Slide 1: Earnings Conference Call and Webcast
1st Earnings Conference Call and Webcast 3rd Quarter 2017 Financial Results October 26, 2017 1 October 26, 2017 ALV – Q3-2017 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Copyright Autoliv Inc., All Rights Reserved
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
Slide 3: Q3'17 Highlights
Q3’17 Highlights Strengthening our market position and preparing for our step-up in growth Financial Performance − Organic Sales* growth 0.5%, lower than the LVP** − Operating Margin* 7.9%, in-line with our guidance with lower organic sales* growth − Operating cash flow $218M and EPS* $1.47 Capi
Slide 4: Q3'17 Strong Performing Models
Q3’17 Strong Performing Models Contributing to our overall Organic Sales* growth Hyundai Grandeur / Azera Nissan Qashqai / Rogue Sport Toyota Camry Nissan Kicks Mercedes GLC Honda CR-V Toyota C-HR Jeep Compass Volvo S90 / V90 Strong Organic Sales* growth on these models were mitigated by lower infla
Slide 5: Q3'17 Product Volumes
Q3’17 Product Volumes Strong volume growth in high value-added Seatbelts Autoliv Quantities Delivered Q3’17 vs. PY** (%) (Millions unless specified) Seatbelts 35.6 4% Pre-tensioners (of which) 16.8 5% Active Seatbelts (of which) 1.2 12% Frontal Airbags 12.4 5% Knee Airbags (of which) 1.4 1% Si
Slide 6: Technology Collaborations and Acquisition
Technology Collaborations and Acquisition Recently announced OPTICS EXPERTISE** DRIVER MONITORING CLOUD SOLUTIONS Acquisition in the product area of Collaboration to develop driver Collaboration with Zenuity to LiDAR and Time of Flight monitoring systems develop Connected Cloud Cameras HUMAN CENTERE
Slide 7: Business Outlook
Business Outlook Strong momentum continues in both segments Passive Safety growth is ramping up New Program Launches Passive Safety − Focus on flawless launch execution on new programs awarded in 2015 while maintaining flexibility to adapt to underlying market fluctuations and uncertainties 200 34
Slide 8: Key Launches in Passive Safety
Key Launches in Passive Safety Contributing to the ramp-up of our expected organic sales* growth Honda Accord Tesla Model 3 D3 JOEM Honda Odyssey VW Polo EU OEM D3 JOEM Honda CR-V D3 JOEM These new program launches are anticipated to contribute ~$500M towards our expected Organic Sales* growth in 20
Slide 9: Overall Market Conditions
Overall Market Conditions Remains mixed with some uncertainties Asia FY 2017 LVP* Vehicles YoY Chg. YoY Chg. Region − LTM* LVP* in China is relatively flat while inventories** declined during Q3’17 (Millions) @ Oct. 17 @ Jul. 17 China 26.4 +1% +1% − The Q4’17 LVP is expected to increase YoY* in Ja
Slide 10: Q3 Financial Overview
Q3 Financial Overview Record Sales and Gross Profit for a 3rd quarter (US $ Millions unless specified) 2017 2016 Sales $2,500 $2,461 Gross Profit $504 20.2% $495 20.1% Operating Income* $196 7.9% $199 8.1% EPS* (assuming dilution) $1.47 $1.63 RoCE* 16% 18% RoE* 12% 14% Operating cash flow $218 $271
Slide 11: Operating Income and Margin Bridge Q3'17 vs. Prior Year
Operating Income* and Margin* Bridge Q3’17 vs. Prior Year Q3’17 vs. Prior Year (20 bps lower) Operating Margin* of 7.9% includes ~60 bps increase in RD&E, net vs. Prior Year (*) Non-US GAAP measures exclude costs for capacity alignments and antitrust related matters. 11 October 26, 2017 ALV – Q3-201
Slide 12: Cash Flow
Cash Flow Investments for growth and shareholder returns (US $ Millions unless specified) Q3’17 Q3’16 LTM** 2016 2015 2014 2013 2012 Net Income 88 136 503 562 458 469 490 486 Depreciation & Amortization 104 98 422 383 319 305 286 273 Other, net (6) 13 (38) 1 0 42 43 10 Change in operating WC* 32 24
Slide 13: Q3 Segment Reporting
Q3 Segment Reporting Strong operational performance in Passive Safety driving group profitability Organic Sales* Sales (US$ Millions) Operating Margin (%) CapEx (%) D&A (%) Headcount Growth (%) 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Passive Safety *** 1.3% 1,952 1,899 8.3 10.0 6.3 5.1 3.9
Slide 14: Looking Ahead Q4'17 Guidance
Looking Ahead Q4’17 Guidance Sales − Organic Sales* growth ~0% YoY** − Strong growth in Europe, Japan and South America is essentially offset by a decline North America, South Korea, China and lower inflator replacement sales − Currency translation ~4% YoY − Continued weakening of the US$ Operat
Slide 15: Looking Ahead FY'17 Guidance
Looking Ahead FY’17 Guidance Sales − Organic Sales* growth >1% YoY** − Mainly related to strong growth in Europe, Japan, India, South America including Active Safety which is partially offset by lower Restraint Controls and Brake Systems, inflator replacement sales and a weaker North America − Acq
Slide 16: Financial Outlook
Financial Outlook Consolidated sales, net and operating margin* remain unchanged for FY’17 Q4’17 FY’17 Sales Organic* ~0% >1% Acquisitions - >1% Exchange rates** Q4’17 FY’17 EUR / US$ 1.1863 1.1295 Fx** ~4% ~0.5% US$ / JPY 112.23 112.03 Consolidated Sales, net ~4% ~3% US$ / KRW 1132 1137 US$ / MXN 1
Slide 17: Initiates Strategic Review Process
Initiates Strategic Review Process Intent is to create two Publicly Traded Companies Passive Safety and Electronics are two distinct businesses: − The pace of technology advancement two businesses − Different market needs driving investments for growth and innovation (RD&E) − Different Sales growt
Slide 18: Targets Stand Alone Passive Safety and Electronics
Targets Stand Alone Passive Safety and Electronics Financial Target Update 2020 Target 2022 Target Sales – at least hold market share and at least grow LVP plus Autoliv Sales >$10B 1% Passive Safety Adj. Operating margin* ~13% Adj. Operating Margin* – at least maintain margins from 2020 leve
Slide 19: Each year, Autoliv's products save over 30,000 lives
Each year, Autoliv’s products save over 30,000 lives autoliv.com