Autoliv: Financial Report October - December 2015
Friday, January 29, 2016 7:25:00 AM ET
Strong quarterly execution - increases investments for future growth
towards end of decade targets.
Autoliv, Inc. (ALV AND STO:ALIVSDB ) - the worldwide leader in
automotive safety systems - is moving ahead towards its end-of-decade
targets for growth, margins and returns outlined in its October 2015
Capital Markets Day. In 2016, the Company increases its RD&E efforts for
future growth while indicating 2016 adjusted operating margin above its
long term target range.
For the three-month period ended December 31, 2015, the Company reported
record sales of $2,520 million. Quarterly organic sales* grew by 13.4%.
Operating margin was 11.2%. The adjusted operating margin* was 11.1%
(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 9%" and an adjusted operating margin of "around 10.5%".
For the first quarter of 2016, the Company expects organic sales to
increase by more than 10% and an adjusted operating margin of around
8.5%. The expectation for the full year is for organic sales growth of
around 5% and an adjusted operating margin of more than 9%. RD&E
investments, net will be in the higher end of the 6-6.5% range, a
significant year-over-year increase.
For Key Figures summary table, please refer to attached file below.
Comments from Jan Carlson, Chairman, President & CEO
"At our Capital Markets Day in early October 2015, we outlined the
Companys targets for the end of the decade. In 2015 we executed
according to plan and we managed to exceed our own expectations from the
beginning of the fourth quarter. In 2016 we continue to step up our RD&E
efforts in support of long term growth.
I am pleased with our performance in the quarter. Asia, Americas and
Europe all showed double-digit organic sales growth* and globally we
grew more than 13%. Both our quarterly sales and operating profit set
new records, we delivered more than 11% adjusted operating margin* and
we had close to record operating cash flow. Through strong execution we
managed to benefit from the stronger than expected light vehicle
production in the quarter.
In China, light vehicle production exceeded the estimates from the
beginning of the quarter which, combined with a beneficial product mix,
enabled us to achieve double-digit organic sales growth in the fourth
quarter and also deliver full-year organic sales growth. This capped a
year that started with unfavorable product mix for Autoliv, followed by
instability in the Chinese market during the summer.
Rapid growth in active safety continued and we achieved over 30% organic
growth for the full year. In early January the new, best in class active
safety vehicle, Mercedes E-Class was launched with a full suite of
active safety products from Autoliv, including ADAS-controller, radars
and cameras based on our own software algorithms. This was an important
milestone towards our ambition to deliver safety products that function
in real-life situations and not only in test environments.
2015 was another year tainted by record recalls and other issues in the
automotive industry. While this is unfortunate, it is encouraging to see
NHTSA and other regulatory bodies sharpen their focus on automotive
safety. At Autoliv we continue to put quality first. During the year we
reinforced our internal focus and communication further, making it clear
that quality is always our number one priority.
The pace of technological development in our industry is higher than
ever and in 2016 we expect to make further investments for the future in
order to maintain our leadership in automotive safety. We plan for
record investments in RD&E, net in the higher end of our current target
range of 6-6.5% of sales, all to keep us at the forefront of this rapid
development. However, the macroeconomic uncertainty is higher than in
previous years, and we are following the global development closely and
apply prudent fiscal management.
We continue to execute on our long-term plan. Our strategies, targets
and ambitions are clear and we continue into 2016 delivering products
and solutions for real-life safety while keeping focused on saving more
lives and creating value for our stakeholders."
An earnings conference call will be held at 3:00 p.m. (CET) today,
January 29. 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.
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