Autoliv, Inc. · NYSE:ALV
Autoliv — Morgan Stanley Industrial & Autos Conference 2012
30 slides from Autoliv's conference presentation, Sep 13, 2012
Slide 1: Morgan Stanley Industrial & Autos Conference
Morgan Stanley Industrial & Autos Conference NYC Ray Pekar – Director IR & Business Development September 13, 2012 Driven for Life © Autoliv Inc., All Rights Reserved Safe Harbor Statement * This report contains statements that are not historical facts but rather forward-looking statements within th
Slide 2: Autoliv in Brief; The Road to Success
Autoliv in Brief Sales and technology leader RoW Japan Europe Sales LTM: US $8.3 billion 8% 11% Fortune 500 company 35% China 11% Sales to all major vehicle 35% manufacturers ~ 80 facilities in 29 countries Americas 11 technical centers in 9 countries and 21 crash test tracks ~ 50,000 associates whe
Slide 3: Highlights; Dividend Trend
Highlights - Executing on our growth and operational strategies Q2 Organic Sales & Margin slightly better than expected • Strong cash flow and return on investment • Record dividend payment Underlying Market Uncertainty • LV registrations & production continue to be weak in Europe • Progress on capa
Slide 4: 2012 Outlook Highlights; Our Response to the Uncertain Macro Situation
2012 Outlook Highlights - 2nd Half Growth YoY organic sales growth ~ 6 % vs. LVP ~ 1% • strong growth in China and Active Safety along with new model launches Lower organic sales growth ~ $90M from earlier guidance • 2pp lower LVP than previous guidance mainly in WEU and RoA Margins* Implied operati
Slide 5: Investments for Growth are Paying Off: China
Investments for Growth are Paying Off - China 2013F – Market Share* % Autoliv 1,400 14 38 1,200 12 LVP ~ 19M 62 1,000 10 M illio n s U S D Sales % of total sales 800 8 600 6 400 4 2011 – Market Share* % 200 2 Autoliv 0 0 34 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F LVP ~16M 6
Slide 6: Investments for Growth are Paying Off: Active Safety
Investments for Growth are Paying Off - Active Safety 2.0 60 Active Safety Sensors Night Vision - Units (million) 50 Automatic Animal Detection No. of vehicle models 40 1.0 30 20 Brake Controls - Integration with Airbag ECU 10 0.0 0 2009 2010 2011 2012F 300 Stereo Vision - Active Safety Sales Target
Slide 7: Financial Outlook; ALV Strategy
Financial Outlook Q3 2012 FY2012 Sales Organic nearly 4% ~6% Acquisitions ~ (0.5%) ~ (0.5%) Fx** (6%) (4%) Consolidated Sales ~ (3%) ~ 1% EBIT Margin * ~ 10% ~ 10% (*) Excludes legal costs & other charges related to the on-going anti-trust investigations and alignment costs (**) 1 Euro = 1.22 US$, 1
Slide 8: Brake and Restraints Controls Integration; Radar Sensor Strategy
Brake and Restraints Controls Integration Current System Integrated System Brake Brake Electronic Hydraulic Controls & Algorithms Passive One Central Controller Safety Improved Cost, Reliability & Controller Performance ALV Post Q2’12 Financial Earnings Report - 15 Autoliv Radar Sensor Strategy Comm
Slide 9: Autoliv's Camera-based Vision System; Night Vision
Autoliv’s Camera-based Vision System BMW 1- and 3-series Introduction September 2011 ALV Post Q2’12 Financial Earnings Report - 17 Autoliv Night Vision - Animal Detection Innovation Detects and warns for deer crossing the road at night
Slide 10: BMW Dynamic Light Spot
BMW Dynamic Light Spot • Autoliv’s Night Vision technology detects pedestrians and directs a “spotlight” on them BMW Dynamic Light Spot
Slide 11: Autoliv in Summary; Thank you
Autoliv in Summary Sustainable growth Among industry leading margins and ROCE Solid balance sheet and strong cash flow Long-term strong returns to shareholders Basis for a sound investment ALV Post Q2’12 Financial Earnings Report - 21 Thank you! Autoliv - Safety Systems Active Autoliv Safety Every y
Slide 12: Q2 Financial Overview; New Technology Launches
Q2 Financial Overview - Record Q2 Sales and DPS (US $ Mil’s unless specified) 2012 2011 Sales $2,089 $2,061 Gross Profit $422 20.2% $422 20.5% EBIT * $196 9.4% $208 10.1% EPS * (assuming dilution) $1.39 $1.56 RoCE * 23% 25% RoE * 15% 19% Operating Cash flow $219 $132 DPS ** $0.47 $0.43 GLVP *** (ann
Slide 13: Cash Flow; Net Free Cash Flow Returns
Cash Flow - High CapEx and RD&E Spend to Support Growth (US $ Mil’s unless specified) Q2 Q2 LTM FY FY FY 2012 2011 ** 2011 2010 2009 Net Income 126 146 526 627 596 13 Depreciation & Amortization 69 66 273 268 282 314 Other non-cash items 19 14 46 38 58 (42) Change in operating WC 5 (94) (43) (175) (
Slide 14: Light Vehicle Production Q2; Autoliv Production
Light Vehicle Production - 2nd Quarter 2012 2011 2012 vs. 2011 ALV Q2’12 Vehicles in millions @ Jul 17 @ Apr 18 Org. Growth Americas 5.0 4.2 18% 16% 19% - North America 4.0 3.1 27% 21% - South America 1.0 1.1 (9%) 4% Europe 4.9 5.3 (7%) (9%) (8%) - WEU 3.2 3.6 (10%) (10%) - EEU 1.7 1.7 (1%) (8%) Jap
Slide 15: Commodity Price Trends; Raw Materials Cost Breakdown
Commodity Price Trends - Increasing raw material costs Steel Index Y-o-Y Chg. Q1 Q2 Q3F Q4F FY12F Steel 6 2 (1) (3) 4 Non-Ferrous 0 (1) (1) (1) (3) Plastic & Yarn 9 2 0 (1) 10 Other 0 (1) 0 1 0 Total (MUSD) 15 2 (2) (4) 11 YoY commodity increase expected to be ~ $11M for FY2012 ALV Post Q2’12 Financ
Slide 16: H1 Financial Overview; Autoliv Production
H1 Financial Overview - Record Sales and DPS (US $ Mil’s unless specified) 2012 2011 Sales $4,268 $4,170 Gross Profit $863 20.2% $888 21.3% EBIT * $413 9.7% $465 11.2% EPS * (assuming dilution) $2.95 $3.52 RoCE * 25% 29% RoE * 16% 21% Operating Cash flow $317 $273 DPS ** $0.92 $0.83 GLVP *** (annual
Slide 17: YoY Change in Organic Sales and LVP; Light Vehicle Production H1
YoY Change in Organic Sales and LVP* Change in ALV organic sales Change in GLOBAL LVP* 60 40 % 20 0 Q4 Q2 Q4 Q2 Q4 Q2 H2'12F 2009 2010 2010 2011 2011 2012 Tsunami Out-performance bounce back (*) Light Vehicle Production ALV Post Q2’12 Financial Earnings Report - 33 Light Vehicle Production - 1st Hal
Slide 18: 2012 Outlook Highlights; Light Vehicle Production Q3
2012 Outlook Highlights - 3rd Quarter Growth YoY organic sales growth nearly 4% • strong growth in China and Active Safety partially offset by an organic sales decline in EU • important platform launches Margins* ~ 10% operating margin • sequentially better utilization in China and RD&E (net) Return
Slide 19: Light Vehicle Production 2nd Half; Major Launches during 2012
Light Vehicle Production - 2nd Half 2012 2011 2012 vs. 2011 ALV H2’12 Vehicles in millions @ Jul 17 @ Apr 18 Org. Growth Americas 9.4 8.8 8% 7% - North America 7.0 6.7 6% 6% - South America 2.4 2.1 13% 12% Europe 8.8 9.5 (7%) (4%) - WEU 5.8 6.4 (9%) (5%) - EEU 3.0 3.1 (3%) (2%) Japan 4.4 4.6 (4%) (7
Slide 20: Light Vehicle Production FY 2012
Light Vehicle Production FY 2012 2012 vs. 2011 ALV FY12 Vehicles in millions @ Aug 18 @ Jul 17 @ Apr 18 @ Jan 18 Org. Growth 2012 Americas 19.3 11% 11% 10% 6% - North America 14.9 14% 14% 12% 6% - South America 4.4 2% 3% 6% 7% Europe 18.9 (6%) (6%) (6%) (8%) - WEU 12.4 (8%) (8%) (7%) (7%) - EEU 6.5
Slide 21: China Passenger Vehicle Sales; US Light Vehicle Inventory
China Passenger Vehicle Sales China Passenger Car Sales 1,400 2010 2011 1,200 1,000 2012 000's of Passenger Cars 800 600 400 200 0 Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Data source: China Auto ALV Post Q2’12 Financial Earnings Report - 41 US Light Vehicle Inventory Data source: JD Powers
Slide 22: LTM SAAR EU vs. US; European Light Vehicle Sales by Country
LTM SAAR EU vs. US LTM SAAR EU vs. US 18 16 14 EU US Millions of Light Vehicles 12 10 8 6 4 2 0 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Data source: IHS ALV Post Q2’12 Financial Earnings Report - 43 European Light Vehicle sales
Slide 23: Technology Leadership; Sales by Customer 2011
Technology Leadership 8% of all automotive industry safety patents 2011 Mono Vision System 2010 Locking Tongue 2009 2nd generation Active Seatbelts 2008 Integrated Safety Electronics, Pedestrian Detection System 2007 Multi Volume Cushion 2006 Safety Vent Bag 2005 Night Vision System, Pedestrian Hood
Slide 24: Product Sales; Autoliv Production Volumes 2011
Product Sales - In 2012H1 Passive and Active Electronics ~ 13% Seatbelts Airbags St. Wheels 2012H1 $4.3B 2011 $8.2B Other Passive Elec. Active Elec. 11% 2% 9% 2% 2% 2% 32% 7% 32% 8% 45% 46% In 2012 FAB ~ 16% and SAB ~ 28% of Airbags ALV Post Q2’12 Financial Earnings Report - 47 Autoliv Production Vo
Slide 25: Best Selling Platforms FY2011; Major Occupant Restraint Suppliers
Best selling platforms FY2011 - Diversified platform mix Ford Focus / C-Max BMW 5 Series Mercedes E-Class VW Golf Renault Mégane GM Delta Ford Escape GM Theta GM T900 ALV Post Q2’12 Financial Earnings Report - 49 Major Occupant Restraint Suppliers - Net Sales Development 9,000 US$ (million) 6,000 **
Slide 26: Market Shares 2011
Market Shares 2011 - Global Safety Market Share by Product 1 1 Passive Safety 1 ~ 36% 1 1 1 Active Safety ~ 20% 1 Autoliv’s Share ALV Post Q2’12 Financial Earnings Report - 51 Market Shares 2011 - Global Passive Safety Market by Region 1 1 1 1 1 Autoliv’s share ALV Post Q2’12 Financial Earnings Repo
Slide 27: Light Vehicle Growth; Automotive Safety Market by Product Line
Light Vehicle Growth - Growing with the right products for the right region 105.0 ~ 98M 90.0 ~ 79M ~ 75M Growth Markets 75.0 ~ 69M 58 Rest of World & 60.0 42 Eastern Europe 27 40 Developed Markets 45.0 11 8 Japan 30.0 8 9 15 16 Western Europe ~42M 14 ~34M 13 ~37M ~40M 15.0 15 15 18 North America 13
Slide 28: Content per Vehicle; Content per Vehicle Trends
Content per Vehicle* - Passive and Active Safety Triad ** Avg. Other markets *** 400 300 USD 200 100 0 2006 2007 2008 2009 2010 2011 * Seatbelts, Airbags, related Electronics and Active Safety Sensors ** TRIAD (Western Europe, Japan, North America) *** RoW (Eastern Europe, Rest of Asia, South Americ
Slide 29: Margin Performance; Returns Performance
Margin* Performance 25.0 22.9 Gross Margin 20.5 19.5 20.2 20.0 15.6 15.0 ** 9.4 10.0 12.7 10.0 9.0 5.0 7.8 Operating Margin % 0.0 2008 2009 2010 2011 2012 (5.0) (1.0) (10.0) (15.0) Strong long-term margins (*) US GAAP, (**) Non US GAAP excludes costs related to capacity alignment and the anti-trust
Slide 30: Cost Structure; Capital Structure
Cost Structure - % of sales 7.4 EBIT * 10.8 11.4 Other 10.2 4.7 Depreciation & Amortization 3.3 Major Major Fixed Costs 15.8 13.9 Fixed Costs 20.5 % Indirect labor 17.2 % 8.1 9.6 Direct labor Value Add 26.3 Major 30.7 Major Direct Costs Direct Costs 60.7 % 61.8 % Raw Material 27.4 20.4 2007 2011 Low
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