STOCKHOLM, Dec. 12, 2017 /PRNewswire/ -- Autoliv, Inc.
(NYSE: ALV and SSE: ALIVsdb), the worldwide leader in automotive
safety systems, today announced that its Board of Directors has
concluded its strategic review and decided to prepare for a
spin-off of its Electronics business segment, creating a new,
independent publicly traded company during the third quarter of
2018.
The analyses conducted under the strategic review concluded that
the assumptions made at the time of the initial announcement in
September 2017 to separate the
Company hold true. Through the separation, additional value for
shareholders and other stakeholders will be created by the ability
to better address two distinct, growing markets with leading
product offerings.
The key drivers for the separation include:
- The different pace of technology advancement in the two
businesses
- Different skill sets of people throughout the organizations
(leadership, engineering, sales)
- Different Sales growth rates over the near and long-term with
limited customer or operational synergies
- Different market needs driving investments for growth and
innovation (RD&E)
- A potentially different shareholder profile due to the timing
of returns
"With the strategic review concluded we now continue the process
with full focus on a successful introduction of our two business
segments as stand-alone companies during 2018. We are excited about
the strategic opportunities for both our current business segments
as separate companies", said Jan
Carlson, Chairman, President and CEO of Autoliv.
The spin-off will be effected by a payment of a dividend of the
common stock of the new Electronics company on a pro rata basis to
the holders of common shares (including through Swedish Depository
Receipts) of Autoliv as of a yet to be determined record date.
As part of the preparation for the spin-off, the Electronics
business is expected to receive a cash injection from Autoliv, with
the underlying objective of Autoliv to remain strong investment
grade. The intent is for the spin-off to be tax free to
stockholders both in the US and Sweden. A Form 10 registration statement for
the transaction will be filed with the Securities and Exchange
Commission during the first half of 2018. It will include
historical financial information for the Electronics business on a
stand-alone basis for the fiscal years 2015-2017 and other details
regarding the proposed spin-off.
After the spin-off, Autoliv's current Passive Safety segment
would continue to operate under the Autoliv name, with continued
listings on the New York Stock Exchange and Nasdaq Stockholm. The
Electronics business will assume a new company name to be announced
at a later stage. It is also expected to be listed in the United States and Sweden. Both companies are to be headquartered
in Stockholm, Sweden.
Forward looking full year 2018 indications for the stand-alone
entities are expected to be given in connection with Autoliv's Q4
2017 earnings release.
The spin-off is expected to be completed during the third
quarter of 2018 subject to market, regulatory and certain other
conditions, including approval by Autoliv's board of directors.
There can be no assurance regarding the ultimate timing of the
spin-off or that the spin-off will ultimately occur. Further
updates to the progress of the separation and stock market listing
process will be provided in a timely manner.
Background
Electronics consists of Active Safety Products (automotive
radars, cameras with driver assist systems, night vision systems
and positioning systems), Restraint Control and Sensing and Brake
Systems. Its market (particularly in active safety towards
autonomous driving) is characterized by a high pace of change and
growth which requires an agile innovation and partnering model as
well as significant upfront investments to capture future growth.
It is estimated that the total available market for Safety
Electronics will grow from around $20
billion in 2017 to more than $40
billion in 2025. The objective for Electronics is to capture
a significant portion of that growth while continuously improving
the profitability of the unit.
Electronics is one of the leaders in Active Safety today with
one of the broadest and most advanced product portfolios in the
industry. Over the last two years Electronics has further
positioned itself to be a major player in automotive electronics,
including the competitiveness of the product portfolio, becoming a
qualified supplier with a high number of OEM's for active safety
and entering into important partnerships with companies like Volvo
Cars (Zenuity), NVIDIA and LiDAR experts Velodyne for the next
generation of highly automated cars. In 2016, Electronics sales
were $2.216 billion, with a target to
reach $3 billion in revenue in
2020.
Passive Safety consists of airbag systems, steering wheels and
seatbelts. Its market is characterized by stable growth and
incremental innovation which requires the highest requirements on
quality and manufacturing efficiency. It is estimated that the
total available market for Passive Safety will grow from around
$20 billion in 2017 to around
$25 billion in 2025. During the same
period Passive Safety is expected to outgrow the market and light
vehicle production, which is expected to grow by close to two
percent annually. The objective for Passive Safety is to remain the
market and innovation leader while maintaining a high level of
quality and capital efficiency and further improving its margin
performance.
Passive Safety is the global market leader with a market share
of 39% in 2016. Over the last 2.5 years Passive Safety's share of
order intake has been around 50% or more indicating significant
market share expansion ahead. Standalone, Passive Safety will have
increased freedom to further optimize its performance. In 2016
Passive Safety sales were $7.9
billion, with a target to reach more than $10 billion in revenues in 2020.
Inquiries:
Media
Thomas Jönsson
Group Vice President, Corporate Communications
Tel +46(0)8-5872-0627
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
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 Group VP of Corporate Communications set out above, at 08.30
CET on December 12, 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.
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 completion and timing of the proposed
spin-off, the future performance of the Passive Safety and
Electronics businesses on a stand-alone basis if the spin-off is
completed; the outlook for Passive Safety and Electronics as
separate businesses if the spin-off is completed; the expected
strategic, operational and competitive benefits of the proposed
spin-off and the effect of the separation on Autoliv and its
stakeholders; 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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SOURCE Autoliv