Autoliv has reported record earnings results for the quarter ended December 31, 2010 driven by strong sales in North America, Japan and China.
Operating income improved to $243 million, income before taxes to $231 million, net income to $179 million and earnings per share assuming dilution to $1.89. Gross margin amounted to 22.2% and operating margin to 12.7%.
Operational cash flow of $326 million and $245 million before financing were also new record highs.
Net sales increased by 14% to $1,907 million with the organic sales portion growing at a rate of 12% compared to a growth rate of 9% for global light vehicle production (LVP).
For the first quarter of 2011, the company expects its consolidated net sales to rise by around 20% compared to the same quarter in 2010, with the organic sales portion growing by more than 10%.
The current indication is that consolidated sales could increase by more than 10% for the full year 2011 with the organic sales portion growing by around 6%. An operating margin of at least 11.5% is expected for both the first quarter and the full year.
Sales of airbag products (including steering wheels and electronics) rose by 17% to $1,281 million. Acquisitions increased sales by 10%, while the production day and currency effects had a negative impact of 5% and 1%, respectively.
Consequently, organic sales of airbag products grew by 13%, which was 10 percentage points higher than the increase in LVP in the Triad (i.e. the main market for airbags).
Autoliv said its strong performance was due to a favourable vehicle mix with GM, Ford, Chinese OEMs and Chrysler, and to strong sales in Japan.
Sales of seatbelt products (including seat sub-systems) increased by 9% to $626 million. Acquisitions added 6%. Sales were reduced by 5% by the production day effect and by 1% by currency effects. Consequently, organic sales of seatbelt products rose by 9%, which was in line with global LVP. GM, Honda, Mercedes and the Chinese customers contributed the most to the growth.
Sales by region
Sales from Autoliv’s European companies decreased by 6% to $717 million primarily due to negative currency effects. Acquisitions increased sales by less than 1%. The production day effect reduced sales by slightly more than 5%. Organic sales growth of 5% was 1 percentage point below the LVP growth in Europe, mainly due to slower LVP growth in the important West European market and the expiration of certain contracts. This was partially offset by strong demand for vehicles with high safety content such as Mercedes’ C-class; BMW’s 5-series and Opel’s new Astra, Autolive said.
Sales from Autoliv’s North American companies increased by nearly 24% to $522 million. Acquisitions added slightly more than 9% and currency effects added slightly more than 1% due to a stronger Mexican peso. The production day effect reduced sales by 5%. Organic sales growth of 19% was more than twice as much as the 8% increase in North American LVP. Autoliv’s better-than-market performance was primarily due to a favourable mix, it said.
Significant contributors to Autoliv’s sales performance were Chevrolet’s Cruze and Silverado; GMC’s Sierra; Ford’s Edge, E-series, F-series Super Duty and Crown Victoria; Chrysler’s Grand Cherokee, Minivan Town & Country and Dodge Durango.
Sales from Autoliv’s companies in Japan increased by 13% to $206 million, including positive currency effects of 8% and a negative production day effect of slightly more than 5%. Organic sales growth of 11% compares favourably with the 9% drop in Japanese LVP. Autoliv’s sales were driven by Mitsubishi’s new RVR/ASX; Honda’s CRV and CRZ; Mazda’s 6 and CX; and Lexus LX, RX and new CT. Sales were also driven by new programs for Daewoo and Hyundai-Kia in Korea, as well as by SUVs, premium cars and other vehicles for the North American and West European export markets.
Sales from Autoliv’s companies in the Rest of the World (RoW) jumped by 49% to $462 million. Acquisitions added 32% and currency effects 3%. The production day effect reduced sales by slightly more than 5%. The organic sales increase of 19% was 3 percentage points higher than the increase in the region’s LVP. Autoliv said its strong performance reflects organic sales increases of 43% in China where LVP grew by 17%. Autoliv’s growth was driven by Geely, Great Wall and Chery, as well as by Volkswagen’s Golf; Nissan’s Qashqai; BMW’s 5-series; and Mercedes’ E-class.