Report
Press release
Strong Sales Growth Continues Led by China and Active Safety
(Stockholm, October 24, 2013) – – – For the three month period ended September 30, 2013, Autoliv Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the world leader in automotive safety – reported consolidated sales of $2,119 million, the highest third quarter sales in Autoliv’s history. The operating margin was 8.8% excluding costs related to antitrust investigations and capacity alignments (non-U.S. GAAP measure, see enclosed reconciliation table). Organic sales* growth of close to 9% exceeded the Company’s expectation by almost 3 percentage points (pp).
Cash flow from operations was $206 million and operating income was $182 million, including $3 million in costs related to antitrust investigations and capacity alignments. Income before taxes was $177 million and net income was $125 million. Earnings Per Share (EPS) increased by 5% to $1.29, assuming dilution.
For the fourth quarter, Autoliv’s strong organic sales growth is expected to continue by more than 9%. The operating margin is expected to be around 9% excluding costs related to antitrust investigations and capacity alignments. We expect 2013 full year organic sales to grow by more than 5%, as compared to the previous indication for growth at around 4%. The operating margin indication remains unchanged at around 9% excluding costs related to antitrust investigations and capacity alignments, mainly due to adverse currency effects and operational inefficiencies.
Comments from Jan Carlson, President and CEO
“We had a solid quarter, delivering strong growth and better than expected margins. Even though we have some challenges I am very pleased with the Company’s overall excellent performance. As in the previous quarter, China and Active Safety products contributed significantly to our strong growth, while operational issues and currencies negatively affected our margins.
Looking forward, we expect strong growth to continue into the fourth quarter, again driven largely by China and Active Safety, but also important model launches and production ramp-ups in Europe, Japan and Brazil. In addition to our high investments and strong growth in Active Safety we anticipate that margins in this business could reach the low end of our long term corporate target range in the next two to three years. Based on strong order intake over the last few years we further believe we are gaining market share in certain product areas.
We recently held an opening ceremony for our new propellant plant in China, the Company’s biggest investment to date, which will start production in the beginning of 2014. This is another important step in our investment strategy, a strategy which will help give us long term competitive advantage as we continue to build the most geographically dispersed global footprint in our industry.
In parallel with these positive developments we are challenged to continue the transition of our European footprint at the highest possible pace. The positive effects from our growth are also partially offset by an unfavorable product mix and negative currency impact. Due to these challenges we do not see positive margin development from higher sales for 2013. We foresee unfavorable product mix, and margin constraints to continue into 2014.
Our current growth shows that we have the right strategy and as we execute towards our strategic targets as outlined at our capital market day and complete our current company transformation, we will build an even stronger Autoliv. In the future we envision that our products and systems will save 150,000 lives every year.”
An earnings conference call will be held at 2:30 p.m. (CET) today, October 24. To follow the webcast, or obtain the pin code and phone number, please access www.autoliv.com. The conference call slides will be available on our web site as soon as possible following the publication of this earnings report.