Autoliv, Inc. · NYSE:ALV
Autoliv — SEB Nordic Seminar January 2019
30 slides from Autoliv's conference presentation, January 2019
Slide 1: Autoliv – SEB Nordic Seminar January 2019
1st Autoliv SEB Nordic Seminar January 2019 Anders Trapp VP IR 1 Copyright Autoliv Inc., All Rights Reserved Copyright Autoliv Inc., All Rights Reserved
Slide 2: Safe Harbor Statement
Safe Harbor Statement* This presentation contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments t
Slide 3: Uniquely Positioned to Save More Lives
Uniquely Positioned to Save More Lives Continuous innovation to reduce Focus on Real Life Safety global traffic fatalities More sophisticated safety solutions for future autonomous and electric vehicles 3 Copyright Autoliv Inc., All Rights Reserved
Slide 4: Significant traffic safety improvement potential
Significant traffic safety improvement potential Road Fatalities by Country 130.1 per 100,000 vehicles 104.5 74.6 57.5 25.6 12.9 4.7 5.3 6.8 6.5 7.3 7.6 Sweden Spain Germany Japan Italy France USA South Brazil Thailand China India Korea Sources: WHO Global Status Report on Road Safety 2015 Published
Slide 5: Autoliv – 65 years of Dedication to Saving Lives
Autoliv – 65 years of Dedication to Saving Lives Entering the next phase Autoliv Lindblads becomes a Period of First Night Vision ̶ Autoservice Acquired by subsidiary of acquisitions and First Knee First Inflatable the start of Active AB is founded First subsidiary Gränges Weda Electrolux joint vent
Slide 6: Autoliv 2018 Key Events
Autoliv 2018 Key Events Autoliv and Veoneer separated to pursue respective growth opportunities ▪ New executive management team from April ▪ Veoneer spin-off in July − Improved focus for both companies (culture, people, business) − Improved flexibility for both companies (culture, people, business)
Slide 7: Autoliv Today is Stronger Than Ever
Autoliv Today is Stronger Than Ever MARKET SHARE ORDER INTAKE SALES ADJ. OPERATING INCOME(1) 38% >50% $8.1 Bn $899 Mn worldwide, clear #1 of global orders 2017A 2017A (11% margin) OPERATIONS IN DAILY PRODUCTION EMPLOYEES FREE CASH FLOW(2) 27 ~1 Mn >66,000 $403 Mn countries units worldwide 2017A (70%
Slide 8: Autoliv Key Targets
Autoliv Key Targets as published at CMD on November 14, 2017 >$10 Bn Revenue ~13% Adj. Operating Margin* ~1.0x Net Debt/ EBITDA 2020 2020 Over Time (*) Non-US GAAP measure excludes costs related to Antitrust matters, Leverage Ratio and Net Debt includes Pension Liability. The forward looking non-U.S
Slide 9: Our Statement of Commitment
Our Statement of Commitment Autoliv’s business is Innovate Life- Commit to guided by our vision of Saving Products our Employees Saving More Lives. By staying at the forefront We are committed to of technology, innovating respecting human rights, Each year, our products and manufacturing high divers
Slide 10: Sustainability Strategy
Sustainability Strategy Our Priorities ✓ Saving more lives – innovation & product quality ✓ Health & Safety - zero accidents ✓ Increase resource efficiency and reduce carbon footprint ✓ Prevent corruption and anti-competitive behavior ✓ Manage the sustainability risks in our supply chain 10 Copyrigh
Slide 11: Strong market position & potential
Strong market position & potential 11 Copyright Autoliv Inc., All Rights Reserved
Slide 12: Autoliv – The Global Automotive Safety Champion
Autoliv – The Global Automotive Safety Champion Only Three Players of Scale Firm Leader at 38% Market Share – Far Exceeding Competitors(1) #1 Rankings Across Product Portfolio(1) 2017A, % 2017A 38% Frontal Airbags Side Airbags Autoliv Comp. 1 30% 48% Comp. 2 Comp. 3 Comp. 4 Seatbelts Steering Wheels
Slide 13: Well-Balanced Customer Base
Well-Balanced Customer Base Significant Presence in High-Growth Markets Serving All Major OEMs… …Across All Key Automotive Regions % of 2017A Revenue(1) % of 2017A Revenue(1) 15% 5% 10% 4% Rest of Europe Asia Asia 33% 9% 4% 37% Japan 10% 10% 9% 2% China 7% 2% 17% 7% 2% 7% 2% 6% Others 9% Americas 30
Slide 14: Highest Reliability and Industry-Leading Quality Standards
Highest Reliability and Industry-Leading Quality Standards “Zero Defects by Flawless Execution” Relentless Focus on Quality Through Q5 Program… …& Minimal Recalls Share of Global Recalls since 2010(2) Design Robust Products Buy Flawless Components Manufacture Flawless Products Verify Product Conform
Slide 15: Content per Vehicle Growth Propelled by Emerging Markets
Content per Vehicle Growth Propelled by Emerging Markets Safety System Penetration Correlates to GDP/ Capita Gap to Developed Markets Expected to Close as Emerging Markets Mature… Passive Safety Content per Vehicle(1) vs. Economic Development 400 North America 300 South Content per Vehicle ($) Korea
Slide 16: Future Mobility Provides New Opportunities
Future Mobility Provides New Opportunities More Advanced Safety Solutions in Future Car New Seating Concept Examples 16 Copyright Autoliv Inc., All Rights Reserved
Slide 17: Order intake and market share opportunities
Order intake and market share opportunities Order Intake Tailwind Driving Sales Growth and Market Share Gains Strong Order Momentum… … bringing Broad Market Share by Brand Origin Improvement Order Intake Share; 2014A-17A % 2017A 2020E >50% ~50% ~50% ~37% 2014A 2015A 2016A 2017A Chinese S. Korean Eur
Slide 18: Strong Balance Sheet and Prudent Financial Policy
Strong Balance Sheet and Prudent Financial Policy Committed to Maintain “Strong Investment Grade” Rating Supported by High FCF Conversion Net Debt/ EBITDA(1) x ✓ Provided $1B of cash liquidity for Veoneer at time of spin-off 2.0 ‒ Mix of new debt and existing cash 1.6 ✓ S&P long-term credit rating A
Slide 19: 3rd Quarter 2018 Financial Results
1st 3rd Quarter 2018 Financial Results 19 Copyright Autoliv Inc., All Rights Reserved Copyright Autoliv Inc., All Rights Reserved
Slide 20: Q3'18 Financial Overview
Q3´18 Financial Overview (US $ Millions unless specified) Q3’18 Q3’17 Sales $2,033 $1,953 Gross Profit $386 19.0% $395 20.2% Operating Income* $194 9.5% $205 10.5% EPS (assuming dilution) $1.34 $1.21 RoCE** 20.4% n/a RoE** 23.2% n/a Operating cash flow $238 $218 Dividend per share $0.62 $0.60 GLVP**
Slide 21: Financial Outlook from October 26, 2018
Financial Outlook from October 26, 2018 Consolidated sales, net and operating margin* FY’18 Sales Organic* ~6% Fx** ~2% Consolidated Sales, net ~8% Operating Margin* ~10.5% Exchange rates** FY’18 EUR / US$ 1,1858 US$ / JPY 110,31 US$ / KRW 1103 US$ / MXN 18,98 US$ / CNY 6,61 (*) Non-US GAAP measures
Slide 22: Light vehicle markets
Light vehicle markets 22 Copyright Autoliv Inc., All Rights Reserved
Slide 23: Light Vehicle Sales
Light Vehicle Sales 23 Copyright Autoliv Inc., All Rights Reserved
Slide 24: Light Vehicle Inventories, US and China
Light Vehicle Inventories, US and China US light vehicle inventories China light vehicle inventories 4.5 140 Month-End Inventory 2017 Inventory 2018 Inventory 4.0 Month-End Days' Supply 120 3 3.5 Millions of Light Vehicles 100 2.25 3.0 2 1.92 1.93 1.88 1.92 2.5 80 1.75 1.79 1.82 Days 1.601.59 1.63 1
Slide 25: China Vehicles production and sales
China Vehicles production and sales Total Vehicles 3600 Production 60% 50% 3000 40% 30% 2400 20% 10% 1800 0% Thousand 1200 -10% -20% 600 -30% -40% 0 -50% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 Monthly 2366 2154 2599 2135 2078 2165 2056 2092 2669 2600 3084 2018 Monthly 2688 1706 2628 23
Slide 26: Trends for FY 2018 LVP forecasts acc to IHS
Trends for FY 2018 LVP forecasts acc to IHS mn Light Vehicle Production forecast 2018 China mn Light Vehicle Production forecast 2018 Western Europe 27.5 15.2 -2.7% vs 2017 -3.3% vs 2017 15 27 14.8 26.5 14.6 14.4 26 14.2 25.5 14 13.8 25 Source: IHS Sep 2017 Dec 2017 Mar 2018 Jun 2018 Sep 2018 Dec 20
Slide 27: Light Vehicle Production forecasts
Light Vehicle Production forecasts LVP growth, year over year 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Western Europe North America China World -1.0% -2.0% -3.0% -4.0% Source: IHS, Dec 14, 2018 2018E 2019E 2020E 27 Copyright Autoliv Inc., All Rights Reserved
Slide 28: Each year, Autoliv's products save over 30,000 lives
Each year, Autoliv’s products save over 30,000 lives autoliv.com
Slide 29: Update U.S. and Mexico NAFTA negotiations
Update U.S. and Mexico NAFTA negotiations ▪ Some of the issues that were negotiated, according to the US: − increase the percentage from 62.5% to 75% of a car that must be sourced from a NAFTA nation to move freely across the borders. − A threshold for the amount of manufacturing that must be perfor
Slide 30: U.S. and China Trade
U.S. and China Trade ▪ 301 relates to intellectual property protection and the US would impose tariffs of autos and auto part imports from China. China has already imposed tariffs on US auto and auto parts imports. − Under this section, the impact to ALV comes indirectly from the vehicle unit volume