Autoliv Inc.
Autoliv Inc.
10/23/2026 | Press release | Distributed by Public on 10/23/2026 07:42
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 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, 2025 filed with the United States Securities and Exchange Commission (the "SEC") on February 19, 2026. 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 PHLX and on NYSE American 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 other non-operating items, net," "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.
EXECUTIVE OVERVIEW
We continued to deliver well across all key areas in the third quarter. Our sales in India grew by nearly 30% and our sales to Chinese OEMs grew by more than 20%. Strong sales growth in Japan contributed to our sales in Asia exceeding China in the quarter. Globally, our organic sales performance exceeded global LVP by around 1pp, significantly outpacing LVP growth in India, Japan and with Chinese OEMs.
We continued to successfully manage geopolitical developments during the quarter, limiting the effects of tariffs, supply chain challenges and raw material price increases. Well-executed cost reduction initiatives and increased engineering income contributed to a third quarter adjusted operating margin of 9.7%.
Our cash flow remained strong, supporting our ambitious shareholder return strategy. Our leverage ratio (Non-GAAP measure) of 1.3x was almost unchanged compared with the prior quarter, despite repurchasing around 1.23 million shares for $150 million and paying dividends of $63 million in the quarter. Over the last 12 months, we have repurchased 4.14 million shares for $500 million, in addition to paying $258 million in dividends and keeping our debt leverage ratio unchanged.
To support our growing partnerships with Chinese OEMs, our innovation capabilities, global competitiveness and long term growth, we opened our second R&D center in China in the third quarter of 2026.
The business environment remains uncertain but we anticipate a strong fourth quarter supported by an increasing number of product launches and significant raw material recoveries. Throughout the year, cost headwinds have increased materially, mainly related to raw materials, logistics, the recent flooding in Thailand and lower call off accuracy since the first quarter. We have been able to offset the majority of these cost headwinds mainly through labor efficiency, material savings through Value Engineering and successful negotiations with customers and suppliers. However, the additional headwinds narrows our full year adjusted operating margin expectation to around 10.5%, the low end of our range of around 10.5-11%. We continue to expect unchanged organic sales growth (Non-GAAP measure) and an operating cash flow of around $1.2 billion.
Based on our full year guidance, we continue to expect strong cash flow for the year, which supports our ambition to provide attractive shareholder returns through share repurchases and dividends.
Finally, we would like to invite you to our 2027 Investor Day, which will take place in Shanghai, China, on April 26 and 27, 2027. It will be held in connection with the Auto Shanghai, the largest and most important auto show in the world.
Financial highlights in the three months period ended September 30, 2026
Change figures below compare to the same period of the previous year, except when stated otherwise.
$2,693 million net sales, decrease of 0.5%
1.1% organic sales decrease (Non-GAAP measure, see reconciliation table below)
9.4% operating margin, 9.7% adjusted operating margin (Non-GAAP measure, see reconciliation table below)
$2.13 diluted EPS, a 6.8% decrease
Key business developments in the three months period ended September 30, 2026
Change figures below compare to the same period of the previous year, except when stated otherwise.
•
Net sales decreased organically (Non-GAAP measure, see reconciliation table below) by 1.1%, which was 0.8pp higher than the global LVP decrease of 1.9% (Mobility Global, October 2026) mainly driven by strong performance in Asia. Regional and customer LVP mix is estimated to have impacted sales negatively by around 0.9pp. Our organic sales (Non-GAAP measure) outperformed LVP in Asia excl. China and in China, while it underperformed in EMEA and was about in line with LVP in the Americas. Our strong performance in Asia excl. China was mainly due to India, where we outperformed by 11pp, driven by continued strong market growth in safety content per vehicle, while in China, we outperformed by around 20pp with Chinese OEMs.
•
Profitability remained strong. Operating income decreased by 5.0% mainly due to the supplier settlement compensation received in the third quarter of 2025. Adjusted operating income (Non-GAAP measure, see reconciliation table below) decreased by 3.4%. Operating margin was 9.4% and adjusted operating margin (Non-GAAP measure, see reconciliation table below) was 9.7%. ROCE was 24.1% and adjusted ROCE (Non-GAAP measure, see reconciliation table below) was 24.4%.
•
Cash flow remained solid. Operating cash flow was $239 million compared to $258 million in 2025. Free operating cash flow (Non-GAAP measure, see reconciliation table below) was $124 million compared to $153 million in 2025. The leverage ratio (Non-GAAP measure, see reconciliation table below) was 1.3x. In the quarter, a dividend of $0.87 per share was paid and 1.23 million shares were repurchased and retired.
Business and market condition update
Supply Chain
Customer call-off accuracy deteriorated slightly compared to the third quarter of 2025 as well as compared to the second quarter of 2026, driven by development in China. We expect call-off volatility for the full year 2026 on average to be slightly improved compared to 2025. However, the continued significant uncertainty in the geopolitical environment and future changes in tariffs and trade restrictions may lead to more negative call-off volatility.
Raw material inflation, geopolitical risks and tariffs
Raw material price changes had a negative impact on our profitability in the third quarter, with a gross impact of around $42 million. For the full year 2026, we currently estimate a gross impact of around $120 million from higher raw material prices. We expect to be able to continue to mitigate a majority of this headwind, mainly through internal cost reductions, material mix improvements and commercial negotiations with customers and suppliers. Given the continued uncertainty in the geopolitical environment, tariffs and trade restrictions may contribute to a more adverse inflationary environment. We continue to implement productivity and cost-reduction initiatives to offset these cost pressures.
The tariffs imposed in 2025 negatively impacted our profitability in the third quarter of 2026. We achieved customer compensation for more than 80% of the tariff costs, resulting in a net negative impact after compensation of around $6 million, in line with the net impact in the third quarter of 2025. Including the dilution effect, the impact on operating margin was around 35bps negative. While it is our ambition and expectation to continue passing tariff costs on to our customers, there is significant uncertainty as future recovery levels may vary. For the full year 2026, we estimate the tariff-related dilution on operating margin will be similar to the around 20 bps experienced for full year 2025.
Ongoing geopolitical developments, including hostilities in and around the Persian Gulf, have increased uncertainty in the global economic environment. These conditions may affect supply chains, commodity prices, customer demand, and broader market stability. As a result, our current financial guidance reflects the best information available today but may change if these geopolitical dynamics materially affect our operations or the markets in which we operate.
We continue to closely monitor both geopolitical developments and the tariff policy environment in order to remain agile and to adjust our commercial and operational responses to any such developments.
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)
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
or As of September 30, |
or As of September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Receivables outstanding relative to sales, %1) |
22.5 |
% |
21.8 |
% |
- |
- |
||||||||||
|
Inventory outstanding relative to sales, %2) |
9.5 |
% |
9.6 |
% |
- |
- |
||||||||||
|
Payables outstanding relative to sales, %3) |
18.5 |
% |
17.5 |
% |
- |
- |
||||||||||
|
Gross margin, %4) |
18.4 |
% |
19.3 |
% |
18.6 |
% |
18.8 |
% |
||||||||
|
Operating margin, %5) |
9.4 |
% |
9.9 |
% |
8.3 |
% |
9.6 |
% |
||||||||
|
Capital employed6) |
4,233 |
4,331 |
- |
- |
||||||||||||
|
Net debt7) |
1,763 |
1,772 |
- |
- |
||||||||||||
|
Return on total equity, %8) |
25.0 |
% |
27.9 |
% |
20.8 |
% |
28.1 |
% |
||||||||
|
Return on capital employed, %9) |
24.1 |
% |
25.1 |
% |
21.5 |
% |
24.9 |
% |
||||||||
|
Headcount at period-end10) |
64,400 |
65,200 |
- |
- |
||||||||||||
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-GAAP measure to 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.
three months period ended September 30, 2026 COMPARED WITH three months period ended September 30, 2025
Consolidated Sales Development
(dollars in millions)
|
Three Months Ended September 30, |
Components of change in net sales |
|||||||||||||||||||
|
2026 |
2025 |
Reported |
Currency |
Organic 3) |
||||||||||||||||
|
Airbags, Steering Wheels and Other2) |
$ |
1,847 |
$ |
1,830 |
0.9 |
% |
0.7 |
% |
0.2 |
% |
||||||||||
|
Seatbelt Products and Other2) |
845 |
875 |
(3.5 |
)% |
0.5 |
% |
(3.9 |
)% |
||||||||||||
|
Total |
$ |
2,693 |
$ |
2,706 |
(0.5 |
)% |
0.6 |
% |
(1.1 |
)% |
||||||||||
|
Americas |
$ |
901 |
$ |
897 |
0.4 |
% |
3.3 |
% |
(2.9 |
)% |
||||||||||
|
EMEA |
711 |
745 |
(4.5 |
)% |
(1.6 |
)% |
(2.9 |
)% |
||||||||||||
|
Asia excl. China |
553 |
538 |
2.7 |
% |
(6.1 |
)% |
8.8 |
% |
||||||||||||
|
China |
528 |
526 |
0.4 |
% |
6.2 |
% |
(5.8 |
)% |
||||||||||||
|
Total |
$ |
2,693 |
$ |
2,706 |
(0.5 |
)% |
0.6 |
% |
(1.1 |
)% |
||||||||||
1) Effects from currency translations.
2) Including Corporate sales.
3) Non-GAAP measure.
Sales by product - Airbags, Steering Wheels and Other
Sales for Airbags, Steering Wheels and Other grew organically (Non-GAAP measure, see reconciliation table above) by 0.2% in the quarter. The largest contributors to the increase were side airbags, center airbags, driver airbags and steering wheels, partly offset by declines for passenger airbags, inflatable curtains and knee airbags.
Sales by product - Seatbelt Products and Other
Sales for Seatbelt Products and Other declined organically (Non-GAAP measure, see reconciliation table above) by 3.9% in the quarter. Sales decreased organically in China, Americas and EMEA while they increased in Asia excluding China.
Sales by region
Our global organic sales (Non-GAAP measure, see reconciliation table above) decreased by 1.1% compared to the global LVP decrease of 1.9% (according to Mobility Global, October 2026). The relative outperformance was positively impacted by product launches but negatively impacted by regional and model LVP mix development (around 90bps). Our organic sales growth (Non-GAAP measure) outperformed LVP growth by 2.5pp in Asia excluding China and by 1.1pp in China. We underperformed LVP in EMEA by 3.7pp. Performance in the Americas overall was in line with LVP, while North America delivered stronger results, outperforming LVP by close to 2 percentage points. LVP in China declined by 6.9%, with Global OEMs LVP declining by 25% and Chinese OEMs LVP growing by 1.4%. Autoliv's sales to domestic OEMs increased organically by around 21% while our sales to global OEMs decreased by around 29%. Chinese OEMs accounted for 58% of our sales in China in the quarter, compared to around 46% a year ago. We expect continued strong 2026 sales performance with domestic OEMs. Our strong sales growth in Asia excluding China was mainly due to 29% organic sales growth in India, reflecting strong LVP growth and the trend of increased safety content in vehicles in India.
Third quarter of 2026 organic growth1)
|
Americas |
EMEA |
Asia excl. China |
China |
Global |
||||||
|
Autoliv |
(2.9)% |
(2.9)% |
8.8% |
(5.8)% |
(1.1)% |
|||||
|
Main growth drivers |
Honda, Subaru, Toyota |
Mercedes, JLR, |
Suzuki, Indian OEM, Mazda |
Chery, Geely, Great Wall |
Mercedes, Chery, Suzuki |
|||||
|
Main decline drivers |
Ford, Stellantis, |
VW, BMW, Stellantis |
Subaru, Mitsubishi, Ford |
Honda,VW, BMW |
VW, Ford, Stellantis |
1) Non-GAAP measure.
Light Vehicle Production Development
Change third quarter of 2026 versus third quarter of 2025
|
Americas |
EMEA |
Asia excl. China |
China |
Global |
||||||
|
LVP1) |
(3.0)% |
0.8 % |
6.4 % |
(6.9)% |
(1.9)% |
1) Source: Mobility Global, October 2026.
Earnings
|
Three Months Ended September 30, |
||||||||||||
|
(Dollars in millions, except per share data) |
2026 |
2025 |
Change |
|||||||||
|
Net Sales |
$ |
2,693 |
$ |
2,706 |
(0.5 |
)% |
||||||
|
Gross profit |
496 |
522 |
(5.0 |
)% |
||||||||
|
% of sales |
18.4 |
% |
19.3 |
% |
(0.9 |
)pp |
||||||
|
S, G&A |
(138 |
) |
(137 |
) |
0.9 |
% |
||||||
|
% of sales |
(5.1 |
)% |
(5.1 |
)% |
(0.1 |
)pp |
||||||
|
R, D&E, net |
(99 |
) |
(117 |
) |
(16 |
)% |
||||||
|
% of sales |
(3.7 |
)% |
(4.3 |
)% |
0.7 |
pp |
||||||
|
Other income (expense), net |
(5 |
) |
(1 |
) |
559 |
% |
||||||
|
Operating income |
254 |
267 |
(5.0 |
)% |
||||||||
|
% of sales |
9.4 |
% |
9.9 |
% |
(0.4 |
)pp |
||||||
|
Adjusted operating income1) |
262 |
271 |
(3.4 |
)% |
||||||||
|
% of sales |
9.7 |
% |
10.0 |
% |
(0.3 |
)pp |
||||||
|
Financial and non-operating items, net |
(24 |
) |
(27 |
) |
(13 |
)% |
||||||
|
Income before taxes |
230 |
240 |
(4.0 |
)% |
||||||||
|
Income taxes |
(75 |
) |
(65 |
) |
16 |
% |
||||||
|
Tax rate |
32.5 |
% |
26.9 |
% |
5.6 |
pp |
||||||
|
Net income |
155 |
175 |
(11 |
)% |
||||||||
|
Earnings per share, diluted2) |
2.13 |
2.28 |
(6.8 |
)% |
||||||||
|
Adjusted earnings per share, diluted1,2) |
2.19 |
2.32 |
(5.7 |
)% |
||||||||
1) Non-GAAP measure, excluding effects from capacity alignments and antitrust related matters.
2) Net of treasury shares.
Third quarter of 2026 financial development
Gross profit decreased by $26 million, and gross margin decreased by 0.9pp compared to the prior year. The decrease in gross profit was mainly attributable to the $13 million gross profit impact of the supplier settlement compensation reported in the third quarter of 2025, lower net sales and higher logistics costs.
S,G&A costs increased by $1 million compared to the prior year, mainly due to slightly higher IT expenses and professional services costs partly offset by slightly lower personnel costs. S,G&A costs in relation to sales were unchanged at 5.1%.
R,D&E, net, costs decreased by $18 million compared to the prior year, mainly due to $26 million of higher engineering income related to timing effects, partly offset by adverse effects from foreign currency translation, IT expenses and personnel costs. R,D&E, net, in relation to sales decreased from 4.3% to 3.7%.
Other income (expense), net, was negative $5 million, compared to negative $1 million in the same period last year. The negative $5 million in the third quarter of 2026 consisted mainly of capacity alignment costs related to our restructuring activities in Türkiye.
Operating income decreased by $13 million compared to the prior year, mainly due to lower gross profit and higher capacity alignment costs, partly offset by lower R,D&E, net, costs, as outlined above.
Adjusted operating income (Non-GAAP measure, see reconciliation table below) decreased by $9 million compared to the prior year, mainly due to the lower gross profit, partly offset by lower R,D&E, net, costs, as outlined above.
Financial and non-operating items, net, was a negative $24 million compared to a negative $27 million a year earlier. The improvement was mainly due to lower costs for non-operating items mainly related to positive foreign currency translation effects.
Income before taxes decreased by $10 million compared to the prior year, mainly due to lower operating income, partly offset by lower costs for financial and non-operating items, net, as outlined above.
Tax rate was 32.5% compared to 26.9% in the prior year. Discrete tax items, net, had an unfavorable impact of 4.9pp in the third quarter of 2026, while discrete tax items, net, had a favorable impact of 1.3pp in the third quarter of 2025. Discrete tax items recorded in the third quarter of 2026 primarily related to negative tax impacts from the closure of tax audits during the quarter.
Earnings per share, diluted decreased by $0.15 compared to the prior year. The main drivers were negative impacts of $0.16 from higher taxes and $0.13 from lower operating income partly offset by $0.11 from a lower number of outstanding shares, diluted and $0.05 from lower financial and non-operating items.
nine months period ended September 30, 2026 COMPARED WITH nine months period ended September 30, 2025
Consolidated Sales Development
(dollars in millions)
|
Nine Months Ended September 30, |
Components of change in net sales |
|||||||||||||||||||
|
2026 |
2025 |
Reported |
Currency |
Organic 3) |
||||||||||||||||
|
Airbags, Steering Wheels and Other2) |
$ |
5,617 |
$ |
5,395 |
4.1 |
% |
2.8 |
% |
1.3 |
% |
||||||||||
|
Seatbelt Products and Other2) |
2,632 |
2,603 |
1.1 |
% |
3.1 |
% |
(2.0 |
)% |
||||||||||||
|
Total |
$ |
8,249 |
$ |
7,998 |
3.1 |
% |
2.9 |
% |
0.2 |
% |
||||||||||
|
Nine Months Ended September 30, |
Components of change in net sales |
|||||||||||||||||||
|
2026 |
2025 |
Reported |
Currency |
Organic 3) |
||||||||||||||||
|
Americas |
$ |
2,673 |
$ |
2,639 |
1.3 |
% |
5.1 |
% |
(3.8 |
)% |
||||||||||
|
EMEA |
2,378 |
2,337 |
1.8 |
% |
4.1 |
% |
(2.3 |
)% |
||||||||||||
|
Asia excl. China |
1,655 |
1,572 |
5.3 |
% |
(5.1 |
)% |
10 |
% |
||||||||||||
|
China |
1,542 |
1,450 |
6.4 |
% |
5.9 |
% |
0.5 |
% |
||||||||||||
|
Total |
$ |
8,249 |
$ |
7,998 |
3.1 |
% |
2.9 |
% |
0.2 |
% |
||||||||||
1) Effects from currency translations.
2) Including Corporate sales.
3) Non-GAAP measure.
Sales by product - Airbags, Steering Wheels and Other
Sales for Airbags, Steering Wheels and Other grew organically (Non-GAAP measure, see reconciliation table above) by 1.3% in the period. The largest contributors to the increase were side airbags and center airbags, followed by driver airbags, partly offset by declines for passenger airbags, steering wheels and inflatable curtains.
Sales by product - Seatbelt Products and Other
Sales for Seatbelt Products and Other declined organically (Non-GAAP measure, see reconciliation table above) by 2.0% in the period. Sales decreased organically in Americas, China and EMEA while they increased in Asia excluding China.
Sales by region
Our global organic sales (Non-GAAP measure, see reconciliation table above) increased by 0.2% compared to the global LVP decrease of 0.9% (according to Mobility Global, October 2026). The relative outperformance was mainly driven by new product launches. Our organic sales growth outperformed LVP growth by 6.9pp in China and by 4.3pp in Asia excluding China. We underperformed LVP in EMEA by 3.7pp and by 3.5pp in Americas, impacted mainly by negative mix due to high LVP growth in lower content South America and a lower content on some replacement models. LVP in China declined by 6.3%, with Global OEMs LVP declining by 16% and Chinese OEMs LVP decreased by 1.6%. Autoliv's sales to domestic OEMs increased organically by around 31% while our sales to global OEMs decreased by around 21%. Chinese OEMs accounted for 53% of our sales in China in the first nine months of 2026, compared to 41% a year ago. Our strong sales growth in Asia excluding China was mainly due to 34% organic sales growth in India, reflecting strong LVP growth but mainly the trend of increased safety content in vehicles in India.
First nine months of 2026 organic growth1)
|
Americas |
EMEA |
Asia excl. China |
China |
Global |
||||||
|
Autoliv |
(3.8)% |
(2.3)% |
10 % |
0.5% |
0.2 % |
|||||
|
Main growth drivers |
Subaru, Honda, Stellantis |
Mercedes, EV OEM, Renault |
Suzuki, Indian OEM, Mazda |
Chery, Nio, Geely |
Suzuki, Chery, Nio |
|||||
|
Main decline drivers |
Ford, Hyundai, |
VW, Stellantis, BMW |
Subaru, Ford, Mitsubishi |
VW, Honda, Mercedes |
VW, Ford, BMW |
1) Non-GAAP measure.
Light Vehicle Production Development
Change first nine months of 2026 versus first nine months of 2025
|
Americas |
EMEA |
Asia excl. China |
China |
Global |
||||||
|
LVP1) |
(0.2)% |
1.4 % |
6.1 % |
(6.3)% |
(0.9)% |
1) Source: Mobility Global, October 2026.
Earnings
|
Nine Months Ended September 30, |
|||||||||||
|
(Dollars in millions, except per share data) |
2026 |
2025 |
Change |
||||||||
|
Net Sales |
$ |
8,249 |
$ |
7,998 |
3.1 |
% |
|||||
|
Gross profit |
1,531 |
1,502 |
2.0 |
% |
|||||||
|
% of sales |
18.6 |
% |
18.8 |
% |
(0.2 |
)pp |
|||||
|
S, G&A |
(437 |
) |
(427 |
) |
2.4 |
% |
|||||
|
% of sales |
(5.3 |
)% |
(5.3 |
)% |
0.0 |
pp |
|||||
|
R, D&E, net |
(341 |
) |
(319 |
) |
6.8 |
% |
|||||
|
% of sales |
(4.1 |
)% |
(4.0 |
)% |
(0.1 |
)pp |
|||||
|
Other income (expense), net |
(70 |
) |
13 |
n/a |
|||||||
|
Operating income |
683 |
769 |
(11 |
)% |
|||||||
|
% of sales |
8.3 |
% |
9.6 |
% |
(1.3 |
)pp |
|||||
|
Adjusted operating income1) |
776 |
777 |
(0.1 |
)% |
|||||||
|
% of sales |
9.4 |
% |
9.7 |
% |
(0.3 |
)pp |
|||||
|
Financial and non-operating items, net |
(97 |
) |
(76 |
) |
28 |
% |
|||||
|
Income before taxes |
586 |
693 |
(15 |
)% |
|||||||
|
Income taxes |
(188 |
) |
(183 |
) |
3.0 |
% |
|||||
|
Tax rate |
32.2 |
% |
26.4 |
% |
5.8 |
pp |
|||||
|
Net income |
398 |
510 |
(22 |
)% |
|||||||
|
Earnings per share, diluted2) |
5.36 |
6.59 |
(19 |
)% |
|||||||
|
Adjusted earnings per share, diluted1,2) |
6.67 |
6.67 |
(0.1 |
)% |
|||||||
1) Non-GAAP measure, excluding effects from capacity alignments and antitrust related matters.
2) Net of treasury shares.
First nine months of 2026 financial development
Gross profit increased by $30 million while gross margin decreased by 0.2pp compared to the prior year. The drivers behind the gross profit improvement were mainly positive effects of higher sales and positive currency translation effects. This was partly offset by $25 million impact from a supplier compensation booked in the third quarter of 2025 which was reversed in the second quarter of 2026, and asset impairment related to the restructuring activities in Türkiye.
S,G&A costs increased by $10 million compared to the prior year, mainly due to negative foreign currency translation effects and higher personnel costs, partly offset by the revision of an estimated credit loss reserve. S,G&A costs in relation to sales were unchanged at 5.3%.
R,D&E, net, costs increased by $22 million compared to the prior year, mainly due to higher personnel costs and negative foreign currency translation effects, partly offset by higher engineering income. R,D&E, net, in relation to sales increased from 4.0% to 4.1%.
Other income (expense), net, was negative $70 million, compared to positive $13 million in the same period last year. The increase in costs was mainly due to higher capacity alignment costs related to restructuring activities in Türkiye.
Operating income decreased by $86 million compared to the prior year, mainly due to higher capacity alignment costs related to restructuring activities in Türkiye, higher R,D&E, net, costs and higher S,G&A costs, partly offset by higher gross profit as outlined above.
Adjusted operating income (Non-GAAP measure, see reconciliation table below) decreased by $1 million compared to the prior year, due to the higher costs for R,D&E, net and S,G&A offset by the higher gross profit, as outlined above.
Financial and non-operating items, net, was negative $97 million compared to negative $76 million a year earlier. The increase in costs was mainly due to higher non-operating items, mainly related to costs associated with restructuring activities in Türkiye and Mexico.
Income before taxes decreased by $107 million compared to the prior year, mainly due to lower operating income and higher costs for financial and non-operating items, net, as outlined above.
Tax rate was 32.2% compared to 26.4% in the prior year. Discrete tax items, net, for the period had an unfavorable impact of 4.2pp. Discrete tax items, net, for the prior year period had a favorable impact of 1.8pp. Discrete tax items recorded in the first nine months of 2026 primarily related to negative tax impacts from closure of tax audits during the third quarter and negative tax impacts recorded in the first half year from costs recorded for the capacity alignment activities for Autoliv's manufacturing operations in Türkiye.
Earnings per share, diluted decreased by $1.23 compared to the prior year. The main drivers were negative impacts of $0.82 from lower operating income, $0.43 from higher tax and $0.18 from financial and non-operating items, partly offset by $0.22 from a lower number of outstanding shares, diluted.
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, 2025 filed with the SEC on February 19, 2026.
Third quarter of 2026 development
Changes in operating working capital had a $45 million negative impact on operating cash flow compared to a negative impact of $53 million in the prior year. The $45 million increase in operating working capital resulted mainly from $71 million in higher inventories and $21 million from receivables, net, partly offset by $52 million from accounts payable and accrued liabilities.
Operating cash flow decreased by $19 million to $239 million compared to the prior year, mainly because of lower net income, partly offset by a smaller increase in operating working capital compared to last year.
Capital expenditure, net, increased by $9 million compared to the prior year. The level of capital expenditure, net, in relation to sales increased to 4.3% versus 3.9% a year earlier.
Free operating cash flow (Non-GAAP measure, see reconciliation table below) was positive $124 million compared to positive $153 million in the prior year. The decrease was due to lower operating cash flow and higher capital expenditure, net, as outlined above.
Cash conversion (Non-GAAP measure, see reconciliation table below) defined as free operating cash flow (Non-GAAP measure) in relation to net income, was 80% compared to 87% a year earlier.
Net debt (Non-GAAP measure, see reconciliation table below) was $1,763 million as of September 30, 2026, which was $9 million lower than a year earlier.
Total equity as of September 30, 2026, decreased by $89 million compared to September 30, 2025. This was mainly due to $505 million in share repurchases, including taxes, and $258 million in dividend payments, partly offset by net income of $623 million.
Leverage ratio (Non-GAAP measure, see reconciliation table below): On September 30, 2026, the Company had a leverage ratio of 1.3x compared to 1.3x on September 30, 2025, as the 12 months trailing adjusted EBITDA (Non-GAAP measure, see reconciliation table below) increased by $26 million while net debt (Non-GAAP measure, see reconciliation table below) per the policy decreased by $1 million. Our target is to have a leverage ratio not higher than 1.5x.
First nine months of 2026 development
Operating cash flow decreased by $15 million to $598 million compared to the prior year, mainly because the lower net income was almost offset by a smaller increase in working capital and higher depreciation.
Capital expenditure, net, decreased by $20 million compared to the prior year. The level of capital expenditure, net, in relation to sales was 3.6% versus 3.9% a year earlier.
Free operating cash flow (Non-GAAP measure, see reconciliation table below) was positive $305 million compared to positive $300 million in the prior year. The increase was mainly due to the lower level of capital expenditure, net.
Cash conversion (Non-GAAP measure, see reconciliation table below) defined as free operating cash flow (Non-GAAP measure) in relation to net income, was 77% compared to 59% a year earlier as free operating cash flow increased while net income decreased.
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 GAAP measures exclusive of these items.
The following tables reconcile Income before income taxes, Net income attributable to controlling interest and Capital employed, which are inputs utilized to calculate Return On Capital Employed ("ROCE"), adjusted ROCE, Return On Total Equity ("ROE"), and adjusted ROE. The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-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, ROE and adjusted 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. Adjusted ROE is annualized income (loss) relative to average total equity for the periods presented as adjusted to exclude certain non-recurring items. The Company's management believes that ROE and adjusted ROE are useful indicators of how well management creates value for its shareholders through its operating activities and its capital management.
Accordingly, the tables below reconcile from GAAP to the equivalent Non-GAAP measure.
Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
(Dollars in millions) |
2026 |
2025 |
2026 |
2025 |
|||||||||
|
Operating income (GAAP) |
$ |
254 |
$ |
267 |
$ |
683 |
$ |
769 |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments |
8 |
2 |
93 |
6 |
|||||||||
|
Antitrust related items |
0 |
2 |
1 |
3 |
|||||||||
|
Total Non-GAAP adjustments to operating income |
8 |
4 |
93 |
8 |
|||||||||
|
Adjusted Operating income (Non-GAAP) |
$ |
262 |
$ |
271 |
$ |
776 |
$ |
777 |
|||||
Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
2026 |
2025 |
2026 |
2025 |
||||||||||
|
Operating margin (GAAP) |
9.4 |
% |
9.9 |
% |
8.3 |
% |
9.6 |
% |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments |
0.3 |
% |
0.1 |
% |
1.1 |
% |
0.1 |
% |
|||||
|
Antitrust related items |
0.0 |
% |
0.1 |
% |
0.0 |
% |
0.0 |
% |
|||||
|
Total Non-GAAP adjustments to operating margin |
0.3 |
% |
0.1 |
% |
1.1 |
% |
0.1 |
% |
|||||
|
Adjusted Operating margin (Non-GAAP) |
9.7 |
% |
10.0 |
% |
9.4 |
% |
9.7 |
% |
|||||
Reconciliation of GAAP measure "Other non-operating items, net" to Non-GAAP measure "Adjusted Other non-operating items, net"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
(Dollars in millions) |
2026 |
2025 |
2026 |
2025 |
|||||||||
|
Other non-operating items, net (GAAP) |
$ |
(2 |
) |
$ |
(7 |
) |
$ |
(30 |
) |
$ |
(10 |
) |
|
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - non-operating1) |
(2 |
) |
- |
20 |
0 |
||||||||
|
Total Non-GAAP adjustments to Other non-operating items, net |
(2 |
) |
- |
20 |
0 |
||||||||
|
Adjusted Other non-operating items, net (Non-GAAP) |
$ |
(5 |
) |
$ |
(7 |
) |
$ |
(10 |
) |
$ |
(10 |
) |
|
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|||||||||||||
Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income taxes"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
(Dollars in millions) |
2026 |
2025 |
2026 |
2025 |
|||||||||
|
Income before income taxes (GAAP) |
$ |
230 |
$ |
240 |
$ |
586 |
$ |
693 |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - operating |
8 |
2 |
93 |
6 |
|||||||||
|
Capacity alignments - non-operating1) |
(2 |
) |
- |
20 |
- |
||||||||
|
Antitrust related items |
0 |
2 |
1 |
3 |
|||||||||
|
Total Non-GAAP adjustments to Income before income taxes |
5 |
4 |
113 |
8 |
|||||||||
|
Adjusted Income before income taxes (Non-GAAP) |
$ |
236 |
$ |
244 |
$ |
700 |
$ |
702 |
|||||
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|||||||||||||
Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
(Dollars in millions) |
2026 |
2025 |
2026 |
2025 |
|||||||||
|
Net income (GAAP) |
$ |
155 |
$ |
175 |
$ |
398 |
$ |
510 |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - operating |
8 |
2 |
93 |
6 |
|||||||||
|
Capacity alignments - non-operating1) |
(2 |
) |
- |
20 |
- |
||||||||
|
Antitrust related items |
0 |
2 |
1 |
3 |
|||||||||
|
Tax on Non-GAAP adjustments |
(1 |
) |
(1 |
) |
(16 |
) |
(2 |
) |
|||||
|
Total Non-GAAP adjustments to Net income |
4 |
3 |
97 |
7 |
|||||||||
|
Adjusted Net income (Non-GAAP) |
$ |
160 |
$ |
178 |
$ |
495 |
$ |
517 |
|||||
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|||||||||||||
Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net income attributable to controlling interest"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
(Dollars in millions) |
2026 |
2025 |
2026 |
2025 |
|||||||||
|
Net income attributable to controlling interest (GAAP) |
$ |
155 |
$ |
175 |
$ |
397 |
$ |
509 |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - operating |
8 |
2 |
93 |
6 |
|||||||||
|
Capacity alignments - non-operating1) |
(2 |
) |
- |
20 |
- |
||||||||
|
Antitrust related items |
0 |
2 |
1 |
3 |
|||||||||
|
Tax on Non-GAAP adjustments |
(1 |
) |
(1 |
) |
(16 |
) |
(2 |
) |
|||||
|
Total non-GAAP adjustments to Net income attributable to controlling interest |
4 |
3 |
97 |
7 |
|||||||||
|
Adjusted Net income attributable to controlling interest (Non-GAAP) |
$ |
159 |
$ |
178 |
$ |
494 |
$ |
516 |
|||||
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|||||||||||||
Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share - diluted"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
(Per share data) |
2026 |
2025 |
2026 |
2025 |
|||||||||
|
Earnings per share - diluted (GAAP) |
$ |
2.13 |
$ |
2.28 |
$ |
5.36 |
$ |
6.59 |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - operating |
0.10 |
0.03 |
1.25 |
0.07 |
|||||||||
|
Capacity alignments - non-operating1) |
(0.03 |
) |
- |
0.27 |
- |
||||||||
|
Antitrust related items |
0.00 |
0.02 |
0.01 |
0.04 |
|||||||||
|
Tax on Non-GAAP adjustments |
(0.01 |
) |
(0.01 |
) |
(0.22 |
) |
(0.02 |
) |
|||||
|
Total Non-GAAP adjustments to Earnings per share - diluted |
0.06 |
0.04 |
1.31 |
0.09 |
|||||||||
|
Adjusted Earnings per share - diluted (Non-GAAP) |
$ |
2.19 |
$ |
2.32 |
$ |
6.67 |
$ |
6.67 |
|||||
|
Weighted average number of shares outstanding - diluted |
72.9 |
76.7 |
74.1 |
77.3 |
|||||||||
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|||||||||||||
Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital Employed"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
2026 |
2025 |
2026 |
2025 |
||||||||||
|
Return on capital employed1) (GAAP) |
24.1 |
% |
25.1 |
% |
21.5 |
% |
24.9 |
% |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - operating |
0.3 |
% |
0.2 |
% |
2.7 |
% |
0.2 |
% |
|||||
|
Antitrust related items |
0.0 |
% |
0.1 |
% |
0.0 |
% |
0.1 |
% |
|||||
|
Total Non-GAAP adjustments to Return on capital employed1) |
0.3 |
% |
0.3 |
% |
2.7 |
% |
0.3 |
% |
|||||
|
Adjusted Return on capital employed1) (Non-GAAP) |
24.4 |
% |
25.5 |
% |
24.2 |
% |
25.2 |
% |
|||||
|
Annualized adjustment2) on Return on capital employed1) |
$ |
32 |
$ |
15 |
$ |
125 |
$ |
11 |
|||||
|
1) Annualized operating income and income from equity method investments, relative to average capital employed. The average capital employed amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period. |
|||||||||||||
|
2) The quarterly annualized adjustment to the operating income and income from equity method investments amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the operating income and income from equity method investments amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four. |
|||||||||||||
Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity"
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
2026 |
2025 |
2026 |
2025 |
||||||||||
|
Return on total equity1) (GAAP) |
25.0 |
% |
27.9 |
% |
20.8 |
% |
28.1 |
% |
|||||
|
Non-GAAP adjustments: |
|||||||||||||
|
Capacity alignments - operating |
0.4 |
% |
0.3 |
% |
4.4 |
% |
0.3 |
% |
|||||
|
Capacity alignments - non-operating2) |
(0.1 |
)% |
- |
0.9 |
% |
- |
|||||||
|
Antitrust related items |
0.0 |
% |
0.2 |
% |
0.0 |
% |
0.1 |
% |
|||||
|
Tax on Non-GAAP adjustments |
(0.1 |
)% |
(0.1 |
)% |
(0.8 |
)% |
(0.1 |
)% |
|||||
|
Total Non-GAAP adjustments to Return on total equity1) |
0.2 |
% |
0.4 |
% |
4.6 |
% |
0.3 |
% |
|||||
|
Adjusted Return on total equity1) (Non-GAAP) |
25.2 |
% |
28.3 |
% |
25.4 |
% |
28.4 |
% |
|||||
|
Annualized adjustment3) on Return on total equity1) |
$ |
18 |
$ |
12 |
$ |
130 |
$ |
9 |
|||||
|
1) Annualized net income relative to average total equity. The average total equity amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period. |
|||||||||||||
|
2) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|||||||||||||
|
3) The quarterly annualized adjustment to net income amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the net income amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four. |
|||||||||||||
Autoliv from time to time enters into "debt-related derivatives" (DRDs) as a part of its debt management and as part of efficiently managing the Company's overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of the Company's debt, therefore we provide this non-U.S. GAAP measure. DRDs are fair value adjustments to the carrying value of the underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values.
Reconciliation of GAAP financial measure to non-GAAP measure "Net debt"
(Dollars in millions)
|
September 30, 2026 |
June 30, 2026 |
September 30, 2025 |
||||||||||
|
Short-term debt |
$ |
251 |
$ |
350 |
$ |
654 |
||||||
|
Long-term debt |
1,683 |
1,688 |
1,374 |
|||||||||
|
Total debt |
1,934 |
2,037 |
2,027 |
|||||||||
|
Cash and cash equivalents |
(197 |
) |
(377 |
) |
(225 |
) |
||||||
|
Debt issuance cost/Debt-related derivatives, net |
26 |
34 |
(30 |
) |
||||||||
|
Net debt (non-GAAP) |
$ |
1,763 |
$ |
1,695 |
$ |
1,772 |
||||||
The non-GAAP measure "Net debt" is also used in the non-GAAP measure "Leverage ratio". Management uses the non-GAAP measure "Leverage Ratio" to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. It is Autoliv's target to operate with a leverage ratio (sum of net debt plus pension liabilities divided by adjusted EBITDA) of 1.5x or below. For details and calculation of leverage ratio (non-GAAP measure), refer to the table below.
Calculation of non-GAAP measure "Leverage ratio"
(Dollars in millions)
|
(Dollars in millions) |
September 30, 2026 |
June 30, 2026 |
September 30, 2025 |
|||||||||
|
Net debt1) (non-GAAP) |
$ |
1,763 |
$ |
1,695 |
$ |
1,772 |
||||||
|
Pension liabilities |
175 |
180 |
167 |
|||||||||
|
Net debt per the Policy (non-GAAP) |
1,938 |
1,874 |
1,939 |
|||||||||
|
Net income2) |
623 |
643 |
754 |
|||||||||
|
Income taxes 2) |
256 |
246 |
261 |
|||||||||
|
Interest expense, net2,3) |
92 |
93 |
94 |
|||||||||
|
Other non-operating items, net2) |
35 |
40 |
20 |
|||||||||
|
Income from equity method investments2) |
(4 |
) |
(5 |
) |
(6 |
) |
||||||
|
Depreciation and amortization of intangibles2) |
437 |
434 |
397 |
|||||||||
|
Capacity alignments2) |
110 |
104 |
(1 |
) |
||||||||
|
Antitrust related items2) |
1 |
2 |
5 |
|||||||||
|
Other items2) |
- |
- |
- |
|||||||||
|
EBITDA per the Policy (Adjusted EBITDA) (non-GAAP) |
$ |
1,550 |
$ |
1,556 |
$ |
1,524 |
||||||
|
Leverage ratio (non-GAAP) |
1.3 |
1.2 |
1.3 |
|||||||||
1) Net debt (non-U.S. GAAP measure) is short- and long-term debt and debt-related derivatives, less cash and cash equivalents.
2) Latest 12-months.
3) Interest expense, net including cost for extinguishment of debt, if any, less interest income.
Management uses the non-GAAP measure "free operating cash flow" to analyze the amount of cash flow being generated by the Company's operations after capital expenditure, net. This measure indicates the Company's cash flow generation level that enables strategic value creation options such as dividends or acquisitions. For details on the calculation of free operating cash flow, see the table below. Management uses the non-GAAP measure "cash conversion" to analyze the proportion of net income that is converted into free operating cash flow. The measure is a tool to evaluate how efficiently the Company utilizes its resources. For details on cash conversion, see the table below.
Reconciliation of GAAP measure "Operating cash flow" to non-GAAP measures "Free operating cash flow" and "Cash conversion"
(Dollars in millions)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Net income |
$ |
155 |
$ |
175 |
$ |
398 |
$ |
510 |
||||||||
|
Changes in operating working capital |
(45 |
) |
(53 |
) |
(154 |
) |
(217 |
) |
||||||||
|
Depreciation and amortization |
107 |
103 |
328 |
299 |
||||||||||||
|
Gain on divestiture of property |
- |
- |
0 |
(6 |
) |
|||||||||||
|
Other, net |
22 |
32 |
26 |
26 |
||||||||||||
|
Operating cash flow (GAAP) |
239 |
258 |
598 |
613 |
||||||||||||
|
Expenditures for property, plant and equipment |
(115 |
) |
(106 |
) |
(295 |
) |
(323 |
) |
||||||||
|
Proceeds from sale of property, plant and equipment |
1 |
1 |
2 |
10 |
||||||||||||
|
Capital expenditure, net1) |
(115 |
) |
(106 |
) |
(293 |
) |
(313 |
) |
||||||||
|
Free operating cash flow2) (non-GAAP) |
$ |
124 |
$ |
153 |
$ |
305 |
$ |
300 |
||||||||
|
Cash conversion3) (non-GAAP) |
80 |
% |
87 |
% |
77 |
% |
59 |
% |
||||||||
|
1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment. |
||||||||||||||||
|
2) Operating cash flow less Capital expenditures, net. |
||||||||||||||||
|
3) Free operating cash flow relative to Net income. |
||||||||||||||||
Headcount
|
September 30, 2026 |
June 30, 2026 |
September 30, 2025 |
||||||||||
|
Total headcount |
64,400 |
63,500 |
65,200 |
|||||||||
|
Whereof: |
||||||||||||
|
Direct personnel in manufacturing |
47,000 |
46,200 |
47,900 |
|||||||||
|
Indirect personnel |
17,400 |
17,300 |
17,300 |
|||||||||
|
Temporary personnel |
13 |
% |
11 |
% |
9 |
% |
||||||
As of September 30, 2026, total headcount (Full Time Equivalent) decreased by around 800, or 1.3%, compared to a year earlier. The indirect workforce increased by around 100, or 0.6%. The direct workforce decreased by approximately 1,000, or 2.0%, reflecting continued good productivity development. Compared to June 30, 2026, total headcount (Full Time Equivalent) increased by around 900, or 1.4%. Indirect headcount increased by around 100, while direct headcount increased by approximately 800.
Full year 2026 guidance
In addition to the assumptions below and in our business and market condition update above, our full year 2026 guidance is based on our customer call-offs and the achievement of our targeted cost compensation adjustments with our customers, including no material changes to tariffs or trade restrictions, as compared to what is in effect as of October 15, 2026, as well as no significant changes in the macro-economic environment, changes in customer call-off volatility or significant supply chain disruptions.
|
Full year 2026 Guidance |
|
|
Organic sales growth |
Around 0% |
|
Adjusted operating margin 1) |
Around 10.5% |
|
Operating cash flow 2) |
Around $1.2 billion |
|
Capital expenditures, net % of sales |
Around 4% |
|
1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. |
|
|
2) Excluding unusual items. |
|
|
Full year 2026 Assumptions |
|
|
LVP growth |
Around 2% negative |
|
Foreign currency impact on net sales |
Around 2.5% positive |
|
Tax rate3) |
Around 30% |
|
3) Excluding unusual tax items. |
|
This report includes content supplied by Mobility Global; Copyright © Light Vehicle Production Forecast, January, April, July and October 2026. All rights reserved.
The forward-looking non-GAAP financial measures above are provided on a non-GAAP basis. The Company has not provided a GAAP reconciliation of these measures because items that impact these measures, such as costs and gains related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and the Company is unable to determine the probable significance of the unavailable information.
Other Items
•
On September 8, 2026, Autoliv announced it is advancing the development of virtual testing through its Human Body Model (HBM) Safety Suite. The platform is designed to support the development of safer vehicles, with Toyota as the first customer to evaluate its capabilities.
•
On October 2, 2026, Autoliv announced the appointments of Natalie Draisin and Thomas Manfred Müller to its Research Advisory Board. Natalie Draisin serves as Director of the North American Office and United Nations Representative at FIA Foundation and is an External Affiliate at the Johns Hopkins Bloomberg School of Public Health.Thomas Manfred Müller, PhD, is a Board Member, Advisor and Business Angel with extensive international experience across leadership and executive roles at Audi, BMW, Volvo Cars, and Volkswagen Group.
•
Autoliv today published on its website its Green Financing Framework which has been updated to incorporate the latest market practices and standards, and to support the long-term commitment of the Company to integrate sustainability across the entire organization.
•
In the third quarter of 2026, Autoliv repurchased and retired 1.23 million shares of common stock at an average price of $121.69 per share under the Autoliv 2029 stock repurchase program. Under this program, repurchases may be made from July 1, 2025 through December 31, 2029. The maximum value of aggregate repurchases under this program is $2.5 billion. Repurchases of stock may be made directly on the NYSE.
•
Autoliv invites investors, analysts and journalists to an Investor Day in Shanghai, China. It will take place on April 26 and 27, 2027, with management presentations, site visits and a full day at the world's leading auto show, Auto Shanghai 2027. Focus will be on global growth, innovations and key trends shaping China's automotive industry and Autoliv's strategy for success in the Chinese market. This includes how we strengthen our relationships with leading Chinese OEMs in China and overseas. Further details regarding agenda and registration will be provided at a later stage.
Autoliv Inc. published this content on October 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2026 at 13:42 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]