Veoneer: Financial Report October - December 2020
Veoneer reported a strong financial performance for Q4 2020, with net sales of $455 million, representing a 17% organic sales increase. Active Safety sales surged by 38%, driven by new product launches. The operating cash flow improved by $27 million year-over-year, with a cash balance of $758 million. For FY 2021, the company anticipates organic sales growth exceeding 25% and expects to end the year with over $400 million in cash. The order intake for 2020 reached approximately $530 million, indicating a positive outlook.
- Net sales increased by $455 million in Q4 2020, up 17% organically.
- Active Safety net sales rose 38%, with organic sales increasing 31%.
- Operating cash flow improved by $27 million year-over-year.
- Cash balance at the end of Q4 2020 was $758 million.
- FY 2021 organic sales growth expected to exceed 25%.
- Operating cash flow was negative at $(77) million.
- Operating losses are expected to continue, though improving from 2020.
STOCKHOLM, Feb. 3, 2021 /PRNewswire/ --
Financial Summary - Q4'20
- Financial performance better than expectations
- Net Sales
$455 million , Organic Sales1 increase17% - Active Safety Net Sales increase
38% , Organic Sales increase31% - Operating cash flow
$(77) million ,$27 million improvement YoY - Cash balance
$758 million
Outlook - FY'21
- Organic Sales1 growth YoY is expected to exceed
25% - Active Safety Organic Sales1 growth YoY is expected to be ~
45% - Currency translation impact is expected to be ~
5% - Operating loss is expected to improve in 2021 from 2020, Cash balance is expected to exceed
$400 million at 2021 year-end - Order intake in 2021 is expected to increase from 2020
Business Highlights and Mid-Term Targets Update
- Organic Sales out-performed the global LVP by ~15pp for the fourth quarter and ~1pp for the full year 2020
- Veoneer and Qualcomm Technologies Inc. finalized an agreement in January 2021 where the companies will collaborate on the delivery of scalable Advanced Driver Assistance Systems (ADAS), Collaborative and Autonomous Driving (AD) solutions
- Market Adjustment Initiatives (MAI) program continued to generate underlying cost structure and balance sheet improvements
- Order book at the end of 2020 was ~
$14 billion , Order intake for 2020 was ~$530 million of average annual sales with lifetime sales of ~$2.6 billion where Active Safety was ~70% - Net Sales in 2023 are expected to be approximately
$2.5 billion and the Company expects to arrive to a sustainable operating profit and positive free cash flow1 during 2023
Comments from Jan Carlson, Chairman, President and CEO
The fourth quarter saw an unfortunate resurgence of the COVID-19 pandemic. We continue to put the health and safety of our people first, reinforcing our measures that were first put in place in the beginning of the pandemic, and we believe that the global efforts and vaccinations that have now started will allow the situation to gradually improve throughout 2021.
In the fourth quarter of 2020 Veoneer saw organic growth for the first time, a pivotal moment for the company. The strong growth was driven by new launches and a stronger development of the light vehicle production than anticipated in the beginning of the quarter. We further continued our strong focus on efficiencies and financial management, which allowed us to finish the year in a stronger cash position than anticipated. Despite some initial additional launch related costs, our ability to deliver new products and technologies to recently launched vehicle platforms in the current uncertain environment was an outstanding achievement. I would like to sincerely thank everyone in Veoneer for coming together as one team and really delivering above and beyond expectations.
During 2020, we experienced dramatic declines in the vehicle production during the first half, and an unprecedented rebound in the second half. This global development, which was witnessed across multiple industries, has created serious challenges for supply of electronic components. Relatively speaking, we have managed this situation well, but we do expect the tightness in supply to affect the global light vehicle production during the first half of 2021. Currently, the effects are difficult to quantify, and we monitor and manage this situation daily.
During the fourth quarter we negotiated, and in January finalized an agreement with Qualcomm to build a world leading solution in ADAS and AD, which we anticipate will be ready for commercial launches in 2024. To build this business we have created Arriver™, our new software unit and brand which will be fully focused on further developing perception, fusion and drive policy software for the next generation cars. It builds on more than a decade of experience in Active Safety development and for drive policy software on previous cooperation with Volvo Cars (VCC) in the Zenuity joint venture. It will deliver an open, scalable and flexible architecture solution running on Qualcomm's next generation Snapdragon Ride™ System on a Chip (SoC) platform. Our joint expectation is to create a leading ADAS and AD solution, which over time, will form the core of one of the leading ecosystems for automation in our industry. With Qualcomm having the lead go-to-market responsibility, we are already receiving very positive feedback from initial presentations to vehicle OEMs and Tier 1 automotive suppliers.
The trend of a changing automotive industry is stronger than ever. Veoneer is right in the middle of this development and we have recently taken critical steps to position our company for the future. We have divested our brake control business, dissolved our joint venture with VCC, and now created Arriver™. Additionally, we are revisiting our Lidar strategy as we see rapid changes in the core technology development and see several new opportunities in the future for Veoneer as a system integrator and industrialization partner for new Lidar startups.
With health and safety as our first priority, our focus remains to be on flawless daily execution, winning new profitable business and building a world leading technology portfolio.
An earnings conference call will be held today, Wednesday, February 3, 2021 at 14:00 CET. To follow the webcast or to obtain the phone number/pin code, please see www.veoneer.com. The slide deck will be available on our website prior to the earnings conference call.
1For all Non-U.S. GAAP financial measures, see the reconciliation tables in this earnings release, including the Non-U.S. GAAP Financial Measures section for further discussion of the forward-looking Non-U.S. GAAP financial measures on page 9.
Contacts:
Thomas Jonsson - EVP Communications & IR, +46 8 527 762 27 or thomas.jonsson@veoneer.com and
Ray Pekar - VP Investor Relations, +1 248 794 4537 or ray.pekar@veoneer.com
This report is information that Veoneer, Inc. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the EVP Communications and IR set out above, at 12:00 CET on Wednesday, February 3, 2021. Inquiries - Company Corporate website www.veoneer.com
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SOURCE Veoneer
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