Autoliv Q3 net sales fall 0.5% to $2,693 million

Autoliv reported third quarter net sales of $2,693 million on October 23, 2026, a decrease of 0.5% compared to the same period in 2025. The company, listed on the NYSE as ALV and the SSE as ALIV.sdb, stated that organic sales decreased by 1.1%. President and CEO Mikael Bratt attributed the performance to a tough environment, noting that Autoliv outperformed the global LVP decrease of 1.9% reported by Mobility Global in October 2026.

Operating income for the quarter decreased by 5.0% from the prior year period. The decline was primarily due to supplier settlement compensation received in the third quarter of 2025. Adjusted operating income decreased by 3.4%. The operating margin stood at 9.4%, while the adjusted operating margin was 9.7%. Return on capital employed was 24.1%, and adjusted return on capital employed was 24.4%. Diluted earnings per share fell 6.8% to $2.13.

Regional performance varied significantly. In Asia excluding China, Autoliv outperformed LVP by 11 percentage points, driven by strong market growth in safety content per vehicle in India, where sales grew by nearly 30%. In China, sales to Chinese OEMs grew by more than 20%, outperforming LVP by around 20 percentage points. Conversely, organic sales underperformed LVP in EMEA and were in line with LVP in the Americas. Bratt noted that strong sales growth in Japan contributed to Asia sales exceeding China in the quarter.

Cash flow remained solid, with operating cash flow of $239 million compared to $258 million in the third quarter of 2025. Free operating cash flow was $124 million, down from $153 million a year earlier. The leverage ratio was 1.3x, almost unchanged from the prior quarter. During the period, Autoliv paid a dividend of $0.87 per share, totaling $63 million, and repurchased and retired 1.23 million shares for $150 million.

For full year 2026, Autoliv maintains guidance for organic sales growth of around 0%, with an expected positive FX impact on net sales of around 2.5%. The company expects an adjusted operating margin of around 10.5%, which is the low end of its previous range of around 10.5% to 11%. This adjustment reflects increased cost headwinds related to raw materials, logistics, flooding in Thailand, and lower call-off accuracy since the first quarter of 2026. Operating cash flow is expected to be around $1.2 billion, and capex is guided at around 4% of sales.

Bratt stated that the company has offset the majority of cost headwinds through labor efficiency, material savings via Value Engineering, and negotiations with customers and suppliers. He anticipates a strong fourth quarter supported by increasing product launches and raw material recoveries. Autoliv opened its second R&D center in China during the third quarter to support partnerships with Chinese OEMs and long-term growth.

Over the last 12 months, Autoliv has repurchased 4.14 million shares for $500 million and paid $258 million in dividends while keeping its debt leverage ratio unchanged. The company has scheduled its 2027 Investor Day for April 26 and 27, 2027, in Shanghai, China, in connection with the Auto Shanghai auto show.