Autoliv, Inc. · NYSE:ALV

Autoliv — Q3 2009 Earnings Presentation

23 slides from Autoliv's earnings presentation, Oct 21, 2009

  1. Slide 1: Autoliv Financial Earnings Q3-2009

    Autoliv Financial Earnings Q3-2009 Jan Carlson, CEO October 21, 2009 Copyright Autoliv Inc., All Rights Reserved

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement * This report contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). All such statements are based upon our current expectations and various assumptions, and app

  3. Slide 3: Q3'09 Overview

    Q3’09 Overview EBIT margin ahead of revised guidance Exceptional cash flow continues Strong margin recovery in 2H’09 (MUS$) 2009 2008 Sales $1,326 $1,545 Gross margin 18.0% 16.9% EBIT (**) $74 $91 EPS (***) $0.36 $0.76 Free Cash Flow (*) $101 $31 (*) After CapEx, net (**) Non-US GAAP, including rest

  4. Slide 4: Cash Flow

    Cash Flow* (MUS$) 2009 2008 LTM** 2008 2007 2006 Q3 Q3 Net Income 34 34 (89) 172 296 423 Depreciation & Amortization 78 86 318 347 321 303 Other non-cash items (4) (11) 44 22 (5) (9) Change in operating WC 17 (7) 158 73 169 (157) Cash from operations 125 102 431 614 781 560 CapEx, net (24) (71) (166

  5. Slide 5: Light Vehicle Production - 3rd Quarter

    Light Vehicle Production - 3rd Quarter Units in millions 2009 ** 2009 2008 Chg vs. ‘08 North America 2.2 2.4 3.0 (21%) - Domestic * 1.2 1.3 1.7 (23%) - New Domestic 1.0 1.1 1.3 (18%) ~(13%) Europe 4.4 4.3 4.9 (12%) - WEU 3.1 3.1 3.3 (6%) - EEU 1.3 1.2 1.6 (24%) Japan 1.9 2.0 2.7 (25%) Total Triad 8.

  6. Slide 6: Autoliv Production - 3rd Quarter

    Autoliv Production - 3rd Quarter Units in Millions 2009 Chg vs. ’08 Seatbelts 23.5 (11%) - Pretensioners (where of) 8.6 (17%) Frontal airbags (excl. knee) 5.0 (5%) Side Airbags - Chest (Thorax) 5.1 2% - Head (Curtain) 5.2 (5%) Steering Wheels 2.0 (14%) Electronic Control Units 1.8 (10%) - LVP* TRIAD

  7. Slide 7: Gross Margin

    Gross Margin 25.0 20.2 19.7 19.1 19.4 20.0 18.0 16.9 15.0 10.0 Q3 ‘09 vs. ‘08 Sales effect (190 bps) Commodity 190 bps 5.0 Labor savings 160 bps Other (net) (50 bps) Gross margin effect 110 bps 0.0 % 2004 2005 2006 2007 2008 2009 YoY improvement despite 12% lower organic sales ALV Q3 Earnings Teleco

  8. Slide 8: Operating Margin

    Operating Margin - strong recovery despite 12% lower organic sales 10.0 7.5 7.5 7.2 7.1 5.9 6.0 5.6 2.0 -2.0 2004 2005 2006 ** 2007 2008* 2009* Q3 ‘09 vs. ‘08 % Gross profit 70 bps Sales leverage effect (150 bps) -6.0 RDE & SGA savings 160 bps Other (net) 20 bps Engineering income (130 bps) TOTAL (3

  9. Slide 9: Cash Flow from Operations

    Cash Flow from Operations $ million 350 300 250 200 150 100 Before Capex 50 After Capex 0 -50 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 -100 ALV Q3 Earnings Teleconference October 20, 2009 - 9 Copyright Autoliv Inc., All Rights Reserved

  10. Slide 10: Action Program & Other Actions - Summary

    Action Program & Other Actions - Summary 2008 2009 MUS $ (unless otherwise specified) Plan Actual Q3 Q3YTD Cost $75 $74 $14 $62 Cash outlay $18 $18 $60 Savings $120 ~ $29 ~ $65 ~ $190 whereof margin improving ~ $40 ~ $90 Cum People affected, net 3,000 ~ 5,900 ~(2,800) ~ 7,200 Accelerate material ini

  11. Slide 11: Headcount reductions by Category

    Headcount reductions by Category* From Q2’08 to Q3’09 TOTAL Q3 0 Temporaries (1,107) + 2,087 -2,000 -4,000 -6,000 -8,000 Employees (6,061) + 736 0 -2,000 Indirect Labor (2,622) (164) -4,000 -6,000 -8,000 -10,000 Direct Labor (4,546) + 2,987 0 LCC (2,359) + 2,371 -2,000 -4,000 HCC (4,809) + 452 -6,00

  12. Slide 12: Commodity Price Trends

    Commodity Price* Trends Steel Index (MEPS) Aluminum (LME) 300 3500 250 3000 2500 200 USD/tonne 2000 Index 150 1500 100 1000 50 500 0 0 Jan/04 Jan/05 Jan/06 Jan/07 Jan/08 Jan/09 Jan/05 Jan/06 Jan/07 Jan/08 Jan/09 Zinc (LME) Commodity (2009) Q1 Q2 Q3 Q4(F) FY’09 5000 4500 Steel 7 3 (17) (20) (27) 4000

  13. Slide 13: Financial Position

    Financial Position - Net Debt to Capitalization 27% 45 40 35 30 25 20 Internal Debt Policy 15 LTM Q3 Policy 10 Leverage Ratio 3.4 1.6 < 3 times Interest Coverage (0.7) 3.7 > 2.75 times 5 0 % 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 No financial covenants on debt ALV Q3 Earnings Telecon

  14. Slide 14: ~31% Net debt reduction since Q3'08

    ~ 31% Net debt reduction since Q3’08 - 43% excluding share purchase contract 1 400 Net Debt Share Purchase Contract 1 200 1 000 800 600 400 200 0 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Net debt at lowest level since 2005 ALV Q3 Earnings Teleconference October 20, 2009 - 14 Copyright Autoliv Inc., All Rights

  15. Slide 15: 2H09 – Key Platforms in China

    2H09 – Key Platforms in China Great Wall Coolbear Skoda Superb Buick Lacrosse Nissan Bluebird Suzuki Alto Volvo S80 Sylphy Chevrolet Cruze VW Golf Citroen C4 Sedan ALV Q3 Earnings Teleconference October 20, 2009 - 15 Copyright Autoliv Inc., All Rights Reserved

  16. Slide 16: US Light Vehicle Inventory

    US Light Vehicle Inventory 120 100 80 60 40 20 2009 2008 5 Yr Avg 0 Days Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 56 days on hand at Q3’09 ~ 1.7M vehicles * Includes both Domestically Manufactured and Imported Vehicles ALV Q3 Earnings Teleconference October 20, 2009 - 16 Copyright Autoliv Inc

  17. Slide 17: European Light Vehicle Sales

    European Light Vehicle Sales September +6.3%, YTD -6.6% ALV Q3 Earnings Teleconference October 20, 2009 - 17 Copyright Autoliv Inc., All Rights Reserved

  18. Slide 18: Light Vehicle Production - 4th Quarter Outlook

    Light Vehicle Production - 4th Quarter Outlook Units in millions 2009 2008 Chg North America 2.7 2.7 2% - Domestic (*) 1.5 1.6 (4%) - New Domestic 1.2 1.1 10% ~ 4% Europe 4.4 4.0 7% - WEU 3.0 2.8 7% - EEU 1.4 1.2 7% Japan 2.2 2.4 (8%) Total Triad 9.3 9.1 2% Rest of World 6.3 5.0 27% Total Global 15.

  19. Slide 19: Light Vehicle Production - Full Year

    Light Vehicle Production - Full Year Units in Millions 2007 2008 2009 B/(W) ’08 North America 15.1 12.6 8.5 (32%) - Domestic * 9.5 7.5 4.7 (37%) - New Domestic 5.6 5.1 3.8 (25%) ~ (25%) Europe 22.1 20.9 16.6 (21%) - WEU 16.1 14.6 11.8 (19%) - EEU 6.0 6.3 4.8 (24%) Japan 10.8 10.7 7.4 (31%) Total Tri

  20. Slide 20: Financial Outlook

    Financial Outlook Sales Q4 2009 FY2009 Organic > 10% ~ 5% better than the LVP in NAFTA & WEU Fx ~ 13% ~ (4%) Consolidated ~ 25% ~ (25%) EBIT Margin * ≥ 7% > 2% Slightly positive EBIT including restructuring (*) Excludes Restructuring Action Program costs and potential customer defaults, % of sales &

  21. Slide 21: Leverage Ratio – Returning to Compliance

    Leverage Ratio – Returning to Compliance Per Policy (LTM) Per Quarter 6 6 5 5 4 4 3 3 2 2 1 1 0 0 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 Net Debt/EBITDA Net Debt/EBITDA* Policy max. * Excluding severance & restructuring ALV Q3 Earnings Teleconference October

  22. Slide 22: Interest Coverage Ratio – Returning to Compliance

    Interest Coverage Ratio – Returning to Compliance Per Policy (LTM) Per Quarter 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 -1 -1 -2 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 -2 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 Interest Coverage Interest Coverage* Policy min. * Excluding severance & restructuring ALV Q3

  23. Slide 23: Thank you!

    Thank you! Autoliv Every year, Autoliv’s products save over 20,000 lives The Worldwide leader in Automotive Safety Systems Driven for life ALV Q3 Earnings Teleconference October 20, 2009 - 27 Copyright Autoliv Inc., All Rights Reserved

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