STOCKHOLM, Jan. 28, 2020 /PRNewswire/ --
Q4 2019: Profitability and cash flow improvement
Financial highlights Q4 2019
$2,191m net sales
0.5% organic sales growth*
10.5% operating margin
11.1% adj. operating margin*
$1.78 EPS - an increase of 268%
$1.84 adj. EPS* - an increase of 30%
Full year 2020 indications
3-4% net sales growth
3-4% organic sales growth
At least 9.5% adj. operating margin
Key business developments in the fourth quarter of 2019
- Organic growth* outperformed global light vehicle production by 5.9pp, with all regions outperforming LVP. Order intake share remained high.
- Profitability improved despite global LVP decline, driven by ramp-up of new programs, improved launch efficiency and the structural efficiency program. Adjusted operating margin* and cash flow improved.
- The structural efficiency program is on track, and we are planning and implementing a multitude of strategic initiatives and structural improvements supporting our medium-term profitability target.
*For non-U.S. GAAP measures see enclosed reconciliation tables. All figures refer to continued operations, excluding former Electronics segment unless stated otherwise. All change figures in this document compare to the same period of previous year except when stated otherwise.
Comments from Mikael Bratt, President & CEO
Our performance progressed throughout the year and in the fourth quarter, we saw the first year-on-year improvement in adjusted operating margin* after the spin-off. Organic growth* was around 6pp above LVP growth in the fourth quarter and about 7pp above LVP growth for the full year. Our cash flow remained strong in the fourth quarter and the full year. I am pleased that 2019 became the fifth straight year for Autoliv to have around 50% global order share.
Global LVP declined by close to 6% in 2019, a sharp contrast to the 1% growth that was expected when the year started. Combined with higher raw material costs, a large number of product launches and beginning to implement our medium term strategic initiatives, 2019 was indeed a challenge. However, it was also a year when we continued to build the foundation for margin improvement in the coming years.
With more than 100 projects being evaluated, we have set a high pace in the planning and implementation of strategic initiatives and structural improvements. These initiatives are key drivers to our medium-term target of around 12% adjusted operating margin and building the foundation to continue to create shareholder value. We remain fully focused on delivering flawless execution of our strong order book with a positive margin contribution.
In 2020 we expect improved adjusted operating margin despite another year of declining LVP. This is based on that our organic sales growth will outperform LVP by about 6pp, some support from raw material costs and savings from the structural efficiency program. Principal headwinds are the expected LVP decline, sharply declining inflator replacement sales and costs for planning and implementing the strategic initiatives with payback in later years.
We expect 2020 seasonality to be even more pronounced than in 2019 in terms of quarterly profitability progression. The start of the year will be challenging but we expect a significantly stronger second half year.
Inquiries: Investors and Analysts
Vice President Investor Relations
Director Investor Relations
Vice President Communications
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 January 28, 2020.
This information was brought to you by Cision http://news.cision.com
The following files are available for download:
View original content:http://www.prnewswire.com/news-releases/autoliv-financial-report-october---december-2019-300994324.html