Autoliv(ALV) - 2025 Q1 - Quarterly Results

Financial Performance - Q1 2025 net sales were $2,578 million, a decrease of 1.4% year-over-year, with organic sales growth of 2.2%[2] - Operating income increased by 31% to$ 254 million, with an operating margin of 9.9%, up from 7.4% in Q1 2024[4] - Earnings per share (diluted) rose by 41% to $2.14, while adjusted earnings per share increased by 37% to$ 2.15[4] - Net income for Q1 2025 was $167 million, a 32% increase from$ 127 million in Q1 2024[35] - Gross profit increased by $36 million to$ 478 million, with a gross margin improvement of 1.6 percentage points to 18.6%[36] - Operating income rose by $60 million to$ 254 million, reflecting a 31% increase year-over-year[40] - Net income attributable to controlling interest in Q1 2025 was $167 million, up from$ 126 million in Q1 2024, marking a 32.5% increase[63] - Autoliv's diluted earnings per share for Q1 2025 was $2.14, compared to$ 1.52 in Q1 2024, reflecting a 40.8% increase[63] Sales and Market Performance - Sales to domestic Chinese OEMs grew by 19%, aligning with their LVP growth, despite overall underperformance in China[10] - Organic sales growth outperformed global LVP growth by 11pp in Europe, 6.1pp in the Americas, and 5.4pp in Asia excluding China[27] - A record number of new product launches is expected to significantly improve sales performance in China in 2025[29] - Net sales for Q1 2025 were $2,578 million, a decrease of 1.4% compared to$ 2,615 million in Q1 2024[35] Cost and Efficiency - The total headcount decreased by 6%, contributing to improved profitability through cost reduction initiatives[10] - S,G&A costs increased by $13 million to$ 145 million, with S,G&A as a percentage of sales rising from 5.1% to 5.6%[37] - R,D&E, net costs decreased by $18 million to$ 95 million, with R,D&E as a percentage of sales improving from 4.3% to 3.7%[38] Cash Flow and Debt - Free operating cash flow is projected to be around $1.2 billion for 2025, with a leverage ratio of 1.3x[12] - Operating cash flow decreased by 37% to$ 77 million, primarily due to a larger increase in operating working capital compared to net income[44][46] - Net debt increased by $225 million to$ 1,787 million, attributed to higher dividends and share repurchases exceeding free operating cash flow[50] - Trade working capital decreased by 4.2% to $1,279 million, with trade working capital as a percentage of sales improving from 12.8% to 12.4%[44][49] Future Outlook - The company expects organic sales growth of around 2% and an adjusted operating margin of 10-10.5% for the full year 2025[9] - The company plans to discuss medium and long-term growth strategies at its Capital Markets Day on June 4, 2025[61] Asset and Liability Management - Autoliv's total assets as of March 31, 2025, were$ 8,114 million, an increase from $7,804 million at the end of 2024[64] - Autoliv's total current liabilities increased to$ 3,800 million as of March 31, 2025, compared to $3,633 million at the end of 2024[64] - Total current assets as of March 31, 2025, increased to$ 3,699 million from $3,483 million as of December 31, 2024, representing a growth of 6.2%[69] - Net debt as of March 31, 2025, was reported at$ 1,787 million, up from $1,554 million as of December 31, 2024, indicating a rise of 15%[71] - The leverage ratio for March 31, 2025, was 1.3, consistent with the previous quarter's ratio of 1.2[73] Return Metrics - Return on capital employed (GAAP) for Q1 2025 was 25.6%, up from 19.7% in Q1 2024[88] - Return on total equity (GAAP) for Q1 2025 was 28.8%, compared to 20.2% in Q1 2024[89]