer demand. As a result, our supply chain, production and logistic systems had to manage significant and late changes to OEM production plans with corresponding uneven utilization of our supply chain, production and logistics assets while at the same time focusing on the many launches and high growth in North America. We see a similar environment for the rest of the year, with continued uncertainty for light vehicle production, especially in China and Europe, with continued uneven asset utilization. We are implementing actions to manage these challenges and we look forward to a gradual improvement in operating leverage over time.
With a never-ending focus on quality and operational excellence, we continue to execute on our growing business volumes and our new opportunities, with extra attention to any changes in light vehicle demand.”
An earnings conference call will be held at 2:00 p.m. (CET) today, October 26. 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 October 26, 2018.