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Autoliv's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: ALV

During the quarter, we returned $45 million to our shareholders in the form of the dividend which is a new record payout. This concludes my formal comments around the second quarter.

And I now want to look into the outlook on the next page. On the next page, we have the third quarter light vehicle production according to IHS. That is expected to increase 2.1% year-over-year. In April, the expectation was an increase of 3.8%. This change in light vehicle production is primarily due to a lower production outlook for Western Europe, China and rest of Asia. However, IHS still expects a year-over-year growth in North America, Japan and China of 8% each, while the production in Europe is expected to be down 8%.

On the next page, we have our outlook for the third quarter. Based on our customer call-offs we expect to continue to offset this strong negative head wins from Western Europe and achieve an organic growth rate of nearly 4%. This growth is due to our long term investments in China in the active safety that are paying off and due to important platform launchers.

For the quarter we expect an underlying operating margin of approximately 10%. Sequentially, our margin improvement from the second quarter is mainly due to better utilisation of our capacity investment in China and R&D net.

On the next slides, we see some of our key launches in China. These models will contribute to our market share gains and the overall market out performance in the second half of this year. The annual revenues for these models are the range of $10 million to $40 million each. On this great wall H6 platform we have a good example where Autoliv supplies all of the passive safety product. These launches will have Autoliv reach close to $1.2 billion of revenue in China this year.

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