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SWEDEN: Autoliv cites active safety among reasons for impressive third quarter results

By Simon Warburton | 28 October 2013

Autoliv is highlighting growth in its steering wheel and active safety business among the reasons for its highest third quarter sales ever, with Europe showing encouraging signs of 'stabilisation.'

The supplier posted consolidated sales of US$2.12bn, with cash flow from operations at US$206m, again, the highest ever, while operating income was US$182m, including US$3m related to antitrust investigations and capacity alignments.

Net income was US$125m and Autoliv is estimating 2013 full-year organic sales to grow by more than 5%, compared to previous indications of around 4%.

"Our steering wheel business - we have grown volumes in the third quarter [of] 30%," an Autoliv spokesman told just-auto from Sweden. "That puts some strain on our manufacturing so it comes currently at a lower margin.

"Active safety is becoming increasingly important all the time - it is the future growth area and current [growth] area of the automotive safety industry.

"In 2012, it was 3% of our total revenue, but from a strategic standpoint the fact we are there and [have] got the right relationships with the OEMs, it is very important."

Autoliv says its active safety business has grown nearly 70% in consecutive quarters, a situation it says it is a "little bit surprised by," but is nonetheless predicting its systems and products could save up to 150,000 lives per year in the future.

Europe is seeing a gradual emergence from economic gloom and Autoliv says it is continuing its "transition" phase on the Continent where it is increasing manufacturing capability footprint from west to east.

"As we do that and we get increasing volumes at the same time, that could put further pressure on that programme, because we have to handle both transitions at the same time," said the Autoliv spokesman.

"While it is a long-term positive, it could put a short-term strain on our capabilities. We would prefer to call it [Europe], stabilisation.

"Registration numbers and light vehicle production numbers, they have come up a little bit. Stabilisation is the word we use. We don't see the fundamentals there for a quick uptick."

The component producer added it expected its strong growth to continue into the fourth quarter, driven largely by China and active safety, but also by model launches and production ramp-ups in Europe, Japan and Brazil.

Autoliv forecasts 6% growth in Q3