Autoliv, Inc., a leading automotive safety supplier, has released its financial report for the second quarter of 2024, showing a 1.1% decrease in net sales to $2,605 million compared to the same period last year. However, the company recorded a 0.7% organic sales growth and a significant improvement in profitability with an operating margin of 7.9% and an adjusted operating margin of 8.5%.
In terms of earnings, Autoliv reported a 178% increase in earnings per share (EPS) to $1.71 and a 3% decrease in adjusted EPS to $1.87. The operating income for the quarter was $206 million, marking a substantial 120% increase from the prior year, while the adjusted operating income improved by 4.4% to $221 million.
The company's return on capital employed also saw a positive trend, reaching 21.0%, compared to 9.5% in the same period last year. Additionally, the operating cash flow was reported at $340 million, a 10% decrease from the previous year.
Looking at the first six months of 2024, Autoliv achieved a 1.8% increase in net sales to $5,220 million, with a 3.0% organic sales growth. The operating income for the first half of the year amounted to $400 million, indicating an 81% increase, while the adjusted operating income saw a significant 22% improvement to $420 million.
The company provided guidance for the full year 2024, expecting around 2% organic sales growth and an adjusted operating margin of around 9.5-10.0%. It also anticipates operating cash flow of around $1.1 billion.
Mikael Bratt, President & CEO of Autoliv, highlighted the company's improved profitability driven by better pricing and successful execution of cost reductions. He also noted that despite lower-than-expected sales, the company's return on capital employed was strong, and the operating cash flow continued to be robust.
The report outlined key business developments, including the company's strong performance in Asia excluding China and in Europe, attributed to product launches and better pricing. However, Autoliv underperformed in the Americas and in China due to lower light vehicle production with certain key customers.
It's worth noting that the company continues to expand its business with domestic Chinese OEMs, positioning itself well to benefit from the new structure of the Chinese market. Autoliv's guidance slightly adjusted to reflect changes in light vehicle production and adverse customer mix, with a focus on delivering an adjusted operating margin of around 11-12% in the second half of the year.
In terms of market conditions, the report highlighted a decline in global light vehicle production by 0.7% year-over-year, as well as cost pressure from labor and other items in the second quarter. Autoliv expects call-off volatility to be lower in 2024 compared to 2023 but remain higher than the pre-pandemic level.
The company's sales by region showed varying performance, with organic sales growth outperforming light vehicle production growth in Asia excluding China and Europe but underperforming in the Americas and China.
As a result of these announcements, the company's shares have moved -10.4% on the market, and are now trading at a price of $97.27. For the full picture, make sure to review Autoliv's 8-K report.
