Autoliv Q4 2019 Earnings Report
Key Takeaways
Autoliv reported Q4 2019 net sales of $2,191 million with 0.5% organic sales growth. The operating margin was 10.5% and adjusted operating margin was 11.1%. EPS increased by 268% to $1.78 and adjusted EPS increased by 30% to $1.84.
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.
2019 became the fifth straight year for Autoliv to have around 50% global order share.
Autoliv
Autoliv
Forward Guidance
For the full year 2020, Autoliv expects net sales growth of 3-4% and organic sales growth of 3-4%. The adjusted operating margin is expected to be at least 9.5%.
Positive Outlook
- Organic sales growth will outperform LVP by about 6pp
- Some support from raw material costs
- Savings from the structural efficiency program
- Seasonality to be even more pronounced than in 2019 in terms of quarterly profitability progression
- Expect a significantly stronger second half year.
Challenges Ahead
- Expected LVP decline
- Sharply declining inflator replacement sales
- Costs for planning and implementing the strategic initiatives with payback in later years
- The start of the year will be challenging
- Continuing high level of uncertainty in the automotive markets