Autoliv, Inc. (NYSE: ALV and SSE: ALIVsdb), the worldwide leader in automotive safety systems, will hold a Capital Markets Day today in Utah, USA.
During the Capital Markets Day members of Autoliv management will outline the company’s strategy, operational strengths, growth opportunities, innovation roadmaps, financial plans and targets.
“We have a strong foundation to continue to create shareholder value. This Capital Markets Day is all about how Autoliv will harness the opportunities arising from technology advancements in production and products. We will outline our roadmaps for sales and profit growth and demonstrate hands on how we are well prepared to take operational excellence to the next level.” said Mikael Bratt, President and CEO of Autoliv.
The company’s strategy builds on an industry leading position, supported by a continued high level of order intake. For the first 10 months of 2019, Autoliv estimates its global share of orders was around 50%. From this strong foundation, Autoliv will broaden its mission to safety for mobility and society while transforming its operations for the new age of digitalization and automation throughout the whole value chain. This includes execution of structural efficiency programs, enhancing automation programs, and execute end-to-end value chain improvement programs.
Targets and ambitions
During the capital markets day, Autoliv will update and outline its targets and ambitions. The company will focus on visible near-term and sustainable long-term growth, profitability improvement and over-the-cycle resilience, cash flow generation for shareholder returns and strong balance sheet and prudent leverage policy to enhance shareholder value over the long-term.
Medium term (up to 3-5 years) targets: On average to grow sales organically* by 3-4% more per year than light vehicle production growth and the company aim to improve its adjusted operating margin* to around 12%, based on an assumed average light vehicle production growth of 1-2% per year.
Autoliv aim for a cash conversion* (operating cash flow less capex, net vs. net income) of at least 80%. The company maintains its target for leverage ratio (net debt to adj. EBITDA) of around 1x, with a range of 0.5x to1.5x.
Long term (beyond 5 years) ambitions: Our ambition remains to grow at least in line with our market. When our ongoing and planned strategic initiatives are fully implemented, the ambition is to further increase our earnings capacity, to an adjusted operating margin* of around 13%.
2020 outlook
Looking into next year, we see potential tailwinds and headwinds. Potential tailwinds include raw material costs, organic growth from market share gains, positive impacts from ongoing cost reduction programs and a stabilization of light vehicle production. Potential headwinds include lower inflator replacement sales and higher depreciation and amortization. Considering these potential tailwinds and headwinds we expect a year over year improvement in adjusted operating margin*, absent unforeseen events.
SOURCE: Autoliv
