Autoliv, Inc. Q1 FY2026 earnings call

First quarter exceeded expectations with strong March sales. Operational performance ahead of plan due to productivity improvements. Positive trend in Asia, especially India and China. Gross profit up 10% but adjusted operating income slightly lower due to temporary factors. Paid $0.87 per share dividend. Reiterated full year 2026 guidance of flat organic sales and adjusted operating margin around 10.5 - 11%. Introduced first airbag for motorcycles and complete wearable airbag solution for motorcycle riders.

Consolidated net sales were almost $2.8 billion, a 7% year-over-year increase. Organic sales grew $21 million or 80 basis points excluding currencies. Gross profit increased by $48 million and gross margin improved by almost 60 basis points. Outperformed light vehicle production by over four percentage points globally. Asia excluding China accounted for 20%, America for 31%, and Europe for 30%. China's sales grew faster than light vehicle production, especially with Chinese OEMs outperforming by over 40 percentage points. India saw 38% organic sales growth.

Reiterates full year 2026 guidance of flat organic sales with outperformance of light vehicle production by around 1 percentage point. Net currency translation effects on sales expected around 3% positive. Adjusted operating margin around 10.5 - 11%. Operating cash flow expected around $1.2 billion. CapEx expected below 5% of sales.

Hostilities in the Persian Gulf may have limited impact but monitored. Geopolitical developments in Persian Gulf can affect raw material prices for textiles, plastics, etc. Full year 2026 gross impact from higher raw material pricing revised to around $90 million from previous assessments.

Q: On China strength and margins.

A: Focus on Chinese OEMs growing market share, working to improve earnings profile across board.

Q: On tariff policy.

A: USMCA structure relevant, no changes meaningfully impacting.

Q: On raw materials and supply.

A: Oil price main driver, supply chain team monitoring, offset activities in place.

Q: On customer call-offs and new model launches.

A: Call-offs stable, new model launches visible with good visibility.

Q: On regional mix and exposure.

A: Mix assumption unchanged, exposure to Persian Gulf region limited.