STOCKHOLM, Oct. 25, 2019 /PRNewswire/ -- Q3 2019:
Business cycle management yielding results
Financial highlights Q3 2019
$2,028m net sales
1.2% organic sales growth*
7.6% operating margin
9.0% adj. operating margin*
$0.98 EPS - a decline of
27%
$1.30 adj. EPS* - a decline of
4%
Full Year 2019 indications
Around (2)% net sales growth
Around 1% organic sales growth
Around 9% adj. operating margin
Key business developments in the third quarter of
2019
- Organic growth outperformed global light vehicle production
by 4.6pp mainly due to China and Americas.
- Profitability still impacted by global LVP decline and high
raw material costs, although less than previous quarter, partly
offset by total workforce decline of 800 vs. a quarter ago, or of
1,600 vs. a year ago.
- Established new customer collaborations; a North
American road safety center with Great Wall Motor and presented
next generation passenger airbag in cooperation with
Honda.
*For non-U.S. GAAP measures see enclosed reconciliation
tables. All figures herein refer to continued operations, excluding
former Electronics segment, unless stated otherwise. All change
figures in this document compare to the same period of previous
year, except when stated otherwise.
Key Figures
|
(Dollars in
millions, except per share data)
|
Q3
2019
|
Q3
2018
|
Change
|
9M
2019
|
9M
2018
|
Change
|
|
Net sales
|
$2,028
|
$2,033
|
(0.3)%
|
$6,356
|
$6,485
|
(2.0)%
|
|
Operating
income
|
$154
|
$193
|
(20)%
|
$497
|
$665
|
(25)%
|
|
Adjusted operating
income1)
|
$183
|
$194
|
(5.7)%
|
$532
|
$668
|
(20)%
|
|
Adjusted operating
margin1)
|
9.0%
|
9.5%
|
(0.5)pp
|
8.4%
|
10.3%
|
(1.9)pp
|
|
Earnings per share,
diluted2, 3)
|
$0.98
|
$1.34
|
(27)%
|
$3.50
|
$5.37
|
(35)%
|
|
Adjusted earnings per
share, diluted1, 2, 3)
|
$1.30
|
$1.35
|
(3.7)%
|
$3.87
|
$5.40
|
(28)%
|
|
Operating cash
flow4)
|
$195
|
$238
|
(18)%
|
$328
|
$520
|
(37)%
|
|
Return on capital
employed5)
|
16.2%
|
20.4%
|
(4.2)pp
|
18.0%
|
20.9%
|
(2.9)pp
|
|
1) Excluding costs
for capacity alignment, antitrust related matters and separation of
our business segments. 2) Assuming dilution and net of treasury
shares. 3) Participating share awards with right to receive
dividend equivalents are (under the two-class method) excluded from
the EPS calculation. 4) For first 9 months 2018 management estimate
for Continuing Operations derived from cash flow including
Discontinued Operations. 5) Operating income and income from equity
method investments, relative to average capital
employed.
|
Comments from Mikael Bratt,
President & CEO
We experienced continued challenging market conditions in the
quarter. Although the rate of decline in light vehicle production
slowed down slightly, uncertainty remains high, market outlook by
IHS continues to be revised down and we do not see a turnaround in
LVP in the near term.
We continued to outperform light vehicle production, growing
organically* about 4.6pp more than LVP in the third quarter, driven
mainly by strong development in China and Americas.
Our business cycle management actions are taking effect and the
adjusted operating margin* decline year over year was substantially
less than in recent quarters, and it improved sequentially. LVP has
continued to slide however, and we now assume 6-7% global LVP
decline for 2019, which moderates our outlook to around 1% for
organic sales growth and to around 9% for adjusted operating
margin.
Although I am not pleased with this profit level, we achieved it
in the context of LVP expectations declining by 7-8pp in just 9
months. The cost improvement actions which enabled this performance
will continue relentlessly.
We reduced our workforce by an additional 800 in the quarter, or
by 1,600 compared to a year ago, despite growing our sales
organically* by 1.2%. Our program to reduce indirect labor costs by
5% is developing as planned and we expect it to impact our costs
meaningfully as of the fourth quarter 2019.
In addition to LVP and raw material headwinds, the strike at
General Motors in North America is
also affecting our sales.
Being close to our customers supports our short- and long-term
business opportunities and this quarter we announced two new
customer collaborations - the North American road safety research
lab together with Great Wall Motor and the next generation
passenger airbag in cooperation with Honda. Our order intake share
remained on a good level in the quarter, supporting a prolonged
sales growth outperformance.
As always, it is of utmost importance to focus on quality and
execution to secure a strong long-term performance for our
company.
Conference call and webcast
An earnings conference call will be held at 2:00 p.m. CET today, October 25, 2019. 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.
Inquiries: Investors and Analysts
Anders Trapp
Vice President Investor Relations
Tel +46-(0)8-58-72-06-71
Henrik Kaar
Director Investor Relations
Tel +46-(0)8-58-72-06-14
Inquiries: Media
Stina
Thorman
Vice President Communications
Tel +46-(0)8-58-72-06-50
This information is information that Autoliv, Inc. is obliged to
make 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
October 25, 2019.
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The following files are available for download:
|
https://mb.cision.com/Main/751/2941445/1129927.pdf
|
The full report
(PDF)
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