Slide 1: 1st Earnings Conference Call and Webcast, 3rd Quarter 2018 Financial Results
1st Earnings Conference Call and Webcast 3rd Quarter 2018 Financial Results October 26, 2018 1 October 26, 2018 ALV – Q3-2018 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: Q3'18 Highlights
Q3’18 Highlights ▪ Strong organic growth, despite weaker market development − Execution on strong order book − Launches on track albeit still with elevated launch related costs − Continued high order intake supporting our strong market position longer term ▪ Operating cash flow on a high level, supp
Slide 4: Q3'18 Financial Highlights
Q3´18 Financial Highlights Step-up in sales growth from strong order book Consolidated Sales Adjusted Operating Income* Reported EPS $ million $ million $ 6%** ~(5)% ~11% 205 1.34 2,033 194 1.21 Q3´17 Q3´18 Q3´17 Q3´18 Q3´17 Q3´18 (*) Non-US GAAP measures exclude costs for capacity alignments, antit
Slide 5: Q3'18 Sales Growth
Q3´18 Sales Growth Sales Bridge Regional Organic Growth** $ million +4.1% Org. growth** +6.4% EUROPE (3.6)% JAPAN LVP* (5)% 2.1% LVP* (3)% AMERICAS CHINA 21.8% LVP* 2% 4.5% LVP* (4)% REST OF ASIA 1.5% LVP* 2% (*) Light Vehicle Production (LVP) according to IHS @ October 16, 2018, (**) Non-US GAAP me
Slide 6: Q3'18 - Key Model Launches
Q3’18 - Key Model Launches VW Tharu Honda Crider Haval F7 . . Audi Q3 BMW X5 . . Chevrolet Silverado Audi A1 Subaru Forester Nissan Altima . 6 October 26, 2018 ALV – Q3-2018 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved
Slide 7: Number of Launches
Product Launches per Quarter YTD increased >30% YoY +25% 250 ~740 200 ~600 ~600 Number of Launches 150 100 50 0 2016 2017 2018 2019 7 October 26, 2018 ALV – Q3-2018 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved
Slide 8: Overall Market Conditions
Overall Market Conditions Light Vehicle Sales LTM** Softening of Major light vehicle markets ▪ Asia − In September, China’s LV sales declined by 11%, marking the third consecutive monthly decline − LVP in the third quarter declined by 4%, this was more than 7 pp lower than expected in July − The Q4’
Slide 9: Q3'18 Financial Overview
Q3´18 Financial Overview (US $ Millions unless specified) Q3’18 Q3’17 Sales $2,033 $1,953 Gross Profit $386 19.0% $395 20.2% Operating Income* $194 9.5% $205 10.5% EPS (assuming dilution) $1.34 $1.21 RoCE** 20.4% n/a RoE** 23.2% n/a Operating cash flow $238 $218 Dividend per share $0.62 $0.60 GLVP**
Slide 10: Adj. Operating Margin Bridge
Adj. Operating Margin* Bridge Q3’18 vs. Prior Year (1.0)pp Adj. EBIT* (5.5)% Adjusted Operating Margin of 9.5% includes ~40 bps increase in Raw material and Currency impact (*) Non-US GAAP measure excludes costs for capacity alignments, antitrust related matters and separation of our business segmen
Slide 11: Margin headwinds Q3'18
Margin headwinds Q3´18 Unbalanced Organic Sales Growth* ▪ Raw material − Continued YoY headwinds from raw materials Asia ▪ Currencies − Currency effects, translation and transaction, slightly worse than expected China ▪ Supply chain, production and logistic challenges − Exceptional growth in America
Slide 12: Cash Flow – including discontinued operations
Cash Flow – including discontinued operations Investments for growth and shareholder returns (US $ Millions unless specified) Q3’18 Q3’17 LTM* 2017 2016 2015 Net Income 118 88 219 303 562 458 Depreciation & Amortization*** 85 104 650 660 383 319 Other, net (8) (6) 27 (27) 1 0 Change in operating WC*
Slide 13: EPS development
EPS development Earnings per Share Earnings per Share excluding items affecting comparability* $ $ 11% -18% $1.64 The main items impacting EPS* were $1.34 $1.35 ▪ ~14 cents from higher tax $1.21 ▪ ~9 cents from lower adjusted operating income* Q3´17 Q3´18 Q3´17 Q3´18 (*) Non-US GAAP measures exclude
Slide 14: Capital Structure
Capital Structure Higher ROCE* and ROE* in the new corporate structure ROCE* ROE* Shareholder returns* $M 800 23.2% Share Repurchase Dividend 20% 20% 20.4% Free Cash flow 600 15% 14% 13% 400 7% 200 0 2015 2016 2017 Q3´18 2015 2016 2017 Q3'18 '09 '11 '13 '15 '17 LTM (*) Non-US GAAP measures Return on
Slide 15: 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* x ✓ Provided $1B of cash liquidity for Veoneer at time of spin-off 2.0 ‒ Mix of new debt and existing cash 1.6 ✓ S&P confirmed long-term credit
Slide 16: Financial Outlook
Financial Outlook Consolidated sales, net and operating margin* FY’18 Sales Organic* ~6% Fx** ~2% Consolidated Sales, net ~8% Operating Margin* ~10.5% Exchange rates** FY’18 EUR / US$ 1,1858 US$ / JPY 110,31 US$ / KRW 1103 US$ / MXN 18,98 US$ / CNY 6,61 (*) Non-US GAAP measures exclude costs for cap
Slide 17: Each year, Autoliv's products save over 30,000 lives
Each year, Autoliv’s products save over 30,000 lives autoliv.com
Slide 18: Appendix
Appendix 18 Date Name of presentation Copyright Autoliv Inc., All Rights Reserved
Slide 19: Q3'18 Product Volumes
Q3´18 Product Volumes Strong volume growth in high value-added Seatbelts Autoliv Quantities Delivered Q3´18 vs. PY** (%) (Millions unless specified) Seatbelts 34.7 (3)% ▪ Pretensioners (of which) 17.1 2% ▪ Active Seatbelts (of which) 1.2 1% Frontal Airbags 13.4 8% ▪ Knee Airbags (of which) 1.3 (5)%
Slide 20: Definition of Symbols
Definition of Symbols ▪ Driver and/or Passenger airbags ▪ Seatbelts ▪ Side airbags ▪ Steering Wheel ▪ Head/Inflatable Curtain airbags ▪ Knee airbag 20 October 26, 2018 ALV – Q3-2018 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved