Autoliv : Earnings Release Q2 2026 Press Release

About this update from Autoliv, Inc.

Financial Report April - June 2026 Stockholm, Sweden, July 17, 2026 (NYSE: ALV and SSE: ALIV.sdb) ~PAGE-BREAK~ Financial Report April - June 2026 1 Q2 2026: Positive momentum continued in second quarter Financial highlights Q2 2026 $2,803 million net sales, increase of 3.3% 1.0% organic sales growth* 6.8% operating margin, 9.6% adj. operating margin* $1.35 diluted EPS, 38% decrease Full year 2026 guidance Around 0% organic sales growth Around 2.5% positive FX impact on net sales Around 10.5-11% adjusted operating margin Around $1.2 billion operating cash flow All change figures in this release compare to the same period of the previous year except when stated otherwise. Key business developments in the second quarter of 2026 • Net sales increased organically* by 1.0%, which was 1.3pp higher than the global LVP decrease of 0.3% (S&P Global July 2026) mainly driven by strong performance in Asia. • Regional and customer LVP mix is estimated to have impacted sales negatively by about 0.6pp. • Our organic sales growth* outperformed LVP significantly in China and in Asia excl. China, underperformed slightly in EMEA and more markedly in Americas. • Our strong performance in Asia excl. China was mainly due to India, where we outperformed by 20pp, driven by continued strong market growth in safety content per vehicle, while our China performance was due to more than 40pp outperformance with Chinese OEMs. • Underlying profitability remained strong. • Operating income decreased substantially due to previously communicated restructuring activities in Türkiye. • Adjusted operating income* increased by 7.3%, despite adverse effects from FX and raw material prices, mainly due to well executed direct material cost savings. • Operating margin was 6.8% and adjusted operating margin* was 9.6%. • ROCE was 17.9% and adjusted ROCE* was 24.9%. • Cash flow was the best for a second quarter so far with operating cash flow improving from $277 million to $434 million, mainly driven by strong underlying profitability and a normalization of working capital. • Free operating cash flow* more than doubled to $340 million. • The leverage ratio* improved to 1.2x. • In the quarter, a dividend of $0.87 per share was paid and 1.65 million shares were repurchased and retired. *For Non-GAAP measures see enclosed reconciliation tables. Key Figures (Dollars in millions, except per share data) Q2 2026 Q2 2025 Change 6M 2026 6M 2025 Change Net sales $2,803 $2,714 3.3% $5,556 $5,292 5.0% Operating income 192 247 (22)% 429 502 (14)% Adjusted operating income 270 251 7.3% 515 506 1.7% Operating margin 6.8% 9.1% (2.3)pp 7.7% 9.5% (1.8)pp Adjusted operating margin 9.6% 9.3% 0.4pp 9.3% 9.6% (0.3)pp Earnings per share - diluted 1.35 2.16 (38)% 3.24 4.31 (25)% Adjusted earnings per share - diluted 2.43 2.21 10% 4.49 4.36 2.9% Operating cash flow 434 277 57% 359 355 1.1% Return on capital employed 17.9% 23.8% (5.8)pp 20.3% 24.8% (4.5)pp Adjusted return on capital employed 24.9% 24.1% 0.8pp 24.1% 25.0% (0.9)pp Dividends paid (64) (54) 19% (130) (108) 20% Share repurchases (200) (51) 293% (200) (101) 97% 1) Excluding effects from capacity alignments and antitrust related matters. Non-GAAP measure, see reconciliation table. 2) Annualized operating income and income from equity method investments, relative to average capital employed. Comments from Mikael Bratt, President & CEO Through focused execution, we maintained the positive momentum from the first quarter. Globally, our sales grew organically more than 1pp faster than global LVP, outgrowing LVP significantly in Asia. Our sales to Chinese OEMs grew by more than 40%, and Chinese OEMs accounted for 55% of our sales in China, compared to 40% a year ago. Our opportunities with Chinese OEMs were to optimize our footprint. In the quarter, we announced that we will discontinue manufacturing operations in Türkiye. We continued to manage geopolitical developments successfully in the quarter, limiting the effects of tariffs, supply chain challenges and raw material price increases. The business environment remains uncertain but our current best estimate for the remainder of the year is to reiterate our full year 2026 guidance of about unchanged organic sales growth, adjusted operating margin of around 10.5-11% and operating cash flow of around 1.2 billion. This is based on the assumption that LVP will decline by around 2.5%. Customer compensations and other mitigation initiatives are expected to have limited impact in Q3, but significantly greater contribution in Q4. Therefore, we expect third quarter adjusted operating margin to be around the first half 2026 level, with a significant improvement in Q4. Based on our full year guidance, we continue to expect strong cash flow for the year, which supports our ambition to provide attractive shareholder returns, including share repurchases of $300-500 million in 2026. further solidified by signing new strategic cooperation agreements with both Great Wall Motor and XPENG. Sales in India continued to grow by more than 35%. Well executed cost reduction activities supported a continued improvement of underlying profitability, with adjusted operating margin increasing to 9.6%. I am pleased that our cash flow improved in line with our expectations, resulting in record operating cash flow for a second quarter, and supporting our ambitious shareholder return strategy. Our leverage ratio improved to 1.2x, despite repurchasing around 1.65 million shares, equal to $200 million, in the quarter. In line with our ambition to ensure long-term competitiveness and align production capacity with market demand, we continue ~PAGE-BREAK~ Financial Report April - June 2026 2 Full year 2026 guidance In addition to the assumptions below and in our business and market update below, our full year 2026 guidance is based on our customer call-offs and the achievement of our targeted cost compensation adjustments with our customers, including no material changes to tariffs or trade restrictions, as compared to what is in effect as of July 9, 2026, as well as no significant changes in the macro-economic environment, changes in customer call-off volatility or significant supply chain disruptions. Full year 2026 Guidance Organic sales growth Around 0% Adjusted operating margin Around 10.5-11% Operating cash flow Around $1.2 billion Capex, net, % of sales Less than 5% 1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. Excluding unusual items. Full year 2026 Assumptions LVP growth Around 2.5% negative FX impact on net sales Around 2.5% positive Tax rate Around 30% 3) Excluding unusual tax items. The forward-looking Non-GAAP financial measures above are provided on a Non-GAAP basis. Autoliv has not provided a GAAP reconciliation of these measures because items that impact these measures, such as costs and gains related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and Autoliv is unable to determine the probable significance of the unavailable information. Conference call and webcast The earnings conference call will be held at 2:00 p.m. CET today, July 17, 2026. Information regarding how to participate is available on www.autoliv.com. The presentation slides for the conference call will be available on our website shortly after the publication of this financial report. ~PAGE-BREAK~ Financial Report April - June 2026 3 Business and market condition update Supply Chain Call-off accuracy improved somewhat compared to Q2 2025, but declined slightly vs. Q1 2026, mainly driven by light vehicle market developments in China. Call-off volatility remains higher than pre-pandemic levels. Low customer demand visibility and changes in customer call-offs with short notice continued to have some negative impact on our production efficiency and profitability. We expect call-off volatility for the full year 2026 on average to be slightly improved compared to 2025 but still remain higher than pre-pandemic levels. However, the continued significant uncertainty in the geopolitical environment and future changes in tariffs and trade restrictions may lead to more negative call-off volatility. Raw material inflation, geopolitical risks and tariffs Raw material price changes had a negative impact on our profitability in the second quarter, with a gross impact of around $21 million. For the full year 2026, our current assessment is for around $110 million gross impact from higher raw material prices. We expect to be able to mitigate a majority of this headwind, mainly through internal cost reductions, material mix improvements and commercial negotiations with customers and suppliers. Given the continued uncertainty in the geopolitical environment, the effects of tariffs and trade restrictions may lead to a more adverse inflation environment. We continue to execute on productivity and cost reduction initiatives to offset these cost pressures. The new tariffs imposed in 2025 negatively impacted our profitability in the second quarter of 2026. We achieved customer compensation for more than 80% of the tariff costs, resulting in a net negative impact after compensation of around $7 million, which was in line with the net amount in Q2 2025. Including the dilution effect, the impact on operating margin was around 35bps negative. The recovery of tariffs related to the U.S. Supreme Court's ruling regarding the International Emergency Economic Powers Act had a net positive effect of around $3 million. While it is our ambition and expectation to continue passing tariff costs on to our customers, there is significant uncertainty as future recovery levels may vary. For the full year 2026, we estimate the tariff-related dilution on operating margin will be similar to the around 20 bps for full year 2025. Ongoing geopolitical developments, including the hostilities in and around the Persian Gulf, have added uncertainty into the global economic environment. These conditions may affect supply chains, commodity prices, customer demand, and broader market stability. As a result, our current financial guidance reflects the best information available today but may change should these geopolitical dynamics materially impact our operations or the markets in which we operate. We continue to closely monitor both geopolitical developments and the tariff policy environment in order to remain agile and to adjust our commercial and operational responses to any such developments. Autoliv to discontinue manufacturing operations in Türkiye On May 8, 2026, Autoliv announced an update to its strategy to align production capacity with future EMEA market requirements. As part of this strategy, Autoliv will gradually discontinue its manufacturing operations in Türkiye, which include the production of steering wheels, airbags, and seatbelts, to continue optimizing its manufacturing footprint and ensure long-term competitiveness and operational sustainability. This discontinuation is expected to affect approximately 2,200 employees. Production in Türkiye will be moved to Autoliv's other existing facilities in the EMEA region. The complete closure is anticipated in the first half of 2028. The Company expects to record restructuring charges of approximately $142 million in total, of which $90 million was recognized in Q2 2026. Cash outflow is expected to be approximately $129 million, with a limited impact on the 2026 cash flow. The Company expects to achieve estimated annual pre-tax savings of $40 million, beginning in 2027, reaching the full run-rate benefit in 2028. This report includes content supplied by S&P Global; Copyright © Light Vehicle Production Forecast, January, April and July 2026. All rights reserved. ~PAGE-BREAK~ Financial Report April - June 2026 4 Key Performance Trends Sales Development by region Operating and adjusted* operating income and margins Operating cash flow and capex, net Shareholder returns Return on Capital Employed Cash Conversion* Key definitions ------------------------------------------------------------------------------------------------------------ Adj. operating income and margin*: Operating income adjusted for capacity alignments, antitrust related matters and for FY 2023 the Andrews litigation settlement. Capacity alignments include non-recurring costs related to our structural efficiency and business cycle management programs. Capex, net: Capital Expenditure, net, defined as Expenditures for Property, Plant and Equipment less Proceeds from sale of Property, Plant and Equipment. Cash conversion*: Free operating cash flow* in relation to net income. Free operating cash flow defined as operating cash flow less capital expenditure, net. ~PAGE-BREAK~

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