Autoliv, Inc. · NYSE:ALV
Autoliv — Investor Presentation (June 2014)
52 slides from Autoliv's investor presentation, Jun 9, 2014
Slide 1: Autoliv - the global leader in automotive safety
Autoliv - the global leader in automotive safety Presentation at Financial Analyst Training Stockholm June 09, 2014 Thomas Jönsson Vice President Corporate Communications Driven for Life. © Autoliv Inc., All Rights Reserved
Slide 2: Autoliv in Brief
Autoliv in Brief Sales and technology leader RoA Sales US$8.8 billion Europe 10% Sales to all major vehicle Japan 8% 33% manufacturers Fortune 500 company with an China 16% 2013 A- credit rating (S&P) ~ 80 facilities in 29 countries 18 technical centers and 33% 20 crash test tracks Americas ~ 56,000
Slide 3: Autoliv Production Volumes 2013
Autoliv Production Volumes 2013 Million Units 150,00 125,00 Knee Without 100,00 pret. Head Global car production 75,00 50,00 Chest With pret. 25,00 Front 0,00 Seatbelt Airbag Steering Wheel ECU Financial Analyst Training Stockholm, June 9, 2014– Page 3 © Autoliv Inc., All Rights Reserved
Slide 4: Sales by Customer - 2013
Sales by Customer - 2013 Others Local Chinese OEM’s 7% 2% 15% 2% 3% 4% 5% 11% 5% 2013 5% 11% 6% 7% 9% 8% Financial Analyst Training Stockholm, June 9, 2014– Page 4 © Autoliv Inc., All Rights Reserved
Slide 5: Net Sales and Light Vehicle Production
Net Sales and Light Vehicle Production US$ (Millions) Units (millions) 10000 100 8803 9000 90 8232 8267 8000 83 80 7171 80 7000 75 70 72 6000 60 5121 5000 50 58 4000 40 3000 30 2000 20 1000 10 0 0 2009 2010 2011 2012 2013 Consolidated sales Global light vehicle production (LVP) Source: IHS @ January
Slide 6: Strong Sales Growth
Strong Sales Growth US$ (Millions) 9000 In 2013, consolidated sales were 8000 $8,803 million with a 7% organic sales growth, marking the fourth 7000 year of consecutive sales growth. 6000 5000 4000 3000 2000 1000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Asia Americas Europe Financial Anal
Slide 7: Net Income
Net Income 700 US$ million 600 500 400 300 200 100 0 2006 Excl. favorable one-time tax effects of $95 million, 2009 Incl. $96 million for restructuring 2012 Incl. $71 million for capacity alignments, 2013 incl. $33 million for capacity alignments and increase in the valuation allowance related to de
Slide 8: Market Growth Drivers
Market Growth Drivers Market share Occupant Restraint Market x Supply value/car x Car built New contracts New products GNP growth Acquisitions New regulations Age of cars Customer mix Penetration rates Prices Country mix Financial Analyst Training Stockholm, June 9, 2014– Page 8 © Autoliv Inc., All
Slide 9: Growth Drivers by Region
Growth Drivers by Region - Strong presence in growth markets * US$ (Billions) 40 ~ $28B 30 CAGR ~ 5% ~ $24B 6.3 RoW + Eastern Europe 4.8 CAGR ~ 10% 20 5.7 4.2 China CAGR ~ 11% 2.4 2.7 Japan CAGR ~ (4%) 6.0 10 5.3 Western Europe CAGR ~ 4% 7.1 North America 7.8 CAGR ~ 3% 0 2013 2016 Growth markets* co
Slide 10: Growth Drivers by Product
Growth Drivers by Product - Strong presence in product growth segments US$ (Billions) 40 ~ $28B 30 CAGR ~ 5% ~ $24B 2.8 1.3 Active Safety * 2.9 2.5 CAGR ~ 29% 20 4.0 Steering Wheels 3.7 CAGR ~ 5% Electronics 5.3 4.9 CAGR ~ 3% Side Airbags 10 CAGR ~ 3% 5.6 5.1 Frontal Airbags CAGR ~ 3% 6.6 Seatbelts
Slide 11: Light Vehicle Production Growth
Light Vehicle Production Growth - 2002 thru 2018 Million Units ~ 99M 100,0 ~ 83M 32 80,0 Other ~59M ~ 66M 25 Growth Markets 60,0 ~ 57M ~28M China 21 28 12 20 4 40,0 8 9 7 Japan 11 9 Western 16 15 ~38M 13 ~40M Europe 20,0 14 Developed Markets North 16 16 18 13 America 0,0 2003 2008 2013 2018 Expect t
Slide 12: Light Vehicle Production
Light Vehicle Production - FY 2014 vs. 2013 ALV YoY Vehicles in millions @ Apr 16 @ Jan 16 Org. Growth 2014 2013 Americas 20.8 20.7 0% 4% - North America 16.8 16.2 4% 4% - South America 4.0 4.5 (11%) 2% Europe 19.5 19.5 1% 1% - WEU 12.8 12.7 2% 1% - EEU 6.7 6.8 (2%) 1% Japan 8.4 8.8 (5%) (8%) China
Slide 13: Content per Vehicle
Content per Vehicle * - Active and Passive Safety (incl. steering wheels) US$ / vehicle 400 Developed markets ** 300 Global 200 Growth markets *** 100 2009 2010 2011 2012 2013 * Seatbelts, Airbags, Steering Wheels, Electronic Control Unit, Crash Sensors, Night Vision, Radar and Vision Systems ** Dev
Slide 14: Market Drivers: Increasing penetration in growth markets
Market Drivers: - Increasing penetration in growth markets China India 100% 100% 90% 90% 80% 80% 70% 70% 60% Frontal 60% Frontal 50% 50% Chest Chest 40% 40% 30% Head 30% Head 20% 20% 10% 10% 0% 0% 2012 2015 2017 2012 2015 2017 South America Global 100% 100% 80% 80% 60% Frontal 60% Frontal Chest Ches
Slide 15: Rating and Regulations
Rating and Regulations - Strong growth driver for vehicle safety Financial Analyst Training Stockholm, June 9, 2014– Page 15 © Autoliv Inc., All Rights Reserved
Slide 16: 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 • ChinaNCAP upgrade in 2013,
Slide 17: Rating and Regulations - knee airbags
Rating and Regulations - knee airbags to prevent long-term disabling injuries Instalation Rates 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2012 2015 2017 Europe North America Financial Analyst Training Stockholm, June 9, 2014– Page 17 © Autoliv Inc., All Rights Reserved
Slide 18: Rating and Regulations - Pedestrian Airbag
Rating and Regulations - Pedestrian Airbag Financial Analyst Training Stockholm, June 9, 2014– Page 18 © Autoliv Inc., All Rights Reserved
Slide 19: Rating and Regulations - Rear Seat Safety
Rating and Regulations - Rear Seat Safety Bag-in-Belt: New smart retractor: A combination of a seatbelt and an airbag For all occupants (adaptivity) Distributes the crash force over a three time Fully mechanical solution to reduce system larger surface cost Financial Analyst Training Stockholm, June
Slide 20: How to continue to outperform the market?
How to continue to outperform the market? US$ (millions) 9 000 ~ 8% CAGR 6 000 ** * 3 000 0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 (*) TRW OSS, estimate $300M in 2011, $350M in 2012, $400 in 2013 safety electronics and
Slide 21: Complete Safety System Supplier
Complete Safety System Supplier Bag-in-belt Extra safety belt Far-side airbag Inflatable curtain airbag Vision system Electronic control unit and Brake control/ESC Blind spot radar Rear-side airbag Driver airbag Steering wheel Integrated child seat Pelvis restraint cushion Side airbag Knee airbag An
Slide 22: Superior Global Presence
Superior Global Presence - Long-term expansion in the growth markets Steering Wheels Active Safety Electronics Seatbelts Headcount Autoliv Airbags 60 000 Manufacturing Facilities North America Developed South America 40 000 Markets 28% Europe Japan Growth China 20 000 Markets 72% Korea India Asia ot
Slide 23: Investment in R,D&E
Investment in R,D&E US$ (Millions) % 10 600 8 500 400 6 300 4 200 2 100 0 0 2009 2010 2011 2012 2013 RD&E expenses net Customer funded % of sales, gross % of sales, net Financial Analyst Training Stockholm, June 9, 2014– Page 23 © Autoliv Inc., All Rights Reserved
Slide 24: Technology Leadership
Technology Leadership - through early lead-to-market and intellectual property Customer World’s Firsts where Autoliv has contributed; Passive safety patent filings in more than one country 2011 Mercedes – Sensor Fusion NIR/FIR for night driving assist (2013) Volvo - External pedestrian protection ai
Slide 25: Lead through Innovation and Technology
Lead through Innovation and Technology with another strong year of new product introductions INNOVATIONS 2013 Financial Analyst Training Stockholm, June 9, 2014– Page 25 © Autoliv Inc., All Rights Reserved
Slide 26: Active Safety Sensors
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, Classifies pedestrians and animals Is not sensitive to light conditions traffic signs Classi
Slide 27: Active Safety Sensors - Short Range and Multi-Mode Radar
Active Safety Sensors - Short Range and Multi-Mode Radar Radar Functions Forward Collision Warning Autonomous Emergency Braking Blind Spot Detection Rear Cross Traffic Alert WARNING BRAKE Rear Collision Warning (Launched in 2013) Financial Analyst Training Stockholm, June 9, 2014– Page 27 © Autoliv
Slide 28: Active Safety Sensors - Stereo Vision
Active Safety Sensors - Stereo Vision New Vision system and Algorithms for Autonomous Emergency Braking Intelligent Speed Assist Road/Lane Departure Assist Pedestrian Avoidance Adaptive Cruise Control Queue Assist Light Source Recognition Road Surface Monitoring (First Launch in 2015) Financial Anal
Slide 29: Active Safety Sensors - Dynamic Spot Light and Fusion
Active Safety Sensors - Dynamic Spot Light and Fusion Night Vision Function: Dual camera system with high definition (HD) display and enhanced pedestrian and animal detection Detected pedestrians and/or animals illuminated by a “spotlight” (Launched in 2013) Financial Analyst Training Stockholm, Jun
Slide 30: The Right Partners
The Right Partners - Our Development Partners Vision Systems Radar Night Vision Financial Analyst Training Stockholm, June 9, 2014– Page 30 © Autoliv Inc., All Rights Reserved
Slide 31: Co-development - Mercedes' Collision Prevention Assist
Co-development -Mercedes’ Collision Prevention Assist (CPA) Financial Analyst Training Stockholm, June 9, 2014– Page 31 © Autoliv Inc., All Rights Reserved
Slide 32: Night Vision Gen-3
Night Vision Gen-3 - with Animal Detection and Warning
Slide 33: Active Safety - a Strategic Journey
Active Safety - a Strategic Journey - On track to reach 500 MUSD sales target Night Vision/ Radar/ Mono Vision/ Brake Stereo Launches BMW Mercedes BMW Control Vision 1000 900 Potential 800 Acquisitions 700 Astyx US$ Millions Radar 600 Visteon Acquisitions 500 Visteon RC Tyco Radar Radar Hella Vision
Slide 34: 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 Financial Analyst Training Stockholm, June 9, 2014– Page 34 © Autoliv Inc., All Rights Reserved
Slide 35: The Right Products
The Right Products - Active Safety Sensors Supplier Vision Radar Night Vision Potential Market Mono Stereo 77 24 NB 25 UWB Far Near Rear Surround Stability Radar Radar Radar Infrared Infrared View View Control Autoliv • • • • • • 2014 Continental • • • • • • • • Bosch • • • • • • • Delphi • • • Magn
Slide 36: Key Focus Areas
Key Focus Areas Savings lives and safety around the automobile Lead through innovation and technology Leverage global footprint and talented- skilled people Zero defects and customer focus Financial Analyst Training Stockholm, June 9, 2014– Page 36 © Autoliv Inc., All Rights Reserved
Slide 37: The Road to Saving More Lives
The Road to Saving More Lives Passive safety products, such as airbags and seatbelts, are there to help protect you from injury if a crash is PROTECTION AUTONOMOUS unavoidable. More than a million human beings owe their life to them. DRIVING In the future, self driving The major advancement from Act
Slide 38: 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 Grow EPS faster than organic sales *Long-term targets exclude potential costs and expenses from on-going antitrust investigations, and currency effec
Slide 39: Average Selling Price Index
Average Selling Price Index 100 80 Passenger Index 60 Driver Side, chest 40 Side, head Electronics 20 0 Financial Analyst Training Stockholm, June 9, 2014– Page 39 © Autoliv Inc., All Rights Reserved
Slide 40: Cost Structure Transformation
Cost Structure Transformation - % of sales 7.4 EBIT * 8.6 11.4 11.5 Other 4.7 Depreciation & Amortization 3.2 Major Major Fixed Costs Indirect labor 14 Fixed Costs 15.8 20.5 % 17.2 % 8.2 9.6 Direct labor 26.7 Major 30.7 Value Add Major Direct Costs Direct Costs 60.7 % 62.7 % Raw Material 27.8 20.4 2
Slide 41: Number of Suppliers
Number of Suppliers - Target=1000 2000 1800 1,570 1,594 1600 1,516 1,490 1,403 1400 1200 1000 Target 800 600 400 200 0 2009 2010 2011 2012 2013 Financial Analyst Training Stockholm, June 9, 2014– Page 41 © Autoliv Inc., All Rights Reserved
Slide 42: Financial Strategy for Margins - Direct Material
Financial Strategy for Margins - Direct Material Direct material savings ≥ 3% thru: Direct Material Savings* (%) 6% Supply base consolidation Product re-designs and reduce tail-end products Vertical integration in certain key components 3% 0% 2007 2008 2009 2010 2011 2012 2013 DM Saving DM Saving ex
Slide 43: Re-design
Re-design - Saves Both Costs and the Environment Financial Analyst Training Stockholm, June 9, 2014– Page 43 © Autoliv Inc., All Rights Reserved
Slide 44: Financial Strategy for Margins - Vertical Integration
Financial Strategy for Margins - Vertical Integration Steering Wheel Cushion Why Vertical Integration? Margins Process flow Supply Chain Management Quality Module Inflator Initiator Propellant Financial Analyst Training Stockholm, June 9, 2014– Page 44 © Autoliv Inc., All Rights Reserved
Slide 45: Financial Strategy for Margins - Direct Labor
Financial Strategy for Margins - Direct Labor 10.0% Direct labor savings ≥ 5% thru: LMPU Improvements Productivity Adapting our global footprint 5.7% 6.2% 6.1% 6.0% 6.1% 6.2% Automation 5.0% One Product, One Process Target 0.0% 2008 2009 2010 2011 2012 2013 Direct labor Headcount Automation (when &
Slide 46: Direct Labor Cost Index per Country
Direct Labor Cost Index per Country - 2013 Sweden 100 France 97 Germany 81 Canada 69 Spain 63 US 58 Japan 57 South Korea 44 Brazil 23 Estonia 22 Poland 19 Hungary 18 South Africa 17 Taiwan 16 Turkey 16 Romania 11 Mexico 11 China 10 Indonesia 9 Thailand 8 Tunisia 6 Phillipines 5 India 5 Financial Ana
Slide 47: Return on Capital Employed
Return on Capital Employed - Among industry leading returns 4 000 RoCE* Excluding Goodwill 60 3 500 Operating Working Capital 50 3 000 U S $ (m illio n s ) 40 2 500 Property, Plant & 2 000 Equipment, net % 30 1 500 20 Goodwill & other 1 000 intangible assets 10 500 RoCE Including Goodwill 0 0 '97 '9
Slide 48: Capital Structure - Debt Limitation Policy
Capital Structure - Debt Limitation Policy Effects of Revised Policy $1.3B headroom available for acquisitions, 4 Old Policy < 3 times Leverage Ratio * Long-term Range shareholder returns and others Current limitation Share buy-backs since October 2013: 3 $90 million We aim to be within the range du
Slide 49: 2013 in Summary
2013 in Summary Growth 7% organic sales growth 57% organic sales growth in Active Safety 26% organic sales growth in China 37% market share in the global automotive safety market Capital Structure $838 million in operational cash flow $379 million of CAPEX, supporting growth $339 million in sharehol
Slide 50: Autoliv in Summary
Autoliv in Summary Sustainable growth Above industry margins Solid balance sheet and cash flow Historically strong returns to shareholders Basis for a sound investment Financial Analyst Training Stockholm, June 9, 2014– Page 50 © Autoliv Inc., All Rights Reserved
Slide 51: Financial Outlook
Financial Outlook Q2 2014 FY2014 Sales Organic* ~ 5% > 5% Acquisitions / (Divestitures) - - Fx** ~ 1% ~ 1% Consolidated Sales ~ 6% > 6% Operating Margin* ~ 9% ~ 9% Expect another year of solid financial performance in 2014 Financial Analyst Training Stockholm, June 9, 2014– Page 51 © Autoliv Inc., A
Slide 52: Autoliv - Safety Systems
Autoliv - Safety Systems Active Safety Autoliv Every year, Autoliv’s products save over 30,000 lives The Worldwide Leader in Automotive Safety Systems Passive Safety Financial Analyst Training Stockholm, June 9, 2014– Page 52 © Autoliv Inc., All Rights Reserved