Autoliv, Inc. · NYSE:ALV
Autoliv — Q3 2005 Earnings Presentation
25 slides from Autoliv's earnings presentation, 2005
Slide 1: Autoliv Teleconference Concerning the 3rd Quarter Financial Earnings 2005
Autoliv Teleconference Concerning the 3rd 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 Q3 2000 2001 2002 2003 2004 2005 AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 3
Slide 4: 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 Q3 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
Slide 5: Light Vehicle Production
Light Vehicle Production Actual units* Q3 ´05 Q3 ´04 Change N. America 3,740 3,645 2.6% - Big 3 2,527 2,541 -0.6% - New Domestic 1,213 1,104 9.9% Europe 4,455 4,629 -3.8% - W. Europe 3,467 3,697 -6.2% - E. Europe 988 932 6.0% Japan 2,409 2,356 2.2% Total in the Triad 10,604 10,630 -0.2% *In thousand
Slide 6: Autoliv's Production Q3 '05 vs Q3 '04
Autoliv’s Production Q3 ´05 vs Q3 ´04 Units in Millions Change Seat belts 21,653 2% Pretensioners 9,873 -2% Frontal airbag 6,037 -3% Side airbag: Chest 4,733 8% Head 3,610 20% Steering wheels 2,059 5% L.V. production in the Triad 10,604 -0.2% Airbags 66% (66%) Seat Belts 34% (34%) (Incl. Steering Wh
Slide 7: Improving Gross Margin Despite Tough Market
Improving Gross Margin % Despite Tough Market 25,0 20,0 18,8 20,2 19,1 18,1 18,0 18,3 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 Q3 2000 2001* 2002 2003 ** 2004 2005 * Excluding Unusual Items in Q3, 2001. ** Including one-time charges in Q4, 2003 which reduce
Slide 8: Operating Margin
Operating Margin % 12 10 According to new accounting principle (SFAS 142) 8,3 7,5 8 7,5 7,2 7,1 6,5 6 5,8 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 Q3 2000 2001* 2002 2003** 2004 2005 * Excluding Unusual Items in Q3, 2001 ** Including special items in Q4, 2003 which boo
Slide 9: Income Statement
Income Statement % of sales (US$ million) Q3 ‘05 Q3 ‘04 % change Q3 ‘05 Q3 ‘04 Airbags $916.9 $911.4 1 65.9 65.9 Seat belts 474.8 471.3 1 34.1 34.1 Total Sales 1,391.7 1,382.7 1 100.0 100.0 COGS (1,110.5) (1,119.1) (1) (79.8) (80.9) Gross profit 281.2 263.6 7 20.2 19.1 SG&A (78.2) (72.7) 8 (5.6) (5.
Slide 10: Return on Equity
Return on Equity % 18 16 14 12 11,0 10 9,6 9,3 8 7,2 6,6 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2001* 2002 2003** 2004 2005 *) Excl. Unusual Items in Q3 and adjusted for new accounting principle **) Including special items in Q4 which boosted the return by 2.9 pp AUTOLIV-AH
Slide 11: Return on Capital Employed
Return on Capital Employed % 20 18 16 13,0 14 13,5 12 11,3 10 9,7 10,3 8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2001* 2002 2003** 2004 2005 *) Excl. Unusual Items in Q3 and adjusted for new accounting principle **) Including special items in Q4 with a net effect of 2.2 pp A
Slide 12: Key Figures
Key Figures Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Earnings/share (US$) $.66 $.94 $.84 $.94 $.72 Return on - equity (%) 9.6 13.4 11.9 14.7 11.0 - capital employed (%) 13.0 17.9 16.1 18.5 13.5 Working capital (US$ million) 587 576 537 481 513 - in % of LTM sales 9.1 9.0 8.5 7.8 8.7 Capital employed
Slide 13: Strong Long-Term Cash Flow
Strong Long-Term Cash Flow US$ million 2001 2002 20031) 2004 LTM LTM* Net income 53 176 268 3326 316 Depreciation & amortization 280 249 279 298 315 Other non-cash items2) 71 38 12 (12) ( (12) 23 Change in WC (138) 46 (30) 6 68 (104) Cash from operations 266 509 529 680 680 550 Capex, net (256) (218
Slide 14: Return to Shareholders
Return to Shareholders Dividend Share buy-backs ($ million) 160 140 120 100 80 60 40 +7% +33% +25% +20% +18% 20 +15% 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ´02 ´02 ´03 ´03 ´03 ´03 ´04 ´04 ´04 ´04 ´05 '05 '05 '05 AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 14
Slide 15: Stock Buy-Backs (MUSD)
Stock Buy-Backs (MUSD) 233.3 Total: 16.7 million 143.9 shares Average price: $33.13 43.0 30.4 103.0 2000 2001 2002 2003 2004 2005 Share price US$ 22.64 19.52 20.92 41.88 45.64 AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 15
Slide 16: Accumulated Raw Materials
Accumulated Raw Materials Price Increase (gross) per Quarter Confirmed changes Carry-over from 2004 US$ million 30 30 Forecast 3 28 27 27 20 4 15 10 12 5 7 2 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 Raw material will cost Autoliv about $92 million more in 2005 than in 2004 before compensation from custom
Slide 17: 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/2005/3Q05 - 17
Slide 18: Purchase in Low Cost Countries (LCC)
Purchase in Low Cost Countries (LCC) 100% 90% 80% 50 70% 60 70 60% 82 75 87 High cost 50% Low cost 40% 30% 50 20% 40 25 30 10% 13 18 0% Q1'04 Q1'05 Q1'06 Q1'07 Q1'08 Q1,09 How? Grow business volume with current LCC supply base Encourage « Key » HCC suppliers to establish in LCC AUTOLIV-AHO/IR/Power/
Slide 19: Employees in Low Cost Countries (LCC)
Employees in Low Cost Countries (LCC) % of total employees % 14 000 50 42% 12 000 40 10 000 8 000 30 6 000 20 4 000 10 2 000 0 0 1999 2000 2001 2002 2003 2004 2005 Q3 AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 19
Slide 20: Major Headcount Changes YTD
Major Headcount Changes YTD Headcount 340 240 140 40 Canada = Net -100 Turkey China Australia Romania U.K. France Mexico Poland Estonia Sweden USA -60 -160 -260 -360 Headcount reduction Headcount increase AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 20
Slide 21: US Light Vehicle Inventory
US Light Vehicle Inventory Domestically Manufactured and Imported Vehicles Days 2004 2005 10-year average 100 90 September 2005, 57 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/2005/3Q05 - 21
Slide 22: Light Vehicle Production: North America
Light Vehicle Production North America Millions -0.8% +2.6% +2.4% 5 -4.6% 4 Total 3 2001 15.5M 2002 16.4M 2 2003 15.9M 2004 15.8M 1 2005 15.7M 2006 15.8M 0 Q1 Q2 Q3 Q4 Source: CSM, forecast Oct. 2005 AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 22
Slide 23: Light Vehicle Production: Europe
Light Vehicle Production Europe Millions 1.3% -3.8% +0.8% 6 -1.6% 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 Oct. 2005 Note: The years 2000-2003 only include Western Europe AUTOLIV-AHO/IR/Power/Status Report/2005/3Q0
Slide 24: Light Vehicle Production: Japan
Light Vehicle Production Japan Millions 3 +5.2% +3.0% +2.2% +3.9% 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 Oct. 2005 AUTOLIV-AHO/IR/Power/Status Report/2005/3Q05 - 24
Slide 25: Outlook for Q4, 2005
Outlook for Q4, 2005* Change Quarter over Quarter • Consolidated Sales: -9% due to reporting days and currency • Organic sales per reporting day: +-0% • EBIT margin: approaching the same level as in the fourth quarter 2004 * Based on the assumptions provided in the quarterly report AUTOLIV-AHO/IR/Po