Financial Report April – June 2021

Consolidated sales

Second quarter

Reported
(U.S. GAAP)

Currency
effects¹⁾

Organic
change*

(Dollars in millions)

2021

2020

Airbag Products and Other²⁾

$1,310

$654

100%

7.5%

92.9%

Seatbelt Products²⁾

$712

$394

80.9%

9.1%

71.7%

Total

$2,022

$1,048

93.0%

8.1%

84.9%

Asia

$794

$588

35.1%

6.6%

28.5%

Whereof:              

China

$399

$366

9.0%

9.3%

(0.3)%

Japan

$175

$105

67.4%

(3.9)%

71.3%

RoA

$219

$117

87.9%

7.4%

80.4%

Americas

$621

$213

191%

9.7%

181%

Europe

$608

$246

147%

10.4%

136%

Total

$2,022

$1,048

93.0%

8.1%

84.9%

1) Effects from currency translations. 2) Including Corporate and other sales.

Q2 2021 organic growth*

Americas

Europe

China

Japan

Rest of Asia

Global

Autoliv

181%

136%

(0.3)%

71%

80%

85%

Main growth drivers

Stellantis, Honda, Nissan

VW, Stellantis, Daimler

GM, Geely, Xpeng

Toyota, Mitsubishi, Mazda

Hyundai/Kia, Suzuki, Mitsubishi

Stellantis, Toyota, VW

Main decline drivers

n/a

n/a

VW, Nissan, Hyundai/Kia

Honda

SsangYong, Renault

SsangYong

Q2 2021

Americas

Europe

China

Japan

Rest of Asia

Global

LVP (June 2021)

159%

98%

(4.6)%

52%

99%

52%

LVP (Apr 2021)

189%

109%

(1.2)%

51%

108%

60%

•

On May 12, 2021, Autoliv announced that its Board of Directors decided to reinstate quarterly dividends and declared a quarterly dividend of $0.62 per share for the second quarter of 2021. “Although the COVID-19 pandemic is not yet behind us, the significant improvement in profitability and free cash flow generation over the recent quarters shows that we have built a solid platform towards our mid-term financial targets” said Jan Carlson, Chairman of the Board of Directors. “It is our ambition to consistently create competitive shareholder value through our purpose-led strategy and operations and I am happy that we can now reinstate our quarterly dividend.” continued Mr. Carlson.

•

On May 18, 2021, Autoliv announced plans to construct a new steering wheel manufacturing plant in Aguascalientes, Mexico. When fully operational, the 30,000 sqm/322,000 sq ft facility will have the potential to employ up to 3,000 people. “We are

doing this expansion to meet growing customer demand,” said Kevin Fox, President, Autoliv Americas. “This new facility, along with our Matamoros, Mexico facility, will allow us to continue to provide world-class support to our customers. This investment will increase capacity, but it will also allow us to optimize our manufacturing processes at both facilities and it will create exciting opportunities for our team members in Mexico,” continued Mr. Fox.

•

On June 17, 2021, Autoliv announced ambitious climate targets including its plan to become carbon neutral in its own operations by 2030, and aims for net-zero emissions across its supply chain by 2040, and its commitment to the Science Based Targets initiative.

Financial Report April – June 2021

(Dollars in millions, except per share data)

Second quarter

First 6 months

Latest 12

Full Year      

(Unaudited)

2021

2020

2021

2020

months

2020

Airbag and Other products¹⁾

$1,310

$654

$2,773

$1,856

$5,741

$4,824

Seatbelt products¹⁾

712

394

1,491

1,037

3,077

2,623

Total net sales

$2,022

$1,048

$4,265

$2,893

$8,819

$7,447

Cost of sales

(1,638)

(1,033)

(3,422)

(2,548)

(7,074)

(6,201)

Gross profit

$384

$14

$843

$345

$1,744

$1,247

Selling, general & administrative expenses

(111)

(98)

(219)

(192)

(416)

(389)

Research, development & engineering expenses, net

(107)

(88)

(213)

(191)

(398)

(376)

Amortization of intangibles

(3)

(2)

(5)

(5)

(10)

(10)

Other income (expense), net

0

(59)

(4)

(57)

(37)

(90)

Operating income (loss)

$164

$(234)

$401

$(99)

$883

$382

Income from equity method investments

0

0

2

0

4

2

Interest income

2

1

2

3

4

5

Interest expense

(16)

(16)

(32)

(32)

(73)

(73)

Other non-operating items, net

2

1

(4)

(7)

(22)

(25)

Income (loss) before income taxes

$152

$(247)

$370

$(135)

$796

$291

Income taxes

(48)

72

(108)

36

(247)

(103)

Net income (loss)

$105

$(174)

$262

$(99)

$550

$188

Less: Net income attributable to non-controlling interest

0

0

1

0

2

1

Net income (loss) attributable to controlling interest

$104

$(175)

$261

$(100)

$548

$187

Earnings (loss) per share^{2, 3)}

$1.19

$(2.00)

$2.98

$(1.14)

$6.25

$2.14

1) Including Corporate and other sales. 2) Assuming dilution when applicable 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.

Financial Report April – June 2021

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Dollars in millions, unaudited)

2021

2021

2020

2020

2020

Assets

Cash & cash equivalents

$893

$1,254

$1,178

$1,477

$1,223

Receivables, net

1,719

1,846

1,822

1,616

1,180

Inventories, net

901

856

798

714

758

Prepaid expenses

230

183

164

179

172

Other current assets

60

260

307

52

50

Total current assets

$3,804

$4,399

$4,269

$4,037

$3,383

Property, plant & equipment, net

1,833

1,810

1,869

1,779

1,753

Operating leases right-of-use assets

133

137

141

137

150

Goodwill

1,393

1,392

1,398

1,390

1,385

Intangible assets, net

11

14

14

15

17

Investments and other non-current assets

462

457

466

476

486

Total assets

$7,636

$8,210

$8,157

$7,833

$7,175

Liabilities and equity

Short-term debt¹⁾

$363

$291

$302

$1,026

$493

Accounts payable

1,125

1,215

1,254

912

616

Accrued expenses

1,066

1,323

1,270

1,011

848

Operating lease liabilities - current

39

38

37

36

37

Other current liabilities

260

321

284

237

159

Total current liabilities

$2,852

$3,188

$3,147

$3,221

$2,152

Long-term debt¹⁾

1,712

2,039

2,110

2,007

2,567

Pension liability

239

239

248

239

236

Operating lease liabilities - non-current

94

100

103

102

114

Other non-current liabilities

125

123

126

151

150

Total non-current liabilities

$2,170

$2,501

$2,587

$2,499

$3,068

Total parent shareholders’ equity

2,600

2,507

2,409

2,100

1,942

Non-controlling interest

15

14

14

14

14

Total equity

$2,615

$2,521

$2,423

$2,113

$1,955

Total liabilities and equity

$7,636

$8,210

$8,157

$7,833

$7,175

1) As of September 30, 2020, $600 million of the revolving credit facility loan was classified as short-term debt since it was repaid on October 2, 2020.

Financial Report April – June 2021

Second quarter

First 6 months

Latest 12

Full Year

(Dollars in millions, unaudited)

2021

2020

2021

2020

months

2020

Net income (loss)

$105

$(174)

$262

$(99)

$550

$188

Depreciation and amortization

100

87

199

175

394

371

Other, net

(16)

(85)

2

(74)

89

13

Changes in operating working capital, net

(125)

44

(214)

25

37

277

Net cash provided by operating activities

$63

$(128)

$249

$28

$1,070

$849

Expenditures for property, plant and equipment

(97)

(65)

(191)

(154)

(380)

(344)

Proceeds from sale of property, plant and equipment

1

1

1

2

4

4

Net cash used in investing activities

$(96)

$(64)

$(189)

$(152)

$(377)

$(340)

Net cash before financing¹⁾

$(33)

$(192)

$60

$(124)

$693

$509

Decrease in short term debt

(338)

(115)

(291)

(142)

(389)

(240)

Repayment of long-term debt

–

–

–

–

(723)

(723)

Increase long-term debt

39

591

14

1,091

100

1,177

Dividends paid

(54)

–

(54)

(54)

(54)

(54)

Common stock options exercised

2

0

2

0

3

1

Dividend paid to non-controlling interests

–

–

–

–

(1)

(1)

Net cash (used in) provided by financing activities

$(352)

$476

$(329)

$895

$(1,064)

$160

Effect of exchange rate changes on cash

23

32

(16)

8

40

64

Increase in cash and cash equivalents

$(361)

$316

$(285)

$779

$(330)

$733

Cash and cash equivalents at period-start

1,254

907

1,178

445

1,223

445

Cash and cash equivalents at period-end

$893

$1,223

$893

$1,223

$893

$1,178

1) Non-U.S. GAAP measure comprised of "Net cash provided by operating activities" and "Net cash used in investing activities". See reconciliation table.

Financial Report April – June 2021

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Dollars in millions)

2021

2021

2020

2020

2020

Receivables, net

$1,719

$1,846

$1,822

$1,616

$1,180

Inventories, net

$901

$856

$798

$714

$758

Accounts payable

$(1,125)

$(1,215)

$(1,254)

$(912)

$(616)

Trade Working capital

$1,495

$1,487

$1,366

$1,418

$1,322

Financial Report April – June 2021

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Dollars in millions)

2021

2021

2020

2020

2020

Short-term debt

$363

$291

$302

$1,026

$493

Long-term debt

1,712

2,039

2,110

2,007

2,567

Total debt

$2,075

$2,330

$2,411

$3,033

$3,060

Cash & cash equivalents

(893)

(1,254)

(1,178)

(1,477)

(1,223)

Debt issuance cost/Debt-related derivatives, net

18

39

(19)

17

1

Net debt

$1,200

$1,115

$1,214

$1,573

$1,838

Dec 31

Dec 31

Dec 31

Dec 31

(Dollars in millions)

2019

2018

2017

2016

Short-term debt

$368

$621

$20

$216

Long-term debt

1,726

1,609

1,311

1,313

Total debt

$2,094

$2,230

$1,330

$1,529

Cash & cash equivalents

(445)

(616)

(960)

(1,227)

Debt issuance cost/Debt-related derivatives, net

0

5

(3)

(3)

Net debt

$1,650

$1,619

$368

$299

Financial Report April – June 2021

Jun 30

Dec 31

Jun 30

(Dollars in millions)

2021

2020

2020

Net debt¹⁾

$1,200

$1,214

$1,838

Pension liabilities

239

248

236

Debt per the Policy

$1,438

$1,462

$2,074

Net income²⁾

$550

$188

$142

Income taxes²⁾

247

103

66

Interest expense, net^{2, 3)}

69

68

62

Other non-operating items, net²⁾

22

25

14

Income from equity method investments²⁾

(4)

(2)

(1)

Depreciation and amortization of intangibles²⁾

394

371

350

Capacity alignments and separation costs^{2, 4)}

37

99

105

EBITDA per the Policy (Adjusted EBITDA)

$1,313

$852

$739

Leverage ratio

1.1

1.7

2.8

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. 4) No separation costs LTM Jun 30, 2021 and Dec 31, 2020. In LTM Jun 30, 2020, separation costs amounted to $1 million.

Financial Report April – June 2021

Second quarter

First 6 months

Latest 12

Full Year

(Dollars in millions)

2021

2020

2021

2020

months

2020

Net income (loss)

$105

$(174)

$262

$(99)

$550

$188

Changes in operating working capital

(125)

44

(214)

25

37

277

Depreciation and amortization

100

87

199

175

394

371

Other, net

(16)

(85)

2

(74)

89

13

Operating cash flow

$63

$(128)

$249

$28

$1,070

$849

Capital expenditure, net

(96)

(64)

(189)

(152)

(377)

(340)

Free cash flow¹⁾

$(33)

$(192)

$60

$(124)

$693

$509

Net cash before financing

$(33)

$(192)

$60

$(124)

$693

$509

Cash conversion²⁾

n/a

n/a

22.8%

n/a

126%

270%

1) Operating cash flow less Capital expenditures, net. 2) Free cash flow relative to Net income.

Full year

Full year

Full year

Full year

(Dollars in millions)

2019

2018¹⁾

2017¹⁾

2016¹⁾

Net income

$463

$184

$303

$562

Changes in operating assets and liabilities

47

(229)

(0)

(78)

Depreciation and amortization

351

397

426

383

Goodwill impairment charges

–

–

234

–

Other, net⁴⁾

(220)

239

(27)

2

Operating cash flow

$641

$591

$936

$868

EC antitrust payment

(203)

–

–

–

Operating cash flow excl antitrust

$844

$591

$936

$868

Capital expenditure, net

(476)

(555)

(570)

(499)

Free cash flow²⁾

$165

$36

$366

$370

Free cash flow excl antitrust payment⁵⁾

$368

$36

$366

$370

Acquisitions of businesses and other, net

–

(73)

(128)

(227)

Net cash before financing

$165

$(37)

$239

$142

Cash conversion³⁾

35.6%

19.5%

121%

65.8%

Cash conversion excl antitrust⁶⁾

79.4%

19.5%

121%

65.8%

1) Including Discontinued Operations. 2) Operating cash flow less Capital expenditures, net. 3) Free cash flow relative to Net income. 4) Including EC antitrust non-cash provision 2018 and EC antitrust payment 2019. 5) For 2019, Operating cash flow excluding EC antitrust payment less Capital expenditures, net. 6) For 2019, Free cash flow excluding EC antitrust payment relative to Net income.

Financial Report April – June 2021

Second quarter 2021

Second quarter 2020

(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 (loss)

$164

$1

$166

$(234)

$62

$(172)

Operating margin, %

8.1

0.1

8.2

(22.3)

5.9

(16.4)

Income (loss) before taxes

$152

$1

$154

$(247)

$62

$(185)

Net income (loss) attributable to controlling interest

$104

$1

$105

$(175)

$52

$(123)

Return on capital employed, %²⁾

17.7

0.1

17.8

(25.0)

6.8

(18.2)

Return on total equity, %³⁾

16.3

0.2

16.5

(34.9)

10.8

(24.1)

Earnings (loss) per share^{4, 5)}

$1.19

$0.01

$1.20

$(2.00)

$0.60

$(1.40)

1) Costs for capacity alignment. 2) Annualized operating income and income from equity method investments, relative to average capital employed. 3) Annualized 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 2021

First 6 months 2020

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Operating income (loss)

$401

$1

$403

$(99)

$64

$(36)

Operating margin, %

9.4

0.0

9.4

(3.4)

2.2

(1.2)

Income (loss) before taxes

$370

$1

$371

$(135)

$64

$(71)

Net income (loss) attributable to controlling interest

$261

$1

$262

$(100)

$54

$(46)

Capital employed

$3,815

$1

$3,816

$3,793

$54

$3,847

Return on capital employed, %²⁾

21.8

0.1

21.9

(5.3)

3.4

(1.9)

Return on total equity, %³⁾

20.8

0.1

20.9

(9.7)

5.3

(4.4)

Earnings (loss) per share^{4, 5)}

$2.98

$0.01

$2.99

$(1.14)

$0.61

$(0.53)

Total parent shareholders' equity per share

$29.72

$0.01

$29.73

$22.24

$0.61

$22.85

1) Costs for capacity alignment. 2) Annualized operating income and income from equity method investments, relative to average capital employed. 3) Annualized income relative to average total equity. 4) Assuming dilution when applicable 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 2020

 (Dollars in millions)

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Operating income

$883

$37

$919

$382

$99

$481

Operating margin, %

10.0

0.4

10.4

5.1

1.4

6.5

1) Costs for capacity alignment.

Full year 2019

Full year 2018

 (Dollars in millions)

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Operating income

$726

$49

$774

$686

$222

$908

Operating margin, %

8.5

0.6

9.1

7.9

2.6

10.5

1) Costs for capacity alignment, antitrust related matters and separation of our business segments.

Financial Report April – June 2021

Full year 2017

Full year 2016

 (Dollars in millions)

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Reported
U.S. GAAP

Adjust-ments¹⁾

Non-U.S.
GAAP

Operating income

$860

$40

$899

$831

$35

$866

Operating margin, %

10.6

0.5

11.1

10.5

0.4

10.9

1) Costs for capacity alignment and antitrust related matters.

Items included in Non-U.S. GAAP adjustments

Second quarter 2021

Second quarter 2020

Adjustment
Millions

Adjustment
Per share

Adjustment
Millions

Adjustment
Per share

Capacity alignment

$1

$0.02

$62

$0.71

Total adjustments to operating income

$1

$0.02

$62

$0.71

Tax on non-U.S. GAAP adjustments¹⁾

$0

$0.00

$(10)

$(0.11)

Total adjustments to net income

$1

$0.01

$52

$0.60

Average number of shares outstanding - diluted²⁾

87.6

87.4

Annualized adjustment on return on capital employed

$6

$248

Adjustment return on capital employed, %

0.1

6.8

Annualized adjustment on return on total equity

$6

$209

Adjustment return on total equity, %

0.2

10.8

1) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s). 2) Annualized average number of outstanding shares

Items included in Non-GAAP adjustments

First 6 months 2021

First 6 months 2020

Adjustment
Millions

Adjustment
Per share

Adjustment
Millions

Adjustment
Per share

Capacity alignment

$1

$0.02

$64

$0.73

Total adjustments to operating income

$1

$0.02

$64

$0.73

Tax on non-U.S. GAAP adjustments¹⁾

$0

$0.00

$(10)

$(0.12)

Total adjustments to net income

$1

$0.01

$54

$0.61

Average number of shares outstanding - diluted²⁾

                  87.6

                  87.4

Annualized adjustment on Return on capital employed

$3

$128

Adjustment Return on capital employed, %

0.1

3.4

Annualized adjustment on Return on total equity

$3

$108

Adjustment return on total equity, %

0.1

5.3

1) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s). 2) Annualized average number of outstanding shares

Financial Report April – June 2021

(Dollars in millions, unaudited)

2020

2019

2018

2017

2016

Sales and Income

Net sales

$7,447

$8,548

$8,678

$8,137

$7,922

Airbag sales¹⁾

4,824

5,676

5,699

5,342

5,256

Seatbelt sales

2,623

2,871

2,980

2,794

2,665

Operating income

382

726

686

860

831

Net income attributable to controlling interest

187

462

376

586

558

Earnings per share (US$) – basic²⁾

2.14

5.29

4.32

6.70

6.33

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

2.14

5.29

4.31

6.68

6.32

Gross margin, %⁴⁾

16.7

18.5

19.7

20.6

20.6

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

(5.0)

(4.7)

(4.8)

(4.6)

(4.5)

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

(5.2)

(4.7)

(4.5)

(5.0)

(5.0)

Operating margin, %⁵⁾

5.1

8.5

7.9

10.6

10.5

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

6.5

9.1

10.5

11.1

10.9

Balance Sheet

Trade working capital

1,366

1,417

1,396

1,444

1,245

Trade working capital in relation to sales, %⁸⁾

13.6

16.2

15.9

16.7

15.7

Receivables outstanding in relation to sales, %⁸⁾

18.1

18.6

19.0

19.6

19.1

Inventory outstanding in relation to sales, %⁸⁾

7.9

8.5

8.6

8.2

7.7

Payables outstanding in relation to sales, %⁸⁾

12.5

10.8

11.7

11.1

11.1

Total equity

2,423

2,122

1,897

4,169

3,926

Total parent shareholders’ equity per share (US$)

27.56

24.19

21.63

46.38

41.69

Current assets excluding cash

3,091

2,557

2,670

2,598

2,269

Property, plant and equipment, net

1,869

1,816

1,690

1,609

1,329

Intangible assets (primarily goodwill)

1,412

1,410

1,423

1,440

1,430

Capital employed

3,637

3,772

3,516

4,538

4,225

Net debt⁷⁾

1,214

1,650

1,619

368

299

Total assets

8,157

6,771

6,722

6,947

6,565

Long-term debt

2,110

1,726

1,609

1,311

1,313

Return on capital employed, %^{9, 10)}

10

20

17

n/a

n/a

Return on total equity, %^{10, 11)}

9

23

13

n/a

n/a

Total equity ratio, %

30

31

28

49

48

Cash flow and other data

Operating Cash flow¹²⁾

849

641

591

936

868

Depreciation and amortization¹²⁾

371

351

397

426

383

Capital expenditures, net¹²⁾

340

476

555

570

499

Capital expenditures, net in relation to sales, %¹²⁾

4.6

5.6

5.7

5.5

4.9

Free Cash flow^{7, 12, 13)}

509

165

36

366

369

Cash conversion, %^{7, 12, 14)}

270

35.6

19.5

121

65.7

Direct shareholder return^{12, 15)}

54

217

214

366

203

Cash dividends paid per share (US$)

0.62

2.48

2.46

2.38

2.30

Number of shares outstanding (millions)¹⁶⁾

87.4

87.2

87.1

87.0

88.2

Number of employees, December 31

61,000

58,900

57,700

56,700

55,800

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) Excluding costs for capacity alignment, antitrust related matters and separation of our business segments. 7) Non-US GAAP measure, for reconciliation see tables above. 8) Relative to annualized fourth quarter sales. 9) Operating income and income from equity method investments, relative to average capital employed. 10) 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. 11) Income relative to average total equity. 12) Including Discontinued Operations. 13) Operating cash flow less Capital expenditures, net. 14) Free cash flow relative to Net income. 15) Dividends paid and Shares repurchased. 16) At year end, excluding dilution and net of treasury shares.