Strong Asian Sales Drove Guidance-Beating Results for Autoliv Inc.

The auto safety product maker sees its organic sales growth continuing in 2017.

Matthew DiLallo
Matthew DiLallo
Feb 2, 2017 at 1:02PM
Robots welding in an automobile factory.

Image source: Getty Images.

Autoliv's (NYSE:ALV) Asian business had its best quarter ever, with sales driving over the $1 billion mark during the quarter thanks to a 15% jump in light vehicle production in China. Those results pushed the auto safety product makers' results slightly ahead of its guidance, though earnings did fall year over year due to weaker margins. The company also released its 2017 guidance calling for continued organic sales growth and margins that were expected to fall in line with its long-term target range, keeping the company on pace to hit its ambitious sales goal.

Autoliv results: The raw numbers


Q4 2016

Q4 2015

Year-Over-Year Change


$2.6 billion

$2.5 billion


Operating income

$238.7 million

$281.3 million


Adjusted EPS




Data source: Autoliv.  

What happened with Autoliv this quarter?

Autoliv's organic sales growth and margins edged above expectations.

  • Heading into the quarter, Autoliv expected fourth-quarter organic sales to be flat year over year while adjusted operating margin would be more than 9%. However, organic sales rose 1.1% for the quarter, while the adjusted operating margin was 9.3%.
  • Meanwhile, full-year sales were up 7.2% on an organic basis to $10.1 billion while the adjusted operating margin was 8.8%.
  • Organic sales in Autoliv's airbag segment were $1.3 billion for the quarter, which was down 0.9% after stripping out the impact from foreign currencies. Driving the decline were lower inflator replacement sales and lower airbag sales in the Americas.
  • Seatbelt sales grew 3.5% on an organic basis to $688 million due primarily to sales growth in China.
  • Passive safety electronic sales were up 8% on an organic basis to $277.6 million due to rapid growth in China and the rest of Asia.
  • Active safety products sales slumped 2.1% organically to $179 million. While the segment saw double-digit organic sales growth of radar and camera systems in Europe, those sales only partially offset declining sales of positioning systems in North America.
  • Finally, the company's brake control systems added $111.1 million in revenue during the quarter, which was in line with expectations. Autoliv did not start generating sales from this segment until the start-up of its ANBS joint venture earlier last year.

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What management had to say

Autoliv CEO Jan Carlson commented on what drove its quarterly and full-year results by noting:

The fourth quarter developed largely in line with our expectations. I am particularly pleased with our growth in Asia, where we, for the first time, recorded sales above $1 billion for a quarter. ... For the full year, our organic growth in China was in line with the strong light vehicle production growth. North American light vehicle production grew modestly in the quarter, while our growth was hampered by lower sales of replacement inflators and an unfavorable model mix. European light vehicle production continued to grow from a high level. In active safety, we are pleased that we recorded double digit sales growth in the quarter for our core products radar and vision, although this was offset by declines in sales of non-core products...Autoliv-Nissin Brake Systems is expanding its customer base, winning a $1.1 billion total contract value for our new braking system with a Detroit-based OEM on a major platform. Passive Safety recorded its highest order intake ever in 2016, winning about 50% of available order value for the second consecutive year.

As Carlson points out, there weren't any surprises during the quarter as strong sales in Asia matched robust vehicle production. Further, the company was able to overcome weaker sales in some product categories with higher sales in others. Overall, the company remains on pace to achieve its long-term targets.

Looking forward

Autoliv expects its results to continue marching higher in 2017. For the first quarter, it anticipates that organic sales will increase by more than 3% while its adjusted operating margin will be around 8%. Meanwhile, it expects full-year results to accelerate from there, with expectations that full-year organic sales will grow 4% while the adjusted margin will be around 8.5%. While that guidance infers slower sales growth this year, Carlson said that the company remains "confident that we are on the right path to surpass our $12 billion corporate sales target for 2019."