ALV · Autoliv, Inc.

Autoliv's first quarter 2026 results showed mixed performance, with net sales increasing 6.8% to $2,753 million, driven by a 6.0% positive currency effect and 0.8% organic growth. The organic sales growth significantly outperformed the global light vehicle production (LVP) decline of 3.4%, with particularly strong performance in Asia. In China, Autoliv outperformed LVP by 15 percentage points, mainly due to improved presence with Chinese OEMs, while in Asia excluding China, the company outperformed by 6.8 percentage points, driven largely by 38% organic sales growth in India reflecting increased safety content per vehicle. However, profitability metrics showed declines, with adjusted operating income decreasing 3.9% to $245 million and adjusted operating margin declining 1.0 percentage point to 8.9%. Management attributed this to adverse FX translation effects, temporary lower R,D&E reimbursements, and the comparison to Q1 2025 which included one-time positive effects. Gross profit increased 10% to $526 million, supported by successful execution of cost reductions and positive FX effects. Operating cash flow was negative $76 million, primarily due to increased working capital from strong March sales, temporary effects expected to reverse later in the year, and high accounts payable at the end of 2025. The company reiterated its full-year 2026 guidance, expecting around 0% organic sales growth, adjusted operating margin around 10.5-11%, and operating cash flow around $1.2 billion, based on assumptions including LVP decline of around 1% and positive FX impact of around 3% on net sales. Management noted ongoing geopolitical challenges and uncertainty but expressed confidence in the company's healthy balance sheet with a leverage ratio of 1.3x, below the 1.5x target limit, supporting planned share repurchases of $300-500 million in 2026.