Autoliv(US:ALV)2026-01-30 11:05Financial Performance - Q4 2025 net sales reached $2,817 million, a 7.7% increase year-over-year, with organic sales growth of 4.2%[3] - Operating income for Q4 2025 was $319 million, a decrease of 9.6% compared to Q4 2024, while adjusted operating income was $337 million, down 3.6%[6] - The operating margin for Q4 2025 was 11.3%, a decline of 2.2 percentage points from the previous year, with an adjusted operating margin of 12.0%[6] - Full year 2025 consolidated sales reached $10,815 million, a 4.1% increase from $10,390 million in 2024[41] - Operating income for the full year increased by $109 million, driven by higher gross profit and improved other income[62] - Earnings per share (diluted) for the full year increased by $1.52 to $9.55, reflecting a 19% growth compared to the prior year[65] - Net income for Q4 2025 was $226 million, a decrease of 7.3% from $243 million in Q4 2024, while full-year net income increased by 14% to $736 million from $648 million[66] - Gross profit for the full year 2025 was $2,074 million, up from $1,927 million in 2024, reflecting a 7.6% increase[88] - Operating income for the full year 2025 was $1,088 million, compared to $979 million in 2024, representing a 11.1% increase[88] - The company’s diluted earnings per share for the full year 2025 was $9.55, an increase from $8.04 in 2024, reflecting a 18.8% growth[88] Cash Flow and Capital Management - Operating cash flow for Q4 2025 increased by 30% to a record $544 million, contributing to a full year operating cash flow of $1,157 million[13] - Free operating cash flow for Q4 2025 was $434 million, up 51% from $288 million in Q4 2024, with a cash conversion rate of 192% compared to 118% a year earlier[70] - Cash and cash equivalents at the end of Q4 2025 increased to $604 million from $330 million at the end of Q4 2024[90] - The company reported a net cash provided by operating activities of $1,157 million for the full year 2025, compared to $1,059 million in 2024[90] - Total current liabilities decreased to $3,923 million as of December 31, 2025, from $4,141 million at the end of Q3 2025[89] - Total current assets increased to $4,101 million as of Dec 31, 2025, up from $3,483 million a year earlier, reflecting a growth of 17.7%[94] - Cash conversion (Non-GAAP) for the full year 2025 was reported at 100%, up from 77% in 2024, indicating improved efficiency in converting net income into free operating cash flow[101] Sales and Market Performance - Sales to Chinese OEMs grew by nearly 40% in Q4 2025, with a full year growth of 23%[7] - The company expects continued strong sales performance with COEMs in 2026, driven by new product launches[13] - Organic sales growth for Airbags, Steering Wheels and Other products was 3.4%, driven primarily by side airbags and inflatable curtains[42] - Organic sales growth for Seatbelt Products and Other was 3.5%, with significant contributions from the Americas and Asia excluding China[43] - Global organic sales increased by 3.4%, outperforming the global light vehicle production (LVP) growth of 3.9%[44] - In China, Autoliv's sales to domestic OEMs increased by 23% in 2025, while sales to global OEMs decreased by 7.3%[45] Cost Management and Profitability - The company recovered close to 100% of tariff costs in Q4 2025 and over 80% for the full year, mitigating the impact on profitability[19] - Inflationary cost pressures were partially offset by price increases and customer compensations, with raw material price changes having a minimal impact on profitability[18] - Full year gross profit increased by $147 million, with a gross margin improvement of 0.6 percentage points to 19.2%[58] - S,G&A costs for the full year increased by $40 million, with S,G&A as a percentage of sales rising from 5.1% to 5.3%[59] Debt and Equity - The leverage ratio improved to 1.1x, below the target limit of 1.5x, indicating strong financial management[13] - Net debt as of December 31, 2025, was $1,566 million, a slight increase of 0.8% from $1,554 million a year earlier, primarily due to cash outflows for dividends and share repurchases[72] - Total equity increased by $297 million to $2,582 million as of December 31, 2025, driven by net income and positive currency translation effects[75] - The leverage ratio improved to 1.1x as of December 31, 2025, down from 1.2x a year earlier, with trailing adjusted EBITDA increasing by $127 million[76] Research and Development - Research, development & engineering expenses for Q4 2025 were $94 million, up from $74 million in Q4 2024, a 27.0% increase[88] - Autoliv introduced the world's first foldable steering wheel for autonomous driving in collaboration with Tensor, enhancing safety features during manual and autonomous driving modes[86] Workforce and Operational Efficiency - The total headcount decreased by approximately 900, or 1.4%, compared to the previous year, despite a 4.1% increase in organic sales[78]