STOCKHOLM, July 18, 2025 /PRNewswire/ --

Q2 2025: Q2 records for sales, operating income and margin as well as EPS

Financial highlights Q2 2025
$2,714 million net sales
4.2% net sales increase
3.4% organic sales growth*
9.1% operating margin
9.3% adjusted operating margin*
$2.16 diluted EPS, 27% increase
$2.21 adjusted diluted EPS*, 18% increase

Full year 2025 guidance
Around 3% organic sales growth
Around 0% FX effect on net sales
Around 10-10.5% adjusted operating margin
Around $1.2 billion operating cash flow

_{All change figures in this release compare to the same period of the previous year except when stated otherwise.}

Key business developments in the second quarter of 2025

Net sales increased organically* by 3.4%, which was 0.7pp higher than the global LVP increase of 2.7% (S&P Global July 2025). Regional and customer LVP mix is estimated to have had about 2.5pp negative impact on sales, while tariff compensations added around 1pp to growth. We outperformed in Americas, Europe and Asia excl. China, mainly due to product launches and tariff compensations. In China, our growth gap vs. LVP was smaller compared to recent quarters, due to improved sales performance with Chinese OEMs. We expect that our record number of new launches will significantly improve our relative sales performance in China in the second half of 2025.
Profitability improved significantly, mainly due to organic sales growth and successful execution of cost reductions. Total headcount decreased by 5%. We estimate that the negative impact from U.S. tariffs was around 35bps on operating margin, as we managed to pass on most of the tariff costs to our customers. Operating income increased by 20% to $247 million and adjusted operating income* increased by 14% to $251 million. Operating margin was 9.1% and adjusted operating margin* was 9.3%. ROCE was 23.8% and adjusted ROCE* was 24.1%.
Operating cash flow was lower than last year, as Q2 2024 was boosted by positive, timing related working capital effects, while working capital changes in 2025 were more normal. This was partly offset by lower capex, net. The leverage ratio* of 1.3x is well below our target limit of 1.5x. In the quarter, a dividend of $0.70 per share was paid and 0.5 million shares were repurchased and retired.

_{*For non-U.S. GAAP measures see enclosed reconciliation tables.}

Key Figures


            
              (Dollars in millions, except per share data)                                                                   Q2 2025 Q2 2024        Change   6M 2025   6M 2024          Change



            Net sales                                                                                                                  $2,714   $2,605          4.2 %    $5,292     $5,220            1.4 %



            Operating income                                                                                                              247      206           20 %       502        400             25 %



            Adjusted operating income1)                                                                                                   251      221           14 %       506        420             21 %



            Operating margin                                                                                                            9.1 %   7.9 %  1.2pp            9.5 %     7.7 %    1.8pp



            Adjusted operating margin1)                                                                                                 9.3 %   8.5 %  0.8pp            9.6 %     8.0 %    1.5pp



            Earnings per share - diluted                                                                                                 2.16     1.71           27 %      4.31       3.23             34 %



            Adjusted earnings per share - diluted1)                                                                                      2.21     1.87           18 %      4.36       3.45             27 %



            Operating cash flow                                                                                                           277      340         (18) %       355        462           (23) %



            Return on capital employed2)                                                                                               23.8 %  21.0 %  2.7pp           24.8 %    20.4 %    4.3pp



            Adjusted return on capital employed1,2)                                                                                    24.1 %  22.5 %  1.6pp           25.0 %    21.4 %    3.6pp



            1) Excluding effects from capacity alignments and antitrust related matters. Non-U.S. GAAP measure, see reconciliation table.
    2) Annualized operating income and income from equity method investments, relative to average capital employed.

Comments from Mikael Bratt, President & CEO

I am pleased to, in a turbulent market environment, report a record breaking second quarter for sales, operating income and margin as well as EPS. The performance was driven by good sales development coupled with successful actions to reduce costs and achieve tariff compensations. We outperformed in Americas, Europe and Asia excl. China and continued to outperform global LVP despite strong headwinds from LVP mix shifts, particularly in China. Based on a positive trend during the second quarter and a record number of new launches we continue to expect significantly improved sales vs. LVP in China in the second half year.

We remain focused on operational efficiency, commercial excellence and our cost reduction programs. Direct headcount was reduced by 6% while sales grew 3% organically, which together with continued repurchases of shares, contributed to a 27% increase in EPS. We remain confident that we can continue to successfully receive compensation from our customers for tariffs, although the industry outlook for tariffs is uncertain. We recovered around 80% of tariff costs in the second quarter, and we expect to recover most of what remains later in the year. We continue to closely monitor and evaluate the situation, focusing on being adaptive and agile.

At our Capital Markets Day in June, we reiterated our financial targets and communicated a new share repurchase program of up to $2.5 billion until the end of 2029 as well as announced a 21% dividend increase for the third quarter to $0.85 per share. Our increased shareholder return ambitions are supported by our strong balance sheet and cash conversion.

Our 2025 guidance for organic sales growth has increased to around 3% due to tariff compensations, and we reiterate our guidance of an adjusted operating margin of around 10-10.5%.

Next Report

Autoliv intends to publish the quarterly earnings report for the third quarter of 2025 on Friday, October 17, 2025.

Inquiries: Investors and Analysts

Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671

Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614

Inquiries: Media

Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424

Autoliv, Inc. is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on July 18, 2025.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/autoliv/r/financial-report-april---june-2025,c4208810

The following files are available for download:


     
     https://mb.cision.com/Main/751/4208810/3585368.pdf The full report
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