Autoliv, Inc. (NYSE: ALV and SSE: ALIVsdb), the worldwide leader in vehicle safety systems, today announces additional actions to manage the auto industry downturn caused by the COVID-19 pandemic. Since Autoliv’s March 19th press release, additional actions include:
- Withdrawing the full year 2020 guidance until the effects of the COVID-19 pandemic can be better assessed;
- Cancelling the dividend scheduled for June 4, 2020 and suspending future dividends although the Board of
- Directors will review such suspension on a quarterly basis; and
- Drawing down $600 million of cash on our existing credit line.
- Executives voluntarily reducing their base salaries by 20% for Q2 2020 and non-Employee Board members reducing annual base retainer by 20% for Q2 2020.
“Today we announce a number of additional actions taken by the Company to continue to manage the effects brought on by the COVID-19 pandemic,” says Mikael Bratt, President and CEO. “The health and safety of our employees continues to be our top priority. We will continue to evaluate the changing environment and are prepared to do what is necessary to get us through this humanitarian and economic crisis to secure an even stronger company when the crisis is over.”
Autoliv withdraws its 2020 guidance
The rapidly evolving pandemic has upended the auto industry and customer projects for 2020. Autoliv is also navigating the same challenges other companies are facing in predicting the overall impact the pandemic will have on the auto industry this year. Given the current environment, the Company is withdrawing our previously issued 2020 guidance.
Autoliv’s liquidity and management actions position us to manage the challenging months ahead
As outlined below, the Company is decisively managing the situation by strengthening its liquidity position and control costs and spending.
Dividend: The Company has decided to cancel the previously announced second quarter dividend that was scheduled for payment on June 4, 2020. The Board of Directors believes that Autoliv has a robust position in terms of both capital and liquidity but cancelling the dividend is in the best interests of the Company to preserve cash and maintain flexibility given the highly uncertain environment. The Company will also suspend its quarterly dividends but the Board of Directors remains committed to returning value to shareholders and will review future dividends and stock buybacks in line with past practice on a quarterly basis.
Fully-Drawn on Credit Facility: To further secure a strong liquidity position, the Company has drawn the remaining $600 million of its existing committed $1.1 billion on its Revolving Credit Facility (the “Facility”). As previously announced, the Company drew $500 million of the Facility on March 19, 2020. By drawing fully on the Facility, the Company’s current cash balance is approximately $1.4 billion. The Company believes a strong cash position will maximize our ability to navigate the challenging market.
Capital expenditure and working capital: The Company’s capital expenditure plans are reviewed with the ambition to reduce spend in 2020, which is heavily dependent on our customers’ launch schedules and activities. Working capital is being optimized through strict inventory control, close monitoring of receivables, and close collaboration with our suppliers. Since the beginning of the year, Autoliv has had in place a supply chain financing program. This program facilitates the Company’s relationship with its key suppliers and provides for potential working capital benefits.
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SOURCE: Autoliv
