Autoliv: Financial Report January - March 2025

Rhea-AI Summary

Autoliv (NYSE: ALV) reported Q1 2025 financial results with net sales of $2,578 million, showing a 1.4% decrease but 2.2% organic sales growth. The company achieved a 9.9% operating margin and delivered $2.14 diluted EPS, a 41% increase year-over-year.

Key highlights include successful cost reduction programs with a 6% decrease in total headcount, and strong sales to domestic Chinese OEMs growing by 19%. The company maintained its full-year 2025 guidance, projecting around 2% organic sales growth and 10-10.5% adjusted operating margin.

Operating income reached $254 million, with free operating cash flow in line with previous year despite higher working capital requirements. The company continued its shareholder returns through a $0.70 per share dividend and repurchased 0.5 million shares during the quarter.

Positive

• 41% increase in diluted EPS to $2.14
• 19% sales growth to domestic Chinese OEMs
• Operating margin improved to 9.9% from 7.4%
• 6% reduction in total headcount through cost reduction programs
• Strong balance sheet with leverage ratio of 1.3x within target range

Negative

• 1.4% decrease in net sales to $2,578 million
• 37% decline in operating cash flow to $77 million
• Underperformance in overall China market due to lower content vehicles mix
• Higher working capital requirements due to increased end-of-quarter sales

Insights

Financial Analyst

Autoliv's Q1 2025 results demonstrate impressive profitability improvements despite challenging market conditions. The 41% increase in diluted EPS to $2.14 and operating margin expansion to 9.9% (up from 7.4% last year) underscore successful execution of their cost reduction initiatives, with total headcount reduced by 6%.

While net sales decreased 1.4%, the 2.2% organic growth outperformed the 0.4% global LVP decline, signaling Autoliv's ability to win market share in key regions. Their 25.6% ROCE reflects efficient capital utilization, essential in the capital-intensive automotive supplier segment.

The company effectively managed tariff challenges by successfully passing costs to customers, preventing margin erosion. The strong execution supports their maintained 2025 guidance of approximately 2% organic growth and 10-10.5% adjusted operating margin.

Shareholder returns remain robust with a $0.70 dividend and 0.5 million shares repurchased. The 1.3x leverage ratio demonstrates balance sheet discipline while supporting growth initiatives. Their performance in China presents both challenges and opportunities, with 19% growth with domestic OEMs but overall underperformance due to content mix. However, planned product launches should improve this dynamic throughout 2025.

STOCKHOLM, April 16, 2025 /PRNewswire/ -- (NYSE: ALV) (SSE: ALIV.sdb)

Q1 2025: Good sales and execution of cost reduction programs

Financial highlights Q1 2025

$2,578 million net sales 
1.4% net sales decrease
2.2% organic sales growth*
9.9% operating margin
9.9% adjusted operating margin*
$2.14 diluted EPS, 41% increase
$2.15 adjusted diluted EPS*, 37% increase

Full year 2025 guidance

Around 2% organic sales growth
Around 3% negative FX effect on net sales
Around 10-10.5% adjusted operating margin
Around $1.2 billion operating cash flow

All change figures in this release compare to the same period of the previous year except when stated otherwise.

Key business developments in the first quarter of 2025

• First quarter sales increased organically* by 2.2%, which was 2.6pp higher than the global LVP decrease of 0.4% (S&P Global March 2025). A strong LVP in March resulted in a stronger than expected global LVP in the quarter. Regional and customer LVP mix is estimated to have contributed to about 3pp underperformance. Compared to March S&P Global LVP data, we outperformed Europe, Americas and in Asia excl. China, mainly due to product launches and positive pricing. Our sales to domestic Chinese OEMs grew by 19%, in line with their LVP growth. As lower content vehicles in China outgrew higher content vehicles, we underperformed in China overall. We expect that our record number of new launches will significantly improve our relative sales performance in China in 2025.
• Profitability improved, mainly due to organic sales growth and successful execution of cost reductions. Total headcount decreased by 6%. Impacts from the U.S. tariffs and counter tariffs in Q1 had a negligible impact on operating profit in the quarter as we managed to pass on the costs of tariff increases to our customers. Operating income was $254 million and adjusted operating income* was $255 million. Operating margin and adjusted operating margin* were both 9.9%.ROCE and adjusted ROCE* were both 25.6%.
• Free operating cash flow* was in line with last year, despite that operating cash flow was slightly lower than last year. A larger working capital build up reflecting higher sales at the end of the quarter was offset by lower capex, net. The leverage ratio* of 1.3x is within our target range. In the quarter, a dividend of $0.70 per share was paid and 0.5 million shares were repurchased and retired.

*For non-U.S. GAAP measures see enclosed reconciliation tables.

Key Figures

(Dollars in millions, except per share data)	Q1 2025	Q1 2024	Change
Net sales	$2,578	$2,615	(1.4) %
Operating income	254	194	31 %
Adjusted operating income1)	255	199	28 %
Operating margin	9.9 %	7.4 %	2.4pp
Adjusted operating margin1)	9.9 %	7.6 %	2.3pp
Earnings per share - diluted	2.14	1.52	41 %
Adjusted earnings per share - diluted1)	2.15	1.58	37 %
Operating cash flow	77	122	(37) %
Return on capital employed2)	25.6 %	19.7 %	5.9pp
Adjusted return on capital employed1,2)	25.6 %	20.2 %	5.4pp
1) Excluding effects from capacity alignments and antitrust related matters. Non-U.S. GAAP measure, see reconciliation table. 2) Annualized operating income and income from equity method investments, relative to average capital employed.

Comments from Mikael Bratt, President & CEO

"I am pleased that we delivered good sales and profitability in the first quarter. Thanks to our adaptability and resilience, driven by our diverse product portfolio and strong customer relationships, we successfully navigated through the first month of North American tariffs. It is encouraging that we, based on LVP data from March, outperformed global LVP despite continued significant headwinds from LVP mix shifts, particularly in China. Based on a record high number of new launches we look forward to a significantly improved sales performance in China in 2025. 

Our strong profitability improvement was a result of well executed operational and commercial efforts. Our structural cost reduction program continued to generate indirect work force reductions, and direct headcount was also reduced significantly although sales grew organically. Results were also supported by reaching Q1 customer compensation agreements for increased costs related to inflation and tariffs. Our continued repurchase of shares also supported a record first quarter EPS. 

After the slow end to 2024, OEM sourcing of safety products for future car models picked up in the first quarter, despite the geopolitical uncertainty.

Our navigation of the new tariff environment in the first quarter gives us confidence that it is possible to continue on that course when facing increasing or changing tariffs, although there is significant uncertainty. We continue to closely monitor and evaluate the situation, focusing on being adaptive and agile, and we consider our regionalized footprint to be a valuable source for flexibility in a challenging geopolitical environment.

The current geopolitical and business environment uncertainties makes it difficult to predict 2025. However, based on the strong first quarter performance and encouraging near term call-off indications, we reiterate our 2025 guidance of an organic sales growth of around 2% and an adjusted operating margin of around 10-10.5%.

Our strong balance sheet and cash conversion set a solid foundation for our commitment to high shareholder returns. I am looking forward to our Capital Markets Day, on June 4, 2025.

Next Report

Autoliv intends to publish the quarterly earnings report for the second quarter of 2025 on Friday, July 18, 2025.

Inquiries: Investors and Analysts

Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671

Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614

Inquiries: Media

Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424

Autoliv, Inc. is obliged to make this information 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 April 16, 2025.

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The full report (PDF)

 

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SOURCE Autoliv

FAQ

What was Autoliv's (ALV) Q1 2025 earnings per share and how did it change?

Autoliv's Q1 2025 diluted EPS was $2.14, representing a 41% increase from $1.52 in Q1 2024.

How much did Autoliv's (ALV) sales grow in China during Q1 2025?

Autoliv's sales to domestic Chinese OEMs grew by 19%, matching their LVP growth rate.

What is Autoliv's (ALV) full-year 2025 guidance for organic sales growth?

Autoliv projects around 2% organic sales growth for full-year 2025.

How much dividend did Autoliv (ALV) pay in Q1 2025?

Autoliv paid a dividend of $0.70 per share in Q1 2025.

What was Autoliv's (ALV) operating margin in Q1 2025?

Both operating margin and adjusted operating margin were 9.9% in Q1 2025.