Autoliv, Inc. · NYSE:ALV
Autoliv — Q2 2005 Earnings Presentation
29 slides from Autoliv's earnings presentation, 2005
Slide 1: Autoliv Teleconference Concerning the 2nd Quarter Financial Earnings 2005
Autoliv Teleconference Concerning the 2nd Quarter Financial Earnings 2005
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that are not statements of historical facts, but instead are forward-looking statements. All forward-looking statements involve risks and uncertainties. Actual results could differ materially from those contained in forward-looking statemen
Slide 3: Sales Trend
Sales Trend US$ million 1600 Moving 12 1400 month average 1200 1000 800 600 400 200 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2000 2001 2002 2003 2004 2005 AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 3
Slide 4: Sales Q2 2005
Sales Q2 2005 MUSD Prospects Q2 2005 1,736 Deviations -Currency effects -55 -Seat sub systems -14 -Net deviation occupant restraints -12 Actual reported sales 1,655 Sales $12 million or 0.7% lower than expected AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 4
Slide 5: Sales Development Q2 2005
Sales Development Q2 2005 Prospects Actual Currency effects +7% +3% Organic growth in restraints +3% +2% Total +10% +5% Seat-sub systems compensated by acquisitions AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 5
Slide 6: Organic Growth vs Vehicle Production
Organic Growth vs Vehicle Production % 20 15 10 5 0 -5 -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2000 2001 2002 2003 2004 2005 Change in Autoliv’s organic sales vs same quarter previous year Change in Light Vehicle Production in the Triad vs same quarter previous year (th
Slide 7: Light Vehicle Production
Light Vehicle Production Actual units* Q2 ´05 Q2 ´04 Change N. America 4,148 4,181 -0.8% - Big 3 2,914 3,084 -5.5% - New Domestic 1,234 1,098 12.4% Europe 5,425 5,427 0.0% - W. Europe 4,355 4,416 -1.4% - E. Europe 1,070 1,010 5.9% Japan 2,400 2,325 3.2% Total in the Triad 11,973 11,933 0.3% *In thou
Slide 8: Higher Market Shares
Higher Market Shares Autoliv Production Q2 ´05 vs Q2 ´04 Units in Millions Change Seat belts 25,284 5% Pretensioners 11,962 1% Frontal airbag 7,211 (4%) Side airbag: Chest 5,475 14% Head 4,024 24% Steering wheels 2,345 17% L.V. production in the Triad 11,973 0.3% Airbags 66% (66%) Seat Belts 34% (34
Slide 9: Improving Gross Margin Despite Tough Market
Improving Gross Margin % Despite Tough Market 25,0 20,0 21,0 20,8 20,6 19,6 18,6 17,9 15,0 10,0 5,0 0,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2000 2001* 2002 2003 ** 2004 2005 * Excluding Unusual Items in Q3, 2001. ** Including one-time charges in Q4, 2003 which reduced g
Slide 10: Operating Margin
Operating Margin % 12 10 10 According to new accounting principle (SFAS 142) 9,0 8,2 8,3 8,7 8 8,0 6,8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2000 2001* 2002 2003** 2004 2005 * Excluding Unusual Items in Q3, 2001 ** Including special items in Q4, 2003 which boosted
Slide 11: Income Statement
Income Statement % of sales (US$ million) Q2 ‘05 Q2 ‘04 % change Q2 ‘05 Q2 ‘04 Airbags $1,087.3 $1,031.2 5 65.7 65.3 Seat belts 567.3 547.4 4 34.3 34.7 Total Sales 1,654.6 1,578.6 5 100.0 100.0 COGS (1,306.6) (1,253.3) 4 (79.0) (79.4) Gross profit 348.0 325.3 7 21.0 20.6 SG&A (84.5) (74.4) 14 (5.1)
Slide 12: Return on Equity
Return on Equity % 18 16 14,6 13,4 14 13,6 12 11,0 10 9,3 8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2001* 2002 2003** 2004 2005 *) Excl. Unusual Items in Q3 and adjusted for new accounting principle **) Including special items in Q4 which boosted the return by 2.9 pp AUTOLIV-AH
Slide 13: Return on Capital Employed
Return on Capital Employed % 20 18 18,4 17,9 16 15,6 14 13,2 12 10,9 10 8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2001* 2002 2003** 2004 2005 *) Excl. Unusual Items in Q3 and adjusted for new accounting principle **) Including special items in Q4 with a net effect of 2.2 pp AUT
Slide 14: Key Figures
Key Figures Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Earnings/share (US$) $.94 $.84 $.94 $.72 $.94 Return on - equity (%) 13.4 11.9 14.7 11.0 14.6 - capital employed (%) 17.9 16.1 18.5 13.5 18.4 Working capital (US$ million) 576 537 481 513 488 - in % of LTM sales 9.0 8.5 7.8 8.7 8.8 Capital employed
Slide 15: Strong Long-Term Cash Flow
Strong Long-Term Cash Flow US$ million 2001 2002 20031) 2004 LTM LTM* Net income 53 176 268 3326 324 Depreciation & amortization 280 249 279 298 314 Other non-cash items2) 71 38 12 (12) ( (12) 8 Change in WC (138) 46 (30) 6 68 (93) Cash from operations 266 509 529 680 680 553 Capex, net (256) (218)
Slide 16: Return to Shareholders
Return to Shareholders (US$ million) Dividend Share buy-backs 90 80 70 60 50 40 30 +20% +25% 20 +15% +33% +18% 10 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ´02 ´02 ´03 ´03 ´03 ´03 ´04 ´04 ´04 ´04 ´05 '05 AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 16
Slide 17: Stock Buy-Backs
Stock Buy-Backs 2.1 Shares in millions 3.4 2.1 Total: 13.7 million 1.6 Average price: $30.62 4.5 2000 2001 2002 2003 2004 2005 Share price US$ 22.64 19.52 20.92 41.88 46.92 AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 17
Slide 18: Accumulated Raw Materials
Accumulated Raw Materials Price Increase (gross) per Quarter Confirmed changes Carry-over from 2004 US$ million 30 3 27 20 4 12 14 10 5 7 2 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 Raw material will cost Autoliv $90 - $100 million more in 2005 than in 2004 before compensation from customers. AUTOLIV-AHO/
Slide 19: Estimated Reductions in Direct Material Costs
Estimated Reductions in Direct Material Costs Direct M aterial Savings Index Year-on-Year, 2000=100 100 95 91 87 85 84 2000 2001 2002 2003 2004 2005 F AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 19
Slide 20: Autoliv Purchase
Autoliv Purchase CCC Share of Total Sourcing Q1 2004 Q1 2005 Plan Q4 2006 CCC CCC 13% CCC 18% 30% Traditional Traditional Traditional Market Market Market 87% 82% 70% AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 20
Slide 21: Employees in Competitive Cost Countries (CCC)
Employees in Competitive Cost Countries (CCC) % of total employees % 14 000 50 40% 12 000 40 10 000 30 8 000 6 000 20 4 000 10 2 000 0 0 2000 2001 2002 2003 2004 2005 Q2 AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 21
Slide 22: Major Headcount Changes H1'05
Major Headcount Changes H1’05 Headcount 200 150 100 50 0 = Net -150 Canada Turkey Australia China Romania U.K. Sweden Estonia Poland USA -50 -100 -150 -200 -250 -300 -350 Headcount reduction Headcount increase AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 22
Slide 23: Savings 2004 from CCC
Savings 2004 from CCC Gross savings 392 Additional costs* -62 Net savings 330 *Freight in up from 1.9% to 2.1% of sales Freight out up from 0.8% to 1.3% of sales Customs duty up from 0.1% to 0.4% of sales AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 23
Slide 24: Major Ongoing Plant Closures
Major Ongoing Plant Closures Headcount Estimated costs (MUSD) Plants Total Reduction Total Non-cash H1’05 Remaining U.K, AB assembly 550 530 15 6 13 2 France, initiators 100 100 5 2 2 3 Australia, AB,SB & webbing 900 565 5 0.5 1.5 3.5 Total 1,550 1,195 25 8.5 16.5 8.5 AUTOLIV-AHO/IR/Power/Status Rep
Slide 25: US Light Vehicle Inventory
US Light Vehicle Inventory Domestically Manufactured and Imported Vehicles Days 2004 2005 10-year average 100 90 June 2005, 58 days 80 70 60 50 40 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 25
Slide 26: Light Vehicle Production: North America
Light Vehicle Production North America Millions 5 -0.8% +1.0% +1.8% -4.6% 4 Total 3 2001 15.5M 2002 16.4M 2 2003 15.9M 2004 15.8M 1 2005 15.7M 2006 16.0M 0 Q1 Q2 Q3 Q4 Source: CSM, forecast July 2005 AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 26
Slide 27: Light Vehicle Production: Europe
Light Vehicle Production Europe Millions 0.0% -3.2% +2.3% 6 -1.4% 5 4 Total 2001 16.8M 3 2002 16.4M 2 2003 16.3M 2004 20.2M 1 2005 20.1M 0 2006 20.6M Q1 Q2 Q3 Q4 Source: JD Power LMC, forecast July 2005 Note: The years 2000-2003 only include Western Europe AUTOLIV-AHO/IR/Power/Status Report/2005/2Q0
Slide 28: Light Vehicle Production: Japan
Light Vehicle Production Japan Millions 3 +5.7% +3.2% +1.3% +2.9% 2,5 2 Total 2001 9.1M 1,5 2002 9.5M 2003 9.5M 1 2004 9.6M 0,5 2005 9.9M 2006 10.0M 0 Q1 Q2 Q3 Q4 Source: CSM, forecast July 2005 AUTOLIV-AHO/IR/Power/Status Report/2005/2Q05 - 28
Slide 29: Outlook for Q3, 2005
Outlook for Q3, 2005* Change Quarter over Quarter • Consolidated Sales: flat due to -6% West Europe LV production & negative FX • Underlying EBIT margin: similar as in Q3’04 excluding a 0.3% restructuring cost effect * Based on the assumptions provided in the quarterly report AUTOLIV-AHO/IR/Power/St