Autoliv (ALIV) Q4 1999 earnings summary

Executive summary

• FY1999 sales rose 9% to $3.812B; underlying growth was 12% after adjusting for currency effects, and EPS increased 6% to $1.95.

• Record sales and earnings were supported by market-share gains, new product launches and cost savings, despite pricing pressure and a stronger U.S. dollar.

Financial highlights

• Net sales increased $323M YoY to $3,812.2M; currency translation reduced reported sales growth by ~3 percentage points, while acquisitions had negligible impact.

• Operating income rose to $368.6M from $354.1M; operating margin declined to 9.7% from 10.2%.

• Net income increased to $199.9M from $188.3M; EPS was $1.95 versus $1.84, while return on sales eased to 5.2% from 5.4%.

• Gross margin was 21.2% versus 21.4% for FY; Q4 gross margin reached 21.7%, the highest since Q1 1998.

Outlook and guidance

• The underlying market was expected to grow ~5% in 2000, excluding currency effects and swings in global vehicle production; share gains, acquisitions and side-curtain exposure could support faster growth.

• First shipments of advanced airbag systems were scheduled before year-end 2000; higher R&D spending was expected to support product development and customer requirements.

• 2000 capital expenditure was budgeted at $285M, primarily for manufacturing capacity and new products.