Core Insights - Autoliv reported record sales, cash flow, and earnings per share for both the fourth quarter and full year 2025, driven by strong growth with Chinese OEMs and in India, while anticipating margin expansion in 2026 despite a softer light-vehicle production outlook [5][4]. Financial Performance - Fourth-quarter sales increased 8% year-over-year to over $2.8 billion, marking the highest quarterly level in the company's history [4]. - Gross profit rose by $22 million year-over-year, although gross margin declined by 70 basis points [1]. - Adjusted operating income decreased 4% year-over-year to $337 million, with an adjusted operating margin of 12.0%, down 140 basis points [3]. - For the full year, net sales reached $10.8 billion, up 4% from 2024, and adjusted operating income rose 11% to $1.1 billion, improving the adjusted operating margin to 10.3% [7]. Cash Flow and Shareholder Returns - Fourth-quarter operating cash flow increased by 30% year-over-year to $544 million, while free operating cash flow rose to $434 million from $288 million a year earlier [2]. - The company returned approximately $590 million to shareholders through dividends and buybacks in 2025, raising the quarterly dividend from $0.70 to $0.87 per share [12]. Market Environment and Regional Growth - Global light vehicle production reached its highest level for any quarter on record, with a 1.3% increase in the fourth quarter, driven by stronger-than-expected production in China and India [8][10]. - Autoliv outperformed global light vehicle production by 3 percentage points in the quarter, with particularly strong performance in Asia, excluding China [10]. Operational Efficiency - The company achieved significant operational efficiency improvements, including lower logistics and labor costs, contributing to gross profit [6]. - Autoliv has realized $100 million of a $130 million structural cost savings plan, with expectations to achieve the remaining savings in the coming years [17]. 2026 Outlook - Autoliv anticipates flat organic sales for 2026, with growth in China, India, and South America offset by lower sales in North America and Europe [15]. - The company expects an adjusted operating margin of around 10.5% to 11% and operating cash flow of about $1.2 billion for 2026 [15]. Business Developments - Autoliv announced an agreement with Tensor to develop the first foldable steering wheel for robo cars, targeted for volume production in late 2026 [20]. - The company secured its first order with a Chinese OEM for vehicle production in Europe, establishing a customer relationship [20].