Slide 1: Earnings Conference Call and Webcast: Q2 2019 Financial Results
Earnings Conference Call and Webcast 229 Quarter 2019 Financial Results July 19,2019 Autoliv
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: Q2'19 Key events
A OS a eae eee Q2’19 Key events = Severe deterioration of market conditions - Light vehicle production (LVP) was substantially weaker in all regions except Japan** - Geopolitical challenges - border crossings, tariffs, Brexit, etc. - Raw material headwinds persist, mainly fram steel and Nylon 6.6 =
Slide 4: Q2'19 Financial Highlights
QJ2°19 Financial Highlights Organic sales growth despite market declines Consolidated Sales Adjusted Operating Income* Adjusted Earnings per Share* USS (Millions) US$ (Millions) USS 2,212 > y 2,155 230 2.22 183 1.38 g218 ge19 g218 ge19 g218 g219 (*) Non-US GAAP measures exclude costs for capacity al
Slide 5: Market Conditions Q2'19
Market Conditions Q2°19 Global LVP fell more than 7% - worse than the decline in Q1°19 10- year Light Vehicle Sales LTM** * China - Chinese** light vehicle registrations fell by 14% in the quarter despite generous discounts in “ June to reduce inventories ahead of changes in emissions rules 2 —China
Slide 6: Q2'19 Sales Growth
Q2°19 Sales Growth Sales Bridge USS (Million) 2,300 $34 2,200 2,100 2,000 1,900 1,800 Q2'18 Org. growth Currency Q2°19 (**) Non-US GAAP measure. Regional Organic Growth** <ahe Weer ay, (6.51% om LVP* (7)% (1.4)% LVP* 6% AMERICAS 11.5% ‘ TSS (o6)m LVP* (2)% k - ©) MINT Ups (17)% 73% yy, LVP* (4)% é (
Slide 7: Q2'19 - Key Model Launches
Q2’19 - Key Model Launches Ford Escape Moh 4A Nissan Versa Chevrolet Silverado Heavy Duty A MA ok 4 @X LE Audi 3 Sportback Mazda CX-30 SOO Ox4 @ % sk —_a Lincoln Corsair Cadillac XT6 DX Bek A OMA Jeep Gladiator Nissan Sylphy our @ x4 4 =e
Slide 8: Q2'19 Financial Overview
Q2°19 Financial Overview Sales $2,155 $2,212 Gross Profit $400 18.6% $440 19.9% Adj. Operating Income! $183 8.5% $230 10.4% EPS (assuming dilution) $1.25 $2.20 Adj. ROCE!2 20% 21% Adj. ROE!2 24% 24% Operating cash flow ($21) $201 Dividend per share $0.62 $0.62 Global LVP3 (annual rate) ~B6M ~93M Aut
Slide 9: Adj. Operating Margin Bridge
Adj. Operating Margin* Bridge Qe’19 vs. Prior Year 12% | Operational Headwinds of ~50 bps = LVP decline has a disproportionate negative impact on mature platforms with normal operating leverage as (20) bps a 8.5% % P = ~15 bps related to temporary costs for the social unrest in Matamoros, Mexico 6%
Slide 10: Cash Flow Continuing Operations
Cash Flow Continuing Operations Capex and D&A Investments for growth and shareholder returns Us tons) soo o wo om aera ott | ume | 2or6 20ie" ° ~, ae Net Income 109 193 246 378 588 560 ~ ne Depreciation & ae 1% AmmaniFetiter 86 87 350 342 307 280 co os EC antitrust payment (203) - (203) - - see mmca
Slide 11: EPS development
EPS development Q2’19 vs. same Quarter Prior Year Earnings per Share US$ Earnings per Share excluding items affecting comparability* uss $2.20 $1.25 02718 g219 The main negative items impacting EPS $2.22 were = ~44cents from unusual tax items $1.38 =~ 39 cents from lower operating income = ~11 cents
Slide 12: Balance Sheet and Financial Policy
Balance Sheet and Financial Policy Committed to Maintain “Strong Investment Grade” Rating Supported by High FCF Conversion Net Debt/ EBITDA*® x 2.0 1.8Xx. 15 Long-Term Target: 1. 10 05 00 Q216 Q217 Qg218 g219 0.5-1.5x Long-Term Range NNN AN EC antitrust fine of $203M Our net debt increased by $204M
Slide 13: 2019 Light Vehicle Production Outlook
A OS a eae eee 2019 Light Vehicle Production Outlook Uncertainty prevails = We expect the challenging market conditions to continue and we see significant uncertainty to IHS’ global LVP forecast enon or Yor tan. yoy = Our FY 2019 outlook is based on global LVP declining 4-6% oo . . . China (5)% (0)%
Slide 14: Financial Outlook 2019
Financial Outlook 2019 Global LVP (4)% to (6)% Org. sales outperformance vs. LVP 6pp to 7pp i i 9 Organic sales growth’ 1% ta 3% FX ~(2)% EUR/ US$ 11283 . US$ / JPY 109.05 Consolidated sales, net (1)% to 1% US$ / KAW Tal Adjusted Operating margin! 9.0% to 9.5% USS / MXN joa US$ /CNY 683 Tax rate ~28
Slide 15: Focused Improvement Agenda
Focused improvement Agenda = Further reduction of direct headcount to align with market demand = Reduction of around 5% of our indirect headcount = Opex/Capex review Adapting to Geopolitical challenges - border crossing, tariffs, etc. = Productivity inprovements after launch Short -term = Purchase e
Slide 16: Welcome to Autoliv Capital Markets Day 2019
y he Welcome to Autoliv Capital Markets Day 2019 November 19 in Salt Lake Area, Utah Autoliv
Slide 17: Autoliv
Le “Autoliv —
Slide 18: Q2'19 Product Volumes
Q2°19 Product Volumes Strong volume growth in Steering Wheels Seatbelts 36.7 (7)% * Pretensioners (of which) 19.5 2% * Active Seatbelts (of which) 14 12% Frontal Airbags 14.3 3% * Knee Airbags (of which) 14 1% Side Airbags 24.8 1% * Chest (Thorax) 13.4 0% = Head (Curtain) 11.4 2% Steering Wheels 53}
Slide 19: Definition of Symbols
Definition of Symbols 4 = Driver and/or Passenger airbags ah = Pedestrian Airbag e . A = Seatbelts @ = Steering Wheel A » Side airbags Of * Head/Inflatable Curtain airbags e * Knee airbag [F] * Pyrotechnical Safety Switch Autoliv