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Mar 31, 2020
Autoliv Q1 2020 Earnings Report
Net sales and EPS decreased due to the impact of COVID-19 and the global LVP decline.
Key Takeaways
Autoliv's Q1 2020 results were impacted by the COVID-19 pandemic, with net sales declining by 15% to $1,846 million and EPS decreasing by 32% to $0.86. The company's organic sales decline outperformed global light vehicle production (LVP), and margins were supported by cost reduction efforts. Autoliv has withdrawn full year 2020 indications until the effects of the COVID-19 pandemic can be better assessed.
Organic sales decline was 11pp better than global light vehicle production, with all regions outperforming LVP.
Gross margin and adjusted operating margin were on similar levels as last year despite the global LVP decline.
Operating cash flow and free cash flow were above Q1’19 levels.
Secured a strong liquidity position by drawing down on our Revolving Credit Facility and suspending dividend payments.
Revenue by Geographic Location
Forward Guidance
Due to the uncertainty caused by the COVID-19 pandemic, Autoliv has withdrawn its full-year 2020 guidance and is unable to estimate the market in Q2 with a reasonable degree of certainty.
Positive Outlook
- OEMs are gradually returning to previous production levels in China.
- Retail sales in China were 14% above last year’s level in the second week of April.
- A number of European automotive plants have recently restarted or are preparing to restart production.
- Most OEMs in the US and Canada plan to resume production by early May.
- The company has developed a Smart Start Playbook to ensure the safety of employees, customers and suppliers when re-starting production.
Challenges Ahead
- Customer closures are now affecting the majority of Autoliv's operations for an uncertain period of time.
- The regional mix, with a higher safety content per vehicle in North America and Europe, will have a negative impact on sales in Q2.
- IHS outlook indicates a Q2 global LVP decline of 45%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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