FRANKFURT, Germany,
Sept. 14, 2017 /PRNewswire/ -- At
its Capital Markets Day, on September
14, Autoliv, Inc. (NYSE: ALV and SSE: ALIVsdb), the
worldwide leader in automotive safety systems, will outline its
strategy for shareholder value creation and sets 2020 targets for
Passive Safety and Electronics as standalone entities.
In a separate press release issued today, Autoliv announced that
its Board of Directors has instructed management to conduct a
strategic review of its operating structure with the intent to
create separate companies of its two current business segments,
Passive Safety and Electronics. The intent is to create two
publicly traded companies capable of addressing two distinct,
growing markets with leading product offerings and thereby create
additional value for shareholders, customers and other stakeholders
as compared to the current, combined structure of Autoliv. The
strategic review process will evaluate this and other options.
Although the strategic review has been initiated, there is no
guarantee that the review will result in any transaction, including
a separation or listing of the businesses. If the separation takes
place, the process is estimated to take around one year under most
separation scenarios. Updates to the progress of the strategic
review will be provided in a timely manner.
Autoliv has been reporting its Passive Safety and Electronics
businesses as two separate segments since the beginning of
2016.
The 2020 targets for Passive Safety as a standalone entity are
as follows, based on the assumptions described further below in
this release:
- To surpass $10 billion in sales,
indicating an annual growth rate of around 8% from 2017.
- To increase its current Passive Safety market share from 39% to
45% or more.
- To reach an adjusted* operating margin of around 13%.
In addition, Passive Safety's 2022 target and ambition for 2025
is to maintain its market share and to grow sales at least in line
with the Passive Safety market, which is estimated to be one
percent above the light vehicle production growth.
The 2020 targets for Electronics as a standalone entity are as
follows, based on the assumptions described further below in this
release:
- To reach $3 billion in sales,
indicating an annual growth rate of 10% from 2017. This target
includes that Active Safety surpasses $1
billion in sales.
- An adjusted* operating margin of 0-5%.
In addition, for 2022, Electronics' targets sales of around
$4 billion, indicating a CAGR in
2017-2022 of around 12% as compared to an estimated CAGR of 10% for
the Electronics market. For 2022, Active Safety targets sales of
around $2 billion, indicating a
2017-2022 CAGR of around 23%, essentially in line with the
estimated CAGR for the Active Safety market.
For 2025, Electronics' ambition is to surpass $6 billion in sales, with Active Safety sales of
around $4 billion, indicating a
2017-2025 CAGR approximately in line with the estimated CAGR for
the Active Safety market of around 23%.
"The targets set for Passive Safety and Electronics illustrate
the high expectations we have for the future development of our
businesses as standalone entities. The expectations for Passive
Safety are based on its strong order intake since 2015, where the
strong sales growth we foresee supports the adjusted* operating
margin of around 13% we estimate for Passive Safety in 2020. The
rapid and broad based build-up of Electronics' technologies,
partnerships and customer presence since 2015 is the foundation for
our expectation that Electronics and Active Safety will keep pace
with market growth in the years to come," said Jan Carlson, Chairman, President and CEO.
During the Capital Markets Day, Autoliv will also detail its
view of the market development for its main businesses, including
estimates of the Active Safety market (includes Vision, Radar, ADAS
ECUs and LiDAR) reaching approximately $24
billion by 2025 indicating a CAGR of approximately 23% from
2017. The Passive Safety market (Airbags, Seatbelts and Steering
Wheels) is expected to grow to $25
billion by 2025, indicating a CAGR of about 3% from
2017.
The above targets and ambitions set out for Passive Safety and
Electronics on a standalone basis are based on the assumption that
following the strategic review initiated today, the Board approves
a separation of Passive Safety and Electronics into two publicly
listed entities. There is no guarantee that this will occur. All
Passive Safety and Electronics standalone targets and assumptions
presented illustrate what these businesses may look like as
standalone entities and include several key assumptions and
uncertainties, including among others:
(i) That the Board approves a separation of our two operating
segments into standalone companies.
(ii) An allocation of various corporate costs, which may not be
reflective of actual costs of separate companies pursuing their
respective strategies.
(iii) That it is anticipated that the Electronics business would
have additional overhead costs and thus a slight margin compression
in the near-term while the Passive Safety business would have a
slight margin support from a different allocation of corporate
costs.
(iv) That the product portfolio will be consistent with
current segment portfolios.
(v) That certain items such as transaction costs and costs of
any transition services are not reflected in the targets and
ambitions.
At the event, the Company's Electronics business will show the
rapid development in the past few years of its technology
competence and partnership network, as well as a significant
broadening of its product offering and customer list.
The following provides a summary of the order intake for the two
operating segments:
- Electronics order intake in 2016 of around $0.8 billion was almost double that of 2015 of
which Active Safety order intake in 2016 of around $0.4 billion was more than 50% higher than in any
previous year.
- Passive Safety increased its order intake from $1.3 billion in 2014 to $2.2 billion in 2015 and $2.3 billion in 2016, continuing to $2.4 billion for the last twelve months (end of
August 2017). This represents an
order intake share increasing from 37% in 2014 to around 50% in
2015, 2016 and for the last twelve months.
Normally there is about 18 to 36 months from time of order to
start of production.
During the weeks following the Capital Markets Day, Autoliv
management intends to conduct non-deal roadshows to meet investors
in Europe and the US.
Autoliv will also at the event update some of its end of decade
(2019) targets, under the current corporate structure.
- To surpass $12 billion in sales,
which is an increase from the previous target of "reach
$12 billion." Of the more than
$12 billion in sales, more than
$9.5 billion are expected to come
from the Passive Safety business segment and around $2.5 billion from the Electronics business
segment. The previous sales target as outlined at the 2015 CMD was
for Sales of around $12 billion of
which "around $9 billion were
expected to come from the Passive safety business segment and
around $3 billion from the
Electronics business segment."
- To increase operating margin in the Passive Safety segment,
which is a higher target compared to the previous target of "at
least maintaining the current margin level".
- To report an operating margin in the Electronics segment of
0-5%, which is a lower target than the previous "to reach the
long-term corporate margin target range"
- To grow adjusted Earnings per Share* (EPS) faster than the
targeted sales growth in 2015-2019 (confirming the previous
target).
Presentations from management at the Capital Markets Day will be
made available on the autoliv.com website under Investors –
Presentations & Transcripts at 08.00 AM
CET on September 14, 2017.
Inquiries:
Investors
Ray Pekar
Vice President Investor Relations Americas.
Tel +1-248-794-4537
Anders Trapp
Vice President Investor Relations
Tel +46 (0)8-5872-0671
Media
Thomas Jönsson
Group Vice President, Corporate Communications
Tel +46 (0)8-5872-0627
This information is information that Autoliv, Inc. is obliged to
make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the VP of Investor Relations set out above, at 07.00 CET on
September 14, 2017.
About Autoliv
Autoliv, Inc. is the worldwide leader in automotive safety
systems, and through its subsidiaries develops and manufactures
automotive safety systems for all major automotive manufacturers in
the world. Together with its joint ventures, Autoliv has more than
80 facilities with 70,000 employees in 27 countries. In addition,
the Company has 22 technical centers in ten countries around the
world, with 19 test tracks, more than any other automotive safety
supplier. Sales in 2016 amounted to about US $10.1 billion. The Company's shares are listed on
the New York Stock Exchange (NYSE: ALV) and its Swedish Depository
Receipts on Nasdaq Stockholm (ALIV sdb). For more information about
Autoliv, please visit our company website at
www.autoliv.com.
Non-U.S. GAAP measures
* In this press release, we refer to non-U.S. GAAP measures
such as operating margin excluding capacity alignment and antitrust
related costs, and EPS excluding antitrust related costs. The
forward looking non-U.S. GAAP financial measures above are provided
on a non-U.S. GAAP basis. Autoliv has not provided a U.S. GAAP
reconciliation of these measures because items that impact these
measures, such as costs related to capacity alignments and
antitrust matters cannot be reasonably predicted or determined. As
a result, such reconciliation is not available without unreasonable
efforts and Autoliv is unable to determine the probable
significance of the unavailable information. CAGR based on
assumptions LTM's are year-end figures.
Safe Harbor Statement
This release contains statements that are not historical
facts but rather forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include those that address activities,
events or developments that Autoliv, Inc. or its management
believes or anticipates may occur in the future. All
forward-looking statements, including without limitation,
statements related to the Company's strategic review of its
operating structure or the terms, timing or structure of any such
transaction as a result of such review, if any; the outlook for
Passive Safety and Electronics as separate businesses; statements
related to the future performance of the Company or of any such
businesses if any such transaction is completed; other targets
regarding the Company's performance as a single entity;
management's examination of historical operating trends and data,
as well as estimates of future sales, operating margin, cash flow,
effective tax rate or other future operating performance or
financial results, are based upon our current expectations, various
assumptions and/or data available from third parties. Our
expectations and assumptions are expressed in good faith and we
believe there is a reasonable basis for them. However, there can be
no assurance that such forward-looking statements will materialize
or prove to be correct as forward-looking statements are inherently
subject to known and unknown risks, uncertainties and other factors
which may cause actual future results, performance or achievements
to differ materially from the future results, performance or
achievements expressed in or implied by such forward-looking
statements. In some cases, you can identify these statements by
forward-looking words such as "estimates", "expects",
"anticipates", "projects", "plans", "intends", "believes", "may",
"likely", "might", "would", "should", "could", or the negative of
these terms and other comparable terminology, although not all
forward-looking statements contain such words. Because these
forward-looking statements involve risks and uncertainties, the
outcome could differ materially from those set out in the
forward-looking statements for a variety of reasons, including
without limitation, changes in light vehicle production;
fluctuation in vehicle production schedules for which the Company
is a supplier, changes in general industry and market conditions or
regional growth or decline; changes in and the successful execution
of our capacity alignment, restructuring and cost reduction
initiatives and the market reaction thereto; loss of business from
increased competition; higher raw material, fuel and energy costs;
changes in consumer and customer preferences for end products;
customer losses; changes in regulatory conditions; customer
bankruptcies, consolidations, or restructurings; divestiture of
customer brands; unfavorable fluctuations in currencies or interest
rates among the various jurisdictions in which we operate;
component shortages; market acceptance of our new products; costs
or difficulties related to the integration of any new or acquired
businesses and technologies; continued uncertainty in pricing
negotiations with customers; successful integration of acquisitions
and operations of joint ventures; successful implementation of
strategic partnerships and collaborations; our ability to be
awarded new business; product liability, warranty and recall claims
and investigations and other litigation and customer reactions
thereto; (including the resolution of the Toyota recall); higher
expenses for our pension and other postretirement benefits,
including higher funding requirements for our pension plans; work
stoppages or other labor issues; possible adverse results of
pending or future litigation or infringement claims; our ability to
protect our intellectual property rights; negative impacts of
antitrust investigations or other governmental investigations and
associated litigation relating to the conduct of our business; tax
assessments by governmental authorities and changes in our
effective tax rate; dependence on key personnel; legislative or
regulatory changes impacting or limiting our business; political
conditions; dependence on and relationships with customers and
suppliers; the uncertainty as to which strategic alternatives may
be available with respect to the Electronics business, whether any
transaction will be commenced or completed as a result of such
review, and the timing and value of any such transaction; risks
related to the potential separation of the Electronics business;
and other risks and uncertainties identified under the headings
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual
Reports and Quarterly Reports on Forms 10-K and 10-Q and any
amendments thereto. For any forward-looking statements contained in
this or any other document, we claim the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we assume no
obligation to update publicly or revise any forward-looking
statements in light of new information or future events, except as
required by law.
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