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July 16, 2021

Autoliv posts Q2 net sales up 93% to US$2.02bn

Strong Q2 bounce-back from Swedish supplier.

By Simon Warburton

Autoliv has posted 2021 second-quarter net sales up 93% to US$2.02bn.

Key business developments in the second quarter of 2021:

  • Strong organic sales growth in all regions, except China, as global LVP grew by 52% vs. Q2 last year (according to IHS Markit June 2021). Sales increased organically by 85%, outperforming global LVP by more than 33pp, largely due to launches and positive vehicle and geographical mix effects. All regions except Rest of Asia outperformed LVP by 4-38pp. Sequentially, LVP declined by 8% compared to Q1 2021
  • Major profitability improvement, mainly driven by strong sales growth. Adjusted operating margin improved by 24.6pp to 8.2%. ROCE improved to 17.7% and ROE improved to 16.3%
  • Improved cash flow and balance sheet. Operating cash flow increased to US$63m while free cash flow was negative US$33m. Net debt declined substantially and leverage ratio improved to 1.1x. Quarterly dividend of US$0.62 was declared for Q2, 2021

“The COVID-19 pandemic continues to affect us in several ways,” said Autoliv president & CEO, Mikael Bratt. “Supply shortage of semiconductors resulted in a Q2 global LVP, that was 8% lower than what was expected at the beginning of the quarter and 8% lower than the first quarter [according to IHS Markit, June, 2021].

“The lower than anticipated LVP, along with the material changes in customer call-offs with short notice, negatively impacted our sales and profitability in the quarter. The low visibility of these changes prevented us from using furloughs effectively to mitigate the effects of the lower customer demand. Although the situation improved towards the end of the quarter, we still expect supply disruptions to impact LVP negatively in the third quarter with some improvement in the fourth quarter.

“I am pleased with our strong sales growth and outperformance vs. LVP in Q2, and the level of our order intake for the first half of the year. I am also pleased with our leverage ratio coming down to 1.1x and that we reinstated a quarterly dividend.”

“We continue to be diligent in our cost control to manage demand volatility. However, as a result of continued demand and supply chain uncertainty, we are adjusting our full year indication. Based on an assumption of 9%-11% global LVP growth for the full year 2021, we expect an organic sales growth of around 16%-18%, and an adjusted operating margin of around 9%-9.5%.”

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