Autoliv Financial Report April - June 1999 Increasing Market Shares
23 July 1999
Autoliv Financial Report April - June 1999 Increasing Market Shares
STOCKHOLM, Sweden, July 22 -- Consolidated net sales for
Autoliv Inc. grew by 11% to $977 million
during the three-month period ended June 30, 1999, compared to the
corresponding quarter 1998. This means that Autoliv has continued to increase
its global market share. In addition, the order intake during the first six
months has increased by more than 30%.
The operating margin improved from 8.9% during the first quarter this year
to 10.0% during the second quarter. Compared to the year-ago quarter,
operating income improved by 5% to $98 million, income before taxes by 3% to
$87 million and net income by 1% to $51 million. Earnings per share was
unchanged at $.50.
Sales
Consolidated net sales for the second quarter 1999 grew by 11% to
$977 million from $878 million during the corresponding period 1998, while
sales adjusted for currency translation effects grew by 13%. Since
approximately 60% of Autoliv's business is in Europe, the weakening of the
Euro had a negative impact of 2%. The effect of acquisitions was
insignificant. The production of light vehicles is estimated to have grown by
2% in Europe and by 11% in North America. In Japan, however, the production
is estimated to have fallen by 4% from an already low level. The average
increase in the Triad was 4%. Sales of airbag products (incl. steering
wheels) rose by 16% to $698 million from $600 million during the second
quarter 1998. The underlying sales adjusted for currency effects increased by
18% and unit sales rose by almost 30%. This means that Autoliv continues to
increase its market share. Sales of seat belts (incl. seat sub-systems) were
almost unchanged at $279 million, while sales excluding currency effects and
acquisitions increased by 3%.
For the six-month period January through June, both consolidated sales and
sales adjusted for currency effects increased by 12% to $1,912 million.
Airbag sales rose by 15% to $1,357 million and seat belt sales by 4% to
$555 million.
The order intake has been strong during the last two quarters and
represents an increase of more than 30% over the corresponding period 1998.
These multi-year contracts will result in sales beginning in 2001.
Earnings
The Company's action program improved the gross margin from 20.4% during
the first quarter to 21.4%, which was only 0.6 percentage points below the
record margin recorded in the second quarter 1998. The operating margin
improved from 8.9% during the first quarter to 10.0%, also 0.6 percentage
points below the operating margin for the comparable quarter 1998.
Compared to the year-ago quarter, gross profit improved by 8% to
$209 million and operating income by 5% to $98 million. Income before taxes
increased by 3% to 87 million. Income from affiliated companies fell as some
joint ventures have become wholly owned. Net income increased by 1% to
$51 million. Earnings per share stood unchanged at $.50. The effective tax
rate stood unchanged at 41% from the first quarter, but increased from
40% recorded during the year-ago period. Excluding non-deductible
amortization, the tax rate was 36%.
For the six-month period ended June 30 1999, net income improved by 2% to
$95 million. Earnings per share increased from $.91 to $.93.
Cash Flow and Balance Sheet
Cash generated by operations increased by 11% from $96 million to
$107 million or to $1.05 per share. Capital expenditures amounted to
$64 million compared to $68 million during the corresponding quarter 1998.
The most important capital expenditures were higher inflator production
capacity, new plants in Turkey and Brazil, and a technical center in Japan.
Net debt stood unchanged at $703 million from the beginning of the year,
despite acquisitions totaling $34 million. Net debt to equity was 38%, both at
period-end and at the beginning of the year.
Employees
The number of employees increased by 600 during the quarter and by 1 000
during the year to 21 700, mainly due to the new production plants, higher
production volumes and transfer of jobs to low labor-cost countries.
Significant Events
Autoliv has made IsoDelta wholly owned by exercising its option to acquire
the remaining 23% of the shares in the European steering wheel company.
A plant for labor-intensive production has been opened in Poland. The
number of employees will be increased from 200 to 600 by the end of next year.
A memorandum of understanding has been reached to acquire close to 50% of
the shares in the Estonian company Norma AS, the dominant seat belt supplier
to the Russian vehicle industry. A definitive agreement, which is expected to
be concluded during the fall, would improve Autoliv's possibilities to sell
new safety technologies in Eastern Europe and provide yet another possibility
to move production to low labor-cost countries. Construction of a new plant
in Romania has begun. The new facility will both replace the existing plant
and provide additional manufacturing capacity, especially for the rapidly
expanding contract work for Autoliv's companies in high-cost countries. The
Shareholders Annual General Meeting re-elected Wilhelm Kull, S. Jay Stewart
and Roger W. Stone to the Company's Board of Directors, approved the Amendment
to the Autoliv 1997 Stock Incentive Plan and ratified Ernst & Young as the
independent auditing firm.
Dividend
A dividend of 11 cents per share will be paid on September 2 to Autoliv
stockholders of record as of August 5. Ex-date will be August 3.
Report
This report has not been examined by the Company's auditors. The next
quarterly report for the period July 1 through September 30 will be published
on October 21.
KEY RATIOS (UNAUDITED)
Quarter Six Months 12 months
Apr.-June Jan.-June July 98-Full Year
1999 1998 1999 1998 June 99 1998
Earnings per share $.50 $.50 $.93 $.91 $1.86 $1.84
Equity per share 18.23 17.25 18.23 17.25 18.23 18.04
Net debt, $ in
millions 703 653 703 653 703 703
Net debt to equity, % 38 37 38 37 38 38
Gross margin, % a) 21.4 22.0 20.9 21.9 21.0 21.4
EBITDA-margin %, b) 16.4 17.0 16.2 16.7 16.4 16.7
Operating margin, % c) 10.0 10.6 9.5 10.3 9.8 10.2
Return on equity, % 11 12 10 11 10 11
Return on capital
employed, % 14 15 14 15 14 14
Return on total
capital, % 11 10 10 10 10 10
Number of employees at
period-end 21 700 19 200 21 700 19 200 21 700 20 700
Number of shares
outstanding,
(in millions) 102.3 102.2 102.3 102,2 102.3 102.3
a) Gross profit relative to sales
b) Income before interest, taxes, depreciation and amortization relative
to sales
c) Operating income relative to sales
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollars in millions, except per share data)
Quarter Six Months 12 months
Apr.-June Jan.-June July 98-Full Year 1998
1999 1998 1999 1998 June 99 1998
Net sales
- Airbag products $698.0 $599.9 $1 357.2 $1 183.5 $2 590.4 $2 416.4
- Seat belt
products 279.0 278.0 555.2 532.3 1 094.9 1 072.0
Total net sales 977.0 877.9 1 912.4 1 715.8 3 685.3 3 488.7
Cost of sales -767.8 -684.9 -1 512.0 -1 340.0 -2 913.2 -2 741.2
Gross profit 209.2 193.0 400.4 375.8 772.1 747.5
Selling, general & administrative
expense -44.8 -39.1 -87.7 -78.6 -167.7 -158.5
Research &
development -50.3 -45.5 -99.2 -91.7 -183.8 -176.2
Amortization of
intangibles -16.1 -15.3 -32.4 -30.4 -63.4 -61.5
Other income, net 0.1 0.1 0.4 0.9 2.4 2.8
Operating income 98.1 93.2 181.5 176.0 359.6 354.1
Equity in earnings of
affiliates -0.4 2.4 0.8 4.2 3.0 6.4
Interest income 2.4 3.1 5.1 4.7 8.4 8.0
Interest expense -13.6 -14.4 -28.0 -29.9 -54.1 -56.0
Income before taxes 86.5 84.3 159.4 155.0 316.9 312.5
Income taxes -35.6 -33.5 -65.0 -61.7 -127.1 123.9
Minority interests in
subsidiaries 0.3 -0.2 0.9 -0.2 0.8 -0.3
Net income 51.2 50.6 95.3 93.1 190.6 188.3
Earnings per share $0.50 $0.50 $0.93 $0.91 $1.86 $1.84
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(Dollars in millions)
June 30 Dec. 31
1999 1998
Assets
Cash & cash equivalents $106.2 $118.5
Accounts receivable 716.4 664.2
Inventories 252.3 264.9
Other current assets 80.6 84.2
Total current assets 1 155.5 1 131.8
Property, plant & equipment, net 850.7 868.6
Intangible assets, net
(mainly goodwill) 1 630.7 1 649.1
Other assets 16.4 18.6
Total assets $3 653.3 $3 668.1
Liabilities and shareholders' equity
Short-term debt $247.1 $192.6
Accounts payable 441.3 457.1
Other current liabilities 424.8 413.0
Total current liabilities 1 113.2 1 062.7
Long-term debt 561.7 628.6
Other non-current liabilities 110.7 116.2
Minority interest in subsidiaries 2.3 14.6
Shareholders' equity 1 865.4 1 846.0
Total liabilities and shareholders'
equity $3 653.3 $3 668.1
SELECTED CASH-FLOW ITEMS (UNAUDITED)
(Dollars in millions)
Quarter Six Months 12 months
Apr.-June Jan.-June July 98-Full Year
1999 1998 1999 1998 June 99 1998
Net income $51.2 $50.6 $95.3 $93.1 $190.6 $188.3
Depreciation and
amortization 64.3 55.7 131.0 110.0 249.0 228.0
Deferred taxes and
other 12.8 -3.4 18.5 -0.8 60.9 41.6
Change in working
capital -21.0 -6.5 -40.1 -45.9 -137.9 -143.6
Net cash provided by
operations 107.3 96.4 204.7 156.4 362.6 314.3
Capital
expenditures -63.5 -67.6 -126.0 -121.4 -283.8 -279.2
Acquisitions of
businesses -9.3 -6.9 -34.1 -10.2 -53.4 -29.5
Net cash after operating
and investing
activities $34.5 $21.9 $44.6 $24.8 $25.4 $5.6
Contact: Mats Odman of Autoliv, +46-8-587-20-600, or fax,
+46-8-24-44-79, or 46-8-24-44-93, or mats.odman@autoliv.com, or
info@autoliv.com.