Autoliv: Financial Report July - September 2025

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]