Q2 2026: Positive momentum continued in second quarter
STOCKHOLM, July 17, 2026 /PRNewswire/ --
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 income1) | 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 margin1) | 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 - diluted1) | 2.43 | 2.21 | 10 % | 4.49 | 4.36 | 2.9 % |
Operating cash flow | 434 | 277 | 57 % | 359 | 355 | 1.1 % |
Return on capital employed2) | 17.9 % | 23.8 % | (5.8)pp | 20.3 % | 24.8 % | (4.5)pp |
Adjusted return on capital employed1,2) | 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. |