Press release
Sales Growth and Strong Cash Flow
(Stockholm, April 25, 2014) – – – For the three-month period ended March 31, 2014, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the worldwide leader in automotive safety systems – reported consolidated sales of $2,296 million, the Company’s highest first quarter sales ever.
Quarterly organic sales* grew by close to 8%, exceeding our guidance for organic sales growth of “around 7%”. The adjusted operating margin* for the quarter was 8.6%, exceeding our guidance for a margin of “around 8%”. Cash flow from operations amounted to $185 million, the Company’s highest cash flow ever for a first quarter, compared to $141 million in the same quarter of 2013.
For the second quarter of 2014, we expect organic sales to increase by around 5% compared to the same period in 2013 and an adjusted operating margin of around 9%. The indication for the full year, is for organic sales growth of more than 5% compared to 2013 and an adjusted operating margin of around 9%.
Key Figures
| (Dollars in millions, except per share data) | Q1 2014 | Q1 2013 | Change |
| Net sales | $2,295.8 | $2,135.0 | 7.5% |
| Operating income | $191.7 | $182.4 | 5.1% |
| Operating margin | 8.4% | 8.5% | (0.1)pp |
| Adjusted operating margin (1) | 8.6% | 8.8% | (0.2)pp |
| Earnings per share, diluted (2) | $1.38 | $1.29 | 7.0% |
| Adjusted earnings per share, diluted (1, 2) | $1.43 | $1.32 | 8.3% |
| Operating cash flow | $185.3 | $140.8 | 31.6% |
| 1) Excluding costs for capacity alignment and antitrust investigations.* 2) Assuming dilution and net of treasury shares. |
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Comments from Jan Carlson, President & CEO
“2014 started with a solid quarter for Autoliv. I am pleased with our continued strong sales growth and the higher than expected operating margin. The margin improvement was a result of strong execution on the higher than expected sales. In addition, we increased shareholder value by returning over $140 million during the quarter.
China saw double digit light vehicle production growth in the first quarter and we believe there will be close to 10% light vehicle production growth in China for the full year 2014. We are making progress with our operational challenges in Europe and Brazil. However the significant vehicle production decline now expected in Brazil this year will put further strain on our improvement efforts in the country.
In our active safety business we saw the fourth consecutive quarter of more than 50% growth, and we expect strong sales to continue. However our growth rates will be more in line with the addressable market for the remainder of the year, as our particularly strong growth during the last three quarters of 2013 impacts the year over year comparisons. In addition we are increasing our engineering efforts in this important growth area in order to further support long term prospects.
In line with adjusting our capital structure we successfully completed a private placement of debt securities in the US market that generated an aggregate of $1.25 billion in proceeds at an average interest rate of around 3.8%, a strong sign of confidence in our Company.
We continue to view 2014 as a transition year with high investments for growth, adjustments of our global footprint and a focus on our operational margin challenges.”
An earnings conference call will be held at 3:00 p.m. (CET) today, April 25. 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.