Press release
6% organic sales growth and 9.5% adjusted operating margin
(Stockholm, July 17, 2015) – – – For the three-month period ended June 30, 2015, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the worldwide leader in automotive safety systems – reported consolidated sales of $2,292 million. Quarterly organic sales* grew by 6.1%. The adjusted operating margin* was 9.5% (for non-U.S. GAAP measures see enclosed reconciliation tables).
The expectation at the beginning of the quarter was for organic sales growth of “around 6%” and an adjusted operating margin of “around 9%”.
For the third quarter of 2015, the Company expects organic sales to increase by more than 7% and an adjusted operating margin of around 9%. The expectation for the full year remains for organic sales growth of more than 6% and an adjusted operating margin of around 9.5%.
Key Figures
For Key Figures summary table, please refer to attached file below.
Comments from Jan Carlson, Chairman, President & CEO
“Autoliv’s strong organic sales growth* continued in the second quarter. Our ability to continue to grow even when a growth market such as China slows down, demonstrates our global strength. Europe and North America were the drivers, showing solid, balanced increases for both passive and active safety products. I am pleased that, through solid execution, we managed to exceed our operating margin expectation from the beginning of the quarter.
I am particularly pleased that we entered into two important agreements. One is a license agreement with Volvo Car Corporation which will enable us to broaden our active safety offering and improve our time to market for several important features for active safety and automation. The second one is the definitive agreement to acquire the automotive business of MACOM which will expand our capabilities in active safety through the addition of GPS module related products. Together these two initiatives brings further important building blocks for preventive safety and the automated driving system of the future car.
We continue to see positive signs in Western Europe, but we are still a long way from the all-time high. We are executing on our capacity alignment program and are increasing our efforts further in order to create an effective future European footprint. In North America, the total light vehicle production shows only modest growth, however the market seems stable with monthly annualized sales volumes of around 17 million vehicles. This situation is beneficial for us as we can optimize production for high capacity utilization.
High interest in active safety products in both Europe and North America led to strong organic growth* of 28% year to date. To a large extent this was driven by more attractive offerings from car manufacturers and more consumers selecting various active safety packages when buying new vehicles which drives growth.
There is uncertainty regarding the market development in China and we are taking action to address the situation. We are implementing tight cost controls and at the same time we are continuing our investment and engineering efforts in China. These measures will enable us to fully capitalize on the long term growth which we believe the Chinese light vehicle market will enjoy. In the short term we are negatively affected by the slowdown in vehicle production, lower delivery volumes from launches and negative vehicle mix including model transitions.
The recall of defective inflators produced by another supplier continues and we focus on supporting our customers as needed. Currently, we estimate that we will deliver up to 20 million inflators mainly in 2015 and 2016, but it is very difficult to determine the final delivery volumes.
We continue 2015 with a clear first priority – a relentless focus on quality”.
An earnings conference call will be held at 2:00 p.m. (CET) today, July 17. To follow the webcast or to obtain the pin code and phone number, please access www.autoliv.com. The conference slides will be available on our web site as soon as possible following the publication of this earnings report.