STOCKHOLM, Jan. 31, 2025 /PRNewswire/ -- (NYSE:ALV) and (SSE: ALIV.sdb)

Q4 2024: Record operating profit, margin and EPS

Financial highlights Q4 2024

$2,616 million net sales

4.9% net sales decrease

3.3% organic sales decline*

13.5% operating margin

13.4% adjusted operating margin*

$3.10 diluted EPS, 14% increase

$3.05 adjusted diluted EPS*, 19% decrease

Full year 2025 guidance

Around 2% organic sales growth

Around 2% 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 compared to the same period of the previous year except when stated otherwise.

Key business developments in the fourth quarter of 2024

Fourth quarter sales decreased organically* by 3.3%, which was 3.7pp below the global LVP increase of 0.4% (S&P Global Jan 2025). Regional and customer LVP mix is estimated to have contributed to about 4pp underperformance. We outperformed in Asia excl. China and in Europe, mainly due to product launches and positive pricing. Our sales to domestic Chinese OEMs grew by 20%, almost in line with their growth in LVP. Due to negative LVP mix in China, as sales of lower safety content models grew strongly while higher content models declined, we still underperformed in China. We expect that our strong order intake with domestic OEMs will lead to a record number of new launches in China and thereby significantly improve Autoliv's performance in China in 2025. Dealer inventory reductions by major customers resulted in underperformance in Americas.
Profitability improved, with several new record highs mainly due to successful execution of cost reductions and commercial recoveries. Total headcount decreased by around 7%. Operating income reached a new record high of $353 million and operating margin reached a new record high of 13.5%. Adjusted operating income* was also a record at $349 million and adjusted operating margin's* new record is now 13.4%. Return on capital employed was 35.8% and adjusted return on capital employed* was 35.2%.
Operating cash flow was $420 million, reaching a new record of $1,059 million for FY2024. Free operating cash flow* in the quarter was $288 million compared to $297 million last year. At 1.2x, the leverage ratio* remained well within our target range. In the quarter, a dividend of $0.70 per share was paid, and 1.04 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)	Q4 2024	Q4 2023	Change	FY 2024	FY 2023	Change
Net sales	$2,616	$2,751	(4.9) %	$10,390	$10,475	(0.8) %
Operating income	353	237	49 %	979	690	42 %
Adjusted operating income¹⁾	349	334	4.7 %	1,007	920	9.5 %
Operating margin	13.5 %	8.6 %	4.9pp	9.4 %	6.6 %	2.8pp
Adjusted operating margin¹⁾	13.4 %	12.1 %	1.2pp	9.7 %	8.8 %	0.9pp
Earnings per share - diluted	3.10	2.71	14 %	8.04	5.72	40 %
Adjusted earnings per share - diluted¹⁾	3.05	3.74	(19) %	8.32	8.19	1.6 %
Operating cash flow	420	447	(6.0) %	1,059	982	7.8 %
Return on capital employed²⁾	35.8 %	24.4 %	11pp	25.0 %	17.7 %	7.2pp
Adjusted return on capital employed^1,2)	35.2 %	32.9 %	2.3pp	25.6 %	23.1 %	2.5pp

¹⁾ Excluding effects from capacity alignments, antitrust related matters and for FY 2023 the Andrews litigation settlement. 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 strong profitability and cash flow in the fourth quarter. We reached new record highs in the quarter for operating profit, operating margin and EPS. For the full year, we also had a record high operating cash flow. I am also pleased that we generated a high return on capital employed for the quarter and year and that we could achieve this strong performance despite a continued LVP mix deterioration leading to lower sales.

Our strong performance for both the quarter and the full year was mainly a result of our strict cost control. Our structural cost reduction program has enabled a reduction of the indirect work force by 1,400 since Q1 2023. We accelerated our operating efficiency improvements, supported by an improved customer call-off accuracy, which contributed to a reduction of direct headcount by 9% in one year. The strong results for both the quarter and the full year were also supported by reaching agreements with all major customers on excess inflation compensation.

As LVP growth mix continued to be tilted towards lower CPV models, we underperformed the LVP growth in China. However, we expect a record number of new launches in China in 2025 and thereby a significant performance improvement in China in 2025.

We achieved several strategic major wins with new automakers in 2024 although OEMs' sourcing of new business was at a low level in 2024. This was due to technological and geopolitical uncertainties and the sourcing of several large platforms were pushed into 2025.

We expect 2025 to be a challenging year for the automotive industry with LVP declining slightly and continued geopolitical risks. This uncertainty makes it challenging to predict how business conditions in general and automotive markets in particular will develop in 2025. However, our continued focus on efficiency is expected to support further improvement of our profitability towards our mid-term financial targets. Our continued strong cash flow and balance sheet should set a solid foundation for our ongoing commitment to high shareholder returns.

I am looking forward to our Capital Markets Day, planned for June 3, 2025, when we will share our view of our way forward with you. More details to be announced shortly.

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 January 31, 2025.

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SOURCE Autoliv

Autoliv: Financial Report October - December 2024