Press release
$2.2 billion in sales with 8.5% adjusted operating margin
(Stockholm, October 23, 2014) – – – For the three-month period ended September 30, 2014, Autoliv, Inc. (NYSE: ALV and SSE: ALIV.Sdb) – the worldwide leader in automotive safety systems – reported consolidated sales of $2,208 million, the highest third quarter sales ever for the Company. Quarterly organic sales (for non-U.S. GAAP measures* see enclosed reconciliation table) grew by close to 5%. The adjusted operating margin* was 8.5%.
The expectation at the beginning of the quarter was for an organic sales growth of “around 6%” and an adjusted operating margin of “around 8.5%”. The lower than expected organic sales growth was primarily due to unfavorable vehicle mix in China, but also due to lower overall production in the Chinese market. We had record operating cash flow for a third quarter of $212 million.
For the fourth quarter of 2014 we expect organic sales to increase by around 2%, and an adjusted operating margin of around 9.5%. The expectation for the full year is now for organic sales growth of around 5.5%, and an adjusted operating margin of around 9%.
Key Figures
For Key Figures summary table, please refer to attached file below.
Comments from Jan Carlson, Chairman, President & CEO
“Our strong operational and quality execution continues which resulted in another quarter of solid financial performance. We managed to deliver record sales, gross profit and operating cash flow for a third quarter. In addition, we returned a record $288 million to our shareholders through dividends and share repurchases. Over the last twelve months we have returned $772 million to our shareholders.
During the 3rd quarter our overall solid organic growth continued despite our slower than expected growth in China. Since 2011 we have consistently outperformed the light vehicle production in China, with the exception of this quarter due to a negative vehicle mix. We expect this negative mix in China to continue in the fourth quarter however we remain confident in our long-term strategies for growth and vertical integration in this market.
Uncertainties around the macro environment have gradually increased throughout the year. This has resulted in a slower light vehicle production growth rate for the 2nd half of this year, compared to what was anticipated in January. The early indication is that this slower LVP growth rate will continue into the first half of 2015. We will continue to monitor the overall market conditions very closely and are prepared to take appropriate actions in a timely manner.
During the quarter we also introduced a new operating structure which will be important for the further growth of the Company. Starting in 2015 Autoliv will have two segments for reporting purposes - passive safety and electronics (including our fast growing active safety business). Operational improvements in our European steering wheel operations developed according to plan, while improvement efforts in Brazil are being hampered by the sharp decline in the Brazilian vehicle production.
In this current environment we continue to execute on our three core strategies with quality first, efficiency through one product one process and innovation for long term market leadership”.
An earnings conference call will be held at 3:00 p.m. (CET) today, October 23. 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.