STOCKHOLM, April 26, 2019 /PRNewswire/ --
(NYSE: ALV) (SSE: ALIV.Sdb)
Q1 2019: Challenging market conditions
Financial highlights Q1 2019
$2,174m consolidated sales
1.8% organic sales growth*
8.0% operating margin
7.7% adj. operating margin*
$1.27 EPS - a decline of 30%
$1.20 adj. EPS* - a decline of 34%
Full Year 2019 indications
Around 5% organic sales growth
Around 3% total sales growth
Around 10.5% adj. operating margin
Key business developments in the first quarter of 2019
- Organic growth outpaced global light vehicle production by 8.6pp mainly due to Americas and China.
- Profitability impacted by the largest global LVP decline (~7%) in a decade, a labor conflict and rising raw materials costs.
- The labor conflict in Mexico caused temporary costs of >$20m. Issue resolved and production returning to normal levels.
*For non-U.S. GAAP measures see enclosed reconciliation tables. All figures herein refer to continued operations, excluding former Electronics segment, unless stated otherwise. All change figures in this document compares to the same period of previous year, except when stated otherwise.
(Dollars in millions, except per share data)
Adjusted operating income1)
Adjusted operating margin1)
Earnings per share, diluted2, 3)
Adjusted earnings per share, diluted1, 2, 3)
Operating cash flow4)
Return on capital employed5, 6)
1) Excluding costs for capacity alignment and antitrust related matters. 2) Assuming dilution and net of treasury shares. 3) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation. 4) For Q1 2018 management estimate for Continuing Operations derived from cash flow including Discontinued Operations. 5) Operating income and income from equity method investments, relative to average capital employed. 6) The Company has decided not to recalculate the prior period since the distribution of Veoneer had a significant impact on total equity and capital employed making the comparison less meaningful.
Comments from Mikael Bratt, President & CEO
Our people did well managing the largest quarterly light vehicle market decline in a decade, and consequently the quarter developed in line with our expectations, excluding the effects of the labor conflict in Mexico.
Despite the unforeseen labor conflict related costs and weak LVP trend, we are able to reiterate our full year profitability indication as we aim to meet these challenges with cost reductions, including a hiring freeze and other measures.
Our sales strongly outpaced light vehicle production thanks to our performance in Americas and China. The sharp decline in LVP was more than offset by continued growth from new launches and we were able to grow sales organically* by almost 2%. However, profitability was negatively affected by the mix impact of LVP driven sales decline for established business and sales growth coming from new launches, as profitability on new launches is initially lower until production is fully ramped up to the designed line capacity.
We saw a clear improvement in launch related costs compared to the fourth quarter of 2018, although we still expect it will take a few more quarters to be back at a normal launch cost level.
Our order intake share remained at a good level although OEM order activity was relatively modest in the quarter.
I am pleased that the labor conflict in Mexico is closed, with only limited production back-log effects remaining, although we are of course never satisfied when disturbances brings negative impacts on us and our customers.
With the EC antitrust decision behind us, we continue to focus on launch effectiveness, productivity and managing light vehicle production volatility, while, as always, having quality as our first priority.
Inquiries: Investors and Analysts
Vice President Investor Relations
Tel +46 (0)8 58-72-06-71
Director Investor Relations
Tel +46 (0)8-58-72-06-14
Vice President Communications
Tel +46 (0)8 58-72-06-50
This information is information that Autoliv, Inc. is obliged to make 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 26, 2019
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