AutoLiv: Financial Report January - March 2020

STOCKHOLM,April 24,2020 -- Q1 2020: Perhaps,the end of the beginning

Financial highlights Q1 2020

$1,846mnet sales

13% organic sales decline*

7.3%operating margin

7.4%adj. operating margin*

$0.86EPS - a decrease of 32%

$0.88 adj. EPS* - a decrease of 27%

Full year 2020 indications

No indications will be provided until effects of COVID-19 pandemic can be better assessed

Key business developments in the first quarter of 2020

Organic sales decline* was 11pp better than global light vehicle production,with all regions outperforming LVP. Order intake share remained high and supportive of prolonged sales outperformance.

Gross margin and adjusted operating margin* were on similar levels as last year despite the global LVP decline,supported by no costs related to social unrest in Matamoros,Mexico,in 2020,cost reductions in R,D&E,S,G&A,production overhead and raw materials. Operating cash flow and free cash flow* were above Q1'19 levels.

Securing a strong liquidity position by drawing down on our Revolving Credit Facility. Liquidity further supported by reducing or suspending non-critical expenses and investments and by cancelling the dividend after the quarter closed.

*For non-U.S. GAAP measures see enclosed reconciliation tables. All change figures in this release compare to the same period of previous year except when stated otherwise.

Key Figures

(Dollars in millions,except per share data)

Q1 2020

Q1 2019

Change

Net sales

$1,846

$2,174

(15)%

Operating income

$134

$173

(23)%

Adjusted operating income1)

$136

$166

(18)%

Operating margin

7.3%

8.0%

(0.7)pp

Adjusted operating margin1)

7.4%

7.7%

(0.3)pp

Earnings per share,diluted2,3)

$0.86

$1.27

(32)%

Adjusted earnings per share,diluted1,2,3)

$0.88

$1.20

(27)%

Operating cash flow

$156

$154

1.4%

Return on capital employed4)

14.5%

19.6%

(5.1)pp

1) Excluding costs for capacity alignment and antitrust related matters. 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) Operating income and income from equity method investments,relative to average capital employed.

Comments from Mikael Bratt,President & CEO

We achieved a strong first quarter despite the sharp decline in light vehicle production,and I am pleased with our sales outperformance,margins and especially our strong cash flow and cash conversion. The task force we set up to manage the situation in China was expanded to global scale and acted promptly with timely cost reduction actions to offset much of the headwinds from weak LVP.

The current situation is more challenging than in the first quarter,as customer closures are now affecting most of our operations,for an unknown period of time,compared to a more limited scope in the first quarter. We have withdrawn our full year 2020 indication until the effects of the COVID-19 pandemic can be better assessed.

We have undertaken a number of actions to manage the evolving situation,including adjusting production and work week hours,reducing or suspending investments and spending that are not critical for daily operations. We have also accelerated cost saving initiatives,furloughed personnel,often in government supported programs,and reduced compensation for executive officers and board members.

Furthermore,we have intensified working capital control through strict inventory control,careful monitoring of receivables and close collaboration with our suppliers. In addition,we have strengthened our liquidity position as we cancelled the second quarter dividend,suspended future dividends and drawn fully on our revolving credit facility.

We are ensuring we have an adequate cost structure that supports our profitability targets,regardless of what level of LVP that will be the new normal,post COVID-19 pandemic.

The strategic initiatives and structural improvement projects we outlined at our 2019 Capital Markets Day remain key priorities,although some projects may be delayed by a few quarters.

While managing a sharp LVP decline in most regions,we are also preparing to restart and ramp up. We are coordinating with our customers and suppliers to make the necessary preparations. The health and safety of our employees remain our top priorities and we are upgrading protective measures and equipment as part of our preparations.

We have seen significant recovery in demand and production in China since restarting in mid-February and all of our plants in China are now operating at normal levels. While preparing for the worst and hoping for the best,we remain focused on quality and safety.

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

Henrik Kaar

Director Investor Relations

Tel: +46 (0)8-58-72-06-14

Marja Huotar

Acting Vice President Communications

Tel: +46 (0)70-957-8135

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 April 24,2020.

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The full report (PDF)