Quarterly Report for Quarter Ending March 31, 2025 (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 2025

or

Commission File No.: 001-12933

AUTOLIV, INC.

(Exact name of registrant as specified in its charter)

+46 8 587 20 600

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15-(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes: ☐ No: ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of April 8, 2025, there were 77,305,160shares of common stock of Autoliv, Inc., par value $1.00 per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. ("Autoliv," the "Company" or "we") or its management believes or anticipates may occur in the future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements.

In some cases, you can identify these statements by forward-looking words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "may," "likely," "might," "would," "should," "could," or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words.

Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: general economic conditions, including inflation; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; global supply chain disruptions, including port, transportation, and distribution delays or interruptions; supply chain disruptions, and component shortages specific to the automotive industry or the Company; geopolitical instability, including the ongoing war between Russia and Ukraine and the hostilities in the Middle East; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignment, restructuring, cost reduction, and efficiency initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel, and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation, civil judgments or financial penalties and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims, and the availability of insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business, including changes in trade policy and tariffs; our ability to meet our sustainability targets, goals and commitments; political conditions; dependence on and relationships with customers and suppliers; the conditions necessary to hit our financial targets; and other risks and uncertainties identified in Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q, Item 1A "Risk Factors" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 20, 2025.

For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in millions, except per share data)

1) Including a gain on sale of property in China of $6million in the first quarter of 2025.

2) Including a cumulative translation gain of $11million related to the sale of the Russian entity in the first quarter of 2025.

3) For the three months periods ended March 31, 2025 and 2024, the aggregate transaction gain (loss) included in net income for the period were a loss of $7million and a loss of $6million, respectively.

See Notes to the Condensed Consolidated Financial Statements (unaudited).

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in millions)

1) A cumulative translation gain of $11million related to the sale of the Russian entity in the first quarter of 2025 has been recycled and reported as part of the net change of cumulative translation adjustment in the Comprehensive Income Statement and Equity Statement. In the Statement of Income this gain has been reported as part of Other income (expense), net.

See Notes to the Condensed Consolidated Financial Statements (unaudited).

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in millions)

1) Amount of obligations confirmed under the Company's Supplier Finance Program that remains unpaid is reported as Accounts Payable in the Condensed Consolidated Balance Sheets. Amount of obligations outstanding as of March 31, 2025 and December 31, 2024 are $306million and $335million, respectively.

2) Including cumulative translation adjustment as of March 31, 2025 and December 31, 2024 to the amount of $(617)million and $(629)million, respectively.

See Notes to the Condensed Consolidated Financial Statements (unaudited).

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in millions)

See Notes to Condensed Consolidated Financial Statements (unaudited).

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CONSOLIDATED STATEMENTS OF TOTAL EQUITY (UNAUDITED) (Dollars in millions)

See Notes to the Condensed Consolidated Financial Statements (unaudited).

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

(Unless otherwise noted, all amounts are presented in millions of dollars, except for per share amounts)

March 31, 2025

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2. NEW ACCOUNTING STANDARDS

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3. FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, short-term debt and other current financial assets and liabilities approximate their fair value because of the short-term maturity of these instruments.

The Company uses derivative financial instruments ("derivatives") as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest rates and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company's use of derivatives is in accordance with the strategies contained in the Company's overall financial policy. All derivatives are recognized in the consolidated financial statements at fair value. For certain derivatives, hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although each hedge is entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest rates and foreign exchange rates.

The degree of judgment utilized in measuring the fair value of the instruments generally correlates to the level of pricing observability. Pricing observability is impacted by several factors, including the type of asset or liability, whether the asset or liability has an established market and the characteristics specific to the transaction. Instruments with readily active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, assets rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value.

All the Company's derivatives are classified as Level 2 financial instruments in the fair value hierarchy. Level 2 pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.

The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements ("ISDA agreements") with all of its derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 have been presented on a gross basis. According to the ISDA agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below.

Derivatives designated as hedging instruments

There were noderivatives designated as hedging instruments as of March 31, 2025 or December 31, 2024 related to the Company's operations.

Derivatives not designated as hedging instruments

Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding as of March 31, 2025 and December 31, 2024 were foreign exchange swaps.

For the three months periods ended March 31, 2025 and 2024, the gains or losses recognized in other non-operating items, net were a gain of $28million and a gain of $10million, respectively, for derivative instruments not designated as hedging instruments. The realized part of the gains or losses referred to above is reported under financing activities in the statement of cash flows.

For the three months periods ended March 31, 2025 and 2024, the gains or losses recognized as interest expense were a loss of $1million and a gain of $1million, respectively.

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PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY

Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. Recall decisions regarding the Company's products may require a significant amount of judgment by us, our customers and safety regulators and are influenced by a variety of factors. Once a recall has been made, the cost of a recall is also subject to a significant amount of judgment and discussions between the Company and its customers. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company's business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by us or expected by the customer in either a warranty or a recall situation. Accordingly, the future costs of warranty or recall claims by the customers may be material. However, the Company believes its established reserves are adequate. Autoliv's warranty reserves are based upon the Company's best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company's recorded estimates.

In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company's results of operations.

The Company maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of both approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent based on our prior claims experience. The Company's insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered. In addition, a number of the agreements entered into by the Company, including the agreements related to the spin-off of Veoneer, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance.

As noted in Note 7 above, as of March 31, 2025, the Company has accrued $71million for total product related liabilities. The majority of the total product liability accrual as of March 31, 2025 relates to recalls, which are generally covered by insurance. Insurance receivables for such recall related liabilities total $54million as of March 31, 2025.

Product Liability:

Autoliv and some of its subsidiaries have been named as one of several defendants in a consolidated class action lawsuit in a multi-district litigation (In Re: ARC Airbag Inflators Products Liability Litigation MDL, No. 3051) in the Northern District of Georgia. The plaintiffs in the multi-district litigation (the "ARC Inflator Class Action") brought claims for fraud, breach of warranty, and violations of consumer protection and trade practices stemming from ARC inflators included in airbag modules that Autoliv or its subsidiaries allegedly supplied after Autoliv acquired certain Delphi assets (the "Delphi Acquisition") in December 2009. The Company denies these allegations. Autoliv is not aware of any performance issues regarding ARC inflators included with its airbags at the directions of its customers that it shipped following the Delphi Acquisition. The proceedings remain ongoing. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the ARC Inflator Class Action. However, the Company continues to evaluate this matter, no accrual has been made, and no estimated range of potential loss can be determined at this time. The Company cannot predict the ultimate outcome of the ARC Inflator Class Action.

On September 5, 2023, the National Highway Traffic Safety Administration ("NHTSA") issued an initial decision to recall approximately 52million frontal driver and passenger airbag inflators manufactured by ARC and Delphi Automotive Systems because NHTSA determined that the airbag inflators contain a safety defect resulting in field ruptures. Some of the ARC inflators included in the airbag modules that Autoliv or its subsidiaries supplied after the Delphi Acquisition were included in such initial decision. NHTSA has yet to release its final decision. If NHTSA's final decision results in a recall, it is anticipated that such decision will be challenged in US federal court. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the NHTSA ARC recall. However, the Company continues to evaluate this matter, no accrual has been

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During the three months ended March 31, 2025, approximately 119thousand shares of common stock from the treasury stock were utilized by the Plan. During the three months ended March 31, 2024, approximately 102thousand shares of common stock from the treasury stock were utilized by the Plan.

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There were no reportable events subsequent to March 31, 2025.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the United States Securities and Exchange Commission (the "SEC") on February 20, 2025. Unless otherwise noted, all dollar amounts are in millions.

Autoliv, Inc. ("Autoliv" or the "Company") is a Delaware corporation with its principal executive offices in Stockholm, Sweden. The Company functions as a holding corporation and owns two principal operating subsidiaries, Autoliv AB and Autoliv ASP, Inc.

Through its operating subsidiaries, Autoliv is a supplier of automotive safety systems with a broad range of product offerings, including modules and components for passenger and driver airbags, side airbags, curtain airbags, seatbelts, steering wheels, and pedestrian protection systems.

Autoliv's filings with the SEC, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements, and all of our other reports and statements, and amendments thereto, are available free of charge on our corporate website at www.autoliv.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC (generally the same day as the filing).

The primary exchange market for Autoliv's securities is the New York Stock Exchange ("NYSE") where Autoliv's common stock trades under the symbol "ALV". Autoliv's Swedish Depositary Receipts ("SDRs") are traded on Nasdaq Stockholm's list for large market cap companies under the symbol "ALIV SDB". Options in SDRs trade on Nasdaq Stockholm under the name "Autoliv SDB". Options in Autoliv shares are traded on Nasdaq OMX PHLX and on NYSE Amex Options under the symbol "ALV".

Autoliv's fiscal year ends on December 31.

Non-U.S. GAAP financial measures

Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for "Organic sales," "Free operating cash flow," "Cash conversion," "Net debt," "Leverage ratio," "Adjusted net income," "Adjusted operating income," "Adjusted operating margin," "Adjusted earnings per share, diluted," "Adjusted return on capital employed," and "Adjusted return on total equity"provided below. Management believes that these non-U.S. GAAP financial measures provide supplemental information to investors regarding the performance of the Company's business and assist investors in analyzing trends in the Company's business. Additional descriptions regarding management's use of these financial measures are included below. Investors should consider these non-U.S. GAAP financial measures in addition to, rather than as substitutes for, financial reporting measures prepared in accordance with U.S. GAAP. These historical non-U.S. GAAP financial measures have been identified as applicable in each section of this report with a tabular presentation reconciling them to the most directly comparable U.S. GAAP financial measures. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.

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EXECUTIVE OVERVIEW

We are pleased that we delivered good sales and profitability in the first quarter. Thanks to our adaptability and resilience, driven by our diverse product portfolio and strong customer relationships, we successfully navigated through the first month of North American tariffs. It is encouraging that we, based on LVP data from March, outperformed global LVP despite continued significant headwinds from LVP mix shifts, particularly in China. Based on a record high number of new launches we look forward to a significantly improved sales performance in China in 2025.

Our strong profitability improvement was a result of well executed operational and commercial efforts. Our structural cost reduction program continued to generate indirect work force reductions, and direct headcount was also reduced significantly although sales grew organically. Results were also supported by reaching Q1 customer compensation agreements for increased costs related to inflation and tariffs. Our continued repurchase of shares also supported a record first quarter EPS.

After the slow end to 2024, OEM sourcing of safety products for future car models picked up in the first quarter, despite the geopolitical uncertainty.

Our navigation of the new tariff environment in the first quarter gives us confidence that it is possible to continue on that course when facing increasing or changing tariffs, although there is significant uncertainty. We continue to closely monitor and evaluate the situation, focusing on being adaptive and agile, and we consider our regionalized footprint to be a valuable source for flexibility in a challenging geopolitical environment.

The current geopolitical and business environment uncertainties make it difficult to predict 2025. However, based on the strong first quarter performance and encouraging near term call-off indications, we reiterate our 2025 guidance of an organic sales growth (Non-U.S. GAAP measure) of around 2% and an adjusted operating margin (Non-U.S. GAAP measure) of around 10-10.5%.

Our strong balance sheet and cash conversion set a solid foundation for our commitment to high shareholder returns. We are looking forward to our Capital Markets Day, on June 4, 2025.

Financial highlights in the three months period ended March 31, 2025

Change figures below compare to the same period of the previous year, except when stated otherwise.

$2,578million net sales

1.4%net sales decrease

2.2% organic sales growth - (Non-U.S. GAAP measure, see reconciliation table below)

9.9%operating margin

9.9%adjusted operating margin - (Non-U.S. GAAP measure, see reconciliation table below)

$2.14diluted EPS, 41% increase

$2.15 adjusted diluted EPS (Non-U.S. GAAP measure, see reconciliation table below), 37% increase

Key business developments in the three months period ended March 31, 2025

Change figures below compare to the same period of the previous year, except when stated otherwise.

First quarter sales increased organically (Non-U.S. GAAP measure, see reconciliation table below) by 2.2%, which was 2.6pp higher than the global LVP decrease of 0.4% (S&P Global March 2025). A strong LVP in March resulted in a stronger than expected global LVP in the quarter. Regional and customer LVP mix is estimated to have contributed to about 3pp underperformance. Compared to March S&P Global LVP data, we outperformed Europe, Americas and in Asia excl. China, mainly due to product launches and positive pricing. Our sales to domestic Chinese OEMs grew by 19%, in line with their LVP growth. As lower content vehicles in China outgrew higher content vehicles, we underperformed in China overall. We expect that our record number of new launches will significantly improve our relative sales performance in China in 2025.

Profitability improved, mainly due to organic sales growth and successful execution of cost reductions. Total headcount decreased by 6%. Impacts from the U.S. tariffs and counter tariffs in the first quarter had a negligible impact on operating profit in the quarter as we managed to pass on the costs of tariff increases to our customers. Operating income was $254 million and adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) was $255 million. Operating margin and adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below) were both 9.9% ROCE and adjusted ROCE (Non-U.S. GAAP measure, see reconciliation table below) were both 25.6%.

Free operating cash flow (Non-U.S. GAAP measure, see reconciliation table below) was in line with last year, despite that operating cash flow was slightly lower than last year. A larger working capital build up reflecting higher sales at the end of the quarter was offset by lower capex, net. The leverage ratio (Non-U.S. GAAP measure, see reconciliation table below) of 1.3x is within our target range. In the quarter, a dividend of $0.70 per share was paid and 0.5 million shares were repurchased and retired.

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Business and market condition update for the first quarter 2025

Supply Chain

In the first quarter of 2025, global LVP decreased by 0.4% year-over-year (according to S&P Global March 2025). Call-off volatility improved slightly compared to a year earlier and was about unchanged compared to the fourth quarter of 2024, although it remains higher than pre-pandemic levels. Low customer demand visibility and changes to customer call-offs with short notice, although it improved, continued to have a negative impact on our production efficiency and profitability in the quarter. We expect call-off volatility in 2025 on average to be slightly lower than it was in 2024 but still remain higher than pre-pandemic levels. However, the uncertainty regarding future changes in tariffs and trade restrictions may lead to a more negative call-off volatility development.

Inflation

In the first quarter, cost pressure from labor and other items still impacted our profitability negatively, although to a lesser degree than the first quarter of 2024. Most of the inflationary cost pressure was offset by price increases and other customer compensations in the quarter. Raw material price changes had a slightly negative impact on our profitability during the first quarter. We expect raw material costs in 2025 to increase for the full year. We expect cost pressure from general inflation to moderate in 2025, but we still expect some pressure coming mainly from labor, especially in Europe and the Americas and potentially from tariffs. The uncertainty regarding effects of tariffs and trade restrictions may lead to a more adverse inflation development. We continue to execute on productivity and cost reduction initiatives to offset these cost pressures.

Geopolitical risks and tariffs

The effects from the new tariffs imposed in the first quarter did not have a material impact on our profitability in the first quarter, as we managed to achieve customer compensations. It is our ambition and expectation that we will continue to pass on tariff costs to our customers, although there is significant uncertainty. Geopolitical uncertainties will continue to create a challenging operating environment. We also see a likelihood that there will be new or increased or changed tariffs or other related trade restrictions imposed in 2025 that may impact our operations. We continue to closely monitor the situation and are prepared to remain agile in responding to any such developments.

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RESULTS OF OPERATIONS

Overview

The following table shows some of the key ratios management uses internally to analyze the Company's current and future financial performance and core operations as well as to identify trends in the Company's financial conditions and results of operations. The Company has provided this information to investors to assist in meaningful comparisons of past and present operating results and to assist in highlighting the results of ongoing core operations. These ratios are more fully explained below and should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K and the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

The Company's management uses the Return on capital employed (ROCE) and Return on total equity (ROE) measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company's business. As used by the Company, ROCE is annualized operating income and income from equity method investments relative to average capital employed. The Company believes ROCE is a useful indicator of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company's capital employed in its business relative to that of its peers.

ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. The Company's management believes that ROE is a useful indicator of how well management creates value for its shareholders through its operating activities and its capital management.

KEY RATIOS

(Dollars in millions, except per share data)

1)Outstanding receivables relative to annualized quarterly sales.

2) Outstanding inventory relative to annualized quarterly sales.

3)Outstanding payables relative to annualized quarterly sales.

4) Gross profit relative to sales.

5) Operating income relative to sales.

6) Total equity and net debt.

7) Net debt adjusted for pension liabilities in relation to EBITDA. See tabular presentation reconciling this non-U.S. GAAP measure to U.S. GAAP below.

8) Net income relative to average total equity.

9) Operating income and income from equity method investments, relative to average capital employed.

10) Employees plus temporary, hourly personnel.

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three months period ended March 31, 2025COMPARED WITH three months period ended March 31, 2024

Consolidated Sales Development

(dollars in millions)

1) Effects from currency translations.

2) Including Corporate sales.

3) Non-U.S. GAAP measure.

Sales by product - Airbags, Steering Wheels and Other

Sales grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 1.7% in the quarter. The largest contributor to the increase was side airbags and steering wheels, followed by inflatable curtains and center airbags. This was partly offset by declines for knee airbags, driver airbags and passenger airbags.

Sales by product - Seatbelts and Other

Sales for Seatbelt Products and Other grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 3.2% in the quarter. Sales increased organically in Asia excluding China and in the Americas while it declined in China and Europe.

Sales by region

Our global organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 2.2% compared to the global LVP decrease of 0.4% (according to S&P Global, March 2025). The outperformance was mainly driven by product launches and pricing. We estimate that the regional and model LVP mix contributed to about 3pp underperformance. This was particularly accentuated in China where we estimate that changes in LVP model mix contributed around 8pp to our underperformance in China. Our organic sales growth outperformed LVP growth by 11pp in Europe, by 6.1pp in Americas and by 5.4pp in Asia excluding China, while we underperformed by 9.2pp in China.

LVP growth in China was heavily tilted to domestic OEMs with typically lower safety content. LVP for global OEMs declined by 9% while it increased by 19% for domestic OEMs. Autoliv's sales to domestic OEMs increased by 19% in the quarter. We expect that our strong order intake with domestic OEMs will lead to a record high number of new launches and significantly improve Autoliv's sales performance in China in 2025.

First quarter of 2025 organic growth1)

1) Non-U.S. GAAP measure.

Light Vehicle Production Development

Change first quarter of 2025 versus first quarter of 2024

1)Source: S&P Global, March 2025.

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Earnings

1) Non-U.S. GAAP measure, excluding effects from capacity alignments, antitrust related matters and for fiscal year 2023 the Andrews litigation settlement.

2) Net of treasury shares.

First quarter of 2025 financial development

Gross profitincreased by $36 million, and the gross margin increased by 1.6pp compared to the prior year. The main drivers behind the improvement were the structural cost reduction program combined with the improved customer call-off accuracy, which supported an improved operational efficiency with lower costs for labor, premium freight and waste and scrap, as well as positive effects from the organic sales growth. The main offsetting factor to the improvement were negative foreign currency translation effects.

S,G&Acosts increased by $13 million compared to the prior year, mainly due to $8 million in increased IT costs and minor cost increases for other items, including personnel costs and legal fees, partly offset by $5 million from positive foreign currency translation effects. S,G&A costs in relation to sales increased from 5.1% to 5.6%.

R,D&E, net costs decreased by $18 million compared to the prior year, with $8 million of the improvement coming from higher engineering income. The decrease was also supported to a smaller extent from several items, mainly $5 million from positive foreign currency translation effects and $3 million in lower personnel costs. R,D&E, net, in relation to sales decreased from 4.3% to 3.7%.

Other income (expense), net was positive $15 million, compared to negative $4 million in the same period last year. Almost all of the Other income in the quarter was from the recycled accumulated currency translation differences related to the divestment of our idled operations in Russia.

Operating income increased by $60 million compared to the prior year, due to the higher gross profit, lower costs for R,D&E, net, and higher Other income (expense), partly offset by higher costs for S,G&A, as outlined above.

Adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) increased by $56 million compared to the prior year, due to the higher gross profit, lower costs for R,D&E, net, and higher Other income (expense), partly offset by higher costs for S,G&A, as outlined above.

Financial and non-operating items, net, was negative $22 million compared to negative $20 million a year earlier. The increase was mainly due to lower interest income following lower cash holdings.

Income before taxesincreased by $59 million compared to the prior year, mainly due to the higher operating income.

Tax ratewas 28.0% compared to 27.0% in the prior year. The lower tax rate in 2024 was mainly due to discrete tax benefits for the release of tax reserves recorded in the first quarter of 2024. Discrete tax items, net, did not have a material impact to the tax rate in the first quarter of 2025 versus a decrease of 2.5pp in the corresponding quarter last year.

Earnings per share, dilutedincreased by $0.62 compared to the prior year. The main drivers were $0.52 from higher operating income and $0.13 from lower number of outstanding shares, diluted.

24

LIQUIDITY AND CAPITAL RESOURCES

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows. The Company's future contractual obligations have not changed materially from the amounts reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 20, 2025.

First quarter of 2025 development

Changes in operating working capital impacted operating cash flow by $179 million negative compared to an impact of $114 million negative in the prior year. The working capital increase in the quarter of $179 million was mainly a result of $166 million in increased receivables following the strong sales towards the end of the quarter, $46 million from lower accrued expenses and $24 million increase in other current assets. This was to some extent offset by $25 million in positive effects from accounts payables and $22 million in lower inventories. These changes are within normal variations related to timings, especially the high level of sales towards the end of the quarter.

Operating cash flow decreased by $45 million to $77 million compared to the prior year, mainly because the increase in operating working capital was larger than the increase in net income, as outlined above.

Capital expenditure, netdecreased by $47 million compared to the prior year. The level of capital expenditure, net, in relation to sales declined to 3.6% versus 5.4% a year earlier. The lower level of capital expenditure, net is mainly related to the lower activity level of footprint optimization in Europe and Americas and less capacity expansion, especially in Asia.

Free operating cash flow(Non-U.S. GAAP measure, see reconciliation table below) was negative $16 million compared to negative $18 million in the prior year. The decrease was due to the lower operating cash flow partly offset by the lower capital expenditure, net, as outlined above.

Cash conversion(Non-U.S. GAAP measure, see reconciliation table below) defined as free operating cash flow (Non-U.S. GAAP measure, see reconciliation table below) in relation to net income, was n/a in the quarter as free operating cash flow was negative.

Net debt(Non-U.S. GAAP measure, see reconciliation table below) was $1,787 million as of March 31, 2025, which was $225 million higher than a year earlier, mainly because in the last twelve months, dividends paid and share repurchases were higher than free operating cash flow.

Total equityas of March 31, 2025, decreased by $80 million compared to March 31, 2024. This was mainly due to $218 million in dividend payments, $447 million in share repurchases, including taxes, and $104 million negative currency translation effects, partly offset by positive net income of $688 million.

Leverage ratio(Non-U.S. GAAP measure, see reconciliation table below): On March 31, 2025, the Company had a leverage ratio of 1.3x compared to 1.3x on March 31, 2024, following that the 12 months trailing adjusted EBITDA (Non-U.S. GAAP measure, see reconciliation table below) increased by around $80 million while net debt per the policy (Non-U.S. GAAP measure, see reconciliation table below) increased by around $241 million.

25

NON-U.S. GAAP MEASURES

The Company believes that comparability between periods is improved through the exclusion of certain items. To assist investors in understanding the operating performance of Autoliv's business, it is useful to consider certain U.S. GAAP measures exclusive of these items.

The following tables reconciles Income before income taxes, Net income attributable to controlling interest, Capital employed, which are inputs utilized to calculate Return On Capital Employed ("ROCE"), adjusted ROCE and Return On Total Equity ("ROE"). The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-U.S. GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods. Autoliv's management uses the ROCE, adjusted ROCE and ROE measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company's business.

As used by the Company, ROCE is annualized operating income and income from equity method investments, relative to average capital employed. Adjusted ROCE is annualized operating income and income from equity method investments, relative to average capital employed as adjusted to exclude certain non-recurring items. See definitions of "annualized operating income" and "average capital employed" in footnote to the tables below. The Company believes ROCE and adjusted ROCE are useful indicators of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company's capital employed in its business relative to that of its peers.

ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. See definitions of "annualized income" "and "average total equity" in footnote to the tables below. The Company's management believes that ROE is a useful indicator of how well management creates value for its shareholders through its operating activities and its capital management.

Accordingly, the tables below reconcile from U.S. GAAP to the equivalent non-U.S. GAAP measure.

Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income"