Autoliv (NYSE: ALV) grows Q1 2026 sales but sees lower EPS and cash flow
Autoliv, Inc. reported first-quarter 2026 net sales of $2,753 million, up 6.8% from 2025, while net income fell to $142 million from $167 million. Operating margin declined to 8.6%, or 8.9% on an adjusted basis, as lower engineering reimbursements and higher restructuring and tax items offset stronger gross profit.
Gross profit rose 10% to $526 million with a 19.1% margin, helped by productivity gains and favorable currency. Diluted EPS decreased to $1.88 (adjusted $2.05). Free operating cash flow was negative $159 million as working capital grew after strong March sales, and cash fell to $342 million, while net debt stood at $1,773 million and leverage remained 1.3x.
Positive
- None.
Negative
- None.
Insights
Solid top-line growth and margins, but weaker cash flow and ongoing legal overhangs.
Autoliv grew Q1 2026 sales 6.8% to $2,753 million, with gross margin improving to 19.1%. Adjusted operating margin of 8.9% shows underlying profitability holding up despite lower R,D&E reimbursements and higher restructuring costs.
Net income declined to $142 million and diluted EPS to $1.88, while adjusted EPS was $2.05. Operating cash flow turned negative $76 million on a $349 million working-capital build from strong March sales and lower payables, pushing free operating cash flow to negative $159 million.
Leverage stayed at 1.3x, below the 1.5x target ceiling, supporting the stated intent to return cash via dividends and $300–500 million of 2026 buybacks. Management reaffirmed 2026 guidance for roughly flat organic sales and 10.5–11% adjusted operating margin, while noting litigation exposures and recall-related contingencies where losses are assessed as reasonably possible but largely not accrued.
Key Figures
Key Terms
Organic sales financial
Adjusted operating income financial
Leverage ratio financial
Light Vehicle Production (LVP) financial
ASC 450 regulatory
Product-related liabilities financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to |
Commission File No.:
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(Address of principal executive offices) |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15-(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Non-accelerated filer |
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Smaller reporting company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes: ☐ No:
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of April 9, 2026, there were
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. (“Autoliv,” the “Company” or “we”) or its management believes or anticipates may occur in the future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements.
In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words.
Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: general global and regional economic conditions, including the impact of inflation; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; global supply chain disruptions, including port, transportation, and distribution delays or interruptions; supply chain disruptions and component shortages specific to the automotive industry or the Company; potential changes to beneficial free trade agreements and regulations, such as the United States-Mexico-Canada Agreement; changes in geopolitical and other economic and political conditions or developments, including inflation, changes in trade policies, tariff regimes, and other developments in and by countries in which we do business that could materially impact supply chains, margins, access to capital, or overall business performance; political stability or geopolitical conflicts; changes in general industry or market conditions, including regional economic growth or decline; changes in and the successful execution of our capacity alignment, restructuring, cost reduction, and efficiency initiatives and the market reaction thereto; loss of business from increased competition; volatility or increases in raw material, fuel, and energy costs; changes in consumer and customer preferences for end products; loss of customers or sales; legislative or regulatory changes; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other negotiations with customers, including inflation and tariff compensations; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation, civil judgments or financial penalties and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims, and the availability of insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments or results of tax audits by governmental authorities and changes in our effective tax rate; dependence on key personnel; our ability to meet our sustainability targets, goals and commitments; dependence on and relationships with customers and suppliers; the conditions necessary to hit our financial targets; and other risks and uncertainties identified in Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, Item 1A “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.
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INDEX |
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PART I - FINANCIAL INFORMATION |
4 |
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ITEM 1. FINANCIAL STATEMENTS |
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Consolidated Statements of Income (unaudited) |
4 |
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Consolidated Statements of Comprehensive Income (unaudited) |
5 |
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Condensed Consolidated Balance Sheets (unaudited) |
6 |
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Consolidated Statements of Cash Flows (unaudited) |
7 |
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Consolidated Statements of Total Equity (unaudited) |
8 |
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Notes to the Condensed Consolidated Financial Statements (unaudited) |
9 |
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Note 1. Basis of Presentation |
9 |
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Note 2. New Accounting Standards |
9 |
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Note 3. Fair Value Measurements |
10 |
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Note 4. Income Taxes |
12 |
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Note 5. Inventories |
12 |
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Note 6. Restructuring |
12 |
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Note 7. Product-Related Liabilities |
13 |
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Note 8. Contingent Liabilities |
13 |
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Note 9. Earnings Per Share |
15 |
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Note 10. Revenue Disaggregation |
16 |
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Note 11. Segment Information |
16 |
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Note 12. Subsequent Events |
16 |
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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ITEM 4. CONTROLS AND PROCEDURES |
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PART II - OTHER INFORMATION |
31 |
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ITEM 1. LEGAL PROCEEDINGS |
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ITEM 1A. RISK FACTORS |
31 |
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
31 |
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES |
31 |
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ITEM 4. MINE SAFETY DISCLOSURES |
31 |
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ITEM 5. OTHER INFORMATION |
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ITEM 6. EXHIBITS |
32 |
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SIGNATURE |
33 |
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3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in millions, except per share data)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Net sales |
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$ |
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$ |
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Cost of sales1) |
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( |
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( |
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Gross profit |
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Selling, general and administrative expenses |
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( |
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( |
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Research, development and engineering expenses, net |
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( |
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( |
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Other income (expense), net2) |
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( |
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Operating income |
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Income from equity method investment |
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Interest income |
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Interest expense |
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( |
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( |
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Other non-operating items, net |
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( |
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Income before income taxes |
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Income tax expense |
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( |
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( |
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Net income3) |
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Less: Net income attributable to non-controlling interest |
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Net income attributable to controlling interest |
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$ |
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$ |
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Net earnings per share – basic |
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$ |
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$ |
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Net earnings per share – diluted |
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$ |
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$ |
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Weighted average number of shares outstanding, net of |
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Weighted average number of shares outstanding, |
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Cash dividend per share – declared |
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$ |
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$ |
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Cash dividend per share – paid |
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$ |
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$ |
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1)
2)
3)
See Notes to the Condensed Consolidated Financial Statements (unaudited).
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in millions)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Net income |
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$ |
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$ |
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Other comprehensive income (loss) before tax: |
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Change in cumulative translation adjustments1) |
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( |
) |
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Net change in unrealized components of defined benefit plans |
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( |
) |
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Other comprehensive income (loss), before tax |
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( |
) |
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Tax effect allocated to other comprehensive income (loss) |
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( |
) |
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Other comprehensive income (loss), net of tax |
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( |
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Comprehensive income |
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Less: Comprehensive income (loss) attributable to |
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Comprehensive income attributable to |
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$ |
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$ |
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1)
See Notes to the Condensed Consolidated Financial Statements (unaudited).
5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
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As of |
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March 31, 2026 |
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December 31, 2025 |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, net |
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Inventories, net |
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Prepaid expenses and accrued income |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Goodwill and intangible assets, net |
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Other non-current assets |
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Total assets |
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Liabilities and equity |
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Short-term debt |
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Accounts payable1) |
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Accrued liabilities |
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Operating lease liabilities - current |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Pension liability |
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Operating lease liabilities - non-current |
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Other non-current liabilities |
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Total non-current liabilities |
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Common stock |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss2) |
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( |
) |
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( |
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Treasury stock |
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( |
) |
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( |
) |
Total controlling interest's equity |
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Non-controlling interest |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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1)
2)
See Notes to the Condensed Consolidated Financial Statements (unaudited).
6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Operating activities |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation and amortization |
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Deferred income taxes |
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( |
) |
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( |
) |
Undistributed earnings from equity method investments, net of dividends |
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( |
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( |
) |
Gain on divestiture of property |
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( |
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Other, net |
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Net change in operating assets and liabilities: |
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Receivables (gross) |
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( |
) |
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( |
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Other operating assets |
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( |
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( |
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Inventories, gross |
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Accounts payable |
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( |
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Accrued expenses |
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( |
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( |
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Income taxes |
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( |
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Net cash (used in) provided by operating activities |
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( |
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Investing activities |
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Expenditures for property, plant and equipment1) |
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( |
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( |
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Proceeds from sale of property, plant and equipment |
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Net cash used in investing activities |
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( |
) |
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( |
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Financing activities |
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Net (decrease) increase in short-term debt |
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( |
) |
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Proceeds from issuance of long-term debt |
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Repayment of long-term debt |
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( |
) |
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Dividends paid |
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( |
) |
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( |
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Stock repurchased |
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( |
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Common stock options exercised |
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Dividends paid to non-controlling interest |
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Net cash (used in) provided by financing activities |
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( |
) |
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Effect of exchange rate changes on cash and cash equivalents |
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( |
) |
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( |
) |
Decrease in cash and cash equivalents |
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( |
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( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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1)
See Notes to Condensed Consolidated Financial Statements (unaudited).
7
CONSOLIDATED STATEMENTS OF TOTAL EQUITY (UNAUDITED) (Dollars in millions)
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Common |
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Additional |
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Retained |
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Accumulated |
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Treasury |
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Total |
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Non- |
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Total |
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Balances at December 31, 2025 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
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Comprehensive Loss: |
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Net income |
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Foreign currency translation |
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( |
) |
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( |
) |
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( |
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Pension liability |
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Total Comprehensive Income |
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— |
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— |
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( |
) |
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— |
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Repurchased and retired shares |
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Stock-based compensation |
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Cash dividends declared |
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( |
) |
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( |
) |
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( |
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Other |
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Balances at March 31, 2026 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
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Common |
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Additional |
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Retained |
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Accumulated |
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Treasury |
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Total |
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Non- |
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Total |
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Balances at December 31, 2024 |
$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
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$ |
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$ |
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$ |
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Comprehensive Income: |
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Net income |
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Foreign currency translation |
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|
|
|
|
|
|
|
||||||||
Pension liability |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Total Comprehensive Income |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Repurchased and retired shares |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Other |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Balances at March 31, 2025 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See Notes to the Condensed Consolidated Financial Statements (unaudited).
8
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, all amounts are presented in millions of dollars, except for per share amounts)
March 31, 2026
1. BASIS OF PRESENTATION
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the prior year audited consolidated financial statements and all adjustments considered necessary for a fair presentation have been included in the consolidated financial statements. All such adjustments are of a normal recurring nature. The results for the interim period are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, 2026.
The Condensed Consolidated Balance Sheets as of December 31, 2025 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements.
The Company has
Certain amounts in the condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. Certain amounts in prior periods may have been reclassified to conform to current year presentation.
Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Autoliv’s actual results to differ materially from the forward-looking statements contained in this report may be found in this report and Autoliv’s other reports filed with the Securities and Exchange Commission (the “SEC”). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
2. NEW ACCOUNTING STANDARDS
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”).
Adoption of new accounting standards
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2025-11 can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company early adopted ASU 2025-11 prospectively in the first quarter of 2026. The adoption of ASU 2025-11 did not have a significant impact on its interim disclosures.
Accounting standards issued but not yet adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses, to improve financial reporting by requiring additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The amendments in ASU 2024-03 do not change or remove current expense disclosure requirements. The amendments require that at each interim and annual reporting period an entity should disclose the amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 1, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2024-03 should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to any or all periods presented in the financial statements. The adoption of ASU 2024-03 is expected to result in incremental disclosures in the Company’s financial statements. The Company will adopt the amendments in ASU 2024-03 prospectively upon the effective date.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Targeted improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs that are accounted for under Subtopic 350-40. ASU 2025-06 removes all references to prescriptive and sequential software development stages throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following
9
occur: 1) Management has authorized and committed to funding the software project and 2) It is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in ASU 2025-06 permits entities to use either 1) a prospective transition approach, 2) a modified transition approach, or 3) a retrospective transition approach. The Company is currently assessing the impact that ASU 2025-06 will have on its financial statements and expects to adopt the amendments in this update using the prospective transition approach. The Company expects that its capitalization of internal-use software costs will not change significantly under the amendments in ASU 2025-06.
3. FAIR VALUE MEASUREMENTS
Assets and liabilities measured at fair value on a recurring basis
The carrying value of cash and cash equivalents, accounts receivable, accounts payable, short-term debt and other current financial assets and liabilities approximate their fair value because of the short-term maturity of these instruments.
The Company uses derivative financial instruments (“derivatives”) as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest rates and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial policy. All derivatives are recognized in the consolidated financial statements at fair value. For certain derivatives, hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although each hedge is entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest rates and foreign exchange rates.
The degree of judgment utilized in measuring the fair value of the instruments generally correlates to the level of pricing observability. Pricing observability is impacted by several factors, including the type of asset or liability, whether the asset or liability has an established market and the characteristics specific to the transaction. Instruments with readily active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, assets rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value.
All the Company’s derivatives are classified as Level 2 financial instruments in the fair value hierarchy. Level 2 pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements (“ISDA agreements”) with all of its derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 have been presented on a gross basis. According to the ISDA agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below.
Derivatives designated as hedging instruments
There were
Derivatives not designated as hedging instruments
Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives
For the three months periods ended March 31, 2026 and 2025, the gains or losses recognized in other non-operating items, net were a loss of $
For the three months periods ended March 31, 2026 and 2025, the gains or losses recognized as interest expense were a loss of $
10
The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis (dollars in millions).
|
|
As of |
|
|
||||||||||||||||||||||
|
|
March 31, 2026 |
|
|
|
December 31, 2025 |
|
|
||||||||||||||||||
|
|
|
|
|
Fair Value Measurements |
|
|
|
|
|
|
Fair Value Measurements |
|
|
||||||||||||
Description |
|
Nominal |
|
|
Derivative |
|
|
Derivative |
|
|
|
Nominal |
|
|
Derivative |
|
|
Derivative |
|
|
||||||
Derivatives not designated as hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange swaps, less |
|
$ |
|
1) |
$ |
|
2) |
$ |
|
3) |
|
$ |
|
4) |
$ |
|
5) |
$ |
|
6) |
||||||
Total derivatives not designated |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||||
1)
2)
3)
4)
5)
6)
Fair Value of Debt
The fair value of long-term debt is determined either from quoted market prices as provided by participants in the secondary market or for long-term debt without quoted market prices, estimated using a discounted cash flow method based on the Company’s current borrowing rates for similar types of financing. The Company has determined that each of these fair value measurements of debt reside within Level 2 of the fair value hierarchy.
The fair value and carrying value of debt is summarized in the table below (dollars in millions).
|
|
As of |
|
|||||||||||||
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Carrying |
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
||||
Long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term portion of long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Overdrafts and other short-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total short-term debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
1)
Assets and liabilities measured at fair value on a non-recurring basis
In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also has assets and liabilities in its balance sheet that are measured at fair value on a nonrecurring basis, including certain long-lived assets, including equity method investments, goodwill and other intangible assets, typically as it relates to impairment.
The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets.
For the three months period ended March 31, 2026, the Company did
11
4. INCOME TAXES
The effective tax rate for the three months period ended March 31, 2026 was
The Company files income tax returns in the U.S. federal jurisdiction, various U.S. states, and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions covering multiple years. The Company is no longer subject to income tax examination by the U.S. federal income tax authorities for years prior to 2021. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2016.
As of March 31, 2026, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Company’s condensed consolidated financial statements. The conclusion of such audits could result in additional increases or decreases to unrecognized tax benefits in some future period or periods.
During the three months period ended March 31, 2026, the Company recorded a net increase of $
Of the total unrecognized tax benefits of $
5. INVENTORIES
Inventories are stated at the lower of cost (“FIFO”) and net realizable value. The components of inventories were as follows (dollars in millions):
|
|
As of |
|
|||||
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work in progress |
|
|
|
|
|
|
||
Finished products |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
|
||
Inventory valuation reserve |
|
|
( |
) |
|
|
( |
) |
Total inventories, net of reserve |
|
$ |
|
|
$ |
|
||
6. RESTRUCTURING
As of March 31, 2026, the restructuring reserve balance of $
Provisions for the three months period ended March 31, 2026 mainly related to restructuring activities in EMEA. Cash payments for the three months period ended March 31, 2026 mainly related to the restructuring activities in EMEA that were initiated in 2023.
The table below summarizes the change in the balance sheet position of the employee-related restructuring reserves (dollars in millions). The restructuring reserve balances are included within Accrued expenses in the Condensed Consolidated Balance Sheets. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income. Restructuring costs other than employee related costs are immaterial for all periods presented.
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Reserve at beginning of the period |
|
$ |
|
|
$ |
|
||
Provision - charge |
|
|
|
|
|
|
||
Provision - reversal |
|
|
( |
) |
|
|
( |
) |
Cash payments |
|
|
( |
) |
|
|
( |
) |
Translation difference |
|
|
( |
) |
|
|
|
|
Reserve at end of the period |
|
$ |
|
|
$ |
|
||
12
7. PRODUCT-RELATED LIABILITIES
The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues, including recalls, product liability, and warranty issues. For further explanation, see Note 8. Contingent Liabilities below.
For the three months period ended March 31, 2026 and March 31, 2025, new provisions and cash payments mainly related to warranty related issues.
As of March 31, 2026, the reserve for product related liabilities consisted of warranty and recall related issues.
The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). The reserve for product-related liabilities is included in accrued expenses and other non-current liabilities on the Condensed Consolidated Balance Sheets. The Company’s product-related liabilities as of March 31, 2026 are partly covered by insurance. Insurance receivables are included within other current assets and other non-current assets on the Condensed Consolidated Balance Sheets. As of March 31, 2026, the Company had total insurance receivables of $
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Reserve at beginning of the period |
|
$ |
|
|
$ |
|
||
Net change in reserve |
|
|
|
|
|
|
||
Cash payments |
|
|
( |
) |
|
|
( |
) |
Translation difference |
|
|
( |
) |
|
|
|
|
Reserve at end of the period |
|
$ |
|
|
$ |
|
||
8. CONTINGENT LIABILITIES
Legal Proceedings
Various claims, lawsuits, and proceedings are pending or threatened against the Company and/or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability, and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, and with the exception of potential future losses resulting from the antitrust proceedings described below, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability, or other losses in the future.
ANTITRUST MATTERS
Authorities in several jurisdictions have conducted broad, and in some cases, long-running investigations of suspected anti-competitive behavior among parts suppliers in the global automotive vehicle industry. These investigations included, but are not limited to, the products that the Company sells. In addition to concluded matters, authorities of other countries, with significant light vehicle manufacturing or sales may initiate similar investigations. As a result of the outcome of the European Commission investigation of anti-competitive behavior among suppliers of occupant safety systems that the Company resolved in 2019 (the "EC investigation"), the Company is subject to a subsequent civil dispute with a non-governmental third party stemming from the same facts and circumstances underlying the EC investigation. The Company is involved in civil litigation in Germany with respect to alleged anti-competitive behavior that occurred over a decade ago.
On October 31, 2024, BMW filed a complaint against the Company in Germany claiming damages of €
This dispute could result in significant expenses as well as an unfavorable outcome that could have a material adverse impact on our customer relationships, business prospects, reputation, operating results, cash flows or financial condition, and our insurance would likely not mitigate such impact. The Company cannot predict the duration, scope, or ultimate outcome of any such disputes.
13
PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY
Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. Recall decisions regarding the Company’s products may require a significant amount of judgment by us, our customers and safety regulators and are influenced by a variety of factors. Once a recall has been made, the cost of a recall is also subject to a significant amount of judgment and discussions between the Company and its customers. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by us or expected by the customer in either a warranty or a recall situation. Accordingly, the future costs of warranty or recall claims by the customers may be material. However, the Company believes its established reserves are adequate.
In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company’s results of operations.
The Company maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of both approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent based on our prior claims experience. The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered. In addition, a number of the agreements entered into by the Company, including the agreements related to the spin-off of Veoneer, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance.
As noted in Note 7 above, as of March 31, 2026, the Company has accrued $
Product Liability:
Autoliv and some of its subsidiaries have been named as one of several defendants in a consolidated class action lawsuit in a multi-district litigation (In Re: ARC Airbag Inflators Products Liability Litigation MDL, No. 3051) in the Northern District of Georgia. The plaintiffs in the multi-district litigation (the "ARC Inflator Class Action") brought claims for fraud, breach of warranty, and violations of consumer protection and trade practices stemming from ARC inflators included in airbag modules that Autoliv or its subsidiaries allegedly supplied after Autoliv acquired certain Delphi assets (the “Delphi Acquisition”) in December 2009. The Company denies these allegations. Autoliv is not aware of any performance issues regarding ARC inflators included with its airbags at the directions of its customers that it shipped following the Delphi Acquisition. The proceedings remain ongoing. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the ARC Inflator Class Action. However, the Company continues to evaluate this matter, no accrual has been made, and no estimated range of potential loss can be determined at this time. The Company cannot predict the ultimate outcome of the ARC Inflator Class Action.
On September 5, 2023, the National Highway Traffic Safety Administration (“NHTSA”) issued an initial decision to recall approximately
14
Specific Recalls:
In the second quarter of 2025, Stellantis initiated a recall of approximately
In the fourth quarter of 2020, the Company was made aware of a potential recall by American Honda Motor Co. and the recall of approximately
Intellectual Property:
In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it may fail to do so. Where the Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material.
The table in Note 7 above summarizes the change in the balance sheet position of the product-related liabilities.
9. EARNINGS PER SHARE
The computation of basic and diluted earnings per share is set forth in the table below.
|
|
Three Months Ended March 31, |
|
|||||
(In millions, except per share amounts) |
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Basic and diluted: |
|
|
|
|
|
|
||
Net income attributable to controlling interest |
|
$ |
|
|
$ |
|
||
Denominator: |
|
|
|
|
|
|
||
Basic: Weighted average common stock |
|
|
|
|
|
|
||
Add: Weighted average stock options/share awards |
|
|
|
|
|
|
||
Diluted weighted average common stock: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net earnings per share - basic |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Net earnings per share - diluted |
|
$ |
|
|
$ |
|
||
15
10. REVENUE DISAGGREGATION
The Company’s disaggregated revenue for the periods presented are as follows (dollars in millions).
Net Sales by Products |
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Airbags, Steering Wheels and Other1) |
|
$ |
|
|
$ |
|
||
Seatbelt Products and Other1) |
|
|
|
|
|
|
||
Total net sales |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Net Sales by Region |
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Americas |
|
$ |
|
|
$ |
|
||
EMEA |
|
|
|
|
|
|
||
Asia excl. China |
|
|
|
|
|
|
||
China |
|
|
|
|
|
|
||
Total net sales |
|
$ |
|
|
$ |
|
||
1)
11. Segment Information
The Company has a single operating and reportable segment which includes Autoliv’s airbag and steering wheels, and seatbelt products and components. The determination of a single operating segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The basis of segmentation and the basis of measurement of segment profit or loss is consistent with our 2025 annual report on the consolidated financial statements.
The significant expenses that are regularly provided to the CODM are disclosed in the Consolidated Statements of Net Income as a part of the consolidated net income and are as follows.
Significant segment expenses / income (Dollars in millions) |
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Total direct costs |
|
$ |
( |
) |
|
$ |
( |
) |
Total production overhead costs |
|
|
( |
) |
|
|
( |
) |
Cost of sales |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Research, development and engineering expenses (gross) |
|
$ |
( |
) |
|
$ |
( |
) |
Reimbursements from customer funded engineering projects |
|
|
|
|
|
|
||
Research, development and engineering expenses, net |
|
$ |
( |
) |
|
$ |
( |
) |
The Company's other significant segment items that are regularly provided to the CODM include selling, general and administrative expenses, and other income (expense), which are disclosed as separate line items in the Consolidated Statements of Income. Other expenses consist of Income from equity method investments, Interest income, Interest expense, Other non-operating items, net, and Income taxes, which are disclosed as separate line items in the Consolidated Statements of Income.
The segment assets are equal to the assets presented in the Consolidated Balance Sheets. Expenditures for long-lived segment assets are equal to the line items Expenditures for property, plant and equipment in the Consolidated Statements of Cash Flow.
Segment assets and expenditures for long-lived assets (Dollars in millions) |
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Expenditures for long-lived assets |
|
$ |
( |
) |
|
$ |
( |
) |
Total assets |
|
|
|
|
|
|
||
12. SUBSEQUENT EVENTS
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the United States Securities and Exchange Commission (the “SEC”) on February 19, 2026. Unless otherwise noted, all dollar amounts are in millions.
Autoliv, Inc. (“Autoliv” or the “Company”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden. The Company functions as a holding corporation and owns two principal operating subsidiaries, Autoliv AB and Autoliv ASP, Inc.
Through its operating subsidiaries, Autoliv is a supplier of automotive safety systems with a broad range of product offerings, including modules and components for passenger and driver airbags, side airbags, curtain airbags, seatbelts, steering wheels, and pedestrian protection systems.
Autoliv’s filings with the SEC, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements, and all of our other reports and statements, and amendments thereto, are available free of charge on our corporate website at www.autoliv.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC (generally the same day as the filing).
The primary exchange market for Autoliv’s securities is the New York Stock Exchange ("NYSE") where Autoliv’s common stock trades under the symbol “ALV”. Autoliv’s Swedish Depositary Receipts ("SDRs") are traded on Nasdaq Stockholm’s list for large market cap companies under the symbol “ALIV SDB”. Options in SDRs trade on Nasdaq Stockholm under the name “Autoliv SDB”. Options in Autoliv shares are traded on Nasdaq OMX PHLX and on NYSE Amex Options under the symbol “ALV”.
Autoliv’s fiscal year ends on December 31.
Non-U.S. GAAP financial measures
Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for “Organic sales,” “Free operating cash flow,” “Cash conversion,” “Net debt,” “Leverage ratio,” “Adjusted net income,” “Adjusted operating income,” “Adjusted operating margin,” “Adjusted other non-operating items,net,” “Adjusted earnings per share, diluted,” “Adjusted return on capital employed,” and “Adjusted return on total equity” provided below. Management believes that these non-U.S. GAAP financial measures provide supplemental information to investors regarding the performance of the Company’s business and assist investors in analyzing trends in the Company's business. Additional descriptions regarding management’s use of these financial measures are included below. Investors should consider these non-U.S. GAAP financial measures in addition to, rather than as substitutes for, financial reporting measures prepared in accordance with U.S. GAAP. These historical non-U.S. GAAP financial measures have been identified as applicable in each section of this report with a tabular presentation reconciling them to the most directly comparable U.S. GAAP financial measures. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.
17
EXECUTIVE OVERVIEW
The first quarter turned out better than we had anticipated, with strong sales in March. Our operational performance exceeded our expectations, with solid productivity improvements, partly supported by reduced call-off volatility. Underlying profitability improved, with gross profit increasing by 10%, although adjusted operating income (Non-GAAP measure, see reconciliation table below) was slightly lower due to temporary lower R,D&E reimbursements and the one-time income in Q1 last year.
Our positive trend in Asia continued, with strong growth in India, South Korea and China. In China, we continued to grow faster than LVP, especially with the Chinese OEMs, outperforming by 40pp. In India, we grew sales organically (Non-GAAP measure, see reconciliation table below) by 38%, reflecting mainly the trend of increased safety content in vehicles in India, as well as the continued high level of LVP growth. We continue to expand our production capabilities in India, investing in additional inflator production capacity for future growth.
We are pleased that we in the quarter introduced our first airbag for motorcycles, as well as our first wearable airbag solution for motorcycle riders, building on our long term strategy of growing business outside our traditional core business.
The quarter was characterized by ongoing and new geopolitical challenges. At this point, it is difficult to fully assess the likely impacts, as the situation remains fluid. We continue to carefully monitor the developments while preparing for various scenarios, including different mitigation strategies.
The business environment is uncertain but our current best estimate for the remainder of the year is a re-iteration of our full year 2026 guidance of about unchanged organic sales (Non-GAAP measure) and an adjusted operating margin (Non-GAAP measure) of around 10.5-11%. This is based on the assumption that LVP will decline by around 1%.
Our balance sheet is healthy, with debt leverage (Non-GAAP measure, see reconciliation table below) of 1.3x, well below our target limit of 1.5x. Based on our guidance for sales and adjusted operating margin, we continue to expect strong cash flow for the year, which supports our ambitions to provide attractive shareholder returns, including to repurchase shares of $300-500 million in 2026.
Financial highlights in the three months period ended March 31, 2026
Change figures below compare to the same period of the previous year, except when stated otherwise.
Key business developments in the three months period ended March 31, 2026
Change figures below compare to the same period of the previous year, except when stated otherwise.
18
Business and market condition update
Supply Chain
Call-off volatility improved somewhat compared to both Q4 2025 and Q1 2025, although it still remains higher than pre-pandemic levels. Low customer demand visibility and changes to customer call-offs with short notice continued to have some negative impact on our production efficiency and profitability. We expect call-off volatility for the full year 2026 on average to be slightly improved compared to 2025 but still remain higher than pre-pandemic levels. However, the continued significant uncertainty in the geopolitical environment and future changes in tariffs and trade restrictions may lead to more negative call-off volatility.
Raw material inflation, geopolitical risks and tariffs
Raw material price changes had only a small negative impact on our profitability in the first quarter, with a gross impact of around $5 million. For the full year 2026, our current assessment is for around $90 million gross impact from higher raw material prices. We expect to be able to mitigate a majority of this headwind, mainly through internal cost reductions, material mix improvements and commercial negotiations with customers and suppliers. Given the continued uncertainty in the geopolitical environment, the effects of tariffs and trade restrictions may lead to a more adverse inflation environment. We continue to execute on productivity and cost reduction initiatives to offset these cost pressures.
The effects of the new tariffs imposed in 2025 impacted our profitability negatively in the first quarter 2026. Although we achieved customer compensations for more than 70% of tariff costs, the net effect on operating margin was around 40bps negative, including the dilution effect. While it is our ambition and expectation to continue passing tariff costs on to our customers, there is significant uncertainty as future recovery levels may vary. For the full year 2026, we estimate the tariff-related dilution on operating margin to be similar to the around 20 bps that it was for full year 2025.
We currently do not expect any material impact from the U.S. Supreme Court's ruling that the International Emergency Economic Powers Act did not authorize the imposition of the tariffs in 2025, as our gross exposure is limited to around $25 million and the net exposure is well below $10 million.
Ongoing geopolitical developments, including the hostilities in and around the Persian Gulf, introduce additional uncertainty into the global economic environment. These conditions may affect supply chains, commodity prices, customer demand, and broader market stability. As a result, our current financial guidance reflects the best information available today but may be subject to change should these geopolitical dynamics materially impact our operations or the markets in which we operate.
We continue to closely monitor both geopolitical developments and the tariff policy environment in order to be agile to adjust our commercial and operational responses to any such developments.
19
RESULTS OF OPERATIONS
Overview
The following table shows some of the key ratios management uses internally to analyze the Company's current and future financial performance and core operations as well as to identify trends in the Company’s financial conditions and results of operations. The Company has provided this information to investors to assist in meaningful comparisons of past and present operating results and to assist in highlighting the results of ongoing core operations. These ratios are more fully explained below and should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K and the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
The Company's management uses the Return on capital employed (ROCE) and Return on total equity (ROE) measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business. As used by the Company, ROCE is annualized operating income and income from equity method investments relative to average capital employed. The Company believes ROCE is a useful indicator of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers.
ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. The Company’s management believes that ROE is a useful indicator of how well management creates value for its shareholders through its operating activities and its capital management.
KEY RATIOS
(Dollars in millions, except per share data)
|
|
Three Months Ended |
|
|||||
|
|
or As of March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Receivables outstanding relative to sales, %1) |
|
|
22.0 |
% |
|
|
21.4 |
% |
Inventory outstanding relative to sales, %2) |
|
|
8.6 |
% |
|
|
8.9 |
% |
Payables outstanding relative to sales, %3) |
|
|
16.9 |
% |
|
|
17.8 |
% |
|
|
|
|
|
|
|
||
Gross margin, %4) |
|
|
19.1 |
% |
|
|
18.6 |
% |
Operating margin, %5) |
|
|
8.6 |
% |
|
|
9.9 |
% |
|
|
|
|
|
|
|
||
Capital employed6) |
|
|
4,417 |
|
|
|
4,149 |
|
Net debt7) |
|
|
1,773 |
|
|
|
1,787 |
|
Return on total equity, %8) |
|
|
21.7 |
% |
|
|
28.8 |
% |
Return on capital employed, %9) |
|
|
22.2 |
% |
|
|
25.6 |
% |
|
|
|
|
|
|
|
||
Headcount at period-end10) |
|
|
64,100 |
|
|
|
65,900 |
|
1) Outstanding receivables relative to annualized quarterly sales.
2) Outstanding inventory relative to annualized quarterly sales.
3) Outstanding payables relative to annualized quarterly sales.
4) Gross profit relative to sales.
5) Operating income relative to sales.
6) Total equity and net debt.
7) Net debt adjusted for pension liabilities in relation to EBITDA. See tabular presentation reconciling this non-U.S. GAAP measure to U.S. GAAP below.
8) Net income relative to average total equity.
9) Operating income and income from equity method investments, relative to average capital employed.
10) Employees plus temporary, hourly personnel.
20
three months period ended March 31, 2026 COMPARED WITH three months period ended March 31, 2025
Consolidated Sales Development
(dollars in millions)
|
|
Three Months Ended March 31, |
|
|
|
|
|
Components of change in net sales |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
Reported |
|
|
Currency |
|
|
Organic 3) |
|
|||||
Airbags, Steering Wheels and Other2) |
|
$ |
1,863 |
|
|
$ |
1,752 |
|
|
|
6.3 |
% |
|
|
5.6 |
% |
|
|
0.7 |
% |
Seatbelt products and Other2) |
|
|
890 |
|
|
|
826 |
|
|
|
7.8 |
% |
|
|
6.7 |
% |
|
|
1.1 |
% |
Total |
|
$ |
2,753 |
|
|
$ |
2,578 |
|
|
|
6.8 |
% |
|
|
6.0 |
% |
|
|
0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Americas |
|
$ |
863 |
|
|
$ |
851 |
|
|
|
1.3 |
% |
|
|
6.5 |
% |
|
|
(5.2 |
)% |
EMEA |
|
|
835 |
|
|
|
764 |
|
|
|
9.3 |
% |
|
|
11.1 |
% |
|
|
(1.8 |
)% |
Asia excl. China |
|
|
563 |
|
|
|
515 |
|
|
|
9.3 |
% |
|
|
(1.8 |
)% |
|
|
11.1 |
% |
China |
|
|
492 |
|
|
|
447 |
|
|
|
10.0 |
% |
|
|
5.1 |
% |
|
|
4.9 |
% |
Total |
|
$ |
2,753 |
|
|
$ |
2,578 |
|
|
|
6.8 |
% |
|
|
6.0 |
% |
|
|
0.8 |
% |
1) Effects from currency translations.
2) Including Corporate sales.
3) Non-U.S. GAAP measure.
Sales by product - Airbags, Steering Wheels and Other
Sales for Airbags, Steering Wheels and Other grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 0.7% in the quarter. The largest contributors to the increase were center airbags, driver airbags and side airbags, partly offset by declines for passenger airbags and inflatable curtains.
Sales by product - Seatbelts and Other
Sales for Seatbelt Products and Other grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 1.1% in the quarter. Sales increased organically in Asia excluding China, EMEA and China while sales declined in Americas.
Sales by region
Our global organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 0.8% compared to the global LVP decrease of 3.4% (according to S&P Global, April 2026). The relative performance was positively impacted by product launches but also by positive effects from the regional and model LVP mix development, which we estimate contributed to about 1.5pp outperformance and by tariff compensations of around 0.5pp. Our organic sales growth (Non-U.S. GAAP measure) outperformed LVP growth by 15pp in China and by 6.8pp in Asia excluding China. We performed in line with LVP in EMEA and underperformed by 4.5pp in Americas, impacted mainly by negative mix due to a high LVP growth in low content South America and a lower content on some replacement models.
LVP in China declined substantially with global OEMs declining by 8.5% and Chinese OEMs declining by 11%. Our sales to domestic OEMs increased by around 30% while our sales to global OEMs decreased by around 10%. We expect continued strong sales growth in China in 2026, driven mainly by our performance with domestic OEMs. Our strong sales growth in Asia excluding China was mainly due to 38% organic sales growth (Non-U.S. GAAP measure, see reconciliation table above) in India, reflecting LVP growth but mainly the trend of increased safety content in vehicles in India.
First quarter of 2026 organic growth1)
|
|
Americas |
|
EMEA |
|
Asia excl. China |
|
China |
|
Global |
Autoliv |
|
(5.2)% |
|
(1.8)% |
|
11.1% |
|
4.9% |
|
0.8 % |
Main growth drivers |
|
Subaru, Stellantis |
|
Renault, Volvo |
|
Suzuki, Tata |
|
Chery, EV COEM |
|
Suzuki, Chery |
Main decline drivers |
|
Ford, GM |
|
VW, Hyundai |
|
Toyota, Subaru |
|
VW, Honda |
|
Ford, VW |
1) Non-U.S. GAAP measure.
Light Vehicle Production Development
Change first quarter of 2026 versus first quarter of 2025
|
|
Americas |
|
EMEA |
|
Asia excl. China |
|
China |
|
Global |
LVP1) |
|
(0.6)% |
|
(0.8)% |
|
4.3 % |
|
(10.1)% |
|
(3.4)% |
1) Source: S&P Global, April 2026.
21
Earnings
|
|
Three Months Ended March 31, |
|
|
|
|
||||||
(Dollars in millions, except per share data) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Net Sales |
|
$ |
2,753 |
|
|
$ |
2,578 |
|
|
|
6.8 |
% |
Gross profit |
|
|
526 |
|
|
|
478 |
|
|
|
10.0 |
% |
% of sales |
|
|
19.1 |
% |
|
|
18.6 |
% |
|
|
0.6 |
pp |
S, G&A |
|
|
(161 |
) |
|
|
(145 |
) |
|
|
11.1 |
% |
% of sales |
|
|
(5.8 |
)% |
|
|
(5.6 |
)% |
|
|
(0.2 |
)pp |
R, D&E, net |
|
|
(120 |
) |
|
|
(95 |
) |
|
|
26 |
% |
% of sales |
|
|
(4.3 |
)% |
|
|
(3.7 |
)% |
|
|
(0.7 |
)pp |
Other income (expense), net |
|
|
(9 |
) |
|
|
15 |
|
|
n/a |
|
|
Operating income |
|
|
237 |
|
|
|
254 |
|
|
|
(6.7 |
)% |
% of sales |
|
|
8.6 |
% |
|
|
9.9 |
% |
|
|
(1.2 |
)pp |
Adjusted operating income1) |
|
|
245 |
|
|
|
255 |
|
|
|
(3.9 |
)% |
% of sales |
|
|
8.9 |
% |
|
|
9.9 |
% |
|
|
(1.0 |
)pp |
Financial and non-operating items, net |
|
|
(35 |
) |
|
|
(22 |
) |
|
|
60.7 |
% |
Income before taxes |
|
|
202 |
|
|
|
233 |
|
|
|
(13.1 |
)% |
Income taxes |
|
|
(60 |
) |
|
|
(65 |
) |
|
|
(7 |
)% |
Tax rate |
|
|
29.9 |
% |
|
|
28.0 |
% |
|
|
1.9 |
pp |
Net income |
|
|
142 |
|
|
|
167 |
|
|
|
(15.4 |
)% |
Earnings per share, diluted2) |
|
|
1.88 |
|
|
|
2.14 |
|
|
|
(12 |
)% |
Adjusted earnings per share, diluted1,2) |
|
|
2.05 |
|
|
|
2.15 |
|
|
|
(5 |
)% |
1) Non-U.S. GAAP measure, excluding effects from capacity alignments and antitrust related matters.
2) Net of treasury shares.
First quarter of 2026 financial development
Gross profit increased by $48 million and gross margin increased by 0.6pp compared to the prior year. The drivers behind the gross profit improvement were mainly positive foreign currency effects, improved operational efficiency with lower costs for labor as well as positive effects from higher sales. This was partly offset by increased tariff costs, net.
S,G&A costs increased by $16 million compared to the prior year, mainly due to $10 million in negative foreign currency translation effects and $5 million in higher costs for personnel driven by wage inflation and a non-recurring cost of $4 million. S,G&A costs in relation to sales increased from 5.6% to 5.8%.
R,D&E, net, costs increased by $25 million compared to the prior year, mainly due to $11 million in lower engineering income related to timing effects, $5 million in higher personnel costs due to wage inflation and $4 million in negative FX translation effects. R,D&E, net, in relation to sales increased from 3.7% to 4.3%.
Other income (expense), net, was negative $9 million, compared to positive $15 million in the same period last year. The positive $15 million in 2025 related mainly to recycled accumulated currency translation differences related to the divestment of our idled operations in Russia while the negative $9 million in 2026 related mainly to restructuring costs in EMEA.
Operating income decreased by $17 million compared to the prior year, due to the higher costs for R,D&E, net, Other income (expense) and S,G&A, partly offset by higher gross profit as outlined above.
Adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) decreased by $10 million compared to the prior year, due to the higher costs for R,D&E, net, S,G&A and Other income (expense), partly offset by higher gross profit as outlined above.
Financial and non-operating items, net, was negative $35 million compared to negative $22 million a year earlier. The cost increase comes from $12 million in higher costs for non-operating items mainly related to restructuring costs in Americas.
Income before taxes decreased by $30 million compared to the prior year, mainly due to the lower operating income and higher costs for financial and non-operating items, net.
Tax rate was 29.9% compared to 28.0% the prior year. Discrete tax items, net, had an unfavorable impact of 2.3pp in the first quarter 2026, while discrete tax items, net were not material in the corresponding quarter last year.
Earnings per share, diluted decreased by $0.26 compared to the prior year. The main drivers were $0.16 from lower operating income, $0.12 from financial and non-operating items, $0.05 from taxes partly offset by $0.07 from lower number of outstanding shares, diluted.
22
LIQUIDITY AND CAPITAL RESOURCES
The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows. The Company’s future contractual obligations have not changed materially from the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
First quarter of 2026 development
Changes in operating working capital impacted operating cash flow by $349 million negative compared to an impact of $179 million negative in the prior year. The $349 million increase in operating working capital mainly comes from $175 million increase in receivables and $134 million decrease in accounts payables. The increase in operating working capital is mainly related to high level of sales in March 2026, other temporary effects that are expected to reverse later in the year and the high level of accounts payable at the end of December 2025.
Operating cash flow decreased by $153 million to $(76) million compared to the prior year, mainly because of the increase in operating working capital outlined above and a lower net income, partly offset by higher depreciation and other non-cash adjustments.
Capital expenditure, net, decreased by $10 million compared to the prior year. The level of capital expenditure, net, in relation to sales declined to 3.0% versus 3.6% a year earlier. The lower level of capital expenditure, net is mainly related to the lower activity level of footprint optimization and less capacity expansion.
Free operating cash flow (Non-U.S. GAAP measure, see reconciliation table below) was negative $159 million compared to negative $16 million in the prior year. The decrease was due to the lower operating cash flow partly offset by the lower capital expenditure, net, as outlined above.
Cash conversion (Non-U.S. GAAP measure, see reconciliation table below) defined as free operating cash flow (Non-U.S. GAAP measure) in relation to net income, was n/a in the quarter compared to n/a a year earlier as free operating cash flow was negative both quarters.
Net debt (Non-U.S. GAAP measure, see reconciliation table below) was $1,773 million as of March 31, 2026, which was $14 million lower than a year earlier.
Total equity as of March 31, 2026, increased by $283 million compared to March 31, 2025. This was mainly due to net income of $710 million and $103 million in positive currency translation effects, partly offset by $304 million in share repurchases, including taxes, and $249 million in dividend payments.
Leverage ratio (Non-U.S. GAAP measure, see reconciliation table below): On March 31, 2026, the Company had a leverage ratio of 1.3x compared to 1.3x on March 31, 2025, as the 12 months trailing adjusted EBITDA (Non-U.S. GAAP measure, see reconciliation table below) increased by $74 million while net debt (Non-U.S. GAAP measure) per the policy was unchanged. Our target is to have a leverage ratio not higher than 1.5x.
NON-U.S. GAAP MEASURES
The Company believes that comparability between periods is improved through the exclusion of certain items. To assist investors in understanding the operating performance of Autoliv's business, it is useful to consider certain U.S. GAAP measures exclusive of these items.
The following tables reconciles Income before income taxes, Net income attributable to controlling interest and Capital employed, which are inputs utilized to calculate Return On Capital Employed (“ROCE”), adjusted ROCE, Return On Total Equity (“ROE”), and adjusted ROE. The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-U.S. GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods. Autoliv’s management uses the ROCE, adjusted ROCE, ROE and adjusted ROE measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business.
As used by the Company, ROCE is annualized operating income and income from equity method investments, relative to average capital employed. Adjusted ROCE is annualized operating income and income from equity method investments, relative to average capital employed as adjusted to exclude certain non-recurring items. See definitions of "annualized operating income" and "average capital employed" in footnote to the tables below. The Company believes ROCE and adjusted ROCE are useful indicators of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers.
23
ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. See definitions of "annualized income" "and "average total equity" in footnote to the tables below. Adjusted ROE is annualized income (loss) relative to average total equity for the periods presented as adjusted to exclude certain non-recurring items. The Company’s management believes that ROE and adjusted ROE are useful indicators of how well management creates value for its shareholders through its operating activities and its capital management.
Accordingly, the tables below reconcile from U.S. GAAP to the equivalent non-U.S. GAAP measure.
Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income"
|
Three Months Ended March 31, |
|
||||
(Dollars in millions) |
2026 |
|
2025 |
|
||
Operating income (GAAP) |
$ |
237 |
|
$ |
254 |
|
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments |
|
8 |
|
|
2 |
|
Less: Antitrust related items |
|
0 |
|
|
(1 |
) |
Total non-GAAP adjustments to operating income |
|
8 |
|
|
1 |
|
Adjusted Operating income (Non-GAAP) |
$ |
245 |
|
$ |
255 |
|
Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin"
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Operating margin (GAAP) |
|
8.6 |
% |
|
9.9 |
% |
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments |
|
0.3 |
% |
|
0.1 |
% |
Less: Antitrust related items |
|
0.0 |
% |
|
(0.0 |
)% |
Total non-GAAP adjustments to operating margin |
|
0.3 |
% |
|
0.0 |
% |
Adjusted Operating margin (Non-GAAP) |
|
8.9 |
% |
|
9.9 |
% |
Reconciliation of GAAP measure "Other non-operating items, net" to Non-GAAP measure "Adjusted Other non-operating items, net"
|
Three Months Ended March 31, |
|
||||
(Dollars in millions) |
2026 |
|
2025 |
|
||
Other non-operating items, net (GAAP) |
$ |
(12 |
) |
$ |
0 |
|
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - non-operating1) |
|
9 |
|
|
- |
|
Total non-GAAP adjustments to Other non-operating items, net |
|
9 |
|
|
- |
|
Adjusted Other non-operating items, net (Non-GAAP) |
$ |
(3 |
) |
$ |
0 |
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|
|||||
Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income taxes"
|
Three Months Ended March 31, |
|
||||
(Dollars in millions) |
2026 |
|
2025 |
|
||
Income before income taxes (GAAP) |
$ |
202 |
|
$ |
233 |
|
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - operating |
|
8 |
|
|
2 |
|
Less: Capacity alignments - non-operating1) |
|
9 |
|
|
- |
|
Less: Antitrust related items |
|
0 |
|
|
(1 |
) |
Total non-GAAP adjustments to Income before income taxes |
|
17 |
|
|
1 |
|
Adjusted Income before income taxes (Non-GAAP) |
$ |
219 |
|
$ |
233 |
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|
|||||
24
Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income"
|
Three Months Ended March 31, |
|
||||
(Dollars in millions) |
2026 |
|
2025 |
|
||
Net income (GAAP) |
$ |
142 |
|
$ |
167 |
|
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - operating |
|
8 |
|
|
2 |
|
Less: Capacity alignments - non-operating1) |
|
9 |
|
|
- |
|
Less: Antitrust related items |
|
0 |
|
|
(1 |
) |
Less: Tax on non-GAAP adjustments |
|
(4 |
) |
|
(0 |
) |
Total non-GAAP adjustments to Net income |
|
12 |
|
|
1 |
|
Adjusted Net income (Non-GAAP) |
$ |
154 |
|
$ |
168 |
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|
|||||
Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net income attributable to controlling interest"
|
Three Months Ended March 31, |
|
||||
(Dollars in millions) |
2026 |
|
2025 |
|
||
Net income attributable to controlling interest (GAAP) |
$ |
141 |
|
$ |
167 |
|
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - operating |
|
8 |
|
|
2 |
|
Less: Capacity alignments - non-operating1) |
|
9 |
|
|
- |
|
Less: Antitrust related items |
|
0 |
|
|
(1 |
) |
Less: Tax on non-GAAP adjustments |
|
(4 |
) |
|
(0 |
) |
Total non-GAAP adjustments to Net income attributable to controlling interest |
|
12 |
|
|
1 |
|
Adjusted Net income attributable to controlling interest (Non-GAAP) |
$ |
154 |
|
$ |
167 |
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|
|||||
Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share - diluted"
|
Three Months Ended March 31, |
|
||||
(Per share data) |
2026 |
|
2025 |
|
||
Earnings per share - diluted (GAAP) |
$ |
1.88 |
|
$ |
2.14 |
|
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - operating |
|
0.10 |
|
|
0.02 |
|
Less: Capacity alignments - non-operating1) |
|
0.12 |
|
|
- |
|
Less: Antitrust related items |
|
0.00 |
|
|
(0.02 |
) |
Less: Tax on non-GAAP adjustments |
|
(0.05 |
) |
|
(0.00 |
) |
Total non-GAAP adjustments to Earnings per share - diluted |
|
0.17 |
|
|
0.01 |
|
Adjusted Earnings per share - diluted (Non-GAAP) |
$ |
2.05 |
|
$ |
2.15 |
|
|
|
|
|
|
||
Weighted average number of shares outstanding - diluted |
|
75.1 |
|
|
77.9 |
|
1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|
|||||
25
Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital Employed"
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Return on capital employed1) (GAAP) |
|
22.2 |
% |
|
25.6 |
% |
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - operating |
|
0.7 |
% |
|
0.2 |
% |
Less: Antitrust related items |
|
0.0 |
% |
|
(0.1 |
)% |
Total non-GAAP adjustments to Return on capital employed1) |
|
0.7 |
% |
|
0.1 |
% |
Adjusted Return on capital employed1) (Non-GAAP) |
|
22.9 |
% |
|
25.6 |
% |
|
|
|
|
|
||
Annualized adjustment2) on Return on capital employed1) |
$ |
31 |
|
$ |
3 |
|
1) Annualized operating income and income from equity method investments, relative to average capital employed. The average capital employed amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period. |
|
|||||
2) The quarterly annualized adjustment to the operating income and income from equity method investments amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the operating income and income from equity method investments amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four. |
|
|||||
Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity"
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Return on total equity1) (GAAP) |
|
21.7 |
% |
|
28.8 |
% |
Non-GAAP adjustments: |
|
|
|
|
||
Less: Capacity alignments - operating |
|
1.1 |
% |
|
0.3 |
% |
Less: Capacity alignments - non-operating2) |
|
1.3 |
% |
|
- |
|
Less: Antitrust related items |
|
0.0 |
% |
|
(0.2 |
)% |
Less: Tax on non-GAAP adjustments |
|
(0.6 |
)% |
|
(0.0 |
)% |
Total non-GAAP adjustments to Return on total equity1) |
|
1.9 |
% |
|
0.1 |
% |
Adjusted Return on total equity1) (Non-GAAP) |
|
23.5 |
% |
|
28.9 |
% |
|
|
|
|
|
||
Annualized adjustment3) on Return on total equity1) |
$ |
50 |
|
$ |
2 |
|
1) Annualized net income relative to average total equity. The average total equity amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period. |
|
|||||
2) Relates to curtailment loss in connection with restructuring and capacity alignment activities. |
|
|||||
3) The quarterly annualized adjustment to net income amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the net income amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four. |
|
|||||
Autoliv from time to time enters into “debt-related derivatives” (DRDs) as a part of its debt management and as part of efficiently managing the Company’s overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of the Company’s debt, therefore we provide this non-U.S. GAAP measure. DRDs are fair value adjustments to the carrying value of the underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values.
Reconciliation of U.S. GAAP financial measure to “Net debt”
(Dollars in millions)
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
|
March 31, 2025 |
|
|||
Short-term debt |
|
$ |
393 |
|
|
$ |
419 |
|
|
$ |
540 |
|
Long-term debt |
|
|
1,699 |
|
|
|
1,734 |
|
|
|
1,565 |
|
Total debt |
|
|
2,091 |
|
|
|
2,153 |
|
|
|
2,105 |
|
Cash and cash equivalents |
|
|
(342 |
) |
|
|
(604 |
) |
|
|
(322 |
) |
Debt issuance cost/Debt-related derivatives, net |
|
|
23 |
|
|
|
17 |
|
|
|
4 |
|
Net debt |
|
$ |
1,773 |
|
|
$ |
1,566 |
|
|
$ |
1,787 |
|
26
The non-U.S. GAAP measure “Net debt” is also used in the non-U.S. GAAP measure “Leverage ratio”. Management uses the non-U.S. GAAP measure “Leverage Ratio” to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. The Company's long-term target for the leverage ratio (sum of net debt plus pension liabilities divided by EBITDA) is 1.0x with the aim to operate within the range of 0.5x to 1.5x. For details and calculation of leverage ratio, refer to the table below.
Calculation of “Leverage ratio”
(Dollars in millions)
(Dollars in millions) |
|
March 31, 2026 |
|
|
December 31, 2025 |
|
|
March 31, 2025 |
|
|||
Net debt1) |
|
$ |
1,773 |
|
|
$ |
1,566 |
|
|
$ |
1,787 |
|
Pension liabilities |
|
|
176 |
|
|
|
169 |
|
|
|
163 |
|
Net debt per the Policy |
|
|
1,949 |
|
|
|
1,736 |
|
|
|
1,950 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net income2) |
|
|
710 |
|
|
|
736 |
|
|
|
688 |
|
Income taxes 2) |
|
|
246 |
|
|
|
250 |
|
|
|
246 |
|
Interest expense, net2,3) |
|
|
93 |
|
|
|
93 |
|
|
|
97 |
|
Other non-operating items, net2) |
|
|
28 |
|
|
|
15 |
|
|
|
16 |
|
Income from equity method investments2) |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
Depreciation and amortization of intangibles2) |
|
|
419 |
|
|
|
407 |
|
|
|
386 |
|
Capacity alignments2) |
|
|
28 |
|
|
|
23 |
|
|
|
19 |
|
Antitrust related items2) |
|
|
4 |
|
|
|
3 |
|
|
|
4 |
|
Other items2) |
|
|
— |
|
|
|
— |
|
|
|
(0 |
) |
EBITDA per the Policy (Adjusted EBITDA) |
|
$ |
1,523 |
|
|
$ |
1,521 |
|
|
$ |
1,449 |
|
Leverage ratio |
|
|
1.3 |
|
|
|
1.1 |
|
|
|
1.3 |
|
1) Net debt (non-U.S. GAAP measure) is short- and long-term debt and debt-related derivatives, less cash and cash equivalents.
2) Latest 12-months.
3) Interest expense, net including cost for extinguishment of debt, if any, less interest income.
Management uses the non-U.S. GAAP measure “free operating cash flow” to analyze the amount of cash flow being generated by the Company’s operations after capital expenditure, net. This measure indicates the Company’s cash flow generation level that enables strategic value creation options such as dividends or acquisitions. For details on the calculation of free operating cash flow, see the table below. Management uses the non-U.S. GAAP measure “cash conversion” to analyze the proportion of net income that is converted into free operating cash flow. The measure is a tool to evaluate how efficiently the Company utilizes its resources. For details on cash conversion, see the table below.
Reconciliation of GAAP measure "Operating cash flow" to "Free operating cash flow" and "Cash conversion"
(Dollars in millions)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income |
|
$ |
142 |
|
|
$ |
167 |
|
Changes in operating working capital |
|
|
(349 |
) |
|
|
(179 |
) |
Depreciation and amortization |
|
|
107 |
|
|
|
95 |
|
Gain on divestiture of property |
|
|
— |
|
|
|
(6 |
) |
Other, net |
|
|
25 |
|
|
|
(1 |
) |
Operating cash flow |
|
|
(76 |
) |
|
|
77 |
|
Expenditures for property, plant and equipment |
|
|
(85 |
) |
|
|
(102 |
) |
Proceeds from sale of property, plant and equipment |
|
|
1 |
|
|
|
8 |
|
Capital expenditure, net1) |
|
|
(84 |
) |
|
|
(93 |
) |
Free operating cash flow2) |
|
$ |
(159 |
) |
|
$ |
(16 |
) |
Cash conversion3) |
|
n/a |
|
|
n/a |
|
||
1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment. |
|
|||||||
2) Operating cash flow less Capital expenditures, net. |
|
|||||||
3) Free operating cash flow relative to Net income. |
|
|||||||
27
Headcount
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
|
March 31, 2025 |
|
|||
Total headcount |
|
|
64,100 |
|
|
|
64,300 |
|
|
|
65,900 |
|
Whereof: |
|
|
|
|
|
|
|
|
|
|||
Direct personnel in manufacturing |
|
|
46,700 |
|
|
|
47,300 |
|
|
|
48,800 |
|
Indirect personnel |
|
|
17,400 |
|
|
|
17,000 |
|
|
|
17,100 |
|
Temporary personnel |
|
|
10 |
% |
|
|
10 |
% |
|
|
10 |
% |
As of March 31, 2026, total headcount (Full Time Equivalent) decreased by around 1,900, or 2.9%, compared to a year earlier. The indirect workforce increased by around 300, or 1.5%, mainly reflecting a change in headcount reporting classification, moving around 300 people from direct to indirect. The direct workforce decreased by approximately 2,100, or 4.4%. The decrease was supported by an improvement in customer call-off accuracy which enabled us to accelerate operating efficiency improvements and also reflecting the reclassification mentioned above.
Compared to December 31, 2025, total headcount (Full Time Equivalent) decreased by around 200, or 0.4%. Indirect headcount increased by around 300, while direct headcount decreased by approximately 600 impacted by the reclassification mentioned above.
Full year 2026 guidance
In addition to the assumptions below and in our business and market update below, our full year 2026 guidance is based on our customer call-offs and the achievement of our targeted cost compensation adjustments with our customers, including no material changes to tariffs or trade restrictions, as compared to what is in effect as of April 10, 2026, as well as no significant changes in the macro-economic environment, changes to customer call-off volatility or significant supply chain disruptions.
Full year 2026 Guidance |
|
Organic sales growth |
Around 0% |
Adjusted operating margin 1) |
Around 10.5-11% |
Operating cash flow 2) |
Around $1.2 billion |
Capital expenditures, net % of sales |
Less than 5% |
1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. |
|
2) Excluding unusual items. |
|
|
|
Full year 2026 Assumptions |
|
LVP growth |
Around 1% negative |
Foreign currency impact on net sales |
Around 3% positive |
Tax rate3) |
Around 28% |
3) Excluding unusual tax items. |
|
This report includes content supplied by S&P Global; Copyright © Light Vehicle Production Forecast, January and April 2026. All rights reserved.
The forward-looking non-U.S. GAAP financial measures above are provided on a non-U.S. GAAP basis. The Company has not provided a U.S. GAAP reconciliation of these measures because items that impact these measures, such as costs and gains related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and the Company is unable to determine the probable significance of the unavailable information.
28
Other Items
29
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of March 31, 2026, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that were provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
ITEM 4. CONTROLS AND PROCEDURES
An evaluation has been carried out, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
30
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary course of our business, we are subject to legal proceedings brought by or against us and our subsidiaries.
See Part I, Item 1, "Financial Statements, Note 8 Contingent Liabilities" of this Quarterly Report on Form 10-Q for a summary of certain ongoing legal proceedings. Such information is incorporated into this Part II, Item 1—"Legal Proceedings" by reference.
ITEM 1A. RISK FACTORS
As of March 31, 2026, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Stock repurchase program
No common stock was repurchased by the Company during the three months period ended March 31, 2026. On June 4, 2025, the Company announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to $2.5 billion of common shares and operates from July 1, 2025 through December 31, 2029.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
31
ITEM 6. EXHIBITS
Exhibit No. |
|
Description |
|
|
|
3.1 |
|
Autoliv’s Restated Certificate of Incorporation, as amended, incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 22, 2015). |
|
|
|
3.2 |
|
Autoliv’s Third Restated By-Laws, incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-12933, filing date December 18, 2015). |
|
|
|
4.1 |
|
Indenture, dated March 30, 2009, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to Autoliv’s Registration Statement on Form 8-A (File No. 001-12933, filing date March 30, 2009). |
|
|
|
4.2 |
|
Second Supplemental Indenture (including Form of Global Note), dated March 15, 2012, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-12933, filing date March 15, 2012). |
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4.3 |
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Form of Note Purchase and Guaranty Agreement dated April 23, 2014, among Autoliv ASP, Inc., Autoliv, Inc. and the purchasers named therein, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 25, 2014). |
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4.4 |
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Amendment and Waiver 2014 Note Purchase and Guaranty Agreement, dated May 24, 2018, among Autoliv, Inc., Autoliv ASP, Inc. and the noteholders named therein, incorporated herein by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018). |
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4.5 |
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Agency Agreement dated June 26, 2018 among Autoliv, Inc., Autoliv ASP, Inc. and HSBC Bank PLC, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018). |
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4.6
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Amended and Restated Agency Agreement, dated March 14, 2025, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 16, 2025). |
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4.7* |
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Base Listing Particulars Agreement, dated March 6, 2026, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein. |
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4.8* |
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Amended and Restated Programme Agreement, dated March 6, 2026, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein. |
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4.9 |
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General Terms and Conditions for Swedish Depository Receipts in Autoliv, Inc. representing common shares in Autoliv, Inc., effective as of April 8, 2024, with Skandinaviska Enskilda Banken AB (publ) serving as custodian, incorporated herein by reference to Exhibit 4.9 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 26, 2024). |
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10.1* |
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Employment Agreement, effective April 1, 2026, by and between Autoliv, Inc. and Monika Grama. |
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31.1* |
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Certification of the Chief Executive Officer of Autoliv, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
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31.2* |
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Certification of the Chief Financial Officer of Autoliv, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
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32.1* |
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Certification of the Chief Executive Officer of Autoliv, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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32.2* |
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Certification of the Chief Financial Officer of Autoliv, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101.INS* |
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Inline XBRL Instance Document – The instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the inline XBRL document. |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema Document. |
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104* |
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Cover Page Interactive Data File (embedded within the inline XBRL document). |
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* Filed herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 17, 2026
AUTOLIV, INC.
(Registrant)
By: |
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/s/ Monika Grama |
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Monika Grama |
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Chief Financial Officer |
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(Duly Authorized Officer and Principal Financial Officer) |
33