Slide 1: Earnings Call Presentation Second Quarter 2020
Earnings Call Presentation ed Quarter 2020 July 17, 2020 Autoliv
Slide 2: Forward-looking statements
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 that Autoliv, Inc. or it
Slide 3: Q2 2020 highlights: sales, margin and operating cash flow
Sales US$ (Millions) ▪ Global Light vehicle production (LVP) fell by 45% -48%*** − April virtually at a standstill in Europe and Americas 8.5% Adj. Op. Margin* Sales outperformed LVP** − Slow and volatile restart and ramp-up creates efficiency challenges $2,155 in all major regions − China LVP almos
Slide 4: LVP YoY change per month
LVP YoY change per month China Europe North America 20% Q2´20: 0% 6.9% -20% -40% -60% Q2´20: Q2´20: -61% -70% -80% -100% April´20 May´20 June´20
Slide 5: Sales Bridge Regional Organic Growth vs. LVP
Sales Bridge Regional Organic Growth** vs. LVP* US$ (Millions) -51% EUROPE JAPAN -48% Org. growth** CHINA AMERICAS REST OF ASIA (*) Light Vehicle Production (LVP) according to IHS @ July, 2020 (**) Non-US GAAP measure
Slide 6: Regional market and Autoliv status
18% 29% 32% 9% • Market and ALV status: • Market and ALV status: Plants • Market and ALV status: Plants • Market and ALV status: All OEMs Production has gradually ramping up production in line with running at reduced capacity have restarted operations. Strong recovered to above Q2 last year. custome
Slide 7: Launch platforms and vehicle models
Lynk & Co 06 Chevrolet Suburban/Tahoe & Buick Envision S GMC Yukon/Yukon XL Fiat 500 Kia Sorento Audi A3 Limousine VW Polo Sedan Xpeng P7 VW Tayron X
Slide 8: Q2 2020 financial summary
(US $ Millions unless specified) Q2’20 Q2’19 Sales $1,048 $2,155 Gross Profit $14 1.4% $400 18.6% Adj. Operating Income1 -$171 -16.4% $183 8.5% EPS (assuming dilution) -$2.00 $1.25 Adj. RoCE1,2 -18% 20% Adj. RoE1,2 -24% 24% Adj. Operating cash flow4 -$128 $182 Dividend paid per share - $0.62 Global
Slide 9: Organic Sales Decline
Organic Sales* Decline Jan´20 Feb´20 Mar´20 April´20 May´20 June´20 0% -10% Q1´20: -13% -20% -30% -40% Q2´20: -50% -48% -60% -70% (*) Non-US GAAP measure
Slide 10: Variable and semi-variable costs; align headcount with LVP
Variable and Semi-variable costs Historical ▪ Direct material ▪ Direct labor ▪ Freight costs • Further align headcount with customer LVP Semi-fixed costs • Reduced work week hours ▪ Fixed Salaries, travel expenses • Furloughing, supported by governments where available ▪ Consultant costs • General h
Slide 11: Cost structure Q2 2020
Variable and Semi-variable costs Historical ▪ Direct material Q2´20 ▪ Direct labor ▪ Freight costs Semi-fixed costs ▪ Fixed Salaries, travel expenses ▪ Consultant costs ▪ Legal fees ▪ Other net external expenses Fixed costs ▪ Rent buildings, machines & office ▪ Insurance, Property tax ▪ IT ▪ Depreci
Slide 12: Organic Sales Decline and results drivers
Organic Sales Decline* Results drivers - Neg April´20 May´20 June´20 • Volume & productivity -$380 million 0% • Direct COVID-19 -$9 million -10% -20% + Pos • Raw material $6 million -30% • FX $5 million -40% Q2´20: -50% -48% • RD&E/SG&A $23 million -60% -70% (*) Non-US GAAP measure excludes costs fo
Slide 13: Cash flow, Capex and D&A
Capex and D&A (US$ Millions unless specified) Q2’20 Q2’19 LTM 2019 Net Income -174 109 143 463 Depreciation & Amortization 87 86 350 351 EC antitrust payment - -203 - -203 Other, net -85 4 -84 -17 Change in operating WC* 44 -17 127 47 Cash Conversion** Operating cash flow -128 -21 535 641 Operating
Slide 14: Net Debt / EBITDA
Net Debt/ EBITDA* x $2,000 3.0 $1,500 2.9x 2.5 $1,000 2.0 $500 1.5 Q1´19 Q2´19 Q3´19 Q4´19 Q1´20 Q2´20 0.5-1.5x Net Debt EBITDA Long-Term Target: 1.0x 1.0 Long-Term Range 0.5 ▪ Our Net Debt* increased by $208M from Q1’20 0.0 ▪ EBITDA LTM decreased by $350M from Q1’20 Q2'17 Q2'18 Q2'19 Q2´20 (*) Auto
Slide 15: Debt Maturities and liquidity
Debt Maturities end of Q2´20* % of ~$3 billion total debt • Significant liquidity cushion with $1.7 billion in ~27% in the next 3 years cash and unutilized credit facilities at June 30 2020 • Entered into a new lending facility of ~$0.6 billion 7% 2021 with the Swedish Export Credit 9% after 2024 •
Slide 16: Light Vehicle Sales and Production LTM
Light Vehicle Sales LTM Global light vehicle production LTM**according to IHS (Million units) (Million units) 100 90 80 70 60 50 40 (*) Source: CAAM, Wards Auto, ACEA etc.., (**) Light Vehicle Production (LVP) according to IHS @ July, 2020
Slide 17: COVID-19 business impact on H2 2020 vs. H2 2019
“ rating margin* ID-19 Business Impact on H2’ 20 Adj. ope COVID- vs. H2°19 Tailwinds . Executing from stro " Structural Efficienc Ng order book y Programs inds from COVID-19 "predictable Lyp . Raw materials . Strategic initiatives (*) Non-US GAAP measure Autoliv
Slide 18: Creating Value for Shareholders
Creating Value for Shareholders =~ — Profitability Cash Flow Improvement and Generation Focus Over-the-Cycle for Shareholder Resilience Returns Visible Short-term Strong Balance Sheet and Prudent Leverage Policy and Long-Term Growth vs. LVP Autoliv
Slide 19: Crisis management, the new normal and strategic plan
Current Crisis Management Ongoing cost reduction activities to offset near-term COVID-19 effects The New Normal Adapting to new normal medium-term market Strategic Plan outlined in 2019 Executing on strong order book Implementing Strategic Initiatives Stabilization of market fundamentals
Slide 20: Employee health, capital management, margin focus
▪ Health of our Employees − Implementing policies to protect employees − Raise awareness of well-being protocols and helpful practices ▪ Capital Management − Capital expenditures delays − Close monitoring of receivables and inventories − Tight collaboration with suppliers ▪ Margin Focus − Further al
Slide 21: Structural Efficiency Program
FY2019 FY2020 FY2020 FY2021 Expected for program Cost $52M $0 Cost ~$65M $0M ~$65M Cash out $29M ~$23M Cash out ~$15M ~$50M ~$65M Headcount ~450 ~350 Headcount ~745 ~185 ~930 reduction reduction Savings ~$10M ~$50M Savings ~$10M ~$45M ~$65M annually ▪ Almost fully implemented ▪ Substantially complet
Slide 22: Automation, supply chain and RD&E effectiveness
▪ Automation, Digitalization & Modularization ▪ Supply Chain Management Effectiveness ▪ RD&E Effectiveness Copyright Autoliv Inc., All Rights Reserved Public
Slide 23: Key takeaways
▪ Health and Safety remain top priority ▪ Exceptional situation requires agility and tough decisions ▪ Assessing the new run rate of LVP, and continuously adjust ▪ Executing on our long-term strategies ▪ Continued flawless execution in a challenging situation
Slide 24: Autoliv products save over 30,000 lives each year
Each year, Autoliv’s products save over 30,000 lives autoliv.com
Slide 25: Product market data by airbag type
19.7 (46)% ▪ 12.0 (39)% ▪ 0.9 (37)% 6.8 (52)% ▪ 0.6 (54)% Side Airbags 13.1 (47)% ▪ Chest (Thorax) 7.3 (46)% ▪ Head (Curtain) 5.8 (49)% Steering Wheels 2.4 (55)% LVP* (Global) 11.7 (45)% (*) Light Vehicle Production (LVP) according to IHS @ July 2020, (**) Prior Year (PY). ALV – Q2-2020 Earnings Cal
Slide 26: Definition of Symbols
Definition of Symbols 4 = Driver and/or Passenger airbags ah = Pedestrian Airbag A = Seatbelts @ « Steering Wheel A » Side airbags NA = Front Center Airbag Of # Head/Inflatable Curtain airbags e = Knee airbag [F] * Pyrotechnical Safety Switch Autoliv