Consolidated Sales

Second quarter

Reported
(U.S. GAAP)

Currency
effects¹⁾

Organic
change*

(Dollars in millions)

2019

2018

Airbag Products and Other²⁾

$1,435.7

$1,437.9

(0.2)%

(3.7)%

3.5%

Seatbelt Products²⁾

$719.0

$773.6

(7.1)%

(4.9)%

(2.2)%

Total

$2,154.7

$2,211.5

(2.6)%

(4.1)%

1.5%

Asia

$757.7

$792.2

(4.4)%

(4.7)%

0.3%

Whereof:              

China

$349.5

$385.1

(9.2)%

(6.6)%

(2.6)%

Japan

$191.1

$195.5

(2.3)%

(0.9)%

(1.4)%

RoA

$217.1

$211.6

2.6%

(4.7)%

7.3%

Americas

$758.1

$682.3

11.1%

(0.4)%

11.5%

Europe

$638.9

$737.0

(13.3)%

(6.8)%

(6.5)%

Total

$2,154.7

$2,211.5

(2.6)%

(4.1)%

1.5%

Consolidated sales

First 6 months

Reported
(U.S. GAAP)

Currency
effects¹⁾

Organic
change*

(Dollars in millions)

2019

2018

Airbag Products and Other²⁾

$2,883.4

$2,877.5

0.2%

(4.0)%

4.2%

Seatbelt Products²⁾

$1,445.3

$1,574.9

(8.2)%

(5.2)%

(3.0)%

Total

$4,328.7

$4,452.4

(2.8)%

(4.4)%

1.6%

Asia

$1,508.5

$1,584.4

(4.8)%

(4.5)%

(0.3)%

Whereof:          

China

$680.0

$751.5

(9.5)%

(6.2)%

(3.3)%

Japan

$399.2

$410.2

(2.7)%

(1.4)%

(1.3)%

RoA

$429.3

$422.7

1.6%

(4.6)%

6.2%

Americas

$1,501.1

$1,349.5

11.2%

(0.9)%

12.1%

Europe

$1,319.1

$1,518.5

(13.1)%

(7.4)%

(5.7)%

Total

$4,328.7

$4,452.4

(2.8)%

(4.4)%

1.6%

Sales by product- Airbags

Sales by product - Seatbelts

Airbag sales organic growth* was mainly driven by strong performance for all types of airbags in North America, steering wheels in North America and frontal airbags, side airbags and inflatable curtains in Rest of Asia. The fastest growing product category was pedestrian safety, from a low base, followed by steering wheels, passenger airbags and knee airbags.

Seatbelt sales organic decline* was mainly driven by weaker sales in Europe, but also to a smaller degree in China, partly mitigated by better performance in North America, Japan and Rest of Asia. The trend of higher sales of more advanced and higher value-added seatbelt systems continued, especially in China and Japan, partly offset by weaker sales in North America.

Sales by region

Growing globally by 1.5% organically*, we grew faster than light vehicle production (according to IHS) by more than 9pp. The largest contributor to overall growth was North America, supported by South America, South Korea and Thailand, partly offset by declines in Europe, China and Japan.

We grew sales organically by around 14pp more than LVP in North America and China, while our 6.5% organic sales decline in Europe was 0.2pp better than LVP. In South America we grew organically around 22pp more than LVP, in Japan we underperformed LVP by about 7pp while we outgrew LVP by around 11pp in Rest of Asia.

Organic growth*

Americas

Europe

China

Japan

Rest of Asia

Global

Autoliv

11.5%

(6.5)%

(2.6)%

(1.4)%

7.3%

1.5%

Main growth drivers

Honda, Nissan, GM, Tesla, FCA

Volvo

Honda, VW, Toyota

Honda, Subaru

South Korea and Thailand

Americas, Rest of Asia

Main decline drivers

Daimler

Daimler, Renault, BMW, Ford, JLR

Geely, Baojun Great Wall

Mitsubishi, Nissan

Mitsubishi, Tata

Europe, Domestic OEMs in China

Americas

Europe

China

Japan

Rest of Asia

Global

Second quarter 2019

IHS LVP (July 2019)

(2.4)%

(6.7)%

(16.5)%

5.7%

(3.5)%

(7.6)%

IHS LVP (April 2019)

(0.5)%

(7.0)%

(2.9)%

(0.3)%

(0.4)%

(3.4)%

First six months 2019

IHS LVP (July 2019)

(2.9)%

(5.6)%

(14.2)%

3.0%

(2.3)%

(6.9)%

Nissan Versa

Audi Q3 Sportback

Lincoln Corsair

Jeep Gladiator

Ford Escape

Chevrolet Silverado HD

Mazda CX-30

Cadillac XT6

Nissan Sylphy

Driver and/or Passenger airbags

Seatbelts

Side airbags

Knee airbag

Head/Inflatable Curtain airbags

Pyrotechnical Safety Switch

Pedestrian Airbag

Steering Wheel

Condensed income statement

Second quarter

First 6 months

(Dollars in millions, except per share data)

2019

2018

Change

2019

2018

Change

Net sales

$2,154.7

$2,211.5

(2.6)%

$4,328.7

$4,452.4

(2.8)%

Cost of sales

$(1,755.0)

$(1,771.8)

(0.9)%

$(3,550.2)

$(3,552.4)

(0.1)%

Gross profit

$399.7

$439.7

(9.1)%

$778.5

$900.0

(13.5)%

S,G&A

$(101.1)

$(99.8)

1.3%

$(202.5)

$(200.9)

0.8%

R,D&E, net

$(117.0)

$(117.5)

(0.4)%

$(224.4)

$(226.0)

(0.7)%

Amortization of intangibles

$(2.9)

$(2.9)

0.0%

$(5.7)

$(5.7)

0.0%

Other (expense) income, net

$(9.2)

$9.6

195.8%

$(3.2)

$5.1

162.7%

Operating income

$169.5

$229.1

(26.0)%

$342.7

$472.5

(27.5)%

Adjusted operating income¹⁾

$183.2

$230.2

(20.4)%

$349.6

$474.8

(26.4)%

Financial and non-operating items, net

$(18.7)

$(19.0)

(1.6)%

$(38.3)

$(33.5)

14.3%

Income before taxes

$150.8

$210.1

(28.2)%

$304.4

$439.0

(30.7)%

Tax rate

27.4%

8.1%

19.3pp

27.4%

19.8%

7.6pp

Net income

$109.4

$193.2

(43.4)%

$220.9

$352.3

(37.3)%

Earnings per share^{2, 3)}

$1.25

$2.20

(43.2)%

$2.52

$4.02

(37.3)%

Adjusted earnings per share^{1, 2, 3)}

$1.38

$2.22

(37.8)%

$2.57

$4.04

(36.4)%

Gross margin

18.6%

19.9%

(1.3)pp

18.0%

20.2%

(2.2)pp

S,G&A % of sales

(4.7)%

(4.5)%

0.2pp

(4.7)%

(4.5)%

0.2pp

R,D&E, net % of sales

(5.4)%

(5.3)%

0.1pp

(5.2)%

(5.1)%

0.1pp

Operating margin

7.9%

10.4%

(2.5)pp

7.9%

10.6%

(2.7)pp

Adjusted operating margin¹⁾

8.5%

10.4%

(1.9)pp

8.1%

10.7%

(2.6)pp

1) Non-U.S. GAAP measure, excluding costs for capacity alignment, antitrust related matters and separation of our business segments. See reconciliation table. 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.

Selected Balance Sheet items

Second quarter

(Dollars in millions)

2019

2018

Change

Operating working capital

$644.8

$775.5

(16.9)%

Operating working capital % of sales¹⁾

7.5%

9.1%

(1.6)pp

Cash & cash equivalent

$406.4

$507.5

(19.9)%

Gross Debt²⁾

$2,217.0

$2,283.6

(2.9)%

Net Debt³⁾

$1,810.9

$1,784.7

1.5%

Total equity

$2,037.7

$2,007.6

1.5%

Leverage ratio

1.8

1.6

12.5%

1) Latest 12 months of net sales. 2) Short- and long-term interest-bearing debt. 3) Short- and long-term debt less cash and cash equivalents and debt-related derivatives. Non U.S. GAAP measure, see reconciliation table.

Selected Cash Flow items

Second quarter

First 6 months

(Dollars in millions)

2019

2018¹⁾

Change

2019

2018¹⁾

Change

Net income

$109.4

$193.2

(43.4)%

$220.9

$352.3

(37.3)%

Changes in operating assets and liabilities²⁾

$(17.1)

$(79.0)

(78.4)%

$(54.2)

$(263.5)

(79.4)%

Depreciation and amortization

$85.9

$86.5

(0.7)%

$176.0

$168.0

4.8%

Other, net³⁾

$(198.8)

$0.3

n/a

$(209.6)

$25.2

(931.7)%

Operating cash flow

$(20.6)

$201.0

(110.2)%

$133.1

$282.0

(52.8)%

Capital expenditure, net

$(127.8)

$(125.2)

2.1%

$(235.8)

$(235.3)

0.2%

Free cash flow⁴⁾

$(148.4)

$75.8

(295.8)%

$(102.7)

$46.7

(319.9)%

Cash conversion⁵⁾

(135.6)%

39.2%

(174.8)pp

(46.5)%

13.3%

(59.8)pp

Dividends paid

$(54.2)

$(54.2)

0.0%

$(108.5)

$(106.6)

1.8%

1) Management estimate for Continuing Operations derived from cash flow including Discontinued Operations. 2) 2018 including separation cost. 3) 2019 including EC antitrust non-cash provision and payment. 4) Operating cash flow less Capital expenditure, net. Non U.S. GAAP measure, see enclosed reconciliation table. 5) Free cash flow relative to Net income. Non U.S. GAAP measure, see reconciliation table.

June 30, 2019

March 31, 2019

June 30, 2018

Headcount

65,670

66,878

66,193

Whereof:  Direct workers in manufacturing

71%

71%

71%

                Best cost countries

80%

80%

80%

                Temporary personnel

10%

12%

13%

Second quarter

First 6 months

Latest 12 months

Full Year

2018

2019

2018

2019

2018

Income

Earnings per share, basic¹⁾

$1.25

$2.21

$2.53

$4.03

$2.81

$4.32

Earnings per share, diluted^{1, 2)}

$1.25

$2.20

$2.52

$4.02

$2.80

$4.31

Gross margin, %³⁾

18.6

19.9

18.0

20.2

18.6

19.7

Adjusted operating margin, %⁴⁾

8.5

10.4

8.1

10.7

9.2

10.5

R,D&E net in relation to sales, %

(5.4)

(5.3)

(5.2)

(5.1)

(4.8)

(4.8)

Balance Sheet

Operating working capital in relation to sales,  %⁵⁾

7.5

9.1

7.5

9.1

7.5

7.9

Capital employed, $ in millions⁶⁾

3,849

3,792

3,849

3,792

3,849

3,516

Return on total equity, %⁷⁾

21.8

24.3

22.4

20.1

12.3

13.0

Return on capital employed, %⁸⁾

18.3

21.2

18.9

21.5

15.1

16.8

Cash dividend paid per share

$0.62

$0.62

$1.24

$1.22

$2.48

$2.46

Net debt, $ in millions⁹⁾

1,811

1,785

1,811

1,785

1,811

1,619

Leverage ratio¹⁰⁾

1.8

1.6

1.8

1.6

1.8

1.5

Days receivables outstanding¹¹⁾

72

79

72

78

73

71

Days inventory outstanding¹²⁾

35

33

35

32

35

35

Cash flow

Operating Cash flow, $ in millions¹³⁾

(20.6)

47.4

133.1

63.0

660.7

590.6

Depreciation and amortization, $ in millions ¹³⁾

85.9

113.5

176.0

223.3

349.8

397.1

Capital expenditures, net in relation to sales, %¹³⁾

(5.9)

(7.4)

(5.4)

(6.8)

(5.7)

(6.4)

Free Cash flow, $ in millions ^{13, 14)}

(148.4)

(117.3)

(102.7)

(241.0)

174.1

35.8

Cash conversion, %^{13, 15)}

(135.6)

(344.0)

(46.5)

(154.0)

70.2

19.5

Direct shareholder return, $ in millions ¹⁶⁾

(54.2)

(54.2)

(108.5)

(106.6)

(216.2)

(214.3)

Other

No. of shares at period-end in millions¹⁷⁾

87.2

87.1

87.2

87.1

87.2

87.1

Average no. of shares in millions²⁾

87.3

87.4

87.4

87.4

87.4

87.3

1) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation. 2) Assuming dilution and net of treasury shares. 3) Gross profit relative to sales. 4) Excluding costs for capacity alignment, antitrust related matters and separation of our business segments. Non-U.S. GAAP measure, see reconciliation table. 5) Latest 12 months of net sales. First six months 2019, latest 12 months & full year 2018 excluding antitrust provision accrual. 6) Total equity and net debt. 7) Net income relative to average total equity. 8) Operating income and income from equity method investments, relative to average capital employed. 9) Non-U.S. GAAP measure. See reconciliation table. 10) Net debt adjusted for pension liabilities in relation to EBITDA. Non-U.S. GAAP measure. See reconciliation table. 11) Outstanding receivables relative to average daily sales. 12) Outstanding inventory relative to average daily sales. 13) Including Discontinued Operations, which had a significant impact through Q2 2018. 14) Operating cash flow less Capital expenditures, net. Non-U.S. GAAP measure, see reconciliation table. 15) Free cash flow relative to Net income. Non-U.S. GAAP measure, see reconciliation table. 16) Dividends paid and Shares repurchased. 17) Excluding dilution and net of treasury shares.

•

On May 3, 2019, Autoliv announced it became a Signatory of United Nations Global Compact. Global Compact is the world’s largest corporate sustainability initiative, calling companies to align strategies and operations with universal principles on human rights, labor, environment and anti-corruption, and take action that advance societal goals.

•

On May 7, 2019, Autoliv announced the appointment of Frithjoff Oldorff as President of Autoliv Europe and member of Autoliv’s Executive Team. He is expected to join Autoliv no later than September 2019. Mr Oldorff has extensive experience leading development and change management in global automotive and engineering businesses. He is currently employed by Gentherm, Inc. as President of the Automotive Business Unit. His work at Gentherm follows a multi-year career with various positions at Faurecia, an Operations role with Freudenberg and the role of COO of W.E.T. Automotive Systems.

•

During the second quarter 2019, Autoliv refinanced certain portion of its short-term debt, resulting in an improved debt maturity profile. An 18 month EUR 100 million bond was issued under the newly established EMTN program and a SEK 1,200 million 3 year bilateral loan was raised with Swedish Export Credit Corporation.

Ex-date (common stock)

August 20, 2019

Ex-date (SDRs)

August 20, 2019

Record Date

August 21, 2019

Payment Date

September 5, 2019

(Dollars in millions, except per share data)

Second quarter

First 6 months

Latest 12 months

Full Year

2018

(Unaudited)

2019

2018

2019

2018

Airbag and Other products¹⁾

$1,435.7

$1,437.9

$2,883.4

$2,877.5

$5,704.5

$5,698.6

Seatbelt products¹⁾

719.0

773.6

1,445.3

1,574.9

2,850.0

2,979.6

Total net sales

$2,154.7

$2,211.5

$4,328.7

$4,452.4

$8,554.5

$8,678.2

Cost of sales

(1,755.0)

(1,771.8)

(3,550.2)

(3,552.4)

(6,964.7)

(6,966.9)

Gross profit

$399.7

$439.7

$778.5

$900.0

$1,589.8

$1,711.3

Selling, general & administrative expenses

(101.1)

(99.8)

(202.5)

(200.9)

(391.9)

(390.3)

Research, development & engineering expenses, net

(117.0)

(117.5)

(224.4)

(226.0)

(411.0)

(412.6)

Amortization of intangibles

(2.9)

(2.9)

(5.7)

(5.7)

(11.3)

(11.3)

Other (expense) income, net

(9.2)

9.6

(3.2)

5.1

(219.4)

(211.1)

Operating income

$169.5

$229.1

$342.7

$472.5

$556.2

$686.0

Income from equity method investments

0.2

1.3

1.2

2.6

2.2

3.6

Interest income

1.0

1.1

2.0

2.8

6.1

6.9

Interest expense

(17.5)

(13.7)

(35.5)

(27.3)

(74.3)

(66.1)

Other non-operating items, net

(2.4)

(7.7)

(6.0)

(11.6)

(12.4)

(18.0)

Income from Continuing Operations before income taxes

$150.8

$210.1

$304.4

$439.0

$477.8

$612.4

Income taxes

(41.4)

(16.9)

(83.5)

(86.7)

(231.7)

(234.9)

Net income from Continuing Operations

$109.4

$193.2

$220.9

$352.3

$246.1

$377.5

Loss from Discontinued Operations, net of income taxes

-

(159.1)

-

(195.8)

2.0

(193.8)

Net income

$109.4

$34.1

$220.9

$156.5

$248.1

$183.7

Less; Net income from Continuing Operations attributable to non-controlling interest

0.3

0.5

0.4

0.9

1.1

1.6

Less; Net loss from Discontinued Operations attributable to non-controlling interest

-

(3.6)

-

(8.3)

-

(8.3)

Net income attributable to controlling interest

$109.1

$37.2

$220.5

$163.9

$247.0

$190.4

Amounts attributable to controlling interest:

Net Income from Continuing Operations

$109.1

$192.7

$220.5

$351.4

$245.0

$375.9

Net Loss from Discontinued Operations, net of income taxes

-

(155.5)

-

(187.5)

2.0

(185.5)

Net income attributable to controlling interest

$109.1

$37.2

$220.5

$163.9

$247.0

$190.4

Earnings per share Continuing Operations^{2, 3)}

$1.25

$2.20

$2.52

$4.02

$2.80

$4.31

Earnings per share Discontinued Operations^{2, 3)}

$ -

$(1.77)

$ -

$(2.14)

$0.02

$(2.13)

Earnings per share^{2, 3)}

$1.25

$0.43

$2.52

$1.88

$2.82

$2.18

1) Including Corporate and other sales. 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 EPS calculation.

June 30

March 31

December 31

September 30

June 30

(Dollars in millions, unaudited)

2019

2019

2018

2018

2018

Assets

Cash & cash equivalents

$406.4

$436.6

$615.8

$533.7

$507.5

Receivables, net

1,695.5

1,749.6

1,667.1

1,784.5

1,902.0

Inventories, net

736.1

741.1

757.9

758.7

709.7

Other current assets

214.2

183.8

244.6

271.2

254.6

Total current assets

$3,052.2

$3,111.1

$3,285.4

$3,348.1

$3,373.8

Property, plant & equipment, net

1,765.0

1,710.9

1,690.1

1,654.8

1,633.4

Investments and other non-current assets

386.7

384.3

323.5

331.3

352.4

Right-of-use assets - operating leases

165.0

147.3

–

–

–

Goodwill assets

1,388.8

1,388.3

1,389.9

1,391.0

1,391.9

Intangible assets, net

27.8

30.7

32.7

35.3

38.3

Total assets

$6,785.5

$6,772.6

$6,721.6

$6,760.5

$6,789.8

Liabilities and equity

Short-term debt

$366.8

$437.6

$620.7

$573.0

$605.6

Accounts payable

956.6

981.7

1,029.0

992.4

1,036.9

Other current liabilities

1,055.4

1,282.2

1,215.8

1,118.4

1,110.8

Operating lease liabilities - current

39.6

37.0

-

-

-

Total current liabilities

$2,418.4

$2,738.5

$2,865.5

$2,683.8

$2,753.3

Long-term debt

1,850.2

1,598.1

1,609.0

1,677.5

1,678.0

Pension liability

202.8

200.4

198.2

204.3

203.8

Other non-current liabilities

150.5

151.1

152.1

141.5

147.1

Operating lease liabilities - non-current

125.9

110.5

-

-

-

Total non-current liabilities

$2,329.4

$2,060.1

$1,959.3

$2,023.3

$2,028.9

Total parent shareholders’ equity

2,024.1

1,960.5

1,883.7

2,040.4

1,994.5

Non-controlling interest

13.6

13.5

13.1

13.0

13.1

Total equity

$2,037.7

$1,974.0

$1,896.8

$2,053.4

$2,007.6

Total liabilities and equity

$6,785.5

$6,772.6

$6,721.6

$6,760.5

$6,789.8

Second quarter

First 6 months

Latest 12 months¹⁾

Full Year

2018¹⁾

(Dollars in millions, unaudited)

2019

2018¹⁾

2019

2018¹⁾

Net income Continuing Operations

$109.4

$193.2

$220.9

$352.3

$246.1

$377.5

Net loss Discontinued Operations

-

(159.1)

-

(195.8)

2.0

(193.8)

Depreciation and amortization

85.9

113.5

176.0

223.3

349.8

397.1

Legal provision²⁾

-

-

-

-

-

210.0

Other, net³⁾

(198.8)

6.5

(209.6)

12.6

16.9

29.1

Changes in operating assets and liabilities⁴⁾

(17.1)

(106.7)

(54.2)

(329.4)

45.9

(229.3)

Net cash (used in) provided by operating activities

$(20.6)

$47.4

$133.1

$63.0

$660.7

$590.6

Capital expenditures, net

(127.8)

(164.7)

(235.8)

(304.0)

(486.6)

(554.8)

Acquisitions of businesses and other, net

–

–

–

(72.9)

-

(72.9)

Net cash used in investing activities

$(127.8)

$(164.7)

$(235.8)

$(376.9)

$(486.6)

$(627.7)

Net cash before financing⁵⁾

$(148.4)

$(117.3)

$(102.7)

$(313.9)

$174.1

$(37.1)

Net (decrease) increase in short-term debt

(77.7)

344.6

(250.8)

410.0

(305.4)

355.4

Issuance of long-term debt

245.2

582.2

245.2

582.2

245.2

582.2

Debt issuance costs

(0.3)

(2.6)

(0.3)

(2.6)

(0.3)

(2.6)

Dividends paid

(54.2)

(54.2)

(108.5)

(106.6)

(216.2)

(214.3)

Common stock options exercised

0.1

2.7

0.2

7.6

0.8

8.2

Dividend paid to non-controlling interests

–

(2.0)

–

(2.0)

(0.1)

(2.1)

Capital contribution to Veoneer

–

(979.7)

–

(979.7)

7.9

(971.8)

Net cash provided by (used in) financing activities

$113.1

$(109.0)

$(114.2)

$(91.1)

$(268.1)

$(245.0)

Effect of exchange rate changes on cash

5.1

(60.1)

7.5

(47.0)

(7.1)

(61.6)

Decrease in cash and cash equivalents

$(30.2)

$(286.4)

$(209.4)

$(452.0)

$(101.1)

$(343.7)

Cash and cash equivalents at period-start

436.6

793.9

615.8

959.5

507.5

959.5

Cash and cash equivalents at period-end

$406.4

$507.5

$406.4

$507.5

$406.4

$615.8

1) Including Discontinued Operations. 2) Including EC antitrust non-cash provision. 3) 2019 including EC antitrust non-cash provision and payment. 4) 2018 including separation cost. 5) Non-U.S. GAAP measure comprised of "Net cash (used in) provided by operating activities" and "Net cash used in investing activities".

June 30

March 31

December 31

September 30

June 30

(Dollars in millions)

2019

2019

2018

2018

2018

Total current assets

$3,052.2

$3,111.1

$3,285.4

$3,348.1

$3,373.8

Total current liabilities¹⁾

(2,418.4)

(2,535.3)

(2,655.5)

(2,683.8)

(2,753.3)

Working capital

$633.8

$575.8

$629.9

$664.3

$620.5

Cash and cash equivalents

(406.4)

(436.6)

(615.8)

(533.7)

(507.5)

Short-term debt

366.8

437.6

620.7

573.0

605.6

Derivative asset and liability, current

(3.5)

2.4

(0.8)

1.8

2.9

Dividends payable

54.1

54.0

54.0

54.0

54.0

Operating working capital

$644.8

$633.2

$688.0

$759.4

$775.5

1) March 2019 and December 2018 excluding the EC antitrust accrual.

June 30

March 31

December 31

September 30

June 30

(Dollars in millions)

2019

2019

2018

2018

2018

Short-term debt

$366.8

$437.6

$620.7

$573.0

$605.6

Long-term debt

1,850.2

1,598.1

1,609.0

1,677.5

1,678.0

Total debt

$2,217.0

$2,035.7

$2,229.7

$2,250.5

$2,283.6

Cash & cash equivalents

(406.4)

(436.6)

(615.8)

(533.7)

(507.5)

Debt issuance cost/Debt-related derivatives, net

0.3

8.1

4.9

7.6

8.6

Net debt

$1,810.9

$1,607.2

$1,618.8

$1,724.4

$1,784.7

June 30

December 31

June 30

(Dollars in millions)

2019

2018

2018

Net debt¹⁾

$1,810.9

$1,618.8

$1,784.7

Pension liabilities

202.8

198.2

203.8

Debt per the Policy

$2,013.7

$1,817.0

$1,988.5

Net income²⁾

248.1

183.7

189.1

Less; Net loss, Discontinued Operations²⁾

(2.0)

193.8

466.8

Net income, Continuing Operations²⁾

$246.1

$377.5

$655.9

Income taxes²⁾

231.7

234.9

174.6

Interest expense, net^{2, 3)}

68.2

59.2

50.8

Depreciation and amortization of intangibles²⁾

349.9

342.0

325.2

Antitrust related matters and capacity alignments²⁾

221.4

216.5

43.2

EBITDA per the Policy

$1,117.3

$1,230.1

$1,249.7

Leverage ratio

1.8

1.5

1.6

1) Short- and long-term debt less cash and cash equivalents and debt-related derivatives. 2) Latest 12 months. 3) Interest expense including cost for extinguishment of debt, if any, less interest income.

Second quarter

First 6 months

Second quarter

First 6 months

(Dollars in millions)

2019

2018¹⁾

2019

2018¹⁾

2018²⁾

2018²⁾

Net income

$109.4

$34.1

$220.9

$156.5

$193.2

$352.3

Changes in operating assets and liabilities³⁾

(17.1)

(106.7)

(54.2)

(329.4)

(79.0)

(263.5)

Depreciation and amortization

85.9

113.5

176.0

223.3

86.5

168.0

Other, net⁴⁾

(198.8)

6.5

(209.6)

12.6

0.3

25.2

Operating cash flow

$(20.6)

$47.4

$133.1

$63.0

$201.0

$282.0

Capital expenditure, net

(127.8)

(164.7)

(235.8)

(304.0)

(125.2)

(235.3)

Free cash flow⁵⁾

$(148.4)

$(117.3)

$(102.7)

$(241.0)

$75.8

$46.7

Cash conversion⁶⁾

(135.6)%

(344.0)%

(46.5)%

(154.0)%

39.2%

13.3%

1) Including Discontinued Operations. 2) For Q2 2018 and first 6 months 2018 management estimate for Continuing Operations based on operations that includes Discontinued Operations. 3) 2018 including separation cost. 4) 2019 including EC antitrust non-cash provision and payment. 5) Operating cash flow less Capital expenditures, net. 6) Free cash flow relative to Net income.

Latest 12

Full year

(Dollars in millions)

Months¹⁾

2018¹⁾

Net income

$248.1

$183.7

Changes in operating assets and liabilities²⁾

45.9

(229.3)

Depreciation and amortization

349.8

397.1

Other, net³⁾

16.9

239.1

Operating cash flow

$660.7

$590.6

Capital expenditure, net

(486.6)

(554.8)

Free cash flow⁴⁾

$174.1

$35.8

Cash conversion⁵⁾

70.2%

19.5%

1) Including Discontinued Operations. 2) 2018 including separation cost. 3) Including EC antitrust non-cash provision and payment. 4) Operating cash flow less Capital expenditures, net. 5) Free cash flow relative to Net income.

Second quarter 2019

Second quarter 2018

(Dollars in millions, except per share data)

Reported
U.S. GAAP

Adjust-

ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-

ments¹⁾

Non-U.S.
GAAP

Operating income

$169.5

$13.7

$183.2

$229.1

$1.1

$230.2

Operating margin, %

7.9

0.6

8.5

10.4

0.0

10.4

Income before taxes from Continuing Operations

$150.8

$13.7

$164.5

$210.1

$1.1

$211.2

Net income attributable to controlling interest from Continuing Operations

$109.1

$11.0

$120.1

$192.7

$1.0

$193.7

Return on capital employed, %²⁾

18.3

1.4

19.7

21.2

0.1

21.3

Return on total equity, %³⁾

21.8

2.2

24.0

24.3

0.2

24.5

Earnings per share, Continuing Operations^{4, 5)}

$1.25

$0.13

$1.38

$2.20

$0.02

$2.22

1) Excluding costs for capacity alignment and antitrust related matters. 2) Operating income and income from equity method investments, relative to average capital employed. 3) Net income relative to average total equity. 4) Assuming dilution and net of treasury shares. 5) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation.

First 6 months 2019

First 6 months 2018

(Dollars in millions, except per share data)

Reported
U.S. GAAP

Adjust-

ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-

ments¹⁾

Non-U.S.
GAAP

Operating income

$342.7

$6.9

$349.6

$472.5

$2.3

$474.8

Operating margin, %

7.9

0.2

8.1

10.6

0.1

10.7

Income before taxes from Continuing operations

$304.4

$6.9

$311.3

$439.0

$2.3

$441.3

Net income attributable to controlling interest from Continuing operation

$220.5

$4.2

$224.7

$351.4

$1.7

$353.1

Capital employed

$3,849

$4

$3,853

$3,792

$2

$3,794

Return on capital employed, %²⁾

18.9

0.3

19.2

21.5

0.1

21.6

Return on total equity, % ³⁾

22.4

0.5

22.9

20.1

0.1

20.2

Earnings per share continuing operations, diluted^{4, 5)}

$2.52

$0.05

$2.57

$4.02

$0.02

$4.04

Total parent shareholders' equity per share

$23.21

$0.05

$23.26

$22.90

$0.02

$22.92

1) Excluding costs for capacity alignment and antitrust related matters 2) Operating income and income from equity method investments continuing operations, relative to average capital employed.  3) Income from continuing operations relative to average total equity. 4) Assuming dilution and net of treasury shares. 5) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation.

Latest 12 months

Full year 2018

Reported
U.S. GAAP

Adjust-

ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-

ments¹⁾

Non-U.S.
GAAP

Operating margin, %

6.5

2.7

9.2

7.9

2.6

10.5

Items included in Non-U.S. GAAP adjustments

Second quarter 2019

Second quarter 2018

Adjustment
Millions

Adjustment
Per share

Adjustment
Millions

Adjustment
Per share

Capacity alignment

$13.2

$0.15

$0.0

$-

Antitrust related matters

0.5

0.01

1.1

0.02

Total adjustments to operating income

$13.7

$0.16

$1.1

$0.02

Tax on non-U.S. GAAP adjustments¹⁾

(2.7)

(0.03)

(0.1)

0.00

Total adjustments to net income

$11.0

$0.13

$1.0

$0.02

Weighted average number of shares outstanding - diluted

87.3

87.4

Return on capital employed^{2, 3)}

$54.8

$4.4

Adjustment return on capital employed

  1.4%

  0.1%

Return on total equity^{4, 5)}

$44.0

$4.0

Adjustment return on total equity

  2.2%

  0.1%

1) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s). 2) After adjustment for annualized Q4 non-U.S. GAAP EBIT adjustment. 3) Operating income and income from equity method investments, relative to average capital employed. 4) Income relative to average total equity. 5) After adjustment for annualized Q4 non-U.S. GAAP Net income adjustment.

Items included in Non-GAAP adjustments

First 6 months 2019

First 6 months 2018

Adjustment
Millions

Adjustment
Per share

Adjustment
Millions

Adjustment
Per share

Capacity alignment

$13.1

$0.15

$1.2

$0.01

Antitrust related matters

(6.2)

(0.07)

1.1

0.01

Total adjustments to operating income

$6.9

$0.08

$2.3

$0.02

Tax on non-U.S. GAAP adjustments¹⁾

(2.7)

(0.03)

(0.6)

0.00

Total adjustments to Income from Continuing operations

$4.2

$0.05

$1.7

$0.02

Weighted average number of shares outstanding - diluted

87.4

87.4

Return on capital employed^{2, 3)}

$13.8

$4.6

Adjustment return on capital employed

  0.3%

  0.2%

Return on total equity^{4, 5)}

$8.4

$3.4

Adjustment return on total equity

  0.5%

  0.2%

1) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s). 2) After adjustment for annualized non-U.S. GAAP EBIT adjustment. 3) Operating income and income from equity method investments Continuing Operations, relative to average capital employed. 4) Income from Continuing Operations relative to average total equity. 5) After adjustment for annualized non-U.S. GAAP Net income adjustment.

(Dollars in millions, except per share data)

2018

2017

2016

2015

Sales and Income    

Net sales

$8,678

$8,137

$7,922

$7,636

Airbag sales¹⁾

5,699

5,342

5,256

5,036

Seatbelt sales

2,980

2,794

2,665

2,599

Operating income

686

860

831

708

Net income attributable to controlling interest

376

586

558

443

Earnings per share (US$) – basic²⁾

4.32

6.70

6.33

5.03

Earnings per share (US$) – assuming dilution^{2, 3)}

4.31

6.68

6.32

5.02

Gross margin, %⁴⁾

19.7

20.6

20.6

20.5

R,D&E net in relation to sales, %

(4.8)

(4.6)

(4.5)

(4.1)

S,G&A net in relation to sales, %

(4.5)

(5.0)

(5.0)

(4.8)

Operating margin, %⁵⁾

7.9

10.6

10.5

9.3

Adjusted operating margin, %^{6, 7, 8)}

10.5

11.1

10.9

11.5

Balance Sheet

Operating working capital

478

581

488

525

Days receivables outstanding⁹⁾

71

76

70

71

Days inventory outstanding¹⁰⁾

35

35

32

31

Total equity

1,897

4,169

3,926

3,468

Total parent shareholders’ equity per share (US$)

21.63

46.38

41.69

39.22

Current assets excluding cash

2,670

2,598

2,269

2,259

Property, plant and equipment, net

1,690

1,609

1,329

1,265

Intangible assets (primarily goodwill)

1,423

1,440

1,430

1,445

Capital employed

3,516

4,538

4,225

3,670

Net debt⁸⁾

1,619

368

299

202

Total assets

6,722

6,947

6,565

6,518

Long-term debt

1,609

1,311

1,313

1,499

Operating working capital in relation to sales,  %

5.5

7.1

6.2

6.9

Return on capital employed, %^{11, 12)}

17

n/a

n/a

n/a

Return on total equity, %^{12, 13)}

13

n/a

n/a

n/a

Total equity ratio, %

28

49

48

46

Cash flow

Operating cash flow¹⁴⁾

591

936

868

751

Depreciation and amortization¹⁴⁾

397

426

383

319

Capital expenditures, net¹⁴⁾

555

570

499

450

Capital expenditures, net in relation to sales, %¹⁴⁾

5.7

5.5

4.9

4.9

Free cash flow^{6, 8, 14, 15)}

36

366

369

301

Cash conversion, %^{6, 8, 14, 16)}

19.5

120.8

65.7

65.8

Direct shareholder return^{14, 17)}

(214)

(366)

(203)

(300)

Cash dividends paid per share (US$)

2.46

2.38

2.30

2.22

Other data

Number of shares outstanding (million)¹⁸⁾

87.1

87.0

88.2

88.1

Number of employees, December 31

57,700

56,700

55,800

51,300

1) Including steering wheels, inflators and initiators. 2) Participating share awards with right to receive dividend equivalents are (under the two-class method) excluded from the EPS calculation. 3) Assuming dilution and net of treasury shares. 4) Gross profit relative to sales. 5) Operating income relative to sales. 6) Unaudited. 7) Excluding costs for capacity alignment, antitrust related matters and separation of our business segments. Non-U.S. GAAP measure, see reconciliation table. 8) Non-US GAAP measure, for reconciliation see tables above. 9) Outstanding receivables relative to average daily sales. 10) Outstanding inventory relative to average daily sales. 11) Operating income and income from equity method investments, relative to average capital employed. 12) The Company has decided not to recalculate prior periods since the distribution of Veoneer had a significant impact on total equity and capital employed making the comparison less meaningful. 13) Income relative to average total equity. 14) Including Discontinued Operations. 15) Operating cash flow less Capital expenditures, net. Non-U.S. GAAP measure, see reconciliation table. 16) Free cash flow relative to Net income. Non-U.S. GAAP measure, see reconciliation table. 17) Dividends paid and Shares repurchased. 18) At year end, excluding dilution and net of treasury shares.