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What changed in AUTOLIV INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AUTOLIV INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+376 added−352 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-20)

Top changes in AUTOLIV INC's 2024 10-K

376 paragraphs added · 352 removed · 283 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe table below shows the Company's total workforce as of December 31, 2023, and 2022. 2023 2022 Total workforce 70,300 69,100 Whereof: Direct workforce in manufacturing 52,500 50,600 Indirect workforce 17,800 18,500 Temporary workforce 11 % 11 % Diversity and Inclusion When attracting, developing and retaining talent, the Company seeks individuals who hold varied experiences and viewpoints to create an inclusive and diverse workplace that allows each employee to do their best work and drive the Company's collective success.
Biggest changeThe table below shows the Company's total workforce as of December 31, 2024, and 2023. 2024 2023 Total workforce 65,200 70,300 Whereof: Direct workforce in manufacturing 48,000 52,400 Indirect workforce 17,200 17,800 Temporary workforce 9 % 11 % Talent Attraction, Development, and Retention The Company believes that attraction, development, and retention of talent is essential to its success, especially in today's environment.
The Company continues to drive its quality initiative called “Q5,” which was initiated in the summer of 2010. It is an integral part of the Company's strategy of shaping a proactive quality culture of zero defects. It is called “Q5” because it addresses quality in five dimensions: products, customers, growth, behavior, and suppliers.
The Company continues to drive its quality initiative called “Q5,” which was initiated in 2010. It is an integral part of the Company's strategy of shaping a proactive quality culture of zero defects. It is called “Q5” because it addresses quality in five dimensions: products, customers, growth, behavior, and suppliers.
For information on the Company's dependence on customers, see “Risk Factors – Our business could be materially and adversely affected if we lost any of our largest customers or if they were unable to pay their invoices” in Item 1A of this Annual Report, and “Dependence on Customers” under the section “Strategic Risks” in Item 7 of this Annual Report, and Note 19 “Segment Information” to the Consolidated Financial Statements Customer sales trends Asian vehicle producers have steadily become increasingly important, mainly driven by growth with Japanese and Chinese OEMs.
For information on the Company's dependence on customers, see “Risk Factors – Our business could be materially and adversely affected if we lost any of our largest customers or if they were unable to pay their invoices” in Item 1A of this Annual Report, and “Dependence on Customers” under the section “Strategic Risks” in Item 7 of this Annual Report, and Note 20 “Segment Information” to the Consolidated Financial Statements Customer sales trends Asian vehicle producers have steadily become increasingly important, mainly driven by growth with Japanese and Chinese OEMs.
Passive safety systems include modules and components for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, steering wheels, inflator technologies, and battery cut-off switches. To expand its product offerings, the Company has formed Mobility Safety Solutions.
Passive safety systems include modules and components for frontal-impact airbag protection systems, side-impact airbag protection systems, pedestrian protection systems, steering wheels, inflator technologies, battery cut-off switches and seatbelts. To expand its product offerings, the Company has formed Mobility Safety Solutions.
In the next three years all LVP growth is expected to come in medium- and low-income regions with lower CPV, leading to a dilution of the average global CPV.
In the next three years, almost all LVP growth is expected to come in medium- and low-income regions with lower CPV, leading to a dilution of the average global CPV.
Item 1. Business General Autoliv, Inc. (“Autoliv”, the “Company” or “we”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden where it currently employs approximately 105 people. The Company functions as a holding corporation and owns two principal subsidiaries, Autoliv AB and Autoliv ASP, Inc. The Company's fiscal year ends on December 31.
Item 1. Business General Autoliv, Inc. (“Autoliv”, the “Company” or “we”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden where it currently employs approximately 110 people. The Company functions as a holding corporation and owns two principal subsidiaries, Autoliv AB and Autoliv ASP, Inc. The Company's fiscal year ends on December 31.
By combining its core competence and industry experience, the Company also develops and manufactures mobility safety solutions such as pedestrian protection, battery cut-off switches, connected safety services, and safety solutions for riders of powered two-wheelers. The Company has 63 production facilities in 23 countries and its customers include the world’s largest car manufacturers.
By combining its core competence and industry experience, the Company also develops and manufactures mobility safety solutions such as pedestrian protection, battery cut-off switches, connected safety services, and safety solutions for riders of powered two-wheelers. The Company has 62 production facilities in 23 countries and its customers include the world’s largest car manufacturers.
Despite this negative regional LVP mix effect, the annual passive safety market (seatbelts and airbags, including steering wheels), is expected to grow from around $23 billion in 2023 to more than $25 billion over the next three years, based on the current macro-economic outlook and the Company's internal market intelligence and estimates.
Despite this negative regional LVP mix effect, the annual passive safety market (seatbelts and airbags, including steering wheels), is expected to grow from around $23 billion in 2024 to more than $25 billion over the next three years, based on the current macro-economic outlook and the Company's internal market intelligence and estimates.
The Company's ability to consistently outperform market growth is rooted in a steady flow of new safety technologies, a strong focus on quality, and a superior production and engineering footprint. The Company's competitors Autoliv is the clear market leader in passive safety components and systems for the automotive industry with an estimated global market share of around 45%.
The Company's ability to consistently outperform market growth is rooted in a steady flow of new safety technologies, a strong focus on quality, and a superior production and engineering footprint. The Company's competitors Autoliv is the clear market leader in passive safety components and systems for the automotive industry with an estimated global market share of around 44%.
In medium- and low-income markets (all markets other than the markets above), the Company sees great opportunities for CPV growth from more airbags and advanced seatbelt products. Average CPV in these markets is around $200 or almost $130 less than in the high-income markets.
In medium- and low-income markets (all markets other than the high-income markets above), the Company sees great opportunities for CPV growth from more airbags and advanced seatbelt products. Average CPV in these markets is around $200 or almost $140 less than in the high-income markets.
Since 1997, the Company’s sales compound annual growth rate (CAGR) for passive safety has been around 5% compared to the market rate of around 2.8% which includes an LVP growth of around 1.9%.
Since 1997, the Company’s sales compound annual growth rate (CAGR) for passive safety has been around 5% compared to the market rate of around 2.7% which includes an LVP growth of around 1.8%.
The component factories manufacture inflators, propellant, initiators, textile cushions, webbing, pressed steel parts, springs, and overmolded steel parts used in seatbelt and airbag assembly and steering wheels. The assembly factories source components from a number of parties, including Autoliv’s own component factories, and assemble complete restraint systems for “just-in-time” delivery to customers.
The component factories manufacture inflators, propellant, initiators, textile cushions, webbing, pressed steel parts, springs, and over molded steel parts used in seatbelt and airbag assembly and steering wheels. The assembly factories source components from a number of parties, including Autoliv’s own component factories, and assemble complete restraint systems for “just-in-time” delivery to customers.
In high-income markets (Western Europe, North America, Japan, and South Korea) the average CPV is around $330. CPV growth in these regions mainly come from new safety systems such as active seatbelts, knee airbags, and front-center airbags along with improved protection for pedestrians and rear-seat occupants like bag-in-belt or more advanced seatbelts.
In high-income markets (Western Europe, North America, Japan, and South Korea) the average CPV is around $340. CPV growth in these regions mainly comes from new safety systems such as active seatbelts, knee airbags, and front-center airbags along with improved protection for pedestrians and rear-seat occupants like bag-in-belt or more advanced seatbelts.
For example, Toyota uses “keiretsu” (in-house) suppliers Tokai Rika for seatbelts and Toyoda Gosei for airbags and steering wheels. These suppliers generally receive most of the Toyota business in Japan, in the same way, Mobis, a major supplier to Hyundai/Kia in South Korea, generally receives a significant part of their business.
For example, Toyota uses “keiretsu” (in-house) suppliers Tokai Rika for seatbelts and Toyoda Gosei for airbags and steering wheels. These suppliers generally receive most of the Toyota business in Japan, in the same way, Mobis, a major supplier to Hyundai/Kia in South Korea, generally receives a significant part of their business. Also BYD Auto., Ltd.
The Company's outperformance is a result of a steady flow of new passive safety technologies, strong focus on quality and a superior global footprint both in products and engineering. This has enabled Autoliv to increase its global market share in passive safety from 27% in 1997 to around 45% in 2023.
The Company's outperformance is a result of a steady flow of new passive safety technologies, strong focus on quality and a superior global footprint both in products and engineering. This has enabled Autoliv to increase its global market share in passive safety from 27% in 1997 to around 44% in 2024.
ZF, one of the Company's largest competitors, is a global leader in driveline and chassis technology as well as in passive safety technologies and is one of the largest global automotive suppliers. Another large competitor is Joyson Safety Systems (JSS), a subsidiary of Ningbo Joyson Electronic Corp.
ZF AG, one of the Company's largest competitors, is a global leader in drive-line and chassis technology as well as in passive safety technologies and is one of the largest global automotive suppliers. Another large competitor is Joyson Safety Systems (JSS), a subsidiary of Ningbo Joyson Electronic Corp.
However, these types of adjustments can be costly and can impact Autoliv's operating margin. When significant volatility in LVP occur, as we have seen in 2022 and 2023 due to supply disruptions, or when there is a shift in regional LVP, the capacity adjustments can take more time and be more costly.
However, these types of adjustments can be costly and can impact Autoliv's operating margin. When significant volatility in LVP occurs, as we saw in 2022 and 2023 due to supply disruptions, or when there is a shift in regional LVP, the capacity adjustments can take more time and be more costly.
Research, Development and Engineering, net (R,D&E) No single customer project accounted for more than 4% of Autoliv’s total R,D&E, net spending during 2023. To support Autoliv’s product portfolio, additional expertise is brought in-house via technology partnerships and licensing agreements. During 2023, gross expenditures for R,D&E amounted to $618 million compared to $595 million in 2022.
Research, Development and Engineering, net (R,D&E) No single customer project accounted for more than 3% of Autoliv’s total R,D&E, net spending during 2024. To support Autoliv’s product portfolio, additional expertise is brought in-house via technology partnerships and licensing agreements. During 2024, gross expenditures for R,D&E amounted to $612 million compared to $618 million in 2023.
For more information about how climate change impacts the Company's business, see "Risk factors – Global climate change could negatively affect our business” in Item 1A of this Annual Report. Raw Materials Direct material purchased from external suppliers represents approximately 55% of the Company's net sales in 2023. The Company mainly purchases manufactured components and raw materials for its operations.
For more information about how climate change impacts the Company's business, see "Risk factors – Global climate change could negatively affect our business” in Item 1A of this Annual Report. Raw Materials Direct material cost represents approximately 55% of the Company's net sales in 2024. The Company mainly purchases manufactured components and raw materials for its operations.
Of the R,D&E, net expense in 2023, 85% was for projects and programs where the Company has customer orders, typically related to vehicle models in development. The remaining 15% was mainly for new innovations, products and standardizations that will yield benefits over time.
Of the R,D&E, net expense in 2024, 86% was for projects and programs where the Company has customer orders, typically related to vehicle models in development. The remaining 14% was mainly for new innovations, products and standardizations that will yield benefits over time.
Of these amounts, $193 million in 2023 and $205 million in 2022 were related to customer-funded engineering projects and crash tests reimbursed by the customers. Net of this income, R,D&E expenditures in 2023 was $425 million compared to $390 million in 2022.
Of these amounts, $214 million in 2024 and $193 million in 2023 were related to customer-funded engineering projects and crash tests reimbursed by the customers. Net of this income, R,D&E expenditures in 2024 was $398 million compared to $425 million in 2023.
Health and Safety The Company is committed to providing a zero accident work environment that promotes the health, safety, and welfare of its employees. Autoliv’s production facilities implement the Company's health and safety management system, which is supported by leadership teams.
Health and Safety The Company is committed to providing a zero-injury work environment that promotes the health, safety, and welfare of its employees. Autoliv’s production facilities implement the Company's health and safety management system, which drives continuous improvement in health and safety, supported by the Company's leadership.
On December 31, 2023, the Company had approximately 70,300 personnel worldwide, with 11% being temporary personnel. Additional information required by this Item 1 regarding developments in the Company’s business during 2023 is contained under Item 7 in this Annual Report.
On December 31, 2024, the Company had approximately 65,200 personnel worldwide, with 9% being temporary personnel. Additional information required by this Item 1 regarding developments in the Company’s business during 2024 is contained under Item 7 in this Annual Report.
The five largest OEMs in 2023 accounted for around 46% of global LVP, and the ten largest OEMs accounted for around 66% of global LVP. A delivery contract is typically for the lifetime of a vehicle model, which is normally between five and seven years depending on customer platform sourcing preferences and strategies.
The company's five largest customers accounted for around 41%, and the ten largest customers for around 59% of global LVP in 2024. A delivery contract is typically for the lifetime of a vehicle model, which is normally between five and seven years depending on customer platform sourcing preferences and strategies.
The Company’s sales in 2023 were $10.5 billion, approximately 67% of which consisted of airbag and steering wheel products and approximately 33% of which consisted of seatbelt products. The Company's business is conducted in the following geographical regions: The Americas, Europe, China, and Asia, excluding China.
The Company’s sales in 2024 were $10.4 billion, approximately 68% of which consisted of airbag and steering wheel products and approximately 32% of which consisted of seatbelt products. The Company's business is conducted in the following geographical regions: The Americas, Europe, China, and Asia, excluding China.
Dependence on Customers In 2023, the Company's top five customers represented around 48% of its consolidated sales and the Company's top ten customers represented around 78% of its consolidated sales. This reflects the concentration of manufacturers in the automotive industry.
Dependence on Customers In 2024, the Company's top five customers represented around 44% of its consolidated net sales and the Company's top ten customers represented around 71% of its consolidated net sales. This reflects the concentration of manufacturers in the automotive industry.
According to S&P Global, LVP is forecasted to grow to close to 90 million by 2026 from approximately 87 million in 2023, due to growing demand and export in medium- and low-income markets.
According to S&P Global, LVP is forecasted to grow to close to 91 million by 2027 from almost 87 million in 2024, due to growing demand and export in medium- and low-income markets.
As a group they represented around 44% of global sales in 2023, of which Japanese OEMs accounts for more than two thirds. This is a result of the Company's stronger market position based on its local presence in Japan.
As a group they represented around 46% of the Company's consolidated net sales in 2024, of which Japanese OEMs accounts for almost two thirds. This is a result of the Company's stronger market position based on its local presence in Japan.
The U.S. based OEMs (including Chrysler and new EV manufactures) accounted for 23% of the Company's global sales in 2023. Globally one of the Company's strongest growing customers from 2022 to 2023 was Honda, closely followed by Toyota.
The U.S. based OEMs (including Chrysler and new EV manufactures) accounted for 21% of the Company's global sales in 2024. Globally one of the Company's strongest growing customers from 2023 to 2024 was Geely followed by Mercedes and Renault.
While there have been a small number of minor labor disputes historically, such disputes have not had a significant or lasting impact on the Company's relationship with its employees, and customer perception of its employee practices or its business results.
While there have been a small number of minor labor disputes historically, such disputes have not had a significant or lasting impact on the Company's relationship with its employees, and customer perception of its employee practices or its business results. Around 60 percent of the Company’s workforce outside the United States is covered by a collective bargaining agreement.
The automotive passive safety market is driven by two primary factors: light vehicle production (LVP) and content per vehicle (CPV). 3 The first growth driver, LVP, has increased at an average annual growth rate of around 1.9% since the start of Autoliv in 1997 despite the substantial headwinds from recent supply chain disruptions and semiconductor shortages, including in 2022.
The automotive passive safety market is driven by two primary factors: light vehicle production (LVP) and content per vehicle (CPV). 3 The first growth driver, LVP, has increased at an average annual growth rate of around 1.8% since the start of Autoliv in 1997 despite persistent headwinds in Europe and North America.
Currently, the volatility of LVP and orders from the Company, while more stable, continue to be more volatile than prior to the Covid-19 pandemic. Additionally, when there is significant demand for a given product due to a major recall of a competitor’s product, like certain of the Company's customers have experienced, capacity adjustments may take time.
During 2024 the volatility of LVP continued to improve, although it is still more volatile than prior to the COVID-19 pandemic. Additionally, when there is significant demand for a given product due to a major recall of a competitor’s product, like certain of the Company's customers have experienced, capacity adjustments may take time.
The products manufactured by Autoliv’s consolidated subsidiaries in 2023 consisted of 148 million complete seatbelt systems (of which 100 million were fitted with pretensioners), 127 million side airbags (including curtain airbags and front center airbags), 63 million frontal airbags, 6 million other airbags and 22 million steering wheels.
The products manufactured by Autoliv’s consolidated subsidiaries in 2024 consisted of 142 million complete seatbelt systems (of which 98 million were fitted with pretensioners), 132 million side airbags (including curtain airbags and front center airbags), 60 million frontal airbags and 21 million steering wheels.
The market for airbags, where Autoliv has a global market share of around 47%, is expected to grow mainly as result of higher installation rates of inflatable curtains, side airbags, and knee airbags. Additionally, the front center airbag is expected to start to contribute to the market growth.
The market for airbags and steering wheels, where Autoliv has a global market share of around 44%, is expected to grow mainly as result of higher installation rates of inflatable curtains, side airbags, knee airbags, center airbags as well as the trend towards higher-value steering wheels with leather and additional features.
The Chinese OEMs as a group accounted for around 6% of the Company's global sales in 2023, with Great Wall representing more than 1% of the Company's global sales. European based brands accounted for 29% of the Company's global sales in 2023.
The Chinese OEMs as a group accounted for around 7% of the Company's consolidated net sales in 2024, with Geely representing more than 2% of the Company's consolidated net sales. European based brands accounted for 30% of the Company's consolidated net sales in 2024.
Implementation of the system as well as the ISO 45001 health and safety management system is monitored through internal and external audits. At the end of 2023, 61% of production facilities were certified according to ISO 45001.
Execution of the system is monitored through internal and external ISO 45001 occupational health and safety management system audits. At the end of 2024, 66% of the Company's production facilities were certified to the ISO 45001 standard. 8 Labor Relations The Company offers fair terms and conditions of employment.
The Company has operations in 25 countries, with 18% of its workforce located in Asia (excluding China), 31% in the Americas, 14% in China, and 37% in Europe (including South Africa, Tunisia and Turkey).
The Company's workforce reflects the diversity of the countries and cultures in which it operates. 30% of the Company’s workforce is located in the Americas, 19% in Asia (excluding China), 14% in China, and 37% in Europe (including South Africa, Tunisia and Turkey). Supporting the development of the employees is essential in a highly competitive and rapidly changing environment.
The Company offers an inclusive work environment where its employees are challenged and achieve great things together. Supporting the development of the employees is essential in a highly competitive and rapidly changing environment.
The Company offers an inclusive work environment where its employees are challenged and achieve great things together. The Company seeks individuals who hold varied experiences and viewpoints to create a workplace that allows each employee to do their best work and drive the Company's collective success.
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The highest growth rate is expected in steering wheels, where Autoliv has a global market share of around 40%, generated by the trend toward higher-value steering wheels with leather and additional features.
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(BYD) has a high degree of vertical integration, with a large proportion of in-house sourcing of products and systems. This includes passive safety systems, which is supplied by its subsidiary FinDreams Technology. Autoliv supplies components, especially inflators, to FinDreams Technology.
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The Company's workforce reflects the diversity of the countries and cultures in which it operates. At the end of 2023, 49% of the Company's workforce and 20% of the Company's senior management positions were held by women.
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The table below show the Company's workforce by age group and gender in % at the end of 2023. % of Men Age group % of Women 1% >60 1% 5% 51-60 5% 10% 41-50 11% 18% 31-40 16% 15% 21-30 14% 2% 2% Talent Attraction, Development, and Retention The Company believes that attraction, development, and retention of talent is essential to its success, especially in today's environment.
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The Company further supports employees’ health and well-being by providing the means necessary to allow many of its employees to work remotely. 8 Labor Relations The Company offers fair terms and conditions of employment.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRISKS RELATED TO GEOPOLITICAL DEVELOPMENTS Although we have minimal operations in Russia no operations in the Middle East, we face risks related to the war in Ukraine and the Red Sea Conflict, which has had, and is expected to continue to have, an adverse impact on our business and financial performance The macro-economic uncertainty has been exacerbated by the war in Ukraine, the war in Israel/Gaza and the Red Sea Conflict.
Biggest changeUnfavorable global economic conditions and geopolitical events could adversely affect our business, results of operations and financial condition The macro-economic uncertainty has been exacerbated by the war in Ukraine and the war in Israel/Gaza, and disruptions to shipping in the Red Sea.
Even where we are able to pass price increases along to our customer, there may be (i) a lapse of time before we are able to do 12 so such that we must absorb the cost increase, and (ii) a negative impact on our relationships with such customers and suppliers which may limit our success in securing future awards from customers and securing acceptable supplies from suppliers.
Even where we are able to pass price increases along to our customer, there may be (i) a lapse of time before we are able to do so such that we must absorb the cost increase, and (ii) a negative impact on our relationships with such customers and suppliers which may limit our success in securing future awards from customers and securing acceptable supplies from suppliers.
We cannot assure that we will not experience any material warranty, product liability or intellectual property claim losses in the future or that we will not incur significant costs to defend such claims. See “If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired”.
We cannot assure that we will not experience any material warranty, product liability or 11 intellectual property claim losses in the future or that we will not incur significant costs to defend such claims. See “If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired”.
In the future, we may pursue acquisitions of businesses or products that are 18 complementary to our business but for which we have historically had little or no direct experience. These transactions can involve significant challenges and risks as well as significant time and resources that may divert management’s attention from other business activities.
In the future, we may pursue acquisitions of businesses or products that are complementary to our business but for which we have historically had little or no direct experience. These transactions can involve significant challenges and risks as well as significant time and resources that may divert management’s attention from other business activities.
We continue to invest in technology and innovation which we believe will be 10 critical to our long-term growth. Our ability to maintain and improve existing products, while successfully developing and introducing distinctive new and enhanced products that anticipate changing customer and consumer preferences and capitalize upon emerging technologies will be a significant factor in our ability to remain competitive.
We continue to invest in technology and innovation which we believe will be critical to our long-term growth. Our ability to maintain and improve existing products, while successfully developing and introducing distinctive new and enhanced products that anticipate changing customer and consumer preferences and capitalize upon emerging technologies will be a significant factor in our ability to remain competitive.
Our ability to obtain unsecured funding at a reasonable cost is dependent on our credit ratings or our perceived creditworthiness. Our current 14 credit rating could be lowered as a result of us experiencing significant negative cash flows, increasing our indebtedness and leverage, or a dire financial outlook, which may affect our ability to procure financing.
Our ability to obtain unsecured funding at a reasonable cost is dependent on our credit ratings or our perceived creditworthiness. Our current credit rating could be lowered as a result of us experiencing significant negative cash flows, increasing our indebtedness and leverage, or a dire financial outlook, which may affect our ability to procure financing.
In addition, as our products more frequently use 11 global designs and are based on or utilize the same or similar parts, components or solutions, there is a risk that the number of vehicles affected globally by a failure or defect will increase significantly with a corresponding increase in our costs.
In addition, as our products more frequently use global designs and are based on or utilize the same or similar parts, components or solutions, there is a risk that the number of vehicles affected globally by a failure or defect will increase significantly with a corresponding increase in our costs.
Significant judgment and estimation are required in determining our effective tax rate and in evaluating our tax positions, in many cases where the ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable, the final determination of our tax liability may be different from what is reflected in our historical income tax provisions and accruals.
Significant judgment and estimation are required in determining our effective tax rate and in evaluating our tax positions, in many cases where the 21 ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable, the final determination of our tax liability may be different from what is reflected in our historical income tax provisions and accruals.
Some of these are based on our internal scenario analysis, which may not prove to be accurate and carries inherent uncertainties. Statements related to these goals, targets, ambitions 16 and objectives reflect our current plans and do not constitute a guarantee that they will be achieved.
Some of these are based on our internal scenario analysis, which may not prove to be accurate and carries inherent uncertainties. Statements related to these goals, targets, ambitions and objectives reflect our current plans and do not constitute a guarantee that they will be achieved.
Additionally, we license proprietary technology, from third parties, that is covered by patents, and we cannot be certain that any such patents will not be challenged, invalidated, or circumvented. Such licenses may also be non-exclusive, meaning our competition may also be able to access such technology.
Additionally, we license proprietary technology, from third parties, which is covered by patents, and we cannot be certain that any such patents will not be challenged, invalidated, or circumvented. Such licenses may also be non-exclusive, meaning our competition may also be able to access such technology.
Disruptions in our supply chain may result for many reasons, including closures of one of our own or one of our suppliers’ facilities or critical manufacturing lines due to strikes or other labor disputes, mechanical failures, electrical outages, fires, explosions, critical pollution levels, critical health and safety and other working conditions issues (including epidemics and pandemics), natural disasters, war, political upheaval, as well as logistical complications due to labor disruptions, weather or natural disasters, acts of terrorism or violence (such as the conflict in the Red Sea), mechanical failures, and legislation or regulation regarding the transport of hazardous goods.
Disruptions in our supply chain may result for many reasons, including closures of one of our own or one of our suppliers’ facilities or critical manufacturing lines due to strikes or other labor disputes, mechanical failures, electrical outages, fires, explosions, critical pollution levels, critical health and safety and other working conditions issues (including epidemics and pandemics), natural disasters, war, political upheaval, as well as logistical complications due to labor disruptions, weather or natural disasters, acts of terrorism or violence (such as the disruptions in shipping in the Red Sea), mechanical failures, and legislation or regulation regarding the transport of hazardous goods.
There are significant resources associated with complying with these requirements, including diligence efforts to determine the sources of conflict minerals used in our products and potential changes to our processes or supplies as a consequence of such diligence efforts.
There are significant resources associated with complying with these requirements, including diligence efforts 12 to determine the sources of conflict minerals used in our products and potential changes to our processes or supplies as a consequence of such diligence efforts.
These matters may include, without limitation, disputes with our suppliers and customers, intellectual property claims, shareholder litigation, government investigations, class action lawsuits, personal injury claims, product liability claims, environmental issues, antitrust, 13 customs and VAT disputes, and employment and tax issues.
These matters may include, without limitation, disputes with our suppliers and customers, intellectual property claims, shareholder litigation, government investigations, class action lawsuits, personal injury claims, product liability claims, environmental issues, antitrust, customs and VAT disputes, and employment and tax issues.
Although have negotiated and continue to negotiate with our customers with respect to these additional costs, commercial negotiations with our customers may not be successful or may not offset all of the adverse impact of higher transportation, energy and commodity costs.
Although we have negotiated and continue to negotiate with our customers with respect to these additional costs, commercial negotiations with our customers may not be successful or may not offset all of the adverse impact of higher transportation, energy and commodity costs.
These open source licenses typically mandate that proprietary software, when combined in specific ways with open source software, become subject to the open source license. If we combine our proprietary software in such ways with open source software, we could be required to release the source code of our proprietary software.
These open source licenses typically mandate that proprietary 20 software, when combined in specific ways with open source software, become subject to the open source license. If we combine our proprietary software in such ways with open source software, we could be required to release the source code of our proprietary software.
Given the competitive nature of our business, the amount of awards we are awarded relative to our peers may decrease over time and our past order intake is not an indicator of future levels or order intake. Additionally, OEMs rigorously evaluate our performance and products against those of our competitors on the basis of product quality, reliability and cost-effectiveness.
Given the competitive nature of our business, the number of awards we are awarded relative to our peers may decrease over time and our past order intake is not an indicator of future levels or order intake. Additionally, OEMs rigorously evaluate our performance and products against those of our competitors on the basis of product quality, reliability and cost-effectiveness.
Our intellectual property plays an important role in maintaining our competitive position in a number of the markets we serve. At present, we hold more than 6,500 patents and patent applications covering a large number of innovations and product ideas, mainly in the fields of seatbelt and airbag technologies.
Our intellectual property plays an important role in maintaining our competitive position in a number of the markets we serve. At present, we hold more than 6,600 patents and patent applications covering a large number of innovations and product ideas, mainly in the fields of seatbelt and airbag technologies.
If a major customer would enter into bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of legal or other modification, or if a major customer otherwise successfully procures protection against us legally enforcing its obligations, it is likely, absent special relief such as having a “preferred status”, that we will be forced to record a substantial loss.
If a major customer enters into bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of legal or other modification, or if a major customer otherwise successfully procures protection against us legally enforcing its obligations, it is likely, absent special relief such as having a “preferred status”, that we will be forced to record a substantial loss.
We may also for the same, or other reasons, find it difficult to secure new long-term credit facilities, at reasonable terms, when our principal credit facility expires in 2027.
We may also for the same, or other reasons, find it difficult to secure new long-term credit facilities, at reasonable terms, when our principal credit facility expires in 2029.
Our indebtedness may harm our financial condition and results of operations As of December 31, 2023, we have outstanding debt of $1.9 billion. We may incur additional debt for a variety of reasons.
Our indebtedness may harm our financial condition and results of operations As of December 31, 2024, we have outstanding debt of $1.9 billion. We may incur additional debt for a variety of reasons.
Global climate change could negatively affect our business Increased public awareness and concern regarding global climate change will likely result in more regional and/or national requirements to reduce or mitigate the effects of greenhouse gas emissions. In addition, our shareholders and customers also expect us to reduce our greenhouse gas emissions.
Global climate change could negatively affect our business Increased public awareness and concern regarding global climate change may result in more regional and/or national requirements to reduce or mitigate the effects of greenhouse gas emissions. In addition, our shareholders and customers also expect us to reduce our greenhouse gas emissions.
Due to the majority of the growth in global LVP over time being concentrated in growth markets, our operating results may be impacted if the passive safety content per vehicle remains low and if the penetration of automotive safety systems does not increase in these regions.
Due to the concentration of the majority of the growth in global LVP over time in growth markets, our operating results may be impacted if the passive safety content per vehicle remains low and if the penetration of automotive safety systems does not increase in these regions.
These proposals, if adopted by countries in which we operate, could result in changes to tax policies, including transfer pricing policies, that could ultimately impact our tax liabilities.
These 17 proposals, if adopted by countries in which we operate, could result in changes to tax policies, including transfer pricing policies, which could ultimately impact our tax liabilities.
Additional information concerning our major customers is included in Note 19, Segment Information, of the Consolidated Financial Statements in this Annual Report.
Additional information concerning our major customers is included in Note 20, Segment Information, of the Consolidated Financial Statements in this Annual Report.
Information concerning our benefit plans is included in Note 18, Retirement Plans, of the Consolidated Financial Statements in this Annual Report.
Information concerning our benefit plans is included in Note 19, Retirement Plans, of the Consolidated Financial Statements in this Annual Report.
In addition to our in-house research and development efforts, we seek to acquire rights to new intellectual property through corporate acquisitions, asset acquisitions, licensing and joint venture arrangements. Our patents and licenses expire on various dates during the period from 2024 to 2043.
In addition to our in-house research and development efforts, we seek to acquire rights to new intellectual property through corporate acquisitions, asset acquisitions, licensing and joint venture arrangements. Our patents and licenses expire on various dates during the period from 2025 to 2044.
Historically, these regulations have imposed ever more stringent safety regulations for vehicles. Safety regulations have a positive impact on driver awareness and acceptance of automotive safety products and technology. These more stringent safety regulations often require vehicles to have more safety content per vehicle and more advanced safety products, which has thus been a driver of growth in our business.
Safety regulations have a positive impact on driver awareness and acceptance of automotive safety products and technology. These more stringent safety regulations often require vehicles to have more safety content per vehicle and more advanced safety products, which has thus been a driver of growth in our business.
The expansion of our product offering will require us to invest time and resources to develop innovative products, such as wearables and helmets, that keep pace with continuing changes in industry standards and to reach new customers who have rapidly changing preferences.
The expansion of our product offering will require us to invest time and resources to develop innovative products, such as wearables and two-wheeler passive safety products, that keep pace with continuing changes in industry standards and to reach new customers who have rapidly changing preferences.
Information concerning our credit facilities and other financings are included in Item 7 in this Annual Report in the section headed “Treasury Activities” and in Note 13, Debt and Credit Agreements, to the Consolidated Financial Statements in this Annual Report.
Information concerning our credit facilities and other financings is included in Item 7 in this Annual Report in the section headed “Treasury Activities” and in Note 14, Debt and Credit Agreements, to the Consolidated Financial Statements in this Annual Report.
Inflation is also currently high world-wide and may continue for an unforeseen time. Due in part to the negative impact of the war in Ukraine, we have experienced exacerbated increases in raw materials and increased costs for transportation, energy, and commodities.
Inflation is also currently high world-wide and may continue for an unforeseen time, which could lead to fluctuations in interest rates. Due in part to the negative impact of the war in Ukraine, we have experienced exacerbated increases in raw materials and increased costs for transportation, energy, and commodities.
Uncertainty regarding inventory levels may be exacerbated by consumer financing programs initiated or terminated by our customers or governments as such changes may affect the timing of their sales. Changes in automotive sales and LVP and/or customers’ inventory levels will have an impact on our financial targets, earnings guidance, and estimates.
Uncertainty regarding inventory levels may be further impacted by consumer financing programs initiated or terminated by our customers or governments, as such changes can influence the timing of sales. Changes in automotive sales and LVP and/or customers’ inventory levels will have an impact on our financial targets, earnings guidance, and estimates.
Growth rates in safety content per vehicle, which can be impacted by changes in consumer trends, political decisions, crash test ratings and safety regulations could affect our results in the future The Company estimates that the average global content of passive safety systems per light vehicle increased in 2023 to around $261.
Growth rates in safety content per vehicle, which can be impacted by changes in consumer trends, political decisions, crash test ratings and safety regulations could affect our results in the future The Company estimates that the average global content of passive safety systems per light vehicle in 2024 was unchanged around $260.
A prolonged recession and/or a downturn in our industry could result in us having insufficient funds to continue our operations and external financing may not be available to us or available only on materially different terms than what has historically been available Our ability to generate cash from our operations is highly dependent on automotive sales and LVP, the global economy, and the economies of our important markets.
See Note 12, Restructuring, to the Consolidated Financial Statements in this Annual Report. 14 A prolonged recession and/or a downturn in our industry could result in us having insufficient funds to continue our operations and external financing may not be available to us or available only on materially different terms than what has historically been available Our ability to generate cash from our operations is highly dependent on automotive sales and LVP, the global economy, and the economies of our important markets.
We are also subject to the existing U.S. Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, which requires equipment manufacturers, such as Autoliv, to comply with “Early Warning” requirements by reporting certain information to the National Highway Traffic Safety Administration (“NHTSA”) such as: information related to defects or reports of injury related to our products.
We are also subject to the existing U.S. Transportation Recall Enhancement, Accountability and Documentation (“TREAD”) Act, which requires equipment manufacturers, such as Autoliv, to comply with “Early Warning” requirements by reporting certain information to NHTSA such as: information related to defects or reports of injury related to our products.
Our financial performance can be impacted depending on the mix of products we sell during a given period. Our earnings guidance, estimates, and financial targets assume a certain geographic sales mix as well as a product sales mix.
Our financial performance can be impacted depending on the mix of products we sell during a given period. Our earnings guidance, estimates, and financial targets assume a certain product sales mix as well as a geographic sales mix as many of the growth markets have a lower content per vehicle.
The discontinuation, lack of commercial success, or loss of business with respect to a particular vehicle model for which we are a significant supplier could reduce our sales and harm our business A number of our customer contracts generally require us to supply a customer’s annual requirements for a particular vehicle model and assembly facilities, rather than for manufacturing a specific quantity of products.
The inability to compete successfully could have a material adverse effect on our business, results of operations, and financial condition. 10 The discontinuation, lack of commercial success, or loss of business with respect to a particular vehicle model for which we are a significant supplier could reduce our sales and harm our business A number of our customer contracts generally require us to supply a customer’s annual requirements for a particular vehicle model and assembly facilities, rather than for manufacturing a specific quantity of products.
This is the result of customer consolidation in the last few decades. In 2023, our top five customers represented around 48% of our consolidated sales, and our largest customer contract accounted for around 2.8% of our consolidated sales.
This is the result of customer consolidation in the last few decades. In 2024, our top five customers represented around 44% of our consolidated sales, and our largest customer contract accounted for around 4% of our consolidated sales.
While we obtain assurances that any third parties we provide data to will protect this information and, where we believe appropriate, monitor the protections employed by these third parties, there is a risk the confidentiality of data held by us or by third parties may be compromised and expose us to liability for such breach.
While we obtain assurances that any third parties to whom we provide data will protect this information and, where we deem appropriate, monitor the protections they employ, there remains a risk that the confidentiality of data held by us or by third parties may be compromised, exposing us to liability for such breach.
No assurance can be given that we will be able to or will choose to pay any dividends or repurchase any shares in the foreseeable future. 15 Cybersecurity incidents or other damage to our technology infrastructure could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and operating results We rely extensively on information technology (“IT”) networks and systems, our global data centers and services provided over the internet to process, transmit and store electronic information, and to manage or support a variety of business processes or activities across our facilities worldwide.
Cybersecurity incidents or other damage to our technology infrastructure could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and operating results We rely extensively on information technology (“IT”) networks and systems, our global data centers and services provided over the internet to process, transmit and store electronic information, and to manage or support a variety of business processes or activities across our facilities worldwide.
Our foreign operations may subject us to risks relating to laws governing international relations Due to our global operations, we are subject to many laws governing international relations (including, but not limited to, the Foreign Corrupt Practices Act, and other anti-bribery regulations in foreign jurisdictions where we do business), which prohibit improper payments to government officials and restrict where and how we can do business, what information or products we can supply to certain countries 17 and what information we can provide to authorities in governmental authorities.
The imposition of customs duties on imports into the U.S., Mexico or Canada could negatively impact our financial performance. 18 Our foreign operations may subject us to risks relating to laws governing international relations Due to our global operations, we are subject to many laws governing international relations (including, but not limited to, the Foreign Corrupt Practices Act, and other anti-bribery regulations in foreign jurisdictions where we do business), which prohibit improper payments to government officials and restrict where and how we can do business, what information or products we can supply to certain countries and what information we can provide to authorities in governmental authorities.
If one or more of our OEM customers determine that they could achieve overall better financial results by incorporating a competitor’s new or existing product, it could affect our ability to be competitive and may decrease our current market share. The inability to compete successfully could have a material adverse effect on our business, results of operations, and financial condition.
If one or more of our OEM customers determine that they could achieve overall better financial results by incorporating a competitor’s new or existing product, it could affect our ability to be competitive and may decrease our current market share.
Item 1A. Ri sk Factors Our business, financial condition, operating results and cash flows may be impacted by a number of factors. A discussion of the risks associated with these material risk factors is included below.
Item 1A. Ri sk Factors Our business, financial condition, operating results and cash flows may be impacted by a number of factors. A discussion of the risks associated with these material risk factors is included below. RISKS RELATED TO OUR INDUSTRY The cyclical nature of automotive sales and production can adversely affect our business.
Such price increases have and could materially increase our operating costs and materially and adversely affect our profit margin, as direct material costs amounted to approximately 55% of our net sales in 2023, of which approximately half is the raw material cost portion. Inflation is currently high world-wide and may continue for some time.
Such price increases have and could materially increase our operating costs and materially and adversely affect our profit margin, as direct material costs amounted to approximately 55% of our net sales in 2024, of which approximately half is the raw material cost portion.
Vehicles produced in different markets may have various passive safety content values. For example, in high-income markets, the premium vehicle segment has an average passive safety content values of over $350 per vehicle, whereas in growth markets such as China and India the average passive safety content per vehicle is approximately $209 and $104, respectively.
Vehicles produced in different markets may have various passive safety content values. For example, in high-income markets, light vehicles have an average passive safety content values of around $340 per vehicle, whereas in growth markets such as China and India the average passive safety content per vehicle is approximately $200 and $120, respectively.
Additionally, even if we are successful with respect to negotiations with customers relating to cost increases, there may be delay before we recover any increased costs. These may have a material negative impact on our business and results of operations. RISKS RELATED TO OUR INDUSTRY The cyclical nature of automotive sales and production can adversely affect our business.
Additionally, even if we are successful with respect to negotiations with customers relating to cost increases, there may be delay before we recover any increased costs. These may have a material negative impact on our business, results of operations, and financial condition.
As a result, our exposure to the risks described above may be greater in the future, and our exposure to risks associated with developing countries, such as the risk of political upheaval and reliability of local infrastructure, may increase.
As a result, our exposure to the risks described above may be greater in the future, and our exposure to risks associated with developing countries, such as the risk of political upheaval and reliability of local infrastructure, may increase. It could also impact importing certain foreign-produced vehicles into the U.S.
We may experience problems integrating acquired technologies into our existing technologies and products, and such acquired intellectual property may be subject to known or contingent liabilities such as infringement claims. 19 Some of our products and technologies may use “open source” software, which may restrict how we use or distribute our products or require that we release the source code of certain products subject to those licenses Some of our products and technologies may incorporate software licensed under so-called “open source” licenses.
Some of our products and technologies may use “open source” software, which may restrict how we use or distribute our products or require that we release the source code of certain products subject to those licenses Some of our products and technologies may incorporate software licensed under so-called “open source” licenses.
We are involved from time to time in legal proceedings and our business may suffer as a result of adverse outcomes of current or future legal proceedings We are, from time to time, involved in litigation, regulatory proceedings, and commercial or contractual disputes that may be significant.
If actual results vary significantly from this projected product and geographic mix of sales, our operating results and financial condition could be negatively impacted. 13 We are involved from time to time in legal proceedings and our business may suffer as a result of adverse outcomes of current or future legal proceedings We are, from time to time, involved in litigation, regulatory proceedings, and commercial or contractual disputes that may be significant.
Although we seek to deploy comprehensive security measures to prevent, detect, address and mitigate these threats, there has been an increased level of activity, and an associated level of sophistication, in cyber-attacks against large multinational companies.
Although we seek to deploy comprehensive security measures to prevent, detect, address and mitigate these threats, there has been an increased level of activity, and an associated level of sophistication, in cyber-attacks against large multinational companies. Threat actors, including nation state attackers, could also use artificial intelligence for malicious purposes, increasing the frequency and complexity of their attacks.
RISKS RELATED TO INTELLECTUAL PROPERTY If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired We have developed a considerable amount of proprietary technology related to automotive safety systems and rely on a number of patents to protect such technology.
If we fail to adequately manage these risks, the acquisitions and other strategic transactions may not result in revenue growth, operational synergies or service or technology enhancements, which could adversely affect our financial condition. 19 RISKS RELATED TO INTELLECTUAL PROPERTY If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired We have developed a considerable amount of proprietary technology related to automotive safety systems and rely on a number of patents to protect such technology.
We continuously seek to maintain a robust program of information security and controls, however, any future significant compromise or breach of our data security, whether external or internal, or misuse of customer, associate, supplier or Company data, could result in significant costs, lost sales, fines, lawsuits, and damage to our reputation.
We continuously seek to maintain a robust program of information security and controls, however, any future significant compromise or breach of our data security, whether external or internal, or misuse of customer, associate, supplier or Company data, could result in significant costs, lost sales, fines, lawsuits, and damage to our reputation. 16 Third parties that maintain certain of our confidential and proprietary information could experience a cybersecurity incident We rely on third parties to provide or maintain some of our IT systems, data centers and related services and do not exercise direct control over these systems.
We face risks related to our defined benefit pension plans and employee benefit plans, including the need for additional funding as well as higher costs and liabilities Our defined benefit pension plans and employee benefit plans may require additional funding or give rise to higher related costs and liabilities which, in some circumstances, could reach material amounts and negatively affect our operating results.
In the event that we determine that we are required to write-down a portion of our goodwill items and other intangible assets and thereby record related non-cash impairment charges, our financial condition and operating results would be adversely affected. 15 We face risks related to our defined benefit pension plans and employee benefit plans, including the need for additional funding as well as higher costs and liabilities Our defined benefit pension plans and employee benefit plans may require additional funding or give rise to higher related costs and liabilities which, in some circumstances, could reach material amounts and negatively affect our operating results.
Commercial negotiations with our customers and suppliers may not always offset all of the adverse impact of higher raw material, energy, labor, logistics, and commodity costs.
Commercial negotiations with our customers and suppliers may not always offset all of the adverse impact of higher raw material, energy, labor, logistics, and commodity costs, including those resulting from tariffs and trade restrictions (including retaliatory tariffs) due to the change in administration in the U.S. Commercial negotiations with our customers and suppliers may not be successful in the future.
These types of lawsuits require significant management time and attention and could result in significant expenses as well as unfavorable outcomes that could have a material adverse impact on our customer relationships, business prospects, reputation, operating results, cash flows or financial condition, and our insurance may not mitigate such impact.
Any unfavorable outcomes of such lawsuits could have a material adverse impact on our customer relationships, business prospects, reputation, operating results, cash flows, or financial condition, and our insurance may not mitigate such impact. See Note 18, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report.
Our future profitability will depend upon, among other things, our ability to continuously reduce our cost per unit and maintain our cost structure, enabling us to remain cost-competitive. Our profitability is also influenced by our success in designing and marketing technological improvements in automotive safety systems, which helps us offset price reductions by our customers.
Our profitability is also influenced by our success in designing and marketing technological improvements in automotive safety systems, which helps us offset price reductions by our customers.
We may be subject to civil antitrust litigation that could negatively impact our business The Company may be subject to civil antitrust lawsuits in the future in countries that permit such civil claims, including lawsuits or other actions by our customers.
The Company is subject to civil antitrust lawsuits in the UK and Germany filed by certain customers with respect to allegations over a decade ago and may be subject to such civil antitrust lawsuits in the future in countries that permit such civil claims, including lawsuits or other actions by our customers.
The Company was previously the subject of an investigation by the European Commission (“EC”) regarding possible anti-competitive behavior among certain suppliers to the automotive vehicle industry. The Company paid a fine to resolve these matters in 2019.
We are and may be in the future subject to civil antitrust litigation that could negatively impact our business The Company was previously the subject of an investigation by the European Commission (“EC”) regarding possible anti-competitive behavior among certain suppliers to the automotive vehicle industry that was resolved in 2019.
Our sales are also affected by inventory levels of our customers. We cannot predict when our customers will decide to either increase or reduce inventory levels or whether new inventory levels will approximate historical inventory levels. This may exacerbate variability in our production schedules and order intake and, as a result, our revenues and financial condition.
Our sales are also affected by the inventory levels of our customers, which we cannot predict. Customers may choose to increase or reduce inventory levels at any time, and new inventory levels may not align with historical trends. These fluctuations can add variability to our production schedules and order intake, potentially impacting our revenues and financial condition.
Any accident or injury to our employees could result in litigation, manufacturing delays and harm to our reputation, which could negatively affect our business, operating results, and financial condition. 20 Our business may be adversely affected by changes in automotive safety regulations or concerns that drive further regulation of the automobile safety market Government vehicle safety regulations are a key driver in our business.
Any accident or injury to our employees could result in litigation, manufacturing delays and harm to our reputation, which could negatively affect our business, operating results, and financial condition.
Removed
If actual results vary significantly from this projected geographic and product mix of sales, our operating results and financial condition could be negatively impacted.
Added
We may not be able to effectively implement new technology-driven products and services or be successful in marketing such products and services. In addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences due to any limitations or failure to use them effectively.
Removed
As a result of the outcome of the EC investigation, we are and we could be, subject to subsequent civil disputes with non-governmental third parties and civil or stockholder litigation stemming from the same facts and circumstances underlying the EC investigation.
Added
Government regulators have also become more focused on potential recall risks as demonstrated by the US National Highway Traffic Safety Administration (“NHTSA”) investigation of the ARC inflators. If NHTSA proceeds with any recalls of ARC inflators, such a recall could have a material impact on our results of operations.
Removed
See Note 17, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report.
Added
While we have recently received inflation related pricing concessions from most of our customers, there is no guarantee that this will occur in the future. Our future profitability will depend upon, among other things, our ability to continuously reduce our cost per unit and maintain our cost structure, enabling us to remain cost-competitive.
Removed
See Note 11, Restructuring, to the Consolidated Financial Statements in this Annual Report.
Added
Inflation and pricing pressures have also negatively impacted companies in our supply chain.
Removed
In the event that we determine that we are required to write-down a portion of our goodwill items and other intangible assets and thereby record related non-cash impairment charges, our financial condition and operating results would be adversely affected.
Added
Inflation is currently high world-wide and may continue for some time, which could lead to fluctuations in interest rates.
Removed
For additional information, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Significant Accounting Policies and Critical Accounting Estimates – Goodwill and Intangibles”.
Added
The trial associated with the lawsuit in the UK recently concluded and a ruling in the proceeding is expected imminently. These types of lawsuits require significant management time and attention and could result in significant expenses.
Removed
Third parties that maintain certain of our confidential and proprietary information could experience a cybersecurity incident We rely on third parties to provide or maintain some of our IT systems, data centers and related services and do not exercise direct control over these systems.
Added
No assurance can be given that we will be able to or will choose to pay any dividends or repurchase any shares in the foreseeable future.
Removed
For example, we have announced that we are collaborating with Polestar to develop a climate neutral car. Such an endeavor requires the innovation and collaboration with a number of partners and is subject to certain inherent risks, including the timetable in which it is achieved.
Added
In the event that our systems are breached or attacked, we may also suffer an outage, failure, or unavailability of data or information technology systems, and interruptions to our business operations while such breach or attacked is being remedied; this may impact data or systems operated by us or by third-party service providers.
Removed
We may also have to purchase carbon offsets in order to meet our targets and objectives, which may not be available or may no longer be considered acceptable to use to meet such targets.
Added
The current U.S. presidential administration has created uncertainty about the future relationship between the U.S. and certain of its trading partners, including with respect to the trade policies and agreements, treaties, government regulations and tariffs that could apply to trade between the U.S. and other nations.
Removed
On December 12, 2022, the European Union member states agreed to implement the OECD’s Pillar 2 global corporate minimum tax at a rate of 15% on companies with revenues of at least $790 million, which went into effect in 2024. The Pillar 2 rules are also in effect in the United Kingdom, Switzerland, and South Korea, among others.
Added
For example, the U.S. administration has indicated that it intends to impose tariffs on imports from Mexico, Canada, and the European Union. In February 2025, additional tariffs have been applied to imports from China and China responded with retaliatory tariffs on the import of American goods.
Removed
Similarly, the United States passed the Inflation Reduction Act of 2022, which also imposes, among other things, a 15% corporate minimum tax for taxable years beginning after December 31, 2022, on certain U.S. based companies that have average revenues over a three-year period of at least $1 billion.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed16 unchanged
Biggest changeFor a full discussion of these cybersecurity risks, please see our Risk Factors in Item 1A. Board and management governance Management's Role The Chief Information Security Officer (CISO) is responsible for overseeing the Company’s cybersecurity practices. Our CISO joined Autoliv in 2015. He has 29 years of information technology experience, including six years as CISO.
Biggest changeFor a full discussion of these cybersecurity risks, please see our Risk Factors in Item 1A. Board and management governance Management's Role The Chief Information Security Officer (CISO) is responsible for overseeing the Company’s cybersecurity practices. Our CISO joined Autoliv in 2015. He has 30 years of information technology experience, including seven years as CISO .
Separately, because we understand the risks associated with engaging third party vendors, such as service providers, consultants and partners, in our cybersecurity risk management processes, we conduct security assessments pre-engagement and monitor their work to mitigate any identified risks. Autoliv has not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the registrant.
Separately, because we understand the risks associated with engaging third party vendors, such as service providers, consultants and partners , in our cybersecurity risk management processes, we conduct security assessments pre-engagement and monitor their work to mitigate any identified risks. Autoliv has not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company.
A documented incident response process and numerous documented playbooks provide the SOC guidance on how to respond for each type of incident, including categorization and principles 22 for escalation. Incidents are escalated in the organization according to defined criteria to engage a level of authority that is deemed appropriate, such as the Corporate Crisis Management Team if necessary.
A documented incident response process and numerous documented playbooks provide the SOC guidance on how to respond for each type of incident, including categorization and principles 23 for escalation. Incidents are escalated in the organization according to defined criteria to engage a level of authority that is deemed appropriate, such as the Corporate Crisis Management Team if necessary.
The DITM Board meets at least quarterly with cybersecurity as a standing agenda item. In addition to the standing DITM Board meetings, the CISO, when needs arise, meets with the full EMT typically at least semi-annually to report on, or discuss, specific cybersecurity-related topics. The Cybersecurity function in Autoliv reports to the CISO.
The DITM Board me ets at least quarterly with cybersecurity as a standing agenda item. In addition to the standing DITM Board meetings, the CISO, when needs arise, meets with the full EMT typically at least semi-annually to report on, or discuss, specific cybersecurity-related topics. The Cybersecurity function in Autoliv reports to the CISO.
The briefings by the CISO to the Audit and Risk Committee and Board also include the review of certifications and cybersecurity maturity assessments by management and third parties. 23
The briefings by the CISO to the Audit and Risk Committee and Board also include the review of certifications and cybersecurity maturity assessments by management and third parties. 24

Item 2. Properties

Properties — owned and leased real estate

11 edited+1 added−1 removed7 unchanged
Biggest changeBrasov Seatbelts, seatbelt webbing, seatbelt components, airbag inflators, steering wheels Owned Lugoj Airbag cushions Owned Resita Airbag cushions Owned Sfantu Georghe Steering wheels Owned Onesti Steering wheels Leased Rovinari Seatbelts Owned South Africa Autoliv Southern Africa (Pty) Ltd. Krügersdorp Seatbelts and airbags Owned South Korea Autoliv Corporation Hwasung Airbags Owned Spain Autoliv BKI S.A.U.
Biggest changeCebu Steering wheels Owned Poland Autoliv Poland Sp. zo.o. Olawa Airbag cushions Owned Jelcz-Laskowice Airbags Owned Romania Autoliv Romania S.R.L. Brasov Seatbelts, seatbelt webbing, seatbelt components, airbag inflators, steering wheels Owned Lugoj Airbag cushions and airbags Owned Resita Airbag cushions Owned Sfantu Georghe Steering wheels Owned Onesti Steering wheels Leased Rovinari Seatbelts Owned South Africa Autoliv Southern Africa (Pty) Ltd.
Collingwood Seatbelt webbing Owned China Autoliv (Baoding) Vehicle Safety Systems Co., Ltd Baoding Airbags Leased Autoliv (Changchun) Vehicle Safety Systems Co., Ltd. Changchun Airbags and seatbelts Owned Autoliv (China) Steering Wheel Co., Ltd. Fengxian/Shanghai Steering wheels Owned Autoliv (Guangzhou) Vehicle Safety Systems Co., Ltd. Guangzhou Airbags and seatbelts Owned Autoliv (Nanjing) Vehicle Safety Systems Co., Ltd.
Collingwood Seatbelt webbing Owned China Autoliv (Baoding) Vehicle Safety Systems Co., Ltd Baoding Airbags and steering wheels Leased Autoliv (Changchun) Vehicle Safety Systems Co., Ltd. Changchun Airbags and seatbelts Owned Autoliv (China) Steering Wheel Co., Ltd. Fengxian/Shanghai Steering wheels Owned Autoliv (Guangzhou) Vehicle Safety Systems Co., Ltd. Guangzhou Airbags and seatbelts Owned Autoliv (Nanjing) Vehicle Safety Systems Co., Ltd.
Brigham City Airbag inflators Owned Ogden Airbags Owned Ogden Airbags and service parts Leased Promontory Propellant Owned Tremonton Airbag initiators and seatbelt micro gas generators Owned 25 AUTOLIV TECHNICAL CENTERS AND CRASH TEST TRACKS Country/Company Location Product(s) supported China Autoliv (Shanghai) Vehicle Safety System Technical Center Co., Ltd.
Brigham City Airbag inflators Owned Ogden Airbags Owned Ogden Airbags and service parts Leased Promontory Propellant Owned Tremonton Airbag initiators and seatbelt micro gas generators Owned 26 AUTOLIV TECHNICAL CENTERS AND CRASH TEST TRACKS Country/Company Location Product(s) supported China Autoliv (Shanghai) Vehicle Safety System Technical Center Co., Ltd.
Item 2. P roperties Autoliv’s principal executive offices are located at Klarabergsviadukten 70, Section B7, SE-111 64, Stockholm, Sweden. Autoliv’s various businesses operate in a number of production facilities and offices.
Item 2. P roperties Autoliv’s principal executive offices are located at Klarabergsviadukten 70, Section D5, SE-111 64, Stockholm, Sweden. Autoliv’s various businesses operate in a number of production facilities and offices.
Shanghai Inflators and pyrotechnics customer applications, airbags, steering wheels and seatbelts customer applications and platform development with full-scale test laboratory France Autoliv France SNC Gournay-en-Bray Airbags and seatbelts customer applications and platform development with full-scale test laboratory Livbag SAS Pont-de-Buis Inflator and pyrotechnic development Autoliv Isodelta SAS Chiré-de-Montreuil Steering wheels development and customer applications Germany Autoliv B.V. & Co.
Shanghai Inflators and pyrotechnics customer applications, airbags, steering wheels and seatbelts customer applications and platform development with full-scale test laboratory France Autoliv France SNC Gournay-en-Bray Airbags and seatbelts customer applications and platform development with full-scale test laboratory Livbag SAS Pont-de-Buis Inflator and pyrotechnic development Germany Autoliv B.V. & Co.
Auburn Hills Airbags, steering wheels, and seatbelts customer applications and platform development with sled test laboratory Ogden Airbags, inflators and pyrotechnics customer applications and platform development 26
Auburn Hills Airbags, steering wheels, and seatbelts customer applications and platform development with sled test laboratory Ogden Airbags, inflators and pyrotechnics customer applications and platform development 27
Autoliv Indonesia Jakarta Seatbelts, airbags and steering wheels Owned Japan Autoliv Japan Ltd. Chubu Airbags and steering wheels Owned Hiroshima Airbags Owned Taketoyo Airbag inflators Leased Tsukuba Airbags, seatbelts and steering wheels Owned 24 Malaysia Autoliv-Hirotako Sdn Bhd Kuala Lumpur Seatbelts, airbags and steering wheels Owned Mexico Autoliv Mexico East S.A. de C.V.
Autoliv Indonesia Jakarta Seatbelts, airbags and steering wheels Owned Japan Autoliv Japan Ltd. Chubu Airbags and steering wheels Owned Hiroshima Airbags Owned Tsukuba Airbags, seatbelts and steering wheels Owned 25 Malaysia Autoliv-Hirotako Sdn Bhd Kuala Lumpur Seatbelts, airbags and steering wheels Owned Mexico Autoliv Mexico East S.A. de C.V. Matamoros Steering wheels Owned Autoliv Mexico S.A. de C.V.
Matamoros Steering wheels Owned Autoliv Mexico S.A. de C.V. Lerma Seatbelts Owned Autoliv Safety Technology de Mexico S.A. de C.V. Tijuana Seatbelts Leased Autoliv Steering Wheels Mexico S. de R.L. de C.V. Querétaro Airbag cushions Leased Autoliv Steering Wheels Mexico S. de R.L. de C.V. Querétaro Airbags Leased Autoliv Mexico S.A. de C.V.
Lerma Seatbelts Owned Autoliv Safety Technology de Mexico S.A. de C.V. Tijuana Seatbelts Leased Autoliv Steering Wheels Mexico S. de R.L. de C.V. Querétaro Airbag cushions Leased Autoliv Steering Wheels Mexico S. de R.L. de C.V. Querétaro Airbags Leased Autoliv Mexico S.A. de C.V. Aguascalientes Steering wheels Owned Philippines Autoliv Cebu Safety Manufacturing, Inc.
Gebze-Kocaeli Seatbelts Owned Autoliv Cankor Otomotiv Emniyet Sistemleri Sanayi Ve Ticaret A.S. Gebze-Subesi Gebze-Kocaeli Airbags, Steering wheels and Seatbelt components Leased United Kingdom Airbags International Ltd Congleton Airbag cushions Owned USA Autoliv ASP, Inc.
Gebze-Subesi Gebze-Kocaeli Airbags, Steering wheels and Seatbelt components Leased United Kingdom Airbags International Ltd Congleton Airbag cushions Owned USA Autoliv ASP, Inc.
Valencia Airbags Owned Sweden Autoliv Sverige AB Vårgårda Airbag inflators Owned Thailand Autoliv Thailand Ltd. Chonburi Seatbelts, Airbags and Steering wheels Owned Chonburi Seatbelt components Leased Tunisia STE ASW3 Nadour El Fahs Steering wheels Owned & Leased STE ASW3 Nadour Nadhour Steering wheels Owned Turkey Autoliv Cankor Otomotiv Emniyet Sistemleri Sanayi Ve Ticaret A.S.
Chonburi Seatbelts, Airbag cushions and Steering wheels Owned Chonburi Seatbelt components Leased Tunisia STE ASW3 Nadour El Fahs Steering wheels Owned & Leased STE ASW3 Nadour Nadhour Steering wheels Owned Turkey Autoliv Cankor Otomotiv Emniyet Sistemleri Sanayi Ve Ticaret A.S. Gebze-Kocaeli Seatbelts Owned Autoliv Cankor Otomotiv Emniyet Sistemleri Sanayi Ve Ticaret A.S.
KG Dachau Customer applications and platform development, airbags with full-scale test laboratory Elmshorn Seatbelts with full-scale test laboratory India Autoliv India Private Ltd. Bangalore Airbags and seatbelts with sled testing Japan Autoliv Japan Ltd. Tsukuba Airbags and seatbelts customer applications and platform development with sled test laboratory Poland Autoliv Poland Sp. zo.o.
KG Dachau Customer applications and platform development, airbags with full-scale test laboratory India Autoliv India Private Ltd. Bangalore Airbags and seatbelts with sled testing Japan Autoliv Japan Ltd. Tsukuba Airbags and seatbelts customer applications and platform development with sled test laboratory Mexico Autoliv Steering Wheels Mexico S. de R.L. de C.V. Queretaro Technical center airbag Poland Autoliv Poland Sp. zo.o.
Removed
Aguascalientes Steering wheels Owned Philippines Autoliv Cebu Safety Manufacturing, Inc. Cebu Steering wheels Owned Poland Autoliv Poland Sp. zo.o. Olawa Airbag cushions Owned Jelcz-Laskowice Airbags Owned Romania Autoliv Romania S.R.L.
Added
Krügersdorp Seatbelts and airbags Owned South Korea Autoliv Corporation Hwasung Airbags and steering wheels Owned Spain Autoliv BKI S.A.U. Valencia Airbags Owned Sweden Autoliv Sverige AB Vårgårda Airbag inflators Owned Thailand Autoliv Thailand Ltd.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings In the ordinary course of its business, the Company is subject to legal proceedings brought by or against the Company and its subsidiaries. See Note 17, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report for a summary of certain ongoing legal proceedings.
Biggest changeItem 3. Legal Proceedings In the ordinary course of its business, the Company is subject to legal proceedings brought by or against the Company and its subsidiaries. See Note 18, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report for a summary of certain ongoing legal proceedings.
Such information is incorporated into this Part I, Item 3 – “Legal Proceedings” by reference. Item 4. Mine Saf ety Disclosures Not applicable. 27 PART II
Such information is incorporated into this Part I, Item 3 – “Legal Proceedings” by reference. Item 4. Mine Saf ety Disclosures Not applicable. 28 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+2 added−2 removed3 unchanged
Biggest changeAutoliv’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”.
Biggest changeOptions 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”. Stock Performance Graph The graph and table below show the cumulative total shareholder return for our common stock since December 31, 2019.
The table in Exhibit 26 provides information with respect to total common stock repurchases made by the Company during the three months period ended December 31, 2023 on NYSE.
Stock repurchase program The table in Exhibit 26 provides information with respect to total common stock repurchases made by the Company during the three months period ended December 31, 2024 on NYSE.
Stock repurchase program On November 16, 2021, the Company announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to $1.5 billion or up to 17 million shares, whichever comes first, between January 2022 and the end of 2024.
(3) In November 2021, the Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $1.5 billion or up to 17 million shares, whichever comes first, between January 2022 and the end of 2024.
Declared dividends are announced in press releases and published on Autoliv’s corporate website. The Board of Directors revisits dividends on a quarterly basis. There can be no assurance that the Board of Directors will declare dividends in the future. See Autoliv’s corporate website for additional details regarding historical dividends.
The Board of Directors revisits dividends on a quarterly basis. There can be no assurance that the Board of Directors will declare dividends in the future. See Autoliv’s corporate website for additional details regarding historical dividends.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Shareholder information 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”.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Shareholder information 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 under the symbol “ALIV SDB”.
Stock options (if exercised) and granted Restricted Stock Units (RSUs) and Performance Shares (PSs) could increase the number of shares outstanding as of December 31, 2023 by 0.3 million shares in the aggregate. Combined, this would add 0.4% to the number of shares outstanding as of December 31, 2023. On December 31, 2023, the Company had 4.9 million treasury shares.
Stock options (if exercised) and granted Restricted Stock Units (RSUs) and Performance Shares (PSs) could increase the number of shares outstanding as of December 31, 2024 by 0.5 million shares in the aggregate. Combined, this would add 0.6% to the number of shares outstanding as of December 31, 2024.
Approximately 3.7 million shares were retired during 2023. During 2023, the weighted average number of shares outstanding (excluding dilution and treasury shares) decreased to 85.0 million from 87.1 million in 2022. Assuming dilution, the weighted average number of shares outstanding for the full year 2023 decreased to 85.2 million from 87.2 million in 2022.
The Company repurchased and immediately retired approximately 5.1 million shares during 2024. During 2024, the weighted average number of shares outstanding (excluding dilution and treasury shares) decreased to 80.2 million from 85.0 million in 2023. Assuming dilution, the weighted average number of shares outstanding for the full year 2024 decreased to 80.4 million from 85.2 million in 2023.
The comparison assumes $100 was invested at the closing price of our common stock on the NYSE on December 31, 2018. Each of the returns shown assumes that all dividends paid were reinvested.
The graph compares our performance to that of the Standard & Poor’s 500 Stock Index (S&P 500) and the Dow Jones US Auto Parts Index. The comparison assumes $100 was invested at the closing price of our common stock on the NYSE on December 31, 2019. Each of the returns shown assumes that all dividends paid were reinvested.
New York Stock Exchange (NYSE) Period Total Number of Shares Purchased (1) Average Price Paid per Share (USD) (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Aggregate Maximum Number of Shares that Yet May Be Purchased Under the Plans or Programs (3) October 1-31, 2023 258,925 $ 94.07 3,858,816 13,141,184 November 1-30, 2023 859,965 $ 99.14 4,718,781 12,281,219 December 1-31, 2023 393,043 $ 102.76 5,111,824 11,888,176 (1) The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.
New York Stock Exchange (NYSE) Period Total Number of Shares Purchased (1) Average Price Paid per Share (USD) (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Aggregate Maximum Number of Shares that Yet May Be Purchased Under the Plans or Programs (3) October 1-31, 2024 225,991 $ 95.57 9,346,800 7,653,200 November 1-30, 2024 549,111 $ 98.27 9,895,911 7,104,089 December 1-31, 2024 268,851 $ 98.34 10,164,762 6,835,238 (1) The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.
(3) On November 16, 2021, the Company announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to $1.5 billion or up to 17 million common shares, whichever comes first, between January 2022 and the end of 2024. Item 6. [RESERVED] 29
On November 11, 2024, the Company announced that the Board of Directors approved the extension of this stock repurchase program through the end of 2025. As of December 31, 2024, the Company may purchase up to $0.5 billion or up to 6.8 million common shares pursuant to the existing program. Item 6. [RESERVED] 30
(USD) 12-31-2018 12-31-2019 12-31-2020 12-31-2021 12-31-2022 12-31-2023 Autoliv, Inc. $ 100.00 $ 124.38 $ 136.81 $ 156.65 $ 119.99 $ 177.63 SP500TR 100.00 131.49 155.68 200.37 164.08 207.21 Dow Jones US Auto Parts Index 100.00 125.27 145.34 174.14 126.42 124.70 28 Number of shares As of December 31, 2023, the number of shares outstanding, net of treasury shares, was 82.6 million, compared to 86.2 million as of December 31, 2022.
(USD) 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Autoliv, Inc. $ 100.00 $ 109.99 $ 125.95 $ 96.47 $ 142.82 $ 124.65 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 Dow Jones US Auto Parts Index 100.00 116.02 139.01 100.92 99.55 75.85 29 Number of shares As of December 31, 2024, the number of shares of common stock outstanding, net of treasury shares, was 77.7 million, compared to 82.6 million as of December 31, 2023.
Removed
Stock Performance Graph The graph and table below show the cumulative total shareholder return for our common stock since December 31, 2018. The graph compares our performance to that of the Standard & Poor’s 500 Stock Index (S&P 500) and the Dow Jones US Auto Parts Index.
Added
On December 31, 2024, the Company had 2.7 million treasury shares compared to 4.9 million as of December 31, 2023. During 2024, the Company also retired 2.0 million shares that had been held in treasury. Shareholders As of February 13, 2025, there were 1,196 holders of record of our common stock.
Removed
The Company intends to retire treasury shares following repurchases on a regular basis. Shareholders Of the shares held by institutional investors, Autoliv estimates that around 33% were held by Sweden-based shareholders, around 43% by US-based shareholders and around 10% by UK-based shareholders. Dividends Autoliv has a history of paying quarterly cash dividends.
Added
Many stockholders choose to own shares through brokerage accounts and other intermediaries rather than as holders of record (excluding individual participants in securities positions listing) so the actual number of stockholders is unknown but significantly higher. Dividends Autoliv has a history of paying quarterly cash dividends. Declared dividends are announced in press releases and published on Autoliv’s corporate website.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeBecause 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 economic conditions, including 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; disruptions and impacts relating to the ongoing war between Russia and Ukraine and the ongoing conflict in the Red Sea; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignments: restructuring, cost reduction, and efficiency initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel, and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; 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; component shortages; 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; 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 by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; our ability to meet our sustainability targets, goals and commitments; political conditions; 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 Annual Report on Form 10-K, Item 1A, and Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.
Biggest changeBecause 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 economic conditions, including 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; geopolitical instability, including the ongoing war between Russia and Ukraine and the hostilities in the Middle East; changes in general industry and market conditions or regional 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; higher raw material, fuel, and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; 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; 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 by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business, including changes in trade policy and tariffs; our ability to meet our sustainability targets, goals and commitments; political conditions; 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 Annual Report on Form 10-K, Item 1A, and Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.
Exhibit and Financial Statement Schedules 91 1 NOTE ABOUT FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K 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.
Exhibit and Financial Statement Schedules 90 1 NOTE ABOUT FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K 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.
Other Information 89 PART III Item 10. Directors, Executive Officers and Corporate Governance 90 Item 11. Executive Compensation 90 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 90 Item 13. Certain Relationships and Related Transactions, and Director Independence 90 Item 14. Principal Accountant Fees and Services 90 PART IV Item 15.
Other Information 88 PART III Item 10. Directors, Executive Officers and Corporate Governance 89 Item 11. Executive Compensation 89 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 89 Item 13. Certain Relationships and Related Transactions, and Director Independence 89 Item 14. Principal Accountant Fees and Services 89 PART IV Item 15.
Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 49 Item 8. Financial Statements and Supplementary Data 51 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 88 Item 9A. Controls and Procedures 88 Item 9B.
Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 51 Item 8. Financial Statements and Supplementary Data 53 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 87 Item 9A. Controls and Procedures 87 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

128 edited+68 added−43 removed70 unchanged
Biggest changeGAAP Operating income $ 690 $ 230 $ 920 $ 659 $ (61 ) $ 598 Operating margin, % 6.6 % 2.2 % 8.8 % 7.5 % (0.7 )% 6.8 % Income before income taxes 612 230 842 603 (61 ) 542 Net income attributable to controlling interest 488 210 697 423 (39 ) 384 Capital employed 3,937 210 4,147 3,810 (39 ) 3,771 Return on capital employed, % 2) 17.7 % 5.3 % 23.1 % 17.5 % (1.5 )% 16.0 % Return on total equity, % 3) 19.0 % 7.2 % 26.2 % 16.3 % (1.3 )% 15.0 % Earnings per share, diluted 4 $ 5.72 $ 2.46 $ 8.19 $ 4.85 $ (0.45 ) $ 4.40 1) Represents costs for capacity alignments, antitrust related matters and the Andrews litigation settlement.
Biggest changeReconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income" (Dollars in millions) 2024 2023 Operating income (GAAP) $ 979 $ 690 Non-GAAP adjustments: Less: Capacity alignments 19 218 Less: The Andrews litigation settlement - 8 Less: Antitrust related items 8 4 Total non-GAAP adjustments to operating income 27 230 Adjusted Operating income (Non-GAAP) $ 1,007 $ 920 38 Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin" 2024 2023 Operating margin (GAAP) 9.4 % 6.6 % Non-GAAP adjustments: Less: Capacity alignments 0.2 % 2.1 % Less: The Andrews litigation settlement - 0.1 % Less: Antitrust related items 0.1 % 0.0 % Total non-GAAP adjustments to operating margin 0.3 % 2.2 % Adjusted Operating margin (Non-GAAP) 9.7 % 8.8 % Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share - diluted" 2024 2023 Earnings per share - diluted (GAAP) $ 8.04 $ 5.72 Non-GAAP adjustments: Less: Capacity alignments 0.24 2.56 Less: The Andrews litigation settlement - 0.09 Less: Antitrust related items 0.10 0.05 Less: Tax on non-GAAP adjustments (0.06 ) (0.24 ) Total non-GAAP adjustments to Earnings per share - diluted 0.28 2.46 Adjusted Earnings per share - diluted (Non-GAAP) $ 8.32 $ 8.19 Weighted average number of shares outstanding - diluted (in millions) 80.4 85.2 The following tables reconcile Income before income taxes, Net income, Net income attributable to controlling interest, Capital employed, which are inputs utilized to calculate Return On Capital Employed (“ROCE”), adjusted ROCE, Return On Total Equity (“ROE”) and adjusted ROE.
COMPONENT COSTS AND RAW MATERIAL PRICES The cost of direct materials was approximately 55% of sales in 2023. The main raw materials being used as input material for the Company's operations are steel, textiles, plastic and non-ferrous metals. The Company still sees effects coming from import tariffs and trade barriers across borders.
COMPONENT COSTS AND RAW MATERIAL PRICES The cost of direct materials was approximately 55% of sales in 2024 (55% in 2023). The main raw materials being used as input material for the Company's operations are steel, textiles, plastic and non-ferrous metals. The Company still sees effects coming from import tariffs and trade barriers across borders.
It cannot be excluded that additional competitors, both global and local, will seek to enter the market or grow beyond their current Keiretsu group or traditional customer base. Particularly in China, South Korea, and Japan there are numerous small domestic competitors often supplying just one OEM group.
It cannot be excluded that additional competitors, both global and local, will seek to enter the market or grow beyond their current Keiretsu group or traditional customer base. Particularly in China, South Korea, and Japan there are numerous domestic competitors often supplying just one OEM group.
See discussions of income taxes under Significant Accounting Policies in this section, Note 2, Summary of Significant Accounting Policies, and Note 5, Income Taxes, to the Consolidated Financial Statements included herein. PENSION ARRANGEMENTS The Company has defined benefit pension plans covering nearly half of the U.S. employees.
See discussions of income taxes under Significant Accounting Policies in this section, Note 2, Summary of Significant Accounting Policies, and Note 5, Income Taxes, to the Consolidated Financial Statements included herein. 41 PENSION ARRANGEMENTS The Company has defined benefit pension plans covering nearly half of the U.S. employees.
In determining whether a loss should be accrued management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact the Company's consolidated financial statements. 48
In determining whether a loss should be accrued management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact the Company's consolidated financial statements.
The Company may elect to make contributions in excess of the minimum funding requirements for the U.S. plans in response to investment performance and changes in interest rates, or when the Company believes that it is financially advantageous to do so and based on other capital requirements. See Note 18, Retirement Plans, to the Consolidated Financial Statements included herein.
The Company may elect to make contributions in excess of the minimum funding requirements for the U.S. plans in response to investment performance and changes in interest rates, or when the Company believes that it is financially advantageous to do so and based on other capital requirements. See Note 19, Retirement Plans, to the Consolidated Financial Statements included herein.
GAAP Performance Measures) of around 1.0x and to be within the range of 0.5x to 1.5x. At December 31, 2023, the current leverage ratio is 1.2x. The Company monitors its capital structure and the financial markets closely and intends to maintain a high level of financial flexibility while being shareholder friendly.
GAAP Performance Measures) of around 1.0x and to be within the range of 0.5x to 1.5x. At December 31, 2024, the current leverage ratio is 1.2x. The Company monitors its capital structure and the financial markets closely and intends to maintain a high level of financial flexibility while being shareholder friendly.
However, the Company has not achieved its 5% productivity target since the COVID-19 pandemic in 2020, due to the related decline in LVP in 2020 and the high volatility in customer call-offs in 2021, 2022 and 2023 driven by the industry wide supply chain instability, especially for semiconductors.
However, the Company had not achieved its 5% productivity target since the COVID-19 pandemic in 2020, due to the related decline in LVP in 2020 and the high volatility in customer call-offs in 2021, 2022 and 2023 driven by the industry wide supply chain instability, especially for semiconductors.
Quality has been and always will be the Company's number one priority, and the Company continues to sharpen its focus in this area. The Company now holds a global market share in passive safety of around 45%, while the Company has been involved in around 2% of recalls in the industry in the past ten years.
Quality has been and always will be the Company's number one priority, and the Company continues to sharpen its focus in this area. The Company now holds a global market share in passive safety of around 44%, while the Company has been involved in around 2% of recalls in the industry in the past ten years.
These initiatives are key drivers to the Company's targets and building the foundation to continue to create shareholder value. 32 IMPROVED EFFICIENCIES THROUGH OPERATIONAL EXCELLENCE Pricing pressure is an inherent part of the automotive supplier business.
These initiatives are key drivers to the Company's targets and building the foundation to continue to create shareholder value. 33 IMPROVED EFFICIENCIES THROUGH OPERATIONAL EXCELLENCE Pricing pressure is an inherent part of the automotive supplier business.
China introduced a vehicle rating program in 2006 and during the past 16 years this China NCAP, together with the additional Chinese rating program, CIASI, from 2017, drive Chinese vehicle safety performance and safety content with regards to crashworthiness and occupant protection.
China introduced a vehicle rating program in 2006 and during the past 18 years this China NCAP, together with the additional Chinese rating program, CIASI, from 2017, drive Chinese vehicle safety performance and safety content with regards to crashworthiness and occupant protection.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Important Trends The discussions and analysis in this section are focused on the Company’s results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Important Trends The discussions and analysis in this section are focused on the Company’s results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
For information about specific financial risks, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk. 45 Significant Accounting Policies and Critical Accounting Estimates NEW ACCOUNTING STANDARDS The Company has considered all applicable recently issued accounting standards.
For information about specific financial risks, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk. 47 Significant Accounting Policies and Critical Accounting Estimates NEW ACCOUNTING STANDARDS The Company has considered all applicable recently issued accounting standards.
The expected rate of long-term return on plan assets are determined based on several factors and must consider long-term expectations and reflect the financial environment in the respective local markets. At December 31, 2023, 31% of the U.S. plan assets were invested in equities, which is close to the target of 32%.
The expected rate of long-term return on plan assets are determined based on several factors and must consider long-term expectations and reflect the financial environment in the respective local markets. At December 31, 2024, 30% of the U.S. plan assets were invested in equities, which is close to the target of 32%.
Customer % of Autoliv sales % of Global LVP 1) Renault/Nissan/Mitsubishi 10 % 8 % Stellantis 10 % 7 % VW 9 % 10 % Honda 9 % 5 % Toyota 9 % 13 % Hyundai 7 % 8 % Ford 7 % 4 % General Motors 6 % 5 % Major EV maker 5 % 2 % Mercedes 4 % 3 % 1) Source: S&P Global Although business with every major customer is split into at least several contracts (usually one contract per vehicle platform) and although the customer base has become more balanced and diversified as a result of the Company's significant expansion in China and other rapidly-growing markets, the loss of all business from a major customer (whether by a cancellation of existing contracts or not awarding Autoliv new business), the consolidation of one or more major customers or a bankruptcy of a major customer could have a material adverse effect on the Company.
Customer % of Autoliv sales % of Global LVP 1) VW 9.2 % 10.0 % Toyota 9.1 % 12.1 % Stellantis 9.1 % 5.9 % Honda 8.7 % 4.4 % Hyundai 7.6 % 8.4 % Ford 6.8 % 4.1 % General Motors 5.6 % 4.7 % Nissan 5.4 % 4.7 % Mercedes 5.2 % 2.7 % Major EV maker 4.5 % 2.0 % 1) Source: S&P Global January 2025 Although business with every major customer is split into at least several contracts (usually one contract per vehicle platform) and although the customer base has become more balanced and diversified as a result of the Company's significant expansion in China and other rapidly-growing markets, the loss of all business from a major customer (whether by a cancellation of existing contracts or not awarding Autoliv new business), the consolidation of one or more major customers or a bankruptcy of a major customer could have a material adverse effect on the Company.
Discussions of the Company's results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found in Part II, Item 7.
Discussions of the Company's results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in Part II, Item 7.
This interrelationship makes it difficult to isolate the impact of costs on any single program, therefore, the Company monitors key measures such as costs in relation to sales and productivity. In 2023, due to cost pressures from labor, logistics, utilities, and other items the Company engaged in extensive negotiations with its customers regarding compensations.
This interrelationship makes it difficult to isolate the impact of costs on any single program, therefore, the Company monitors key measures such as costs in relation to sales and productivity. In 2024, due to cost pressures from labor and other items the Company engaged in extensive negotiations with its customers regarding compensations.
During 2023 and 2022 the Company paid dividends of $225 million and $224 million, respectively. It is the Company’s policy to maintain a financial leverage commensurate with a “strong investment grade credit rating”. The long-term target is to have a leverage ratio (see section Non-U.S.
During 2024 and 2023 the Company paid dividends of $219 million and $225 million, respectively. It is the Company’s policy to maintain a financial leverage commensurate with a “strong investment grade credit rating”. The long-term target is to have a leverage ratio (see section Non-U.S.
For material contractual debt obligations as of December 31, 2023, see Note 13, Debt and Credit Agreements, to the Consolidated Financial Statements included herein. Operating lease obligations represent the payment obligations (undiscounted cash flows) under leases classified as operating leases. Capital lease obligations are not material. See Note 3, Leases, to the Consolidated Financial Statements included herein.
For material contractual debt obligations as of December 31, 2024, see Note 14, Debt and Credit Agreements, to the Consolidated Financial Statements included herein. Operating lease obligations represent the payment obligations (undiscounted cash flows) under leases classified as operating leases. Capital lease obligations are not material. See Note 3, Leases, to the Consolidated Financial Statements included herein.
See also Note 19, Segment Information, to the Consolidated Financial Statements included herein. 44 CUSTOMER PAYMENT RISK Another risk related to the Company's customers is the risk that one or more of its customers will be unable to pay their invoices that become due.
See also Note 20, Segment Information, to the Consolidated Financial Statements included herein. 46 CUSTOMER PAYMENT RISK Another risk related to the Company's customers is the risk that one or more of its customers will be unable to pay their invoices that become due.
PATENTS AND PROPRIETARY TECHNOLOGY The Company’s strategy is to protect its innovations with patents, and to vigorously protect and defend its patents, trademarks, and know-how against infringement and unauthorized use. At the end of 2023, the Company held more than 6,500 patents and patents applications.
PATENTS AND PROPRIETARY TECHNOLOGY The Company’s strategy is to protect its innovations with patents, and to vigorously protect and defend its patents, trademarks, and know-how against infringement and unauthorized use. At the end of 2024, the Company held more than 6,600 patents and patents applications.
National Highway Traffic Safety Administration. Europe upgraded the Euro NCAP rating system during 2018, and is now completing a new upgrade, intended to be fully implemented by 2025. Japan and South Korea are continuously upgrading their respective vehicle rating programs, JNCAP and KNCAP respectively.
Europe upgraded the Euro NCAP rating system during 2018, and is now completing a new upgrade, intended to be fully implemented by 2025. Japan and South Korea are continuously upgrading their respective vehicle rating programs, JNCAP and KNCAP respectively.
These patents expire on various dates during the period from 2024 to 2043 The expiration of any single patent is not expected to have a material adverse effect on the Company’s financial results.
These patents expire on various dates during the period from 2025 to 2044 The expiration of any single patent is not expected to have a material adverse effect on the Company’s financial results.
The risk of fluctuating sales has also been mitigated by Autoliv’s rapid expansion in Asia and other growth markets, which has reduced the Company’s former high dependence on sales in Europe to a diversified mix with Europe, the Americas and Asia each accounting for approximately 27%, 34% and 39%, respectively, of the Company's 2023 total sales.
The risk of fluctuating sales has also been mitigated by Autoliv’s rapid expansion in Asia and other growth markets, which has reduced the Company’s former high dependence on sales in Europe to a diversified mix with Europe, the Americas and Asia each accounting for approximately 28%, 33% and 39%, respectively, of the Company's 2024 total sales.
Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the year ended December 31, 2022, which was filed with the United States Securities and Exchange Commission on February 22, 2022. Autoliv, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the year ended December 31, 2023, which was filed with the United States Securities and Exchange Commission on February 20, 2024. Autoliv, Inc.
The accounting estimates that require management’s most significant judgments include the estimation of variable considerations, assessment of recoverability of goodwill and intangible assets, estimation of pension benefit obligations based on actuarial assumptions, estimation of accruals for warranty and recalls, restructuring charges, uncertain tax positions, valuation allowances and legal proceedings. The Company has summarized its critical accounting policies requiring judgment below.
The accounting estimates that require management’s most significant judgments include the estimation of variable considerations, estimation of pension benefit obligations based on actuarial assumptions, estimation of accruals for warranty and recalls, uncertain tax positions, valuation allowances and legal proceedings. The Company has summarized its critical accounting policies requiring judgment below.
U.S. dollars) and currency rates have proven to be rather volatile. Organic sales present the increase or decrease in the overall U.S. dollar net sales on a comparable basis, allowing separate discussions of the impact of acquisitions/divestitures and exchange rates. See tabular reconciliations above, that present changes in “organic sales growth” as reconciled to the change in total U.S.
Organic sales present the increase or decrease in the overall U.S. dollar net sales on a comparable basis, allowing separate discussions of the impact of acquisitions/divestitures and exchange rates. See tabular reconciliations above, that present changes in “organic sales growth” as reconciled to the change in total GAAP net sales.
For the U.S. plans, the assumptions used for calculating the 2023 pension expense were a discount rate of 5.41% and an expected long-term rate of return on plan assets of 5.05%. The assumptions used in calculating the U.S. benefit obligations disclosed, as of December 31, 2023 were a discount rate of 5.13%.
For the U.S. plans, the assumptions used for calculating the 2024 pension expense were a discount rate of 5.13% and an expected long-term rate of return on plan assets of 6.21%. The assumptions used in calculating the U.S. benefit obligations disclosed, as of December 31, 2024 were a discount rate of 5.60%.
Assumption (in millions) Change 2023 net periodic benefit cost increase (decrease) 2023 projected benefit obligation increase (decrease) Discount rate 1pp increase $ 1 $ (17 ) Discount rate 1pp decrease (1 ) 20 Return on plan assets 1pp decrease 2 n/a 47 INCOME TAXES Significant judgment is required in determining the worldwide provision for income taxes.
Assumption (in millions) Change 2024 net periodic benefit cost increase (decrease) 2024 projected benefit obligation increase (decrease) Discount rate 1pp increase $ 1 $ (14 ) Discount rate 1pp decrease (1 ) 16 Return on plan assets 1pp decrease 2 n/a 49 INCOME TAXES Significant judgment is required in determining the worldwide provision for income taxes.
The Company believes price adjustments will gradually offset the cost inflation, with limited positive effects in the first quarter and gradual improvement as the year progresses. 30 GROWTH IMPACTED BY LIGHT VEHICLE PRODUCTION, SAFETY CONTENT PER VEHICLE, AND STRONG ORDER BOOK The most important driver for Autoliv’s sales is the LVP.
The Company believes price adjustments will gradually offset the cost inflation, with limited positive effects in the first quarter and gradual improvement as the year progresses. 31 GROWTH IMPACTED BY LIGHT VEHICLE PRODUCTION AND SAFETY CONTENT PER VEHICLE The most important driver for Autoliv’s sales is the LVP. In 2024, global LVP declined by 1.2%.
These discussions resulted in a net positive price development, gradually implemented throughout the year. This was also the case in 2023, and is expected for 2024 as well.
These discussions resulted in a net positive price development, gradually implemented throughout the year. This was also the case in 2023, and for 2024 as well, albeit at a lower level.
The estimated amount of variable consideration that will be received by the Company are based on historical experience and trends, management´s understanding of the status of negotiations with customers and anticipated future pricing strategies. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer.
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. The estimated amount of variable consideration that will be received or paid by the Company is based on historical experience and trends, management's understanding of the status of negotiations with customers and including pricing strategies.
These judgments are based on the Company's historical experience, terms of existing contracts, and management’s evaluation of trends in the industry, information provided by the Company's customers and information available from other outside sources, as appropriate.
By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on the Company's historical experience, terms of existing contracts, and management’s evaluation of trends in the industry, information provided by the Company's customers and information available from other outside sources, as appropriate.
These barriers are impacting the raw material market and creating pricing and availability uncertainties. There is also volatility in the sea freight rates driven by geopolitical events. Inflation was significant across raw materials and services in 2023. The Company took actions, including pricing discussions with customers and suppliers, competitive sourcing and exploring alternative materials.
These barriers are impacting the raw material market and creating pricing and availability uncertainties. There is also volatility in the sea freight rates driven by geopolitical events. In 2024, raw material inflation was limited. Cost inflation remained significant and related primarily to labor. The Company took actions, including pricing discussions with customers and suppliers, competitive sourcing and exploring alternative materials.
As part of the adjustment of the capital structure, the Company historically has repurchased shares of its common stock. During 2023 and 2022, the Company repurchased and retired 3.67 million and 1.44 million shares, respectively, under the stock repurchase program authorized by the Board of Directors in November 2021.
As part of the adjustment of the capital structure, the Company historically has repurchased shares of its common stock. During 2024 and 2023, the Company repurchased and retired 5.1 million and 3.7 million shares, respectively, under the new stock repurchase program approved by the Board of Directors in November 2021.
DEPENDENCE ON CUSTOMERS As a result of this highly consolidated market, the Company is dependent on a relatively small number of customers with strong purchasing power. In 2023, the five largest vehicle manufacturers accounted for around 46% of global LVP and the ten largest manufacturers accounted for around 66% of global LVP.
DEPENDENCE ON CUSTOMERS As a result of this highly consolidated market, the Company is dependent on a relatively small number of customers with strong purchasing power. In 2024, the Company's five largest customers accounted for around 41% of global LVP and the ten largest accounted for around 62% of global LVP.
CONTINGENT LIABILITIES Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability or other matters.
In the year-end 2024 and 2023 respectively the capitalized amount has been insignificant. CONTINGENT LIABILITIES Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability or other matters.
It is the Company’s strategy to reduce the risks associated with fluctuating LVP by using temporary personnel in direct production, when appropriate. During 2023 and 2022, the level of temporary personnel in relation to total personnel in direct production remained flat at 41 13%.
It is the Company’s strategy to reduce the risks associated with fluctuating LVP by using temporary personnel in direct production, when appropriate. During 2024 and 2023, the level of temporary personnel in relation to total personnel in direct production decreased to 11% from 13%.
Based on the intended indirect workforce reductions in these three announcements, the Company estimates that the annual cost reductions will amount to around $130 million in total annual savings when fully implemented, with around $50 million in savings in 2024, which is expected to increase to around $100 million in 2025.
Based on the intended indirect workforce reductions, the Company estimates that the annual cost reductions will amount to around $135 million in total annual savings when fully implemented, with around $50 million in savings recorded in 2024, which is expected to increase to around $100 million in 2025 and the remaining amount in 2026 and 2027.
See Note 18, Retirement Plans to the Consolidated Financial Statements included herein. The Company, in consultation with its actuarial advisors, determines certain key assumptions to be used in calculating the projected benefit obligation and annual pension expense.
These U.S. plans represent approximately 50% of the Company’s total pension benefit obligation. See Note 19, Retirement Plans to the Consolidated Financial Statements included herein. The Company, in consultation with its actuarial advisors, determines certain key assumptions to be used in calculating the projected benefit obligation and annual pension expense.
Sales by Product Years ended December 31, Components of change in net sales 2023 2022 Reported change Currency effects 1) Organic 3) Airbags, Steering Wheels and Other 2) $ 7,055 $ 5,807 21 % 0.1 % 21 % Seatbelt products and Other 2) 3,420 3,035 13 % 0.7 % 12 % Total $ 10,475 $ 8,842 18 % 0.3 % 18 % 1) Effects from currency translations. 2) Including Corporate and Other sales.
Sales by Product Years ended December 31, Components of change in net sales 2024 2023 Reported change Currency effects 1) Organic 3) Airbags, Steering Wheels and Other 2) $ 7,023 $ 7,055 (0.5 )% (1.2 )% 0.7 % Seatbelt products and Other 2) 3,367 3,420 (1.6 )% (1.3 )% (0.2 )% Total $ 10,390 $ 10,475 (0.8 )% (1.2 )% 0.4 % 1) Effects from currency translations. 2) Including Corporate and Other sales.
Total interest-bearing debt at December 31, 2023 amounted to $1,862 million, an increase of $96 million compared to December 31, 2022. Cash flow from operations was $982 million in 2023 and $713 million in 2022. Capital expenditures, net amounted to $569 million in 2023 and $485 million in 2022.
Total interest-bearing debt at December 31, 2024 amounted to $1,909 million, an increase of $47 million compared to December 31, 2023. Cash flow from operations was $1,059 million in 2024 and $982 million in 2023. Capital expenditures, net amounted to $563 million in 2024 and $569 million in 2023.
In addition, India has announced that its Bharat NCAP shall start in 2023. 43 Vehicles with automated driving systems (ADS) are expected to provide additional opportunities through integration of protective safety systems with ADAS technologies, as well as new vehicle interior layouts and seating configurations. This development is likely to become subject to legal requirements.
Vehicles with automated driving systems (ADS) are expected to provide additional opportunities through integration of protective safety systems with ADAS technologies, as well as new vehicle interior layouts and seating configurations. This development is likely to become subject to legal requirements.
The Company may also find itself subject, possibly due to changes in legislation or other regulation, to environmental liabilities based on the activities of its predecessor entities or of businesses acquired. Such liability could be based on activities which are not related to the Company’s current activities.
The Company may also find itself subject, possibly due to changes in legislation or other regulation, to environmental liabilities based on the activities of its predecessor entities or of businesses acquired.
India requires frontal airbags for the driver from July 2019, and passenger airbags from 2021 for all new passenger vehicles (M1), moreover has announced that side airbags shall become mandatory in 2023.
India requires frontal airbags for the driver from July 2019, and passenger airbags from 2021 for all new passenger vehicles (M1), moreover has announced that side airbags shall become mandatory in 2023. In addition, India's Bharat NCAP went into effect in 2023 and was updated in 2024.
Discrete tax items, net, decreased the tax rate in 2023 by 17.3pp. The decrease is mainly related to a net deferred tax asset recognized in the fourth quarter due to the transfer of certain assets and operations as part of restructuring activities.
Income Taxes The tax rate for 2024 was 26.0%, compared to 20.1% in 2023. Discrete tax items, net, decreased the tax rate in 2023 by 17.3pp, mainly related to a net deferred tax asset recognized in the fourth quarter of 2023 due to the transfer of certain assets and operations as part of restructuring activities .
The change was mainly due to dividends paid to shareholders of $226 million, share repurchases of $356 million, partly offset by $489 million from net income and positive foreign exchange effects of $20 million. TREASURY ACTIVITES DEBT AND CREDIT ARRANGEMENTS The Company's total debt as of December 31, 2023 and 2022 was $1,862 million and $1,766 million, respectively.
The change was mainly due to dividends paid to shareholders of $219 million, share repurchases of $558 million, negative foreign exchange effects of $161 million, partly offset by $648 million from net income. TREASURY ACTIVITES DEBT AND CREDIT ARRANGEMENTS The Company's total debt as of December 31, 2024 and 2023 was $1,909 million and $1,862 million, respectively.
The past years’ high order intake share has resulted in the Company's sales development outperforming the underlying LVP significantly. In the past 5 years, the Company's organic sales development outpaced global LVP between 5 and 9 percentage points every year .
This excludes the impact from cost inflation related price increases. The past years’ high order intake share has resulted in the Company's sales development outperforming the underlying LVP significantly. In the past 5 years, the Company's organic sales development outpaced global LVP between around 2 and 9 percentage points every year.
For more information, see Note 11, Restructuring, to the Consolidated Financial Statements included herein. In addition to the structural improvements outlined above, the Company continues to implement the strategic initiatives to improve the efficiency of its value chain from end to end, not least through the Autoliv Production System and increased digitalization and automation.
In addition to the structural improvements outlined above, the Company continues to implement the strategic initiatives to improve the efficiency of its value chain from end to end, not least through the Autoliv Production System and increased digitalization and automation.
Factoring agreements did not have any material impact on receivables outstanding for 2023 or 2022. Inventory outstanding in relation to sales (see Glossary and Definitions for definition) was 9% at December 31, 2023, compared to 10% at December 31, 2022.
Receivables outstanding in relation to sales was 19% at December 31, 2024, compared to 20% at December 31, 2023. Factoring agreements did not have any material impact on receivables outstanding for 2024 or 2023. Inventory outstanding in relation to sales was 9% at December 31, 2024, compared to 9% at December 31, 2023.
Several countries, e.g., Malaysia and Thailand, are increasingly adopting the UN Regulations regarding vehicle safety under the UN 1958 agreement, and Malaysia started a world first motorcycle safety rating program in 2021. The United States upgraded its vehicle rating program, US NCAP, in 2010, which now is in the process of being updated by the U.S.
Several countries, e.g., Malaysia and Thailand, are increasingly adopting the UN Regulations regarding vehicle safety under the UN 1958 agreement, and Malaysia started a world first motorcycle safety rating program in 2021. The United States upgraded its vehicle rating program, US NCAP, in 2011 and again in 2024.
This indicates that the Company is delivering on its quality strategy. For more information see product warranty and recalls in Note 12, Product Related Liabilities, to the Consolidated Financial Statements in this Annual Report. CHANGES IN COMPETITIVE LANDSCAPE During the past eight years, Autoliv experienced significant changes in its competitive landscape.
This indicates that the Company is delivering on its quality strategy. For more information see product warranty and recalls in Note 13, Product Related Liabilities, to the Consolidated Financial Statements in this Annual Report. CHANGES IN COMPETITIVE AND CUSTOMER LANDSCAPE The Company has not noted any significant changes in the competitive landscape in 2024.
Financial measure Full year indication Organic sales growth Around 5% Foreign currency impact on net sales Around 0% Adjusted operating margin 1) Around 10.5% Tax rate 2) Around 28% Operating cash flow 3) Around $1.2 billion Capital expenditures, net % of sales Around 5.5% 1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. 2) Excluding unusual tax items. 3) Excluding unusual items.
Full year 2025 Guidance Organic sales growth Around 2% Adjusted operating margin 1) Around 10-10.5% Operating cash flow 2) Around $1.2 billion Capital expenditures, net, % of sales Around 5% 1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. 2) Excluding unusual items.
No assurances can be given that such proceedings and claims will not have a material adverse impact on the Company’s profitability and consolidated financial position, or that reserves or insurance will mitigate such impact. See Note 17, Contingent Liabilities, to the Consolidated Financial Statements included herein and Item 3 – Legal Proceedings.
No assurances can be given that such proceedings and claims will not have a material adverse impact on the Company’s profitability and consolidated financial position, or that reserves or insurance will mitigate such impact.
Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. Government safety regulators also have policies and practices with respect to recalls.
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. Government safety regulators also have policies and practices with respect to recalls.
In the ordinary course of a global business, there are many transactions for which the ultimate tax outcome is uncertain. Many of these uncertainties arise because of intercompany transactions.
In the ordinary course of a global business, there are many transactions for which the ultimate tax outcome is uncertain. Many of these uncertainties arise because of intercompany transactions. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws.
This stock repurchase program authorizes the Company to repurchase up to $1.5 billion or up to 17 million shares (whichever comes first) between January 2022 and the end of 2024. In addition, in 2022, the Company retired 10 million shares of common stock that has been held in treasury.
In 2022, the Company also retired 10 million shares of common stock that had been repurchased under a prior stock repurchase program and since held in treasury. Under the current stock repurchase program authorized by the Board to repurchase up to $1.5 billion, or 17 million common shares (whichever comes first), between January 2022 and the end of 2024.
The balanced regional sales mix has been achieved through timely investments and strengthening of technical and support capabilities in growth markets. 31 ORDER INTAKE ADDING TO AN ALREADY STRONG CUSTOMER BASE The Company's order intake in 2023, with high win rates for new EV platforms with both new and traditional OEMs as well as for ICE platforms, added to the Company's already strong base, which includes supplying products to more than 1,300 vehicle models and around 100 car brands.
ORDER INTAKE ADDING TO AN ALREADY STRONG CUSTOMER BASE The Company's order intake in 2024, with high win rates for new platforms with both new and traditional OEMs as well as for both EV and ICE platforms, added to the Company's already strong base, which includes supplying products to more than 1,300 vehicle models and around 100 car brands.
Adjusted operating margin and adjusted EPS, as shown in the table below, should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with U.S. GAAP, including operating margin and EPS. Items affecting comparability 2023 2022 (DOLLARS IN MILLIONS, EXCEPT EPS) Reported Adjust- ments 1) Non- U.S.
Adjusted operating margin and adjusted diluted EPS, as shown in the table below, should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, including operating margin and diluted EPS.
The SEK 3,000 million loan mature in 2025 carrying a floating interest rate of 3M STIBOR +1.85%. In 2014, the Company issued and sold long-term debt securities in a U.S. Private Placement pursuant to a Note Purchase and Guaranty Agreement dated April 23, 2014, by and among Autoliv ASP Inc., the Company and the purchasers listed therein.
In 2014, the Company issued and sold long-term debt securities in a U.S. Private Placement pursuant to a Note Purchase and Guaranty Agreement dated April 23, 2014, by and among Autoliv ASP Inc., the Company and the purchasers listed therein.
Ultimately, however, sales are determined by the production levels for the individual vehicle models for which Autoliv is a supplier (see Dependence on Customers). The Company’s sales are split over several hundred contracts covering more than 1,300 vehicle models. This moderates the effect of changes in vehicle demand of individual countries and regions as well as production issues.
Global LVP is an indicator of the Company’s sales development. Ultimately, however, sales are determined by the production levels for the individual vehicle models for which Autoliv is a supplier (see Dependence on Customers). The Company’s sales are split over several hundred contracts covering more than 1,300 vehicle models.
In 2023, the Company’s five largest customers accounted for around 48% of consolidated sales and the ten largest customers accounted for around 78% of consolidated sales. The Company's largest customer contract accounted for around 3% of consolidated sales in 2023.
In 2024, the Company’s five largest customers accounted for around 44% of consolidated sales and the ten largest customers accounted for around 71% of consolidated sales. The Company's largest customer contract accounted for around 4% of consolidated sales in 2024.
Legal Proceedings and Note 17 Contingent Liabilities to the Consolidated Financial Statements in this Annual Report. 34 results of operations Consolidated net sales in 2023 increased by 18.5% compared to 2022. Excluding positive currency translation effects of 0.3%, the organic sales increased (Non-U.S. GAAP measure, see reconciliation table below) by 18.2%.
Legal Proceedings and Note 18 Contingent Liabilities to the Consolidated Financial Statements in this Annual Report. 35 results of operations Consolidated net sales in 2024 decreased by 0.8% compared to 2023. Excluding negative currency translation effects of 1.2%, the organic sales increased (Non-U.S.
The Company believes that the more stringent crash rating requirements and consumer demand for more safety should enable the global automotive safety market to grow around 1-2 percentage points per year faster than the global LVP in the medium and long term. This excludes the impact from cost inflation related price increases.
The average global safety CPV (airbags, pedestrian safety, seatbelts, and steering wheels) amounted to around $260 in 2024. The Company believes that the more stringent crash rating requirements and consumer demand for more safety should enable the global automotive safety market to grow around 1-2 percentage points per year faster than the global LVP in the medium and long term.
The number of shares outstanding is expected to increase by 0.3 million when all Restricted Stock Units (RSU) and Performance Shares (PSs) vest and if all stock options (SOs) to key employees are exercised, see Note 16, Stock Incentive Plans, to the Consolidated Financial Statements included herein.
The number of shares outstanding is expected to increase by 0.5 million when all RSUs and PSs vest and if all SOs to key employees are exercised, see Note 17, Stock Incentive Plans, to the Consolidated Financial Statements included herein. During 2024 the Company repurchased and retired approximately 5.1 million shares equal to $552 million.
In addition, from time to time, the Company may make payments to customers in connection with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless the payment concession can be clearly linked to the future business award.
These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless the payment concession can be clearly linked to the future business award. If the payments are capitalized, the amounts are amortized to revenue as the related goods are transferred.
China’s share was also unchanged, at 32%, while Japan’s share increased to 10% from 9% and India's share remained at 6%. Despite macro-economic uncertainties in parts of the world, we expect light vehicle markets to grow both in the medium and long term, driven by pent-up end user demand, rebuilding of new vehicle inventories and a growing GDP/capita.
Despite macro-economic uncertainties in parts of the world, we expect light vehicle markets to grow both in the medium and long term, driven by pent-up end user demand and a growing GDP/capita.
At December 31, 2023, the Company had received $209 million for sold receivables without recourse and discounted notes with a discount cost of $3 million during the year, compared to $174 million at December 31, 2022 with a discount cost of $2 million recorded in Other non-operating items, net. 40 NUMBER OF SHARES At December 31, 2023, 82.6 million shares were outstanding (net of 4.9 million treasury shares), a 4.1% decrease from 86.2 million one year earlier.
At December 31, 2024, the Company had received $211 million for sold receivables without recourse and discounted notes with a discount cost of $3 million during the year, compared to $209 million at December 31, 2023 with a discount cost of $3 million recorded in Other non-operating items, net.
TRADE Autoliv is subject to various international trade regulations and regimes and changes in these regimes could lead to increased compliance costs and costs of raw materials and other components.
Such liability could be based on activities which are not related to the Company’s current activities. 45 TRADE Autoliv is subject to various international trade regulations and regimes and changes in these regimes could lead to increased compliance costs and costs of raw materials and other components.
China Global Autoliv 15% 19% 17% 24% 18% Main growth drivers Honda, Nissan, Mercedes Stellantis, VW, Mercedes Honda, Great Wall, Mercedes Toyota, Hyundai, Subaru Honda, Toyota, Mercedes Main decline drivers Ford, BMW, Renault Mitsubishi Nissan, Renault, BMW Renault Ford 35 Condensed Statement of Income Years ended December 31, (Dollars in millions, except per share data) 2023 2022 Change Net Sales $ 10,475 $ 8,842 18 % Gross profit 1,822 1,396 30 % % of sales 17.4 % 15.8 % 1.6 pp S, G&A (498 ) (437 ) 14 % % of sales (4.8 )% (4.9 )% 0.2 pp R, D&E, net (425 ) (390 ) 8.8 % % of sales (4.1 )% (4.4 )% 0.4 pp Amortization of Intangibles (2 ) (3 ) (24 )% Other income (expense), net (207 ) 93 n/a Operating income 690 659 4.7 % % of sales 6.6 % 7.5 % (0.9 )pp Adjusted operating income 1) 920 598 54 % % of sales 8.8 % 6.8 % 2.0 pp Financial and non-operating items, net (77 ) (56 ) 39 % Income before taxes 612 603 1.5 % Income taxes (123 ) (178 ) (31 )% Tax rate 20.1 % 29.5 % (9.4 )pp Net income 489 425 15 % Earnings per share, diluted 2) 5.72 4.85 18 % Adjusted earnings per share, diluted 1,2) 8.19 4.40 86 % 1) Assuming dilution and net of treasury shares. 2) Non-U.S.
China Global Autoliv (1.7)% 1.4% (3.2)% 6.6% 0.4% Main growth drivers Toyota, Honda, VW Renault, Mercedes, Ford Geely, Chery, Changan Hyundai, Suzuki, Tata Geely, Mercedes, Renault Main decline drivers Stellantis, EV OEM, Nissan Stellantis, Volvo, Fisker GM, Honda, EV OEM Nissan, Mazda, Renault Stellantis, EV OEM, GM 36 Condensed Statement of Income Years ended December 31, (Dollars in millions, except per share data) 2024 2023 Change Net Sales $ 10,390 $ 10,475 (0.8 )% Gross profit 1,927 1,822 5.8 % % of sales 18.5 % 17.4 % 1.2 pp S, G&A (530 ) (500 ) 6.0 % % of sales (5.1 )% (4.8 )% (0.3 )pp R, D&E, net (398 ) (425 ) (6.3 )% % of sales (3.8 )% (4.1 )% 0.2 pp Other income (expense), net (19 ) (207 ) (91 )% Operating income 979 690 42 % % of sales 9.4 % 6.6 % 2.8 pp Adjusted operating income 1) 1,007 920 9 % % of sales 9.7 % 8.8 % 0.9 pp Financial and non-operating items, net (105 ) (77 ) 35 % Income before taxes 875 612 43 % Income taxes (227 ) (123 ) 84 % Tax rate 26.0 % 20.1 % 5.9 pp Net income 648 489 32 % Earnings per share, diluted 2) 8.04 5.72 40 % Adjusted earnings per share, diluted 1,2) 8.32 8.19 2 % 1) Assuming dilution and net of treasury shares. 2) Non-U.S.
In the year ended December 31, 2023, a number of factors influenced the Company’s results of operations, including: • Industry supply chain disruptions caused high customer call-off volatility • Cost inflation, especially for labor, logistics and utilities, and corresponding inflation compensation negotiations with customers • Continued growth above LVP driven by price, higher content per vehicle, and execution of strong order book • Order intake adding to an already strong customer base • Strategic and structural initiatives • Continued focus on operational excellence and quality 2023 2022 YEARS ENDED DEC. 31 (DOLLARS IN MILLIONS, EXCEPT EPS) Reported 1) change Reported 1) change Global light vehicle production (in thousands) 87,323 9.4 % 79,818 7.7 % Consolidated net sales $ 10,475 18 % $ 8,842 7.4 % Operating income 690 4.7 % 659 (2.3 ) % Operating margin, % 6.6 (0.9 ) pp 7.5 (0.7 ) pp Net income attributable to controlling interest 488 15 % 423 (2.7 ) % Earnings per share 2) 5.72 18 % 4.85 (2.2 ) % Net cash provided by operating activities 982 38 % 713 (5.4 ) % Return on capital employed, % 17.7 0.2 pp 17.5 (0.8 ) pp 1) Reported figures impacted by costs for capacity alignments and antitrust related matters.
In the year ended December 31, 2024, a number of factors influenced the Company’s results of operations, including: • Customer call-off volatility improved, yet remains above pre-pandemic levels, limiting productivity. • Cost inflation moderated but remains elevated, especially for labor • Continued growth above LVP despite unfavorable LVP mix development • Order intake impacted by developments in technology, geopolitics and customer landscape. • Strategic and structural initiatives • Continued focus on operational excellence and quality 2024 2023 YEARS ENDED DEC. 31 (DOLLARS IN MILLIONS, EXCEPT EPS) Reported 1) change Reported 1) change Global light vehicle production (in thousands) 86,708 (1.2 ) % 87,772 10 % Consolidated net sales $ 10,390 (0.8 ) % $ 10,475 18 % Operating income 979 42 % 690 4.7 % Operating margin, % 9.4 2.8 pp 6.6 (0.9 ) pp Net income attributable to controlling interest 646 33 % 488 15 % Earnings per share - diluted 2) 8.04 40 % 5.72 18 % Net cash provided by operating activities 1,059 7.8 % 982 38 % Return on capital employed, % 25.0 7.3 pp 17.7 0.2 pp 1) Reported figures impacted by costs for capacity alignments and antitrust related matters.
As a result, such reconciliation is not available without unreasonable efforts and Autoliv is unable to determine the probable significance of the unavailable information. Significant Legal Matters See Item 3.
GAAP reconciliation of these measures because items that impact these measures, such as costs 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 Autoliv is unable to determine the probable significance of the unavailable information. Significant Legal Matters See Item 3.
As of December 31, 2023, $767 million remains outstanding from the 2014 issuance. The Company has a €3,000 million Euro Medium Term Note Program in place for being able to issue notes to be traded on the Global Exchange Market of Euronext Dublin. At December 31, 2023, €500 million had been issued under this program.
As of December 31, 2024, $470 million remains outstanding with $285 million maturing in April 2026 and $185 million maturing in April 2029. The Company has a €3,000 million Euro Medium Term Note Program in place for being able to issue notes to be traded on the Global Exchange Market of Euronext Dublin.
PRODUCT WARRANTY AND RECALLS If our products are alleged to fail to perform as expected or are defective, the Company may be exposed to various claims for damages and compensation. Such claims may result in costs and other losses to the Company even where the relevant product is eventually found to have functioned properly.
Such claims may result in costs and other losses to the Company even where the relevant product is eventually found to have functioned properly. If a product (actually or allegedly) fails to perform as expected or is defective, we may face warranty and recall claims.
As of December 31, 2021, the main U.S defined benefit plan was frozen for further benefits. Many of the Company’s non-U.S. employees are also covered by pension arrangements.
As of December 31, 2021, the main U.S defined benefit plan was frozen for further benefits. Many of the Company’s non-U.S. employees are also covered by pension arrangements. At December 31, 2024, the Company’s net pension liability (i.e. the actual funded status) for its U.S. and non-U.S. plans was $153 million compared to $159 million at December 31, 2023.
Depreciation and amortization totaled $378 million in 2023 compared to $363 million in 2022. During the years 2023 and 2022, a majority of the Company's investments were for production capacity to support new product launches and automation projects for improved efficiency.
During the years 2024 and 2023, a majority of the Company's investments were for production capacity to support new product launches and automation projects for improved efficiency. NET CASH USED IN FINANCING ACTIVITIES Net cash used in financing activities amounted to $680 million and $490 million for the years 2024 and 2023, respectively.
It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. Organic Sales The Company analyzes its sales trends and performance as changes in “organic sales growth” or “organic sales decline”, because the Company currently generates approximately three quarters of net sales in currencies other than the reporting currency (i.e.
Organic Sales The Company analyzes its sales trends and performance as changes in “organic sales growth” or “organic sales decline”, because the Company currently generates approximately three quarters of net sales in currencies other than the reporting currency (i.e. U.S. dollars) and currency rates have proven to be rather volatile.
If a product (actually or allegedly) fails to perform as expected or is defective, we may face warranty and recall claims. If such actual or alleged failure or defect results, or is alleged to result, in bodily injury and/or property damage, we may also face product liability and other claims.
If such actual or alleged failure or defect results, or is alleged to result, in bodily injury and/or property damage, we may also face product liability and other claims. The Company may experience material warranty, recall, product or other liability claims or losses in the future, and the Company may incur significant cost to defend against such claims.
GAAP measures the Company uses to evaluate its business, because the Company believes it assists investors and analysts in comparing the Company's performance across reporting periods on a consistent basis by excluding items that are non-operational or non-recurring in nature (such as costs related to capacity alignments, costs related to antitrust matters and for EPS unusual tax items) and that the Company does not believe are indicative of its core operating performance and underlying business trends.
Reconciliation of GAAP measure "Total debt" to non-GAAP measure “Net debt” DECEMBER 31 (Dollars in millions) 2024 2023 Short-term debt $ 387 $ 538 Long-term debt 1,522 1,324 Total debt 1,909 1,862 Cash and cash equivalents (330 ) (498 ) Debt issuance cost/Debt-related derivatives, net (24 ) 3 Net debt $ 1,554 $ 1,367 Adjusted operating income, adjusted operating margin and adjusted diluted Earnings per share (EPS) Adjusted operating margin and adjusted diluted EPS are non-GAAP measures the Company uses to evaluate its business, because the Company believes it assists investors and analysts in comparing the Company's performance across reporting periods on a consistent basis by excluding items that are non-operational or non-recurring in nature (such as costs related to capacity alignments, costs related to antitrust matters and for diluted EPS unusual tax items) and that the Company does not believe are indicative of its core operating performance and underlying business trends.
Airbags, Steering Wheels and Other Sales for all major product categories increased organically (Non-U.S. GAAP measure, see reconciliation table above) during the year. The largest contributor to the increase was steering wheels and inflatable curtains, followed by side airbags and passenger airbags. Seatbelt Products and Other Sales for seatbelt products and other increased organically (Non-U.S.
Airbags, Steering Wheels and Other Sales grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 0.7% in 2024. The largest contributor to the increase was steering wheels, followed by center airbags, side airbags, inflatable curtains and inflators, partly offset by decreases for passenger airbags, knee airbags and driver airbags.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeCALCULATION OF LEVERAGE RATIO (DOLLARS IN MILLIONS) December 31, 2023 2022 Net debt 1) $ 1,367 $ 1,184 Pension liabilities 159 154 Debt per the Policy 1,527 1,338 Net income 2) 489 425 Income taxes 2) 123 178 Interest expense, net 2,3) 80 54 Other non-operating items, net 2) 3 5 Income from equity method investments 2) (5 ) (3 ) Depreciation and amortization of intangibles 2) 378 363 Capacity alignments costs and antitrust related matters 2) 230 (61 ) EBITDA per the Policy (Adjusted EBITDA) $ 1,297 $ 961 Leverage ratio 1.2 1.4 1) Net debt is short- and long-term debt and debt-related derivatives less cash and cash equivalents (non-U.S.
Biggest changeCALCULATION OF NON-GAAP MEASURE LEVERAGE RATIO December 31, 2024 2023 Net debt 1) $ 1,554 $ 1,367 Pension liabilities 153 159 Debt per the Policy 1,708 1,527 Net income 2) 648 489 Income taxes 2) 227 123 Interest expense, net 2,3) 95 80 Other non-operating items, net 2) 16 3 Income from equity method investments 2) (7 ) (5 ) Depreciation and amortization of intangibles 2) 387 378 Capacity alignments costs and antitrust related matters 2) 27 230 EBITDA per the Policy (Adjusted EBITDA) $ 1,394 $ 1,297 Leverage ratio 1.2 1.2 1) Net debt is short- and long-term debt and debt-related derivatives less cash and cash equivalents (non-GAAP measure). 2) Latest 12 months. 3) Interest expense, net is interest expense including cost for extinguishment of debt, if any, less interest income. 52 CREDIT RISK IN FINANCIAL MARKETS Credit risk refers to the risk of a financial counterparty being unable to fulfill an agreed-upon obligation.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk The Company is exposed to several markets risks in the ordinary course of business including risks related to currencies, interest rates, financing, capital structure and credit ratings and impairment.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk The Company is exposed to several markets risks in the ordinary course of business including risks related to currencies, interest rates, financing, capital structure, credit ratings and impairment.
IMPAIRMENT RISK Impairment risk refers to the risk that the Company will write down a material amount of its goodwill of close to $1.4 billion as of December 31, 2023. This risk is assessed at least annually in the fourth quarter each year when the Company performs its impairment testing.
IMPAIRMENT RISK Impairment risk refers to the risk that the Company will write down a material amount of its goodwill of close to $1.4 billion as of December 31, 2024. This risk is assessed at least annually in the fourth quarter each year when the Company performs its impairment testing.
The management of the financing risk ensures access to funding in a cost-efficient way by diversification of funding sources and debt maturities. Autoliv has diversified its long-term funding sources by issuing notes in the USPP and Eurobond markets, and by signing a long-term credit agreement with 11 banks.
The management of the financing risk ensures access to funding in a cost-efficient way by diversification of funding sources and debt maturities. Autoliv has diversified its long-term funding sources by issuing notes in the USPP and Eurobond markets, and by signing a long-term credit agreement with 12 banks.
In addition, the net exposure is limited to only around one quarter of net sales and is made up of around 50 different currency pairs with exposures of more than $1 million each. The Company generally does not hedge these flows. 2.
In addition, the net exposure is limited to only around one quarter of net sales and is made up of around 45 different currency pairs with exposures of more than $1 million each. The Company generally does not hedge these flows. 2.
Consequently, changes in currency rates relating to funding and foreign currency accounts normally have a small impact on the Company’s income. In 2023 and 2022, the impact from the Company’s currency exposure were not material. INTEREST RATE RISK Interest rate risk refers to the risk that interest rate changes will affect the Company’s borrowing costs.
Consequently, changes in currency rates relating to funding and foreign currency accounts normally have a small impact on the Company’s income. In 2024 and 2023, the impact from the Company’s currency exposure were not material. INTEREST RATE RISK Interest rate risk refers to the risk that interest rate changes will affect the Company’s borrowing costs.
To further reduce credit risk, deposits and financial instruments can only be entered into with core banks up to a calculated risk amount of $200 million per bank for banks rated A- or above and up to $50 million for banks rated BBB+.
To further reduce credit risk, deposits and financial instruments can only be entered into with core banks up to a calculated risk amount of $250 million per bank for banks rated A- or above and up to $50 million for banks rated BBB+.
In addition, deposits can be made in U.S. and Swedish government short-term notes and certain AAA rated money market funds, as approved by the Company’s Board of Directors. At December 31, 2023, the Company held $290 million in AAA rated money market funds.
In addition, deposits can be made in U.S. and Swedish government short-term notes and certain AAA rated money market funds, as approved by the Company’s Board of Directors. At December 31, 2024, the Company held $31 million in AAA rated money market funds.
The Company estimates that a 1% increase in the value of the U.S. dollar versus European currencies will decrease reported U.S. dollar annual net sales in 2024 by $31 million, while operating income for 2024 will decline by $3 million, assuming reported corporate average margin. The Company’s policy is not to hedge this type of translation exposure.
The Company estimates that a 1% increase in the value of the U.S. dollar versus European currencies will decrease reported U.S. dollar annual net sales in 2025 by $28 million, while operating income for 2025 will decline by $3 million, assuming reported corporate average margin. The Company’s policy is not to hedge this type of translation exposure.
Given the Company’s current capital structure, we estimate that a one-percentage point interest rate increase would decrease net interest expense by approximately $0.4 million on an annual basis.
Given the Company’s current capital structure, we estimate that a one-percentage point interest rate increase would increase net interest expense by approximately $0.7 million on an annual basis.
Taking the cash and cash equivalents of $498 million (which is primarily subject to floating interest rates) minus the portion of debt carrying floating interest rates, we estimated that a one-percentage point interest rate increase would decrease net interest expense by approximately $0.4 million on an annual basis.
Taking the cash and cash equivalents of $330 million (which is primarily subject to floating interest rates) minus the portion of debt carrying floating interest rates, we estimated that a one-percentage point interest rate increase would increase net interest expense by approximately $0.7 million on an annual basis.
This is based on the capital structure at the end of 2023 when the gross fixed-rate debt was $1,024 million while the Company had a net debt position of $1,367 million (see section Non-U.S. GAAP Performance Measures). Thus, a change in the interest rate environment would not have a notable impact on the Company’s interest expense.
This is based on the capital structure at the end of 2024 when the gross fixed-rate debt was $1,522 million while the Company had a net debt position of $1,554 million (see section Non-U.S. GAAP Performance Measures). Thus, a change in the interest rate environment would not have a notable impact on the Company’s interest expense.
The Company's interest rate risk policy states that the average interest rate fixing period should be minimum 1 year and maximum 5 years. At December 31, 2023, the average interest rate fixing period for the Company’s outstanding debt was 2.1 years, and at December 31, 2022, the average interest rate fixing period for the Company’s outstanding debt was 1.6 years.
The Company's interest rate risk policy states that the average interest rate fixing period should be minimum 1 year and maximum 5 years. At December 31, 2024, the average interest rate fixing period for the Company’s outstanding debt was 2.8 years, and at December 31, 2023, the average interest rate fixing period for the Company’s outstanding debt was 2.1 years.
As of December 31, 2023, the Company had $498 million in cash and cash equivalents of which the majority were subject to a floating interest rate.
As of December 31, 2024, the Company had $330 million in cash and cash equivalents of which the majority were subject to a floating interest rate.
Per December 31, 2023, 29% corresponding to $538 million of the Autoliv Group’s total debt had maturity less than 12 months. This amount was fully covered by unutilized committed credit facilities with maturity in excess of 12 months.
Per December 31, 2024, 20% corresponding to $387 million of the Autoliv Group’s total debt had maturity less than 12 months. This amount was fully covered by unutilized committed credit facilities with maturity in excess of 12 months.
Revaluation effects come from valuation of assets and liabilities denominated in other currencies than the reporting currency of each unit. The Company's net transaction exposure in 2023 was approximately $1.8 billion.
Revaluation effects come from valuation of assets and liabilities denominated in other currencies than the reporting currency of each unit. The Company's net transaction exposure in 2024 was approximately $2.4 billion.
The Company estimates that 28% of its consolidated net sales will be denominated in Euro or other European currencies during 2024, while 19% of its consolidated net sales are estimated to be denominated in U.S. dollars.
The Company estimates that 27% of its consolidated net sales will be denominated in Euro or other European currencies during 2025, while 18% of its consolidated net sales are estimated to be denominated in U.S. dollars.
The Company also has a lending facility with the Swedish Export Credit Corporation. The Company has a Medium Term Note Program in place for being able to issue notes to be traded on the Global Exchange Market of Euronext Dublin.
The Company also has a lending facility with the Swedish Export Credit Corporation. The Company has a Euro Medium Term Note Program in place for being able to issue notes to be listed at Euronext Dublin.
See also discussion under Goodwill and Intangible Assets in Note 2, Summary of Significant Accounting Policies, and Note 10, Goodwill and Intangible Assets, to the Consolidated Financial Statements included herein.
The Company could also acquire companies where goodwill could turn out to be less resilient to deteriorations in external conditions. See also discussion under Goodwill and Intangible Assets in Note 2, Summary of Significant Accounting Policies, and Note 10, Goodwill and Intangible Assets, to the Consolidated Financial Statements included herein.
The most notable debt carrying fixed interest rates is the €500 million bond issued in 2023, see Note 13 to the Consolidated Financial Statements included herein. 49 FINANCING RISK Financing risk refers to the risk that it will be difficult and/or expensive to finance new or existing debt to meet the financing needs of the Autoliv Group.
See Note 14 to the Consolidated Financial Statements included herein. 51 FINANCING RISK Financing risk refers to the risk that it will be difficult and/or expensive to finance new or existing debt to meet the financing needs of the Autoliv Group.
However, there can be no assurance that goodwill will not be impaired due to future significant declines in LVP, due to the Company's technologies or products becoming obsolete or for any other reason. The Company could also acquire companies where goodwill could turn out to be less resilient to deteriorations in external conditions.
It has been concluded that presently the Company's goodwill is not “at risk”. However, there can be no assurance that goodwill will not be impaired due to future significant declines in LVP, due to the Company's technologies or products becoming obsolete or for any other reason.
Autoliv is committed to maintain a “strong investment grade credit rating." As of December 31, 2023, the Company had a long-term credit rating from S&P Global Ratings (“S&P”) of BBB. The amount of interest-bearing debt held impacts the future financial flexibility as well as the credit rating. Management uses the non-U.S.
Autoliv is committed to maintain a “strong investment grade credit rating." As of December 31, 2024, the Company had a long-term credit rating from S&P Global Ratings of BBB, from Moody’s of Baa1 and from Fitch of BBB+. As of February 7, 2025, S&P Global Ratings withdrew the ratings for Autoliv on the company’s request.
Autoliv’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. At December 31, 2023, the leverage ratio (non-U.S. GAAP measure, see calculation table below) was 1.2x. For details and calculation of leverage ratio, refer to the table below.
At December 31, 2024, the leverage ratio (non-GAAP measure, see calculation table below) was 1.2x. For details and calculation of leverage ratio, refer to the table below.
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.
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. Autoliv’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.
Fixed interest rate debt can be achieved both by issuing fixed rate notes and through interest rate swaps.
Fixed interest rate debt can be achieved both by issuing fixed rate notes and through interest rate swaps. The most notable debt carrying fixed interest rates is the €500 million bond issued in 2023, the €500 million bond issued in 2024, and the U.S. private placement notes totaling $470 million.
Removed
GAAP measure). 2) Latest 12 months. 3) Interest expense, net is interest expense including cost for extinguishment of debt, if any, less interest income. 50 CREDIT RISK IN FINANCIAL MARKETS Credit risk refers to the risk of a financial counterparty being unable to fulfill an agreed-upon obligation.
Added
The amount of interest-bearing debt held impacts the future financial flexibility as well as the credit rating. Management uses the non-GAAP measure “Leverage Ratio” to analyze the amount of debt the Company can incur under its debt policy.
Removed
In 2023, the Company performed a quantitative impairment testing by calculating the fair value of its goodwill. The estimated fair market value of goodwill is determined by the discounted cash flow method. The Company discounts projected operating cash flows using its weighted average cost of capital.
Removed
Estimating the fair value requires the Company to make judgments about appropriate discount rates, growth rates, relevant comparable company earnings multiples and the amount and timing of expected future cash flows. It has been concluded that presently the Company's goodwill is not “at risk”.

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