Autoliv has summarised its second quarter results (for April – June 2020) simply as “adapting to weak but improving light vehicle production (LVP)”.
Q2 sales declined 48% year on year to US$1,048m, operating margin was negative 22.3% and earnings per share (EPS) fell $3.25 to a loss of $2 or an adjusted loss of $1.40 after declining $2.78.
Autoliv did not provide any 2020 outlook saying: “No indications will be provided until effects of [the] COVID-19 pandemic can be better assessed”.
The supplier said April sales declined 65% year on year, May by 55% and June by 20% but “order intake in the first half year was in line with last year and supportive of prolonged sales outperformance”.
Profitability and cash flow were affected by customer plant closures and “a volatile industry ramp up” and by continued high engineering activity preparing for future model launches.
“Our liquidity position remains strong with $1.7bn in cash and committed, unused loan facilities. Operating cash flow was $128m negative in Q2 but it turned positive in June,” Autoliv said in a statement.
Substantial cost reductions with short- and long-term effects includes reduction of personnel costs by 25% versus Q1, and launching the second phase of a structural efficiency programme which targets additional annual employee cost reductions of around $65m.
“Further potential structural cost reductions, including footprint, remain under evaluation,” the supplier said.
Mikael Bratt, President & CEO, said: “The challenges we managed in the second quarter were unprecedented.
“I am proud that we have a solid organisation that managed to reduce costs and safely restart operations while continue to execute on our long term strategy.
“We must balance the cost reduction responses against the need for capacity to manage the recovery that started mid quarter and continues in the first weeks of July.
“We also need to preserve capacity for the new normal market demand and our expected outgrowth.”