In the financial report for the period of October * December 2024, Autoliv, Inc. reported a 4.9% decrease in net sales compared to the same period in the previous year. However, the operating income saw a substantial increase, reaching $353 million, a 49% increase from the same period in 2023. The operating margin also saw a significant increase, rising to 13.5% from 8.6% in the fourth quarter of 2023.
Adjusted operating income also saw an increase of 4.7% from the fourth quarter of 2023, amounting to $349 million, and the adjusted operating margin rose to 13.4% from 12.1% in the same period the previous year. Despite the decrease in net sales, the company achieved a 14% increase in diluted earnings per share at $3.10 and a 19% decrease in adjusted diluted earnings per share at $3.05.
In terms of cash flow, Autoliv reported a 6.0% decrease in operating cash flow for the fourth quarter of 2024 compared to the same period in 2023, reaching $420 million. However, the full year 2024 saw a 7.8% increase in operating cash flow, totaling $1,059 million. The return on capital employed also saw a significant increase, rising to 35.8% from 24.4% in the fourth quarter of 2023.
Looking ahead, the company provided full year 2025 guidance, projecting around 2% organic sales growth and around 10-10.5% adjusted operating margin. The guidance for operating cash flow in 2025 is around $1.2 billion, with net capital expenditure expected to be around 5% of sales.
Autoliv attributed its strong performance in the face of decreased net sales to strict cost control, successful execution of cost reductions, and commercial recoveries. The company also highlighted a record number of new launches expected in China in 2025, which is anticipated to significantly improve performance in that market.
The company's president and CEO, Mikael Bratt, expressed satisfaction with the strong profitability and cash flow in the fourth quarter, emphasizing the achievement of new record highs for operating profit, operating margin, and earnings per share. He also noted the expectation of a challenging year for the automotive industry in 2025 due to geopolitical risks and a slight decline in light vehicle production.
In terms of regional performance, Autoliv's organic sales declined by 3.3% globally in the fourth quarter of 2024, underperforming the global light vehicle production increase of 0.4%. The underperformance was largely driven by negative regional and model light vehicle production mix, particularly in China and the Americas.
Following these announcements, the company's shares moved -3.4%, and are now trading at a price of $97.88. Check out the company's full 8-K submission here.
