Autoliv Reports Q2 Income
28 July 1997
Autoliv's Net Income Up 11 Percent in Second Quarter
STOCKHOLM, July 28 -- Autoliv Inc. (NYSE: ALV; SSE), a
worldwide leader in automotive safety, increased its net income by 11 percent
on a comparable basis to $48.5 million and earnings per share to 47 cents for
the three-month period ended June 30, 1997, compared to $43.5 million and 42
cents, respectively, for the corresponding period 1996. The improvements in
earnings are mainly explained by a strong unit sales growth and continued
productivity improvements.
This first financial report from Autoliv Inc. is based on reported
activities for the period commencing May 1, when the company was founded,
through June 30, 1997. Prior months are included on a pro forma basis.
Sales
Consolidated net sales for the quarter ended June 30, 1997, increased by 3
percent to $849 million over the corresponding quarter 1996. Excluding the
impact of the translation effect of the strengthening of the U.S. dollar,
sales grew by about 10 percent (65 percent of the company's sales are outside
the United States). Prices have continued to decline. The production of
light vehicles in Europe and the U.S., Autoliv's main markets, is estimated to
have grown by 2 percent.
Posted sales of airbag products (including steering wheels) rose 4
percent, while airbag product sales adjusted for currency effects, corporate
acquisitions grew by about 9 percent. Sales of side-impact airbag products
grew particularly fast with shipments to Audi, BMW, Mazda, Mitsubishi, Nissan,
Porsche, Renault, Subaru, Toyota, Volkswagen and Volvo.
Posted sales of seat belt products (including seat sub-systems) rose
1 percent, while the sales excluding currency effects grew 12 percent. The
improvements are explained by continued strong sales of pretensioners, new
contracts and slightly higher market shares in key markets.
Net sales for the six-month period January - June rose 3 percent to $1,684
million over the corresponding period 1996. Adjusted for currency translation
effects and corporate acquisitions, sales grew by about 9 percent. Posted
sales for airbags and seat belts increased 4 percent and 1 percent,
respectively, while the growth rates excluding currency effects and
acquisitions were 8 percent and 11 percent, respectively.
Earnings
The Company's net income for the six-month period ended June 30, 1997,
rose 12 percent on a comparable basis to $103.5 million and earnings per share
to $1.01, compared to $92.4 million and 90 cents, respectively, for the
corresponding period 1996.
In accordance with the information provided in the prospectus, posted net
income has been charged by $732 million to reflect the one-time write-off of
purchased in-process research and development. This amount -- as well as the
amount for acquired patents and patent-supported technology -- has been
updated compared to the prospectus following an independent appraisal. The
goodwill and patent amortizations have been adjusted accordingly, from $46.64
to $49.5 million per year.
The operating margin was 10.7 percent during the quarter and 11.6 percent
for the six-month period, compared to 10.5 percent and 11.1 percent,
respectively, for the corresponding periods 1996. Return on equity was 13
percent versus 11 percent for the latest full year. All numbers are on a
comparable basis.
The tax rate is 41 percent for both the quarter and the six-month period.
Excluding non-deductible amortizations, the tax rate is 36 percent.
Cash-flow & Balance Sheet
Cash provided by operations increased from $172 million to $221 million
between the six-month periods 1996 and 1997. Capital expenditures amounted to
$104 million for the 1997 period compared to $123 million for the 1996 period.
Acquisitions of business represented only $4 million versus $65 million.
Therefore cash flow after operating and investing activities improved by $129
million to $114 million, or to $1.10 per share.
As of June 30, 1997, net debt is $625 million, a decrease by $79 million
from the beginning of the year. Net debt to total capital stood at 27 percent
compared to 30 percent at the beginning of the year.
Intangible assets of $1,573 million as of June 30, 1997, include mainly
goodwill of $1,262 million and patents and patent-supported technology of $264
million from the merger.
Employees
The number of employees has increase by 2,100 since June 30, 1996, to
16,300. More than 50 percent of the increase is due to continued vertical
integration and corporate acquisitions.
Significant Events
- The company was founded on May 1 through a merger of Autoliv AB in
Sweden and the Automotive Safety Products business of Morton International in
the United States. Trading in the Company's stock began on the New York Stock
Exchange (NYSE) on May 1, while trading in Autoliv's Swedish Depository
Receipts commenced the following day on the Stockholm Stock Exchange (SSE).
- ITS, the world's first head protection airbag for side-impact, was
introduced on BMW 7 series cars.
- The Autoliv Umbrella RDS Airbag system will be introduced on new cars,
including all Renault cars.
- One of the most advanced crash test facilities in the world began
operation in Sweden.
- Construction commenced in Russia of a plant with the capacity of one
million seat belts and Autoliv Argentina became a wholly-owned subsidiary.
- The Chief Operating Officer, Fred Musone, and the Vice President
Production, Robert Rapone, exercised their options to leave the
company.
- Autoliv and Celsius, a leading Swedish high-tech group, have agreed to
develop and produce an advance automotive safety radar system.
Dividend
A dividend of 11 cents per share will be paid on September 4 to Autoliv
stockholders of record as of August 7, 1997. Exdate on the stock exchange
will be August 5.
Report
This report has not been examined by the Company's auditors. The next
financial report, which will cover the period July-September, will be
published on October 22.
KEY RATIOS (UNAUDITED)
Six Month January - June Twelve Month
1997(1) 1996(2) 1996(2)
Earnings per share
(fully diluted)(a) $1.01 $0.90 $1.69
Net debt,
$ in millions 625 NA 704
Net debt to total
capital, pct. 27% NA 30%
Operating margin,
pct.(a) 11.6% 11.1% 10.8%
Return on equity,
pct.(a) 13% 11%(b) 11%
Return on capital
employed, pct.(a) 17% 14%(b) 14%
Return on total capital,
pct.(a) 13% 11%(b) 11%
Number of employees
at period-end 16,300 14,200 15,300
Number of shares,
fully diluted
(in millions) 102.9 102.9 102.9
(a) On a comparable basis
(b) Calculated for full year 1996
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in millions, except per share data)
Quarter April - June
1997(1) 1996(2)
Net Sales
- Airbag products $607.1 $583.7
- Seat belt products 242.4 239.6
Total net sales 849.5 823.3
Cost of sales -665.2 -652.8
Gross profit 184.3 170.5
Selling, general & administrative
expense -41.3 -37.2
Research & development -36.9 -34.8
Amortization of intangibles -14.2(3) -15.1(3)
Other income, net -0.9 2.8
Operating income 91.0 86.2
Equity in earnings of affiliates 2.2 0.7
Interest income 2.6 1.5
Interest expense -12.7 -13.4
Income before taxes 83.1 75.0
Income taxes -34.0 -31.2
Minority interests in subsidiaries -0.6 -0.3
Income before one-time items 48.5 43.5
Earnings per share 0.47 0.42
Write-off of acquired R&D -732.2(3) -
Reported net income $-683.8 $ 43.5
(1) Pro forma except May and June 1997
(2) Pro forma
(3) Based on update independent appraisal
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in millions, except per share data)
Six Month January - June
1997(1) 1996(2)
Net Sales
- Airbag products $1,208.4 $1,165.0
- Seat belt products 475.3 471.9
Total net sales 1,683.7 1,636.9
Cost of sales -1,303.8 -1,291.4
Gross profit 379.9 345.5
Selling, general & administrative
expense -80.9 -71.3
Research & development -74.2 -67.7
Amortization of intangibles -29.5(3) -29.8(3)
Other income, net -0.5 5.4
Operating income 194.8 182.1
Equity in earnings of affiliates 4.9 2.0
Interest income 3.9 3.2
Interest expense -26.6 -26.5
Income before taxes 177.0 160.8
Income taxes -72.6 -68.1
Minority interests in subsidiaries -0.9 -0.3
Income before one-time items 103.5 92.4
Earnings per share 1.01 0.90
Write-off of acquired R&D -732.3(3) -
Reported net income $-628.8 $ 92.4
(1) Pro forma except May and June 1997
(2) Pro forma
(3) Based on update independent appraisal
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in millions, except per share data)
Twelve Month
1996(2)
Net Sales
- Airbag products $2,287.3
- Seat belt products 917.1
Total net sales 3,204.4
Cost of sales -2,523.9
Gross profit 680.5
Selling, general & administrative
expense -145.4
Research & development -133.5
Amortization of intangibles -60.7(3)
Other income, net 4.7
Operating income 345.6
Equity in earnings of affiliates 3.0
Interest income 6.4
Interest expense -54.5
Income before taxes 300.5
Income taxes -126.0
Minority interests in subsidiaries -0.7
Income before one-time items 173.8
Earnings per share 1.69
Write-off of acquired R&D -
Reported net income $173.8
(1) Pro forma except May and June 1997
(2) Pro forma
(3) Based on update independent appraisal
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Dollars in millions)
June 30 Dec. 31
1997 1996(1)
Assets
Cash & cash equivalents $141.3 $121.0
Accounts receivable 612.1 598.2
Inventories 153.3 172.2
Other current assets 65.8 48.2
Total current assets 972.5 939.6
Property, plant & equipment, net 680.1 692.7
Intangible assets, net
(mainly goodwill) 1,572.9(2) 1,593.0(3)
Other assets 31.5 28.6
Total assets $3,257.0 $3,253.9
Liabilities and shareholders' equity
Short-term debt $65.8 $62.1
Accounts payable 320.9 360.7
Other current liabilities 405.2 344.5
Total current liabilities 791.9 767.3
Long-term debt 700.5 762.8
Other non-current liabilities 82.4 80.8
Minority interest in subsidiaries 17.0 22.0
Shareholders' equity 1,665.2 1,621.0
Total liabilities and
shareholders' equity $3,257.0 $3,253.9
(1) Pro forma
(2) Whereof goodwill $1,262 million, and acquired patent-supported
technology $264 million from the merger
(3) Updated independent appraisal
SELECTED CASH-FLOW ITEMS (UNAUDITED)
(Dollars in millions)
Six Month January - June Twelve Month
1997(1) 1996(2) 1996(2)
Net income $-628.8 $92.4 $173.8
Write-off of acquired R&D 732.3 - -
Depreciation and amortization 110.5 102.5 207.0
Deferred taxes and other -3.5 2.8 1.2
Change in working capital 10.3 -25.4 -30.0
Net cash provided by
operating activities 220.8 172.3 352.0
Capital expenditures -103.4 -122.7 -269.6
Acquisitions of business -3.9 -65.1 -68.6
Net cash after operating
activities $113.5 $-15.5 $13.8
(1) Pro forma except May and June 1997
(2) Pro forma
Autoliv Inc.
P.O. Box 70381, S-107 24 Stockholm
Visiting address: World Trade Center, Klarabergsviadukten 70,
Section C
Internet: http://www.et.se/afv/bolagsinfo/autoliv
Telephone: +46-8-402-0600
Fax: +46 24 44 79 / 24 44 93
SOURCE Autoliv Inc.