1. Q4 2024 shows record operating profit and EPS growth. 2. Sales decreased 4.9% but operating margin increased to 13.5%. 3. Full year 2025 guidance predicts 2% organic sales growth. 4. LVP mix remains challenging, impacting sales growth in China. 5. Cost control measures have significantly improved profitability.
Record earnings per share and operating margin suggest strong financial health.
Strong profit indicators and cash flow can positively influence investor sentiment.
Immediate positive results may boost stock in short-term; long-term trends are uncertain.
$2,616 million net sales, 4.9% net sales decrease, 3.3% organic sales decline, 13.5% operating margin, 13.4% adjusted operating margin, $3.10 diluted EPS, 14% increase, $3.05 adjusted diluted EPS, 19% decrease.
Around 2% organic sales growth, Around 2% negative FX effect on net sales, Around 10-10.5% adjusted operating margin, Around $1.2 billion operating cash flow.
All change figures in this release compared to the same period of the previous year except when stated otherwise.
*For non-U.S. GAAP measures see enclosed reconciliation tables.
| (Dollars in millions, except per share data) | Q4 2024 | Q4 2023 | Change | FY 2024 | FY 2023 | Change |
|---|---|---|---|---|---|---|
| Net sales | $2,616 | $2,751 | (4.9)% | $10,390 | $10,475 | (0.8)% |
| Operating income | 353 | 237 | 49 % | 979 | 690 | 42 % |
| Adjusted operating income | 349 | 334 | 4.7 % | 1,007 | 920 | 9.5 % |
| Operating margin | 13.5 % | 8.6 % | 4.9 pp | 9.4 % | 6.6 % | 2.8 pp |
| Adjusted operating margin | 13.4 % | 12.1 % | 1.2 pp | 9.7 % | 8.8 % | 0.9 pp |
| Earnings per share - diluted | 3.10 | 2.71 | 14 % | 8.04 | 5.72 | 40 % |
| Adjusted earnings per share - diluted | 3.05 | 3.74 | (19) % | 8.32 | 8.19 | 1.6 % |
| Operating cash flow | 420 | 447 | (6.0) % | 1,059 | 982 | 7.8 % |
| Return on capital employed | 35.8 % | 24.4 % | 11 pp | 25.0 % | 17.7 % | 7.2 pp |
| Adjusted return on capital employed | 35.2 % | 32.9 % | 2.3 pp | 25.6 % | 23.1 % | 2.5 pp |
1) Excluding effects from capacity alignments, antitrust-related matters and for FY 2023 the Andrews litigation settlement. Non-U.S. GAAP measure, see reconciliation table. 2) Annualized operating income and income from equity method investments, relative to average capital employed.
I am pleased that we delivered strong profitability and cash flow in the fourth quarter. We reached new record highs in the quarter for operating profit, operating margin and EPS. For the full year, we also had a record high operating cash flow. I am also pleased that we generated a high return on capital employed for the quarter and year and that we could achieve this strong performance despite a continued LVP mix deterioration leading to lower sales.
Our strong performance for both the quarter and the full year was mainly a result of our strict cost control. Our structural cost reduction program has enabled a reduction of the indirect work force by 1,400 since Q1 2023. We accelerated our operating efficiency improvements, supported by an improved customer call-off accuracy, which contributed to a reduction of direct headcount by 9% in one year. The strong results for both the quarter and the full year were also supported by reaching agreements with all major customers on excess inflation compensation.
As LVP growth mix continued to be tilted towards lower CPV models, we underperformed the LVP growth in China. However, we expect a record number of new launches in China in 2025 and thereby a significant performance improvement in China in 2025.
We achieved several strategic major wins with new automakers in 2024 although OEMs' sourcing of new business was at a low level in 2024. This was due to technological and geopolitical uncertainties and the sourcing of several large platforms were pushed into 2025.
We expect 2025 to be a challenging year for the automotive industry with LVP declining slightly and continued geopolitical risks. This uncertainty makes it challenging to predict how business conditions in general and automotive markets in particular will develop in 2025. However, our continued focus on efficiency is expected to support further improvement of our profitability towards our mid-term financial targets. Our continued strong cash flow and balance sheet should set a solid foundation for our ongoing commitment to high shareholder returns.
I am looking forward to our Capital Markets Day, planned for June 3, 2025, when we will share our view of our way forward with you. More details to be announced shortly.
Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671
Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614
Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424
Autoliv, Inc. is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on January 31, 2025.
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SOURCE Autoliv