Specialist safety equipment supplier Autoliv said fourth quarter 2019 sales of $2,191m was organic sales growth of 0.5% year on year, leading to a 10.5% operating margin, 11.1% adjusted operating margin, earnings per share up 268% to US$1.78 EPS and adjusted EPS of $1.84, an increase of 30%.
For full year 2020, the supplier is targeting 3-4% net sales growth, 3-4% organic sales growth and an operating margin of at least 9.5%.
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Autoliv said fourth quarter organic growth outperformed global light vehicle production (LVP) by 5.9% with all regions outperforming LVP.
Order intake "share remained high".
Profitability improved despite the global LVP decline, driven by launch of new supply programmes, improved launch efficiency and the ongoing structural efficiency programme.
Adjusted operating margin and cash flow improved.
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By GlobalData"The structural efficiency programme is on track, and we are planning and implementing a multitude of strategic initiatives and structural improvements supporting our medium term profitability target," Autoliv said in a statement.
Mikael Bratt, president & CEO, said: "Our performance progressed throughout the year and in the fourth quarter, we saw the first year-on-year improvement in adjusted operating margin after the spin-off.
"Global LVP declined by close to 6% in 2019, a sharp contrast to the 1% growth that was expected when the year started. Combined with higher raw material costs, a large number of product launches and beginning to implement our medium term strategic initiatives, 2019 was indeed a challenge.
"However, it was also a year when we continued to build the foundation for margin improvement in the coming years.
"With more than 100 projects being evaluated, we have set a high pace in the planning and implementation of strategic initiatives and structural improvements. These initiatives are key drivers to our medium-term target of around 12% adjusted operating margin and building the foundation to continue to create shareholder value.
"In 2020 we expect improved adjusted operating margin despite another year of declining LVP. This is based on that our organic sales growth will outperform LVP by about 6%, [with] some support from raw material costs and savings from the structural efficiency programme.
"Principal headwinds are the expected LVP decline, sharply declining [airbag, Takata recall-related] inflator replacement sales and costs for planning and implementing the strategic initiatives with payback in later years.
"We expect 2020 seasonality to be even more pronounced than in 2019 in terms of quarterly profitability progression. The start of the year will be challenging but we expect a significantly stronger second half year."
