Autoliv 4th Quarter Financial Report:
27 January 2000
Autoliv 4th Quarter Financial Report:
* Quarterly sales exceeded one billion for the first time
* Income before taxes $99 million, up 5% reported and 11% underlying
* EPS $.60, up 5% reported and 12% underlying
STOCKHOLM, Sweden, Jan. 27 -- The worldwide leader in
automotive safety systems, Autoliv Inc. , today
reported record sales and earnings both for the last quarter 1999 and the full
year.
For the quarter, consolidated net sales rose to $1.0 billion or by 6% and
earnings per share to $.60 or by 7%. Underlying sales and earnings improved
by 12% and 15%, respectively, adjusted for currency effects.
For the full year, sales grew by 9% to $3.8 billion and earnings per share
by 6% to $1.95. This means that Autoliv has continued to grow substantially
faster than the world market, sustaining profitability despite pricing
pressure.
Income before taxes improved by 5% to $99 million in the quarter and by 6%
to $330 million in the year.
SALES
Fourth Quarter
For the three-month period ended December 31, 1999, consolidated net
sales grew by 6% to $1,026 million from $969 million during the corresponding
1998 period, while sales adjusted for currency translation effects grew by
12%. Since approximately 60% of Autoliv's business is in Europe, the weakening
of the Euro had a negative impact of 6%. The effect of
acquisitions/divestitures was insignificant.
The production of light vehicles is estimated to have grown by 1% in
Europe and by 2% in North America. In Japan, however, the production is
estimated to have declined by 1%. The average increase in the Triad was less
than 1%.
Sales of airbag products (incl. steering wheels) rose by 8% to
$735 million from $679 million during the fourth quarter 1998. The underlying
sales adjusted for currency effects and acquisitions increased by 13%. Unit
sales of side airbags rose by almost 50% and of frontal airbags by 14%.
Sales of seat belts (incl. seat sub-systems) were almost unchanged at
$291 million, while sales excluding currency effects and divestitures
increased by 10%.
Full Year
For the 12-month period January through December, consolidated sales rose
by 9% to $3.812 million. This compares favorably with the growth of the world
market which is estimated to have been less than 4%. Adjusted for currency
effects, Autoliv's sales increased by 12%. Sales were mainly driven by the
record number of program launches in 1998, market share gains and a favorable
customer mix.
Airbag sales rose by 12% to $2,715 million and by 14% adjusted for
currency effects, while seat belt sales increased by 2% and 6%, respectively,
to $1,097 million.
EARNINGS
Fourth Quarter
For the fourth quarter, gross profit improved by 6% to $222 million and
gross margins to 21.7% from 21.5% during the year-ago period. This was the
best gross margin recorded in six quarters, which reflects the ongoing
moderation in pricing pressure and Autoliv's aggressive cost-saving program.
Operating income rose by 2% to $106 million, and operating margins
amounted to 10.4% compared to 10.7% during the fourth quarter 1998. The
margins was negatively affected by increased R&D expenditures due to the
strong order intake during the year. The financial net expense was reduced as
a result of improved cash generation. Net income rose by 7% to $61 million.
The effective tax rate was 39.6% compared to 38.9%.
The fourth quarter 1999 was thus better than the fourth quarter 1998,
which had been the best quarter historically. Excluding the translation
effect of currency rates, gross profit improved by 11%, operating income by 6%
and net income by 15%.
Full Year
For the full year, gross profit improved by 8% to $807 million, operating
income by 4% to $369 million and net income by 6% to $200 million. Gross
margin was 21.2% compared to 21.4%. Operating margin was 9.7% compared to
10.2%. The margin was negatively affected by higher R&D expenditures.
The effective tax rate was almost unchanged at 40.6% compared to 40.5% for
the year-ago period.
Return on equity stood unchanged at 10.6%, while return on capital
employed improved from 14.2% in 1998 to 14.6%.
CASH FLOW AND BALANCE SHEET
Fourth Quarter
Cash generated by operations improved by $22 million to $156 million
during the fourth quarter 1999, partly as a result of less need for additional
working capital. Cash flow after investing activities improved by $54 million
from $35 million to $89 million, mainly due to a reduction in Capital
expenditures, net. Capital expenditures, gross amounted to $74 million and
net to $49 million.
Full Year
Cash generated by operations during the year improved by $122 million to
$436 million or to $4.26 per share. Capital expenditures, net amounted to
$212 million and were $42 million less than depreciation and amortization.
Net debt decreased by $107 million from the beginning of the year to
$596 million at year-end, despite acquisitions totaling $44 million. Net debt
to equity improved from 38% at the beginning of the year to 31% at the end.
EMPLOYEES
The number of employees increased by 500 during the quarter and by 1,900
during the year to 22,600, mainly due to the new production plants, higher
production volumes and transfer of jobs to low labor-cost countries.
SIGNIFICANT EVENTS
The first order has been received in a new area: Roll-over protection.
The agreed-upon acquisition of 49.5% in Norma became effective, the
joint-venture in Indonesia became wholly owned and Rykneld Tean Ltd. was sold.
The effects on sales from these transactions were insignificant.
A new plant for seat belts, airbags and steering wheels has been opened in
Turkey and two plants for leather-wrapping of steering wheels in Tunisia.
Izumi, the second largest steering wheel company in Japan, was acquired at
the beginning of January 2000. The acquisition makes Autoliv one of the
largest steering wheel companies in the world and the only company with
steering wheel plants in North America, Europe, Japan and South America.
DIVIDEND
A dividend of 11 cents per share will be paid on March 4 to Autoliv
stockholders of record as of February 3. The first day the stock will trade
without the dividend will be February 1.
REPORT
This report, which is unaudited, has been issued by the Company's
President. The next quarterly report for the period January through March
will be published on April 19, 2000.
KEY RATIOS (UNAUDITED)
Quarter 12 Months
Oct.-Dec. Jan.-Dec.
1999 1998 1999 1998
Earnings per share $.60 $.56 $1.95 $1.84
Equity per share 18.86 18.04 18.86 18.04
Net debt, $ in
millions 596 703 596 703
Net debt to equity, % 31 38 31 38
Gross margin, % a) 21.7 21.5 21.2 21.4
EBITDA-margin %, b) 16.6 17.0 16.3 16.7
Operating/EBIT margin, % c)10.4 10.7 9.7 10.2
Return on equity, % 10.6 10.6
Return on capital
employed, % 14.6 14.2
Number of employees at
period-end 22 600 20 700
Number of shares outstanding
(assuming dilution)
(in millions) 102.4 102.3 102.4 102.3
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 12 Months
Oct.-Dec. Jan.-Dec.
1999 1998 1999 1998
Net sales
- Airbag products $735.4 $679.3 $2 714.9 $2 416.7
- Seat belt
products 290.6 289.2 1 097.3 1 072.0
Total net sales 1 026.0 968.5 3 812.2 3 488.7
Cost of sales -803.8 -759.7 -3 005.4 -2 741.2
Gross profit 222.2 208.8 806.8 747.5
Selling, general & administrative
expense -48.1 -43.9 -176.8 -158.5
Research &
development -52.4 -44.4 -197.3 -176.2
Amortization of
intangibles -15.4 -15.8 -64.1 -61.5
Other income, net -0.1 -0.7 0.0 2.8
Operating income 106.2 104.0 368.6 354.1
Equity in earnings of
affiliates 1.6 1.3 4.6 6.4
Interest income 3.6 1.6 11.3 8.0
Interest expense -12.9 -13.4 -54.8 -56.0
Income before taxes 98.5 93.5 329.7 312.5
Income taxes -38.4 -35.9 -132.0 -123.9
Minority interests in
subsidiaries 1.3 -0.1 2.2 -0.3
Net income 61.4 57.5 199.9 188.3
Earnings per share $.60 $.56 $1.95 $1.84
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(Dollars in millions)
Dec. 31 Dec. 31
1999 1998
Assets
Cash & cash equivalents $119.2 $118.5
Accounts receivable 709.6 664.2
Inventories 274.0 264.9
Other current assets 78.7 84.2
Total current assets 1 181.5 1 131.8
Property, plant & equipment, net 834.6 868.6
Intangible assets, net
(mainly goodwill) 1 595.7 1 649.1
Other assets 34.7 18.6
Total assets $3 646.5 $3 668.1
Liabilities and shareholders' equity
Short-term debt $244.5 $192.6
Accounts payable 453.4 457.1
Other current liabilities 406.7 413.0
Total current liabilities 1 104.6 1 062.7
Long-term debt 470.4 628.6
Other non-current liabilities 131.5 116.2
Minority interest in subsidiaries 9.0 14.6
Shareholders' equity 1 931.0 1 846.0
Total liabilities and shareholders'
equity $3 646.5 $3 668.1
SELECTED CASH-FLOW ITEMS (UNAUDITED)
(Dollars in millions)
Quarter 12 Months
Oct.-Dec. Jan.-Dec.
1999 1998 1999 1998
Net income $61.4 $57.5 $199.9 $188.3
Depreciation and
amortization 64.0 60.4 253.4 228.0
Deferred taxes and
other 10.9 43.5 51.1 41.6
Change in working
capital 19.2 -27.6 -68.3 -143.6
Net cash provided
by operations 155.5 133.8 436.1 314.3
Capital
expenditures -49.0 -81.7 -211.7 -279.2
Acquisitions of
businesses -17.3 -16.7 -43.7 -29.5
Net cash after operating
and investing
activities $89.2 $35.4 $180.7 $5.6
Contact:
Barry Murphy, Dir. Investor Relations, 248-475-0409, fax 248-475-9838, or
barry_murphy@autolivsasp.com
Mats Odman, Tel 8-587-20-623, fax, 8-411 70 25 or 46-8 24 44 79, or
mats.odman@autoliv.com, or info@autoliv.com.