Autoliv (ALIV) Q2 2024 earnings summary

Executive summary

• Profitability improved year-over-year and sequentially despite a 1% decline in net sales, driven by cost reductions and pricing actions.

• Adjusted operating income rose to $221 million (8.5% margin), with gross profit margin improving to 18.2%.

• Indirect workforce reduced by over 1,100 (more than 5%), targeting $50 million in 2024 savings.

• Settled most cost compensation claims with customers, aiming for completion in Q3.

• Strategic agreement signed with XPENG AEROHT to pioneer safety solutions for future mobility.

Financial highlights

• Q2 2024 net sales were $2,605 million, down 1% year-over-year; organic sales up 1%.

• Adjusted operating income increased 4% to $221 million; adjusted operating margin rose 50 bps to 8.5%.

• Gross profit increased by $28 million to $475 million; gross margin up to 18.2%.

• Operating cash flow was $340 million, down from $379 million in Q2 2023; free cash flow was $194 million.

• Adjusted EPS, diluted, decreased by $0.05, mainly due to higher taxes and financial items.

Outlook and guidance

• Full-year 2024 guidance revised down, reflecting a global light vehicle production decline of ~3%.

• Organic sales expected to increase by ~2%; adjusted operating margin guided at 9.5%-10%.

• Operating cash flow expected around $1.1 billion; tax rate forecast at ~28%.

• H2 2024 profitability expected to improve, with adjusted operating margin of 11%-12%.

• Capex to remain ~5.5% of sales.