Autoliv, Inc. · NYSE:ALV

Autoliv — Investor Day (September 2017)

60 slides from Autoliv's investor day presentation, Sep 14, 2017

  1. Slide 1: Creating more value, Saving more lives

    Creating more value Saving more lives 1 Copyright Autoliv Inc., All Rights Reserved

  2. Slide 2: Capital Markets Day Agenda

    Capitals Markets Day Agenda 08.35-09.20 Strategic Direction Jan Carlson 09.20-09.50 Technology Steve Fredin/ Dennis Nobelius 09.50-10.30 Coffee Break & Exhibition 10.30-11.00 Financial Overview and Targets Mats Backman 11.00-11.50 Q&A 11.50-12.00 CEO Conclusion 12.00-13.00 Lunch served in Palmengart

  3. Slide 3: 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

  4. Slide 4: Our Board has initiated a strategic review

    Our Board has initiated a strategic review As announced earlier today, Board of Directors has instructed management to conduct a strategic review of its operating structure with the intent to create separate companies of its two current business segments, Passive Safety and Electronics. Certain CMD

  5. Slide 5: Welcome

    Welcome Creating more value Saving more lives Jan Carlson Chairman, President & CEO 5 Copyright Autoliv Inc., All Rights Reserved

  6. Slide 6: Automotive industry in its largest transformation ever

    Automotive industry in its largest transformation ever Automotive Mega trends AUTOMATED DRIVING & CONNECTIVITY NEW MOBILITY CLEAN MOBILITY 6 Copyright Autoliv Inc., All Rights Reserved

  7. Slide 7: Consumers are ready!

    GERMANY CHINA 35% 65% Are Consumers Consumers ready for are ready! Autonomous INDIA USA 62% Driving? 45% 7 Copyright Autoliv Inc., All Rights Reserved Source: Deloitte study on ”Consumer opinions on advanced vehicle technology ”

  8. Slide 8: Consumers are ready! Technology is ready

    Consumers Technology are is ready ready! 8 Copyright Autoliv Inc., All Rights Reserved

  9. Slide 9: Next big change is here. Are we ready?

    Next big Are we change ready? is here 9 Copyright Autoliv Inc., All Rights Reserved

  10. Slide 10: A historical decision that resulted in a world leader

    A historical decision that resulted in a world leader Autoliv Group US$ (millions) The air bag revolution The China car market The Digital revolution revolution 10,000 Merger with Morton ASP 8,000 6,000 Autoliv spin-off from Electrolux 4,000 2,000 ,0 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009

  11. Slide 11: Autoliv – Stronger than ever

    Autoliv – Stronger than ever WORLD LEADING QUALITY LEADER in all PEOPLE AND CULTURE INNOVATION FOOTPRINT parts and aspects of our We rely on the skills of our builds the long term in manufacturing and business people success engineering 11 Copyright Autoliv Inc., All Rights Reserved

  12. Slide 12: Example Q5 Behavior – JIDOKA

    Example Q5 Behavior – JIDOKA ”automation with a human touch" A recent example:  On August 18, Viktor Tsysar noticed a difference in hardness and gloss of a component for an airbag during assembly in Autoliv Poland  He immediately stopped the production line  It turns out a that supplier hade used

  13. Slide 13: Autoliv stronger than ever – with sustainability in focus

    Autoliv stronger than ever – with sustainability in focus Autoliv’s vision of Saving More Lives Innovate Life- Commit to Saving Products our Employees Directly supports the UN Sustainable Development Goal no 3, Good Health and Well-being, focused on reducing global deaths and injuries from road traf

  14. Slide 14: Our Strategies to Stay Ahead

    Our Strategies to Stay Ahead RECALLS* MARKET SHARE 2016** Quality – Zero defects by Autoliv Global 39% flawless execution 2% Europe One Product One Process to improve ~ 170M Americas cost effectiveness recalled and robustness since 2010 Japan China Innovation to lead industry Rest of Asia in Real Li

  15. Slide 15: Road Fatalities per Country

    Road Fatalities per Country per 100,000 inhabitants/year per 100,000 vehicles 120 100 80 60 40 20 0 France Germany Italy Spain Sweden China India Japan South USA Brazil Korea Source: Autoliv estimates 15 Copyright Autoliv Inc., All Rights Reserved

  16. Slide 16: Additional benefits to consumers

    Additional benefits to consumers Comfort, convenience and productivity 16 Copyright Autoliv Inc., All Rights Reserved

  17. Slide 17: A decade of transformation

    A decade of transformation  Company transformed for the digital  Invested in vertical integration for age cushions and inflators in China  Made substantial investments in  Supported the industry in difficult times technology, capacity and operational efficiency  Investment in technology for sma

  18. Slide 18: Our Transformation continues

    Our Transformation continues 18 Copyright Autoliv Inc., All Rights Reserved

  19. Slide 19: Strategic review of transition to stand alone entities

    Strategic review of transition to stand alone entities Passive Safety Electronics Standalone Standalone 19 Copyright Autoliv Inc., All Rights Reserved

  20. Slide 20: Passive Safety never in a better position

    Passive Safety never in a better position 20 Copyright Autoliv Inc., All Rights Reserved

  21. Slide 21: A Winning Business Formula

    A Winning Business Formula Number of units (million)* 350 Statistically, more than 3 airbags and seatbelts from Autoliv have 300 been delivered to every vehicle 250 produced globally last 10 years CAGR 200 ~12%** 150 1.3B 1.2B 100 Airbags* Seatbelts* CAGR 50 ~5%** 0 1997 07' 08' 09' 10' 11' 12' 13'

  22. Slide 22: A Winning Business Formula: 39% global market share

    A Winning Business Formula 7% 5%5% Today the global leader in passive safety 8% 5% 32% 7% 7% Frontal Side 12% 49% 40% 39% global market share Airbags 13% Airbags 15% 21% 14% 35% 30% 11% 10% 25% 3% 4% 7% 9% 32% 39% 20% Steering Seatbelts 16% 10% Wheels 15% 15% 20% 24% 10% 5% Serving 1,300 models and

  23. Slide 23: Cost Efficiency: Growth Within Existing Footprint

    Cost Efficiency: Growth Within Existing Footprint Freeing-up factory space lowers CAPEX and improves RoCE Pyrotechnic inflator plant in Taketoyo, Japan Reduce Line ADP No of production lines Expanding prototype area from 6 to + 50% No of products / 9 lines Line Frontal production m2 Line Frontal Lin

  24. Slide 24: Passive Safety a ~$25B Market in 2025

    Passive Safety a ~$25B Market in 2025 Market is expected to grow 1 pp faster than the underlying LVP LVP CAGR: ~2% US$ (Billions) CAGR: ~3% Content Per Vehicle CPV ($) 26 ~$25B 300 24 ~$23B RoW 250 4.7 22 India ~$20B 4.3 200 20 0.7 China 3.8 0.5 Triad 18 150 16 0.3 6.5 5.3 100 14 4.4 50 12 12.9 13.1

  25. Slide 25: Passive Safety a ~$25B Market in 2025

    Passive Safety a ~$25B Market in 2025 Market is expected to grow 1 pp faster than the underlying LVP LVP CAGR: ~2% US$ (Billions) New opportunities in the AD World CAGR: ~3% 26 ~$25B 24 ~$23B RoW 4.7 22 India ~$20B 4.3 20 0.7 China 3.8 0.5 Triad 18 16 0.3 6.5 5.3 14 4.4 12 12.9 13.1 11.5 10 2017 202

  26. Slide 26: Passive Safety: ~50% of Industry Order Wins

    Passive Safety ~50% of Industry Order Wins in 2015 to 2017 YTD Order Intake* Billions $2.4 $2.2 $2.3 Stand alone targets 2020:  >$10B = 8% CAGR** 2017 - 2020 ~51% ~50% ~50% ~48% ~50%  ~13% adj Operating Margin*** $1.3 ~50% ~50% ~37% Beyond 2020: ~37% ~37%  At least maintain market share and grow

  27. Slide 27: Electronics - built for the future

    Electronics - built for the future 27 Copyright Autoliv Inc., All Rights Reserved

  28. Slide 28: Electronics – a ~$43B Market in 2025

    Electronics – a ~$43B Market in 2025 ~10% CAGR 2017 to 2025 Electronics TAM* US$ (Billions) CAGR: ~10% 50 45 ~$43 40 35 ~$32 30 ~$28 25 ~$20 20 15 10 5 0 2017 2020 2022 2025 *) TAM (Total Addressable Market), CAGR (Compound Annual Growth Rate), **) Active Safety Market includes Radar (Front/side/rea

  29. Slide 29: Active Safety Sensor market

    Active Safety Sensor market CAGR: 23% Active Safety* US$ (millions) 25,000 20,000 15,000 Night Vision 10,000 ADAS ECU LiDAR Radar Systems 5,000 Vision Systems 0 2017 2018 2019 2020 2025 *) Active Safety Market includes Radar (Front/side/rear), Forward looking Cameras (Mono/Stereo/Night Vision, Other

  30. Slide 30: Electronics – Our Journey so far

    Electronics – Our Journey so far Zenuity JV US$ (Millions) (2017) ANBS 2,500 JV 2,000 Volvo IP License, MACOM Visteon Radar, 1,500 Aztyx/Hella Divest IP Telematics 1,000 Visteon Sagem / Restraint Tyco Nokia Electronics Radar JV’s ,500 ,0 1997 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

  31. Slide 31: Autoliv Electronics

    Autoliv Electronics Close to Customers Brake systems 22% Restraint Sales* Control $2,260 45% million Active Safety 33% 7,100 EMPLOYEES 3,200 ENGINEERS 31 OEM CUSTOMERS 20 FACILITIES in 10 countries of which 65% software and 7 new entry customers * Last Twelve month sales June 31, 2017 31 Copyright A

  32. Slide 32: Safety Electronics – Our Industry Firsts

    Customer trust Safety Electronics – Our Industry First’s* Mono FIR Sensor Fusion Regenerative Night Vision System FIR / NIR Night Vision System Braking System Active Safety and Braking 4 Corner Radar Short & Medium AEB And Pre-triggering Range Radar Radar and Mono Vision Passive Safety Pedestrian Wa

  33. Slide 33: One of the world's broadest safety electronics product range

    One of the world’s broadest safety electronics product range Brake systems Restraint Control Active Safety Copyright Autoliv Inc., All Rights Reserved

  34. Slide 34: Electronics success factor: Technology, Innovation and Agility

    Electronics success factor: Technology, Innovation and Agility 34 Copyright Autoliv Inc., All Rights Reserved

  35. Slide 35: The Road Towards Saving More Lives

    The Road Towards Saving More Lives Some Pre-Requisites for Success Building Trust… …in Every Day Traffic USER ARTIFICIAL MOBILITY QUALITY ROBUSTNESS INNOVATION EXPERIENCE INTELLIGENCE 35 Copyright Autoliv Inc., All Rights Reserved

  36. Slide 36: Robustness never more important

    Robustness never more important Electronics products needs Robustness at least as much as Passive Products Rarely Constantly Copyright Autoliv Inc., All Rights Reserved

  37. Slide 37: Customer trust

    Customer trust Our Passive Safety quality journey extends really well into Electronics All Safety Products Electronics Autoliv Autoliv 2% Electronics <1% ~ 170M ~ 32M recalled recalled since 2010 since 2010 Scope: Japan, Canada, US, China, South Korea, Australian, EU, UK, DE AB, SB, Electronics 37 2

  38. Slide 38: Autoliv Electronics – Market Shares 2016

    Autoliv Electronics – Market Shares 2016 RESTRAINT CONTROL SENSING ACTIVE SAFETY BRAKE CONTROL Autoliv 5% Autoliv Autoliv 26% 18% Others 38 Copyright Autoliv Inc., All Rights Reserved

  39. Slide 39: Clusters for AD

    Clusters for AD 39 Copyright Autoliv Inc., All Rights Reserved

  40. Slide 40: Zenuity bringing Sensor Fusion, Decision and Control

    Zenuity bringing Sensor Fusion, Decision and Control Cloud Actuator Decision & Control Sensors Sensing Vehicle Control Actuator Sensor Fusion System 40 Copyright Autoliv Inc., All Rights Reserved

  41. Slide 41: ZENUITY – the customers

    ZENUITY – the customers Ambition I N N O VAT I O N LEADERS AMBITIOUS& EMERGING FAST OEMS  Exciting business model FOLLOWERS  Impressed by feature offer FOLLOWERS  Legislation positive for ADAS Internal capability  Total system key for AD  ZENUITY media positioning  • SYSTEM OFFER  Followers,

  42. Slide 42: Technology Cooperations

    Technology Cooperations Recently announced LiDAR COMPUTING PLATFORM DRIVER MONITORING CLOUD SOLUTIONS Volume production of Collaborate on AI Collaboration to develop Zenuity are collaborating to automotive grade LiDAR computing platform driver monitoring systems develop Connected Cloud systems Compr

  43. Slide 43: The developing eco-system

    The developing eco-system Cloud Partner Sensors Actuators Decision & Control Sensor Fusion Partners Partner System Partner 43 Copyright Autoliv Inc., All Rights Reserved

  44. Slide 44: Electronics – Market Trends and Growth Drivers

    Electronics – Market Trends and Growth Drivers Increasing levels of software in the future are required to enhance safety Market Growth Content per Vehicle $ 250  Consumers are ready 200  Safety 150  Comfort and assistance  Convenience (AD) 100  Technology is ready 50 CPV AS* 0 2017 2018 2019 2

  45. Slide 45: Electronics Active Safety – Building for the long-term

    Electronics Active Safety – Building for the long-term OUR FOOTPRINT Recent JVs WITHIN THE PYRAMID Autonomous and M&A Driving Partners Automated Route Automated Route In-house 2013 (Trained) (Destination) Automated Automated City Automated Valet Evasive Highway Driving Driving Parking Maneuvers AEB

  46. Slide 46: Electronics Active Safety – Building for the long-term

    Electronics Active Safety – Building for the long-term OUR FOOTPRINT Recent JVs WITHIN THE PYRAMID Autonomous and M&A Driving Partners Automated Route Automated Route In-house 2015 (Trained) (Destination) Automated Automated City Automated Valet Evasive Highway Driving Driving Parking Maneuvers AEB

  47. Slide 47: Electronics Active Safety – Building for the long-term

    Electronics Active Safety – Building for the long-term OUR FOOTPRINT Recent JVs WITHIN THE PYRAMID Autonomous and M&A Driving Partners Automated Route Automated Route In-house TODAY (Trained) (Destination) Automated Automated City Automated Valet Evasive Highway Driving Driving Parking Maneuvers AEB

  48. Slide 48: Copyright Autoliv Inc., All Rights Reserved

    2013 2015 2017 48 Copyright Autoliv Inc., All Rights Reserved

  49. Slide 49: Active Safety – Customer snapshot

    Active Safety – Customer snapshot Customer RADAR VISION* ADAS ECU LIDAR Customer 1 2013 Customer 2 Customer 3 Customer 4 Customer 5 Customer 6 Customer 7 Customer 8 Represents >90% of global light Customer 9 vehicle production Customer 10 Customer 11 Customer 12 Awarded Customer 13 business Customer

  50. Slide 50: Active Safety – Customer snapshot

    Active Safety – Customer snapshot Customer RADAR VISION* ADAS ECU LIDAR Customer 1 2015 Customer 2 Customer 3 Customer 4 Customer 5 Customer 6 Customer 7 Customer 8 Represents >90% of global light Customer 9 vehicle production Customer 10 Customer 11 Customer 12 Awarded Customer 13 business Customer

  51. Slide 51: Active Safety – Customer snapshot

    Active Safety – Customer snapshot Customer RADAR VISION* ADAS ECU LIDAR 2017 Customer 1 Customer 2 YTD Customer 3 Customer 4 Customer 5 Customer 6 Customer 7 Customer 8 Represents >90% of global light Customer 9 vehicle production Customer 10 Customer 11 Customer 12 Awarded Customer 13 business Cust

  52. Slide 52: Active Safety – Order Intake

    Active Safety – Order Intake Expect to increase sales beyond 2018 ALV Active Safety – Order Intake* US$ (Millions)  Due to a significant broadening of the 400 product offering and customer bid-list, order intake in 2016 increased substantially over previous years  Active Safety order intake in 201

  53. Slide 53: Active Safety - Selected Customer Launches

    Active Safety - Selected Customer Launches Vision Radar 24 GHz NB  Europe (SOP 2018)  Europe (SOP 2020)  Europe (SOP 2019)  Asia (SOP 2019)  Asia (SOP 2018)  North America (SOP 2019) ADAS ECU Radar 77GHz  Europe (SOP 2019)  Europe (SOP 2019)  Asia (SOP 2019) Night Vision  North America (SO

  54. Slide 54: Awarded by Geely

    Awarded by Geely- announced today  77GHz high-resolution radar systems  Complements the Mono Vision camera award  For autonomous driving 54 Copyright Autoliv Inc., All Rights Reserved

  55. Slide 55: Active Safety Revenue by OEM group

    Active Safety Revenue by OEM group 2022 Sales 2020 Sales LTM Sales ~$2 B >$1 B $0.75 B 55 Copyright Autoliv Inc., All Rights Reserved

  56. Slide 56: Autoliv Active Safety Sales Growth

    Autoliv Active Safety Sales Growth 2020 Sales target of >$1B Active Safety Sales – US$ Billion CAGR* ~23%  High market growth  Strong product offering 2025 Ambition  Strong bid-list presence ~2  Active Safety sales ~$4B  New order wins during 2016-17 >1 0.74 0.75 0.61 0.49 2014 2015 2016 LTM**

  57. Slide 57: Autoliv Electronics Sales Growth

    Autoliv Electronics Sales Growth 2020 Sales target of ~$3B corresponds to a ~10% CAGR from 2017 Electronics Sales – US$ Billion CAGR* ~15%  High market growth CAGR* ~10% 2025 Ambition  Strong product offering  Electronics sales >$6B  Strong bid-list presence LVP* ~4 >2%  Active Safety sales ~$4

  58. Slide 58: Safety Electronics Moving on Technology

    Safety Electronics Moving on Technology 58 Copyright Autoliv Inc., All Rights Reserved

  59. Slide 59: Different success factors shaping the future

    Different success factors shaping the future PASSIVE SAFETY ELECTRONICS MARKET & TECHNOLOGY KEY PRIORITIES CRITICAL COMPETENCES ATTRACT TALENT MANAGEMENT WORKING ENVIRONMENT KEY SELLING POINTS CAPITAL MARKETS ATTRACTION 59 Copyright Autoliv Inc., All Rights Reserved

  60. Slide 60: Creating more value, Saving more lives

    Customers Owners & Business Creditors Partners VA L U E Family & Employees Society Creating more value Saving more lives 60 Copyright Autoliv Inc., All Rights Reserved

Autoliv — Investor Day (September 2017) on 6ix