Autoliv, Inc. · NYSE:ALV
Autoliv — JP Morgan Virtual Auto Conference 2020
21 slides from Autoliv's conference presentation, Aug 12, 2020
Slide 1: Saving More Lives
Saving More Lives Mikael Bratt- President and CEO JP Morgan Virtual Auto Conference 2020 August 12, 2020 Autoliv
Slide 2: Forward-looking statements
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 that Autoliv, Inc. or it
Slide 3: Q2 2020 Sales and Operating Cash Flow Highlights
Sales US$ (Millions) ▪ Global Light vehicle production (LVP) fell by 45% -48%*** − April virtually at a standstill in Europe and Americas 8.5% Adj. Op. Margin* Sales outperformed LVP** − Slow and volatile restart and ramp-up creates efficiency challenges $2,155 in all major regions − China LVP almos
Slide 4: LVP YoY change per month
LVP YoY change per month China Europe North America 20% Q2´20: 0% 6.9% -20% -40% -60% Q2´20: Q2´20: -61% -70% -80% -100% April´20 May´20 June´20
Slide 5: Sales Bridge Regional Organic Growth vs. LVP
Sales Bridge Regional Organic Growth** vs. LVP* US$ (Millions) -51% EUROPE JAPAN -48% Org. growth** CHINA AMERICAS REST OF ASIA (*) Light Vehicle Production (LVP) according to IHS @ July, 2020 (**) Non-US GAAP measure
Slide 6: Q2'20 Results vs Q2'19
(US $ Millions unless specified) Q2’20 Q2’19 Sales $1,048 $2,155 Gross Profit $14 1.4% $400 18.6% Adj. Operating Income1 -$171 -16.4% $183 8.5% EPS (assuming dilution) -$2.00 $1.25 Adj. RoCE1,2 -18% 20% Adj. RoE1,2 -24% 24% Adj. Operating cash flow4 -$128 $182 Dividend paid per share - $0.62 Global
Slide 7: Organic Sales Decline
Organic Sales* Decline Jan´20 Feb´20 Mar´20 April´20 May´20 June´20 0% -10% Q1´20: -13% -20% -30% -40% Q2´20: -50% -48% -60% -70% (*) Non-US GAAP measure
Slide 8: Cost structure: variable, semi-fixed and fixed costs
Variable and Semi-variable costs Historical ▪ Direct material Q2´20 ▪ Direct labor ▪ Freight costs Semi-fixed costs ▪ Fixed Salaries, travel expenses ▪ Consultant costs ▪ Legal fees ▪ Other net external expenses Fixed costs ▪ Rent buildings, machines & office ▪ Insurance, Property tax ▪ IT ▪ Depreci
Slide 9: Organic Sales Decline and Results drivers
Organic Sales Decline* Results drivers - Neg April´20 May´20 June´20 • Volume & productivity -$380 million 0% • Direct COVID-19 -$9 million -10% -20% + Pos • Raw material $6 million -30% • FX $5 million -40% Q2´20: -50% -48% • RD&E/SG&A $23 million -60% -70% (*) Non-US GAAP measure excludes costs fo
Slide 10: Capex and D&A
Capex and D&A (US$ Millions unless specified) Q2’20 Q2’19 LTM 2019 Net Income -174 109 143 463 Depreciation & Amortization 87 86 350 351 EC antitrust payment - -203 - -203 Other, net -85 4 -84 -17 Change in operating WC* 44 -17 127 47 Cash Conversion** Operating cash flow -128 -21 535 641 Operating
Slide 11: Net Debt/EBITDA
Net Debt/ EBITDA* x $2,000 3.0 $1,500 2.9x 2.5 $1,000 2.0 $500 1.5 Q1´19 Q2´19 Q3´19 Q4´19 Q1´20 Q2´20 0.5-1.5x Net Debt EBITDA Long-Term Target: 1.0x 1.0 Long-Term Range 0.5 ▪ Our Net Debt* increased by $208M from Q1’20 0.0 ▪ EBITDA LTM decreased by $350M from Q1’20 Q2'17 Q2'18 Q2'19 Q2´20 (*) Auto
Slide 12: Debt Maturities end of Q2'20
Debt Maturities end of Q2´20* % of ~$3 billion total debt • Significant liquidity cushion with $1.7 billion in ~27% in the next 3 years cash and unutilized credit facilities at June 30 2020 • Entered into a new lending facility of ~$0.6 billion 7% 2021 with the Swedish Export Credit 9% after 2024 •
Slide 13: Light Vehicle Sales and Global Light Vehicle Production LTM
Light Vehicle Sales LTM Global light vehicle production LTM**according to IHS (Million units) (Million units) 100 90 80 70 60 50 40 (*) Source: CAAM, Wards Auto, ACEA etc.., (**) Light Vehicle Production (LVP) according to IHS @ July, 2020
Slide 14: COVID-19 Business Impact on H2'20 Adj. operating margin
“ rating margin* ID-19 Business Impact on H2’ 20 Adj. ope COVID- vs. H2°19 Tailwinds . Executing from stro " Structural Efficienc Ng order book y Programs inds from COVID-19 "predictable Lyp . Raw materials . Strategic initiatives (*) Non-US GAAP measure Autoliv
Slide 15: Creating Value for Shareholders
Creating Value for Shareholders =~ — Profitability Cash Flow Improvement and Generation Focus Over-the-Cycle for Shareholder Resilience Returns Visible Short-term Strong Balance Sheet and Prudent Leverage Policy and Long-Term Growth vs. LVP Autoliv
Slide 16: Crisis Management, The New Normal, Strategic Plan
Current Crisis Management Ongoing cost reduction activities to offset near-term COVID-19 effects The New Normal Adapting to new normal medium-term market Strategic Plan outlined in 2019 Executing on strong order book Implementing Strategic Initiatives Stabilization of market fundamentals
Slide 17: Employee Health, Capital Management, Margin Focus
▪ Health of our Employees − Implementing policies to protect employees − Raise awareness of well-being protocols and helpful practices ▪ Capital Management − Capital expenditures delays − Close monitoring of receivables and inventories − Tight collaboration with suppliers ▪ Margin Focus − Further al
Slide 18: Structural Efficiency Program
FY2019 FY2020 FY2020 FY2021 Expected for program Cost $52M $0 Cost ~$65M $0M ~$65M Cash out $29M ~$23M Cash out ~$15M ~$50M ~$65M Headcount ~450 ~350 Headcount ~745 ~185 ~930 reduction reduction Savings ~$10M ~$50M Savings ~$10M ~$45M ~$65M annually ▪ Almost fully implemented ▪ Substantially complet
Slide 19: Automation, Supply Chain, RD&E Effectiveness
▪ Automation, Digitalization & Modularization ▪ Supply Chain Management Effectiveness ▪ RD&E Effectiveness ALV – JP Morgan Virtual Auto Conference 2020 Copyright Autoliv Inc., All Rights Reserved Public Aug 12, 2020
Slide 20: We are all-in on taking Autoliv to the next level
We are all-in on taking Autoliv to the next level
Slide 21: Each year, Autoliv's products save over 30,000 lives
Each year, Autoliv’s products save over 30,000 lives autoliv.com