Slide 1: Earnings Call Presentation 2nd Quarter 2022
More Lives Saved More Life Lived Earnings Call Presentation 2nd Quarter 2022 July 22, 2022 July 22, 2022 ALV – Q2-2022 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
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: Q2'22 Progress in Customer Price Discussions
Q2’22 Progress in Customer Price Discussions ▪ A distressed global supply chain aggravated by lockdowns in China ▪ Strong sales outperformance vs. global LVP ▪ Operating income better than expected − Strong June performance from LVP recovery, price increases and patent litigation settlement − Negati
Slide 4: Q2'22 Financial Overview
Q2’22 Financial Overview Low LVP level, partly offset by customer compensations Consolidated Sales Adjusted Operating Income* Operating Cash Flow US$ (Millions) US$ (Millions) US$ (Millions) 3% -$42 -$114 $2,081 $166 $2,022 8.2% Adj. Op. Margin* $124 6.0% Adj. Op. Margin* $63 Q2’21 Q2’22 Q2’21 Q2’22
Slide 5: Q2'22 Sales Growth
Q2’22 Sales Growth Sales Bridge US$ (Millions) Organic growth (**) Non-US GAAP measure. July 22, 2022 ALV – Q2-2022 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 6: Q2'22 Organic Sales Growth - Outperforming global LVP by 7pp
Q2’22 Organic Sales* Growth - Outperforming global LVP by 7pp Organic Growth* vs. LVP** (Percentage points) EUROPE ALV vs. LVP JAPAN ALV vs. LVP 15 10 AMERICAS ALV vs. LVP 8 CHINA ALV vs. LVP -4 REST OF ASIA ALV vs. LVP -3 (*) Non-US GAAP measure (**) Light Vehicle Production (LVP) according to IHS
Slide 7: Q2'22 Key Model Launches
Q2’22 Key Model Launches Great Wall ORA Ballet Cat VW ID. Buzz Li Xiang L9 Mercedes-Benz GLC Range Rover Sport Mercedes-Benz EQE Opel Astra Sports Tourer Mercedes-Benz EQS SUV. Honda HR-V/ZR-V July 22, 2022 ALV – Q2-2022 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 8: Q2'22 Financial Overview
Q2’22 Financial Overview (US$ Millions unless specified) Q2’22 Q2’21 Sales $2,081 $2,022 Gross Profit $326 15.7% $384 19.0% Adj. Operating Income1 $124 6.0% $166 8.2% EPS (assuming dilution) $0.91 $1.19 Adj. RoCE1,2 13% 18% Adj. RoE1,2 12% 16% Operating cash flow -$51 $63 Dividend paid per share $0.
Slide 9: Q2'22 Adj. Operating Income Bridge
Q2’22 Adj. Operating Income* Bridge Vs. prior year US$ (Millions) -$42 $166 Profitability declined due to higher raw material costs, currencies and low and volatile LVP as well as lockdowns in China. This was to some extent 99 $124 offset by a strong performance in June driven by a recovery in LVP a
Slide 10: Q2'22 Adj. Operating Income Bridge excluding discrete items
Q2’22 Adj. Operating Income* Bridge excluding discrete items Vs. prior year US$ (Millions) -$42 $166 Excluding the patent litigation settlement and retroactive pricing, the operating income was $73 99 $124 million in Q2´22 -21 $73 -30 -115 -6 0 -20 (*) Non-US GAAP measures exclude costs for capacity
Slide 11: Cost Inflation Compensation Negotiations
Cost Inflation Compensation Negotiations ▪ Seeking compensation for cost increases in raw materials, labor, logistics and utilities ▪ Negotiations are progressing and continue − Prices must reflect the changed cost environment − Focusing on substantial price increases − Some customer pricing are ret
Slide 12: Cash Flow
Cash Flow Capex and D&A Temporary negative effects on working capital (US$ Millions unless specified) Q2´22 Q2’21 LTM 2021 2020 Net Income 79 $105 338 $437 $188 Depreciation & Amortization 90 100 381 394 371 Cash Flow Other, net3 19 -16 -89 -15 13 Change in operating WC -239 -125 -106 -63 277 Operat
Slide 13: Debt Leverage Ratio
Debt Leverage Ratio* Net Debt*/ EBITDA* Net Debt* and EBITDA* per the Policy x US$ (Millions) 3.0 $2,000 2.5 $1,500 2.0 1.7x 1.5 $1,000 Long-Term Target: 1.0x 0.5-1.5x 1.0 Long-Term Range $500 0.5 0.0 Net Debt EBITDA Q2'19 Q2´20 Q2'21 Q2´22 ▪ Our Net Debt* increased by $244M from Q1’22 ▪ EBITDA LTM
Slide 14: Substantial Raw Material Cost Increases across all Commodities
Substantial Raw Material Cost Increases across all Commodities IHS Markit Q2´22 ▪ Substantial full year 2022 headwind from raw materials − Commodity prices are down since their peak in early March, although they are still up year to date. ▪ In current price environment, raw material costs could be u
Slide 15: Mitigating the Impact of the new Challenges
Mitigating the Impact of the new Challenges Additional cost control measures Headcount development ▪ Margin Focus − Y-o-Y headcount virtually unchanged despite higher sales 70,000 − Reducing consultants and temporary employees − Direct Labor being adjusted to LVP levels 68,000 − Cost saving and foot
Slide 16: Expected LVP Recovery in H2'22
Expected LVP Recovery in H2´22 Global LVP according to IHS Markit* 22.0 ▪ Q2 seems to have been the low point − The lockdowns in China materially impacted the LVP 21.0 − Continued headwinds from semi conductor shortages − Negative regional mix for Autoliv 20.0 ▪ IHS Markit expects 3.4 million higher
Slide 17: Light Vehicle Production Outlook
Light Vehicle Production Outlook Light Vehicle Sales LTM (Million units) Availability of automotive chips is expected to improve in second half of the year North America. Sales of new vehicles remain well below demand, and well below sales a year ago.. The effects of the lockdowns in China, that aff
Slide 18: Business Outlook H2'22
Business Outlook H2’22 ▪ Continued strong outperformance vs LVP expected − Expect higher outperformance for the rest of the year ▪ Sequential margins improvement anticipated − Improved LVP volumes and stability − Price increases and other recoveries − Strict cost control − Gradually improved supply
Slide 19: Full Year 2022 Indications
Full Year 2022 Indications Full year indication LVP growth 2% to 5% Organic sales increase1 Around 13% to 16% FX Around -5% Adjusted Operating margin1 Around 6.0% to 7.0% Tax rate2 Around 30% Operating Cash flow2 Around $750 to $850 million Capex, net % of sales Around 5.5% (1) Non-US GAAP measures.
Slide 20: Closing: Outlook Summary
Closing: Outlook Summary ▪ Continued strong outperformance vs LVP ▪ Sequential margins improvement mainly through higher sales, price increases and some level of market stabilization ▪ Balance sheet and cash flow should allow for continued shareholder returns ▪ Trajectory towards mid-term target − B
Slide 21: July 22, 2022 ALV – Q2-2022 Earnings Call and Webcast
July 22, 2022 ALV – Q2-2022 Earnings Call and Webcast Copyright Autoliv Inc., All Rights Reserved Public
Slide 22: Q2'22 Product Volumes
Q2´22 Product Volumes Autoliv Quantities Delivered Q2´22 vs. PY** (%) (Millions unless specified) Seatbelts 31.1 0% ▪ Pretensioners (of which) 19.6 8% ▪ Active Seatbelts (of which) 1.5 (2)% Frontal Airbags 13.1 4% ▪ Knee Airbags (of which) 1.5 12% Side Airbags 23.1 6% ▪ Chest (Thorax) 12.0 4% ▪ Head
Slide 23: Definition of Symbols
Definition of Symbols ▪ Driver and/or Passenger Airbags ▪ Pedestrian Airbag ▪ Seatbelts ▪ Steering Wheel ▪ Side Airbags ▪ Front Center Airbag ▪ Head/Inflatable Curtain Airbags ▪ Bag-in-Belt ▪ Knee Airbag ▪ EV / PHEV ▪ Pyrotechnical Safety Switch July 22, 2022 ALV – Q2-2022 Earnings Call and Webcast