FORM 10-Q Filing Information [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides essential identification details for Autoliv, Inc.'s Form 10-Q filing for the quarter ended September 30, 2025 - Autoliv, Inc. is a Delaware corporation, with its common stock (par value **$1.00** per share) traded on the New York Stock Exchange under the symbol **ALV**[2](index=2&type=chunk)[3](index=3&type=chunk) - The registrant is a large accelerated filer and has filed all required reports and interactive data files during the preceding **12 months**[3](index=3&type=chunk)[4](index=4&type=chunk) Shares Outstanding as of October 13, 2025 | Class of Stock | Shares Outstanding | | :--------------- | :----------------- | | Common Stock | 75,965,348 | Forward-Looking Statements [Nature and Risks of Forward-Looking Statements](index=2&type=section&id=Nature%20and%20Risks%20of%20Forward-Looking%20Statements) This section clarifies that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - Forward-looking statements are based on current expectations, assumptions, and third-party data, but are subject to known and unknown risks and uncertainties[7](index=7&type=chunk) - Key risks include general economic conditions (e.g., inflation), changes in light vehicle production, global supply chain disruptions, geopolitical instability, increased competition, higher raw material costs, regulatory changes, currency fluctuations, product liability claims, and tax assessments[9](index=9&type=chunk) - The company claims safe harbor protection for forward-looking statements under the Private Securities Litigation Reform Act of 1995 and does not assume an obligation to update them, except as required by law[10](index=10&type=chunk) PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Autoliv's unaudited condensed consolidated financial statements and related notes for the reporting periods [Consolidated Statements of Income (unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20(unaudited)) This section presents Autoliv's unaudited consolidated statements of income for the three and nine months ended September 30, 2025 and 2024 Consolidated Statements of Income (Unaudited) - Key Figures (Dollars in millions, except per share data) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $2,706 | $2,555 | $7,998 | $7,774 | | Gross profit | $522 | $459 | $1,502 | $1,377 | | Operating income | $267 | $226 | $769 | $626 | | Income before income taxes | $240 | $197 | $693 | $554 | | Net income | $175 | $139 | $510 | $404 | | Net earnings per share – basic | $2.29 | $1.75 | $6.61 | $4.99 | | Net earnings per share – diluted| $2.28 | $1.74 | $6.59 | $4.98 | | Cash dividend per share – paid | $0.85 | $0.68 | $2.25 | $2.04 | - Net sales increased by **5.9%** for the three months ended September 30, 2025, and by **2.9%** for the nine months ended September 30, 2025, compared to the prior year periods[15](index=15&type=chunk) - Diluted EPS increased by **31%** to **$2.28** for the three months ended September 30, 2025, and by **32%** to **$6.59** for the nine months ended September 30, 2025[15](index=15&type=chunk) [Consolidated Statements of Comprehensive Income (unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(unaudited)) This section presents Autoliv's unaudited consolidated statements of comprehensive income for the three and nine months ended September 30, 2025 and 2024 Consolidated Statements of Comprehensive Income (Unaudited) - Key Figures (Dollars in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $175 | $139 | $510 | $404 | | Other comprehensive income (loss), net of tax | $3 | $35 | $129 | $(63) | | Comprehensive income attributable to controlling interest | $178 | $173 | $638 | $340 | - Comprehensive income attributable to controlling interest increased to **$178 million** for the three months ended September 30, 2025, from **$173 million** in the prior year, and significantly increased to **$638 million** for the nine months ended September 30, 2025, from **$340 million** in the prior year[21](index=21&type=chunk) - A cumulative translation gain of **$11 million** related to the sale of the Russian entity in Q1 2025 was recycled and reported as part of the net change of cumulative translation adjustment in the Comprehensive Income Statement[21](index=21&type=chunk) [Condensed Consolidated Balance Sheets (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This section presents Autoliv's unaudited condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 Condensed Consolidated Balance Sheets (Unaudited) - Key Figures (Dollars in millions) | Metric | As of Sep 30, 2025 | As of Dec 31, 2024 | | :-------------------------------- | :----------------- | :----------------- | | Total current assets | $3,946 | $3,483 | | Total assets | $8,463 | $7,804 | | Total current liabilities | $4,141 | $3,633 | | Total non-current liabilities | $1,763 | $1,885 | | Total controlling interest's equity | $2,549 | $2,276 | | Total liabilities and equity | $8,463 | $7,804 | - Total assets increased to **$8,463 million** as of September 30, 2025, from **$7,804 million** at December 31, 2024[24](index=24&type=chunk) - Total controlling interest's equity increased to **$2,549 million** as of September 30, 2025, from **$2,276 million** at December 31, 2024[24](index=24&type=chunk) [Consolidated Statements of Cash Flows (unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This section presents Autoliv's unaudited consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 Consolidated Statements of Cash Flows (Unaudited) - Key Figures (Dollars in millions) | Metric | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $613 | $639 | | Net cash used in investing activities | $(313) | $(431) | | Net cash used in financing activities | $(316) | $(259) | | Decrease in cash and cash equivalents | $(105) | $(84) | | Cash and cash equivalents at end of period | $225 | $415 | - Net cash provided by operating activities decreased slightly to **$613 million** for the nine months ended September 30, 2025, from **$639 million** in the prior year[28](index=28&type=chunk) - Net cash used in investing activities improved to **$(313) million** for the nine months ended September 30, 2025, from **$(431) million** in the prior year, primarily due to lower capital expenditures[28](index=28&type=chunk) [Consolidated Statements of Total Equity (unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Total%20Equity%20(unaudited)) This section presents Autoliv's unaudited consolidated statements of total equity as of September 30, 2025 and December 31, 2024 Consolidated Statements of Total Equity (Unaudited) - Key Figures (Dollars in millions) | Metric | As of Sep 30, 2025 | As of Dec 31, 2024 | | :----------------------------------- | :----------------- | :----------------- | | Total controlling interest's equity | $2,549 | $2,276 | | Total equity | $2,559 | $2,285 | - Total controlling interest's equity increased by **$273 million** from December 31, 2024, to September 30, 2025, driven by net income and foreign currency translation adjustments, partly offset by share repurchases and cash dividends[29](index=29&type=chunk) - Accumulated other comprehensive loss improved from **$(659) million** at December 31, 2024, to **$(530) million** at September 30, 2025, mainly due to positive foreign currency translation adjustments[29](index=29&type=chunk) [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining accounting policies and specific financial items [Note 1. Basis of Presentation](index=10&type=section&id=Note%201.%20Basis%20of%20Presentation) This note outlines the basis for preparing the interim unaudited condensed consolidated financial statements in accordance with U.S. GAAP - The interim unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions, not including all footnotes required for complete annual statements[32](index=32&type=chunk) - Autoliv has one reportable segment, encompassing airbag, seatbelt products, and components[33](index=33&type=chunk) [Note 2. New Accounting Standards](index=11&type=section&id=Note%202.%20New%20Accounting%20Standards) This note details recently issued accounting pronouncements and their potential impact on the company's financial reporting - ASU 2023-09 (Income Taxes) will significantly increase income tax disclosures, effective for annual periods after December 15, 2024, and will be adopted prospectively[39](index=39&type=chunk) - ASU 2024-03 (Expense Disaggregation) requires additional disclosures for specific expense categories (inventory purchase, employee compensation, depreciation, intangible asset amortization), effective for annual periods after December 1, 2026[40](index=40&type=chunk) - ASU 2025-06 (Internal-Use Software) modernizes accounting for software costs, requiring capitalization when authorized, funded, and probable of completion, effective for annual periods after December 15, 2027[41](index=41&type=chunk) [Note 3. Fair Value Measurements](index=12&type=section&id=Note%203.%20Fair%20Value%20Measurements) This note describes the company's use of derivative financial instruments and fair value measurements for financial assets and liabilities - The Company uses derivative financial instruments (foreign exchange swaps) to mitigate market risk from interest rates and foreign exchange rates, not for speculative purposes[43](index=43&type=chunk)[48](index=48&type=chunk) - All derivatives are classified as **Level 2** financial instruments, meaning their fair value is measured using directly or indirectly observable inputs other than quoted prices in active markets[45](index=45&type=chunk) Fair Value of Debt (Dollars in millions) | Debt Type | As of Sep 30, 2025 (Carrying Value) | As of Sep 30, 2025 (Fair Value) | As of Dec 31, 2024 (Carrying Value) | As of Dec 31, 2024 (Fair Value) | | :------------------------- | :---------------------------------- | :------------------------------ | :---------------------------------- | :------------------------------ | | Long-term debt | $1,374 | $1,403 | $1,522 | $1,537 | | Short-term debt | $654 | $658 | $387 | $389 | | **Total Debt** | **$2,028** | **$2,061** | **$1,909** | **$1,926** | [Note 4. Income Taxes](index=14&type=section&id=Note%204.%20Income%20Taxes) This note provides information on the company's effective tax rates and unrecognized tax benefits for the reporting periods - The effective tax rate for the three months ended September 30, 2025, was **26.9%**, down from **29.6%** in the prior year, with discrete tax items having a favorable impact of **1.3%**[61](index=61&type=chunk) - For the nine months ended September 30, 2025, the effective tax rate was **26.4%**, down from **27.0%** in the prior year, with discrete tax items having a favorable impact of **1.8%**[62](index=62&type=chunk) - As of September 30, 2025, total unrecognized tax benefits were **$39 million**, with **$11 million** classified as current and **$27 million** as non-current[66](index=66&type=chunk) [Note 5. Inventories](index=14&type=section&id=Note%205.%20Inventories) This note presents a breakdown of the company's inventories, net of valuation reserves, as of the reporting dates Inventories, Net of Reserve (Dollars in millions) | Inventory Component | As of Sep 30, 2025 | As of Dec 31, 2024 | | :---------------------- | :----------------- | :----------------- | | Raw materials | $481 | $418 | | Work in progress | $314 | $295 | | Finished products | $326 | $290 | | Inventories (Gross) | $1,122 | $1,003 | | Inventory valuation reserve | $(85) | $(82) | | **Total inventories, net** | **$1,036** | **$921** | - Total inventories, net, increased to **$1,036 million** as of September 30, 2025, from **$921 million** at December 31, 2024, primarily driven by increases in raw materials, work in progress, and finished products[67](index=67&type=chunk) [Note 6. Restructuring](index=14&type=section&id=Note%206.%20Restructuring) This note details the company's restructuring reserves and related activities, primarily for cost reduction programs - As of September 30, 2025, the restructuring reserve balance was **$101 million**, mainly attributed to structural cost reduction programs initiated in Europe in 2023, expected to conclude in 2026[68](index=68&type=chunk) - No material restructuring initiatives were entered into during the three and nine months ended September 30, 2025[69](index=69&type=chunk) Employee-Related Restructuring Reserves (Dollars in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Reserve at beginning of period | $117 | $189 | $151 | $213 | | Provision - charge | $2 | $9 | $4 | $22 | | Cash payments | $(17) | $(19) | $(67) | $(49) | | Reserve at end of period | $101 | $187 | $101 | $187 | [Note 7. Product-Related Liabilities](index=15&type=section&id=Note%207.%20Product-Related%20Liabilities) This note outlines the company's reserves for product liability and warranty claims, including recall-related issues - The Company is exposed to product liability and warranty claims, maintaining reserves for product risks related to performance issues, including recalls and warranty issues[72](index=72&type=chunk) - As of September 30, 2025, the reserve for product-related liabilities was **$85 million**, mainly for recall-related issues, partly covered by **$15 million** in insurance receivables[74](index=74&type=chunk)[75](index=75&type=chunk) Product-Related Liabilities (Dollars in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Reserve at beginning of period | $69 | $73 | $65 | $96 | | Net change in reserve | $25 | $6 | $40 | $(2) | | Cash payments | $(9) | $(3) | $(23) | $(17) | | Reserve at end of period | $85 | $77 | $85 | $77 | [Note 8. Contingent Liabilities](index=15&type=section&id=Note%208.%20Contingent%20Liabilities) This note describes significant contingent liabilities, including ongoing civil litigation and product recall-related matters - The Company is involved in civil litigation in Germany, including a BMW complaint for **€63 million** plus interest related to anti-competitive behavior, with a potential loss range of **€0 to €95 million**[79](index=79&type=chunk) - Autoliv is a defendant in the ARC Airbag Inflators Products Liability Litigation, with NHTSA issuing an initial decision to recall approximately **52 million** inflators; no accrual has been made, and no estimated range of potential loss can be determined[85](index=85&type=chunk)[87](index=87&type=chunk) - Stellantis initiated a recall of approximately **250,000** vehicles for side curtain airbags, with Autoliv estimating a potential loss range of **$0 to $385 million**, expecting a substantial portion to be covered by insurance[88](index=88&type=chunk) - The Honda Buckle Recall, announced in March 2023, has an accrual exceeding insurance receivables by approximately **$12 million** as of September 30, 2025[89](index=89&type=chunk) [Note 9. Earnings Per Share](index=18&type=section&id=Note%209.%20Earnings%20Per%20Share) This note provides the calculation of basic and diluted earnings per share for the reporting periods Earnings Per Share (In millions, except per share amounts) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income attributable to controlling interest | $175 | $138 | $509 | $403 | | Basic: Weighted average common stock | 76.4 | 79.2 | 77.0 | 80.7 | | Diluted weighted average common stock | 76.7 | 79.3 | 77.3 | 80.9 | | Net earnings per share - basic | $2.29 | $1.75 | $6.61 | $4.99 | | Net earnings per share - diluted | $2.28 | $1.74 | $6.59 | $4.98 | - Diluted EPS increased by **31%** to **$2.28** for the three months ended September 30, 2025, and by **32%** to **$6.59** for the nine months ended September 30, 2025, compared to the prior year periods[95](index=95&type=chunk) [Note 10. Revenue Disaggregation](index=18&type=section&id=Note%2010.%20Revenue%20Disaggregation) This note disaggregates net sales by product category and geographic region for the reporting periods Net Sales by Products (Dollars in millions) | Product Category | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Airbags, Steering Wheels and Other | $1,830 | $1,736 | $5,395 | $5,264 | | Seatbelt Products and Other | $875 | $819 | $2,603 | $2,511 | | **Total net sales** | **$2,706** | **$2,555** | **$7,998** | **$7,774** | Net Sales by Region (Dollars in millions) | Region | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Americas | $897 | $851 | $2,639 | $2,637 | | Europe | $745 | $700 | $2,337 | $2,231 | | China | $526 | $495 | $1,450 | $1,423 | | Asia excl. China | $538 | $508 | $1,572 | $1,483 | | **Total net sales** | **$2,706** | **$2,555** | **$7,998** | **$7,774** | - Airbags, Steering Wheels and Other products generated **$1,830 million** in net sales for the three months ended September 30, 2025, and **$5,395 million** for the nine months, showing consistent growth[97](index=97&type=chunk) [Note 11. Segment Information](index=18&type=section&id=Note%2011.%20Segment%20Information) This note confirms Autoliv operates as a single reportable segment and provides related financial information - Autoliv operates as a single operating and reportable segment, encompassing airbag, steering wheel, and seatbelt products and components[98](index=98&type=chunk) Significant Segment Expenses (Dollars in millions) | Expense Category | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost of sales | $(2,184) | $(2,095) | $(6,496) | $(6,398) | | Research, development and engineering expenses, net | $(117) | $(96) | $(319) | $(325) | Segment Assets and Expenditures for Long-Lived Assets (Dollars in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Expenditures for long-lived assets | $(106) | $(146) | $(323) | $(440) | | Total assets | $8,463 | $8,306 | $8,463 | $8,306 | [Note 12. Subsequent Events](index=19&type=section&id=Note%2012.%20Subsequent%20Events) This note reports on any significant events occurring after the balance sheet date but before the financial statements were issued - There were no reportable events subsequent to September 30, 2025[104](index=104&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's analysis of Autoliv's financial condition and results of operations, highlighting key performance drivers and market factors [Executive Overview](index=21&type=section&id=EXECUTIVE%20OVERVIEW) This section provides a high-level summary of Autoliv's financial performance and strategic initiatives for the reporting period - Autoliv achieved a record-breaking third quarter for sales, operating income, and EPS, driven by better-than-expected sales in Americas and Europe, successful cost reductions, and tariff compensation[113](index=113&type=chunk) - The company is investing in China with a second R&D Center, a strategic agreement with CATARC to advance safety standards, and a planned joint venture with HSAE for advanced safety electronics[114](index=114&type=chunk) Financial Highlights (Three Months Ended September 30, 2025) | Metric | Value | Change YoY | | :-------------------------- | :---------- | :--------- | | Net sales | $2,706 million | 5.9% | | Organic sales growth | 3.9% | - | | Operating margin | 9.9% | +1.0 pp | | Adjusted operating margin | 10.0% | +0.7 pp | | Diluted EPS | $2.28 | 31% | | Adjusted diluted EPS | $2.32 | 26% | [Business and Market Condition Update](index=22&type=section&id=Business%20and%20market%20condition%20update) This section provides an update on global light vehicle production, cost pressures, and tariff recovery efforts - Global Light Vehicle Production (LVP) increased by **4.6%** year-over-year in Q3 2025, with call-off volatility improving slightly but remaining higher than pre-pandemic levels[120](index=120&type=chunk) - Cost pressure from labor and other items negatively impacted profitability in Q3, but most inflationary costs were offset by price increases and customer compensations[121](index=121&type=chunk) - Autoliv recovered approximately **75%** of tariff costs in Q3 2025, with an ambition to pass on most remaining costs; the unrecovered tariff impact on operating income was around **$5 million** negative in the quarter[122](index=122&type=chunk) [Results of Operations](index=23&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including sales, gross profit, and operating income, for the reporting periods [Overview (Key Ratios)](index=23&type=section&id=Overview) This section provides a summary of key financial ratios for the three months ended or as of September 30 Key Ratios (Three Months Ended or As of September 30) | Metric | 2025 | 2024 | | :-------------------------------------- | :-------- | :-------- | | Receivables outstanding relative to sales, % | 21.8% | 21.5% | | Inventory outstanding relative to sales, % | 9.6% | 9.8% | | Payables outstanding relative to sales, % | 17.5% | 18.4% | | Gross margin, % | 19.3% | 18.0% | | Operating margin, % | 9.9% | 8.9% | | Capital employed | $4,331 | $4,085 |\ | Net debt | $1,772 | $1,787 |\ | Return on total equity, % | 27.9% | 24.1% |\ | Return on capital employed, % | 25.1% | 22.9% |\ | Headcount at period-end | 65,200 | 67,200 | - Gross margin improved by **1.3 percentage points** to **19.3%** and operating margin improved by **1.0 percentage point** to **9.9%** for the three months ended September 30, 2025[127](index=127&type=chunk) - Return on capital employed (ROCE) increased to **25.1%** and Return on total equity (ROE) increased to **27.9%** for the three months ended September 30, 2025[127](index=127&type=chunk) [Three Months Ended September 30, 2025 vs. 2024](index=24&type=section&id=THREE%20MONTHS%20PERIOD%20ENDED%20SEPTEMBER%2030,%202025%20COMPARED%20WITH%20THREE%20MONTHS%20PERIOD%20ENDED%20SEPTEMBER%2030,%202024) This section compares Autoliv's financial performance for the three months ended September 30, 2025, against the prior year Consolidated Sales Development (Three Months Ended September 30) | Category | 2025 Sales ($M) | 2024 Sales ($M) | Reported Change (%) | Currency Effects (%) | Organic Growth (%) | | :-------------------------------- | :-------------- | :-------------- | :------------------ | :------------------- | :----------------- | | Airbags, Steering Wheels and Other | $1,830 | $1,736 | 5.4% | 1.8% | 3.6% | | Seatbelt products and Other | $875 | $819 | 6.9% | 2.4% | 4.5% | | **Total** | **$2,706** | **$2,555** | **5.9%** | **2.0%** | **3.9%** | Sales by Region (Three Months Ended September 30) | Region | 2025 Sales ($M) | 2024 Sales ($M) | Reported Change (%) | Currency Effects (%) | Organic Growth (%) | | :--------------- | :-------------- | :-------------- | :------------------ | :------------------- | :----------------- | | Americas | $897 | $851 | 5.3% | 0.6% | 4.7% | | Europe | $745 | $700 | 6.4% | 6.3% | 0.1% | | China | $526 | $495 | 6.3% | 0.1% | 6.2% | | Asia excl. China | $538 | $508 | 5.8% | 0.3% | 5.5% | | **Total** | **$2,706** | **$2,555** | **5.9%** | **2.0%** | **3.9%** | - Global organic sales grew by **3.9%**, underperforming global LVP growth of **4.6%** due to negative regional and model LVP mix, particularly in China, where sales to domestic OEMs grew by **23%** while sales to global OEMs decreased by **5%**[135](index=135&type=chunk)[136](index=136&type=chunk) Earnings Performance (Three Months Ended September 30) | Metric | 2025 ($M) | 2024 ($M) | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | | Net Sales | $2,706 | $2,555 | 5.9% | | Gross profit | $522 | $459 | 13.7% | | Operating income | $267 | $226 | 18.1% | | Adjusted operating income | $271 | $237 | 14.2% | | Net income | $175 | $139 | 26.4% | | Earnings per share, diluted | $2.28 | $1.74 | 31% | - Gross profit increased by **$63 million**, and gross margin improved by **1.3 percentage points**, driven by higher sales, improved operational efficiency, and supplier compensation[143](index=143&type=chunk) - Operating income increased by **$41 million (18.1%)** and adjusted operating income increased by **$34 million (14.2%)** compared to the prior year[145](index=145&type=chunk)[146](index=146&type=chunk) [Nine Months Ended September 30, 2025 vs. 2024](index=26&type=section&id=NINE%20MONTHS%20PERIOD%20ENDED%20SEPTEMBER%2030,%202025%20COMPARED%20WITH%20NINE%20MONTHS%20PERIOD%20ENDED%20SEPTEMBER%2030,%202024) This section compares Autoliv's financial performance for the nine months ended September 30, 2025, against the prior year Consolidated Sales Development (Nine Months Ended September 30) | Category | 2025 Sales ($M) | 2024 Sales ($M) | Reported Change (%) | Currency Effects (%) | Organic Growth (%) | | :-------------------------------- | :-------------- | :-------------- | :------------------ | :------------------- | :----------------- | | Airbags, Steering Wheels and Other | $5,395 | $5,264 | 2.5% | (0.3)% | 2.8% | | Seatbelt products and Other | $2,603 | $2,511 | 3.7% | (0.2)% | 3.9% | | **Total** | **$7,998** | **$7,774** | **2.9%** | **(0.3)%** | **3.1%** | Sales by Region (Nine Months Ended September 30) | Region | 2025 Sales ($M) | 2024 Sales ($M) | Reported Change (%) | Currency Effects (%) | Organic Growth (%) | | :--------------- | :-------------- | :-------------- | :------------------ | :------------------- | :----------------- | | Americas | $2,639 | $2,637 | 0.1% | (3.3)% | 3.4% | | Europe | $2,337 | $2,231 | 4.7% | 2.9% | 1.8% | | China | $1,450 | $1,423 | 1.9% | (0.3)% | 2.2% | | Asia excl. China | $1,572 | $1,483 | 6.0% | 0.3% | 5.7% | | **Total** | **$7,998** | **$7,774** | **2.9%** | **(0.3)%** | **3.1%** | - Global organic sales increased by **3.1%**, underperforming global LVP growth of **3.9%**, primarily due to a negative regional and model LVP mix, especially in China where sales to domestic OEMs increased by **16%** but to global OEMs decreased by **5.7%**[153](index=153&type=chunk)[154](index=154&type=chunk) Earnings Performance (Nine Months Ended September 30) | Metric | 2025 ($M) | 2024 ($M) | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | | Net Sales | $7,998 | $7,774 | 2.9% | | Gross profit | $1,502 | $1,377 | 9.1% | | Operating income | $769 | $626 | 23% | | Adjusted operating income | $777 | $657 | 18% | | Net income | $510 | $404 | 26% | | Earnings per share, diluted | $6.59 | $4.98 | 32% | - Gross profit increased by **$125 million (9.1%)**, and gross margin improved by **1.1 percentage points**, driven by improved operational efficiency and organic sales growth[160](index=160&type=chunk) - Operating income increased by **$143 million (23%)** and adjusted operating income increased by **$120 million (18%)** compared to the prior year[164](index=164&type=chunk)[165](index=165&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses Autoliv's cash flow, capital expenditures, and debt position, highlighting its financial flexibility - Operating cash flow increased by **$81 million** to **$258 million** in Q3 2025, driven by higher net income and more positive non-cash items[170](index=170&type=chunk) - Capital expenditure, net, decreased by **$40 million** in Q3 2025, leading to a substantial increase in free operating cash flow to **$153 million** from **$32 million** in the prior year[171](index=171&type=chunk)[172](index=172&type=chunk) - Net debt was **$1,772 million** as of September 30, 2025, a **$15 million** decrease from a year earlier, and the leverage ratio was **1.3x**, below the target limit of **1.5x**[174](index=174&type=chunk)[176](index=176&type=chunk) [Commitments](index=29&type=section&id=COMMITMENTS) This section outlines the company's significant contractual obligations, including future software subscription payments - The Company has a 5-year Enterprise Subscription Agreement (EAS) for software licenses, with future undiscounted payments totaling approximately **$50 million**[181](index=181&type=chunk) Future Software Subscription Payments (Undiscounted) | Period | Amount (Millions) | | :---------- | :---------------- | | Less than 1 year | $12 | | 1-3 years | $25 | | 3-5 years | $13 | [Non-U.S. GAAP Measures](index=29&type=section&id=NON-U.S.%20GAAP%20MEASURES) This section defines and reconciles non-U.S. GAAP financial measures used by management to assess business performance - Management uses non-U.S. GAAP measures like 'Organic sales,' 'Free operating cash flow,' 'Cash conversion,' 'Net debt,' 'Leverage ratio,' 'Adjusted net income,' 'Adjusted operating income,' 'Adjusted operating margin,' 'Adjusted earnings per share, diluted,' 'Adjusted return on capital employed,' and 'Adjusted return on total equity' to provide supplemental information and analyze business trends[111](index=111&type=chunk) Adjusted Operating Income and Margin (Dollars in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Operating income (GAAP) | $267 | $226 | $769 | $626 | | Adjusted Operating income (Non-GAAP) | $271 | $237 | $777 | $657 | | Operating margin (GAAP) | 9.9% | 8.9% | 9.6% | 8.1% | | Adjusted Operating margin (Non-GAAP) | 10.0% | 9.3% | 9.7% | 8.5% | Net Debt and Leverage Ratio (Dollars in millions) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------------- | :----------- | :----------- | :----------- | | Net debt | $1,772 | $1,752 | $1,787 | | Pension liabilities | $167 | $167 | $147 | | Net debt per the Policy | $1,939 | $1,919 | $1,934 | | EBITDA per the Policy (Adjusted EBITDA) | $1,524 | $1,483 | $1,376 | | Leverage ratio | 1.3 | 1.3 | 1.4 | Free Operating Cash Flow and Cash Conversion (Dollars in millions) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Operating cash flow | $258 | $177 | $613 | $639 | | Capital expenditure, net | $(106) | $(145) | $(313) | $(431) | | Free operating cash flow | $153 | $32 | $300 | $208 | | Cash conversion | 87% | 23% | 59% | 52% | [Headcount](index=33&type=section&id=Headcount) This section provides a breakdown of the company's total headcount, including direct and indirect personnel Total Headcount (FTE) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :----------------------------------- | :----------- | :----------- | :----------- | | Total headcount | 65,200 | 65,100 | 67,200 | | Direct personnel in manufacturing | 47,900 | 48,000 | 49,800 | | Indirect personnel | 17,300 | 17,100 | 17,400 | | Temporary personnel (% of total) | 9% | 9% | 9% | - Total headcount decreased by approximately **2,000 (3.0%)** year-over-year despite organic sales growth, supported by improved customer call-off accuracy and operational efficiency[199](index=199&type=chunk) [Full Year 2025 Guidance](index=33&type=section&id=Full%20year%202025%20guidance) This section provides Autoliv's financial guidance and underlying assumptions for the full year 2025 Full Year 2025 Guidance and Assumptions | Metric | Guidance | | :----------------------------------- | :-------------- | | Organic sales growth | Around 3% | | Adjusted operating margin | Around 10-10.5% |\ | Operating cash flow | Around $1.2 billion |\ | Capital expenditures, net % of sales | Around 4.5% |\ | LVP growth | Around 1.5% |\ | Foreign currency impact on net sales | Around 1% |\ | Tax rate | Around 28% | - The guidance assumes no further material changes to tariffs or trade restrictions, no significant changes in the macro-economic environment, customer call-off volatility, or supply chain disruptions[201](index=201&type=chunk) [Other Recent Events](index=34&type=section&id=Other%20recent%20events) This section highlights significant corporate developments and strategic initiatives that occurred recently - Autoliv announced a strategic agreement with CATARC (China Automotive Technology and Research Center Co) to jointly advance automotive safety standards and innovation in China and globally[114](index=114&type=chunk)[207](index=207&type=chunk) - The company intends to form a new joint venture with Hangsheng Electric Co., Ltd. (HSAE) to develop and manufacture advanced safety electronics for the Chinese automotive market, focusing on features like Hands-On Detection and Pre-Pretensioner Mechatronic Integration[114](index=114&type=chunk)[207](index=207&type=chunk) - Autoliv China broke ground on a new R&D center in Wuhan, China, scheduled to begin operations in Q3 2026, to support the global growth of Chinese OEMs and advance safety technologies[114](index=114&type=chunk)[207](index=207&type=chunk) - In Q3 2025, Autoliv repurchased and retired **0.84 million** shares of common stock for **$100 million** under its **$2.5 billion** stock repurchase program[116](index=116&type=chunk)[207](index=207&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there have been no material changes to the quantitative and qualitative disclosures about market risk since the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to market risk disclosures have occurred as of September 30, 2025, compared to the previous Annual Report on Form 10-K[208](index=208&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of Autoliv's disclosure controls and procedures as of September 30, 2025, and reports no material changes in internal control over financial reporting during the fiscal quarter - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of September 30, 2025[209](index=209&type=chunk) - There have been no material changes in the Company's internal control over financial reporting during the fiscal quarter[209](index=209&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=36&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 8, 'Contingent Liabilities,' in Part I, Item 1 for a summary of ongoing legal proceedings, indicating that the Company is subject to various claims and lawsuits in the ordinary course of business - The Company is subject to legal proceedings in the ordinary course of business, with details summarized in Note 8, 'Contingent Liabilities,' of the financial statements[210](index=210&type=chunk) [ITEM 1A. RISK FACTORS](index=36&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section highlights risks related to international operations, including exposure to local economic conditions, changes in laws, trade policies, tariffs, and geopolitical uncertainties - The Company's international operations expose it to risks such as local economic conditions, unexpected changes in laws, regulations, trade, monetary or fiscal policy, foreign tax consequences, and geopolitical instability[212](index=212&type=chunk) - Changes in trade policies, tariffs (e.g., U.S. tariffs on imports from China), and related retaliatory measures could depress economic activity, restrict access to suppliers or customers, and materially affect cash flows, operating results, and financial condition[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Increasing manufacturing footprint and business relationships in growth markets amplify exposure to risks like political upheaval and reliability of local infrastructure[215](index=215&type=chunk)[216](index=216&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the Company's stock repurchase activities during the three months ended September 30, 2025, under its publicly announced stock repurchase program Common Stock Repurchases (Three Months Ended September 30, 2025) | Period | Total Shares Purchased | Average Price Paid per Share (USD) | Approximate Dollar Value Remaining Under Program (USD) | | :----------------- | :--------------------- | :--------------------------------- | :----------------------------------------------------- | | July 1-31, 2025 | 160,980 | $115.16 | $2,481,461,150 | | August 1-31, 2025 | 474,018 | $117.20 | $2,425,906,610 | | September 1-30, 2025 | 207,131 | $125.07 | $2,400,000,029 | | **Total Q3 2025** | **842,129** | **$118.75 (approx)** | **$2,400,000,029** | - On June 4, 2025, the Board approved a new stock repurchase program authorizing up to **$2.5 billion** in common share repurchases from July 1, 2025, through December 31, 2029[219](index=219&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=37&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is marked as 'Not applicable,' indicating no defaults upon senior securities during the reporting period - This item is not applicable for the reporting period, indicating no defaults upon senior securities[220](index=220&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=37&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is marked as 'Not applicable,' indicating no mine safety disclosures are required for the reporting period - This item is not applicable for the reporting period, indicating no mine safety disclosures are required[221](index=221&type=chunk) [ITEM 5. OTHER INFORMATION](index=37&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This item is marked as 'Not applicable,' indicating no other information requiring disclosure under this section for the reporting period - This item is not applicable for the reporting period, indicating no other information requiring disclosure[222](index=222&type=chunk) [ITEM 6. EXHIBITS](index=38&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, indentures, agreements, and certifications, providing references to previous filings where applicable - The exhibits include Autoliv's Restated Certificate of Incorporation, Third Restated By-Laws, various Indentures and Agreements related to debt, and certifications from the CEO and CFO[223](index=223&type=chunk) Signature [Filing Signature](index=39&type=section&id=Filing%20Signature) This section formally concludes the Form 10-Q filing, with the signature of Autoliv, Inc.'s Chief Financial Officer, Fredrik Westin, on October 17, 2025 - The report was signed by Fredrik Westin, Chief Financial Officer of Autoliv, Inc., on October 17, 2025[226](index=226&type=chunk)[227](index=227&type=chunk)

Financial Data and Key Metrics Changes - The company reported record-breaking third-quarter sales of over $2.7 billion, a 6% increase year-over-year, driven by strong performance in Asia and South America [9][12] - Adjusted operating income increased by 14% to $271 million, with an adjusted operating margin of 10%, up 70 basis points from the previous year [9][16] - Earnings per share increased by 26% to $2.31, marking the ninth consecutive quarter of growth in adjusted earnings per share [17] - Operating cash flow was robust at $258 million, an increase of 46% compared to the previous year [19] Business Line Data and Key Metrics Changes - Sales growth was particularly strong in China, with a return to outperformance with Chinese OEMs, driven by recent product launches [4][12] - The company achieved a gross margin of 19.3%, an increase of 130 basis points year-over-year, primarily due to direct labor efficiency and headcount reductions [10][16] Market Data and Key Metrics Changes - Global light vehicle production increased by 4.6% in the third quarter, exceeding expectations, with strong growth for domestic OEMs in China [11][23] - Light vehicle production in North America showed resilience, while production in Western Europe and Japan declined by approximately 2% to 3% [11][23] - The company underperformed light vehicle production by 0.7% globally, attributed to a negative regional mix [12][13] Company Strategy and Development Direction - The company is focused on expanding its presence in China, investing in a second R&D center to strengthen partnerships with Chinese OEMs [6][7] - A strategic agreement with CATARC aims to define the next generation of safety standards in the automotive sector [7][8] - The company plans to form a joint venture with HSAE to develop advanced safety electronics, targeting high-growth areas [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial targets despite anticipated challenges in the fourth quarter, including lower light vehicle production and geopolitical issues [25][26] - The outlook for the global auto industry has improved, particularly for North America and China, with expectations of sustained growth in Chinese light vehicle production over the medium term [23][24] Other Important Information - The company has committed to stock repurchases of $300 to $500 million annually and increased its quarterly dividend to $0.85 per share [6][17] - The leverage ratio remains low at 1.3 times, below the target limit of 1.5 times, reflecting prudent financial management [22] Q&A Session Summary Question: Why isn't organic sales benefiting from the stronger production environment? - Management explained that adjustments for past quarters and a larger negative market mix impacted organic sales guidance [30][31] Question: Was there anything unusual in the strong margin for Q3? - Management confirmed that a $50 million supplier compensation was one-time and highlighted the importance of internal improvement efforts [32][33] Question: Should Q4 trends be extrapolated into 2026? - Management expressed confidence in reaching midterm targets and noted that Q4 is typically the strongest quarter of the year [36][39] Question: Can you dimensionalize the headwinds for Q4? - Management indicated that engineering income would be the largest headwind, followed by the absence of out-of-period inflation compensation and increased depreciation [44][45] Question: How is the company positioned in the Chinese market? - Management noted strong growth with Chinese OEMs and ongoing investments, including a new R&D center [52][53] Question: What is the outlook for the European market? - Management remains cautious about the European market, primarily due to demand uncertainties [54] Question: How does the company view supplier contract trends? - Management stated that they do not foresee major concerns regarding contract negotiations with OEMs [76][77] Question: What is the impact of the recent supply issues on European production? - Management indicated it is too early to comment on potential impacts but emphasized their preparedness to manage supply chain constraints [80]

Financial Data and Key Metrics Changes - The company reported record-breaking third-quarter sales of approximately $2.7 billion, representing a 6% year-over-year increase, driven by strong performance in Asia and South America, along with favorable currency effects and tariff-related compensation [11][22][12] - Adjusted operating income increased by 14% to $271 million from $237 million last year, with an adjusted operating margin of 10%, which is 70 basis points better than the same quarter last year [12][23] - Earnings per share for the third quarter reached a record high, with a 26% increase year-over-year, primarily driven by higher operating income and a reduced share count [8][24] - Operating cash flow totaled $258 million, an increase of $81 million or 46% compared to the previous year [12][26] Business Line Data and Key Metrics Changes - Sales growth in China has returned to outperformance, driven by recent product launches, with sales to domestic OEMs growing by almost 23%, significantly outpacing light vehicle production growth [7][19] - The company achieved a gross margin of 19.3%, an increase of 130 basis points year-over-year, primarily due to direct labor efficiency and headcount reductions [13][23] Market Data and Key Metrics Changes - Global light vehicle production increased by 4.6% in the third quarter, exceeding expectations, with strong growth for domestic OEMs in China supported by government policies [14][15] - Light vehicle production in North America showed resilience, while production in Western Europe and Japan declined by approximately 2% to 3% [15][31] Company Strategy and Development Direction - The company is focusing on expanding its presence in China, investing in a second R&D center to strengthen partnerships with Chinese OEMs [9][10] - A joint venture with HSAE, a leading Chinese automotive electronics developer, aims to develop advanced safety electronics, enhancing the company's competitive position in high-growth areas [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate trade volatility and regional dynamics, with an improved outlook for global light vehicle production, particularly in North America and China [31][32] - Despite expected challenges in 2025, the company anticipates higher sales and continued outperformance, especially in China, while acknowledging potential headwinds from inflation compensation and increased depreciation costs [35][36] Other Important Information - The company plans to repurchase shares worth $300 million to $500 million annually and has increased its quarterly dividend to $0.85 per share, reflecting confidence in financial strength [9][24] - The leverage ratio remains low at 1.3 times, below the target limit of 1.5 times, indicating prudent financial management [30] Q&A Session Summary Question: Why isn't organic sales benefiting from the stronger production environment? - Management explained that adjustments for past quarters and a larger negative market mix impacted organic sales guidance, along with delays in new launches in China [42][44] Question: Was there anything unusual in the strong margin for Q3? - Management confirmed that a $50 million supplier compensation was a one-time benefit, contributing to the strong margin alongside higher-than-expected sales [45][46] Question: How should Q4 trends be viewed for 2026? - Management expressed confidence in reaching midterm targets, noting that Q4 is typically the strongest quarter, but current trends should not be extrapolated directly into 2026 [50][52] Question: What are the expected headwinds for Q4? - Management identified lower engineering income, reduced inflation compensation, and increased depreciation as the main headwinds for Q4 [61][63] Question: How is the company positioned in the Chinese market? - Management highlighted strong growth with domestic OEMs, despite some negative impacts from global customers, and expressed optimism about future performance in China [116][117]

Core Insights - Autoliv, Inc. reported quarterly earnings of $2.32 per share, exceeding the Zacks Consensus Estimate of $2.1 per share, and showing an increase from $1.84 per share a year ago, resulting in an earnings surprise of +10.48% [1] - The company achieved revenues of $2.71 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.10% and up from $2.56 billion year-over-year [2] - Autoliv's stock has increased by approximately 29.2% since the beginning of the year, outperforming the S&P 500's gain of 12.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.92 on revenues of $2.7 billion, and for the current fiscal year, it is $9.32 on revenues of $10.64 billion [7] - The estimate revisions trend for Autoliv was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Automotive - Original Equipment industry, to which Autoliv belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Sales reached a record $2706 million for the third quarter, compared to $2555 million in Q3'24[7, 12] - Adjusted operating income increased to $271 million, up from $237 million in Q3'24[12] - Adjusted operating margin improved to 10%, a rise from 93% in the same period last year[12] - Operating cash flow increased by 46% from $177 million to $258 million[12] Growth Drivers - Organic sales grew by 39%[25] - Share repurchases amounted to $100 million, and a dividend of $085 per share was paid, a 21% increase compared to Q2'25[7] - Sales in Americas emerged as the largest contributor to the increase[7] - The company outperformed strongly with Chinese OEMs, mainly as a result of several new launches[7] Strategic Initiatives - A second R&D center in China is expected to be operational in Q3'26[7] - Strategic partnership with CATARC in China to advance safety technologies[8] - Strategic Joint Venture to advance automotive safety electronics[9]

Core Insights - The company reported record sales, operating income, and earnings per share (EPS) for Q3 2025, with net sales reaching $2,706 million, a 5.9% increase year-over-year, and a 31% increase in diluted EPS to $2.28 [1][3][6] Financial Performance - Q3 2025 net sales were $2,706 million, up from $2,555 million in Q3 2024, reflecting a 5.9% increase, with organic sales growth of 3.9% [3][4] - Operating income rose by 18% to $267 million, while adjusted operating income increased by 14% to $271 million [3][4] - The operating margin improved to 9.9%, and the adjusted operating margin reached 10.0%, both showing significant year-over-year increases [3][4] - Diluted EPS increased by 31% to $2.28, with adjusted diluted EPS rising by 26% to $2.32 [3][4] Cash Flow and Capital Management - Operating cash flow surged by 46% to $258 million, driven by improved profitability and working capital management [4][10] - The company maintained a leverage ratio of 1.3x, below its target limit of 1.5x, while also increasing its dividend by 21% and repurchasing shares worth $100 million [4][10] Market and Regional Performance - Organic sales growth was 3.9%, slightly below the global light vehicle production (LVP) increase of 4.6%, with regional performance varying [4][6] - The company outperformed in Asia (excluding China) and the Americas, while underperforming in China and Europe [4][6] - In China, organic sales growth to local OEMs was approximately 8 percentage points higher than the LVP growth [4][6] Strategic Initiatives - The company is investing in a second R&D center in China to support its business with Chinese OEMs and has signed a strategic agreement with CATARC to advance automotive safety standards [8][9] - A joint venture with HSAE is planned to develop advanced safety electronics, enhancing vertical integration of the product portfolio [8][9] Future Outlook - The company expects to achieve full-year guidance of an adjusted operating margin of around 10-10.5%, anticipating performance at the midpoint of this range [11][13]

Core Insights - Autoliv, the world's largest producer of airbags and seatbelts, reported a third-quarter adjusted operating profit that exceeded market expectations [1] - The company indicated that it has recovered approximately 75% of the tariff impact from previous trade disputes [1] Financial Performance - The adjusted operating profit for the third quarter was above market expectations, showcasing strong financial performance [1] - Specific figures regarding the profit were not disclosed in the provided content [1] Market Position - Autoliv maintains its position as the leading global supplier in the automotive safety industry, particularly in airbags and seatbelts [1] - The recovery of 75% of the tariff impact suggests effective management strategies in response to external economic pressures [1]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Autoliv achieved record Q3 2025 financial results, driven by strong sales and cost reductions, while reaffirming positive full-year guidance and strategic investments [Q3 2025 Financial Highlights](index=2&type=section&id=Q3%202025%20Financial%20Highlights) Autoliv reported a record-breaking third quarter in 2025, achieving significant increases in net sales, operating income, and diluted EPS. The company's adjusted operating margin also saw a notable improvement, reflecting strong financial performance | Key Figures (Dollars in millions, except per share data) | Q3 2025 | Q3 2024 | Change | 9M 2025 | 9M 2024 | Change | | :------------------------------------------------ | :------ | :------ | :----- | :------ | :------ | :----- | | Net sales | $2,706 | $2,555 | 5.9% | $7,998 | $7,774 | 2.9% | | Operating income | 267 | 226 | 18% | 769 | 626 | 23% | | Adjusted operating income | 271 | 237 | 14% | 777 | 657 | 18% | | Operating margin | 9.9% | 8.9% | 1.0pp | 9.6% | 8.1% | 1.6pp | | Adjusted operating margin | 10.0% | 9.3% | 0.7pp | 9.7% | 8.5% | 1.3pp | | Earnings per share - diluted | 2.28 | 1.74 | 31% | 6.59 | 4.98 | 32% | | Adjusted earnings per share - diluted | 2.32 | 1.84 | 26% | 6.67 | 5.30 | 26% | | Operating cash flow | 258 | 177 | 46% | 613 | 639 | (4.1)% | | Return on capital employed | 25.1% | 22.9% | 2.2pp | 24.9% | 21.2% | 3.8pp | | Adjusted return on capital employed | 25.5% | 23.9% | 1.6pp | 25.2% | 22.1% | 3.0pp | [CEO's Comments](index=2&type=section&id=CEO%27s%20Comments) Mikael Bratt, President & CEO, highlighted Q3 2025 as a record-breaking quarter for sales, operating income, and EPS, driven by strong sales in Americas and Europe, cost reductions, and tariff compensation. The company saw solid outperformance with domestic Chinese OEMs and continued high growth in India. Strategic investments in China, including a new R&D center and a joint venture for advanced safety electronics, are underway to support future growth - Q3 2025 was a record-breaking quarter for sales, operating income, and EPS, driven by better-than-expected sales in Americas and Europe, successful cost reduction, and tariff compensation[8](index=8&type=chunk) - The company achieved solid outperformance with domestic Chinese OEMs and expects increased outperformance in China in Q4[8](index=8&type=chunk) - High growth in India continued, accounting for approximately **one-third of global organic growth in Q3**, driven by increased penetration of automotive safety[9](index=9&type=chunk) - Autoliv is investing for continued success in China, including building a second R&D Center and forming a joint venture with HSAE for advanced safety electronics[9](index=9&type=chunk) - Around **75% of tariff costs were recovered in Q3**, with expectations to recover most of the remainder in Q4[10](index=10&type=chunk) - Operating cash flow increased by **46%**, and free cash flow improved substantially due to strong balance sheet control and lower capital expenditure, net[11](index=11&type=chunk) [Key Business Developments in Q3 2025](index=2&type=section&id=Key%20Business%20Developments%20in%20Q3%202025) In Q3 2025, Autoliv's organic sales grew by 3.9%, slightly below global LVP increase, impacted by regional LVP mix but boosted by tariff compensations. Profitability significantly improved due to organic sales growth, cost reductions, and supplier settlements. Operating cash flow increased substantially, and the company maintained a healthy leverage ratio while increasing dividends and repurchasing shares - Net sales increased organically by **3.9%**, which was **0.7 percentage points lower** than the global Light Vehicle Production (LVP) increase of **4.6%**. Regional and customer LVP mix negatively impacted sales by about **1 percentage point**, while tariff compensations added around **0.5 percentage points**[13](index=13&type=chunk) - Profitability improved significantly, with operating income increasing by **18% to $267 million** and adjusted operating income increasing by **14% to $271 million**. This was mainly due to organic sales growth, successful cost reductions, and positive effects from supplier settlement and compensation[13](index=13&type=chunk) - Operating cash flow increased by **46%**, reflecting improved profit and working capital. Capital expenditure, net, was significantly reduced, leading to a substantial increase in free operating cash flow[13](index=13&type=chunk) - The leverage ratio stood at **1.3x**, below the target limit of **1.5x**. In the quarter, a dividend of **$0.85 per share** (**21% increase** from Q2 '25) was paid, and **0.84 million shares** were repurchased and retired[13](index=13&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) Autoliv reaffirmed its full-year 2025 guidance, expecting around 3% organic sales growth and an adjusted operating margin of 10-10.5%, with operating cash flow around $1.2 billion. The guidance is based on customer call-offs, targeted cost compensation adjustments, and no significant changes in macro-economic conditions or trade restrictions | Full year 2025 Guidance | | | :------------------------ | :---------- | | Organic sales growth | Around 3% | | Adjusted operating margin | Around 10-10.5% | | Operating cash flow | Around $1.2 billion | | Capex, net, % of sales | Around 4.5% | | Full year 2025 Assumptions | | | :------------------------- | :---------- | | LVP growth | Around 1.5% | | FX impact on net sales | Around 1% | | Tax rate | Around 28% | - The guidance assumes achievement of targeted cost compensation adjustments with customers, including for new tariffs, and no further material changes to tariffs or trade restrictions as of October 15, 2025[14](index=14&type=chunk) - No significant changes in the macro-economic environment, customer call-off volatility, or significant supply chain disruptions are assumed[14](index=14&type=chunk) [Business and Market Conditions](index=4&type=section&id=Business%20and%20Market%20Conditions) Autoliv manages supply chain volatility, inflation, and geopolitical risks, actively mitigating costs and tariff impacts [Supply Chain](index=4&type=section&id=Supply%20Chain) Global Light Vehicle Production (LVP) increased by 4.6% year-over-year in Q3 2025. While call-off volatility improved slightly compared to the previous year, it remains higher than pre-pandemic levels, impacting production efficiency and profitability. The company anticipates slightly lower call-off volatility for the full year 2025 compared to 2024, but continued uncertainty regarding tariffs and trade restrictions could worsen the environment - Global LVP increased by **4.6%** year-over-year in Q3 2025[17](index=17&type=chunk) - Call-off volatility improved slightly but remains higher than pre-pandemic levels, negatively impacting production efficiency and profitability[17](index=17&type=chunk) - Full year 2025 call-off volatility is expected to be slightly lower than 2024 but still above pre-pandemic levels, with tariff uncertainty posing a risk[17](index=17&type=chunk) [Inflation](index=4&type=section&id=Inflation) Cost pressure from labor and other items negatively impacted profitability in Q3, though less severely than in Q3 2024. Most inflationary costs were offset by price increases and customer compensations. Raw material prices had no significant impact, but ongoing tariff and trade restriction uncertainties could lead to a more adverse inflation environment. Autoliv continues to implement productivity and cost reduction initiatives - Cost pressure from labor and other items negatively impacted profitability in Q3 2025, but to a lesser degree than Q3 2024[18](index=18&type=chunk) - Most inflationary cost pressure was offset by price increases and customer compensations[18](index=18&type=chunk) - Raw material price changes did not have a meaningful impact on profitability during the quarter[18](index=18&type=chunk) - Uncertainty regarding tariffs and trade restrictions may lead to a more adverse inflation environment[18](index=18&type=chunk) [Geopolitical Risks and Tariffs](index=4&type=section&id=Geopolitical%20Risks%20and%20Tariffs) New tariffs in the first nine months of 2025 did not materially impact Q3 profitability, as Autoliv secured customer compensations for most costs, recovering about 75% in the quarter. The unrecovered tariff impact on operating income was around $5 million negative, with a 20bps negative impact on operating margin. The company expects to recover most remaining tariffs later in the year and anticipates a full-year tariff dilution of around 20 bps on operating margin, while closely monitoring the evolving geopolitical and trade policy environment - New tariffs did not materially impact Q3 profitability due to customer compensations, with around **75% of tariff costs recovered**[19](index=19&type=chunk) - The impact of unrecovered tariffs on operating income was approximately **$5 million negative** in Q3, and operating margin was negatively impacted by around **20bps**[19](index=19&type=chunk) - For the full year 2025, tariff dilution on operating margin is expected to be around **20 bps**[19](index=19&type=chunk) - Geopolitical uncertainties continue to create a challenging operating environment, and the company remains agile in responding to trade policy developments[19](index=19&type=chunk) [Sales Performance](index=6&type=section&id=Sales%20Performance) Autoliv's Q3 and 9M 2025 organic sales grew across segments and regions, supported by new product launches despite China LVP mix [Q3 2025 Consolidated Sales Development](index=6&type=section&id=Q3%202025%20Consolidated%20Sales%20Development) Autoliv's consolidated sales in Q3 2025 increased by 5.9% to $2,706 million, with organic sales growth of 3.9%. Growth was observed across both product segments and all regions, with China showing strong organic growth despite overall LVP underperformance | Consolidated sales (Dollars in millions) | Q3 2025 | Q3 2024 | Reported change (U.S. GAAP) | Currency effects | Organic change* | | :--------------------------------------- | :------ | :------ | :-------------------------- | :--------------- | :-------------- | | Airbags, Steering Wheels and Other | $1,830 | $1,736 | 5.4% | 1.8% | 3.6% | | Seatbelt Products and Other | 875 | 819 | 6.9% | 2.4% | 4.5% | | Total | $2,706 | $2,555 | 5.9% | 2.0% | 3.9% | | Consolidated sales by region (Dollars in millions) | Q3 2025 | Q3 2024 | Reported change (U.S. GAAP) | Currency effects | Organic change* | | :------------------------------------------------- | :------ | :------ | :-------------------------- | :--------------- | :-------------- | | Americas | $897 | $851 | 5.3% | 0.6% | 4.7% | | Europe | 745 | 700 | 6.4% | 6.3% | 0.1% | | China | 526 | 495 | 6.3% | 0.1% | 6.2% | | Asia excl. China | 538 | 508 | 5.8% | 0.3% | 5.5% | | Total | $2,706 | $2,555 | 5.9% | 2.0% | 3.9% | [Sales by Product (Airbags, Steering Wheels and Other)](index=6&type=section&id=Sales%20by%20Product%20%28Airbags%2C%20Steering%20Wheels%20and%20Other%29) Organic sales for Airbags, Steering Wheels and Other grew by 3.6% in Q3 2025, primarily driven by inflatable curtains, side airbags, driver airbags, and center airbags, partially offset by a decline in steering wheels - Organic sales for Airbags, Steering Wheels and Other grew by **3.6%** in Q3 2025[35](index=35&type=chunk) - Largest contributors to the increase were inflatable curtains, side airbags, driver airbags, and center airbags[35](index=35&type=chunk) - This growth was partly offset by a decline in steering wheels[35](index=35&type=chunk) [Sales by Product (Seatbelt Products and Other)](index=6&type=section&id=Sales%20by%20Product%20%28Seatbelt%20Products%20and%20Other%29) Organic sales for Seatbelt Products and Other increased by 4.5% in Q3 2025, with growth observed across all regions, led by strong performance in Europe and Americas - Organic sales for Seatbelt Products and Other grew by **4.5%** in Q3 2025[36](index=36&type=chunk) - Sales increased organically in all regions, with strong growth in Europe and Americas[36](index=36&type=chunk) [Sales by Region](index=6&type=section&id=Sales%20by%20Region) Global organic sales increased by 3.9%, underperforming the global LVP increase of 4.6% due to negative regional and model LVP mix, particularly in China. However, Autoliv's sales growth with domestic Chinese OEMs significantly outpaced their LVP growth, indicating improved performance in this segment - Global organic sales increased by **3.9%**, underperforming global LVP growth of **4.6%** by **0.7 percentage points**[37](index=37&type=chunk) - Outperformed LVP growth in Asia ex. China (**4.2pp**) and Americas (**0.5pp**), but underperformed in China (**3.5pp**) and Europe (**1.2pp**)[37](index=37&type=chunk) - Autoliv's sales growth with domestic Chinese OEMs was **23%**, significantly higher than their LVP growth of **15%**[38](index=38&type=chunk) | Q3 2025 organic growth* | Americas | Europe | China | Asia excl. China | Global | | :---------------------- | :------- | :----- | :---- | :--------------- | :----- | | Autoliv | 4.7% | 0.1% | 6.2% | 5.5% | 3.9% | | LVP (Oct 2025) | 4.2% | 1.3% | 9.7% | 1.3% | 4.6% | [First Nine Months 2025 Consolidated Sales Development](index=7&type=section&id=First%20Nine%20Months%202025%20Consolidated%20Sales%20Development) For the first nine months of 2025, total net sales grew by 2.9% to $7,998 million, with organic sales growth of 3.1%. Both product segments and most regions contributed to this growth, although China showed a significant underperformance relative to its LVP growth, primarily due to the mix towards domestic OEMs with lower safety content | Consolidated sales (Dollars in millions) | 9M 2025 | 9M 2024 | Reported change (U.S. GAAP) | Currency effects | Organic change* | | :--------------------------------------- | :------ | :------ | :-------------------------- | :--------------- | :-------------- | | Airbags, Steering Wheels and Other | $5,395 | $5,264 | 2.5% | (0.3)% | 2.8% | | Seatbelt Products and Other | 2,603 | 2,511 | 3.7% | (0.2)% | 3.9% | | Total | $7,998 | $7,774 | 2.9% | (0.3)% | 3.1% | | Consolidated sales by region (Dollars in millions) | 9M 2025 | 9M 2024 | Reported change (U.S. GAAP) | Currency effects | Organic change* | | :------------------------------------------------- | :------ | :------ | :-------------------------- | :--------------- | :-------------- | | Americas | $2,639 | $2,637 | 0.1% | (3.3)% | 3.4% | | Europe | 2,337 | 2,231 | 4.7% | 2.9% | 1.8% | | China | 1,450 | 1,423 | 1.9% | (0.3)% | 2.2% | | Asia excl. China | 1,572 | 1,483 | 6.0% | 0.3% | 5.7% | | Total | $7,998 | $7,774 | 2.9% | (0.3)% | 3.1% | [Sales by Product (Airbags, Steering Wheels and Other) 9M](index=7&type=section&id=Sales%20by%20Product%20%28Airbags%2C%20Steering%20Wheels%20and%20Other%29%209M) Organic sales for Airbags, Steering Wheels and Other grew by 2.8% in the first nine months of 2025, primarily driven by inflatable curtains, side airbags, center airbags, steering wheels, and driver airbags - Organic sales for Airbags, Steering Wheels and Other grew by **2.8%** in the first nine months of 2025[42](index=42&type=chunk) - Key contributors to the increase were inflatable curtains, side airbags, center airbags, steering wheels, and driver airbags[42](index=42&type=chunk) [Sales by Product (Seatbelt Products and Other) 9M](index=7&type=section&id=Sales%20by%20Product%20%28Seatbelt%20Products%20and%20Other%29%209M) Organic sales for Seatbelt Products and Other increased by 3.9% in the first nine months of 2025, mainly driven by Americas and Asia excluding China - Organic sales for Seatbelt Products and Other grew by **3.9%** in the first nine months of 2025[43](index=43&type=chunk) - Sales growth was mainly driven by Americas and Asia excluding China[43](index=43&type=chunk) [Sales by Region 9M](index=7&type=section&id=Sales%20by%20Region%209M) Global organic sales increased by 3.1% in the first nine months, underperforming global LVP growth of 3.9% due to negative regional and model LVP mix, particularly in China. Autoliv's sales to domestic Chinese OEMs increased by 16%, while sales to global OEMs in China decreased by 5.7% - Global organic sales increased by **3.1%**, underperforming global LVP growth of **3.9%** by **0.8 percentage points**[44](index=44&type=chunk) - Outperformed LVP growth in Americas (**3.5pp**), Europe (**3.4pp**), and Asia excluding China (**3.0pp**), but underperformed by **9.3pp** in China[44](index=44&type=chunk) - Autoliv's sales to domestic Chinese OEMs increased by **16%**, while sales to global OEMs in China decreased by **5.7%**[45](index=45&type=chunk) | 9M 2025 organic growth* | Americas | Europe | China | Asia excl. China | Global | | :---------------------- | :------- | :----- | :---- | :--------------- | :----- | | Autoliv | 3.4% | 1.8% | 2.2% | 5.7% | 3.1% | | LVP (Oct 2025) | (0.1)% | (1.6)% | 11.5% | 2.7% | 3.9% | [Key Product Launches in Q3 2025](index=8&type=section&id=Key%20Product%20Launches%20in%20Q3%202025) Autoliv launched safety products for several new vehicle models in Q3 2025, including the Onvo L90, Kia PV5, Volvo XC70, Subaru Outback, Jeep Compass, Renault Clio, Geely Galaxy M9, and Nissan Sentra, covering a range of airbags, seatbelts, and other safety components - Key launches in Q3 2025 included safety systems for Onvo L90, Kia PV5, Volvo XC70, Subaru Outback, Jeep Compass, Renault Clio, Geely Galaxy M9, and Nissan Sentra[49](index=49&type=chunk) - Products launched included Driver/Passenger Airbags, Seatbelts, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Knee Airbag, Front Center Airbag, Bag-in-Belt, Pyrotechnical Safety Switch, Pedestrian Airbag, and Hood Lifter[49](index=49&type=chunk) [Financial Performance](index=9&type=section&id=Financial%20Performance) Autoliv's Q3 and 9M 2025 financial performance was strong, with significant income and cash flow growth, a healthy balance sheet, and reduced headcount [Condensed Income Statement Analysis](index=9&type=section&id=Condensed%20Income%20Statement%20Analysis) Autoliv's income statement showed strong growth in Q3 and the first nine months of 2025. Gross profit and operating income increased significantly, driven by higher sales, improved operational efficiency, and lower costs. Diluted EPS also saw substantial increases for both periods | Condensed Income Statement (Dollars in millions, except per share data) | Q3 2025 | Q3 2024 | Change | 9M 2025 | 9M 2024 | Change | | :-------------------------------------------------------------------- | :------ | :------ | :----- | :------ | :------ | :----- | | Net sales | $2,706 | $2,555 | 5.9% | $7,998 | $7,774 | 2.9% | | Gross profit | 522 | 459 | 14% | 1,502 | 1,377 | 9.1% | | Operating income | 267 | 226 | 18% | 769 | 626 | 23% | | Adjusted operating income | 271 | 237 | 14% | 777 | 657 | 18% | | Net income | $175 | $139 | 26% | $510 | $404 | 26% | | Earnings per share - diluted | $2.28 | $1.74 | 31% | $6.59 | $4.98 | 32% | | Adjusted earnings per share - diluted | $2.32 | $1.84 | 26% | $6.67 | $5.30 | 26% | | Gross margin | 19.3% | 18.0% | 1.3pp | 18.8% | 17.7% | 1.1pp | | Operating margin | 9.9% | 8.9% | 1.0pp | 9.6% | 8.1% | 1.6pp | | Tax Rate | 26.9% | 29.6% | (2.6)pp| 26.4% | 27.0% | (0.6)pp| [Third Quarter 2025 Development](index=9&type=section&id=Third%20Quarter%202025%20Development) In Q3 2025, gross profit increased by $63 million (14%) and gross margin by 1.3pp, driven by higher sales, improved operational efficiency, and supplier compensations. Operating income rose by $41 million (18%), and diluted EPS increased by $0.54 (31%), benefiting from higher operating income, tax effects, and fewer outstanding shares - Gross profit increased by **$63 million** (**14%**) and gross margin by **1.3pp**, mainly due to higher sales, improved operational efficiency, and supplier compensations[51](index=51&type=chunk) - Operating income increased by **$41 million** (**18%**) compared to the prior year[54](index=54&type=chunk) - Diluted EPS increased by **$0.54** (**31%**), driven by higher operating income (**$0.36**), taxes (**$0.09**), and lower outstanding shares (**$0.08**)[56](index=56&type=chunk) - R,D&E, net costs increased by **$22 million** (**23%**), primarily due to lower engineering income[52](index=52&type=chunk) [First Nine Months 2025 Development](index=10&type=section&id=First%20Nine%20Months%202025%20Development) For the first nine months of 2025, gross profit increased by $125 million (9.1%) and gross margin by 1.1pp, attributed to improved operational efficiency, organic sales growth, and lower material costs. Operating income rose by $143 million (23%), and diluted EPS increased by $1.61 (32%), primarily from higher operating income and fewer outstanding shares - Gross profit increased by **$125 million** (**9.1%**) and gross margin by **1.1pp**, driven by improved operational efficiency, organic sales growth, and lower material costs[57](index=57&type=chunk) - Operating income increased by **$143 million** (**23%**) compared to the prior year[61](index=61&type=chunk) - Diluted EPS increased by **$1.61** (**32%**), mainly from higher operating income (**$1.28**) and lower outstanding shares (**$0.29**)[63](index=63&type=chunk) - R,D&E, net costs decreased by **$5 million** (**1.6%**), benefiting from positive FX translation effects and lower professional service costs[59](index=59&type=chunk) [Selected Cash Flow and Balance Sheet Items Analysis](index=11&type=section&id=Selected%20Cash%20Flow%20and%20Balance%20Sheet%20Items%20Analysis) Autoliv demonstrated strong cash flow generation in Q3 2025, with operating cash flow increasing by 46% and free operating cash flow by 378%. For the first nine months, free operating cash flow also saw a significant increase of 44%, despite a slight decrease in operating cash flow. The company maintained a healthy balance sheet with a leverage ratio of 1.3x, below its target limit | Selected Cash Flow items (Dollars in millions) | Q3 2025 | Q3 2024 | Change | 9M 2025 | 9M 2024 | Change | | :--------------------------------------------- | :------ | :------ | :----- | :------ | :------ | :----- | | Net income | $175 | $139 | 26% | $510 | $404 | 26% | | Operating cash flow | 258 | 177 | 46% | 613 | 639 | (4.1)% | | Capital expenditure, net | (106) | (145) | (27)% | (313) | (431) | (27)% | | Free operating cash flow | $153 | $32 | 378% | $300 | $208 | 44% | | Cash conversion | 87% | 23% | 64pp | 59% | 52% | 7pp | | Dividends paid | (65) | (54) | 21% | (173) | (164) | 5.3% | | Share repurchases | (100) | (130) | (23)% | (201) | (450) | (55)% | | Selected Balance Sheet items (Dollars in millions) | Q3 2025 | Q3 2024 | Change | | :------------------------------------------------- | :------ | :------ | :----- | | Trade working capital | $1,504 | $1,307 | 15% | | Trade working capital in relation to sales | 13.9% | 12.8% | 1.1pp | | Cash & cash equivalents | 225 | 415 | (46)% | | Gross Debt | 2,027 | 2,210 | (8.3)% | | Net Debt | 1,772 | 1,787 | (0.8)% | | Capital employed | 4,331 | 4,085 | 6.0% | | Total equity | 2,559 | 2,298 | 11% | | Leverage ratio | 1.3 | 1.4 | (0.1) | [Third Quarter 2025 Development Cash Flow](index=11&type=section&id=Third%20Quarter%202025%20Development%20Cash%20Flow) Operating cash flow increased by $81 million (46%) to $258 million in Q3 2025, driven by higher net income and more positive non-cash items. Capital expenditure, net, decreased by $40 million (27%), leading to a substantial increase in free operating cash flow to $153 million (378%). Cash conversion improved significantly to 87% - Operating cash flow increased by **$81 million** (**46%**) to **$258 million** in Q3 2025[66](index=66&type=chunk) - Capital expenditure, net, decreased by **$40 million** (**27%**), with the ratio to sales declining to **3.9%** from **5.7%**[67](index=67&type=chunk) - Free operating cash flow was positive **$153 million**, a **378% increase** from **$32 million** in the prior year[68](index=68&type=chunk) - Cash conversion was **87%** in Q3, up from **23%** a year earlier[68](index=68&type=chunk) [First Nine Months 2025 Development Cash Flow](index=12&type=section&id=First%20Nine%20Months%202025%20Development%20Cash%20Flow) For the first nine months of 2025, operating cash flow decreased by $27 million (4.1%) to $613 million, primarily due to a larger increase in operating working capital. However, capital expenditure, net, decreased by $118 million (27%), resulting in a 44% increase in free operating cash flow to $300 million. The leverage ratio improved to 1.3x from 1.4x - Operating cash flow decreased by **$27 million** (**4.1%**) to **$613 million** for the first nine months of 2025[71](index=71&type=chunk) - Capital expenditure, net, decreased by **$118 million** (**27%**), with the ratio to sales declining to **3.9%** from **5.5%**[72](index=72&type=chunk) - Free operating cash flow was positive **$300 million**, a **44% increase** from **$208 million** in the prior year[74](index=74&type=chunk) - The leverage ratio improved to **1.3x** as of September 30, 2025, from **1.4x** a year earlier[74](index=74&type=chunk) [Headcount](index=12&type=section&id=Headcount) As of September 30, 2025, total headcount decreased by 3.0% year-over-year to 65,200, despite a 3.9% organic sales increase and some in-sourcing. This reduction was primarily in the direct workforce, supported by improved customer call-off accuracy and operational efficiency initiatives | Headcount | Sep 30 2025 | Jun 30 2025 | Sep 30 2024 | | :----------------------------- | :---------- | :---------- | :---------- | | Total headcount | 65,200 | 65,100 | 67,200 | | Direct headcount in manufacturing | 47,900 | 48,000 | 49,800 | | Indirect headcount | 17,300 | 17,100 | 17,400 | | Temporary personnel | 9% | 9% | 9% | - Total headcount decreased by approximately **2,000** (**3.0%**) year-over-year, despite a **3.9% organic sales increase** and in-sourcing of about **250 FTEs**[76](index=76&type=chunk) - The direct workforce decreased by approximately **1,900** (**3.8%**), supported by improved customer call-off accuracy and operational efficiency improvements[76](index=76&type=chunk) [Non-U.S. GAAP Reconciliations and Definitions](index=18&type=section&id=Non-U.S.%20GAAP%20Reconciliations%20and%20Definitions) This section provides reconciliations and definitions for non-U.S. GAAP financial measures, enhancing comparability and transparency [Components in Sales Increase/Decrease](index=18&type=section&id=Components%20in%20Sales%20Increase%2FDecrease) Autoliv analyzes sales trends using organic sales growth to provide a comparable basis, separating the impact of acquisitions/divestitures and exchange rates, as approximately 75% of sales are generated in non-U.S. dollar currencies - Organic sales growth is used to analyze sales trends on a comparable basis, isolating the impact of acquisitions/divestitures and exchange rates[90](index=90&type=chunk) - Approximately **75%** of the company's sales are generated in currencies other than the U.S. dollar[90](index=90&type=chunk) [Trade Working Capital Reconciliation](index=18&type=section&id=Trade%20Working%20Capital%20Reconciliation) Trade working capital, a non-U.S. GAAP measure, is used by management to assess operational efficiency and its impact on cash generation. It is defined as outstanding receivables and inventory less outstanding payables, and its relationship to annualized sales is a key indicator - Trade working capital is a non-U.S. GAAP measure used to assess operational efficiency and its impact on cash generation[91](index=91&type=chunk) | (Dollars in millions) | Sep 30 2025 | Jun 30 2025 | Mar 31 2025 | Dec 31 2024 | Sep 30 2024 | | :-------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Receivables, net | $2,357 | $2,341 | $2,205 | $1,993 | $2,192 | | Inventories, net | 1,036 | 957 | 913 | 921 | 997 | | Accounts payable | (1,889) | (1,945) | (1,839) | (1,799) | (1,881) | | Trade working capital | $1,504 | $1,354 | $1,279 | $1,115 | $1,307 | | Annualized quarterly sales | $10,822 | $10,857 | $10,312 | $10,463 | $10,218 | | Trade working capital in relation to annualized quarterly sales | 13.9% | 12.5% | 12.4% | 10.7% | 12.8% | [Net Debt Reconciliation](index=20&type=section&id=Net%20Debt%20Reconciliation) Net debt, a non-U.S. GAAP measure, is used to analyze the company's debt position, adjusted for debt-related derivatives to reflect the total financial liability without currency or interest fair values. This metric is crucial for creditors and credit rating agencies - Net debt is a non-U.S. GAAP measure used to analyze the company's debt, adjusted for debt-related derivatives to show total financial liability[94](index=94&type=chunk) | (Dollars in millions) | Sep 30 2025 | Jun 30 2025 | Mar 31 2025 | Dec 31 2024 | Sep 30 2024 | | :-------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Short-term debt | $654 | $679 | $540 | $387 | $624 | | Long-term debt | 1,374 | 1,372 | 1,565 | 1,522 | 1,586 | | Total debt | 2,027 | 2,051 | 2,105 | 1,909 | 2,210 | | Cash & cash equivalents | (225) | (237) | (322) | (330) | (415) | | Debt issuance cost/Debt-related derivatives, net | (30) | (62) | 4 | (24) | (9) | | Net debt | $1,772 | $1,752 | $1,787 | $1,554 | $1,787 | [Leverage Ratio Reconciliation](index=20&type=section&id=Leverage%20Ratio%20Reconciliation) The leverage ratio, a non-U.S. GAAP measure, is used to analyze the company's debt capacity under its policy, aiming for a strong investment grade credit rating with a long-term target of 1.5x or below. It is calculated as net debt adjusted for pension liabilities in relation to adjusted EBITDA - The leverage ratio is a non-U.S. GAAP measure used to analyze debt capacity, aiming for a strong investment grade credit rating and a long-term target of **1.5x or below**[96](index=96&type=chunk) - It is measured as net debt adjusted for pension liabilities in relation to adjusted EBITDA[96](index=96&type=chunk) | (Dollars in millions) | Sep 30 2025 | Jun 30 2025 | Sep 30 2024 | | :-------------------- | :---------- | :---------- | :---------- | | Net debt | $1,772 | $1,752 | $1,787 | | Pension liabilities | 167 | 167 | 147 | | Net debt per the Policy | $1,939 | $1,919 | $1,934 | | EBITDA per the Policy (Adjusted EBITDA) | $1,524 | $1,483 | $1,376 | | Leverage ratio | 1.3 | 1.3 | 1.4 | [Free Operating Cash Flow and Cash Conversion Reconciliation](index=21&type=section&id=Free%20Operating%20Cash%20Flow%20and%20Cash%20Conversion%20Reconciliation) Free operating cash flow, a non-U.S. GAAP measure, indicates cash generated after capital expenditures, enabling strategic value creation. Cash conversion, also non-U.S. GAAP, evaluates the efficiency of converting net income into free operating cash flow - Free operating cash flow is a non-U.S. GAAP measure used to analyze cash flow generated after capital expenditure, net, indicating strategic value creation capacity[98](index=98&type=chunk) - Cash conversion is a non-U.S. GAAP measure used to analyze the proportion of net income converted into free operating cash flow, evaluating resource utilization efficiency[98](index=98&type=chunk) | (Dollars in millions) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | Latest 12 months | Full Year 2024 | | :-------------------- | :------ | :------ | :------ | :------ | :--------------- | :------------- | | Operating cash flow | 258 | 177 | $613 | $639 | 1,033 | 1,059 | | Capital expenditure, net | (106) | (145) | (313) | (431) | (445) | (563) | | Free operating cash flow | $153 | $32 | $300 | $208 | $588 | $497 | | Cash conversion | 87% | 23% | 59% | 52% | 78% | 77% | [Items Affecting Comparability (ROCE, ROE)](index=22&type=section&id=Items%20Affecting%20Comparability%20%28ROCE%2C%20ROE%29) Autoliv provides adjusted non-U.S. GAAP measures for Return on Capital Employed (ROCE) and Return on Total Equity (ROE) to improve comparability between periods by excluding certain non-recurring items like capacity alignments and antitrust matters. These adjusted metrics help investors and analysts evaluate long-term performance and management's value creation - Adjusted non-U.S. GAAP measures for ROCE and ROE are provided to improve comparability between periods by excluding specific non-recurring items[100](index=100&type=chunk)[101](index=101&type=chunk) - ROCE and adjusted ROCE are indicators of long-term performance and profitability of capital employed, while ROE indicates management's value creation for shareholders[102](index=102&type=chunk)[103](index=103&type=chunk) | (Dollars in millions) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Operating income (GAAP) | $267 | $226 | $769 | $626 | | Adjusted Operating income (Non-GAAP) | $271 | $237 | $777 | $657 | | Operating margin (GAAP) | 9.9% | 8.9% | 9.6% | 8.1% | | Adjusted Operating margin (Non-GAAP) | 10.0% | 9.3% | 9.7% | 8.5% | | Return on capital employed (GAAP) | 25.1% | 22.9% | 24.9% | 21.2% | | Adjusted Return on capital employed (Non-GAAP) | 25.5% | 23.9% | 25.2% | 22.1% | | Return on total equity (GAAP) | 27.9% | 24.1% | 28.1% | 22.4% | | Adjusted Return on total equity (Non-GAAP) | 28.3% | 25.3% | 28.4% | 23.7% | [Consolidated Financial Statements](index=15&type=section&id=Consolidated%20Financial%20Statements) This section presents Autoliv's official consolidated statements of income, balance sheets, and cash flow, detailing financial position and performance [Consolidated Statements of Income](index=15&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income for Q3 and the first nine months of 2025 show significant year-over-year growth in net sales, gross profit, operating income, and net income, reflecting strong operational performance | (Dollars in millions, except per share data, unaudited) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | Latest 12 months | Full Year 2024 | | :---------------------------------------------------- | :------ | :------ | :------ | :------ | :--------------- | :------------- | | Total net sales | 2,706 | 2,555 | 7,998 | 7,774 | 10,614 | 10,390 | | Gross profit | 522 | 459 | 1,502 | 1,377 | 2,052 | 1,927 | | Operating income | 267 | 226 | 769 | 626 | 1,122 | 979 | | Income before income taxes | 240 | 197 | 693 | 554 | 1,015 | 875 | | Net income | 175 | 139 | 510 | 404 | 754 | 648 | | Earnings per share - diluted | $2.28 | $1.74 | $6.59 | $4.98 | $9.70 | $8.04 | [Consolidated Balance Sheets](index=16&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets as of September 30, 2025, show an increase in total assets and total equity compared to the prior year, indicating a strengthening financial position. Current assets and liabilities also saw changes, with cash and cash equivalents decreasing | (Dollars in millions, unaudited) | Sep 30 2025 | Jun 30 2025 | Mar 31 2025 | Dec 31 2024 | Sep 30 2024 | | :------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Cash & cash equivalents | $225 | $237 | $322 | $330 | $415 | | Total current assets | 3,946 | 3,929 | 3,699 | 3,483 | 3,865 | | Total assets | 8,463 | 8,476 | 8,114 | 7,804 | 8,306 | | Total current liabilities | 4,141 | 4,235 | 3,800 | 3,633 | 4,034 | | Total equity | 2,559 | 2,480 | 2,361 | 2,285 | 2,298 | [Consolidated Statements of Cash Flow](index=17&type=section&id=Consolidated%20Statements%20of%20Cash%20Flow) The Consolidated Statements of Cash Flow highlight strong operating cash flow generation in Q3 2025, with a significant increase year-over-year. For the first nine months, operating cash flow saw a slight decrease, but investing activities showed reduced cash usage, contributing to overall cash management | (Dollars in millions, unaudited) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | Latest 12 months | Full Year 2024 | | :------------------------------- | :------ | :------ | :------ | :------ | :--------------- | :------------- | | Net cash provided by operating activities | 258 | 177 | 613 | 639 | 1,033 | 1,059 | | Net cash used in investing activities | (106) | (145) | (313) | (431) | (445) | (563) | | Net cash (used in) provided by financing activities | (146) | 11 | (316) | (259) | (738) | (680) | | (Decrease) increase in cash and cash equivalents | (12) | 6 | (105) | (84) | (190) | (168) | | Cash and cash equivalents at period-end | $225 | $415 | $225 | $415 | $225 | $330 | [Other Information](index=13&type=section&id=Other%20Information) This section covers recent strategic initiatives, future reporting, essential definitions, SEC filings, and the company's safe harbor statement [Recent Strategic Developments](index=13&type=section&id=Recent%20Strategic%20Developments) Autoliv announced several strategic initiatives in October 2025, including a partnership with CATARC to advance automotive safety standards in China, a joint venture with HSAE for advanced safety electronics development and manufacturing, and the groundbreaking of a new R&D center in Wuhan, China. The company also continued its share repurchase program in Q3 2025 - On October 14, 2025, Autoliv signed a strategic agreement with CATARC to jointly advance automotive safety standards and innovation in China, providing technical support for Chinese OEMs' R&D and global expansion[84](index=84&type=chunk) - On October 9, 2025, Autoliv announced intent to form a new joint venture with HSAE to develop and manufacture advanced safety electronics for the Chinese automotive market, focusing on products like Hands-On Detection (HOD) and Pre-Pretensioner Mechatronic Integration (PPMI)[84](index=84&type=chunk) - On July 27, 2025, Autoliv China held the groundbreaking ceremony for its new R&D center in Wuhan, China, scheduled to begin operations in Q3 2026, to support the global growth of Chinese OEMs[84](index=84&type=chunk) - In Q3 2025, Autoliv repurchased and retired **0.84 million shares** of common stock for **$100 million** under the 2029 stock repurchase program[84](index=84&type=chunk) [Next Report & Inquiries](index=13&type=section&id=Next%20Report%20%26%20Inquiries) Autoliv plans to release its Q4 2025 earnings report on January 30, 2026. Contact information for investor relations and media inquiries is provided - Autoliv intends to publish the quarterly earnings report for the fourth quarter of 2025 on Friday, January 30, 2026[79](index=79&type=chunk) - Inquiries can be directed to Anders Trapp (VP Investor Relations), Henrik Kaar (Director Investor Relations), or Gabriella Etemad (SVP Communications)[80](index=80&type=chunk) [Definitions and SEC Filings](index=13&type=section&id=Definitions%20and%20SEC%20Filings) Definitions of terms used in the report are available on Autoliv's website or in its Annual Report. The company's SEC filings, including 10-K, 10-Q, and 8-K reports, are accessible free of charge from Autoliv and on the SEC's website - Definitions of terms used in this report are available on www.autoliv.com or in the Annual Report[82](index=82&type=chunk) - Autoliv's SEC filings (10-K, 10-Q, 8-K, etc.) can be obtained free of charge from Autoliv or at www.sec.gov and www.autoliv.com[82](index=82&type=chunk) [Safe Harbor Statement](index=14&type=section&id=Safe%20Harbor%20Statement) This report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that may cause actual future results to differ materially from expectations. Autoliv claims the protection of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and assumes no obligation to update these statements, except as required by law - The report contains forward-looking statements based on current expectations, assumptions, and third-party data, which are subject to known and unknown risks and uncertainties[85](index=85&type=chunk) - Actual future results, performance, or achievements may differ materially due to various factors, including general economic conditions, changes in LVP, supply chain disruptions, geopolitical instability, and regulatory changes[85](index=85&type=chunk) - Autoliv claims the protection of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995 and does not assume any obligation to update or revise these statements, except as legally required[85](index=85&type=chunk) [Historical Financial Data](index=26&type=section&id=Historical%20Financial%20Data) This section provides a five-year historical overview of Autoliv's key financial metrics from 2020 to 2024, offering performance context [Full Year Financial Summary (2020-2024)](index=26&type=section&id=Full%20Year%20Financial%20Summary%20%282020-2024%29) This section provides a five-year historical overview of Autoliv's key financial metrics from 2020 to 2024, covering sales, income, balance sheet items, and cash flow. It highlights trends in net sales, operating income, net income, and various ratios, offering context for the company's performance | (Dollars in millions, except per share data, unaudited) | 2024 | 2023 | 2022 | 2021 | 2020 | | :---------------------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net sales | $10,390 | $10,475 | $8,842 | $8,230 | $7,447 | | Operating income | 979 | 690 | 659 | 675 | 382 | | Net income attributable to controlling interest | 646 | 488 | 423 | 435 | 187 | | Earnings per share – diluted | 8.04 | 5.72 | 4.85 | 4.96 | 2.14 | | Gross margin | 18.5% | 17.4% | 15.8% | 18.4% | 16.7% | | Operating margin | 9.4% | 6.6% | 7.5% | 8.2% | 5.1% | | Adjusted operating margin | 9.7% | 8.8% | 6.8% | 8.3% | 6.5% | | Trade working capital | 1,115 | 1,232 | 1,183 | 1,332 | 1,366 | | Total equity | 2,285 | 2,570 | 2,626 | 2,648 | 2,423 | | Net debt | 1,554 | 1,367 | 1,184 | 1,052 | 1,214 | | Operating cash flow | 1,059 | 982 | 713 | 754 | 849 | | Free operating cash flow | 497 | 414 | 228 | 300 | 509 | | Cash conversion | 77% | 85% | 54% | 69% | 270% |

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Core Insights - Autoliv Inc. is a leading manufacturer of automotive safety systems, preparing to release quarterly earnings on October 17, 2025, with Wall Street expecting an EPS of $2.03 and revenue of approximately $2.7 billion [1][6] Financial Performance Expectations - The upcoming earnings report is anticipated to show a year-over-year increase in earnings, driven by higher revenues for the quarter ending September 2025, with the Zacks Consensus Estimate predicting a slightly lower EPS of $2.00, indicating potential market volatility [2][6] Market Valuation Metrics - Autoliv's P/E ratio of 13.04 suggests a moderate valuation of its earnings, while the price-to-sales ratio of 0.89 indicates investor willingness to pay per dollar of sales [3][6] - The enterprise value to sales ratio of 1.08 reflects the market's valuation of the company's total worth relative to its sales [3] Cash Flow and Financial Health - The enterprise value to operating cash flow ratio of 11.83 shows how the market values Autoliv in relation to its cash flow from operations, and an earnings yield of 7.67% provides insight into the return on investment for shareholders [4] - The debt-to-equity ratio of 0.90 indicates a balanced use of debt and equity to finance the company's assets [4][6] - Autoliv's current ratio of 0.93 measures its ability to cover short-term liabilities with short-term assets, suggesting potential challenges in meeting short-term obligations [5]