Autoliv, Inc. · NYSE:ALV

Autoliv — Handelsbanken Large Cap Seminar (September 2018)

28 slides from Autoliv's conference presentation, Sep 12, 2018

  1. Slide 1: Autoliv – Mats Backman, CFO

    1st Autoliv September 12th, 2018 Mats Backman CFO Copyright Autoliv Inc., All Rights Reserved 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: Uniquely Positioned to Save More Lives

    Uniquely Positioned to Save More Lives Continuous innovation to reduce Focus on Real Life Safety global traffic fatalities More sophisticated safety solutions for future autonomous and electric vehicles Handelsbanken Sept 12, 2018 Copyright Autoliv Inc., All Rights Reserved

  4. Slide 4: Millions of Reasons to Do More

    Millions of Reasons to Do More Road Fatalities Worldwide Number of Traffic Fatalities, Globally(1) 1.3 million 2017E 2030E (1) WHO February, 2018 Handelsbanken Sept 12, 2018 Copyright Autoliv Inc., All Rights Reserved

  5. Slide 5: Autoliv – 65 years of Dedication to Saving Lives

    Autoliv – 65 years of Dedication to Saving Lives Entering the next phase Autoliv Lindblads becomes a Period of First Night Vision ̶ Autoservice Acquired by subsidiary of acquisitions and First Knee First Inflatable the start of Active AB is founded First subsidiary Gränges Weda Electrolux joint vent

  6. Slide 6: Creating the New Autoliv

    Creating the New Autoliv Our Strategic Direction More Focused Increased Operational Higher Potential for Dedicated Culture Strategy Flexibility Profitable Growth Handelsbanken Sept 12, 2018 Copyright Autoliv Inc., All Rights Reserved

  7. Slide 7: Autoliv Today is Stronger Than Ever

    Autoliv Today is Stronger Than Ever MARKET SHARE ORDER INTAKE SALES ADJ. OPERATING INCOME(1) 38% >50% $8.1 Bn $899 Mn worldwide, clear #1 of global orders 2017A 2017A (11% margin) OPERATIONS IN DAILY PRODUCTION EMPLOYEES FREE CASH FLOW(2) 27 ~1 Mn >66,000 $403 Mn countries units worldwide 2017A (70%

  8. Slide 8: Autoliv – The Global Automotive Safety Champion

    Autoliv – The Global Automotive Safety Champion Only Three Players of Scale Firm Leader at 38% Market Share – Far Exceeding Competitors(1) #1 Rankings Across Product Portfolio(1) 2017A, % 2017A 38% Frontal Airbags Side Airbags Autoliv Comp. 1 30% 48% Comp. 2 Comp. 3 Comp. 4 Seatbelts Steering Wheels

  9. Slide 9: Well-Balanced Customer Base

    Well-Balanced Customer Base Significant Presence in High-Growth Markets Serving All Major OEMs… …Across All Key Automotive Regions % of 2017A Revenue(1) % of 2017A Revenue(1) 15% 5% 10% 4% Rest of Europe Asia Asia 33% 9% 4% 37% Japan 10% 10% 9% 2% China 7% 2% 17% 7% 2% 7% 2% 6% Others 9% Americas 30

  10. Slide 10: Highest Reliability and Industry-Leading Quality Standards

    Highest Reliability and Industry-Leading Quality Standards “Zero Defects by Flawless Execution” Relentless Focus on Quality Through Q5 Program… …& Minimal Recalls Share of Global Recalls since 2010(2) Design Robust Products Buy Flawless Components Manufacture Flawless Products Verify Product Conform

  11. Slide 11: Autoliv Key Targets

    Autoliv Key Targets >$10 Bn Revenue ~13% Adj. Operating Margin* ~1.0x Net Debt/ EBITDA 2020 2020 Over Time (*) Non-US GAAP measure excludes costs related to Antitrust matters, Leverage Ratio and Net Debt includes Pension Liability. The forward looking non-U.S. GAAP financial measures herein are prov

  12. Slide 12: Autoliv Key Targets

    Autoliv Key Targets >$10 Bn Revenue ~13% Adj. Operating Margin* ~1.0x Net Debt/ EBITDA 2020 2020 Over Time (*) Non-US GAAP measure excludes costs related to Antitrust matters, Leverage Ratio and Net Debt includes Pension Liability. The forward looking non-U.S. GAAP financial measures herein are prov

  13. Slide 13: Unprecedented Business Momentum Translating Into Growth

    Unprecedented Business Momentum Translating Into Growth Order Intake Tailwind Driving Sales Growth: ~8% Revenue CAGR 2017A to 2020 Strong Order Momentum… …Translating Into Significant Revenue Growth(1) Order Intake Share; 2014A-17A Revenue; 2017A-20 18-36 months lead time to start of production >50%

  14. Slide 14: Content per Vehicle Growth Propelled by Emerging Markets

    Content per Vehicle Growth Propelled by Emerging Markets Safety System Penetration Correlates to GDP/ Capita Autoliv’s Total Addressable Market(1) Gap to Developed Markets Expected to Close as Emerging Markets Mature… $ Bn Passive Safety Content per Vehicle(1) vs. Economic Development 400 28 ~26 Nor

  15. Slide 15: Future Mobility Provides New Opportunities

    Future Mobility Provides New Opportunities More Advanced Safety Solutions in Future Car New Seating Concept Examples Handelsbanken Sept 12, 2018 Copyright Autoliv Inc., All Rights Reserved

  16. Slide 16: Autoliv Key Targets

    Autoliv Key Targets >$10 Bn Revenue ~13% Adj. Operating Margin* ~1.0x Net Debt/ EBITDA 2020 2020 Over Time (*) Non-US GAAP measure excludes costs related to Antitrust matters, Leverage Ratio and Net Debt includes Pension Liability. The forward looking non-U.S. GAAP financial measures herein are prov

  17. Slide 17: Multiple Levers for Continued Margin Improvements

    Multiple Levers for Continued Margin Improvements Operating Leverage and Efficiency Improvements Driving Margin Expansion Adj. Operating Margin(1, 2) Driven by ~13% ✓ Utilizing existing footprint for growth A ~11% ✓ RD&E normalization B ✓ Ongoing efficiency improvements C 2017A 2020E (1) Autoliv con

  18. Slide 18: Multiple Levers for Continued Margin Improvements (Cont'd)

    Multiple Levers for Continued Margin Improvements (Cont’d) Tangible Drivers for Profitability Improvement RD&E Normalizing as Utilizing Existing Footprint for Growth Continuous Efficiency Improvements Order Backlog Materializes Case Study: Airbag Module Assembly Plant in Japan Application Projects H

  19. Slide 19: Autoliv Key Targets

    Autoliv Key Targets >$10 Bn Revenue ~13% Adj. Operating Margin* ~1.0x Net Debt/ EBITDA 2020 2020 Over Time (*) Non-US GAAP measure excludes costs related to Antitrust matters, Leverage Ratio and Net Debt includes Pension Liability. The forward looking non-U.S. GAAP financial measures herein are prov

  20. Slide 20: Strong Balance Sheet and Prudent Financial Policy

    Strong Balance Sheet and Prudent Financial Policy Committed to Maintain “Strong Investment Grade” Rating Supported by High FCF Conversion Net Debt/ EBITDA(1) x ✓ Provided $1B of cash liquidity for Veoneer at time of spin-off 2.0 ‒ Mix of new debt and existing cash 1.6 ✓ S&P confirmed long-term credi

  21. Slide 21: Focus on Cash Flow Generation and Asset Returns

    Focus on Cash Flow Generation and Asset Returns… Improving Cash Flow and Asset Returns Despite Increasing Investments for Growth Free Cash Flow and Asset Return Capex, net $ Mn $ Mn 26.0% 24.0% 5.0% 5.7% 21.2% 19.0% 424 467 403 370 366 398 77% 70% 66% 68% 2016A 2017A 2016A 2017A Free Cash Flow(1) Re

  22. Slide 22: 2nd Quarter 2018 Financial Results

    1st 2nd Quarter 2018 Financial Results Handelsbanken Sept 12, 2018 Copyright Autoliv Inc., All Rights Reserved Copyright Autoliv Inc., All Rights Reserved

  23. Slide 23: Q2'18 Financial Overview

    Q2´18 Financial Overview (US $ Millions unless specified) 2018 2017 Sales $2,212 $1,984 Gross Profit $440 19.9% $415 20.9% Operating Income* $230 10.4% $216 10.9% EPS* (assuming dilution) $2.22 $1.50 RoCE* 21% n/a RoE* 25% n/a Operating cash flow** $47 $179 Dividend per share $0.62 $0.60 GLVP** (ann

  24. Slide 24: Financial Outlook from July 27, 2018

    Financial Outlook from July 27, 2018 Consolidated sales, net and operating margin* FY’18 Sales Organic* ~8% Fx** ~2% Consolidated Sales, net ~10% Operating Margin* >11% Exchange rates** FY’18 EUR / US$ 1,1915 US$ / JPY 110,31 US$ / KRW 1100 US$ / MXN 19,03 US$ / CNY 6,52 (*) Non-US GAAP measures exc

  25. Slide 25: Development of FY 2018 LVP forecasts acc to IHS

    Development of FY 2018 LVP forecasts acc to IHS (mn) Handelsbanken Sept 12, 2018 Copyright Autoliv Inc., All Rights Reserved

  26. Slide 26: Each year, Autoliv's products save over 30,000 lives

    Each year, Autoliv’s products save over 30,000 lives autoliv.com

  27. Slide 27: Update U.S. and Mexico NAFTA negotiations

    Update U.S. and Mexico NAFTA negotiations ▪ Some of the issues that were negotiated, according to the US: − increase the percentage from 62.5% to 75% of a car that must be sourced from a NAFTA nation to move freely across the borders. − A threshold for the amount of manufacturing that must be perfor

  28. Slide 28: U.S. and China Trade

    U.S. and China Trade ▪ 301 relates to intellectual property protection and the US would impose tariffs of autos and auto part imports from China. China has already imposed tariffs on US auto and auto parts imports. − Under this section, the impact to ALV comes indirectly from the vehicle unit volume

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