Autoliv Q3 2024 Earnings Report
Key Takeaways
Autoliv reported solid sales outperformance in Q3 2024, with a 0.8% organic sales decline, 4pp better than global LVP decline. Profitability remained unchanged despite a slight net sales decrease, driven by cost reductions and commercial recoveries. The company reaffirms its guidance of around 9.5-10.0% adjusted operating margin for 2024.
Sales decreased organically by 0.8%, outperforming global LVP decline by 4pp.
Sales to domestic Chinese OEMs grew by 18%, twice as much as their LVP growth.
Profitability was unchanged due to cost reductions and commercial recoveries, offsetting inflationary pressures.
Operating cash flow was $177 million, on track towards $1.1 billion for 2024.
Autoliv
Autoliv
Forward Guidance
Autoliv reaffirms its full year 2024 guidance, expecting to be at the low end of the range of around 9.5-10.0% adjusted operating margin and around 1% organic sales growth. Operating cash flow is on track towards the full year guidance of $1.1 billion.
Positive Outlook
- Expect further market share gains with domestic Chinese OEMs.
- Excess inflation compensation negotiations with customers have developed in line with expectations.
- Seasonally strong fourth quarter remaining of the year.
- Operating cash flow is on track towards the full year guidance of $1.1 billion.
- Balance sheet remains strong with a debt leverage of 1.4x.
Challenges Ahead
- Expect full year 2024 organic growth to be 1% instead of previously expected 2% due to unfavorable market mix development.
- Light vehicle production was weak in the third quarter, declining by close to 5% globally.
- Cost pressure from labor and other items had a negative impact on profitability.
- Low customer demand visibility and changes to customer call-offs with short notice had a negative impact on production efficiency and profitability.
- Expect continued cost pressure from inflation relating mainly to labor, especially in Europe and the Americas.