Autoliv: Financial Report January - March 2024

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Apr 26, 2024, 07:16 ET

STOCKHOLM, April 26, 2024 /PRNewswire/ -- (NYSE: ALV) (SSE: ALIV.sdb)

Q1 2024: Broad based improvements

Financial highlights Q1 2024
$2,615 million net sales
5% net sales increase
5% organic sales growth*
7.4% operating margin
7.6% adjusted operating margin*
$1.52 EPS, 77% increase
$1.58 adjusted EPS*, 76% increase

Full year 2024 guidance
Around 5% organic sales growth
Around 0% FX effect on net sales
Around 10.5% 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 first quarter of 2024

Record first quarter sales, increased organically* by 5%, which was 6pp better than global LVP decline of 1% (S&P Global April 2024). We outperformed in all regions, mainly due to new product launches and higher prices carried over from last year.
Profitability improved substantially, driven mainly by organic growth and cost reduction activities. Operating income was $194 million and operating margin was 7.4%. Adjusted operating income* improved from $131 million to $199 million and adjusted operating margin* increased from 5.3% to 7.6%. Return on capital employed was 19.7% and adjusted return on capital employed* was 20.2%.
Strong cash flow improvement. Operating cash flow improved by $168 million and free cash flow* improved by $171 million. The leverage ratio* of 1.3x was close to unchanged compared to three months earlier and 0.3x lower than a year earlier despite returning $0.7 billion to shareholders as dividends and share repurchases in the last 12 months. In the quarter, a dividend of $0.68 per share was paid, and 1.37 million shares were repurchased and retired.

_{*For non-U.S. GAAP measures see enclosed reconciliation tables.}

Key Figures

(Dollars in millions, except per share data)	Q1 2024	Q1 2023	Change
Net sales	$2,615	$2,493	4.9 %
Operating income	194	127	52 %
Adjusted operating income¹⁾	199	131	51 %
Operating margin	7.4 %	5.1 %	2.3pp
Adjusted operating margin¹⁾	7.6 %	5.3 %	2.3pp
Earnings per share²⁾	1.52	0.86	77 %
Adjusted earnings per share^1,2)	1.58	0.90	76 %
Operating cash flow	$122	$(46)	n/a
Return on capital employed³⁾	19.7 %	13.0 %	6.7pp
Adjusted return on capital employed^1,3)	20.2 %	13.4 %	6.8pp
1) Excluding effects from capacity alignments and antitrust related matters. Non-U.S. GAAP measure, see reconciliation table. 2) Assuming dilution when applicable and net of treasury shares. 3) Annualized operating income and income from equity method investments, relative to average capital employed.

Comments from Mikael Bratt, President & CEO
We delivered record first quarter sales, outperforming global LVP growth by 6pp. We outperformed in all regions, including China despite a negative LVP mix development with domestic Chinese OEMs growing by 17% and global OEMs declining by 5%. It is encouraging that our sales in India grew organically by 27%.
Sales in India are now larger than in South Korea, accounting for more than 4% of our global sales.

We delivered results in line with what we previously communicated, despite LVP being 1pp below what was expected three months ago, and we are on track to deliver on our full year outlook. We expect a record number of product launches in 2024, despite some OEMs changing certain vehicle model launch plans, mainly for EV platforms.

Profitability continued to improve significantly, driven mainly by volume growth and cost reductions. Restructuring activities are yielding results with indirect headcount declining by around 1,000, or by more than 5%, in the past 12 months.

Our continued focus on balance sheet efficiency is supporting our strong performance for cash flow, cash conversion, and return on capital employed.

I am particularly pleased with our leverage ratio of 1.3x, which declined significantly compared to a year ago, despite returning $0.7 billion to shareholders and investing in footprint optimization and growth. To support future growth, we are currently investing in increased capacity in Vietnam, China and India.

We are facing inflationary pressure again this year and we continue to expect compensation for what is in excess of what we can offset through normal productivity measures. The discussions with our customers are progressing according to plan.

As we have previously communicated, we expect the seasonality of past years to likely continue in 2024, with a gradual improvement throughout the year, leading to a full year adjusted operating margin* of around 10.5%. Key drivers for the full year margin progression are organic growth, our structural and strategic cost reduction initiatives, and a lower call-off volatility.

The 2024 development we expect should set up a solid base towards a continued high level of shareholder returns and our target of around 12% adjusted operating margin*.

Inquiries: Investors and Analysts
Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671

Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614

Inquiries: Media
Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424

Autoliv, Inc. is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on April 26, 2024