Autoliv, Inc. · NYSE:ALV

Autoliv — Barclays Industrial Select Conference 2016

40 slides from Autoliv's conference presentation, Feb 18, 2016

  1. Slide 1: Barclays Industrial Select Conference

    Barclays Industrial Select Conference Miami Beach, FL Jan Carlson – Chairman, President & CEO February 18, 2016 Saving More Lives Copyright Autoliv Inc., All Rights Reserved

  2. 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

  3. Slide 3: Saving Lives and Creating Value

    Saving Lives and Creating Value Customers Owners & Business Creditors Partners VA L U E Family & Employees Society ALV Q1’16 Investor Meetings - 3 Copyright Autoliv Inc., All Rights Reserved

  4. Slide 4: It starts with me

    It starts with me ALV Q1’16 Investor Meetings - 4 Copyright Autoliv Inc., All Rights Reserved

  5. Slide 5: Industry Pioneer with Strong Heritage

    Industry Pioneer with Strong Heritage More than 60 years of innovation in Automotive Safety MECHANICAL PYROTECHNICAL ELECTRONICS DIGITAL 1950s 1980s 1990s 2000s 2010s ALV Q1’16 Investor Meetings - 5 Copyright Autoliv Inc., All Rights Reserved

  6. Slide 6: Autoliv Today

    Autoliv Today* A global leader in Automotive Safety with a well-balanced footprint RoA Japan 10% Seatbelts 28% 7% 31% Europe China 17% 55% Airbags 7% Active Safety 10% 35% Passive Electronics Americas ~64,000 associates 80 facilities in 18 technical 20 crash (~6,000 R,D&E) 28 countries centers test

  7. Slide 7: Our Guiding Principles: Saving more lives

    Our Guiding Principles OUR VISION OUR MISSION OUR VALUES Saving To be the One Autoliv leading supplier more of Safety Systems Transparent lives for the Future Car, Innovative well integrated Agile with Autonomous Driving ALV Q1’16 Investor Meetings - 7 Copyright Autoliv Inc., All Rights Reserved

  8. Slide 8: Our Strategy to Stay Ahead

    Our Strategy to Stay Ahead Relentless focus on Operational Excellence Zero Defects by flawless execution One Product One Process to improve cost effectiveness and robustness Innovation to lead industry in Real Life Safety ALV Q1’16 Investor Meetings - 8 Copyright Autoliv Inc., All Rights Reserved

  9. Slide 9: Our Strategy to Stay Ahead

    Our Strategy to Stay Ahead Quality is our first priority, in all we do Behavior Q5 is about Quality in all dimensions and is our journey towards “Zero Defects” ALV Q1’16 Investor Meetings - 9 Copyright Autoliv Inc., All Rights Reserved

  10. Slide 10: Our Strategy to Stay Ahead

    Our Strategy to Stay Ahead Invest for robust growth in our markets to deliver Real Life Safety 1,000 14% Autoliv ~1% 12% 800 10% 600 8% Share CAPEX 6% industry 400 recalls 4% 200 2% 0 0% 2004 2006 2008 2010 2012 2014 ALV Q1’16 Investor Meetings - 10 Copyright Autoliv Inc., All Rights Reserved

  11. Slide 11: Our Strategy to Stay Ahead

    Our Strategy to Stay Ahead A holistic approach to Automotive Safety Standardized Test Scenarios REAL LIFE SAFETY System Traffic Safety Integration Research Real Life Situations and Benefit Active Passive Technologies Technologies New requirements drive the market, from standard situations to “Real L

  12. Slide 12: Real Life Safety towards Autonomous Driving

    Real Life Safety towards Autonomous Driving Our current footprint within the pyramid Autonomous Recent JVs Driving and M&A Automated Route Automated Route Partners (Trained) (Destination) Automated Highway Automated City Automated Valet Evasive In house Driving Driving Parking Maneuvers AEB – Inters

  13. Slide 13: Industry Partners in Safety with Autoliv Products

    Industry Partners in Safety with Autoliv Products Mercedes E-Class Volvo S90  Active Safety  Airbags  Stereo & Mono Vision (Front camera)  Driver  Radar (77GHz) – 4 corners  Inflatable Curtain  ADAS ECU  Steering Wheel  Airbags  Seatbelts  Front Driver, Passenger, Knee  Front Active Seat

  14. Slide 14: Long-term Targets

    Long-term Targets Remain unchanged Organic* sales Operating margin* EPS* growth faster Net Debt*/EBITDA growth at least range 8-9% over than organic sales around one times in line with our the business growth (Debt Limitation market cycles Policy) …and faster than our …US GAAP excl. costs …US GAAP e

  15. Slide 15: End of Decade Targets

    End of Decade Targets CMD – October 2015  Changing industry landscape  Focus on Quality and Real Life Safety is our way to stay ahead  Long term Financial Targets remain unchanged  Strategic targets through end of decade: ‒ Sales target is $12B with an ambition to reach up to $15B ‒ Expand our p

  16. Slide 16: A Sound Investment

    A Sound Investment  Strong long-term top-line growth  Among industry leading margins and return on capital  Strong balance sheet and free cash flow generation over the cycles  Shareholder returns over time ALV Q1’16 Investor Meetings - 16 Copyright Autoliv Inc., All Rights Reserved

  17. Slide 17: Thank you

    Thank you Every year, Autoliv’s products save over 30,000 lives and prevent ten times as many severe injuries ALV Q1’16 Investor Meetings - 17 Copyright Autoliv Inc., All Rights Reserved

  18. Slide 18: Autoliv at the 2016 CES

    Autoliv at the 2016 Real Life Safety Demos Autoliv ADAS Content Demo’s included:  Mono vision based AEB,  Mono vs. Stereo Vision real life braking,  Radar based AEB,  Rear cross traffic alert and braking,  Night Vision (FIR) with various scenarios,  HMI Zforce intuitive steering wheel for AD,

  19. Slide 19: 2016 Car and Truck of the Year

    2016 Car and Truck of the Year Honda Civic and Volvo XC90 Autoliv Content:  Driver Airbag and Steering Wheel  Side Inflatable Curtain Airbag  Active Seatbelts with pretensioners  Electronic control unit and crash sensors  Battery Safety Switch Autoliv Content:  Active Safety - Radar (24 GHz) 

  20. Slide 20: Three pillars of Autoliv Electronics

    Three pillars of Autoliv Electronics M&A is strengthening our way to $3B Autoliv Electronics Passive Safety Electronics Active Safety Passive Safety Electronics ADAS Brake Control Systems 2014 approx. $1B 2014 approx. $500M 2016 approx. $600M* 2019 > $1B 2019 > $1B 2019 < $1B M&A MACOM JV with Nissi

  21. Slide 21: Evolving 5-Star NCAP Requirements

    Evolving 5-Star NCAP Requirements Real Life Safety will rely on more complex Sensor Fusion Solutions 2013 2014 2016 2018 2020 Market Intro Preferred Central ADAS ECU Autoliv 1st Market Intro Preferred Front Corner Radar Autoliv 1st AEB Mono AEB Radar 1 sensor Fusion Fusion Front Sensor Autoliv 1st r

  22. Slide 22: Active Safety Update

    Active Safety Update Expanding our portfolio for Real Life Safety  Launched 4 key new technologies 600 Active Safety Sales • Stereo and Mono Vision, Radar, ADAS ECU* on the (US $ Millions) new Mercedes E-Class 400  Customer launches during Q4’15 • Radar – Chevy Camaro and Malibu, Honda Elysion, 20

  23. Slide 23: China Market Uncertainty Continues

    China Market Uncertainty Continues Light vehicle growth is slowing  Market ALV OEM Sales in China 18 • LVP* growth ended very strong ~13% in Q4’15, 1,600 15 boosted by incentives and low interest rates 1,200 US $ Millions 12 % of ALV Sales • Inventory** at year end were at acceptable 9 800 levels 6

  24. Slide 24: Autoliv Inflators

    Autoliv Inflators an industry standard Inflator replacement program New Production Investment  Supply up to 20 million inflators  12 Inflator Lines and 4 Initiator Lines  Increase in new frontal airbag business awards  1 Spray Dryer and 5 Presses Global capability includes in-house production of

  25. Slide 25: Looking ahead – 2016

    Looking ahead – 2016* Executing towards our long-term plan  Growth and Margins • Organic sales* growth ~5%, ~2pp better than LVP** • Adjusted operating margin* >9%  Capital Structure • Strong balance sheet for an volatile, mixed and uncertain macro environment • Operating cash flow ~$0.8B, excludi

  26. Slide 26: Market Conditions

    Market Conditions Macro environment remains very mixed and uncertain  Asia FY’16 LVP * Vehicles (Mil’s) • Strong rebound in China sales** since Sept 2015, Region YoY Chg. China 24.0 +6% LVP* increase 5% for Q1’16 YoY Japan 8.7 +2% • Japan LVP roughly flat for Q1’16 YoY RoA 12.6 +2% • RoA LVP declin

  27. Slide 27: Light Vehicle Production - an early indication for FY'16

    Light Vehicle Production - an early indication for FY’16 Vehicles in millions Q1 Q2 Q3 Q4 FY’16 ’16 vs.’15 Americas 4.8 5.2 5.0 4.9 19.9 2% - North America 4.2 4.5 4.3 4.1 17.1 4% - South America 0.6 0.7 0.7 0.8 2.8 (9)% Europe 5.5 5.7 4.7 5.3 21.2 2% - WEU 3.8 3.9 3.2 3.6 14.5 2% - EEU 1.7 1.8 1.5

  28. Slide 28: Major Launches during 2016

    Major Launches during 2016 with our Passive and Active Safety Products Mercedes E-Class Honda Odyssey Audi A5 Honda CR-V Volvo S90 Hyundai Grandeur VW Tiguan Ford F-Series Super Duty Chrysler Pacifica Autoliv Electronics products on all of these models ALV Q1’16 Investor Meetings - 28 Copyright Auto

  29. Slide 29: Looking Forward – 2016

    Looking Forward – 2016* Key Assumptions  3 extra workings days in Q1’16, offset in Q4’16  ~1% lower organic growth due to 50% of 2016 inflator replacements delayed until 2017  Opportunity for additional inflator replacement volumes above 20M to could benefit 2017/18  RD&E, net in the high-end of

  30. Slide 30: Looking Ahead Q1'16 Guidance

    Looking Ahead Q1’16 Guidance*  Sales • YoY organic sales** increase >10% - Mainly related to strong growth in all major regions, Active Safety and the inflator replacement business • Sequential consolidated sales decline ~8% - Mainly due to the seasonality effects and lower inflator replacement bus

  31. Slide 31: Looking Ahead FY'16 Indication

    Looking Ahead FY’16 Indication*  Sales • YoY organic sales** increase ~5% - Mainly related to strong growth in Europe, China and Active Safety • YoY currency translation effect ~(3)% - Primarily due to the continued strengthening of the US$  Operating Margin** >9% • YoY - Positive effects from org

  32. Slide 32: Financial Outlook

    Financial Outlook* Q1’16 FY’16 Sales Organic** >10% ~5% Acquisitions / (Divestitures) <1% ~0.5% Fx*** >(4)% ~(3)% Consolidated Sales, net ~7% >2% Operating Margin** ~8.5% >9% Exchange rates*** Q1 2016 FY 2016 EUR / US$ 1.0873 1.0879 US$ / JPY 117.98 117.90 US$ / KRW 1208 1211 US$ / MXN 17.86 17.92 U

  33. Slide 33: Recap - 2015

    Recap - 2015 Executing towards our end of decade targets  Growth and Margins • Strong organic sales* growth 8%, >5 times better than LVP*, Active Safety ~31% • Adjusted operating margin* 9.7%, 60 bps better YoY with an adjusted EPS $6.65, increase YoY 12% • M&A including the Volvo IP*, MACOM automo

  34. Slide 34: Q4'15 Highlights

    Q4’15 Highlights Record sales and operating profit, better than expected  Financial Performance • Organic sales* growth 13.4%, ~9pp better than LVP** • Operating margin* 11.1%, ~1pp better YoY** • EPS* $2.08, ~15% better YoY** • Record operating cash flow $321M • RoCE* ~29%, RoE* ~21%  Shareholder

  35. Slide 35: Q4 Financial Overview

    Q4 Financial Overview Record financial performance in most measures (US$ Million’s unless specified) 2015 2014 Sales $2,520 $2,354 Gross Profit $521 20.7% $468 19.9% Operating Income* $279 11.1% $237 10.1% EPS* (assuming dilution) $2.08 $1.81 RoCE* 29% 26% RoE* 21% 18% Operating Cash flow $321 $229

  36. Slide 36: Strong Volume Growth

    Strong Volume Growth Unit growth exceeds LVP* in essentially all product areas Autoliv Quantities Delivered Q4’15 vs. PY (Millions unless specified) Seatbelts 38.5 4% • Pretensioners (of which) 18.5 19% • Active Seatbelts (of which) 0.9 12% Frontal Airbags 12.9 7% • Knee Airbags (of which) 1.4 2% Si

  37. Slide 37: Strong Performing Models

    Strong Performing Models Contributing to overall net organic sales* growth in Q4’15 Mercedes GLE Hyundai Tucson Honda Civic Ford F-Series KIA Sportage Baojun 560 Jeep Cherokee Mercedes C-Class Volvo XC90 Q4’15 Active Safety organic sales* growth ~29%, Autoliv Electronics products on all of these mod

  38. Slide 38: FY'15 Financial Overview

    FY’15 Financial Overview Solid financial performance (US$ Million’s unless specified) 2015 2014 Sales $9,170 $9,240 Gross Profit $1,844 20.1% $1,804 19.5% Operating Income* $893 9.7% $842 9.1% EPS* (assuming dilution) $6.65 $5.93 RoCE* 24% 24% RoE* 17% 14% Operating Cash flow $751 $713 Dividend** $2

  39. Slide 39: Cash Flow

    Cash Flow Investments for growth and shareholder returns (US$ Million’s unless specified) Q4 Q4 FY FY FY FY FY 2015 2014 2015 2014 2013 2012 2011 Net Income 186 148 458 469 490 486 627 Depreciation & Amortization 90 77 319 305 286 273 268 Other, net 12 21 0 42 43 10 38 Change in operating WC * 33 (1

  40. Slide 40: Segment Reporting FY'15

    Segment Reporting FY’15 Organic Operating Margin CapEx D&A Sales 2015 2014 2015 2014 2015 2014 Growth * Passive Safety *** 6.9% 8.8% 7.7% 5.3% 5.0% 3.5% 3.3% Airbags 8.9% Seatbelts 3.2% Electronics *** 12.9% 4.1% 5.1% 3.3% 4.3% 3.1% 3.0% Passive Safety Electronics 5.1% Active Safety 30.5% Autoliv Gr

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