Autoliv, Inc. · NYSE:ALV
Autoliv — Investor Day (May 2013)
122 slides from Autoliv's investor day presentation, May 14, 2013
Slide 1: Autoliv's Business Plan
Autoliv’s Business Plan Capital Market Day Vårgårda, May 14, 2013 Jan Carlson President & CEO Copyright Autoliv Inc., All Rights Reserved Driven for Life.
Slide 2: Safe Harbor Statement
Safe Harbor Statement * Each of the presentations herein contain 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
Slide 3: Safety is our DNA
Safety is our DNA Page- 3 Copyright Autoliv Inc., All Rights Reserved
Slide 4: Capital Market Day Press Releases
Capital Market Day Press Releases Strategy and Targets Outlines Strategy Updates Long Term Targets New Debt Policy First Stereo Vision Contract in Active Safety Page- 4 Copyright Autoliv Inc., All Rights Reserved
Slide 5: Today's Program
Today’s Program Business Plan and Targets Financials and New Debt Policy Growth Markets Innovations Active Safety Page- 5 Copyright Autoliv Inc., All Rights Reserved
Slide 6: Long Term Targets
Long Term Targets* Grow organic sales at least in line with our market Net Debt/EBITDA around one times Operating margin 8-9% over the business cycles EPS growth faster than organic sales growth Excluding effects of currency (*) US GAAP excluding costs related to the antitrust investigations Page- 6
Slide 7: Previous Debt Policy
Previous Debt Policy* Interest Coverage significantly above 2.75 times and Leverage ratio significantly below 3 times. Old Policy < 3 times Leverage Ratio * Current limitation Times 2 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 (*) Non US GAAP measure, see Annual Reports for reconciliation Page- 7 Copyr
Slide 8: Revised Debt Policy
Revised Debt Policy* Leverage ratio policy in the range of 0.5 to 1.5 times with a long-term target around 1 time. Leverage Ratio * Long-term Range Times 2 Max New Target Min ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 We intend to start adjusting this year, and plan to be within the range during 2014 (
Slide 9: Steady Growth Hides Dramatic Business Transformation
Steady Growth Hides Dramatic Business Transformation Challenging World Vehicles 50 Light 30 Million 20 LVP Growth Markets LVP Triad Sales (illions) 6 $ (Billions)US 4 $ US 2 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 Protection to Prevention Page- 9 Copyright Autoliv Inc., All R
Slide 10: How to continue to grow?
How to continue to grow? US$ (Millions) 0 000 000 000 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 * (*) DIR estimate. Takata Guidance for FY2012 period ending March 2013 (*) TRW OSS, excludes electronics and driver assist systems Page- 10 Copyr
Slide 11: Market Forecast – Current Market CAGR 5%
Market Forecast – Current Market 30 CAGR 5% (Billions) 20 $ 15 US 2012 2015 2017 Passive Safety Developed Markets Passive Safety Growth Markets Active Safety Page- 11 Copyright Autoliv Inc., All Rights Reserved
Slide 12: Market Forecast – Additional Potential Market
Market Forecast – Additional Potential Market 35 Potential Market 30 CAGR 5% (Billions) 20 Current Market US $ 15 10 2012 2015 2017 Passive Safety Developed Markets Passive Safety Growth Markets Active Safety Potential market: Stability Control and Rear/Surround View Systems Page- 12 Copyright Autol
Slide 13: Light Vehicle Production Growth
Light Vehicle Production Growth - 2012 thru 2017 2012-17 CAGR LVP 100.0.0 ~ 98M Global Market 4% ~ 91M Growth Markets 7% ~ 80M 33 80.0.0 30 RoW + EEU 5% 25 ~59M 60.0.0 ~42M China 9% 23 26 17 40.0.0 Japan (4%) 8 millions 9 8 13 13 13 WEU 2% 20.0.0 ~39M vehicles ~37M 17 18 Light 15 North America 3% .0
Slide 14: Market Drivers: Rating programs evolution
Market Drivers: - Rating programs evolution EuroNCAP 2014 Active Safety weighting increases from 10% to 20% Active Safety required to achieve 5 Star 2015 Revision of passive safety side impact test 2017 Active Safety required to achieve 4 Star Other NCAP programs Active safety inclusion in “NCAP’s:
Slide 15: Market Drivers: Increasing penetration in growth markets
Market Drivers: - Increasing penetration in growth markets China 100% India 100% 80% 80% 60% Frontal 60% Frontal Chest Chest 40% 40% Head Head 20% 20% 0% 0% 2012 2015 2017 2012 2015 2017 South 100% 100% Global America 80% 80% 60% Frontal 60% Frontal Chest Chest 40% 40% Head Head 20% 20% 0% 0% 2012 2
Slide 16: Market Drivers: Innovation in Passive Safety
Market Drivers - Innovation in Passive Safety Strengthening market leadership through innovation Pedestrian Protection Airbag Pre pretentioner Knee Airbag Rear seat safety Page- 16 Copyright Autoliv Inc., All Rights Reserved
Slide 17: Sales Drivers: Strong presence in Growth Markets
Sales Drivers: - Strong presence in Growth Markets Growth Markets excl. 20 China CAGR 11% (Billions) China GAGR 14% $ Japan CAGR (4%) US W.Europe CAGR 2% North America CAGR 4% 2012 2015 2012 ALV Market Share Growth Markets 34% Page- 17 Copyright Autoliv Inc., All Rights Reserved
Slide 18: Sales Drivers: Strong presence in product growth segments
Sales Drivers: - Strong presence in product growth segments Market by product 30 000 Autoliv Market Shares Active Safety CAGR 27% 25 000 Product 2012 2015 Steering Wheel CAGR 4% Active Safety 20% 24% 20 000 Electronics Steering 27% 27% CAGR 4% Wheel 15 000 Side Airbags Electronics 22% 24% CAGR 3% 10
Slide 19: Active Safety—a Strategic Journey
Active Safety—a Strategic Journey - On track to reach 500 MUSD sales target Launches Night Vision/ Radar/ Mono Vision/ Brake Stereo BMW Mercedes BMW Control Vision 1000 800 Potential 700 Astyx Acquisitions 600 Radar Millions Visteon Acquisitions 500 Visteon RC Tyco Radar Radar Hella $ US 400 Vision
Slide 20: Sales Drivers: Strengthen ALV in Active Safety
Sales Drivers: - Strengthen ALV in Active Safety Stereo Vision Cameras For Premium OEM Launch 2015 Possible applications: Autonomous Emergency Braking Intelligent Speed Assist Pedestrian Detection Light Source Recognition Lane and Road Departure Warning Adaptive Cruise Control Queue Assist Road Bump
Slide 21: Active Safety Summary
Active Safety Summary Broadest product portfolio today Innovation and integration in brake control major opportunity Active M&A strategy to be the most complete supplier in Active Safety Page- 21 Copyright Autoliv Inc., All Rights Reserved
Slide 22: Financial Strategy
Financial Strategy Increasing “Shareholder Value” Long-term operating margin target* ?8-9% thru the business cycles Off-set customer pricing margin effect with; ?Direct material savings ? 3% Direct labor savings ? 5% New Value-added products Capacity alignments to manage global footprint RD&E invest
Slide 23: Summary
Summary Go aggressively for market share in active safety Strengthen passive safety leadership further Have the best geographical footprint Continue to lead technology in passive & active safety Grow organically and through M&A 150,000 lives saved by our products annually Page- 23 Copyright Autoliv
Slide 24: Autoliv—Safety Systems
Autoliv—Safety Systems Active Autoliv Safety Every year, Autoliv’s products save over 25,000 lives Passive Safety Page- 24 Copyright Autoliv Inc., All Rights Reserved
Slide 25: Financial Strategy for Increasing Shareholder Value
Financial Strategy for Increasing Shareholder Value Capital Market Day Vårgårda, May 14, 2013 Driven for Life. Mats Wallin Vice President & CFO Copyright Autoliv Inc., All Rights Reserved
Slide 26: 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
Slide 27: Financial Strategy for Increasing Shareholder Value
Financial Strategy for Increasing Shareholder Value Financial Guiding Principles Cash flow Generation Margins EPS Free Cash Flow & RoCE Capital Structure Debt Policy & RoE Page—3 Copyright Autoliv Inc., All Rights Reserved
Slide 28: Financial Guiding Principles
Financial Guiding Principles for Increasing Shareholder Value Cash flow generation focus Growth with tight cost and capital control “Strong Investment Grade” credit rating “Financial Flexibility” for growth in a cyclical industry “Shareholder Friendly” Increasing Shareholder Value thru returns to Sh
Slide 29: Financial Strategy for Increasing Shareholder Value
Financial Strategy for Increasing Shareholder Value Financial Guiding Principles Cash flow Generation Margins EPS Free Cash Flow & RoCE Capital Structure Debt Policy & RoE Page—5 Copyright Autoliv Inc., All Rights Reserved
Slide 30: Long-term Operating Margin Target
Long-term Operating Margin Target* is 8-9% thru the business cycles % Operating Margin ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13F Operating margin exceeds 8% over the last 15 years (*) US GAAP excluding costs related to the antitrust investigations
Slide 31: Financial Strategy for Margins - Cost Structure
Financial Strategy for Margins - Cost Structure (% of Sales) Before Crisis After Crisis 7.4 EBIT 8.5 11.4 Other 12.4 4.7 D & A 3.3 Major Fixed Costs 15.8 13.9 Major Fixed Costs 20.5 % Indirect labor 17.2 % 9.6 Direct labor 8.1 26.4 30.7 Value Add Major Direct Costs Major Direct Costs 60.7 % 61.9 % R
Slide 32: Financial Strategy for Margins - Direct Material
Financial Strategy for Margins - Direct Material Direct material savings ? 3% thru: Supply base consolidation and local sourcing Product re-designs and reduce tail-end products Vertical integration in certain key components Number of Suppliers* 570 1 594 516 1 490 2008 2009 2010 2011 2012 Direct Mat
Slide 33: Financial Strategy for Margins - Vertical Integration
Financial Strategy for Margins - Vertical Integration Steering Wheel Cushion Why Vertical Integration? Margins Process flow Supply Chain Management Module Quality Inflator Initiator Propellant Also produce close to 100% of our seatbelt webbing in house
Slide 34: Financial Strategy for Margins - Modular Designs
Financial Strategy for Margins by adapting to specific market needs with Modular Designs Base Module Content per Vehicle ~ 20% of the PrePretensioner module PrePretensioner module Base module (Active Seatbelt) R200.2 Operating margins can even be higher where content per vehicle is lower
Slide 35: Financial Strategy for Margins - Direct Labor
Financial Strategy for Margins - Direct Labor 10.0% Direct labor savings ? 5% thru: LMPU Improvements Productivity 5.7% 6.2% 6.1% 6.0% 6.1% Adapting our global footprint 5.0% Automation Target One Product, One Process 0.0% 2008 2009 2010 2011 2012 Direct labor Headcount Automation (when & where it m
Slide 36: Financial Strategy for Margins - One Process
Financial Strategy for Margins - Reduce Manufacturing Costs with One Process Benefits of Flexible Roll-folder Floor space savings ~ 50% CapEx savings ~ 25% Easy to retrofit Improved Quality Applies to the majority of side-curtain airbag designs More than 30 Flexible Roll-folders in operation in all
Slide 37: Financial Strategy for Margins - New Innovations
Financial Strategy for Margins - New Innovations Bag in Belt Pedestrian Airbags New Seatbelt function Stereo Vision System Introducing new value added products leveraging our core competencies in seatbelts, airbags and vision
Slide 38: Financial Strategy for Margins - Aligning Global Footprint
Financial Strategy for Margins - Aligning our Global Footprint to the Markets millions 30 Growth Markets* in WEU LVP 20 2007 2008 2009 2010 2011 2012 2013 2014 2015 FY12 Q1 13 FY’ 13 (US$ million’s unless otherwise specified) Cost (gross) $79 $3 $25-50 Cash outlay—$5 $40-70 Savings—~ $3 ~ $15 Carry
Slide 39: Financial Strategy for Margins - RD&E, net
Financial Strategy for Margins - RD&E, net looking ahead 18 % of Sales, Active Safety % % of Sales, Total 2012A 2013F 2014F 2015F Factors Affecting RD&E: Many new technologies in development not yet launched Improved leverage as gaining critical mass Increased RD&E in growth markets RD&E, net is exp
Slide 40: Financial Strategy for Increasing Shareholder Value
Financial Strategy for Increasing Shareholder Value Financial Guiding Principles Cash flow Generation Margins EPS Free Cash Flow & RoCE Capital Structure Debt Policy & RoE Page—16 Copyright Autoliv Inc., All Rights Reserved
Slide 41: Financial Strategy for EPS - Interest and Debt Maturities
Financial Strategy for EPS - Interest, net and Debt Maturities Int exp, net 50 ~ 50% (millions) 40 $ US ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 LTM Maturities (millions) 1 ies in 2014: $ M at 5.5% US 0 M at 3.9% at 9.0% 16 2017 2018 + Q1’13 interest cost at historical low levels ~ $7M
Slide 42: Financial Strategy for EPS - Factors affecting the Tax Rate
Financial Strategy for EPS - Factors affecting the Tax Rate Tax rate may be increased by: Change in country mix New or increased start up losses 40% US Tax Rate 35% Write off of Deferred Tax Assets Antitrust settlements/penalties 30% New tax legislation Underlying Tax Rate Use of Capital 20% excludi
Slide 43: Financial Strategy for EPS - Currency
Financial Strategy for EPS - Currency Transaction Effect: Translation Effect: 2013F: $1.7 billion 2012A Sales by Currency top exposures is 55% ~ 75% Non US currencies top exposures is 68% 74% 26% 0 0 Sell USD buy MXN 17% Sell EUR buy SEK 13% 0 0 0 Buy USD sell KRW 10% Buy EUR sell CNY 10% US Non US
Slide 44: Financial Strategy for Increasing Shareholder Value
Financial Strategy for Increasing Shareholder Value Financial Guiding Principles Cash flow Generation Margins EPS Free Cash Flow & RoCE Capital Structure Debt Policy & RoE Page—20 Copyright Autoliv Inc., All Rights Reserved
Slide 45: Return on Capital Employed
Return on Capital Employed - Among Industry Leading Returns RoCE % ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 4,000 3,500 Operating Working Capital * 3,000 ) s 2,500 n illio Property, Plant & (m 2,000 Equipment, net $ S 1,500 U 1,000 Goodwill & other intangible assets ‘07 ‘08 ‘0
Slide 46: Financial Strategy for Cash Flow - Operating Working Capital
Financial Strategy for Cash Flow - Operating Working Capital * Target < 10% of sales 9.1 8.0 sales 7.0 of 6 6.5 6.2 % 5.4 3 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 Working Capital Management: Supplier terms to match our customers Campus Facility Concept Global Products and Process Local Sourcing Target operating ca
Slide 47: Financial Strategy for Cash Flow - CapEx, Depreciation and Amortization
Financial Strategy for Cash Flow - Capital Expenditures, Depreciation and Amortization D&A 900 8 CapEx, net Capex % of Sales Capital Management: D&A % of Sales Source CapEx from low cost countries (millions) % Campus Facility Concept $ 4 US Global Products and Process Vertical Integration 0 0 ‘97 ‘9
Slide 48: Financial Strategy for RoCE - Capital Employed Turnover
Financial Strategy for RoCE - Increasing Capital Employed Turnover* 2.6 2.4 Capital Management: 2.2 Supplier terms to match our customers Source CapEx from low cost countries Turns 1.8 Campus Facility Concept 1.6 Global Products and Processes 1.4 Local Sourcing 1.2 Value creating Acquisitions ‘97 ‘9
Slide 49: Financial Strategy for Free Cash Flow
Financial Strategy for Free Cash Flow* - Free Cash flow vs. Net Income and Use of Free Cash flow Net Income Free Cash flow ) s n illio 400 (m $ S U ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 Use of Free Cash flow 1997—2012 Cash Acquisitions 19% 18% 29% 34% Dividends Buybacks ~ 8
Slide 50: Financial Strategy for Increasing Shareholder Value
Financial Strategy for Increasing Shareholder Value Financial Guiding Principles Cash flow Generation Margins EPS Free Cash Flow & RoCE Capital Structure Debt Policy & RoE Page—26 Copyright Autoliv Inc., All Rights Reserved
Slide 51: Capital Structure - Debt Limitation Policy
Capital Structure - Debt Limitation Policy Current Policy Maintain a financial leverage commensurate with a “strong investment grade credit rating.” Interest Coverage (*) significantly above 2.75 x’s Leverage ratio (*) significantly below 3 x’s Revised Policy Maintain a financial leverage commensura
Slide 52: Capital Structure - Debt Limitation Policy
Capital Structure - Debt Limitation Policy Old Policy < 3 times Leverage Ratio * Long-term Range Effects of Revised Policy $1.3B headroom available for Current limitation acquisitions, shareholder returns and others Times 2 Max We intend to start adjusting this year and Target plan to be within the
Slide 53: Capital Structure - Share Count vs. EPS and RoE
Capital Structure - Share Count vs. Earnings per Share and RoE Shares (millions) $ EPS US Count 50 4 EPS Share 25 2 0 0 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 Return on Equity % ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 The revised debt limitation polic
Slide 54: Financial Strategy - Continued focus on value creation
Financial Strategy - Continued focus on value creation Solid growth with industry leading margins Continued focus on cash flow and returns on capital Increase Shareholder Value thru acquisitions or returns in line with the revised debt limitation policy Long-term EPS growth rate faster than organic
Slide 55: Reconciliations
Reconciliations Page—31 Copyright Autoliv Inc., All Rights Reserved
Slide 56: Free Cash flow
Free Cash flow Millions unless specified 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Oper CF $ 343 $ 314 $ 436 $ 266 $ 266 $ 509 $ 529 $ 680 $ 479 $ 560 $ 781 $ 614 $ 493 $ 924 $ 758 $ 689 Capex, net $ 183 $ 285 $ 261 $ 235 $ 248 $ 228 $ 258 $ 324 $ 315 $ 292 $ 31
Slide 57: Items Affecting the Tax Rate
Items Affecting the Tax Rate 2010 2011 2012 Reported Pre-Tax Income 805.5 828.3 668.6 U.S. Federal Income Tax Rate 35.0% 35.0% 35.0% R&D and Other tax credits -3.3% -3.0% -3.2% Foreign rate variance ex. holidays -6.4% -6.3% -5.5% Withholding Taxes 2.7% 1.9% 1.3% Cost of Double Taxation 1.9% 0.7% 0.9
Slide 58: Thank you!
Thank you! Autoliv—Safety Systems Active Autoliv Safety Every year, Autoliv’s products save over 25,000 lives Passive Safety
Slide 59: Safety in the Growth Markets
Safety in the Growth Markets Capital Market Day Vårgårda, May 14, 2013 George Chang President Autoliv Asia Copyright Autoliv Inc., All Rights Reserved Driven for Life.
Slide 60: 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
Slide 61: Sales Drivers: Strong presence in Growth Markets
Sales Drivers: - Strong presence in Growth Markets Growth Markets excl. China CAGR 11% (Billions) China GAGR 14% $ Japan CAGR (4%) US W.Europe CAGR 2% North America CAGR 4% 2012 2015 2012 ALV Market Share* Growth Markets 34%
Slide 62: The Growth Markets
The Growth Markets Russia China India Thailand Brazil Philipinnes Indonesia South Africa Page—4
Slide 63: Growth Markets Snapshot
Growth Markets Snapshot Country Population GDP/Capital Vehicle/1,000 Safety Fatalities per Fatalities per (Million) (US $) People Content/ 100,000 inhabitants 100,000 motor Vehicle (US $) vehicles China 1,344 6,000 85 210 5.1 36 India 1,241 1,500 18 60 11.1 315 Indonesia 242 4,700 60 140 16.2 210 Th
Slide 64: Growth Drivers: Light Vehicle Production
Growth Drivers: - Light Vehicle Production (LVP) units 15 Million 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source : IHS data
Slide 65: India - ALV sales expected to increase 80%
India - ALV sales expected to increase 80% Light Vehicle Production 30 2012* 2015* 20 units ALV ALV 15 35% 42% Others Others Million 58% 10 65% * Combined market share for airbags and seatbelts Current CPV: $60 per vehicle Source : IHS data Page—7 Copyright Autoliv Inc., All Rights Reserved
Slide 66: ASEAN - Strong growth with JOEMs
ASEAN - Strong growth with JOEMs Light Vehicle Production 30 2012* 2015* ALV units ALV 15 32% 37% Others Million Others 63% 10 68% * Combined market share for airbags and seatbelts Current CPV: $200 per vehicle Source : IHS data Page—8 Copyright Autoliv Inc., All Rights Reserved
Slide 67: South America - Stable market shares with increasing CPV
South America - Stable market shares with increasing CPV Light Vehicle Production 30 2012* 2015* 20 units ALV ALV 15 32% 33% Million Others Others 10 68% 67% * Combined market share for airbags and seatbelts Current CPV: $140 per vehicle Source : IHS data Page—9 Copyright Autoliv Inc., All Rights Re
Slide 68: South America - Brazil: Frontal airbags mandated
South America - Brazil: Frontal airbags mandated by law from 2014 Light Vehicle Production 30 Safety Content & Safety Market Brazil 25 180 800 160 700 20 140 600 units car 120 500 USD/ 400 Million 10 80 MUSD CPV 60 300 200 20 100 0 0 2012 2015 Supply Value Market Value Current CPV: $140 per vehicle
Slide 69: China - Increasing market share, CPV & LVP
China - Increasing market share, CPV & LVP Light Vehicle Production 30 2012* 2015* 20 units ALV ALV 15 35% 37% Million Others Others 10 63% 65% * Combined market share for airbags and seatbelts Current CPV: $210 per vehicle Source : IHS data Page—11 Copyright Autoliv Inc., All Rights Reserved
Slide 70: China - Increasing market share, CPV & LVP
China - Increasing market share, CPV & LVP Light Vehicle Production 30 2012* 2015* Chinese Chinese 20 15% 13% units ALV ALV 15 35% 37% Million Others 10 Others 50% 50% * Combined market share for airbags and seatbelts Current CPV: $210 per vehicle Source : IHS data Page—12 Copyright Autoliv Inc., Al
Slide 71: Rating and Regulations
Rating and Regulations - Strong growth driver for vehicle safety India Only Page—13 Copyright Autoliv Inc., All Rights Reserved
Slide 72: Investments for Growth
Investments for Growth - Recent announcements Propellant Campus for Asia _ Global capacity + 25% _ For increasing demand _ Closer to demand & cost optimization _ $33 million Seat Belt Webbing _ SOP 2014 _ Global capacity +20% _ For increasing demand _ Closer to demand & cost optimization _ $10 Milli
Slide 73: Conclusions Growth Markets 2012-15
Conclusions Growth Markets 2012-15 - Rapid sales growth at least in line with the growth markets 30 Market Share Growth Markets 40% Growth Markets 35% excl. China CAGR 20 30% 11% China GAGR 14% 25% (Billions) 15 20% $ US 10 15% 10% 5% 0 0% 2012 2015 2009 2010 2011 2012
Slide 74: Conclusion: Better Balanced Sales Mix Globally
Conclusion: - Better Balanced Sales Mix Globally 100% 90% 80% Asian OEMs 70% 60% Other 50% Chinese OEMs 40% Korean OEMs Japanese OEMs 30% European Volume 20% European Premium 10% D3 0% 2012 2015
Slide 75: Thank you!
Thank you! Autoliv—Safety Systems Active Autoliv Safety Every year, Autoliv’s products save over 25,000 lives Passive Safety Page—17 Copyright Autoliv Inc., All Rights Reserved
Slide 76: The Next Decade of Innovations
The Next Decade of Innovations Capital Market Day Vårgårda, May 14, 2013 Driven for Life. Johan Löfvenholm V.P. Engineering Copyright Autoliv Inc., All Rights Reserved
Slide 77: 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
Slide 78: Is our RD&E paying off?
Is our RD&E paying off? US$ (millions) % 10 600 400 6 100 2 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RD&E expenses net Customer funded Page—3 Copyright Autoliv Inc., All Rights Reserved
Slide 79: Is our RD&E paying off? - New Products and Patents
Is our RD&E paying off? - New Products and Patents Safety Patents First Filings 2010 2013 Bag-in-belt 2012 Pedestrian airbag* / Dynamic Spot Light*/ Animal detection system* GM 2011 Camera-based Advanced Driver Assistance System 6% AUTOLIV 2010 Locking tongue* 5% 2008 Integrated safety electronics*
Slide 80: Road Traffic Fatalities acc. to WHO
Road Traffic Fatalities acc. to WHO Total 2004 Total 2030 Leading Cause % Leading Cause % Ischaemic heart disease 12.2 1 Ischaemic heart disease 12.2 Cerebrovascular disease 9.7 2 Cerebrovascular disease 9.7 Lower respiratory infections 7.0 3 Chronic obstructive pulmonary disease 7.0 Chronic obstruc
Slide 81: Our Vision
Our Vision Human lives saved by our products 150 000 125 000 100 000 75 000 50 000 25 000 2012 Vision …additionally they prevent ten times as many severe injuries
Slide 82: Just How Important is Safety
Just How Important is Safety - “North America Consumers’ Attitude & Perception” study February 2013 Frost & Sullivan Report
Slide 83: R,D&E Rational
R,D&E Rational _ Safety content per vehicle • Consumer Demand • New Ratings & Regulations _ ALV’s market share _ Reduce costs
Slide 84: Reduce Costs
Reduce Costs - example of redesign to save costs and weight Weight: 3.3 kg -30% Weight: 2.3 kg -26% Weight: 1.7 kg Page—9 Copyright Autoliv Inc., All Rights Reserved
Slide 85: Trends & Needs—Automotive Safety
Trends & Needs—Automotive Safety _ Safety Ratings & Regulations - Safer transportation _ Environment and Society - Shifting mobility needs _ Growth Markets - Focus increases
Slide 86: Rating and Regulations
Rating and Regulations - Strong growth driver for vehicle safety
Slide 87: Rating and Regulations - Euro NCAP
Rating and Regulations - Euro NCAP in migration towards Active Safety and Adaptivety _ 2014 _ Active Safety weighting increases from 10% to 20% _ Active Safety required to achieve 5 Star _ 2015 _ Revision of passive safety side impact test _ IC coverage will be evaluated _ New deformable barrier _ R
Slide 88: Rating and Regulations - US NCAP
Rating and Regulations - US NCAP in migration towards Active Safety and Adaptivety _ 2013 IIHS _ Add additional Small overlap crash rating _ NHTSA request for comments _ Active Safety Areas Under Consideration _ Crash Avoidance and Post-Crash Technology Areas Under Consideration _ Features: Blind Sp
Slide 89: Rating and Regulations - Rear Seat Safety
Rating and Regulations - Rear Seat Safety New smart retractor: Bag-in-Belt: _ For all occupants (adaptivity) _ A combination of a seatbelt and an airbag _ Fully mechanical solution to reduce _ Distributes the crash force over a three time system cost larger surface
Slide 90: Rating and Regulations - Pedestrian Airbag
Rating and Regulations - Pedestrian Airbag
Slide 91: Rating and Regulations - Pedestrian Airbag
Rating and Regulations - Pedestrian Airbag
Slide 92: Rating and Regulations - Knee airbags
Rating and Regulations - Knee airbags to prevent long-term disabling injuries Installation Rates 50% 40% 30% 20% 10% 0% 2012 2015 2017 Europe North America
Slide 93: Rating and Regulations - Small Overlap
Rating and Regulations - Small Overlap a quarter of all fatalities in frontal crashes Oblique IC Concept Test by IIHS Car to Car at 64 km/h
Slide 94: Growth Markets - Products developed for Growth Markets
Growth Markets - Products developed directly for Growth Markets _ First Seatbelt to be developed in China and India _ Component design to take advantage of Low Labor Country (LLC) sourcing _ Industrialization for LLC production
Slide 95: Environment and Society
Environment and Society Electrical Cars create new challenges New “Green” Inflator Familly Old AGP-1 _ Example – Battery Disconnect switch Benefits _ No harmful waste products – only water vapor and argon gas _ Recyclable components _ Weight and cost reduction ~30%
Slide 96: Addressing the Trends into the Next Decade
Addressing the Trends into the Next Decade Addressed by ALV _ Safety Ratings & Regulations - Safer transportation _ Environment and Society - Shifting mobility needs _ Growth Markets - Focus increases We will continue to deliver Worlds-first safety products to support sales to outperform our market
Slide 97: Is our RD&E paying off? - growing market shares
Is our RD&E paying off? - growing market shares in a growing market Global Market Shares Market by product 50% 30 40% 25 30% (Billions) $ 15 20% US 10% 0% Total Frontal Side ECU Seatbelts Steering Restraints Airbags Airbags Wheels 0 2009 2012 2012 2015 Page—22 Copyright Autoliv Inc., All Rights Rese
Slide 98: Thank you!
Thank you! Autoliv—Safety Systems Active Autoliv Safety Every year, Autoliv’s products save over 25,000 lives Passive Safety Page—23 Copyright Autoliv Inc., All Rights Reserved
Slide 99: Capturing the Lead in Integrated Safety
Capturing the Lead in Integrated Safety Capital Market Day Vårgårda, May 14, 2013 Driven for Life. Steve Rodé President Autoliv Copyright Autoliv Inc., All Rights Reserved Electronics
Slide 100: 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
Slide 101: Press Release
Press Release _ Stereo Vision Cameras For Premium OEM _ Launch 2015 _ Possible applications: • Autonomous Emergency Braking • Intelligent Speed Assist • Pedestrian Detection • Light Source Recognition • Lane and Road Departure Warning • Adaptive Cruise Control • Queue Assist • Road Bump Assist Page—
Slide 102: Market Forecast
Market Forecast Potential Market 30 My topic CAGR 5% (Billions) 20 $ Current Market UD 15 10 2012 2015 2017 Passive Safety Developed Markets Passive Safety Growth Markets Active Safety Potential market: Stability Control and Rear/Surround View Systems
Slide 103: Active Safety Sensors Market
Active Safety Sensors Market Sensors Market by Technology 2012 Estimated Market Shares 2500 2000 Other #2 (Millions) 1500 Night Vision $ Autoliv Radar US 1000 Vision 500 2012 2015
Slide 104: Estimated Effect of New EuroNCAP
Estimated Effect of New EuroNCAP On 5 Star Vehicles US$ On Total European Market US$ (millions) 160 1 000 800 120 600 80 400 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016
Slide 105: What is Integrated Safety?
What is Integrated Safety? POINT OF NO RETURN (One third of Assistance a second) Active Safety Passive Safety INTEGRATED SAFETY Page—7 Copyright Autoliv Inc., All Rights Reserved
Slide 106: How ALV will Capture the Lead in Integrated Safety?
How ALV will Capture the Lead in Integrated Safety? The Right People Speed to Market The Right Partners The Right Products Leverage Our Passive Safety Leadership
Slide 107: Leverage Our Passive Safety Leadership
Leverage Our Passive Safety Leadership Vision Brake Control Active and Passive Safety Radar as One System Prevention & Protection Passive Safety Control Night Vision Page—9 Copyright Autoliv Inc., All Rights Reserved
Slide 108: Leverage Our Passive Safety Leadership - ECU Example
Leverage Our Passive Safety Leadership - Example Electronic Control Units (ECU) Restraint Controls Volumes 2008-2015 up 230% Brake ECU ESC 15 IMU Restraint Control Units + IMU Million 10 5 2008 2010 2012 F2015 IMU Integration 2008 Page—10 Copyright Autoliv Inc., All Rights Reserved
Slide 109: Leverage Our Passive Safety Leadership - ECU Example
Leverage Our Passive Safety Leadership - Example Electronic Control Units (ECU) Brake Brake OEM ECU ECU ESC IMU Restraint Control Restraint/ + IMU Chassis Controller IMU Integration 2008 Brake Controls Integration 2014
Slide 110: Leverage Our Passive Safety Leadership - ECU Example
Leverage Our Passive Safety Leadership - Example Electronic Control Units (ECU) Brake Brake OEM ECU ECU ESC IMU Restraint Control Restraint/ + IMU Chassis Controller _ Electronic Stability Control (ESC) _ Anti-Lock Brakes (ABS) _ Traction Control _ Autonomous Emergency Braking (AEB) IMU Integration
Slide 111: Leverage Our Passive Safety Leadership - ECU Example
Leverage Our Passive Safety Leadership - Example Electronic Control Units (ECU) Radar Steering ECU Brake Brake OEM Brake Suspension ECU ECU ECU ECU Vision ESC IMU Safety/ Restraint Chassis Control Restraint/ Radar + IMU Chassis Controller Radar Controller GPS Driveline ECU Radar Radar IMU Integratio
Slide 112: The Right Products - Active Safety Sensors
The Right Products - Active Safety Sensors Radar Vision Infrared Sensing _ Detects vehicles and objects _ Detects visible shapes, markings, objects _ Does not need visible light _ Measures distances _ “Reads” lane markings, light sources, traffic signs _ Classifies pedestrians and animals _ Is not s
Slide 113: The Right Products - Active Safety Sensors
The Right Products - Active Safety Sensors Supplier Vision Radar Night Vision Mono Stereo 77 Radar 24 NB 25 UWB Far Near Radar Radar Infrared Infrared Autoliv • • • • • • Continental • • • • • Bosch • • • • Delphi • • Magna • Valeo • • Denso • • • Gentex • Hella • Calsonic TRW • • • Takata • •
Slide 114: The Right Products - Active Safety Sensors
The Right Products - Active Safety Sensors Supplier Vision Radar Night Vision Potential Market Mono Stereo 77 Radar 24 NB 25 UWB Far Near Rear View Surround Stability Radar Radar Infrared Infrared View Control Autoliv • • • • • • 2014 Continental • • • • • • • • Bosch • • • • • • • Delphi • • • Magn
Slide 115: The Right Products - Integrated Safety
The Right Products - Integrated Safety ACTIVE PASSIVE SAFETY SAFETY RADAR SAFETY DOMAIN CONTROLLER Blind Spot, Rear Cross Traf PEDESTRIAN AIRBAG Collision Prevention, Adap Cruise Control NIGHT VISION KNEE AIRBAG Automatic Animal Detectio Dynamic Spot Light Sensor Fusion NIR / FIR VISION BAG-IN-BELT
Slide 116: The Right Partners - Our Development Partners
The Right Partners - Our Development Partners Vision Systems Radar Night Vision
Slide 117: The Right Partners - Our Current Customers
The Right Partners - Our Current Customers North America Europe Asia
Slide 118: Co-development - Mercedes' Collision Prevention Assist
Co-development - Mercedes’ Collision Prevention Assist (CPA)
Slide 119: The Right People in the Right Places
The Right People in the Right Places - Global footprint Sweden USA Motala/Linköping Lowell Canada Markham Great Britain Korea USA Coventry Seoul Goleta Japan France Hiroshima USA Cergy/Rouen Yokohama China Detroit Romania Shanghai Timisoara India Germany Bangalore Cologne Dachau Development Holzgerl
Slide 120: Speed to Market
Speed to Market - Active Safety is a dynamic market. Speed is a competitive advantage Need Technology Needed Start of Production Award Development Frequency Regulation 24GHz NB Radar 2011 2012 Asia Customer Demand 77GHz Multi-Mode Radar 2011 2012 Vision System Capability Autoliv Vision Algorithms 20
Slide 121: Active Safety—a Strategic Journey
Active Safety—a Strategic Journey - On track to reach 500 MUSD sales target Launches Night Vision/ Radar/ Mono Vision/ Brake Stereo BMW Mercedes BMW Control Vision 1000 Potential Acquisitions 700 Astyx 600 Radar Millions Visteon Acquisitions 500 Visteon RC Tyco Radar $ Radar Hella US 400 Vision 500
Slide 122: Autoliv—Safety Systems
Autoliv—Safety Systems Active Autoliv Safety Every year, Autoliv’s products save over 25,000 lives Passive Safety