2024
Annual and
Sustainability
Report
Saving More Lives
Contents
Forward-Looking Statements
Except for historical information, matters discussed in the annual report are forward-looking statements and are based on management’s estimates,
assumptions and projections. Actual results could vary materially. Please review the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections in the Company’s annual report on Form 10-K for the fiscal year ended December
31, 2024, and subsequent SEC filings, for factors that could affect the Company’s performance and cause results to differ materially from
management’s expectations. The information in this report reflected management’s estimates, assumptions and projections as of January 31,
2025. Autoliv has not made updates since then and makes no representation, express or implied, that the information is still current or complete.
The Company is under no obligation to update any part of this document.
This report includes content supplied by S&P Global. Copyright © Light Vehicle Production Forecast, January 2025. All rights reserved.
Cover: Huaihai Middle Road and North-South Elevated Road, Huangpu District, Shanghai, China.
Annual and Sustainability
Report 2024
02
This is Autoliv
Year in Brief ..........................................................................................................................................04
CEO Message ......................................................................................................................................06
Vision / Mission / Key Behaviors . .........................................................................................................08
2024 Financial Summary ..................................................................................................................... 10
Financial and Sustainability Targets ..................................................................................................... 12
Strategy for Change
Our Strategic Framework ..................................................................................................................... 16
Customer Focus ................................................................................................................................... 18
Competitive Products and Solutions ....................................................................................................22
Efficient Value Delivery ........................................................................................................................28
The Autoliv Way ...................................................................................................................................32
Sustainability
Sustainability Highlights ...................................................................................................................... 36
A Driving Force in Sustainable Mobility ............................................................................................... 38
Sustainability Materiality Assessment ..................................................................................................40
Sustainability Governance ...................................................................................................................42
Road Safety .........................................................................................................................................44
Climate and Circularity .........................................................................................................................47
TCFD Disclosure ..................................................................................................................................52
A Safe and Inclusive Workplace ...........................................................................................................54
Responsible Business ..........................................................................................................................56
Sustainability Appendix ........................................................................................................................62
Investing in Autoliv
Creating Shareholder Value................................................................................................................. 68
Board and Management
Board of Directors.................................................................................................................................72
Executive Management Team...............................................................................................................73
Location and Capabilites.................................................................................................................................75
Contacts and Calendar....................................................................................................................................76
Multi-Year Financial Summary.........................................................................................................................77
03
THIS IS AUTOLIV
Year in Brief
*) Non-GAAP Performance Measures. See "Non-GAAP Performance Measures" section in the 10-K filed with the SEC.
$10.4b
net sales
9.7%
adj. operating margin*
$1.1b
operating cash flow
65,000
associates worldwide
44%
market share
30%
renewable electricity use
15%
improvement in GHG
emissions intensity
$771m
shareholder returns
Key Figures 2024
The World’s
Automotive
Safety Supplier
37,000
lives and reduced around 600,000 injuries.
Our products saved approximately
04
A
utoliv, Inc. (NYSE: ALV; Nasdaq Stockholm:
ALIV.sdb) is the worldwide leader in automotive
safety systems. At Autoliv, we challenge and
redefine the standards of mobility safety to sus-
tainably deliver leading solutions. We develop, manufacture
and market protective systems, such as airbags, seatbelts,
and steering wheels, for all major vehicle manufacturers
in the world. In 2024, our products saved approximately
37,000 lives and reduced around 600,000 injuries.
Autonomous driving, connected cars and electric vehicles
are transforming the automotive industry. We are well-
positioned to sustainably adapt to these new business
opportunities.
By leveraging our technological expertise and opera-
tional capabilities, we are also exploring new growth oppor-
tunities, such as safety for commercial vehicles and pyro
safety switches.
ASIA
19%
CHINA
19%
EUROPE
28%
AMERICAS
33%
Share of total sales
Due to rounding effects, the illustration does not sum up to 100%.
05
2024 was a year of market fluctuations and geo-
political uncertainties. We nevertheless remained
focused and resilient, and performed well. Chang-
ing market dynamics together with advancements
in electrification and automation are creating both
new challenges and business opportunities, and
we are well positioned to leverage these trends.
Market development
The automotive industry is undergoing major changes, and we are
responding and adapting to this new normal. Light vehicle sales have
decreased in several regions, inflation remained high, and although the
volatility in Light Vehicle Production (LVP) improved, it remained above
pre-pandemic level. We are successfully navigating these challenges
and delivered a solid performance for the year with improvements to
our margins, our profitability, and cash flow. Our positive long-term
outlook for LVP remains as we consider the current macro-economic
weakness and technological uncertainty to be temporary.
Financial performance and shareholder value creation
I am proud of the significant progress and achievements we have made.
We anticipated the current challenges in the industry at an early stage
and implemented proactive efficiency and cost-saving initiatives with a
particular focus on Europe and the Americas. To support our growth we
are investing in new facilities in China, Vietnam, and India. We are opti-
mizing our footprint in Europe. Furthermore, we are continuing to seek
the best production locations to support our customers. As a result, our
position remains strong.
Despite a lower LVP, we managed to improve our adjusted operat-
ing margin* through effective cost control and price management, along
with the successful execution of strategic initiatives. Once again, we
outperformed global LVP. We consider it strategically important that we
significantly strengthened our position with domestic Chinese OEMs in
2024, and that our sales in India grew considerably. Our Indian opera-
tions now account for more than four percent of our global sales.
THIS IS AUTOLIV
CEO Message
“The automotive
industry is undergoing
major changes, and
we are responding
and adapting to this
new normal.”
Mikael Bratt
President and CEO
Well-Positioned
in the Changing
Automotive
Industry
*) Non-GAAP Performance Measures. See "Non-GAAP Performance Measures"
section in the 10-K filed with the SEC.
06
Over the years, Autoliv has shown its ability to generate solid
cash flow and regularly deliver value to shareholders using both
dividends and share repurchases. 2024 was no exception as we
returned a total of $ 771 million to shareholders as we increased
the dividend per share and repurchased 5.1 million shares. The
share repurchase mandate has been extended by one year to the
end of 2025.
Development in the Chinese market
Autoliv is the leading automotive safety supplier to both global and
domestic OEMs in China, and our China division contributed 19% to
Autoliv’s global sales in 2024.
Chinese light vehicle manufacturers have become increasingly
important contributors to Autoliv’s sales. Our market share with the
fast-growing domestic OEMs increased significantly as our sales
grew by 24% to this group. We see further potential for higher sales
from market share gains as well as increasing safety content per ve-
hicle.
Over the past decade, we have invested significantly in China, pi-
oneering innovation in safety systems supporting real-life situations.
We work with local universities, research institutes, and leading car
manufacturers to advance automotive safety technologies.
In June 2024, we partnered with XPENG AEROHT, one of Asia’s
leading flying car innovators, to develop safety solutions for future
mobility. Combining XPENG AEROHT’s technology with our safe-
ty expertise will allow us to play a key role in this emerging field. In
December, we also signed a new strategic collaboration agreement
with Jiangling Motors Co., Ltd (JMC), a renowned Chinese automo-
tive manufacturer. The partnership aims to leverage our respective
strengths to advance innovation and facilitate global expansion.
Leading through innovation and quality
We maintain our leadership by consistently delivering on our cus-
tomer commitment and achieving performance improvements
through innovation, quality, operational excellence, and effective
project execution.
In a highly competitive market, it is vital that we continually evalu-
ate market dynamics and develop products and solutions to meet
evolving demands. We not only think about what our customers
want today but also understand what our customers will need in the
future. Accelerated innovation is essential and we seek to improve
our development of new safety solutions for the market, including
safety products adjusted to new seating positions and products for
advanced driver-assistance systems.
Innovation requires diverse perspectives. Autoliv’s Research
Advisory Board has supported the scientific basis for our product
development for the past 40 years. The Research Advisory Board
includes international experts in traffic safety, vehicle technology,
and biomechanics, who contribute their ideas to advance Autoliv’s
technological direction.
During the year, we made further progress within the area of Mo-
bility Safety Solutions regarding new safety systems for a broader
range of commercial vehicles and pyro safety switches for electrical
vehicles.
The automotive industry, characterized by complex products
and shorter development cycles, along with a higher number of
recalls, places a strong emphasis on quality. We prioritize quality
throughout the entire value chain, and we focus on optimizing the fi-
nal result rather than specific tasks. Our targets are zero critical qual-
ity issues and zero recalls.
Progress on our climate efforts
Sustainability is a vital part of our vision of Saving More Lives and
we strive to integrate it into our daily decision-making. Our sustain-
ability approach focuses on four areas, with specific targets. Our
business directly contributes to the realization of several UN Sus-
tainable Development Goals (SDGs) and, as a UN Global Com-
pact signatory, we are committed to following its principles.
In the area of Climate and Circularity, we increased our renew-
able electricity usage during 2024. There has been a significant im-
provement in recent years, from 1% in 2021 to 30% in 2024.
We continued to increase our use of low-carbon materials,
which requires broad cross-functional collaboration from sales,
product design and engineering to operations and sourcing. Nota-
ble examples include an increased share of recycled magnesium
in our products and the introduction of airbags made from 100%
recycled polyester.
In 2024, we completed our third supplier climate survey, de-
signed to assess the climate efforts of our various suppliers. This
data, along with climate-related requirements, support our work
in the supplier evaluation and dialogue processes. In addition, we
launched the supplier climate accelerator program allowing us
to work closely with suppliers on reducing their greenhouse gas
(GHG) emissions.
These steps are vital to Autoliv’s commitment to reach carbon
neutrality in our own operations by 2030 and achieve net-zero
GHG emissions across the supply chain by 2040.
Autoliv Safety Foundation
We founded the Autoliv Safety Foundation in 2024. The purpose
of the foundation is to promote research and development in traffic
safety and related areas to create a better and safer world. Addi-
tionally, the foundation aims to provide assistance in humanitarian
disasters in regions where Autoliv operates. A project supporting
road safety in Mexico was initiated at the end of the year.
Collaboration for Saving More Lives
I believe that our success depends on strong collaboration within
the organization and with customers and suppliers. Identifying cus-
tomer needs and finding growth opportunities are essential for pro-
viding value and ensuring business progress.
As a market leader, we are paving the way and aim to trans-
form the industry. Market leadership is achieved by being best-in-
class when it comes to delivering on our customer commitment.
This requires setting ambitious targets and engaging in focused
teamwork to find efficient ways of working and optimizing the entire
value chain. Collaborating with committed colleagues worldwide
assures me that we can transform the industry and realize our
vision of Saving More Lives.
Mikael Bratt
President and CEO
07
Saving
More Lives
Our Vision
THIS IS AUTOLIV
Vision / Mission / Key Behaviors
Every day, our products save lives. Every time they do, there is a
person and a story behind it. Autoliv aims to save 100,000 lives
annually, supporting our overall vision of Saving More Lives. By
contributing to safer journeys, we can help more people to live life
to the fullest, or as we say, More Lives Saved – More Life Lived.
08
Our Key
Behaviors
As the industry market leader, what we
do matters. Our desired Key Behaviors
express the essence of how we work.
They define how we strive to achieve
success together with colleagues,
customers and partners.
Take
Ownership
Be Curious
Add Value
Collaborate
Make it
Easy
Providing World Class
Life-Saving Solutions
for Mobility and Society
Our Mission
09
Autoliv achieved record operating income and
operating cash flow, thanks to effective cost
reductions and commercial recoveries, despite
continued market headwinds from high infla-
tionary pressure and a volatile Light Vehicle
Production (LVP).
2024 Financial
Summary
THIS IS AUTOLIV
2024 Financial Summary
Americas 33%
China 19%
Europe 28%
Asia 19%
Sales by Division
In 2024, Autoliv’s sales performance varied
across its divisions, with strong growth in
Europe and Asia.
Due to rounding effects, the illustration does not sum up to 100%.
10
Return on Equity
%
0
5
10
15
20
25
30
24
23
22
21
20
Operating Cash Flow
& Cash Conversion*
US$ (Millions) and in %
500
600
700
800
900
1,000
1,100
24
23
22
21
20
0
50
100
150
200
250
300
Operating Cash Flow
Cash Conversion*
Return on Capital
Employed
%
0
5
10
15
20
25
24
23
22
21
20
Leverage Ratio
Net Debt/ EBITDA
0,0
0,5
1,0
1,5
2,0
2,5
3,0
24
23
22
21
20
Long-Term Target: 1.0x
0.5-1.5x
Long-Term
Range
Adjusted Operating
Profit & Margin*
US$ (Millions) and in relation to sales %
0
200
400
600
800
1,000
1,200
24
23
22
21
20
0
2
4
6
8
10
12
Adjusted Operating Income*
Adjusted Operating Margin*
Sales and Global LVP
US$ (Millions) and Units (Millions)
0
2,000
4,000
6,000
8,000
10,000
24
23
22
21
20
15
35
55
75
95
Sales
LVP
Organic Growth*
vs. LVP Change
Percentage Points
0
2
4
6
8
24
23
22
21
20
Outperformance
Gross Profit
Gross Margin
Gross Profit & Gross Margin
US$ (Millions) and in relation to sales %
0
500
1,000
1,500
2,000
24
23
22
21
20
10
12
14
16
18
20
*) Non-GAAP Performance Measures. See "Non-GAAP Performance Measures" section in the 10-K filed with the SEC.
11
100,000
lives saved per year
Ambition
THIS IS AUTOLIV
Financial and Sustainability Targets
Leveraging Industry
Trends for Growth
and Profitability
Guided by our vision of Saving More Lives and
our mission to provide world-class, life-saving
solutions for mobility and society, we have set
short- and long-term targets in key areas.
Financial targets
Our ability to consistently outperform light vehicle production
and leverage our growth into higher profitability is rooted in our
continuous investment in new safety technologies, a strong fo-
cus on quality, and a superior and cost-effective production and
engineering footprint.
Sustainability targets
Sustainability is an integral part of our business strategy and an
important driver for market differentiation and stakeholder value
creation, helping to ensure that our business will continue to thrive
and contribute to sustainable development in the long term.
12
*) Non-GAAP Performance Measures. See "Non-GAAP Performance Measures" section in the 10-K filed with the SEC.
Sustainability Key Targets
and Ambitions
100,000
Lives saved per year
A Safe and
Inclusive
Workplace
Climate and
Circularity
Responsible
Business
0.30
Recordable
Incident Rate
by 2025
Carbon
neutrality
in own operations
by 2030
100%
in target group
completed
Antitrust training
1
reported unsafe act
or condition per
employee per year
Net-zero
emissions
across our supply
chain by 2040
100%
in target group Code
of Conduct certified
Year-over-year
improvement in
employee
experience
Year-over-year
improvement in
energy
intensity
100%
direct material suppliers
sustainability audited
22%
women in senior
management
by 2025
Year-over-year
improvement in
waste
intensity
100%
direct material
suppliers respond to
conflict minerals survey
Saving
More
Lives
Target
Long-
Term
Ambition
Financial Key Targets
and Ambition
~13%
Adjusted operating margin*
4-6%
Average annual organic growth*
~12%
Adjusted operating margin*
13
The Autoliv Strategy
Strategy
for Change
14
15
STRATEGY FOR CHANGE
Our Strategic Framework
Our Strategic
Framework
Autoliv's Strategic Framework
consists of four elements that
directly support our financial and
sustainability objectives and
targets. Our focus areas require
everyone's commitment in order
to realize our strategy and meet
our objectives and targets:
Customer Focus
• We create value for the customer by creating a
fit between the customer need and our offering
Competitive Products and Solutions
• Develop competitive products and solutions to
meet the identified customer needs
• Create efficient processes and actively manage
our portfolio to deliver on our profitability targets
Efficient Value Delivery
• We align our value chain to ensure value is
delivered to our customers at the right time, in
the right place, at the right cost and with the
right capital intensity
The Autoliv Way
• The Autoliv Way gives us a common view of what
great looks like at Autoliv and how we get there
16
The
Autoliv
Way
17
Our strategy, business priorities and targets are deeply rooted in
the growing global demand for traffic safety. 1.2 million lives are
lost annually on the roads according to the World Health Organi-
zation. Vulnerable road users – pedestrians, cyclists, and motor-
cyclists – make up about half of these fatalities.
Road traffic accidents are a major cause of death among all
age groups and the leading cause of death among children and
young adults between the ages of 5 and 29. In addition, tens of
millions suffer non-fatal traffic-related injuries, causing not only
human suffering, but also estimated costs of 1-3% of global GDP.
This underlines the importance of our commitment to save more
lives and reduce the number of injuries on our roads.
Market development
The automotive safety market is driven by two fundamental fac-
tors: Light Vehicle Production (LVP) and safety content per vehi-
cle (CPV). In the long term, new technologies such as autono-
mous driving and drivetrain electrification are expected to have
positive effects on the safety CPV.
With advanced protective systems for new flexible seating
positions, safety integration in seats, human-machine inter-
face in steering wheels, and protection systems outside the
vehicle for vulnerable road users, there is an increasing need
for innovations in safety systems. In the medium term, CPV is
expected to grow mainly due to increased government regula-
tions and test rating requirements in growth markets, but also as a
result of higher installation rates of knee and center airbags, more
advanced steering wheels and seatbelt systems in more mature
markets.
Market position
Our long-term focus on customer commitment, through quality,
delivery and cost in everything we do, is the foundation for our
long-term success. We have been involved in less than 2% of re-
calls of airbags and seatbelts in the last 10 years, an important
indicator that quality is always at the core of what we do.
Since 2018, our market share has increased by 5 percentage
points to 44%, excluding sales of inflators and other components.
Our market position is strong in all product categories, with 44%
in airbags and steering wheels and 45% in seatbelts. All of our
largest regions have increased their market shares since 2018, to
47% in Americas, 52% in Europe, 33% in China and 45% in Asia
excluding China.
We consider our key competitors to be ZF Lifetec, a subsidiary
of ZF Friedrichshafen AG, and Joyson Safety Systems, a subsi-
diary of Ningbo Joyson Electronic Corp. In Japan, Brazil, South
Korea and China, we also compete with a number of domestic
suppliers, often with close ties to domestic vehicle manufactu-
rers.
Global Light Vehicle Production
LVP has increased at an average annual growth rate of 1.8% since
1997. However, global LVP has declined from a peak of 92 million
in 2017, to 87 million in 2024. We expect that LVP will continue to
grow both in the medium and in the long term. Most of the growth
is expected to come from markets in Asia and South America.
Safety Content Per Vehicle
A global development towards increased safety standards with
stricter regulations and increasingly stringent rating frameworks
is a strong driver of safety content in vehicles. Other drivers are
the premium vehicle trend and the increasing focus on safety in
medium- and low-income markets. By continuously researching,
developing and introducing new technologies with higher value-
added features, Autoliv can influence safety content per vehicle.
In 2024, the global average CPV remained approximately
$260, as CPV growth in most markets was offset by a significant
negative mix effect due to strong LVP growth in low CPV markets
and segments. This is considered a temporary effect, and we ex-
pect the automotive safety market to continue growing at an annu-
al rate of 1-2%. In recent years, India has introduced regulations
leading to mandatory frontal airbags for all new models, and most
vehicle manufacturers have also decided to make side airbag
systems standard on future vehicles.
Strengthening
Our Position in a
Changing Market
STRATEGY FOR CHANGE
Customer Focus
18
Content per Vehicle1)
US$ per vehicle
0
50
100
150
200
250
300
350
400
450
India
SA
China
EEU
Japan
WEU
NA
Average 2024: ~$260
2024
1) Company estimates. Includes seatbelts, airbags, steering
wheels and pedestrian safety, excluding sales of components
such as inflators.
Market Share by
Product Area1)
Autoliv global market share
44%
Global Industry
Leader1)
44%
45%
Airbags and Steering Wheels
Seatbelts
2015
19
Building on a long history of collaboration with vehicle manu-
facturers (OEMs), Autoliv has one of the industry’s most diver-
se customer bases reflecting a strong position with mass market
brands, premium brands, and new entrants to the automotive
industry. Technology-driven trends are disrupting the automoti-
ve industry, driving collaboration to address the challenges and
opportunities that the industry is facing, notably connectivity,
automation, emissions and safety. In the last two years, Autoliv
has announced partnerships with five leading Chinese OEMs to
address opportunities and challenges in the rapidly evolving glo-
bal automotive landscape.
Autoliv currently delivers products and solutions to about
100 vehicle brands around the world and holds a leading market po-
sition with most major OEMs. During 2024, we launched a record
number of products on a number of important new vehicle mo-
dels, especially in China, supporting our future growth.
Sales by customer
In 2024, our top five customers represented 44% of sales and the
ten largest represented 71% of sales. This reflects the concen-
tration in the automotive industry. The five largest customers in
2024 accounted for 41% of global Light Vehicle Production (LVP)
and the ten largest for 59%. The top ten customer list includes
four Asian vehicle manufacturers. Asian vehicle producers have
steadily become increasingly important, built on our strong lo-
cal presence and our global manufacturing footprint. As a group,
Asian OEMs now represent around 47% of our global sales,
whereof Chinese OEMs accounted for 7 percentage points. Glob-
ally, European-based brands accounted for 30% of our sales in
2024. U.S.-based brands (including Chrysler and new EV OEMs)
accounted for 21%.The fastest growing customer in 2024 was
Geely followed by Mercedes and Renault.
Sales by region
With operations in 25 countries and one of the broadest customer
bases of any automotive supplier, Autoliv has the best global foot-
print in the industry. In 2024, the total Asian market, accounted for
39% of Autoliv’s sales. The second largest market was Americas,
representing 33% of sales. The European market accounted for
28% of sales in 2024, which is roughly 10 percentage points less
than a decade ago, reflecting a weak LVP as well as our strong
market share gains in Asia and Americas over the past few years.
~100 Brands
Autoliv delivers products to
STRATEGY FOR CHANGE
Customer Focus
Strong and
Diversified
Customer Base
20
Sales by Product
Sales by Division
Sales by Customer
Important
Launches
in 2024
Onvo L60
Nissan Kicks
Subaru Forester
Toyota 4Runner
Nissan Patrol/Armada
Zeekr 7X
Mercedes G-Class
LEVC L380
Lynk&Co Z10
Tank 700
Tata Curvv
Seatbelts
Airbags
32%
68%
BMW 4%
Hyundai 8%
VW 9%
Toyota 9%
Stellantis 9%
Honda 9%
Ford 7%
GM 6%
Nissan 5%
Suzuki 2%
EV Maker 4%
Mercedes 5%
Volvo 2%
Renault 4%
Others 13%
Subaru 2%
Geely 2%
Americas
33%
Europe
28%
China
19%
Asia
19%
Due to rounding effects, the illustration does
not sum up to 100%.
21
STRATEGY FOR CHANGE
Competitive Products and Solutions
PYRO SAFETY SWITCH
Prevents fire and
electrocution
Pyro safety switches can disconnect
or cut power during/after an accident.
4
ACTIVE HOOD LIFTER
Reduces pedestrian head injuries
Active hood lifters help to mitigate the impact of a
pedestrian's head against the structure beneath the
hood, meaning the engine, suspension, etc.
3
5
DRIVER AND PASSENGER AIRBAG
Saves lives and reduces injuries
The driver airbag reduces fatalities in frontal crashes
by approximately 25% (for belted drivers) and
reduces serious head injuries by over 60%.
1
PEDESTRIAN AIRBAG
Protects pedestrians
The pedestrian airbag aims to mitigate and
reduce the severity of a head impact in case
of a pedestrian-vehicle accident.
2
12
CENTER AIRBAG
Enhances row
protection
The center airbag can prevent
row passengers from colliding with
each other during side impacts.
11
INTEGRATED CHILD BOOSTER SEAT
Provides protection
and comfort
The integrated booster seat is specially
designed to provide safety for children,
together with the car's seatbelt.
KNEE AIRBAG
Reduces leg injuries
Knee airbags, which deploy from a vehicle’s lower dashboard,
distribute the impact forces on an occupant's legs, thereby
reducing leg and knee injuries. Additionally, they are designed to
control the movement of the occupant so that the driver and pas-
senger airbags can provide optimal protection.
Based on our extensive research into
real-life accidents, we develop and
engineer automotive safety solutions
to save more lives and prevent
injuries on the roads.
Products
and Solutions –
Autoliv Inside
22
MOBILITY SAFETY SOLUTIONS
Safety Systems
for Commercial
Vehicles
Accidents where commercial vehicles are
involved often result in severe outcomes
due to their weight and size. Autoliv designs
and sells specific safety solutions, including
airbags, seatbelts, steering wheels, and pyro
safety switches, for commercial vehicles
such as trucks, buses, and more.
SIDE AIRBAG
Protects in side
collisions
Side airbags reduce the
risk of chest injuries by
approximately 25%.
With dual-chamber side
airbags, both the pelvis
and the chest areas are
protected which further
reduces the risk of
serious injuries in side-
impact crashes.
SEATBELT
Top life-saving
device
Seatbelts are considered
the primary restraint system,
because of their vital role in
occupant safety, and can
reduce fatalities by as much
as 45%.
9
SIDE-CURTAIN AIRBAG
Reduces head
injuries
Reduces the risk of life
threatening head injuries
by approximately 50%.
10
STEERING WHEEL
With the lives
of others in
your hands
The steering wheel
is a vital part of the
safety system and
controls many of the
vehicle’s functions.
6
BELT IN SEAT
Ensuring the
effectiveness
of the belt
Integrating the seatbelt
in the seat supports
improved safety in
reclined seating posi-
tions, a feature used in
self-driving vehicles,
and ensuring the belt
remains properly posi-
tioned and effective.
7
8
23
Delivering on our vision of Saving More Lives
and maintaining competitiveness requires
innovative strategies and solutions. As societal
trends and technological advancements trans-
form the mobility landscape, we are dedicated
to advancing the industry through innovation.
The rapid advancement of new technologies and shifting demo-
graphics will shape the future of our industry. Global megatrends
such as automation, electrification, and connectivity are trans-
forming the future transport system. Our understanding of these
trends, paired with our approach to real-life safety, enables us to
innovate and stay competitive.
We challenge and redefine the standards of mobility safety
to sustainably deliver leading solutions. Our research and inno-
vation capabilities are well-equipped to deal with electrified and
automated cars and to create specially designed safety prod-
ucts to protect vulnerable road users.
A focus for our research teams is creating innovative occu-
pant safety solutions for new interior layouts, which may arise
as driver assistance systems advance towards automated
driving.
Our approach to Saving More Lives in real-life situations
The Autoliv Circle of Life is our structured approach as we go be-
yond standardized test scenarios to save more lives in real-life
situations. An important step in this approach is to conduct traf-
fic safety research to verify or develop new test methods and vir-
tual tools. By using these methods and tools we can efficiently
evaluate the reduction in injury risks from new innovations. This
research-based approach has enabled Autoliv to be a leader in
automotive safety technology.
Occupant protection in future cars
Autonomous driving will accommodate more relaxed seating
positions and flexible interior layouts in future cars. This could
lead to a different balance of seatbelt to airbag restraint and
shoulder to lap belt forces.
At the University of Virginia, researchers observed iliac wing
fractures due to high lap belt forces during tests. Reducing
these forces is possible with load limiting, a concept wide-
ly used for shoulder belts in standard seating positions. We
utilized the research in virtual simulations with Human Body
Models, to show that applying lap belt load-limiting on both
anchor and buckle attachment points reduces pelvis forces.
Testing prototypes of an advanced 3-point seatbelt with double
lap belt pretensioning and load limiting showed it is technically
feasible and can reduce injury risks.
Innovation
as an Enabler
to Save More
Lives
STRATEGY FOR CHANGE
Competitive Products and Solutions
24
Based on our research we have developed a buckle-load limiter
that offers a compact design that enhances efficiency and sim-
plifies implementation, while enabling our customers to achieve
better safety system performance. This new product limits the
load to the pelvis where necessary, for example in some reclined
seating positions, contributing to reducing pelvis and thoracic
injuries.
Driver monitoring cameras integrated into steering wheels
Another vehicle-interior innovation is a camera-based driver
monitoring system integrated into the steering wheel. Position-
ing the monitoring system centrally enhances the detection of
driver engagement and drowsiness, making distraction detec-
tion more efficient compared to placing the camera in other loca-
tions within the car.
The integrated monitoring system can also detect seatbelt
misuse and classify drivers, enabling personalized protection
when paired with Autoliv’s expertise in restraint design.
Developing safety for mobility and society
A major focus area for us is new safety solutions driven by the
evolution of mobility and society. To expand into new markets,
Autoliv’s Mobility Safety Solutions leverage our technologi-
cal know-how, operational capabilities, and global footprint. In
2024, we enhanced our commercial vehicle product offerings
Real
Life
Safety
Crash
Statistics on
a Macro Level
Start of
Production
In-Depth
Studies of
Crashes and
Incidents
Biomechanics
and Human
Factors
Finding
the Best
Technology
for Safety
Needs
Developing
New Test
Methods
Validation of
New Safety
Systems for
Real-Life
Traffic
The Autoliv
Circle of Life for
Traffic Safety
25
and expanded our electrical safety solutions with pyro safety
switches and pyro technology for high- and medium-voltage ap-
plications. Additionally, we supplied components to customers
in both the automotive industry and other sectors.
Motorcycle and bike riders have not experienced the same
level of safety advancements as car occupants. Autoliv’s ex-
tensive research into motorcycle and bike riding behavior and
crashes has led to the development of two sets of cost-effective
airbag systems: on-vehicle motorcycle safety solutions and on-
rider safety solutions.
The triple helix model of innovation at Autoliv
In an ever-evolving world, we encounter numerous challenges
that are beyond our capacity to resolve ourselves. At Autoliv, col-
laboration is a key determinant of success. We frequently operate
according to the triple helix model of innovation, which refers
to the cooperative relationship among academia, industry, and
government, aiming to drive economic and social development.
Working together across various sectors can align private
sector innovation with societal objectives, directing technologi-
cal progress towards areas that provide the greatest benefit to
society. We strategically choose our partners to develop our in-
novation capabilities, stay ahead of the competition, speed up
our time to market, and become more efficient in R&D.
We collaborate with top universities, institutes, and start-ups
globally in our core competence areas and beyond. By actively
participating in research platforms and international projects,
as well as partnering with regulators and policymakers, Autoliv
supports and accelerates evidence-based safety enhance-
ments for all road users.
Collaboration
Industry partners
Academia
Policy makers
Saving
More Lives
Ambition to save
100,000 lives
annually
Growth
Outgrowing
the market
New products
and services
New businesses
Innovative Capabilities
Future Advantages
Operational Capabilities
Efficiency, Quality and
Standardization
Differentiating Capabilities
Competitive Advantages
The Bernoulli AirbagTM
PACE Pilot
Award Finalist
Autoliv’s revolutionary technology found within The Bernoulli
AirbagTM Module was recognized in 2024 by Automotive News.
From many cutting-edge technologies, The Bernoulli AirbagTM
Module was named a PACE Pilot Finalist for 2025. The PACE Pilot
Award recognizes advancements under development, with new
materials, fresh ideas, creative processes and bold execution.
STRATEGY FOR CHANGE
Competitive Products and Solutions
26
Our Real-Life
Approach
to Innovation
Foldable steering wheel
for self-driving vehicles
Center airbag for rear seat
passengers
Door mounted inflatable curtain
airbag for first and second row
protection
Advanced airbags for self-driving
vehicles with foldable steering
wheels
Steering wheels for commercial
vehicles with hands-on-detection
and heating
Lower cost and lower-carbon
footprint airbags based on
recycled materials
27
Operational Excellence
Throughout the
Product Lifecycle
We align our value chain to ensure value is delivered to
our customers at the right time, in the right location, with
the right quality, at the right cost and with the right capital
intensity.
STRATEGY FOR CHANGE
Efficient Value Delivery
28
Develop product strategy, plan, and roadmap
Our product development begins well before we receive custom-
er inquiries. We engage in safety research, innovation, and the
development of generic technologies to ensure we are prepared
with the right products and solutions when the market needs them.
Upon securing a business opportunity, we tailor our solutions to
fit the customer’s specific system and source the appropriate
suppliers.
Autoliv leads the automotive safety industry by consistently
advancing through innovation, quality, operational excellence,
and effective project execution. We maintain our top position by
delivering exceptional value to our customers and continuously
enhancing performance.
Our strategic product planning process strengthens cross-
functional collaboration and plays a central role in understand-
ing what our customers want and what the market needs.
Innovate and develop products and solutions
With strategic product planning in place based on our real-life
safety approach and market insights, the product development
process now begins. As the market evolves, we constantly chal-
lenge ourselves and reinvent the way we develop products and
solutions.
Our end-to-end product development process is about ma-
turing the technology and ultimately ensuring that the product
or solution is robust enough to be produced at scale and imple-
mented flawlessly into the customer system.
Sell on product plan
Commercial excellence is part of our product lifecycle, where
value creation and customer focus are at the core. We aim to ex-
ceed our customers’ expectations throughout the entire lifecycle
to achieve long-term profitable growth as their preferred partner.
Commercial excellence covers the entire product lifecycle and
requires coordination and support from divisions, functions, and
product lines.
Managing and executing customer projects
Once we reach the stage of the product lifecycle of having secured
new business, the next step is to carry out a customer application
project to ensure our solutions fit into the specific customer sys-
tem. We committ to a date when serial production will start, and
we also committed to a price. In this phase, time, cost, and quality
are of the essence to ensure a flawless launch and delivery.
Produce, maintain, and improve
Once we have taken our product through planning, sales, and de-
velopment, it is finally time to start serial production. The Autoliv
Production System (APS) provides a framework for managing
our global production operations, ensuring efficiency and growth.
It is fundamental to every single part of our company – particularly
when it comes to manufacturing.
Autoliv has a strong history of implementing improvements
under the APS framework, guiding us to operational excellence
by focusing on learning, standardization, and continuous im-
provement.
29
Every year, we compete in several hundred ten-
ders for new business. To remain the preferred
partner for our customers, we work diligently
with quality, reliability, technology, and flexibility.
This is, and has been, instrumental in building
our business and brand over the last 70 years.
The trust our customers have in Autoliv is further supported by
incorporating sustainability into everything we do. We are uniqu-
ely positioned to benefit from the industry transformation.
Our ability to consistently outperform market growth is rooted
in a strong focus on innovation, quality, and a superior production
system serving around 100 car brands globally. To ensure that we
maintain and strengthen our position as the industry leader, we
have developed a number of strategies.
Innovation
Our ability to consistently outperform market growth is depend-
ent on our ability to provide new safety technologies. We have
accelerated our innovation agenda, focusing on key industry
technology and product trends. A major focus area is new pas-
sive safety solutions driven by the evolution of new interiors for
electrical and self-driving vehicles.
Quality leadership (Q5)
Continued focus on quality is imperative for remaining the pre-
ferred partner for our customers. Accordingly, we are committed
to delivering the highest quality, safety and performance in our
products and services, in alignment with our vision of Saving
More Lives.
We continue to invest in our quality culture and Zero Defect
mindset. We are adapting our processes to incorporate quality
earlier in the design process and cooperate more closely with
suppliers to further improve our Zero Defect performance by app-
lying our Q5 methodology – quality in all dimensions.
Modularization
Modulization ensures our competitiveness by eliminating the
need to redevelop the product for each customer request while
minimizing complexity and optimizing our resources.
How to
Preserve
Value to Our
Customers
STRATEGY FOR CHANGE
Efficient Value Delivery
30
It involves designing and organizing a product or service into
parts that can be combined into a final solution. Very much like
building blocks. Each part of the product is divided into different
functions, and each function is divided into different executions.
This enables us to achieve economies of scale while supplying
the highest possible value to our customers.
Autoliv Production System (APS)
APS is how we stay competitive and grow towards excellence in
our daily work. It contributes to every single part of Autoliv and it
is particularly central to manufacturing. APS is the backbone of
how we drive operations across our production network.
Combined with digitalization of manufacturing and automa-
tion of processes, we are continuously progressing our operatio-
nal excellence journey.
Sustainability
The automotive industry is undergoing a major transformation,
as sustainability becomes an important aspect for car buyers
as well as some governments and regulators. Our sustainability
approach of Saving More Lives, safe and inclusive workplace,
climate and circularity and responsible business is aligned with
and supports our customers’ broader sustainability agenda.
Brand strength
We are committed to further strengthening the visibility and rec-
ognition of the Autoliv brand. In a fast-changing world, company
reputation and public responsibility are increasingly important to
all stakeholders and can have a direct influence and impact on
commercial potential.
A strong Autoliv brand is equally important as we develop our
new adjacent business areas. Based on our proven market suc-
cess, we are taking further steps to increase our visibility beyond
our current customer strongholds.
31
At Autoliv, teamwork and strong leadership are fundamental
to meet customer needs and overcome business challenges,
today and in the future. Our workflows are oriented to support
experience sharing and openness among colleagues.
STRATEGY FOR CHANGE
The Autoliv Way
Commitment to
Collaboration and
Leadership Excellence
32
A holistic perspective as well as considering and respecting all
parts of the value chain are key to unlocking our potential as an
organization. This means we always work with the end deliver-
able in mind, to ensure that the final result is optimized, not a
specific task along the way.
By caring about the employee experience, creating an open
and inclusive workplace, and prioritizing employee develop-
ment and growth, we stand the best chance to unlock the inher-
ent potential of our people.
We believe that leadership applies to everyone in the com-
pany. This starts with taking responsibility for one’s growth and
developing the skills needed to meet future challenges. Leader-
ship involves purposeful actions, authentic motivation, and gen-
uine care. Our approximately 65,000 colleagues in operations
across 25 countries give us opportunities to leverage synergies,
best practices, and scale.
Our leaders are guided by our shared responsibilities: ena-
bling success, shaping the future, fulfilling our potential, and
developing a sustainable business.
Enabling success is about making it easy for our teams and
team members to be successful and creating the conditions for
efficient execution. It includes how leaders support the work of
their teams, ensuring that proper resources, systems, organiza-
tion, communication, empowerment, and accountability are in
place.
Shaping the future is about creating the new, managing
change and transformation, prioritizing and aligning initiatives,
innovating, responding to the external environment, and relay-
ing an inspiring vision for the future.
Fulfilling our potential is about the growth and development
of our team members, and how we collaborate, provide recog-
nition, and ensure an appropriate work-life balance. This area
captures the essence of developing people through work with an
emphasis on helping all team members fulfill their potential and
become the best versions of themselves.
Developing a sustainable business is about acting with in-
tegrity, ensuring physical and psychological safety and well-
being, creating a diverse organization, and focusing on quality.
Delivering on these responsibilities helps create an inclusive
workplace where everyone belongs and contributes their best.
It also strengthens employees’ health and well-being, engage-
ment, and ability to innovate.
33
Sustainability
Sustainability
Report
34
35
SUSTAINABILITY
Highlights
Sustainability
Highlights
430
358
2022
2023
2024
306
306 kton
GHG emissions from own
operations (Scope 1+2)
36
Sustainability is an integral part of our business strategy and
an important driver for market differentiation and stakeholder
value creation. In 2024, we made significant progress on a
number of our key metrics and related targets related to our
sustainability focus areas. Further information on performance
is available in the Sustainability Appendix.
Energy intensity
(MWh per million USD, FX-adjusted)
99.7
Waste intensity
(ton per million USD sales, FX-adjusted)
10.8
Share of renewable electricity
30%
Recordable Incident Rate
(Incidents per 200,000 hours worked)
0.32
99.7
100.5
110.5
23%
13%
30%
2024
2024
2024
2024
2023
2023
2023
2023
2022
2022
2022
2022
0.32
0.38
0.38
10.8
10.8
11.6
37
Our sustainability approach creates long-term
stakeholder value by focusing on the most
material global megatrends and sustainability
topics, supported by long-term ambitions and
concrete targets.
Global megatrends such as climate change, circular economy
and urbanization are shaping the automotive industry and fu-
ture transport systems. These megatrends influence policy and
regulations, technological developments, our key stakeholders’
priorities and create both opportunities and risks for Autoliv. Our
sustainability approach addresses the global megatrends in
order to create long-term stakeholder value by focusing on the
most material sustainability topics supported by long-term am-
bitions and concrete targets.
Guided by our vision of Saving More Lives, our mission is to
provide world-class, life-saving solutions for mobility and soci-
ety. Sustainability is an integral part of our business strategy and
a fundamental driver for market differentiation and stakeholder
value creation, helping to ensure that our business will continue
to thrive and contribute to sustainable development in the long
term. We engage with our customers to ensure that we are part
of driving the transition to low-carbon and circular mobility, thus
realizing new business potential for us and our customers.
Our sustainability approach is based on four focus areas with
broad ambitions and more specific short-term targets defined for
each area. These areas represent the strongest links to our busi-
ness risks and opportunities and the greatest impact on key stake-
holder groups, society and the environment. All four areas repre-
sent global challenges where we believe that our work can make a
positive difference. We are a signatory of the UN Global Com-
pact and our work and policies, such as our Code of Conduct,
are aligned with international frameworks such as the ILO core
conventions and the OECD Guidelines.
Our core business and sustainability work contribute to the
realization of a number of UN Sustainable Development Goals
(SDGs). Our core business contributes to reducing the number
of road fatalities (SDG 3) and making transportation systems
safer for everyone, including vulnerable road users (SDG 11).
We support research and knowledge sharing that benefit devel-
oping countries (SDG 17). Over time, our climate and circularity
agenda aims to not only reduce our own negative environmental
impact (SDG 9, SDG 13) but also help drive green innovation
(SDG 12) among direct material suppliers, vehicle manufactur-
ers and energy providers (SDG 7). By proactively managing
health and safety risks and labor rights (SDG 8), promoting di-
versity and inclusion (SDG 5) and holding all employees to the
highest ethical business standards (SDG 16), we lay the foun-
dation for a high-performing organization where every employee
has the means to speak up and drive improvement.
For further information about performance data and more,
see the Sustainability Appendix.
A Driving Force
in Sustainable
Mobility
SUSTAINABILITY
A Driving Force in Sustainable Mobility
38
• Zero accidents
• Embrace inclusive ways of working
Saving More Lives
Focus Area
Ambitions
Responsible Business
Climate and Circularity
A Safe and Inclusive
Workplace
• Carbon neutrality in own operations by 2030
• Net zero emissions across our supply chain by 2040
• Proactively prevent corruption and other
unethical business practices
• Respect human rights
• Manage supply chain sustainability risks
Contribution to UN Sustainable
Development Goals
• 100,000 lives saved per year
39
SUSTAINABILITY
Materiality Assessment
Sustainability
Materiality
Assessment
In 2024, key material topics identified included:
•
Climate change
•
Circularity
•
Life-saving products and innovations
•
Product safety
•
Health and safety
•
Inclusion
•
Labor rights
•
Anti-corruption
•
Antitrust
•
Corporate culture
Environment
Social
Governance
An integrated approach to assessing the im-
pacts, risks and opportunities of our business
allows us to focus on managing the most
material topics.
The starting point for our sustainability approach and reporting
is understanding our most material topics. Our materiality as-
sessment process aims to identify the key sustainability topics
in our own operations and our value chain. The process is based
on the double materiality principle: both impact materiality (how
Autoliv impacts people and the environment) and financial ma-
teriality (how various sustainability topics impact Autoliv) are
considered.
The double materiality assessment process is aligned with
the Enterprise Risk Management process, with assessments
carried out continuously throughout the year. During the year,
we placed specific emphasis on further aligning our assessment
methodology with the upcoming EU Corporate Sustainability
Reporting Directive (CSRD) requirements. Assessment activi-
ties during the year included:
•
Market research as well as direct dialogue to understand
our customers’ sustainability priorities, challenges and
opportunities for collaboration
•
Cross-functional workshops with internal topic experts
and representatives from key functions to ensure a broad
inside-out understanding of our material topics
•
Review of industry-related reports, etc. regarding
impacts, risks and opportunities
•
Review of investor-driven sustainability/ESG assess-
ments as well as meetings with key shareholders
•
Review of employee engagement survey results and
reports filed through the Autoliv Helpline and other
Speak Up channels
For many topics, we also carry out topic-specific assessments
to gain a deeper understanding of both impact and financial ma-
teriality. For example, for climate change, we have carried out
a value chain greenhouse gas footprint assessment, identified
emission sources and reduction levers, and identified key transi-
tion and physical risks and opportunities that could impact our
business.
The sustainability impacts and performance of our supply
chain cut across most of the above topics, in particular regard-
ing climate change, circularity, product safety, health and safety,
labor rights and business conduct.
40
Shaping the
Industry Agenda
Autoliv is engaged in several global
and regional associations and orga-
nizations, as well as academic and
public-private partnerships, in order
to contribute actively to driving pro-
gress in our sustainability focus areas.
Autoliv is an active member of com-
mittees that shape the organizations’
positions and communication on key
topics such as furthering traffic and
vehicle safety standards in regulations
and ratings, equity in crash safety, and
how the automotive supplier industry
can actively drive low-carbon mobility.
Moreover, Autoliv actively contri-
butes to the resilience of the auto-
motive supplier sector, to encourage
enhancements in national and inter-
national traffic and vehicle safety stan-
dards, research funding and capacity,
advocating for greater priority to road
traffic safety in global policy and na-
tional legislation as well as for how
the industry can support the transition
towards low-carbon mobility.
Examples of some of the organiza-
tions where Autoliv is a member:
•
Since 2022, Autoliv has been a
member of the UN Road Safety
Fund (UNRSF) Advisory Board.
The UNRSF’s aim is to promote
road safety in developing countries
in order to meet Sustainable De-
velopment Goal 3.6 of halving road
traffic fatalities by 2030. Autoliv
advises the UNRSF on its direction
and operational work. Through
its partnership with the UNRSF,
Autoliv has been able to work more
actively at the global policy level
and communicate its recommen-
dations, and to directly support the
UN-funded initiatives carried out
in low- and middle-income coun-
tries, both financially and through
sharing our expertise. In 2024, we
extended our collaboration with
the UNRSF by making a targeted
contribution to the UN project call
aimed at enhancing motorcycle
rider safety.
•
In the U.S., the Automotive
Safety Council (ASC) focuses on
promoting global deployment of
automotive safety technology. The
ASC is active in providing industry
guidance on road traffic safety-
related legislation.
•
In Europe, Autoliv is actively
engaged in a number of working
groups of the European Asso-
ciation of Automotive Suppliers
(CLEPA). Much of the work relates
to shaping future safety regulations
as well as industry’s role in the
EU sustainability agenda through
collaboration with other automotive
suppliers on topics such as circu-
larity, the EU Taxonomy, corporate
sustainability due diligence and
reporting.
41
Autoliv’s sustainability work is managed within
a well-defined governance structure, with
clearly established ownership and responsibi-
lities at all levels in the organization.
The underlying principle of our governance model is integrating
sustainability responsibilities into the ordinary course of bu-
siness and company processes. This means that the ultimate
responsibility for executing sustainability activities and targets
lies with the line organization and is monitored through mana-
gement reporting. According to our Key Behaviors, we expect
every employee to take ownership of sustainability topics by
proactively contributing improvement ideas and by following
company policies and standards.
Ultimate oversight of the company’s sustainability activities
lies with the Board of Directors. The Board sets the direction
for sustainability activities and regularly monitors progress on
Autoliv’s sustainability strategy and targets through its Nomina-
ting and Corporate Governance Committee (NCGC). The Bo-
ard reviews and approves the Code of Conduct as well as the
Annual and Sustainability Report and the Modern Slavery Act
Statement.
Implementation responsibility for sustainability lies with the
Executive Management Team (EMT). The EMT has appointed
a Sustainability Board charged with providing regular direction
and oversight. The Sustainability Board consists of the CEO
and other EMT members and meets on a quarterly basis. The
Sustainability Board reviews and approves Autoliv’s sustaina-
bility strategy, annual and long-term plans, targets and policies
for key topics, and monitors implementation and performance.
Integration of sustainability into Autoliv’s business is led by
the HR & Sustainability function. The Vice President, Sustaina-
bility, who reports to the Executive Vice President, HR & Sustai-
nability, coordinates, develops and monitors Autoliv’s sustaina-
bility agenda and facilitates the Sustainability Board meetings
and other sustainability-related reporting to management.
Everyday sustainability topics are managed, as appropriate, by
the HR & Sustainability function, divisions and other corporate
functions such as supply chain management, research, deve-
lopment and engineering, and legal and compliance. Divisions
and corporate functions have dedicated sustainability resour-
ces such as climate coordinators, health & safety coordinators,
eco-design/life-cycle assessment experts and supply chain
sustainability specialists.
Risk management
Autoliv has a global risk management organization and utilizes
several different tools, such as an Enterprise Risk Management
(ERM) framework which includes annual, divisional, functional
and corporate risk mapping activities, monitoring of risk trends,
implementation of risk improvement plans and follow-up of the
effectiveness of risk mitigation measures. Risk reporting is car-
ried out on a regular basis to the Board of Directors and its Audit
and Risk Committee. With regard to sustainability-related risks,
the ERM framework takes into consideration the double ma-
teriality perspective. This means assessing both how Autoliv’s
operations impact people and the environment, and how vario-
us sustainability topics impact Autoliv’s business. Sustainability
risks, such as product safety, climate change, natural resour-
ces scarcity, environmental compliance, health and safety and
other labor rights, business ethics, business conduct and supply
chain sustainability, are included in the ERM framework.
We assess how sustainability relates to business risks, such
as legal proceedings, regulatory changes, contingent liabilities,
supply chain disruptions and operational disruptions. Furthermo-
re, there are relevant corporate standards for topics such as site risk
management, loss prevention, emergency procedures, busi-
ness contingency planning and physical security. A more de-
tailed description of Autoliv’s material operational, strategic
and financial risks, including sustainability-related risks, can be
found in the “Risk Factors” and “Risks and Risk Management”
sections of the 10-K filed with the SEC. More information on
climate-related risks is available in the TCFD Disclosure.
SUSTAINABILITY
Governance
Sustainability
Governance
42
Board of Directors visit Autoliv Japan Chubu facility,
September, 2024.
Sustainability Governance
All employees
Organization
EVP, HR & Sustainability
Executive Management Team
Board of Directors
Functions
VP, Sustainability
Sustainability Board
Nominating & Corporate Governance Committee
Divisions
43
As the global leader in automotive safety we
make a significant contribution to global road
safety.
When the UN Sustainable Development Goals (SDGs) were
launched, road safety was made a global priority for good rea-
son: according to the World Health Organization (WHO) global
status report on road safety 2023, around 1.2 million people die
in traffic incidents every year. Road traffic injuries are the leading
cause of death among young people between the ages of 5 and
29. As well as being a public health problem, road traffic injuries
carry a huge cost for society: according to some estimates, the
global macroeconomic cost of road traffic injuries is estimated
to amount to 1-3% of global GDP. Many families are driven into
poverty by the loss of a breadwinner or by the expenses of pro-
longed medical care.
In August 2020, the UN General Assembly adopted the res-
olution “Improving global road safety”, proclaiming the Second
Decade of Action for Road Safety 2021-2030. The target, repre-
sented as SDG 3.6, is to reduce road traffic deaths and injuries
by at least 50% by 2030. According to the resolution, vehicle
safety is a key component, and member states are encouraged
to adopt vehicle safety regulations that make seatbelts, airbags
and active safety systems standard equipment. In addition to
safer vehicles, infrastructure improvements, road user behavior
and protective equipment are also keys to achieving the target.
Our ambition and approach
Saving More Lives is our core business and our most important
contribution to sustainable development and the realization of
SDG 3.6. According to our estimations, our products in use
already save approximately 37,000 lives and reduce around
600,000 injuries every year. Our long-term ambition is for our
products to save 100,000 lives per year. Achieving this ambition
is based on:
•
Retaining our strong market position and continuing to
grow in our core business, including increasing content
per vehicle, while maintaining the highest level of quality
as our products never get a second chance
•
Successfully expanding our business into new
mobility segments aimed at motorcyclists, cyclists
and pedestrians
•
Proactively broadening the scope of research and devel-
opment to also cover a wider range of occupant protec-
tion parameters regarding height, weight, age and gender
•
Increased multi-stakeholder efforts, in particular educa-
tion to increase seatbelt use since seatbelts are the most
effective way of reducing fatalities and serious injuries
Research and development collaborations
We proactively engage with national and international authori-
ties as well as academia to further our impact. Below are some
examples of our collaborations during 2024:
•
Power two-wheeler riders account for 30% of global traffic
fatalities, making it important to continue to research and
develop technologies for improved motorcyclist safety.
This is carried out in close dialogue with customers and
partners. In addition to on-motorcycle solutions, we
also work to increase the comfort and safety of personal
protective equipment. We explore helmets with integrated
airbags that provide improved protection for the head and
face and inflatable vests that improve protection of the
thorax and shoulders.
SUSTAINABILITY
Road Safety
Road Safety
– a Global
Challenge
100,000
Lives saved per year
2024 outcome:
Our products saved approximately 37,000 lives
and reduced around 600,000 injuries
Ambition:
44
•
Public transport safety has been placed on the global
agenda by SDG 11.2, which calls for safer and expanded
public transport. Although public transport is considered
to be one of the safest modes of transport of today, relat-
ed injuries and fatalities still remain an issue and deserve
attention. We have identified safety concerns related to
public transport and suggested potential passive safety
systems that could mitigate injuries both to pedestrians
and to bus occupants.
•
SDGs 1, 3 and 11 promote cycling, and choosing cycling
as a mode of transport holds many advantages. However,
heavy goods vehicles and buses are a major threat to
cyclists as they are large vehicles. A bicycle is small and
fast to maneuver, making it hard for other road users to
predict where it is going as the intention of a bicyclist can
easily be misjudged. The results from an internal study
provided detailed and actionable insights for manu-
facturers and agencies that can help to address safety
concerns – to make cycling safer.
•
In a collaboration with Virginia Tech and the Swedish
Transport Administration we analyzed and published Ger-
man data on injury risk for front and side impacts using a
new method to account for underreporting of crashes with
uninjured persons. A comparison with Swedish data was
also undertaken. The results could help policy makers in
Sweden to regulate the speed limits on Swedish roads
based on injury risk.
Further information about our engagement in industry associa-
tions and other organizations is available in Sustainability Mate-
riality Assessment.
Collaboration with universities
To ensure real-life benefits and to develop evidence-based test
methods for product development, Autoliv engages in collabo-
ration with universities globally.
Current helmet standards and ratings do not consider the
complexity of facial impact protection performance or Traumatic
Brain Injury (TBI). For this reason, we are continuing the collab-
oration with the Royal Institute of Technology in Sweden, Impe-
rial College London, and a Swedish helmet manufacturer with
the aim of influencing helmet standards and ratings. Both vir-
tual and physical test methods are being developed and newly
developed brain injury assessment tools and injury-specific risk
functions will be used for evaluation and optimization of safety
systems. We have refined the brain-skull interface modelling to
enable better prediction of prioritized TBI types and identified
the needs for new brain injury risk assessment criteria through
in-depth accident databases.
In 2024, Autoliv started working on a four-year European re-
search project under the Horizon Europe framework. IMPROVA
(Injury Mitigation to Promote Vision-Zero Achievement) will fo-
cus on the conditions and mechanisms leading to serious inju-
ries of all road user types, and both physical and psychological
long-term consequences (LTC). Human body models will be up-
graded to create better capabilities to depict LTC-relevant injury
mechanisms, and virtual testing procedures will be developed
and demonstrated for future application environments. Com-
munication with regulatory authorities, NCAPs, industrial part-
ners, rescue teams and end-users will provide better awareness
of the topic and enable implementation of appropriate counter-
measures.
The countries most successful in curbing road
traffic injuries apply a Safe System Approach
– a combination of five critical factors underpinned
by collaboration between key stakeholders:
Safe System
Approach
• Safe vehicles
• Safe speeds
• Safe roads
• Safe road user behavior
• Post-crash care
45
SUSTAINABILITY
Road Safety
Equity
in Vehicle
Safety
Autoliv is a forerunner in the emer-
ging area of equity in vehicle safety.
Current occupant substitutes used
for estimating injury risk in crash tes-
ting are limited to three crash-test
dummy sizes representing small,
mid-size and large occupants, based
on 1970’s U.S. population height and
weight distributions. The mid-size
male dummy has historically been
the one most frequently used in rating
and regulatory testing. However, over
the past decades, there has been a
consistent trend of increasing popula-
tion weight. Car crash injury statistics
highlight that obese occupants, both
male and female, are at increased risk
of injury and death when compared to
average weight males. Beyond sex
and size, injury and fatality risks in-
crease substantially with age.
Autoliv researchers have looked
at seatbelt fit as an important safe-
ty aspect for many years, along with
how seatbelts distribute forces on the
human body. Our hypothesis is that
the belt system and how it distribu-
tes load across the body to protect
people can still be developed further,
provided that next generation tools
and evaluation methods become
ready to use and widely accepted.
For this reason, to enable the deve-
lopment of safety systems that are
as effective as possible for everyone,
Autoliv is actively researching tools
and methods that can be used to re-
present the contemporary population
in a wide range of crash scenarios.
This year, Autoliv joined new resear-
ch projects aiming to further enhance
state-of-the-art injury risk prediction
with virtual human body models re-
presenting males and females of dif-
ferent ages and sizes. Targeted body
regions include chest, hip and neck,
which are commonly injured in cras-
hes, indicating an opportunity for fur-
ther enhanced protection.
The Global
Burden of
Road Traffic
Deaths
x3
There were an estimated 1,19 million road traffic deaths in 2021; this
corresponds to a rate of 15 road traffic deaths per 100 000 population.
As of 2019, road traffic injury remains the leading cause of death for
children and young people aged 5-29 years as is the 12th leading cau-
se of death when all ages are considered.
Motorcyclists and other powered two- and three-wheeler riders repre-
sent 30% of global road traffic deaths. Four-wheeled vehicle occu-
pants make up 25% of fatalities.
Pedestrians account for 21% of fatalities and cyclists account for 5%
of fatalities.
92% of deaths occur in low- and middle-income countries.
The risk of death is three times higher in low-income countries than
high-income countries despite these countries having less than 1% of
all motor vehicles.
Source: WHO global status report on road
safety 2023.
46
Autoliv aims to reduce greenhouse gas (GHG)
emissions and increase circular use of mate-
rials throughout the value chain, supporting
customers’ transition to low-carbon, sustain-
able mobility.
Ambition and approach
We are committed to operating our business in an environmental-
ly sustainable manner, taking into account our environmental im-
pact throughout the lifecycle of sourcing, design, production and
end of life. Our environmental policy, updated in 2024, lays out our
commitments in areas such as GHG emissions reduction, renew-
able electricity, circularity and resource efficiency. With particular
emphasis on climate action, we actively engage with customers,
suppliers and other stakeholders to take on the environmental
sustainability challenge across the value chain.
Environmental management system
Autoliv’s environmental management system (EMS) empha-
sizes continuous improvement and is aligned with ISO 14001
requirements. The EMS establishes the requirements for a
standardized approach to environmental management, includ-
ing identification of material environmental aspects, objective
setting, competence development, performance follow-up and
standardized reporting. At year end, 96% of all manufacturing
facilities were externally certified in accordance with ISO 14001.
Climate action
Launched in 2021, our climate strategy is based on two long-term
climate targets:
•
Carbon neutrality in own operations by 2030
•
Net-zero emissions across our supply chain by 2040
These targets, aligned with the Paris Agreement ambition of lim-
iting global warming to 1.5°C, help ensure our competitiveness
now and in the future. In addition to these ambitions, we have
adopted separate Science Based Targets for 2030 covering our
own operations (Scope 1+2) as well as our supply chain (Scope 3
upstream). Further information about the targets and our environ-
mental performance is available in the Sustainability Appendix.
Our GHG footprint
To fully understand our GHG footprint as well as key climate-
related risks and opportunities, we have carried out a value chain
GHG footprint assessment and scenario analysis. The assess-
ment was carried out in accordance with the GHG Protocol Scope
3 Calculation Guidance. Scope 1+2 emissions were calculated
based on actual operational data covering energy consumption
and fugitive emissions, while Scope 3 emissions were modelled
based on actual and estimated sourcing data and generic emis-
sion factors.
The assessment showed that the largest sources of emis-
sions covered by our long-term ambitions were materials used in
our production (in particular steel, textiles and other plastics, and
SUSTAINABILITY
Climate and Circularity
Climate and
Circularity
Carbon neutrality
in own operations
Net-zero emissions
across our supply chain
Ambition:
Carbon neutrality in own operations by 2030
2024 Outcome: 306 kton CO2e
Year-over-year improvement in energy intensity: Continuous
2024 Outcome: 1% improvement
Year-over-year improvement in waste intensity: Continuous
2024 Outcome: No change
Targets
47
magnesium), followed by emissions from logistics, and electricity
used in our own operations. Downstream Scope 3 emissions, in
particular use-phase emissions, constituted the largest share of
the total GHG footprint but since we consider our possibility to re-
duce downstream Scope 3 emissions to be greatly limited (such
reductions are mainly driven by our customers’ work on electrifi-
cation), they are excluded from our long-term ambitions and Sci-
ence Based Target covering Scope 3.
Autoliv’s climate program
Based on the outcome of the GHG footprint assessment, we
have designed a climate program organized into a number of
operational initiatives focusing on the most impactful decarboni-
zation levers and value creation activities. Supporting the opera-
tional initiatives are a number of cross-cutting initiatives related to
governance, performance tracking, business strategy integration,
risk management and competence development. Guided by our
1.5°C-aligned long-term targets, the climate program and related
processes such as risk assessments represent Autoliv’s low-
carbon transition plan.
Below is a summary of some of the work and key achieve-
ments within the program during the year.
Low-carbon supply chain
Key decarbonization levers identified to reach net-zero emissions
across our supply chain (Scope 3 upstream) include:
•
Transitioning to recycled, bio-based and other low-carbon
materials in our products as well as in packaging
•
Improving materials efficiency
•
Requiring suppliers to use low-carbon electricity
•
Reducing the GHG footprint of our logistics through
route, capacity and footprint optimization as well as a shift
towards low-carbon transportation modes and vehicles
Further information about metrics and targets related to the cli-
mate program is available in the TCFD Disclosure.
GHG emissions from the materials used in our products
and packaging (Scope 3 category 1) account for around 75% of
Autoliv’s Scope 3 upstream emissions, meaning effective man-
agement and reduction is crucial in achieving our 2040 net-zero
ambition.
To increase the use of low-carbon materials, we actively col-
laborate with our existing supply base and other partners to as-
sess and introduce solutions with a reduced carbon footprint.
Focus areas include increasing the use of magnesium and alu-
minum with high recycled content, and testing and customer
validation of low-carbon materials. Examples of specific material
initiatives to reduce our Scope 3 emissions related to key direct
materials include:
•
Textiles: continue validation of emission-reduced vari-
ants, and increase usage of lower-carbon polymers such
as PET
•
Non-ferrous metals: increase use of high-quality scrap
sources to further increase recycling content, and en-
gagement with startups for low-carbon solutions, utilizing
new technologies and alternative feedstocks
•
Steel: collaboration with strategic partners including
Arvedi, Shougang, SSAB, and ThyssenKrupp to develop
and source low-carbon steel
Autoliv’s GHG footprint across own operations and supply chain¹ 2024 (kton CO2e)
Total
Scope 1
Scope 2
Scope 3¹:
Purchased goods
and services
Scope 3¹:
Upstream
transportation
GHG emissions
from fossil fuels and
fugitive emissions in
operations
GHG emissions
from purchased
electricity, heat and
steam in operations
GHG emissions
from materials used
in products and
packaging
(Scope 3 Category 1)
GHG emissions
from upstream
transportation
(Scope 3 Category 4)
GHG emissions
from business travel,
employee commuting
and more (Scope 3
Categories 2, 3, 5, 6, 7)
Scope 3¹:
Other upstream
Own operations
Upstream activities
4,073 (100%)
242 (6%)
449 (11%)
231 (6%)
3,076 (75%)
75 (2%)
1) Considering the challenges related to accurately modelling upstream Scope 3 emissions, such as the accuracy of historical data and the availability and applicability of emission factors, actual up-
stream Scope 3 emissions may differ materially from those modelled. The modelling primarily aims to identify the major sources of Scope 3 emissions across the value chain, which supports Autoliv in
developing specific activities for improvement and implementing the relevant measures. Autoliv aims to, over time, increase the accuracy of reported upstream Scope 3 emissions by addressing mate-
rial uncertainties. The illustration above does not include modelled downstream Scope 3 emissions, which include emissions from the use phase of vehicles where Autoliv's products are installed.
SUSTAINABILITY
Climate and Circularity
48
Low-carbon electricity in the
supply chain
Low-carbon materials sourcing
Low-carbon logistics
Renewable energy for operations
Energy and resource efficiency
Phase-down of natural gas usage
Phase-down of fugitive emissions
Low-carbon product design
Low-carbon sales strategy
Program governance and
performance tracking
Business strategy
integration
Risk management
Organization and
competence development
Cross-cutting Initiatives
Low-Carbon1) Supply Chain
Low-Carbon1) and Efficient Operations
Low-Carbon1) Product Offering
1) Low-carbon is generally understood as referring to actions/solutions that reduce carbon emissions aligned with limiting global warming to 1.5 degrees Celsius.
49
In 2024, we launched a collaboration and engagement program
with our direct material suppliers to drive the low-carbon electrici-
ty transition and overall GHG emissions reductions in the supply
chain. The program consists of workshops with selected strategic
supplier groups, as well as webinars reaching all direct material
suppliers. The program addresses the main areas of our climate-
related sustainable sourcing requirements:
•
GHG emissions tracking and target setting
•
Renewable electricity transition
•
Product carbon footprint calculations
•
GHG emissions reductions in the value chain
In late 2024, we hosted several workshops in China and Romania
with strong engagement from the suppliers attending, and a will-
ingness to develop and learn from both Autoliv and from other
suppliers. The program will continue in 2025 with workshops in Ko-
rea, Japan and the U.S., and webinars targeting all direct material
suppliers as well as Autoliv’s supply chain organization.
To track progress and support supplier prioritization, we imple-
mented climate-related KPIs such as renewable electricity shift,
and introduced a supplier climate maturity status that we consi-
der in the sourcing process. Performance and maturity status are
based on suppliers’ responses to our annual climate survey.
In the low-carbon logistics program, we introduced several
new initiatives to continuously improve operational efficiency in
transportation by reducing air freight transport, shifting to sea
transport, optimizing routes, and enhancing vehicle capacity uti-
lization. Our packaging initiatives aims to eliminate unnecessary
packaging, reduce usage, and increase use of returnable options,
achieving both cost and emissions reductions. We developed
sustainable sourcing requirements for logistics and packaging
suppliers, to be rolled out in early 2025.
Low-carbon and efficient operations
Key decarbonization levers identified within our own operations
(Scope 1+2) include:
•
Transitioning to low-carbon electricity at our facilities
•
Improving energy efficiency
•
Phasing down natural gas usage
•
Phasing down fugitive emissions
Electricity consumption at our facilities is by far the largest contri-
butor to our Scope 1+2 emissions. We aim to cover majority of our
renewable electricity needs via long term power purchase agre-
ements (PPAs), complemented in priority order with: on-site so-
lar, green tariff and RECs, in those places where we have limited
or no PPA options.
During 2024, we expanded use of renewable electricity through
various “green tariffs” and renewable electricity instruments, and
continued formalizing our long-terms plans to secure renewable
electricity through large-scale PPAs. In 2024, 30% of our total
electricity consumption came from renewable electricity instru-
ments, up from 23% in 2023. In addition to renewable electric-
ity instruments and contracts, several production facilities have
installed or are in the process of installing on-site solar generation
capacity.
Sulfur hexafluoride (SF6) used in steering wheel production
has been our largest source of fugitive emissions, making up
around 6% of Autoliv’s total Scope 1+2 emissions in 2023. We
launched an action plan in 2022 to fully phase out the remain-
ing use of SF₆, and concluded the phase-out in the first quarter
of 2024.
To reduce our GHG emissions from natural gas used in pro-
duction processes, we conducted several trials and projects to
assess the potential for energy efficiency improvement, e.g. from
process optimization and heat recovery, and electrification of pro-
duction equipment. We achieved positive results from several
trials and projects and will look to implement or scale up these
solutions where possible.
As part of our Green Factory Program, we set targets for
GHG emissions reduction and energy intensity improvement
for all manufacturing sites and regularly conduct assessments
covering energy, water and waste in order to continuously im-
prove environmental performance and efficiency in our opera-
tions. Green factory assessment is an integral part of Autoliv’s
overall operational excellence assessment that is conducted
in each production facility on a quarterly basis.During the year,
we implemented a number of energy efficiency projects tar-
geting areas such as air compressor leaks, waste heat re-
covery, LED lighting, HVAC improvement and replacing older
equipment with new, more efficient equipment. We also conduct-
ed energy management workshops and trainings in different divi-
sions.
Compared to 2023, total energy consumption decreased by
2% and energy intensity decreased by 1%.
Low-carbon product offerings
Autoliv’s products are generally powertrain-agnostic and can be fit-
ted in electric vehicles and plug-in hybrid vehicles with only model-
specific adjustments needed. Around 14% of sales in 2024 came
from battery electric vehicles with zero tailpipe emissions, and we
estimate that our global EV market share is in line with our total
global market share of 44%.
Utilizing Autoliv’s competence from our core business, we have
developed several products for electrical safety, with the com-
mon denominator being utilization of pyrotechnics. The products
range from high volume, off-the-shelf products, primarily the Pyro
Safety Switch, to tailor-made solutions.
We aim to develop attractive, low-carbon product offerings
to support our customers in their transition to zero-emission, low
environmental impact vehicles. During 2024, all product lines
continued implementation and refinement of their low-carbon
product roadmaps. We already offer our customers specific prod-
SUSTAINABILITY
Climate and Circularity
50
ucts that support their carbon footprint reduction strategies, such
as products with lower weight and higher content of recycled
non-ferrous metals and low-carbon polymers. Examples include
increased use of recycled magnesium in steering wheels and
switching to airbag fabrics with a significantly lower GHG foot-
print.
We continued evaluating our products’ overall environmental
footprint throughout their lifecycle, with a focus on understand-
ing the main sources of GHG emissions. These lifecycle assess-
ments (LCAs) help prioritize actions in product development. The
LCAs also allow us to proactively engage with customers, high-
lighting the carbon footprint of our products and how embedded
emissions can be reduced. We also provide LCA support to our
suppliers, to help them understand their GHG emissions “hot
spots” and actions to prioritize. We implemented sustainable de-
sign guidelines for engineering, and started to introduce low GHG
emissions and circularity criteria in our production development
standards.
Cross-cutting initiatives
Sustainability topics, including climate, is part of employee on-
boarding training. We continued specific climate training in par-
ticular in China where employees were provided with training
as part of a “Sustainability Month” campaign. We continued the
implementation of our Sustainability Guidelines for Capex invest-
ments which specific climate impact guidance and assessment,
with particular focus on improving assessment process efficiency.
The guidelines aim to ensure that all investments are aligned with
our 2030 climate ambitions and specify exclusion criteria for in-
vestments that could lead to increased GHG emissions above
certain emission thresholds beyond 2030. The guidelines also
encourage investments with a positive climate impact, such as,
installation of solar panels, improvements to energy efficiency,
and replacement of fossil-fuel equipment with electric alterna-
tives.
Read more about climate-related governance and risk man-
agement in the TCFD Disclosure.
Circularity and natural resources
Waste and circularity
During the year, we took further steps to develop our circularity
strategy and roadmap. Our circularity strategy builds on three
keys areas:
•
Materials recirculation, including closed-loop and open-
loop recycling of our raw materials as well as the share of
recycled content in raw materials
•
Materials efficiency, including materials utilization, light-
weighting of components, packaging optimization and
reuse
•
Cross-cutting initiatives, such as design for circularity, cir-
cularity in operations, and data, systems and governance
We continuously manage and monitor waste management prac-
tices at site level through the Green Factory program, in which
waste management is part of the quarterly assessment. Directing
waste away from landfill remains a priority at our production si-
tes. The rate of reuse, recycling and energy recovery increased to
92% (91% in 2023) of total waste reported.
Water
Our most water-intensive operations are associated with the
production of airbag fabrics, accounting for around 60% of water
withdrawal. Based on the WRI Aqueduct Water Risk Atlas, around
20% of Autoliv’s facilities are located in regions with high or ex-
tremely high water stress levels. However, only one of the ten most
water-intensive production sites is located in a high water stress
region. To improve water efficiency, we set a water-related target
of continuous improvement in the Green Factory program.
Biodiversity
In 2023, we carried out a biodiversity risk screening based on the
LEAP approach and the recommendations of the Taskforce for
Nature-related Financial Disclosures (TNFD). In 2024, based
on the findings, we developed a biodiversity action roadmap for
our own operations as well as the supply chain. In our own opera-
tions, we included biodiversity assessment as part of our stand-
ard guidelines for footprint planning. To manage supply chain
impacts, we have included biodiversity in our Supplier Code of
Conduct and work with our leather suppliers to ensure that those
in scope of upcoming EUDR requirements will be prepared to
meet those requirements.
Materials management and substances of concern
As a global automotive component manufacturer, compliance
with chemical and material regulations is essential. At the core
is our standard that defines Autoliv’s requirements for material
data reporting and substance use restrictions, applicable for both
Autoliv and its suppliers. This standard is updated twice a year
to reflect the latest legal and customer requirements. Through re-
porting to the automotive industry databases IMDS and CAMDS,
we trace the content in our components delivered to customers
and confirm compliance regarding applicable legal and customer
requirements.
We follow up continuously with our suppliers to find alternative
materials in case a substance needs to be phased out. In 2024,
particular effort was devoted to assessing how to meet increasing
legal requirements regarding the phase-out of PFAS.
51
Autoliv considers the management of climate-
related risks and opportunities to be a key com-
ponent of ensuring long-term business success.
This disclosure is aligned with the Task Force on
Climate-Related Financial Disclosures (TCFD)
recommendations.
Governance
The underlying governance principle of the climate program is
close integration into existing governance structures. The Board
of Directors is ultimately responsible for the oversight of sustain-
ability-related matters, including climate change, and has del-
egated certain responsibilities to its committees. The Board of
Directors and its Nominating and Corporate Governance Com-
mittee (NCGC) receive regular updates on climate-related mat-
ters and performance. In 2021, the Board of Directors endorsed
Autoliv’s current long-term climate targets as well as the strategic
direction for reaching the targets. Throughout 2024, the Board
and NCGC received updates on progress related to the climate
program and our plans for 2025 and beyond.
The Executive Management Team (EMT) is responsible
for implementation of sustainability-related matters, including
climate change. The Sustainability Board, which consists of the
CEO and several EMT members, has overall operational oversight
of Autoliv’s climate program. Other relevant Management Boards,
such as the Industrial & Product Board, Innovation Board and
Commercial Board, focus on specific climate program initiatives
such as low-carbon product design and low-carbon sales strategy.
Performance against climate-related targets is reviewed regularly
by the EMT, divisional and other functional management teams
and followed up in monthly business reviews.
The Executive Vice President HR & Sustainability, supported
by the VP Sustainability, is ultimately responsible for the overall
direction and governance of the program, and for ensuring imple-
mentation progress. Further information is available in Sustain-
ability Governance.
Strategy
Scenario analysis
In 2021, as part of the development of the current climate strat-
egy, we carried out our first climate scenario analysis. The analy-
sis, which covered both transition and physical risks, was based
on a 2°C scenario (equivalent to RCP 4.5 or SSP2) and a 3-4°C
scenario (equivalent to RCP 8.5 or SSP5). Transition risks were
assessed on a 2030-2040 timeframe, while physical risks were
assessed on a 2050 timeframe.
From a financial impact perspective, the most material transi-
tion risks identified were:
•
The risk of a global decrease in overall vehicles sales
•
Increasing prices for certain raw materials as a result of
carbon pricing mechanisms (such as CBAM)
•
Potential revenue loss if Autoliv fails to meet increasingly
strict supplier requirements from OEMs who themselves
have set strict GHG emissions reduction targets
The most material physical risks identified, generally connected
to a 3-4°C scenario, were factors that would lead to significant
production disruptions. These include wildfires, flooding and ex-
treme heat. These risks were seen as particularly high in coun-
tries and regions such as southwest U.S., Mexico, India and
China. These risks are also expected to impact suppliers and
customers in these regions.
The most material opportunities identified pertained to build-
ing a strong position among climate-progressive OEMs including
electric vehicle (EV) manufacturers as a supplier of low-carbon
components as well as opportunities to increase operational en-
ergy and materials efficiency.
Strategy and business impact integration
Climate change-related risks and opportunities are integrated into
Autoliv’s business strategy and cascaded through established
steering mechanisms such as annual business planning and
target setting.
SUSTAINABILITY
TCFD Disclosure
TCFD
Disclosure
52
Climate-related opportunities
To realize key climate-related business opportunities, we are
continuously working on low-carbon product offerings and form-
ing partnerships with customers to help them reduce the carbon
footprint of their products. In addition, efforts to increase the en-
ergy and materials efficiency of our operations will support in re-
ducing related operational expenditures. As part of our climate
transition plan, we aim to further develop and use climate sce-
narios as a supporting tool in quantifying the financial impacts
of climate-related risks and opportunities. We are closely moni-
toring the ongoing development of guidance regarding the use of
carbon offsetting and elimination as well as carbon markets and
related pricing and take them into account as relevant in our deci-
sion making.
Autoliv’s strategic plan was updated in 2022, covering the
years 2023-2025. Climate is included as one of the focus areas in
the strategic plan. During 2024, we focused on further integrating
climate considerations into the company’s strategic product plan-
ning process and other key processes, such as product design
and materials sourcing.
In 2021, we published our Sustainable Financing Framework
aligned with the ICMA Green Bond Principles. In March 2023, we
issued our inaugural €500M green bond, with all proceeds allo-
cated to Clean Transportation. The number of electric vehicles
estimated produced with products supplied by Autoliv for the al-
located proceeds was around 3.8 million. In February 2024, we
issued our second €500M green bond, with the same allocation
and estimated impact as the first bond.
Risk management
Climate-related risks are generally integrated into the Enterprise
Risk Management (ERM) process. For further information about
ERM and management of sustainability risks, see Sustainability
Governance.
We consider transition risks as generally mitigated through
continuous activities in the climate program. Physical risks are
generally considered mitigated through site risk and impact
assessments, footprint planning as well as ongoing business
continuity management processes. We did not experience any
significant climate-related disruptions to business in 2024.
Metrics and targets
In addition to Autoliv’s long-term targets and Science Based
Targets, the climate program covers a number of more detailed
performance metrics and related targets. These cover the most
important emissions reduction levers such as sourcing of low-
carbon raw materials, low-carbon logistics and a transition to-
wards renewable electricity use. We set annual division-level
Scope 1+2 and Scope 3 targets as part of Autoliv’s Policy Deploy-
ment, a process to translate the company’s overall strategic plan
into concrete execution steps. Reporting on progress is done in
various forums such and Board of Directors’ Nominating & Cor-
porate Governance Committee, Executive Management Team,
Sustainability Board and various function and division level man-
agement forums.
Since 2022, GHG emissions from own operations (Scope
1+2) is a performance component of the long-term equity incentive
program. The program covers around 300 participants, including
the CEO and all EMT members.
For more information on GHG emissions and target outco-
mes, see Sustainability Appendix.
Transition risks
Most material risks
Potential financial impacts
Policy and legal
Carbon pricing mechanisms leading to increasing
prices for raw materials with a large carbon footprint
Increased operational expenditures
Technology
Decrease in overall vehicle sales
Loss of revenue
Market
Higher demand for renewable electricity and
low-carbon raw materials
Increased operational expenditures
Reputational
Increasing stakeholder requirements or expectations
on Autoliv to aggressively reduce GHG emissions in
its own operations and/or supply chain
Loss of revenue, reduced
access to capital
Physical risks
Acute/short-term
Wildfires
Extreme heat
Flooding
Loss of revenue related to production disruptions
Chronic/long-term
Extreme heat
Water stress
Costs related to the need of relocating production
Climate Risk Assessment
53
Health, safety, and inclusion are pillars of our
people strategy, ensuring that we create value
from and for our most valuable asset - our
employees.
Health & Safety
Our ambition and approach
Autoliv is committed to a safe and healthy workplace. We start
with the principle that work-related injuries and illnesses are pre-
ventable and seek to operate our business to avoid causing injury
or ill health to employees, contractors and other stakeholders. Ac-
countability for occupational health and safety (H&S) rests with
Autoliv’s leadership. Managers have the primary responsibility for
ensuring compliance with Autoliv’s occupational H&S standards.
Every employee, at each level of the organization, is responsible
for ensuring their own and others’ health and safety by following
our Standards, identifying and helping to eliminate unsafe condi-
tions and unsafe behaviors, and speaking up as appropriate.
Health and safety management system
We integrate H&S into everyday business by incorporating it into
our production system and those projects and processes that
may affect the working environment of our employees. All produc-
tion sites are required to implement Autoliv’s health and safety
management system (HSMS), which in turn is aligned with the re-
quirements of the ISO 45001 Standard. Assurance of compliance
is provided through the common global safety assessment that
is an integrated part of the operational excellence assessment.
These quarterly assessments identify the maturity of each site’s
safety management system, and enable us to focus on further re-
ducing risk in the more hazardous activities in our business, and
support ongoing continuous improvement in safety across the
business.
The HSMS is supported by local leadership teams who en-
courage operators and visitors to engage in and proactively speak
up about health and safety concerns and to take responsibility for
safety. Implementation of the system is monitored through inter-
nal compliance audits and external certification audits. At year-
end, 66% of production sites were ISO 45001 certified.
In 2024, to support our ongoing focus on proactive accident
prevention and continuously improving safety in our workplaces,
we revised the criteria for recording unsafe acts and conditions
to include only which where some form of containment or cor-
rective action followed their identification. Using a process al-
ready integrated into our quality management system, we have
adopted the term Contained Safety Jidoka to identify this very
specific activity. We report this metric in our monthly manage-
ment reporting, and during 2024 the reporting of unsafe acts and
conditions significantly surpassed our target of 1 per employee,
reflecting an ongoing awareness of the importance of reporting
and addressing safety concerns.
H&S training and awareness building
During 2024, H&S remained a key topic at EMT and Divisional
Management Team meetings, and leadership safety training
SUSTAINABILITY
A Safe and Inclusive Workplace
A Safe and
Inclusive
Workplace
0.30 Recordable Incident Rate by 2025
2024 Outcome: 0.32
1 reported unsafe act or condition per employee per year
2024 Outcome: 1.3 per employee
Year-over-year improvement in Employee experience: Continuous
2024 Outcome: Improvement
22% women in senior management by 2025
2024 Outcome: 19%
Zero accidents
Embrace inclusive
ways of working
Ambition:
Targets
54
continued throughout the year. All employees working in produc-
tion are trained in relevant H&S topics and H&S is included as a
standard item in daily team meetings. In the annual employee en-
gagement survey, 88% responded that they felt safe at work and
over 80% responded that they felt empowered to stop unsafe work
without fear of retaliation.
Focus on high-risk activities
Throughout 2024, we maintained strong focus on high-risk activi-
ties within our operations. To better control these risks, we consoli-
dated the application of our revised internal high-risk Standards,
which cover:
•
Working at height
• Lock-out/tag-out
•
Traffic safety
• Machine safety
•
Lifting and rigging
• Contractor safety
We continue to focus on incidents that could have resulted in a
serious injury or fatality. All such incidents are thoroughly inves-
tigated and reviewed by the responsible management team and
shared globally so that measures can be put in place to prevent
repeat incidents.
Inclusion
Our ambition and approach
Inclusive ways of working are an asset and a fundamental part of
the Autoliv Key Behaviors. Including a multitude of perspectives
is an integral aspect of successful decision-making in all parts of
the organization and helps drive innovation and create long-term
sustainable shareholder value in a rapidly changing industry. We
believe that everyone should be respected and treated fairly, and
we are committed to providing an inclusive workplace where eve-
ryone can be themselves, deliver results and bring their authentic
selves to work. Our efforts to represent the communities in which
we operate are supported by our use of competence-based crite-
ria for recruiting.
Activities during the year
During 2024, we continued to deliver on our inclusion efforts by
increasing opportunities to create equal access for consideration
into senior management positions. Action taken during the year
included:
•
An inclusion summit for all top leadership
•
Introduced training, best practices, and initiatives related to
inclusive recruitment
•
Initiated a special project on how to provide equal access to
senior management
Measuring employee experience
We conducted a major update of our employee listening strat-
egy, created a new framework for the employee experience, and
launched a company-wide employee experience survey. In 2024,
the listening program was expanded to include all Autoliv em-
ployees including production associates. The updated survey in-
cludes statements that measure key aspects of an inclusive work
environment including whether employees feel that they can be
themselves at work (“Authenticity”), whether they have the same
opportunity to advance in the organization (“Perceived fairness”),
and belongingness. Together, these measures constitute our “In-
clusion Index,” one of 5 critical KPIs in the survey.
Perceived fairness was among the most improved areas com-
pared to 2023, improving by 14 percentage points and above the
global average. Authenticity remained stable from 2023 with a 1
percentage point increase but below the global average.
People development
We want all colleagues to achieve professional success and
reach their full potential. Key components of this ambition include
fostering a Speak Up culture, strategic workforce planning where
we identify talent requirements, and our Key Behaviors which re-
mind us how to act to bring the best version of Autoliv to life every
day. Dialogue between managers and team members, which in-
cludes all of these components, is a cornerstone of everyone’s
growth. This dialogue is summarized in an annual Performance
and Development Dialogue (PDD). In 2024, 99% of targeted
employees conducted a PDD with their managers. To further sup-
port our employees’ growth, we use several development chan-
nels, such as facilitated and self-paced development programs,
technical and specialist career paths, international assignments
and continuous on-the-job training.
Leadership
Commitment
Leaders at all levels of the
organization are actively
involved in creating a behavior
that supports and promotes
strong H&S performance and
continuous improvement.
Employee
Involvement
Employees are actively
engaged in all aspects of
H&S performance, including
establishing goals, identifying
and reporting hazards/risks,
investigating incidents and
tracking progress.
Workplace Safety
is a Condition for
Employment
Every employee is respon-
sible for contributing to their
own workplace safety.
Recognition and
Control of Risks
Processes and procedures
are implemented to proac-
tively identify, prevent, reduce
and/or control potential
hazards/risks.
Continuous
Improvement
Processes and procedures
are implemented to monitor
H&S, verify implementation,
identify defects and provide
opportunities for improve-
ment.
Autoliv's Health & Safety
Work Principles
55
Responsible business practices are key in
ensuring that we understand the impacts of our
business operations, comply with laws and reg-
ulations, and meet stakeholder expectations.
Our Responsible Business strategy
Responsible Business is a fundamental element of Autoliv’s sus-
tainability framework. To recruit and retain the best talent and to
build enduring relationships with our customers and suppliers, it
is essential that Autoliv is known for the quality and integrity of
its conduct as well as its products and services. Through our ap-
proach to Responsible Business, we work to continually strength-
en how we:
•
Proactively prevent corruption and other illegal or
unethical business practices wherever we operate
•
Respect human rights across our value chain
•
Manage sustainability risks and impacts across our
supply chain
Compliance and Corporate Integrity
Autoliv’s Compliance and Corporate Integrity Program
Autoliv’s compliance program is designed in accordance with best
practice guidance, such as guidelines for effective compliance
programs under the Organizational Guidelines issued by the U.S.
Department of Justice. The program serves to ensure that ad-
equate procedures are in place to prevent Autoliv from taking part
in any anti-competitive activities, any corrupt business practices,
or other illegal and unethical behavior, and that the company ad-
heres to applicable laws and regulations. The program also drives
compliance with relevant corporate standards including the Auto-
liv Code of Conduct.
Leading with Integrity
Leading with Integrity is at the core of Autoliv’s Compliance Pro-
gram. The purpose is to enable, inspire, and make it easy for all
employees to make the right decisions and to foster an open and
transparent culture where all employees feel safe and encouraged
to speak up.
In 2023, we launched a number of initiatives under the “Lead-
ing with Integrity” umbrella, aimed at strengthening the culture
SUSTAINABILITY
Responsible Business
Responsible
Business
Targets
100% of target group completed Antitrust training: Continuous
2024 Outcome: 92%
100% of target group Code of Conduct certified: Continuous
2024 Outcome: 94%
100% direct material suppliers sustainability audited: Continuous
2024 Outcome: 100%
100% direct material suppliers respond to conflict minerals survey:
Continuous. 2024 Outcome: 99%
Proactively prevent corruption and
other unethical business practices
Respect human rights
Manage supply chain
sustainability risks
Ambition:
56
of integrity within the organization by equipping leaders and em-
ployees with skills to make responsible decisions daily. One no-
table example was the development of an interactive game, “In-
tegrity Check – The Autoliv Code of Conduct Game,” designed
to increase employees’ awareness of our Code of Conduct in a
playful and engaging manner. Throughout 2024, the game was
rolled out globally. Additionally, we conducted “Listen Up” work-
shops for leaders, focusing on how they can support and promote
a Speak Up Culture.
The Autoliv Code of Conduct
The Autoliv Code of Conduct is our fundamental guide for how
to do business. It guides our actions and decisions to ensure we
uphold the highest standards in all aspects of our business. The
Code of Conduct is readily available on our website and has been
translated to 19 languages.
In November, a new Code of Conduct e-learning pro-
gram was rolled out to all non-production employees. The
program is designed to be adaptive and specific to each role
and function. It begins with a pre-assessment to evaluate ex-
isting knowledge. Participants who demonstrate a thorough
understanding of the Code by answering all questions cor-
rectly will proceed directly to the end of the course. Those
who miss any questions will be guided through relevant
scenarios and questions to address areas needing improvement
in terms of awareness and knowledge. This approach ensures
efficient use of time for those already familiar with the Code while
providing essential training for those requiring further instruction.
In addition, Autoliv’s onboarding process for new employees
includes an introduction to the Code of Conduct through team-
based discussions on its role, our Integrity Check, mutual expec-
tations, and the importance of speaking up. In 2024, an online
version of the Code of Conduct onboarding was created and
integrated into the global onboarding program. Specific Code of
Conduct training tailored for production staff was also provided.
Annual Code of Conduct certification
Each year, all Autoliv employees in a leadership role must com-
plete a Code of Conduct certification. This process includes dis-
closing any known violations and affirming that leaders actively
promote the Code within their teams. At year-end, 94% of target
group leaders had successfully completed their certification.
Anti-corruption
At Autoliv, we compete vigorously and effectively while always
complying with applicable anti-corruption laws. We have zero
tolerance for any form of corruption in our business dealings
and expect the same standards from our business partners. Our
anti-corruption program is intended to support the princi-
ples in the Autoliv Code of Conduct and internal anti-corrup-
tion policy by providing employees guidance pertaining to:
Compliance Program Elements
Is it legal
and consistent
with our
Code?
Do I
have all the
information to
support a good
decision?
Do I still
feel proud of
myself and
Autoliv?
Do I know
how to explain
the decision
to those
impacted?
Have I
discussed
with the right
people?
Autoliv's
Integrity Check
Autoliv’s Integrity Check is a tool designed to help employees navigate
conflicts, dilemmas, and difficult decisions in the workplace. It involves
a series of simple but useful questions that help individuals or teams
pause and reflect on the situation. The goal is to avoid rushed judg-
ments and make more thoughtful, unbiased decisions.
57
•
Avoiding corruption and bribery
•
Proper interaction with public officials
•
Guidance on gifts and hospitality
•
Charitable donations and sponsorships
•
How to manage risks relating to third parties
We use a combination of face-to-face workshops and virtual
training to maintain anti-corruption awareness and knowledge for
certain employees in functions with an increased risk exposure.
Anti-corruption training is mandatory for selected employees in
functions with a high corruption risk exposure.
Antitrust and Fair Competition
We will always thrive best in fair and open markets. Therefore, we
rigorously follow all competition and antitrust laws that apply to
our operations. Our Antitrust and Competition Policy provides
detailed guidance on how to ensure compliance with competition
and antitrust laws.
In 2024, supported by external expertise, we initiated a
comprehensive review of our antitrust compliance program.
This review is part of a proactive effort to continuously improve
our Antitrust compliance program and involved a review of ex-
isting policies and procedures, a risk assessment based on in-
terviews, and a survey. An updated antitrust policy, along with
updated procedures and guidelines, will be communicated to
all employees in early 2025.
To further increase knowledge about Antitrust and Fair
Competition, face-to-face training sessions were conducted
throughout the year in several divisions. These sessions were
specifically designed for functions and roles with an increased
exposure to antitrust risks, ensuring that employees received
training tailored to their job responsibilities and work contexts.
This initiative will continue in 2025.
Speaking Up
Autoliv has embraced a broad definition of Speaking Up: “any
communication or discussion with the intent to bring positive
change, show encouragement, or highlight an issue for improve-
ment”. To help ensure that our broad definition of Speaking Up is
consistently referenced and promoted across workstreams and
strategic initiatives, implementation of the Speak Up policy is the
joint responsibility of several functions such as Compliance &
Corporate Integrity, Health & Safety, Quality, and HR. Although
we believe this broader definition benefits our business in all
aspects, we make it clear that Autoliv employees are responsible
for immediately reporting suspected or known violations of the
Code of Conduct, the law, or Autoliv’s policies. All employees are
frequently informed of the multiple channels available for raising
such issues.
Throughout the past year, we emphasized the importance
of Speaking Up across the organization through various chan-
nels. This included a series of “Speak Up Stories” articles which
shared real-life examples of how employees can contribute to
fostering an environment where everyone feels safe and en-
couraged to Speak Up. In addition, for the first time, a speci-
fic Speak Up Award was handed out as part of Autoliv’s 2024
Awards and Recognition Program, under the category Leading
the Autoliv Way. This award was given to the Autoliv Japan Qu-
ality Compliance Program team for its exceptional contributions
and commitment to promoting a culture of openness and spea-
king up within their function.
Awareness of Speak Up channels and confidence in speaking
up are measured in employee surveys. In the 2024 Employee En-
gagement Survey, 69% of participants gave a favorable response
to the question “I can report unethical practices without fear of re-
taliation”. While many teams report that they can report unethical
practices without fear, we recognize that this sentiment is not yet
universal across all parts of Autoliv.
The Code of Conduct and Speak Up policy firmly state that
no employee or third party should be adversely affected for report-
ing in good faith or for refusing to carry out a directive believed to
constitute a violation of the Code or other Autoliv policies, laws, or
regulations.
Autoliv Helpline - our grievance mechanism
The Autoliv Helpline is a third-party operated reporting service
available to all employees and third parties, allowing reports to be
made without fear of retaliation. Stakeholders can raise questions
or concerns about any suspected misconduct within Autoliv’s op-
erations, including violations of the Code of Conduct, Supplier
Code of Conduct, laws, or policies under which we operate.
In 2023, we established a new Helpline and Case Manage-
ment System. The new system includes significant improve-
ments for both the reporter and for the process for functions con-
ducting investigations.
Reports can be made anonymously and/or confidentially in
the language of any country where Autoliv operates. All reports
are investigated to determine whether there is any violation of the
law, the Code of Conduct, or other Autoliv policies.
SUSTAINABILITY
Responsible Business
58
Speak Up reporting
In 2024, a total of 245 reports were received by the Compliance
team. Around 87% were received via the Helpline reporting sys-
tem (phone or online) and the other reports were raised internally,
meaning reported directly to management, HR, Legal, or Compli-
ance teams. Of the reports received, 50% were opened for a com-
pliance investigation. Of the investigations closed in 2024, 35% of
the allegations or cases were found to be substantiated or partially
substantiated. Substantiated cases are presented to the appropri-
ate management for decision on remediation activities and other
disciplinary action. All high-risk cases are presented to Executive
Management and the Audit and Risk Committee of the Board on
a regular basis.
Tax Policy
At Autoliv, tax planning is carried out in compliance with the Tax
Policy approved by the Board of Directors. The basic principle is to
respect all relevant laws, disclosure requirements and regulations,
while safeguarding shareholder interests and the Autoliv brand. All
tax planning must be in line with Autoliv’s business purpose and no
baseless organizational structure is permitted. All Autoliv affiliates
are required to pay all tax obligations and meet relevant payment
deadlines, to fully comply with all relevant tax laws and accounting
rules and regulations in the tax jurisdictions in which the business
operates, and to be open and transparent with tax authorities about
their tax liability. When disputes arise, Autoliv will proactively seek
to work cooperatively with full transparency.
Human Rights
Human rights are an integral part of Autoliv’s sustainability agen-
da and cut across all sustainability focus areas. We are commit-
ted to respecting the UN Universal Declaration of Human Rights
as well as human rights-related commitments laid out in the UN
Global Compact Principles and OECD Guidelines for Multinational
Enterprises. Human rights commitments are included in our Code
of Conduct and Supplier Code. Our commitments are supported
by topic-specific policies that cover specific human rights, such as
our Health & Safety Policy, Respect in the Workplace Policy and
Conflict Minerals Policy. Implementation of our commitments is
ensured through various tools such as management attention and
reporting, management systems, internal standards, audits, risk
assessments, and training. Read more about our health & safety
work in A Safe and Inclusive Workplace and conflict minerals work
in Supply Chain Sustainability.
Key human rights-related issues and commitments for Autoliv
include:
•
Our products save lives, and we need to ensure the
quality and safety of our products as they never get a
second chance
•
We are committed to offering a safe and inclusive
workplace and respecting labor rights
•
Our climate ambitions are aligned with the Paris
Agreement goal of limiting global warming to 1.5°C,
thereby mitigating the most severe climate change
impacts on societies and the environment
•
Our supply chain sustainability risk management
processes consider human rights risks and impact
In 2024, we continued to further develop our human rights due
diligence processes with particular emphasis on including human
rights considerations into our footprint planning and new facility
project standards, continuing to build a systematic risk-based
due diligence approach, as well as improving transparency in our
supply chain.
Labor rights
Autoliv is committed to offering fair terms and conditions of em-
ployment to all employees regardless of employment type, sta-
tus, or location. These commitments extend across our supply
chain and include third-party employees at our sites. We support
the International Labour Organization’s Fundamental Principles
and Labor Standards and are committed to:
Human Rights
in the Automotive
Industry
As laid out in the “Shifting Gears, An Assessment of Human
Rights Risks & Due Diligence in the Automotive Industry”
report, published by the Automotive Industry Action Group
(AIAG), the industry’s most salient human rights risks and
issues include:
Child labor and forced labor
Workplace health and safety, discrimination
and harassment
Working conditions, wages and freedom
of association
Conflict minerals
Climate change and environmental degradation
59
•
Providing fair and equitable wages, working hours,
benefits, and other conditions of employment in
accordance with applicable laws
•
Recognizing and respecting employees’ right to
freedom of association and collective bargaining
•
Providing decent and safe working conditions
•
Prohibiting child, forced, and bonded labor
•
Promoting a safe workplace free from any form of
discrimination or harassment
Autoliv is committed to engaging in open and transparent dialogue
with all employees and, where applicable, with representatives of
organized labor groups and unions. Approximately 55% of our
workforce is covered by collective bargaining agreements. In ad-
dition, we have a number of different mechanisms through which
employees can raise topics with management. These include
Autoliv’s Speak Up channels (including the Autoliv Helpline),
employee engagement surveys and related feedback sessions,
employee suggestion programs, local health and safety commit-
tees, and operational committees. The major unions representing
Autoliv employees in different regions are disclosed as part of the
10-K filed with the SEC.
The headcount reductions to accelerate structural cost reduc-
tions first communicated in 2023, continued throughout 2024.
Autoliv is committed to managing any workforce reductions
responsibly. In all cases, negotiations were carried out with local
unions and authorities in accordance with local laws and regula-
tions. Depending on the circumstances, certain employees were
offered relocation, severance pay, early retirement packages, or
other additional compensation.
Community Engagement
As a large employer and important part of many communities
where we operate, we strive to create positive impact wherever
we can. Community engagement initiatives are generally decided
and carried out locally, most often focusing on road safety activi-
ties or engaging on other topics close to our core business. Ex-
amples during the year include a traffic safety day for children at
our tech center in Japan, and the ‘Autoliv Safety Day’ in Romania,
engaging not only Autoliv volunteers but also partners such as the
Romanian police, local authorities and NGOs. On the corporate
level, Autoliv together with several other companies have a long-
standing collaboration with the NGO Pratham to ensure effective
education for 30,000 children in Assam in India.
Autoliv Safety Foundation
Autoliv Safety Foundation was founded in 2024, with the purpose
of supporting scientific research and development in the field of
road safety and related areas to promote a better and safer world.
The foundation also aims to aid in the event of humanitarian dis-
asters in the proximity of locations where Autoliv conducts opera-
tions.
Autoliv Safety Foundation made a donation to YOURS (Youth
for Road Safety), a global organization led by and for young pe-
ople, empowering them to tackle road safety challenges and pro-
mote sustainable mobility. This donation will support initiatives in
2025 aimed at improving road safety in Mexico, with a focus on
engaging young people to create a lasting impact, especially in
motorcycle safety. Furthermore, the foundation extended its sup-
port to communities affected by a typhoon in Vietnam and floo-
ding in Spain, where Autoliv has operations.
Supply Chain Sustainability
Our ambition and approach
Through responsible sourcing practices and supplier collabora-
tion, Autoliv aims to create positive social and environmental
value across our supply chain. We expect suppliers and third par-
ties to enact the same standards and processes as we do when
it comes to proactively managing key sustainability impacts and
risks such as GHG emissions, labor rights, and anti-corruption.
To manage our global supply chain in a responsible manner,
we focus on integrating sustainability into relevant supply chain
management processes. Suppliers are monitored in a live risk
tool covering such factors as natural disasters, financial status,
reputation, risks, and responsible sourcing practices. Autoliv’s
lead buyers are updated regularly with information related to their
suppliers, allowing them to take immediate action when necessa-
ry. Our approach is to work with suppliers, to the greatest extent
possible, to resolve issues before determining to potentially pha-
se out the supplier.
We perform due diligence on high-risk third-party relations-
hips and apply risk-based controls to support our third parties in
applying our anti-corruption commitments. In 2024, work conti-
nued to strengthen the framework for the due diligence process
for suppliers. As part of this work, a new Standard on Third Party
Due Diligence was developed. This Standard clarifies Autoliv’s
commitments to practice due care when doing business with third
parties.
Further information related to supply chain risks is available in
the 10-K filed with the SEC.
SUSTAINABILITY
Responsible Business
60
Supplier Code of Conduct and Sustainable
Sourcing Requirements
We expect our suppliers to comply with the laws and regulations
in the areas where they operate and to follow Autoliv’s policies
and procedures, including our Standards of Business Conduct
and Ethics for Suppliers (Supplier Code of Conduct). In situa-
tions where an Autoliv requirement may differ from local laws or
regulations, we expect our suppliers to follow the most stringent
requirements.
The Supplier Code conveys our expectation that suppliers will
uphold our social, ethical and environmental standards in condu-
cting their businesses in areas including human rights and wor-
king conditions, environmental protection, and business conduct
and ethics. For direct material suppliers, the Supplier Code is in-
cluded in the Autoliv Supplier Manual (ASM). All direct material
suppliers are required to acknowledge their compliance with the
ASM as part of our general terms and conditions and by signing
a separate acknowledgement letter for the ASM. In the case of
indirect suppliers, a reference to the Supplier Code is included in
the general terms and conditions attached to purchasing orders.
In 2024, the Supplier Code was updated to cover new topics and
with stricter requirements related to environment and health and
safety.
Autoliv’s Sustainable Sourcing Requirements contain further
detailed requirements and expectations related to the four focus
areas of the Supplier Code of Conduct. In 2023, the document
was released to our direct material suppliers, and in 2024 require-
ments for indirect suppliers were developed, to be released in
early 2025.
Supplier quality and sustainability audits
Autoliv has dedicated teams responsible for the quality manage-
ment of our supply base, including mandatory steps such as pre-
qualification audits of new direct material suppliers. Sustainability
criteria are included as a module in pre-qualification audits and
must be met before becoming an Autoliv supplier. These audits
ensure that our suppliers adhere to Autoliv’s standards as well as
to applicable local laws and regulations, and establish a process
for working with suppliers that fail to meet our policies and stand-
ards. If audited suppliers don’t meet our requirements, an internal
escalation process is in place to ensure that non-conformities are
corrected. At year-end, 100% of active direct material suppliers
within audit scope had undergone a sustainability audit. Our audit
practices are aligned with the AIAG guidelines.
We carry out additional qualification of sub-suppliers for spe-
cial processes, such as heat treatment, to ensure our quality re-
quirements are met. Using a risk-based approach, we also ensure
technical qualification of raw material suppliers.
Conflict minerals and extended minerals
Pursuant to U.S. Securities and Exchange Commission (SEC)
rules, conflict minerals include certain minerals (tin, tantalum,
tungsten and gold, also known as 3TG) that originated in the
Democratic Republic of Congo or an adjoining country and are
sold to benefit groups financing armed conflicts in those re-
gions. We recognize the need to end the illegal extraction and
trade of natural resources, and the human rights violations,
conflicts and environmental degradation that result from this
trade. We have designed our conflict minerals approach in ac-
cordance with the internationally recognized OECD Due Dili-
gence Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas, specifically as it
relates to our position as a downstream purchaser. The OECD
Due Diligence Guidance has a broader scope and covers more
minerals than 3TG. Our Conflict Minerals Policy provides fur-
ther clarification regarding conflict minerals, and its principles
are incorporated into our Supplier Code of Conduct and the
Sustainable Sourcing Requirements.
To comply with the SEC’s conflict minerals rules and regula-
tions and to ensure responsible sourcing of components, parts or
products containing conflict minerals, we continuously review our
supply chain and work with our suppliers to identify and improve
the traceability of potential conflict minerals. We support indus-
try initiatives, such as the Responsible Minerals Initiative (RMI),
and utilize external expert guidance to validate that the metals
used in our products come from sustainable sources and do not
contribute to conflicts. In cases where we find potential risks and
conflicts with smelters identified within our supply chain, we take
immediate action to mitigate the potential risks. In some cases,
this means discontinuing sourcing from suppliers that are in viola-
tion of our requirements to ensure sourcing from designated RMI
active or conformant suppliers.
To ensure our understanding of the potential use of conflict
minerals, we have implemented an annual conflict minerals
campaign covering our direct material suppliers. The scope of
the annual campaign includes all direct material suppliers that
have conducted business with us during the current calendar
year and have listed 3TG in their Bill of Materials. This informa-
tion is extracted from the automotive industry standard reporting
platform IMDS. The response rate to the latest completed cam-
paign, which ended in May 2024, was 99%. Most non-responding
suppliers were customer-directed suppliers. We are working with
these customers to mitigate this issue for future conflict minerals
campaigns. We publish an annual report on our conflict minerals
campaign on our website.
In addition to conflict minerals, we also have an annual report-
ing campaign in place related to tracing extended minerals (co-
balt and mica) used in components supplied to us. Autoliv does
not permit the sourcing of cobalt or mica from high-risk smelters.
Suppliers must be able to trace the cobalt and mica content in
components or raw materials by part number from their facility
back to the supplier sourcing from the identified smelters, and to
remove any high-risk smelters.
61
Sustainability
Appendix
SUSTAINABILITY
Appendix
Reporting scope
The report covers Autoliv Inc. and all companies over which
Autoliv Inc. directly or indirectly exercises control (operational
control approach). Reported information is based on actual data
and covers the full calendar year. Exceptions to this scope:
•
Health and safety reporting excludes office locations
•
Environmental reporting excludes offices and other loca-
tions that have an individually insignificant impact (annual
energy consumption <1 GWh) and that continue to be
insignificant when aggregated
•
Scope 1+2 market-based emissions for 2024 are based
on actual activity data for January-November and esti-
mated activity data for December. Estimations are based
primarily on historical activity data (Q4 2023 and Q1-Q3
2024)
GHG emissions and energy
All GHG emissions are reported as CO₂e. Due to their nature or
to availability, some emission factors used may only cover CO₂,
however the difference has been assessed as non-material.
Energy consumption and GHG emissions are based on activity
data reported in volume or quantity in an internal reporting system.
The data is based primarily on invoices, but may be estimated if
exact measurements or invoices do not exist.
Scope 1+2 emissions
Autoliv applies the GHG Protocol Corporate Accounting and
Reporting Standard. Autoliv’s primary Scope 2 GHG accounting
approach is market-based, and GHG emissions targets and other
related metrics are based on market-based Scope 2 emissions.
Emission factors are updated annually and previous years’ emis-
sions are not recalculated using the latest emission factors. The
following emission factor sources were used to calculate 2024
GHG emissions:
•
Scope 1 energy fuels 1): Defra 2023
•
Scope 1 fugitive emissions 2, 3): Defra 2023, IPCC AR5,
producer-stated GWP
•
Scope 2 market-based electricity: provided by supplier,
or regional/national grid average for the locations where
suppliers were unable to provide a specific emission factor
•
Scope 2 market-based district heating/steam: IEA 2023,
China Development and Reform Commission
•
Scope 2 location-based electricity: IEA 2023
•
Scope 2 location-based district heating/steam: IEA 2023,
China Development and Reform Commission
1) Gasoline, diesel, fuel oil, LPG. 2) SF6, fugitive CO2, N2O and various refrigerants. 3) The emission
factor for SF6 at one facility has been adjusted down by 20% to account for not all gas being released
into the atmosphere. The adjustment is based on tests at the facility and is a best estimate associ-
ated with inherent uncertainty as the exact reduction has not been established.
2022 scope 1+2 emissions have been calculated using mainly old-
er sets of the same emission factor sources. Notably, the updated
emission factors for 2023 represented around a 40 kton reduction
in Scope 1+2 emissions, impacting in particular market-based
electricity emissions. The impact of updated 2024 emission factors
compared to 2023 emission factors was negligible.
Scope 3 emissions
Reported Scope 3 emissions have been modelled in accordance
with the GHG Protocol Scope 3 Calculation Guidance and is based
on a combination of spend data (e.g. logistics spend) and activity
data (e.g. materials purchased). Generic emission factors have
been applied as supplier-specific emission factors are generally
not available. Reporting is limited to Scope 3 upstream categories
as those are considered material for Autoliv and are covered by Au-
toliv’s supply chain climate ambition and Scope 3 Science Based
Target.
62
Science Based Targets
In January 2022, the Science Based Targets initiative (SBTi)
approved Autoliv’s Science Based Targets (SBTs):
•
Reduce absolute Scope 1+2 emissions by 75% from a
2018 base year
•
Reduce absolute Scope 3 upstream emissions by 15%
from a 2018 base year
The Scope 1+2 SBT is 1.5°C aligned and has a baseline of 423
kton. 2024 Scope 1+2 emissions of 306 kton is a 28% absolute
reduction compared to the baseline. The scope 3 SBT is 2°C alig-
ned and has a baseline of 3,100 kton. 2024 Scope 3 upstream
emissions of 3,767 kton is a 22% absolute increase compared to
the baseline.
Energy
Energy conversion factors for energy fuels come from public
sources. The same energy conversion factors have been applied
to all reported energy consumption 2022-2024 with the exception
of a lower conversion factor for natural gas for 2022.
Changes and corrections
In 2024, there were no material changes in reporting scope, and
no material recalculations. Material recalculations for 2022 and
2023 reported figures are explained in the 2023 report. Scope 3
emissions for 2024 are rounded off to the closest kton instead of
closest 10 kton. Share of employees covered by collective barga-
ining agreements for 2024 has been reported rounded off to the
nearest 5% rather than 10%.
External reporting frameworks
The following external reporting frameworks have been consi-
dered for the structure and content of this Sustainability Report:
•
We consider the Sustainability Report aligned with the
general requirements of the EU Non-Financial Reporting
Directive (NFRD). Autoliv’s assessment, supported by
third party legal expertise, is that for the year 2024, Auto-
liv Inc. was not required to report in accordance with the
EU Non-Financial Reporting Directive (NFRD) or the EU
Corporate Sustainability Reporting Directive (CSRD)
•
This Sustainability Appendix includes references to the
voluntary SASB Auto Parts Sustainability Accounting
Standard
•
A TCFD Disclosure is included in this report
•
A statement prepared to comply with the disclosure obli-
gation of California’s Voluntary Carbon Market Disclosure
Act (VCMDA) is available on autoliv.com
External assurance
Scope 1+2 emissions for 2023 and 2024, reported in accordan-
ce with the GHG Protocol Corporate Accounting and Reporting
Standard, have been subject to limited review carried out by EY.
The limited review has been conducted in accordance with the
ISAE 3410 assurance standard. The auditor’s reports are availa-
ble on autoliv.com. An additional statement prepared to comply
with the disclosure obligations of the VCMDA is available on the
Climate Action page on autoliv.com.
UN Global Compact Communication on Progress
This Sustainability Report serves as Autoliv’s Communication on
Progress related to the UN Global Compact. The following sec-
tions demonstrate our commitment to implementing the Global
Compact principles:
•
Road Safety - a Global Challenge: Principle 1
•
A Safe and Inclusive Workplace: Principle 6
•
Climate and Circularity: Principles 7-9
•
Responsible Business: Principles 1-6, 10
63
SUSTAINABILITY
Appendix
Saving More Lives
Targets & Metrics
2024
2023
2022
Comments
100,000 lives saved per year
37,000
35,000
Close to
35,000
We estimate that in addition to lives saved,
our products reduced more than 600,000
injuries in 2024.
Share of global recalls (%)1
~2%
~2%
~2%
The share is calculated as a ten year rolling average based on infor-
mation from national official databases.
1) SASB TR-AP-250a 1.
A Safe and Inclusive Workplace
Targets & Metrics
2024
2023
2022
Comments
Health and Safety
0.30 Recordable Incident Rate by 2025
0.32
0.38
0.38
Number of reportable injuries, i.e. injuries
that require treatment beyond first aid or results in one or more days
of lost time, per 200,000 employee hours of exposure.
Work-related fatalities
0
0
2
Share of production sites
ISO 45001 certified (%)
66%
61%
56%
Inclusion
Year-on-year improvement in Employee
experience. Continuous
- Authenticity
- Perceived fairness
74%
74%
73%
59%
80%
73%
22% women in senior management
by 2025
19%
19%
18%
Senior management consists of around
110 employees and include the Executive
Management Team.
Share of women in the workforce (%)
49%
49%
49%
Share of women in the Executive
Management Team (%)
8%
8%
0%
Climate and Circularity
Targets & Metrics
2024
2023
2022
Comments
Carbon neutrality in own operations
by 2030
306 kton
CO2e
358 kton
CO2e
430 kton
CO2e
Scope 1+2 market-based
emissions.
Year-on-year improvement in energy
intensity Continuous
1%
improve-
ment
3%
improve-
ment
2%
improve-
ment
MWh per million USD sales (FX adjusted).
Year-on-year improvement in waste
intensity Continuous
No change
5% impro-
vement
5% impro-
vement
Ton per million USD sales (FX adjusted).
64
Climate and Circularity
Targets & Metrics
2024
2023
2022
Comments
GHG Emissions
GHG emissions intensity (Scope 1+2)
29.5
34.2
48.5
Ton CO2e per million USD sales (FX adjusted).
Direct Scope 1 GHG emissions
(kton CO2e)
- Natural gas
- Other energy fuels
– SF6
- Other fugitive emissions
Total
56
7
7
5
75
57
9
22
7
95
52
10
35
5
102
Phase-out of SF6 was completed in the the first quarter of 2024,
significantly contributing to lower scope 1 emissions in 2024.
Indirect Scope 2 GHG emissions
(kton CO2e)
- Electricity, market-based
- District heating/steam, market-based
Total, market-based
- Electricity, location-based
- District heating/steam, location-based
Total, location-based
220
11
231
298
11
309
247
16
263
290
16
306
311
17
328
299
17
316
Upstream Scope 3 emissions (kton CO2e)
- Purchased goods and services (category 1)
- Upstream transportation (category 4)
- Other upstream (categories 2, 3, 5, 6, 7, 8)
Total
3,076
449
242
3,767
3,070
460
240
3,770
3,000
510
190
3,700
Energy1
Energy intensity
99.7
100.5
110.5
MWh per million USD sales (FX adjusted).
Energy use (GWh)
- Direct - natural gas
- Direct - other energy fuels
Direct total
- Indirect - electricity
- Indirect - district heating/steam
Indirect total
Total
276
29
305
704
27
731
1,036
282
39
321
704
28
732
1,053
250
40
290
661
29
690
980
Included in total direct energy use but not
part of the breakdown is around 340 MWh
of on-site solar PV generation.
Share of renewable energy/electricity (%)
- Renewable energy
- Renewable electricity
20%
30%
15%
23%
9%
13%
Renewable electricity is calculated as as the share
of purchased electricity covered by a 'green tariff', EAC/REC/GO or
PPA and may come from any renewable source. 100% of direct energy
is considered non-renewable.
1) SASB TR-AP-130a
Waste1
Waste (kton)
112
113
101
Share of waste by type (%)
- Non-hazardous
- Hazardous
89%
11%
89%
11%
89%
11%
Share of waste by treatment (%)
- Reuse, recycling, energy recovery
- Landfill
92%
8%
91%
9%
90%
10%
1) SASB TR-AP-150a
65
SUSTAINABILITY
Appendix
Climate and Circularity
Targets & Metrics
2024
2023
2022
Comments
Other
Water withdrawal (thousand m3)
2,225
2,294
2,361
100% of water withdrawal is reported as
coming from municipal or third party sources.
Share of production sites
ISO 14001 certified (%)
96%
92%
96%
Number of significant spills,
and related fines
0
0
0
A significant spill is defined as having a financial
impact of USD 100,000 or more.
Responsible Business
Targets & Metrics
2024
2023
2022
Comments
Business Ethics
100% in target group completed
antitrust training
Continuous
92%
98%
99%
Target group is based on the risk exposure
of certain employee groups.
100% in target group Code of
Conduct certified
Continuous
94%
93%
99%
Target group is employees in a leadership role.
Supply Chain Sustainability
100% direct material suppliers
sustainability audited
Continuous
100%
99%
98%
Percentage is based on active direct material suppliers within audit
scope that have undergone a sustainability audit.
100% direct material suppliers respond
to conflict minerals survey
Continuous
99%
97%
89%
Compliance Speak Up
Number of Compliance Speak Up reports
– Reported through Autoliv Helpline (%)
– Reported through other channels (%)
245
426
318
Other channels include internal reports directly to management,
HR, the Legal or Compliance teams.
87%
13%
89%
11%
89%
11%
Compliance Speak Up reports
per 100 employees
0.38
0.61
0.46
Labor Rights
Share of employees covered by collective
bargaining agreements (%)
~55%
~50%
~50%
Around 80% of the countries where Autoliv has
employees have collective bargaining agreements.
66
67
By ensuring customer satisfaction, maintaining
tight cost control and developing new products,
we generate cash for long-term growth, financial
stability and competitive returns to our share-
holders.
Autoliv has a strong cash flow and cash generation focus. Our op-
erating cash flow has always exceeded our capital expenditures.
On average, our continuing operations have generated $871 mil-
lion in cash per year over the last five years, while our capital ex-
penditures, net, have averaged $482 million per year during the
same period.
Capital efficiency
Our strong cash flow reflects both Autoliv’s earnings performance
and our capital efficiency. In 2024, our capital turnover rate, mean-
ing our sales in relation to average capital employed, was 2.7,
significantly better than our 5-year average capital turnover rate
of 2.4.
Our cash flow model
When analyzing how best to use each year’s cash flows from op-
erations, Autoliv’s Executive Management and the Board of Di-
rectors use a model for creating shareholder value that considers
variables such as the marginal cost of borrowing, the return on
marginal investments and the price of Autoliv shares. When eval-
uating the various uses of cash, the need for flexibility is weighed
against acquisitions and other potential uses of cash.
Investing in operations
To create long-term shareholder value, cash flow from opera-
tions should only be used to finance investments in operations
until the point when the return on investment no longer exceeds
the cost of capital. Our historical weighted average cost of capi-
tal has been approximately 10% to 13% in the past ten years.
Autoliv’s pre-tax return on capital employed has generally ex-
ceeded this level, except during the COVID-19 pandemic in 2020.
In 2024, Autoliv generated a high return on capital employed
(ROCE) of 25%, reflecting its strong financial performance and
effective cost management. Over the past five years, Autoliv has
consistently improved its ROCE, driven by strategic initiatives
INVESTING IN AUTOLIV
Creating Shareholder Value
Creating
Shareholder
Value
$771 m
Shareholder
Returns
Ownership
distribution of
institutional
investors
Company estimates, end of 2024.
Rest of World 3%
Rest of Europe 7%
United Kingdom 10%
Sweden 33%
United States 47%
68
and operational efficiencies. During this period, the return on
capital employed has been about one to two times the pre-tax
cost of capital. In 2024, $563 million was reinvested in the form
of capital expenditures, net, 53% of the year’s operating cash
flow of $1,059 million. Capital expenditures, net, were 45%
higher than depreciation and amortization as we invest in foot-
print optimization, capacity increases and flexible automation to
drive increased efficiency and to support sales growth.
Acquisitions, divestments and investments in assets
In order to accelerate company growth and create shareholder
value over time, we may use some of the cash flow generated for
acquisitions and for investments in assets such as joint ventures
and intellectual property. These investments are typically made
to consolidate our position in the industry, increase our vertical
integration or expand into new markets. In the near future, we do
not consider acquisitions as a high priority.
Shareholder returns
Autoliv has historically used both dividend payments and share
repurchases to create shareholder value. Autoliv does not have
a set dividend policy. Instead, the Board of Directors regularly
analyzes which method is most effective in order to create share-
holder value. For the full year 2024, the dividend was increased
from $2.66 to $2.74 per share. In total, $219 million was used to pay
dividends to shareholders in 2024. Historically, the dividend has
usually represented a yield of approximately 2-3% in relation to
Autoliv’s average share price, except in 2020, when a dividend
was only paid for one quarter as a response to the effects of
the COVID-19 pandemic. In 2024, this yield was around 2.6%.
Repurchases of shares can create more value for shareholders
than dividends, if the share price appreciates over the long term.
During 2024, Autoliv repurchased 5.1 million shares, equal to
$552 million, under the current stock repurchase program au-
thorized by the Board. The program authorizes repurchases
of up to $1.5 billion, or 17 million common shares (whichever
comes first), until the end of 2025. At end of 2024, the total num-
ber of shares repurchased under the program was approximate-
ly 10.2 million for a total of $1,019 million.
Capital structure
Our debt limitation policy is to maintain a financial leverage
Autoliv's model for creating
shareholder value
US$ (millions)
200
400
600
800
1,000
1,200
2024
2023
CASH IN
CASH OUT
Cash IN
Cash IN
Cash OUT
Cash OUT
1,059
563
219
552
275
982
569
225
352
164
Operations
Increase in net debt and other
Total dividends paid
Stock repurchases
Capital expenditures, net
69
commensurate with a “strong investment grade credit rating”. Our
long-term target is to have a leverage ratio (Net Debt, including
pension liability, in relation to EBITDA) of around 1 time and to
be within the range of 0.5 and 1.5 times. In addition to the above,
the objective is to provide the Company with sufficient flexibility
to manage the inherent risks and cyclicality in Autoliv’s business
and allow the Company to realize strategic opportunities and
fund growth initiatives while creating shareholder value. In 2024,
Autoliv remained within the target range as cash flow remained
solid and EBITDA improved. On December 31, 2024, the lever-
age ratio was 1.2 times. Autoliv holds a long-term credit rating of
“Baa1” from Moody’s and “BBB+” from Fitch, both with a stable
outlook. We aim to maintain a strong investment grade rating as
our current capital structure should provide flexibility to generate
further shareholder returns and the funding of our capital require-
ments.
Shareholder information
Autoliv’s common stock is traded on the New York Stock
Exchange (NYSE) while Autoliv’s Swedish Depository Receipts
(SDRs) are traded on the NASDAQ Stockholm. As of Decem-
ber 31, 2024, Autoliv estimates that approximately 36% of
shares outstanding were SDRs (vs. 49% two years earlier)
while 64% were common stock. In 2024, approximately 90%
of the total volume was traded on the NYSE. During 2024, the
number of shares outstanding decreased by more than 4.9 mil-
lion to 77.7 million (excluding treasury shares). Stock options (if
exercised) and granted restricted stock units and performance
shares could increase the number of shares outstanding by 0.5
million shares in total. Combined, this would add 0.6% to the
Autoliv shares outstanding.
INVESTING IN AUTOLIV
Creating Shareholder Value
1. Cevian Capital
12%
2. Fidelity Management & Research Company
9%
3. BlackRock
6%
4. Alecta
6%
1) Shareholders holding more than 5% at the end of 2024, based on the 13-D/G filings and
company estimates, of outstanding shares.
The largest shareholders, December 31st, 20241)
70
Operating cash flow
Capital expenditures, net
0
200
400
600
800
1,000
1,200
24
23
22
21
20
Cash flow vs. Capex
US$ (Millions)
Capital Turnover Rate
Times, sales in relation to average
capital employed
0
1
2
3
24
23
22
21
20
Share buybacks
Dividend
0
100
200
300
400
500
600
700
800
24
23
22
21
20
Shareholder Returns
US$ (Millions)
Return on Capital Employed
%
0
5
10
15
20
25
24
23
22
21
20
Trade working capital*
0
1,000
2,000
3,000
4,000
5,000
24
23
22
21
20
Property, plant and equipment
Goodwill and other intangible assets
Assets by Category
US$ (Millions)
Capex and D&A
US$ (Millions) and in relation to sales %
150
300
400
500
600
700
24
23
22
21
20
0
1
2
3
4
5
6
7
Capex, net
Capex, net % of sales
D&A % of sales
*) Non-GAAP Performance Measures. See "Non-GAAP
Performance Measures" section in the 10-K filed with the SEC.
71
BOARD AND MANAGEMENT
1. Jan Carlson
Chairman since 2014.
Director since 2007.
2. Mikael Bratt
President and CEO of Autoliv Inc.
Director since 2018.
3. Laurie Brlas
Director since 2020. Member of
the Audit and Risk Committee and
the Nominating and Corporate
Governance Committee.
4. Hasse Johansson
Director since 2018. Member of the
Audit and Risk Committee.
5. Leif Johansson
Director since 2016. Chair of
the Nominating and Corporate
Governance Committee. Member
of the Leadership Development
and Compensation Committee.
6. Franz-Josef Kortüm
Director since 2014. Member of
the Nominating and Corporate
Governance Committee.
7. Frédéric Lissalde
Director since 2020. Chair of
the Leadership Development
and Compensation Committee.
Member of the Nominating and
Corporate Governance Committee.
8. Xiaozhi Liu
Director since 2011. Member of
the Leadership Development and
Compensation Committee.
9. Gustav Lundgren
Director since 2022. Member of the
Audit and Risk Committee.
10. Martin Lundstedt
Director since 2021. Member of
the Leadership Development and
Compensation Committee.
11. Thaddeus “Ted” Senko
Director since 2018. Chair of the
Audit Committee.
12. Adriana Karaboutis
Director since 2024.
Board
of Directors
1
4
11
12
3
5
10
2
7
9
8
6
72
1. Mikael Bratt
President and CEO.
2. Petra Albuschus
Executive Vice President,
Human Resources & Sustainability.
3. Kevin Fox
President, Autoliv Americas.
4. Magnus Jarlegren
President, Autoliv Europe.
5. Fabien Dumont
Executive Vice President,
Chief Technology Officer.
6. Jonas Jademyr
Executive Vice President, Quality
and Program Management.
7. Colin Naughton
President, Autoliv Asia.
8. Anthony Nellis
Executive Vice President,
Legal Affairs; General
Counsel & Secretary.
9. Staffan Olsson
Executive Vice President,
Operations.
10. Christian Swahn
Executive Vice President,
Supply Chain Management.
11. Fredrik Westin
Executive Vice President,
Finance and Chief
Financial Officer.
12. Sng Yih
President, Autoliv China.
Executive
Management Team
73
1
12
10
2
7
9
8
6
4
5
3
11
Location and
Capabilities
74
Headquartered in Stockholm, Sweden. Incorporated in Delaware, United States
Location
Employees
Tech center
Production
Sales support
Other 2)
BRAZIL1)
1,290
CANADA
477
CHINA1)
8,725
ESTONIA1)
769
FRANCE
1,519
GERMANY
572
HUNGARY1)
1,517
INDIA1)
4,253
INDONESIA1)
175
JAPAN
1,986
MALAYSIA1)
MEXICO1)
13,988
PHILIPPINES1)
1,218
POLAND1)
2,137
ROMANIA1)
9,297
SOUTH AFRICA1)
231
SOUTH KOREA
476
SPAIN
419
SWEDEN
474
SWITZERLAND
40
THAILAND1)
4,427
TUNISIA1)
4,350
TURKEY1)
2,536
UNITED KINGDOM
222
USA
3,957
1) Defined as a best-cost country. 2) Includes weaving and sewing of textile cushions and seatbelt webbing, inflators, and components for airbag
and seatbelt products.
75
AUTOLIV, INC.
Visiting address:
Klarabergsviadukten 70, Section D,
5th Floor, Stockholm, Sweden
Postal address:
P.O. Box 70381, SE-107 24 Stockholm, Sweden
Tel: +46 (0)8 587 20 600
E-mail: info@autoliv.com
www.autoliv.com
CONTACT OUR BOARD
Autoliv, Inc.
P.O. Box 70381, SE-107 24 Stockholm, Sweden
Tel: +46 (0)8 587 20 600
E-mail: legalaffairs@autoliv.com
The Board, individual directors and the committees of
the Board can be contacted using the address above.
Contact can be made anonymously and communication
with individual directors is not screened. The relevant
chairman receives all such communication after it has
been determined that the content represents a message
to such chairman.
STOCK TRANSFER AGENT AND REGISTRAR
www.computershare.com
INVESTOR REQUESTS
Autoliv, Inc.,
P.O. Box 70381, SE-107 24, Stockholm, Sweden
Tel: +46 (0)8 587 20 600
E-mail: ir@autoliv.com
2025 PRELIMINARY FINANCIAL CALENDAR
April 16, Financial Report Q1
May 8, Annual Stockholders Meeting
July 18, Financial Report Q2
October 17, Financial Report Q3
Concept and Design: PCG
Photos: Getty Images, PCG, Shutterstock,
Spectrum Digitale Medien GmbH,
Autoliv colleagues
Contacts
and Calendar
76
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number: 001-12933
AUTOLIV, INC.
(Exact name of registrant as specified in its charter)
Delaware
51-0378542
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Klarabergsviadukten 70, Section D5,
Box 70381,
SE-107 24
Stockholm, Sweden
(Zip Code)
(Address of principal executive offices)
+46 8 587 20 600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
Trading Symbol(s):
Name of each exchange on which registered:
Common Stock (par value $1.00 per share)
ALV
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days. Yes: ☒ No: ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes: ☒ No: ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared
or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes: ☐ No: ☒
The aggregate market value of the voting and non-voting common equity of Autoliv, Inc. held by non-affiliates as of the last business day of the second
fiscal quarter of 2024 amounted to $8,568 million.
Number of shares of Common Stock outstanding as of February 12, 2025: 77,714,402.
Auditor Firm Id: 1433 Auditor Name: Ernst & Young AB Auditor Location: Stockholm, Sweden
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for the annual stockholders’ meeting to be held on May 8, 2025, to be dated on or around March 25,
2025 (the “2025 Proxy Statement”), are incorporated by reference into Part III of this Annual Report on Form 10-K. The 2025 Proxy Statement will be filed
with the U.S. Securities and Exchange Commission within 120 days after December 31, 2024.
1
AUTOLIV, INC.
Index
PART I
Item 1.
Business
3
Item 1A.
Risk Factors
10
Item 1B.
Unresolved Staff Comments
22
Item 1C.
Cybersecurity
23
Item 2.
Properties
25
Item 3.
Legal Proceedings
28
Item 4.
Mine Safety Disclosures
28
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
29
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.
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.
Exhibit and Financial Statement Schedules
90
2
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. (“Autoliv,” the “Company” or “we”) or its management believes or anticipates may occur in the
future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third
parties. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However,
there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are
inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or
achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking
statements.
In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,”
“plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable
terminology, although not all forward-looking statements contain such words.
Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the
forward-looking statements for a variety of reasons, including without limitation: general 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.
For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise
any forward-looking statements in light of new information or future events, except as required by law.
3
PART I
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.
The Company is a leading developer, manufacturer, and supplier of passive safety systems to the automotive industry with a broad range
of product offerings.
Passive safety systems are primarily meant to improve safety for occupants in a vehicle. 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. 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. 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.
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.
Reportable Segment
The Company has one reportable segment based on the way the Company evaluates its financial performance and manages its
operations. The Company's business is comprised of passive safety products –principally airbags (including steering wheels and inflators)
and seatbelts. For more information regarding the Company’s segment reporting, see Note 1, Basis of Presentation, to the Consolidated
Financial Statements in this Annual Report.
Products, Market, and Competition
Products
Providing life-saving solutions is a key priority as the world population grows and develops. However, population expansion in growth
markets and the rise of megacities creates new complexities. To meet this challenge, the Company develops safety solutions for both
mobility and society that work in real life situations. The Company's passive safety systems such as seatbelts and airbags substantially
mitigate human consequences of traffic accidents.
The airbag module is designed to inflate extremely rapidly and then quickly deflate during a collision or impact. It consists of the container,
an airbag cushion, and an inflator. The purpose of the airbag is to provide the occupants a cushioning and restraint during a crash event
to prevent any impact or impact-caused injuries between the occupant and the interior of the vehicle.
Seatbelts can reduce the overall risk of serious injuries in frontal crashes by as much as 60% due to advanced seatbelt technologies such
as pretensioners and load limiters.
The Company also manufactures steering wheels that are crafted to ensure they meet safety requirements and are functional as well as
stylish.
Market and Competition
Consumer research clearly shows that consumers want safe vehicles, and several significant trends are likely to positively influence
overall safety content per vehicle. These include:
1) Society becoming increasingly focused on Vision Zero and its goal of reducing traffic fatalities and their associated costs;
2) Demographic trends of increased urbanization, aging driver populations, and increased safety focus in growth markets;
3) Evolving government regulations and test rating systems to improve the safety of vehicles in various markets, such as the
updated European New Car Assessment Program (Euro NCAP), China NCAP, and USNCAP; and
4) The trend towards more electrical vehicles may lead to roomier interiors that may require more advanced passive safety systems,
as well as products to cut the electrical power in case of an accident.
The automotive passive safety market is driven by two primary factors: light vehicle production (LVP) and content per vehicle (CPV).
4
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. 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.
Unlike LVP, where Autoliv can only aim to be on the best-selling platforms, Autoliv can influence CPV more directly by continuously
developing and introducing new technologies with higher value-added features. Over the long term, this increases average safety CPV
and has caused the Company's markets to grow faster than the LVP.
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 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.
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.
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.
As a result of higher installation rates of airbags, more advanced seatbelt products, and more complex steering wheels, CPV is expected
to increase at a similar pace in both high-income and medium- and low-income markets over the next three years.
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. 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.
In seatbelts, Autoliv has reached a global market share of around 45%, primarily due to being the technology leader with several important
innovations such as pretensioners and active seatbelts. The Company's strong market position is also a reflection of its superior global
footprint. Seatbelts are the primary life-saving safety product globally and are also an important requirement in low-end vehicles in the
medium- and low-income markets. This provides the Company with an excellent opportunity to benefit from the expected growth in this
segment of the market.
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 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%.
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. JSS is the result of the merger
between Key Safety Systems (KSS) and Takata Corporation after KSS acquired Takata in 2018.
In Japan, Brazil, South Korea, and China, there are a number of local suppliers that have close ties with the domestic vehicle
manufacturers. 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. (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.
Other competitors include Nihon Plast and Ashimori in Japan, Yanfeng and Jinheng in China, Samsong in South Korea, and Chris Cintos
de Seguranca in South America. Collectively, these competitors account for the majority of the remaining market share in passive safety.
Additional information concerning the Company's products, markets and competition is included in the “Risks and Risk Management”
section under Item 7 of this Annual Report.
5
Manufacturing and Production
See “Item 2. Properties” for a description of Autoliv’s principal properties. 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. 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.
Autoliv’s “just-in-time” delivery system is designed to accommodate the specific requirements of each customer for low levels of inventory
and rapid stock delivery service. “Just-in-time” deliveries require final assembly or, at least, distribution centers in geographic areas close
to customers to facilitate rapid delivery. The fact that the major automobile manufacturers are continually expanding their production
activities into more countries and require the same or similar safety systems as those produced in Europe, Japan, or the U.S. increases
the importance for suppliers to have assembly capacity in several countries. Consolidation among the Company's customers also
supports this trend.
Autoliv’s assembly operations generally are not constrained by capacity considerations unless there is a disruption in the supply of raw
materials and components. When dramatic shifts in LVP occur, Autoliv can generally adjust capacity in response to any changes in
demand within a few days by adding or removing work shifts and within a few months by adding or removing standardized production
and assembly lines. Most of Autoliv’s assembly factories can make sufficient space available to accommodate additional production lines
to satisfy foreseeable increases in capacity. As a result, Autoliv can usually adjust its manufacturing capacity faster than its customers
can adjust their capacity as a result of fluctuations in the general demand for vehicles or in the demand for a specific vehicle model,
provided that customers promptly notify Autoliv when they become aware of such changes in demand. 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. 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 Company could experience disruption in its supply or delivery chain, which could cause one or more of its customers to halt or delay
production. For more information, see Item 1A – “Risk Factors” in this Annual Report.
Quality Management
Autoliv believes that superior quality is a prerequisite to being considered a leading global supplier of automotive safety systems and is
key to the Company's financial performance, because quality excellence is critical for winning new orders, preventing recalls, and
maintaining low scrap rates. Autoliv has for many years emphasized a “zero-defect” proactive quality policy and continues to strive to
improve its working methods. Autoliv’s products are expected to always meet performance expectations and be delivered to its customers
at the right times and in the right amounts. The Company believes its continued quality improvements further enhance the Company's
reputation among its customers, employees, and governmental authorities.
Although quality has always been paramount in the automotive industry, especially for safety products, automobile manufacturers have
become increasingly focused on quality with even less tolerance for any deviations. This intensified focus on quality is partially due to an
increase in the number of vehicle recalls for a variety of reasons (not just safety), including a few high-profile vehicle recalls. This trend
is likely to continue as automobile manufacturers introduce even stricter quality requirements and regulating agencies and other
authorities increase the level of scrutiny given to vehicle safety issues. The Company has not been immune to the recalls that have been
impacting the automotive industry.
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. The goal of Q5 is to firmly tie together quality with value within all of the Company's processes
and for all of its employees, thereby leading to the best value for its customers. Since 2010, the Company has continually focused on this
quality initiative to provide additional skills training to more employees and suppliers. These activities have significantly improved the
Company's quality performance.
In the Company's pursuit of quality excellence, the Company developed a chain of four “defense lines” to deal with potential quality issues.
The defense lines are: 1) robust product designs, 2) flawless components from suppliers and the Company's own in-house component
companies, 3) manufacturing flawless products with a system for verifying that the Company's products conform with specifications, and
4) an advanced traceability system in the event of a recall.
The Company's pursuit of quality excellence extends from the earliest phases of product development to the proper disposal of a product
following many years of use in a vehicle. Autoliv’s comprehensive Autoliv Product Development System (“APS”) includes several key
check points during the process of developing new products that are designed to ensure that such products are well-built and have no
hidden defects. Through this process, the Company works closely with its suppliers and customers to set clear standards that help to
ensure robust component design and lowest cost for function in order to proactively prevent problems and ensure the Company delivers
only the best designs to the market.
6
The APS, based on the goals of improving quality and efficiency, is at the core of Autoliv’s manufacturing philosophy. APS integrates
essential quality elements, such as mistake proofing, statistical process control and operator involvement, into the manufacturing
processes so all Autoliv associates are aware of and understand the critical connection between themselves and the Company's lifesaving
products. This “zero-defect” principle extends beyond Autoliv to the entire supplier base. All of the Company's suppliers must accept the
strict quality standards in the global Autoliv Supplier Manual, which defines the Company's quality requirements and focuses on preventing
bad parts from being produced by its suppliers and helps eliminate defective intermediate products in the Company's assembly lines as
early as possible. In addition, Autoliv’s One Product One Process (“1P1P”) initiative is its strategy for developing and managing
standardization of both core products and customer-specific features, leading not only to improved quality, but also greater cost efficiency
and more efficient supply chain management.
IATF 16949:2016 is one of the automotive industry’s most widely used international standards for quality management. All Autoliv facilities
that ship products to OEMs are regularly certified according to the International Automotive Task Force (IATF) standards.
Environmental and Safety Regulations
For information on how environmental and safety regulations impact the Company's business, see “Risk Factors – ‘Our business may be
adversely affected by laws or regulations, including environmental, occupational health and safety, and other governmental regulations’,
“Global climate change could negatively affect our business”, “Our goals, targets, and ambitions related to sustainability and emissions
reduction, and our public statements and disclosures regarding them, expose us to numerous risks” and “Our business may be adversely
affected by changes in automotive safety regulations or concerns that drive further regulation of the automobile safety market”” in Item
1A and “Risks and Risk Management” in Item 7 of this Annual Report.
Climate change
The Company is committed to operating its business in an environmentally sustainable manner, meaning developing and producing
products in a resource efficient way while limiting the Company's environmental impact in the most material areas of greenhouse gas
emissions, energy use, waste, and water. With particular emphasis on climate action, the Company actively engages with its customers,
suppliers, and others to drive sustainable mobility.
In June 2021, the Company launched an updated climate strategy including new long-term climate ambitions:
•
Carbon neutrality in own operations by 2030, and
•
Net-zero emissions across our supply chain by 2040
These industry-leading climate ambitions are aligned with a 1.5°C trajectory and should position the Company as the supplier of choice
for the most climate-focused customers, helping to ensure the Company's competitiveness now and in the future. In addition to these
ambitions, the Company adopted Science Based Targets (SBTs) for 2030 covering its own operations as well as the supply chain. The
targets were approved in January 2022 and are available at the SBTi website.
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. The Company takes several actions to manage the raw material fluctuations, such as
competitive sourcing and looking for alternative materials. The Company is also taking necessary actions to gradually implement raw
materials with a lower carbon emission footprint.
For information on the sources and availability of raw materials, see "Operational Risks - Component costs" in Item 7 and “Risk Factors
– Changes in the source, cost, availability of, and regulations pertaining to raw materials and components may adversely affect our profit
margins” in Item 1A of this Annual Report.
Intellectual Property
The Company has developed a considerable amount of proprietary technology related to automotive safety systems and relies on many
patents to protect such technology. The Company's intellectual property plays an important role in maintaining its competitive position in
a number of the markets the Company serves. For information on the Company's use of intellectual property and its importance to the
Company, see “Risk Factors – If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability
to compete may be impaired” in Item 1A of this Annual Report.
7
Backlog
The Company has frame contracts with automobile manufacturers and such contracts are typically entered into up to three years before
the start of production of the relevant car model or platform and provide for a term covering the life of such car model or platform including
service parts after a vehicle model is no longer produced. These contracts, however, do not typically provide minimum quantities, firm
prices, or exclusivity but instead permit the automobile manufacturer to resource the relevant products at given intervals (or at any time)
from other suppliers. We sometimes refer to this backlog as our order intake or order book. For more information about order intake see
“Risk Factors – The cyclical nature of automotive sales and production can adversely affect our business. Our business is directly related
to LVP in the global market and by our customers, and automotive sales and LVP are the most important drivers for our sales” in Item 1A
of this Annual Report.
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. 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.
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. 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 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. 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.
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. 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. 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.
Regulatory Costs
The fitting of seatbelts in most types of motor vehicles is mandatory in almost all countries and many countries have strict laws regarding
the use of seatbelts while in vehicles. In addition, most developed countries require that seats in intercity buses and commercial vehicles
be fitted with seatbelts. In the U.S., federal legislation requires frontal airbags on the driver-side and the passenger-side of all new
passenger cars, sport utility vehicles, pickup trucks, and vans.
For information concerning the material effects on the Company's business relating to its compliance with government safety regulations,
see “Risk Factors – ‘Our business may be adversely affected by laws or regulations, including environmental, occupational health and
safety, and other governmental regulations’ and ‘Our business may be adversely affected by changes in automotive safety regulations or
concerns that drive further regulation of the automobile safety market’” in Item 1A of this Annual Report and in Item 7 under the section
“Risks and Risk Management” of this Annual Report.
8
Human Capital Management
The Company's drive for excellence is what makes Autoliv the world’s leading supplier of automotive safety systems. From the earliest
stages of product development to sales and design to the final delivery of the finished product, Autoliv's employees are driven by the
Company's mission to Save More Lives.
The successful execution of the Company's strategies relies on its ability to shape a quality and performance-oriented culture, and to
adapt quickly to sudden shifts in its circumstances, such as supply chain disruptions and geopolitical instability. As the Company moves
forward its workforce (employees plus temporary personnel) strives to respond with agility to new possibilities to grow and improve the
Company's business whilst delivering with excellence to its customers. The Company builds a winning team by focusing on creating a
work environment that attracts, retains, and engages its employees.
The 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 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. 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. An important
cornerstone of each employee’s growth is the ongoing dialogue between the team member and manager, which is summarized during
an annual Performance and Development Dialogue (PDD). During the year, 99% of targeted employees conducted a PDD with their
managers. To provide opportunities for professional and personal growth of the employees, the Company has a multitude of development
channels, including technical and specialist career paths, international assignments, and other such programs.
The Company provides market-based competitive compensation through its salary, annual incentive, and long-term incentive programs
and benefits packages that promote employee well-being across all aspects of their lives.
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. 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.
9
Labor Relations
The Company offers fair terms and conditions of employment. The Company's overall purpose, Code of Conduct, talent development
strategies, and employment policies support the principles in the United Nations Universal Declaration of Human Rights, and the
International Labor Organization’s Fundamental Principles and Labor Standards.
The Company considers its relationship with its employees to be good. 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.
Major unions in Europe to which some of the Company's employees belong include: IG Metall in Germany; Unite the union in the United
Kingdom; Confédération Générale des Travailleurs (CGT), Confédération Française Démocratique du Travail (CFDT), Confédération
Française de l’Encadrement Confédération Générale des cadres (CFE-CGC), Force Ouvrière (FO), Confédération Française des
Travailleurs Chrétiens (CFTC), Solidaires, Unitaires, Démocratiques (SUD) and Conféderation Autonome du Travail (CAT) in France;
Union General de Trabajadores (UGT), Union Sindical Obrera (USO), Comisiones Obereras (CCOO) and Confederacion General de
Trabajadores (CGT) in Spain; IF Metall, Unionen, Sveriges Ingenjörer and Ledarna in Sweden; Industriaal- ja Metallitöötajate
Ametiühingute Liit (IMTAL) in Estonia; Vasas Szakszervezeti Szövetség (Hungarian Metallworkers‘ Federation) in Hungary; Samorzadny
NiezalezĪny Zwiazek Zawodowy Pracownikow and Zakladowa Organizacja Związkowa NSZZ Solidarnosc in Poland; National Union of
Metal Workers South Africa (NUMSA) in South Africa; Union Générale des Travailleurs Tunisiens (UGTT) and Union des travailleurs
Tunisiens (UTT) in Tunisia, and Türk Metal Sendikasi in Turkey.
In addition, the Company’s employees in other regions are represented by the following unions: Unifor in Canada; Sindicato de Jornaleros
y Obreros Industriales y de la Industria Maquiladora de H.Matamoros, Tamaulipas (CTM); Sindicato Nacional de Trabajadores de la
Industria Metalúrgica y Similares, Federación Valle de Toluca (CTM); Sindicato Nacional “Nueva Cultura Laboral” de trabajadores de la
fabricación, manufactura, ensamble de autopartes mecánicas y eléctricas y componentes de la Industria Automotriz, C.R.O.C.; Sindicato
Nacional de Trabajadores de la Industria Arnesera, Eléctrica, Automotriz y Aeronáutica de la República Mexicana; “Nueva Cultura
Laboral” “de trabajadores de la fabricación, manufactura, ensamble de autopartes mecánicas y eléctricas y componentes de la industria
Automotriz (CROC); Sindicato Nacional de Trabajadores de la Industria de Autopartes en General y/o Similares, Conexos y sus Servicios
de la República Mexicana, in Mexico; Sindicato Industrial de Trabajadores de la Transformación, Construcción, Automotriz, Agropecuaria,
Plásticos y de la Industria en General, del Comercio y Servicios, Similares, anexos y conexos del Estado de Querétaro “Ángel Castillo
Resendiz”; Sindicato dos Metalúrgicos de Taubaté e Região in Brazil; Autoliv India Employees Association, Bangalore & Mysore in India;
Korean Metal Workers Union (FKTU) in South Korea; Autoliv Japan Roudou Kumiai in Japan, and All-China Federation of Trade Unions
in China.
In many European countries, Canada, Mexico, Brazil and South Korea, wages, salaries and general working conditions are negotiated
with local unions and/or are subject to centrally negotiated collective bargaining agreements. The terms of the Company's various
agreements with unions typically range between one to three years. Some of the Company's subsidiaries in Europe, Canada, Mexico,
Brazil and South Korea must negotiate with the applicable local unions with respect to important changes in operations, working and
employment conditions. Twice a year, members of the Company’s management conduct a meeting with the European Works Council
(EWC) to provide employee representatives with important information about the Company and a forum for the exchange of ideas and
opinions. In many Asia Pacific countries, the central or regional governments provide guidance each year for salary adjustments or
statutory minimum wage for workers. The Company's employees may join associations in accordance with local legislation and rules,
although the level of unionization varies significantly throughout its operations.
Available Information
The Company files or furnishes with the United States Securities and Exchange Commission (the “SEC”) periodic reports and
amendments thereto, which include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statements, and other information. Such reports, amendments, proxy statements, and other information are made available free of charge
on the Company's corporate website at www.autoliv.com and are available as soon as reasonably practicable after they are electronically
filed with the SEC. The Company's Corporate Governance Guidelines, committee charters, code of conduct, and other documents
governing the Company are also available on its corporate website at www.autoliv.com. The SEC maintains an internet site that contains
reports, proxy statements and other information at www.sec.gov. Hard copies of the above-mentioned documents can be obtained free
of charge by contacting the Company at: Autoliv, Inc., P.O. Box 70381, SE-107 24, Stockholm, Sweden.
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Item 1A. Risk 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. Our business is directly related to
LVP in the global market and by our customers, and automotive sales and LVP are the most important drivers for our sales
Automotive sales and production are highly cyclical and can be affected by general or regional economic or industry conditions, the level
of consumer demand, recalls and other safety issues, labor relations issues, technological changes, fuel prices and availability, vehicle
safety regulations and other regulatory requirements, governmental initiatives, trade agreements, political volatility (especially in energy
producing countries and growth markets), changes in interest rate levels and credit availability, and other factors. Some regions around
the world may at various times be more particularly impacted by these factors than other regions. Economic declines that result in a
significant reduction in automotive sales and production by our customers have in the past had, and may in the future have, a material
adverse effect on our business, results of operations, 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. 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. In addition, we base our growth projections in part on business awards, or order intake, made by our customers. However,
actual production orders from our customers may not approximate the awarded business or our estimated order intake. Any significant
reduction in automotive sales and/or LVP by our customers, whether due to general economic conditions or any other factors relevant to
sales or LVP, could have a material adverse effect on our business, results of operations, and financial condition.
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.
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. 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. As passive safety content per vehicle
is also an indicator of our sales development, should these trends continue, the average value of passive safety systems per vehicle
could decline.
We operate in a highly competitive market
The market for passive safety systems is highly competitive. We compete with a number of other companies that produce and sell similar
products. Among other factors, our products compete on the basis of price, quality, manufacturing and distribution capability, design and
performance, technological innovation, delivery, and service. Some of our competitors are subsidiaries (or divisions, units or similar) of
companies that are larger and have greater financial and other resources than us. Some of our competitors may also have a “preferred
status” as a result of special relationships or ownership interests with certain customers. Our ability to compete successfully depends, in
large part, on our success in continuing to innovate and manufacture products that have commercial success with our customer and end-
consumers, differentiating our products from those of our competitors, continuing to deliver quality products in the time frames required
by our customers, and maintaining best-cost production. 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. 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. If we are unsuccessful or are less successful than our competitors in predicting the course of
market development, developing innovative products, processes, and/or use of materials or adapting to new technologies or evolving
regulatory, industry or customer requirements, we may be placed at a competitive disadvantage. For example, our customers are
increasingly focused on developing electric vehicles. If we fail to be awarded business on electric vehicle models, or these electric vehicles
are not successful commercially, it will harm our future business prospects. Our competitive environment continues to change, including
increased competition from entrants outside the traditional automotive industry, creating uncertainty about the future competitive
landscape. 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. 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.
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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. Such contracts range from one year to the life of the
model, which is generally four to seven years. These contracts are often subject to renegotiation, sometimes as frequently as annually,
which may affect product pricing, and generally may be terminated by our customers at any time. Therefore, the discontinuation of, the
loss of business with respect to, or a lack of commercial success of a particular vehicle model or brand for which we are a significant
supplier could reduce our sales and harm our business prospects, operating results, cash flows, or financial condition.
We are working to expand our product offerings beyond light passenger vehicles to include other mobility safety solutions. If
we are not successful in expanding our product offerings or if it takes longer or costs are more than expected, it could harm
our business
The Company is working to expand its product offerings to focus on mobility safety solutions. Because mobility safety product offerings
are currently in the development stages, it is difficult for us to anticipate the level of sales they may generate. 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. Our product offerings might not receive customer acceptance if customer preferences shift to other products, and our future
success depends in part on our ability to anticipate and respond to these changes. If we are not successful in expanding our product
offerings or if it takes longer or costs are more than expected, it could negatively impact our financial results, competitive position, and
future business prospects.
RISKS RELATED TO OUR BUSINESS
We may incur material losses and costs as a result of product liability, warranty, and recall claims that may be brought against
us or our customers
We face risks related to product liability claims, warranty claims, and recalls in the event that any of our products actually or allegedly are
defective, fail to perform as expected, or the use of our products results, or is alleged to result, in bodily injury and/or property damage.
We may not be able to anticipate all of the possible performance or reliability problems that could arise with our products after they are
released to the market. Additionally, increasing regulation and reporting requirements regarding potentially defective products, particularly
in the U.S., may increase the possibility that we become involved in additional product liability or recall investigations or claims. See –
“Our business may be adversely affected by changes in automotive safety regulations or concerns that drive further regulation of the
automobile safety market”. Although we currently carry product liability and product recall insurance in excess of our self-insured amounts,
no assurance can be made that such insurance will provide adequate coverage against potential claims, such insurance is available or
will continue to be available in the appropriate markets, or that we will be able to obtain such insurance on acceptable terms in the future.
The cost of such insurance has risen in recent years and our self-insured amounts have risen as well. Although we have invested and
will continue to invest in our engineering, design, and quality infrastructure, we cannot give any assurance that our products will not suffer
from defects or other deficiencies or that we will not experience material warranty claims or product recalls. In the future, we could
experience material warranty or product liability losses and incur significant costs to process and defend these claims. A successful claim
brought against us in excess of available insurance coverage, if any, or a requirement to participate in any product recall, could have a
material adverse effect on our operating results, cash flows, or financial condition. Future recalls could result in costs not covered by
insurance in excess of our self-insurance, further government inquiries, litigation, reputational harm, and could divert management’s
attention away from other matters. The main variables affecting the costs of a recall are the number of vehicles ultimately determined to
be affected by the issue, the cost per vehicle associated with a recall, the determination of proportionate responsibility among the
customer, the Company, and any relevant sub-suppliers, and actual insurance recoveries. Every vehicle manufacturer has its own
practices regarding product recalls and other product liability actions relating to its suppliers, and the performance and remedial
requirements vary between jurisdictions. Due to recall activity in the automotive industry over the past decade, some vehicle manufactures
have become even more sensitive to product recall risks. 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. As suppliers become
more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are
increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Product recalls in our industry,
even when they do not involve our products, can harm the reputations of our customers, competitors, and us, particularly if those recalls
cause consumers to question the safety or reliability of products similar to those we produce. In addition, with global platforms and
procedures, vehicle manufacturers are increasingly evaluating our quality performance on a global basis; any one or more quality,
warranty or other recall issue(s) (including issues affecting few units and/or having a small financial impact) may cause a vehicle
manufacturer to implement measures which may have a severe impact on our operations, such as a global, temporary or prolonged
suspension of new orders. 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. A warranty, recall or product liability claim brought against us in excess of our available
insurance may have a material adverse effect on our business. Vehicle manufacturers are also increasingly requiring their outside
suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle
warranties. A vehicle manufacturer may attempt to hold us responsible for some or the entire repair or replacement costs of defective
products under new vehicle warranties when the product supplied did not perform as represented. Accordingly, the future costs of warranty
claims by our customers may be material. However, the final amounts determined to be due related to these matters could differ materially
from our recorded warranty estimates and our business prospects, operating results, cash flows or financial condition may be materially
impacted as a result. In addition, as we adopt new technology, we face an inherent risk of exposure to the claims of others that we have
allegedly violated their intellectual property rights. We cannot assure that we will not experience any material warranty, product liability or
12
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”.
Escalating pricing pressures from our customers may adversely affect our business
The automotive industry continues to experience aggressive pricing pressure from customers. This trend is partly attributable to the major
automobile manufacturers’ strong purchasing power. As with other automotive component manufacturers, we are often expected to quote
fixed prices or are forced to accept prices with annual price reduction commitments for long-term sales arrangements or discounted
reimbursements for engineering work. Price reductions have impacted our sales and profit margins and are expected to continue to do
so in the future. 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. 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. If we are unable to offset continued price reductions through improved operating efficiencies and reduced expenditures, these
price reductions may have a material adverse effect on our business prospects, operating results, cash flows or financial condition.
We could experience disruption in our supply or delivery chain, which could cause one or more of our customers to halt or
delay production
We, as with other component manufactures in the automotive industry, ship our products to customer vehicle assembly facilities
throughout the world on a “just-in-time” basis for our customers to maintain low inventory levels. Our suppliers (external suppliers as well
as our own production sites) use a similar method in providing raw materials to us. However, this “just-in-time” method makes the logistics
supply chain in our industry very complex and vulnerable to disruption. 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. Inflation and pricing pressures have also negatively
impacted companies in our supply chain. Additionally, we may experience disruptions if there are newly imposed trade restrictions or
delays in customs processing, including if we are unable to obtain government authorization to export or import certain materials, including
materials that may be viewed as dangerous such as the propellant used for our inflators. As we continue to expand in growth markets,
the risk of such disruptions is heightened. The unavailability of even a single small subcomponent necessary to manufacture one of our
products, for whatever reason, could force us to cease production of that product, possibly for a prolonged period. Similarly, a potential
quality issue could force us to halt deliveries while we validate the products. Even when products are ready to be shipped, or have been
shipped, delays may arise before they reach our customer. Also, similar difficulties for other suppliers may force our customers to halt
production, which may in turn impact our sales shipments to such customers. When we fail to timely deliver, we may have to absorb our
own costs for identifying and resolving the ultimate problem as well as expeditiously producing and shipping replacement components or
products. Generally, we must also carry the costs associated with “catching up,” such as overtime and premium freight. If we are the
cause of a customer being forced to halt production, the customer may seek to recoup all of its losses and expenses from us. These
losses and expenses could be very significant and may include consequential losses such as lost profits. Where a customer halts
production because of another supplier failing to deliver on time, we may not be fully compensated, if at all. Thus, any such supply chain
disruptions could severely impact our operations and/or those of our customers and force us to halt production for prolonged periods of
time which could expose us to material claims for compensation and have a material adverse effect on our business prospects, operating
results, or financial condition.
Adverse developments affecting our suppliers could harm our profitability
Any significant disruption in our supplier relationships, particularly relationships with single-source suppliers, could harm our profitability.
Furthermore, some of our suppliers may not be able to sufficiently manage the currency commodity cost volatility and/or sharply changing
volumes while still performing as we expect. For example, recalls or field actions from our customers can stress the capacity of our supply
chain and may inhibit our ability to timely deliver order volumes. We may incur costs as we try to make contingency plans to manage the
risks for delivery delays, production delays, production issues or delivery of non-conforming products by our suppliers.
Changes in the source, cost, availability of and regulations pertaining to raw materials and components may adversely affect
our profit margins
Our business uses a broad range of raw materials and components in the manufacture of our products, nearly all of which are generally
available from a number of qualified suppliers. Our industry may be affected from time to time by limited supplies or price fluctuations of
certain key components and materials. Strong worldwide demand for certain raw materials has had a significant impact on prices and
short-term availability in recent years. 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. Inflation is currently high world-wide and may continue for some time, which could lead to fluctuations
in interest rates. 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. 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. In addition, no
assurances can be given that the magnitude and duration of such cost increases or any future cost increases could not have a larger
adverse impact on our profitability and consolidated financial position than currently anticipated. Furthermore, if costs for raw materials
go down, the price for our products may decrease as well as the price is indexed to the cost of raw materials. Additionally, various
government regulators require companies that manufacture products containing certain minerals and their derivatives that are known as
“conflict minerals”, originating from the Democratic Republic of Congo or adjoining countries to perform due diligence and report the
source of such materials. There are significant resources associated with complying with these requirements, including diligence efforts
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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. As there may be only a limited number of suppliers able to offer certified “conflict free” conflict minerals, there
can be no assurance that we will be able to obtain necessary conflict free minerals from such suppliers in sufficient quantities or at
competitive prices. We may face reputational challenges if we determine that certain of our products contain minerals not determined to
be conflict free or if we are unable to sufficiently verify the origins for all minerals used in our products through the procedures we may
implement. Furthermore, our customers are also increasingly requiring us to track sustainable sources of certain raw materials, which
also requires additional diligence efforts and there can be no assurance that we will be able to obtain these materials in a cost-efficient
and sustainable manner. Accordingly, these rules and customer requirements may adversely affect our business prospects, operating
results, cash flows, or financial condition.
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
We are dependent on a few large customers with strong purchasing power. 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. Although business with any given customer is typically split into several contracts (either on the
basis of one contract per vehicle model or on a broader platform basis), the loss of business from any of our major customers (whether
by lower overall demand for vehicles, cancellation of existing contracts or the failure to award us new business) could have a material
adverse effect on our business, results of operations, and financial condition. Similarly, further consolidation of our customers in the future
could make us more reliant upon a smaller group of customers for a significant portion of our consolidated sales and negatively impact
our bargaining power when contracting with such customers. Customers may put us on a “new business hold,” which would limit our
ability to quote or be awarded all or part of their future vehicle contracts if quality or other issues arise in the vehicles for which we were
a supplier. This could have a significant negative impact on our order intake. Such new business holds range in length and scope and
are generally accompanied by a certain set of remedial conditions that must be met before we are eligible to bid for new business. Meeting
any such conditions within the prescribed timeframe may require additional Company resources. A failure to satisfy any such conditions
may have a material adverse impact on our financial results in the long term. There is a risk that one or more of our major customers may
be unable to pay our invoices as they become due or that a customer will simply refuse to make such payments given its financial
difficulties. 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. Additional information concerning our major customers is included in Note 20, Segment Information, of the
Consolidated Financial Statements in this Annual Report.
Our inability to effectively manage the timing, quality and costs of new program launches could adversely affect our financial
performance
To compete effectively in the automotive supply industry, we must be able to launch new products to meet our customers’ timing,
performance, and quality standards. At times, we face an uneven number of launches and some launches, for various reasons, may have
shortened launch lead times. We cannot provide assurance that we will be able to install and certify the equipment needed to produce
products for new programs in time for the start of production, or that the transitioning of our manufacturing facilities and resources to full
production for such new programs will not impact production rates or other operational efficiency measures at our facilities. In addition,
we cannot provide assurance that our customers will execute on schedule the launch of their new product programs, for which we might
supply products. Additionally, as a Tier 1 supplier, we must effectively coordinate the activities of numerous suppliers in order to launch
programs successfully. Given the complexity of new program launches, especially involving new and innovative technologies, we may
experience difficulties managing product quality, timeliness and associated costs. In addition, new program launches require a significant
ramp up of costs; however, the sales related to these new programs generally are dependent upon the timing and success of the
introduction of new vehicles by the Company’s customers. Our inability to effectively manage the timing, quality and costs of these new
program launches could adversely affect our business prospects, operating results, cash flows, or financial condition.
Changes in our product mix may impact our financial performance
We sell products that have varying profit margins. 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. If actual results vary significantly from this projected product
and geographic mix of sales, our operating results and financial condition could be negatively impacted.
14
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.
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. In such matters, government agencies or private parties may seek to recover
from us very large, indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive damages) or
seek to limit our operations in some way. The possibility exists that claims may be asserted against us and their magnitude may remain
unknown for long periods of time. These types of lawsuits could require a significant amount of management’s time and attention and a
substantial legal liability or adverse regulatory outcome and the substantial expenses to defend the litigation or regulatory proceedings
may have a material adverse effect on our customer relationships, business prospects, reputation, operating results, cash flows, and
financial condition. No assurances can be given that such proceedings and claims will not have a material adverse impact on our
profitability and consolidated financial position or that our established reserves or our available insurance will mitigate such impact.
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. 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 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. 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.
Work stoppages, slow-downs or other labor issues at our customers’ facilities or at our facilities could adversely affect our
operations
Because the automotive industry relies heavily on “just-in-time” delivery of components during the assembly and manufacture of vehicles,
a work stoppage or slow-down at one or more of the Company’s facilities could have a material adverse effect on our business. Similarly,
if any of our customers were to experience a work stoppage or slow-down, that customer may halt or limit the purchase of our products.
Similarly, a work stoppage or slow-down at another supplier could interrupt production at one of our customers’ facilities which would
have the same effect. While labor contract negotiations at our facilities historically have rarely resulted in work stoppages, no assurances
can be given that we will be able to negotiate acceptable contracts with these unions or that our failure to do so will not result in work
stoppages. A work stoppage or other labor disruption at one or more of our facilities or our customers’ facilities could cause us to shut
down production facilities supplying these products, which could have a material adverse effect on our business, results of operations,
and financial condition.
Our ability to operate our company effectively could be impaired if we fail to attract and retain executive officers and other key
personnel
Our ability to operate our business and implement our strategies effectively depends, in part, on the efforts of our executive officers and
other key employees. In addition, our future success will depend on, among other factors, our ability to attract, develop, and retain other
qualified personnel, particularly engineers and other employees with software and technical expertise. The loss of the services of any of
our executive officers or other key employees or the failure to attract, develop, or retain other qualified personnel could have a material
adverse effect on our business.
Restructuring, efficiency, and strategic initiatives and capacity alignments are complex and difficult and at any time additional
restructuring steps may be necessary, possibly on short notice and at significant cost
Our restructuring, efficiency, and strategic initiatives and capacity alignments include efforts to adjust our manufacturing capacity, direct
and indirect labor workforce, and cost structure to meet current and projected operational and market requirements, including plant
closures, transfer of sourcing to best cost countries, consolidation of our supplier base, and standardization of products to reduce our
overhead costs and consolidate our operational centers. The successful implementation of our restructuring activities and capacity
alignments will involve sourcing, logistics, technology, and employment arrangements. Because these restructuring, efficiency, and
strategic initiatives and capacity alignments can be complex, there may be difficulties or delays in the implementation of any such
initiatives and capacity alignments or they may not be immediately effective, resulting in an adverse material impact on our performance.
In addition, there is a risk that inflation, high-turnover rates, and increased competition may reduce the efficiencies now available in best-
cost countries to levels that no longer allow for cost-beneficial restructuring opportunities. Therefore, there can be no assurances that any
future restructurings or capacity alignments will be completed as planned or achieve the desired results. See Note 12, Restructuring, to
the Consolidated Financial Statements in this Annual Report.
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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. If LVP were to remain on low levels for an extended period of time, we would experience a
significantly negative cash flow. Similarly, if cash losses for customer defaults rise sharply, we would experience a negative cash flow.
Such negative cash flow could result in our having insufficient funds to continue our operations unless we can procure external financing,
which may not be possible. Our access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient
amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors. 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. 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. Further, even our existing
unutilized credit facilities may not be available to us as agreed, or only at additional cost, if participating banks are unable to raise the
necessary funds, where, for instance, financial markets are not functioning as expected or one or more banks in our principal credit facility
syndicate were to default. As a result, we cannot assure you that we will continue to have sufficient liquidity to meet our operating needs.
In the event that we do not have sufficient external financing, we may be required to seek additional capital, sell assets, reduce or cut
back our operating activities or otherwise alter our business strategy. 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.
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. Although our
significant credit facilities and debt agreements do not have any financial covenants, our level of indebtedness will have several important
effects on our future operations, including, without limitation: a portion of our cash flows from operations will be dedicated to the payment
of any interest or could be used for amortization required with respect to outstanding indebtedness; increases in our outstanding
indebtedness and leverage will increase our vulnerability to adverse changes in general economic and industry conditions, as well as to
competitive pressure; depending on the levels of our outstanding debt, our ability to obtain additional financing for working capital,
acquisitions, capital expenditures, general corporate and other purposes may be limited; and potential future tightening of the availability
of capital both from financial institutions and the debt markets may have an adverse effect on our ability to access additional capital.
Governmental restrictions may impact our business adversely
Some of our customers are (or may be) owned by a governmental entity, receive various forms of governmental aid or support, or are
subject to governmental influence in other forms, which may impact us as a supplier to these customers. As a result, they may be required
to partner with local entities or procure components from local suppliers to achieve a specific local content or be subject to other
restrictions regarding localized content or ownership. The nature and form of any such restrictions or protections, whatever their basis, is
very difficult to predict as is their potential impact. However, they are likely to be based on political rather than economical or operational
considerations and may materially impact our business.
Impairment charges relating to our assets, goodwill and other intangible assets could adversely affect our financial performance
We periodically review the carrying value of our assets, goodwill and other intangible assets for impairment indicators. If one or more of
our customers’ facilities cease production or decrease their production volumes, the assets we carry related to our facilities serving such
customers may decrease in value because we may no longer be able to utilize or realize them as intended. Where such decreases are
significant, such impairments may have a material adverse impact on our financial results. We monitor the various factors that impact the
valuation of our goodwill and other intangible assets, including expected future cash flow levels, global economic conditions, market price
for our stock, and trends with our customers. Impairment of goodwill and other identifiable intangible assets may result from, among other
things, deterioration in our performance and especially the cash flow performance of these goodwill assets, adverse market conditions
and adverse changes in applicable laws or regulations. If there are changes in these circumstances or the other variables associated with
the estimates, judgments and assumptions relating to the valuation of goodwill, when assessing the valuation of our goodwill items, we
may determine that it is appropriate to write down a portion of our goodwill or intangible assets and record related non-cash impairment
charges. 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.
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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. We are required to
make certain year-end assumptions regarding our pension plans. Our pension obligations are dependent on several factors, including
factors outside our control such as changes in interest rates, the market performance of the diversified investments underlying the pension
plans, actuarial data and adjustments and an increase in the minimum funding requirements or other regulatory changes governing the
plans. Adverse equity market conditions and volatility in the credit market may have an unfavorable impact on the value of our pension
assets and our future estimated pension liabilities. Internal factors such as an adjustment to the level of benefits provided under the plans
may also lead to an increase in our pension liability. If these or other internal and external risks were to occur, alone or in combination,
our required contributions to the plans and the costs and net liabilities associated with the plans could increase substantially and have a
material effect on our business. Information concerning our benefit plans is included in Note 19, Retirement Plans, of the Consolidated
Financial Statements in this Annual Report.
We may not be able to, or we may decide not to, pay dividends or repurchase shares at a level anticipated by our shareholders,
which could reduce shareholder returns
The extent to which we pay dividends on our common stock and repurchase our common stock in the future is at the discretion of our
Board of Directors and depends upon a number of factors, including our earnings, financial condition, cash and capital needs,
indebtedness and leverage, and general economic or business conditions. 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.
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. In addition, a greater number of our employees are working remotely which may increase cybersecurity
vulnerabilities and risk to our IT networks and systems. The secure operation of our IT networks and systems and the proper processing
and maintenance of this information are critical to our business operations. We have been, and likely will continue to be, subject to cyber-
attacks. 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. The ever-evolving threats mean we and our third-party service providers and vendors must continually
evaluate and adapt our respective systems and processes and overall security environment, as well as those of any companies we
acquire. There is no guarantee that these measures will be fully implemented, complied with, or effective in safeguarding against all data
security breaches, system compromises or misuses of data. Our security measures may be breached due to human or technological
error, employee malfeasance, system malfunctions or attacks from uncoordinated individuals or sophisticated and targeted measures
known as advanced persistent threats, directed at the Company, its products, its customers, its third-party service providers, and/or other
entities with whom we do business. Because techniques used to obtain unauthorized access or to sabotage systems change frequently
and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement
adequate preventative measures. Disruptions and attacks on our IT systems or the systems of third parties storing our data or employee
malfeasance or human or technological error could result in the misappropriation, loss, destruction or corruption of our critical data and
confidential or proprietary information, personal information of our employees, the leakage of our or our customers’ confidential
information, improper use of our systems and networks, production downtimes and both internal and external supply shortages, which
could have a material adverse effect on our results of operations. It may also result in the theft of intellectual property or other
misappropriation of assets, or otherwise compromise our confidential or proprietary information and materially disrupt our operations. The
potential consequences of a material cybersecurity incident include reputational damage, damaged customer relationships, loss of
revenue, lower order intake in the future, theft of intellectual property, litigation with third parties, diminution in the value of our investment
in research, development and engineering, diversion of the attention of management away from the operation of our business and
increased cybersecurity protection and remediation costs, legal claims and liability, regulatory scrutiny, sanctions, fines or penalties (which
may not be covered by our insurance policies), negative publicity, release of sensitive and/or confidential information, increases in
operating expenses, or lost revenues which in turn could adversely affect our competitiveness and results of operations. To the extent
that any disruption or security breach results in a misappropriation, loss, destruction or corruption of our customer’s information, it could
affect our relationships with our customers, create significant expense for us to investigate and remediate damage, lead to claims against
the Company and ultimately harm our business, strategy, result of operations, or financial condition. In addition, we may be required to
incur significant costs to protect against damage caused by these disruptions or security breaches in the future. 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. In addition, as the regulatory environment related to information security, data collection and use,
and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with
those requirements could result in additional costs. Furthermore, our technology systems are vulnerable to damage or interruption from
natural disasters, power loss and telecommunication failures. 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.
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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. Despite the implementation of security measures at third party locations, these IT systems, data centers and
cloud services are also vulnerable to security breaches or other disruptions. Additionally, we and certain of our third-party vendors, collect
and store personal information in connection with human resources operations and other aspects of our business. 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.
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. There continues to be a lack of consistent climate legislation, which creates economic and regulatory
uncertainty. Any future regulations aimed at mitigating climate change may negatively impact the prices of raw materials and energy, as
well as the demand for certain of our customer’s products which could in turn impact demand for our products and impact our results of
operations. The costs of compliance and any changes to our operations mandated by new or amended laws, may be significant. We may
also face unexpected delays in obtaining permits and approvals required by such laws in connection with our manufacturing facilities,
which would hinder our operation of these facilities. Furthermore, any violations of these laws may result in substantial fines and penalties,
remediation costs, third party damages, or a suspension or cessation of our operations. We also face physical and transition risks from
climate change. The manifestations of climate change, such as extreme weather conditions or more frequent extreme weather events,
including wildfires, flooding, water stress and extreme heat, could disrupt our operations, damage our facilities, disrupt our supply chain,
including our customers or suppliers, impact the availability and cost of materials needed for manufacturing or increase insurance and
other operating costs. As a result, severe weather or a natural disaster that results in a prolonged disruption to our operations, or the
operations of our customers or suppliers, could have a material adverse effect on our operating results, cash flows or financial condition.
Our goals, targets and ambitions related to sustainability and emissions reduction, and our public statements and disclosures
regarding them, expose us to numerous risks
We have developed, and will continue to develop and set, goals, targets, ambitions and other objectives related to sustainability matters,
including our net-zero emission targets both for ourselves and our supply chain. 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. Our efforts to research, establish,
accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial,
legal, and other risks. Additionally, greenhouse gas emissions, particular emissions that come from individuals and entities up and down
the value chain (otherwise known as Scope 3 emissions), are very difficult to estimate and our estimates may be materially different than
actual emissions. Additionally, accepted methodologies or regulatory requirements for estimating emissions, particularly Scope 3
emissions, continue to evolve. The manner in which we estimate and disclose Scope 3 emissions may differ from other companies and
may be different than future regulatory requirements, and currently, we do not include downstream Scope 3 emissions in our targets and
ambitions. If future governmental regulations require us to modify the basis of our Scope 3 emissions disclosure, our historically disclosed
Scope 3 emissions may change materially. Our ability to achieve any stated goal, target, ambition or objective, including with respect to
emissions reduction, is subject to numerous factors and conditions, some of which are outside of our control.
Our business may face increased scrutiny from investors and other stakeholders related to our sustainability activities, including the goals,
targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not
meet investor or other stakeholder expectations and standards, which continue to evolve, our reputation, our ability to attract or retain
employees, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived
failure to pursue or fulfill our sustainability-focused goals, targets, ambitions and objectives, to comply with ethical, environmental, or other
standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we
announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and
private litigation.
RISKS RELATED TO INTERNATIONAL OPERATIONS
Our business is exposed to risks inherent in international operations
We currently conduct operations in various countries and jurisdictions, including locating certain of our manufacturing and distribution
facilities internationally, which subjects us to the legal, political, regulatory and social requirements and economic conditions in these
jurisdictions. Some of these countries are considered growth markets and emerging markets. International sales and operations,
especially in growth markets, subject us to certain risks inherent in doing business abroad, including: exposure to local economic
conditions; unexpected changes in laws, regulations, trade, or monetary or fiscal policy, including interest rates, foreign currency
exchange rates, and changes in inflation rates; foreign tax consequences; inability to collect, or delays in collecting, value-added taxes
and/or other receivables associated with remittances and other payments by subsidiaries; exposure to local political turmoil and
challenging labor conditions; changes in general economic and political conditions in countries where we operate, particularly in emerging
markets; expropriation and nationalization; enforcing legal agreements or collecting receivables through foreign legal systems; wage
inflation; currency controls, including lack of liquidity in foreign currency due to governmental restrictions, trade protection policies and
currency controls, which may create difficulty in repatriating profits or making other remittances; compliance with the requirements of an
increasing body of applicable anti-bribery laws; reduced intellectual property protection in various markets; investment restrictions or
requirements; and the imposition of product tariffs and the burden of complying with a wide variety of international and U.S. export laws.
The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. The Organization for Economic Co-operation and
Development (“OECD”) continues its base erosion and profit shifting (“BEPS”) project begun in 2015 with new proposals for a global
minimum tax, further development of a coordinated set of rules for taxation and the allocation of taxing rights between jurisdictions. These
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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.
Changes in tax laws or policies by the U.S. or foreign jurisdictions could result in a higher effective tax rate on our worldwide earnings,
and any such change could have a material adverse effect on our business prospects, cash flows, operating results and financial
condition.
Our international operations also depend upon favorable trade relations between the countries where we manufacture and sell products
and those foreign countries in which our customers and suppliers have operations. 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. 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. Changes in national policy, other governmental action related to tariffs or international trade agreements, changes in
social, political regulatory, and economic conditions or in laws and policies governing foreign trade, manufacturing, development and
investment in the territories and countries where the Company currently manufactures and sells products, and any resulting negative
sentiments towards the Company as a result of such changes could depress economic activity and restrict our access to suppliers or
customers and have a material adverse effect on our cash flows, operating results and financial condition.
Increasing our manufacturing footprint in the growth markets and our business relationships with automotive manufacturers in these
markets are particularly important elements of our strategy. 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. Changes in national policy or
continued uncertainty could depress economic activity and restrict our access to suppliers or customers and have a material adverse
effect on our cash flows, operating results and financial condition. Additionally, such trade restrictions or material increases in tariffs could
impact our targets, earnings guidance, and estimates. The ultimate impact of any tariffs, including any related responses, are uncertain
and will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount,
scope, and nature of the tariffs. Any or all of these actions could adversely affect our business, financial condition and cash flows.
Increasing our manufacturing footprint in the growth markets and our business relationships with automotive manufacturers in these
markets are particularly important elements of our strategy. 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. Changes in national policy or
continued uncertainty could depress economic activity and restrict our access to suppliers or customers and have a material adverse
effect on our cash flows, operating results and financial condition.
Unfavorable 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. Although the length and impact of the ongoing war/conflicts is highly unpredictable, it exacerbated volatility in commodity
prices, energy prices, inflationary pressures, credit markets, foreign exchange rates and supply chain disruptions. Furthermore,
governments in the United States, United Kingdom, Canada, and European Union have each imposed export controls on certain products
and financial and economic sanctions on certain industry sectors and parties in Russia. Existing or additional sanctions could further
adversely affect the global economy and further disrupt the global supply chain. 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. 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. 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.
Significant changes in the United States Mexico Canada Agreement (USMCA) could adversely affect our financial performance
The U.S., Mexico and Canada entered into the USMCA, a successor to the North American Free Trade Agreement (NAFTA), effective
as of July 1, 2020. The USMCA changed the automotive rules of origin that dictate what percentage of an automobile must be built from
parts that originated from countries in the NAFTA region. The rules require that at least 75% of parts be made in North America and that
40-45% of an automobile must be made by workers earning at least $16 an hour. Reflective of the automotive industry, our vehicle parts
manufacturing facilities in the U.S., Mexico and Canada are highly dependent on duty-free trade amongst the U.S., Mexico, and Canada.
The USMCA will undergo a joint review in 2026. If the USMCA is earlier terminated, or otherwise substantially amended, it could have a
material adverse impact on our financial performance. The imposition of customs duties on imports into the U.S., Mexico or Canada could
negatively impact our financial performance.
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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. We also export components and products that are subject
to certain trade-related U.S. laws, including the U.S. Export Administration Act and various economic sanctions programs administered
by the U.S. Treasury’s Office of Foreign Assets Control. Although we have procedures and policies in place that should mitigate the risk
of violating these laws, there is no guarantee that they will be sufficiently effective. If and when we acquire new businesses, we may not
be able to ensure that the pre-existing controls and procedures meant to prevent violations of these laws were effective, and violations
may occur if we are unable to timely implement corrective and effective controls and procedures when integrating newly acquired
businesses. Any allegations of noncompliance with these laws could harm our reputation, divert management attention and result in
significant expenses, and could therefore materially harm our business prospects, operating results and financial condition.
Our business in Asia is subject to aggressive competition and is sensitive to economic, market, and political conditions
We operate in the automotive supply market throughout Asia including the highly competitive markets in China, South Korea, and India.
In each of these markets we face competition from both international and smaller domestic manufacturers. Due to the significance of the
Asian markets for our profit and growth, we are exposed to risks in China, South Korea, and India. We anticipate that additional
competitors, both international and domestic, may seek to enter the Chinese, South Korean, and/or Indian markets resulting in increased
competition. Increased competition may result in lower sales volumes, price reductions, reduced margins and our inability to gain or hold
market share. There have been periods of increased market volatility and moderation in the levels of economic growth in China, which
resulted in periods of lower automotive production growth rates in China than those previously experienced. Our business in Asia is
sensitive to economic and market conditions that drive automotive sales volumes in China, South Korea, and India and may be impacted
if there are reductions in vehicle demand in those markets. There are also trade and political tensions between China and other countries
in the western world. If we are unable to maintain our position in the Asian markets, the pace of growth slows, or vehicle sales in these
markets decrease, our business prospects, operating results and financial condition could be materially adversely affected.
Global integration may result in additional risks
Because of our efforts to manage costs by integrating our operations globally, we face the additional risk that, should any of the other
risks discussed herein materialize, the negative effects could be more pronounced. For example, while supply delays of a component
have typically only affected a few customer vehicle models, such a delay could now affect several vehicle models of several customers
in several geographic areas. Similarly, any recall or warranty issue we face due to a product defect or failure is now more likely to involve
a larger number of units in several geographic areas.
Our business faces exchange rate risks
As a result of our global presence, a significant portion of our revenues and expenses are denominated in currencies other than the U.S.
dollar. We are therefore subject to foreign currency risks and foreign exchange exposure. Such risks and exposures include: transaction
exposure, which arises because the cost of a product originates in one currency and the product is sold in another currency; revaluation
effects, which arise from valuation of assets denominated in other currencies than the reporting currency of each unit; translation exposure
in the income statement, which arises when the income statements of non-U.S. subsidiaries are translated into U.S. dollars; translation
exposure in the balance sheet, which arises when the balance sheets of non-U.S. subsidiaries are translated into U.S. dollars; and
changes in the reported U.S. dollar amounts of cash flows. We cannot predict exchange rate volatility or the extent of its impact on our
future financial results. We typically denominate foreign transactions in foreign currencies to achieve a natural hedge. However, a natural
hedge cannot be achieved for all our currency flows; therefore, a net transaction exposure remains within the group. The net exposure
can be significant and creates a transaction exposure risk for the Company. The Company does not hedge translation exposure. However,
we do engage in foreign exchange rate hedging from time to time related to foreign currency transactions. For additional information, see
Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk - Currency risks.
RISKS RELATED TO ACQUISITIONS
We face risks in connection with acquisitions, joint ventures, partnerships, and other strategic transactions
Our growth has been enhanced through strategic transactions, including acquisitions of businesses, products and technologies,
partnerships, strategic alliances, and joint development agreements that we believe will complement our business. We regularly evaluate
acquisition opportunities, frequently engage in acquisition discussions, conduct due diligence activities in connection with possible
acquisitions, and, where appropriate, engage in acquisition negotiations. We may not be able to successfully identify suitable acquisition
and joint venture candidates or complete transactions on acceptable terms, integrate acquired operations into our existing operations or
expand into new markets. Our failure to identify suitable strategic transactions may restrict our ability to grow our business. These strategic
transactions also involve numerous additional risks to us and our investors, including: risks related to retaining acquired management
and employees; difficulties in integrating acquired technologies, products, operations, services and personnel with our existing
businesses; diversion of our management’s attention from other business concerns; assumption of contingent liabilities; potential adverse
financial impacts, including from the amortization of expenses related to intangible assets and from potential impairment of goodwill;
incurrence of indebtedness; and potential damage to existing customer relationships or lack of customer acceptance or inability to attract
new customers as a result of these transactions. 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. 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.
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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. 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. 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. We do not expect the expiration of
any single patent or license to have a material adverse effect on our business, operating results and financial condition. Developments
or assertions by or against us relating to intellectual property rights could negatively impact our business. We primarily protect our
innovations with patents and vigorously protect and defend our patents, trademarks and know-how against infringement and unauthorized
use. If we are not able to protect our intellectual property and our proprietary rights and technology, we could lose those rights and incur
substantial costs policing and defending those rights. We also generate license revenue from these patents, which we may lose if we do
not adequately protect our intellectual property and proprietary rights. Our means of protecting our intellectual property, proprietary rights
and technology may not be adequate, and our competitors may independently develop technologies that are similar or superior to our
proprietary technologies, duplicate our technologies, or design around the patents we own or license. In addition, the laws of some foreign
countries do not protect our proprietary rights to as great an extent as the laws of the U.S. and we may encounter significant problems in
protecting and defending our intellectual property rights in certain foreign jurisdictions. This could make it difficult for us to stop the
infringement of our patents or misappropriation of our other intellectual property rights. Proceedings to enforce our patent rights in foreign
jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. Accordingly, our
efforts to protect our intellectual property rights in such countries may be inadequate.
We may not be able to protect our proprietary technology and intellectual property rights, which could result in the loss of our
rights or increased costs
Although we believe that our products and technology do not infringe the proprietary rights of others, third parties may assert infringement
claims against us in the future. 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. Further, we expect to continue to expand our products and services
and expand into new businesses, including through developing new products, acquisitions, joint ventures and joint development
agreements, which could increase our exposure to patent and other intellectual property claims from competitors and other parties. If
claims alleging patent, copyright or trademark infringement are brought against us and are successfully prosecuted against us, they could
result in substantial costs. If a successful claim is made against us and we fail to develop non-infringing technology, our business,
operating results and financial condition could be materially adversely affected. In addition, certain of our products utilize components
that are developed by third parties and licensed to us. If claims alleging patent, copyright or trademark infringement are brought against
such licensors and successfully prosecuted, they could result in substantial costs, and we may not be able to replace the functions
provided by these licensors. Alternate sources for the technology currently licensed to us may not be available in a timely manner, may
not provide the same functions as currently provided or may be more expensive than products currently used. We may develop proprietary
information through our in-house research and development efforts, consulting arrangements or research collaborations with other entities
or organizations. We may seek to protect this proprietary information by entering into confidentiality agreements or consulting, services
or employment agreements that contain non-disclosure and non-use provisions with our employees, consultants, scientific advisors and
other third parties. However, we may fail to enter into the necessary agreements, and even if entered into, these agreements may be
breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information.
We may not be able to respond quickly enough to changes in technology and technological risks and to develop our intellectual
property into commercially viable products
Changes in legislative, regulatory, or industry requirements or in competitive technologies may render certain of our products obsolete or
less attractive to our customers. We currently license certain proprietary technology to third parties and, if such technology becomes
obsolete or less attractive, those licensees could terminate our license agreements, which could adversely affect our results of operations.
Our ability to anticipate changes in technology and regulatory standards and to successfully develop and introduce new and enhanced
products on a timely basis will be a significant factor in our ability to remain competitive. We cannot provide assurance that we will be
able to achieve the technological advances that may be necessary for us to remain competitive or that certain of our products will not
become obsolete. We are also subject to the risks generally associated with new product introductions and applications, including lack of
market acceptance, delays in product development and failure of products to operate properly. As part of our business strategy, we may
from time to time seek to acquire businesses or assets that provide us with additional intellectual property. 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.
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. In addition to risks
related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as
open source licensors generally do not provide warranties or controls on origin of the software. Additionally, open source licenses typically
require that source code subject to the license be made available to the public and that any modifications or derivative works to open
source software continue to be licensed under open source licenses. These open source licenses typically mandate that proprietary
21
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.
We take steps to ensure that our proprietary software is not combined with, and does not incorporate, open source software in ways that
would require our proprietary software to be subject to an open source license. However, few courts have interpreted open source
licenses; therefore, the way these licenses may be interpreted and enforced is subject to some uncertainty.
RISKS RELATED TO GOVERNMENT REGULATIONS AND TAXES
Our business may be adversely affected by laws or regulations, including environmental, occupational health and safety, and
other governmental regulations
We are subject to various federal, state, local and foreign laws and regulations, including those related to the requirements of
environmental, occupational health and safety, financial, and other matters. We cannot predict the substance or impact of pending or
future legislation or regulations, or the application thereof. The introduction of new laws or regulations or changes in existing laws or
regulations, or the interpretations thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our
actions and adversely affect our business prospects, operating results, cash flows or financial condition. Our operations are subject to
environmental and safety laws and regulations governing, among other things, emissions to air, discharges to waters and the generation,
handling, storage, transportation, treatment and disposal of waste and other materials. The operation of automotive parts manufacturing
facilities entails risks in these areas, and we cannot assure that we will not incur material costs or liabilities as a result. Additionally,
environmental laws, regulations, and permits and the enforcement thereof change frequently and have tended to become increasingly
stringent over time, which may necessitate substantial capital expenditures or operating costs or may require changes of production
processes. Although we have no known pending material environmental issues, there is no assurance that we will not be adversely
impacted by any environmental costs, liabilities, or claims in the future either under present laws and regulations or those that may be
adopted or imposed in the future. Our costs, liabilities, and obligations relating to environmental matters may have a material adverse
effect on our business, operating results, cash flows, or financial condition. Our facilities in the U.S. are subject to regulation by the
Occupational Safety and Health Administration (“OSHA”), which regulates the protection of the health and safety of workers. In addition,
the OSHA hazard communication standard requires that we maintain information about hazardous materials used or produced in our
operations and that we provide this information to employees, state and local governmental authorities and residents. We are also subject
to occupational safety regulations in other countries. Our failure to comply with government occupational safety regulations, including
OSHA requirements, or general industry standards relating to employee health and safety, keep adequate records or monitor occupational
exposure to regulated substances could expose us to liability, enforcement, and fines and penalties, and could have a material adverse
effect on our business, operating results, cash flows, or financial condition. Although we employ safety procedures in the design and
operation of our facilities, there is a risk that an accident or injury to one of our employees could occur in one of our facilities. 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.
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. 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. However, these regulations are subject to change
based on a number of factors that are not within our control, including new scientific or medical data, adverse publicity regarding the
industry recalls and safety risks of airbags or seatbelts (for instance, to children and small adults), domestic and foreign political
developments or considerations, and litigation relating to our products and our competitors’ products. Changes in government regulations
in response to these and other considerations could have a severe impact on our business. Although we believe that over time safety will
continue to be a regulatory priority, if government priorities shift and we are unable to adapt to changing regulations, our business may
suffer material adverse effects. The regulatory obligation of complying with safety regulations could increase as federal and local
regulators impose more stringent compliance and reporting requirements in response to product recalls and safety issues in our industry.
We are subject to existing stringent requirements under the National Traffic and Motor Vehicle Safety Act of 1966 (the “Vehicle Safety
Act”), including a duty to report, subject to strict timing requirements, safety defects with our products. The Vehicle Safety Act imposes
potentially significant civil penalties for violations including the failure to comply with such reporting actions. 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. TREAD imposes criminal liability for violating such requirements
if a defect subsequently causes death or bodily injury. In addition, the Vehicle Safety Act authorizes NHTSA to require a manufacturer to
recall and repair vehicles that contain safety defects or fail to comply with U.S. federal motor vehicle safety standards. Sales into foreign
countries may be subject to similar regulations. Due to the record recall of airbag inflators of one of our competitors, NHTSA has become
more active in requesting information from suppliers and vehicle manufactures regarding potential product defects.
Negative or unexpected tax developments could adversely affect our effective tax rate, operating results and financial condition
Changes in, or changes in the application of, U.S. or foreign tax laws, regulations or accounting principles with respect to matters such
as tax base, tax rates, transfer pricing, dividends and restrictions on certain forms of tax relief or limitations on favorable tax treatment
could affect the calculation of our income taxes and other tax liabilities, our effective tax rate, and the carrying value of our deferred tax
assets. Our annual tax rate is based on our income and the tax laws in the jurisdictions in which we operate. Because of our global
operations we face uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. Significant
judgment and estimation are required in determining our effective tax rate and in evaluating our tax positions, in many cases where the
22
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. We are regularly examined by tax
authorities around the world and in a number of jurisdictions, we are currently under examination, which inherently creates uncertainty.
Although we periodically assess the likelihood of adverse outcomes, negative or unexpected results from one or more of such reviews
and audits, including any related interest or penalties imposed by governmental authorities, could increase our effective tax rate and
adversely impact our operating results, cash flows or financial condition. The effective tax rates used for interim reporting are based on
our projected full-year geographic earnings mix and take into account projected tax costs on intercompany dividends from lower tier
subsidiaries. Changes in currency exchange rates, earnings mix among taxing jurisdictions, or the ability of our subsidiaries to pay
dividends could impact our reported effective tax rates, or cause fluctuations in the tax rate from quarter to quarter. Certain anti-trust
judgments or settlements may not be tax deductible, which could have a material negative impact to our annual tax rate. A number of
other factors may also increase our effective tax rate, which could have an adverse impact on our profitability and operating results. Due
to our numerous foreign operations, our tax rate may be impacted by our global mix of earnings if our pre-tax income is lower than
anticipated in countries with lower statutory tax rates and/or is higher than anticipated in countries with higher statutory tax rates. Based
on U.S. regulatory rules, we do not record current or deferred tax liabilities on permanent investments in our foreign subsidiaries. See
Note 5, Income Taxes, to the Consolidated Financial Statements in this Annual Report.
We may not be able to fully realize our deferred tax assets
We currently carry deferred tax assets, net of valuation allowances, resulting from deductible temporary differences and tax loss carry-
forwards, both of which will reduce taxable income in the future. However, deferred tax assets may only be realized against taxable
income. The amount of our deferred tax assets could be reduced, from time to time, due to adverse changes in our operations or in
estimates of future taxable income from operations during the carry-forward period as a result of a deterioration in market conditions or
other circumstances. Any such reduction would adversely affect our income in the period of the adjustment. Additional information on our
deferred tax assets is included in Note 5, Income Taxes, to the Consolidated Financial Statements in this Annual Report.
Item 1B. Unresolved Staff Comments
Not applicable.
23
Item 1C. Cybersecurity
Autoliv maintains a cybersecurity program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats as an
integrated part of the Company’s overall operations. The objective is to provide protection against cybersecurity threats to our employees,
operations, data, and products.
Cybersecurity risk management and strategy
Cybersecurity risk management for the Company is undertaken both through dedicated cybersecurity risk management processes and
within the Company’s overall Enterprise Risk Management program, which is overseen by the Audit and Risk Committee of the Company’s
Board of Directors.
Autoliv has established an Enterprise Risk Management framework aligned to the ISO 31000:2019 to ensure that the context, principles,
and processes for risk management are embedded and integrated with the operations of the company. All risks across the Autoliv risk
universe, including cybersecurity, are assessed with bottom-up risk assessments and subsequently are aggregated and reported to the
Audit and Risk Committee of the Company’s Board of Directors.
Autoliv utilizes the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework in combination with other
corresponding and partially mandated frameworks to guide cybersecurity risk management. This approach includes the identification,
assessment, response, and management of risks arising from cybersecurity threats that may result in material adverse effects on the
confidentiality, integrity, and availability of our business, data and information systems. The Company contracts with third parties to assess
Autoliv’s cybersecurity program relative to its peers, utilizing the NIST framework as a baseline. Furthermore, Autoliv is pursuing, under
TISAX (Trusted Information Security Assessment Exchange), an assessment and exchange mechanism for information security in the
automotive industry, as well as compliance with road vehicle cybersecurity requirements as applicable to the supply chain under ISO
21434.
Frequent testing/auditing activities, bottom-up cybersecurity risk assessments, vulnerability scanning, monitoring of external threat
intelligence and supplier risk sources, and 24/7 incident monitoring are executed by the cybersecurity function to inform our understanding
of the cybersecurity risk landscape, including solutions from third-party service providers, and what areas of enhancement to prioritize.
Further input is gained from regular maturity assessments executed by third parties as well as TISAX assessments executed by external
audit bodies.
Autoliv combines expertise from our internal cybersecurity function with additional specialist capacities from external consultants and
partners as may be from time to time. 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. Despite our efforts, there can be no assurance that our cybersecurity risk management processes and measures described
will be fully implemented, complied with or effective in protecting our systems and information. We face risks from cybersecurity threats
that, if realized, are reasonably likely to materially affect our business strategy, result of operations or financial condition. For 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. The CISO reports directly to the
CFO but, in line with the corporate governance model, the CISO’s activities are formally governed through a management board, the
“Digitalization and IT Management Board” (“DITM Board”) comprised of the Chief Information Officer (CIO) and certain members of
Autoliv’s Executive Management Team (“EMT”) representing engineering, supply chain management, operations and manufacturing,
quality and project management, finance, information technology, and divisional teams. 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 cybersecurity function includes team members in all of the Company’s
divisions including technical security architects and incident response team members. The core team is supported by the broader
organization with security coordinators in each plant and tech center and additional functional security experts as deemed relevant, such
as in supply chain management and engineering. The function has the responsibility to operate day-to-day activities (e.g., testing, incident
monitoring and response, vulnerability scanning and awareness training) as well as to drive prioritized improvements (as identified through
the risk management processes), together with other relevant Autoliv functions and stakeholders. The security operations center (“SOC”),
part of the Cybersecurity function, monitors Autoliv for cyber incidents 24/7. 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
24
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.
Board of Directors Oversight
Our Board, in coordination with the Audit and Risk Committee, oversees the Company’s Enterprise Risk Management process, including
the management of risks arising from cybersecurity threats. Our Board has delegated the primary responsibility to oversee cybersecurity
matters to the Audit and Risk Committee. Both the Board and the Audit and Risk Committee periodically review the measures we have
implemented to identify and mitigate cybersecurity risks.
The Audit and Risk Committee receives information from the CISO and other members of management on at least a quarterly basis which
is supplemented by a more extensive briefing from the CISO and management on at least a semi-annual basis on cybersecurity matters,
including updates on cybersecurity training programs and the results of external assessments, as applicable. The CISO provides at least
an annual briefing to the Board of Directors on these same topics.
The routine reporting to the Audit and Risk Committee and the Board includes as appropriate the highlights from the full spectrum of work
done within the Company’s cybersecurity program. 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.
25
Item 2. Properties
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. Autoliv believes that its properties are adequately maintained and
suitable for their intended use and that the Company’s production facilities have adequate capacity for the Company’s current and
foreseeable needs. All of Autoliv’s production facilities and offices are owned or leased by operating (either subsidiary or joint venture)
companies.
AUTOLIV MANUFACTURING FACILITIES
Country/Company
Location of Facility
Items produced at Facility
Owned/Leased
Brazil
Autoliv do Brasil Ltda.
Taubaté
Seatbelts, airbags, steering
wheels and seatbelt webbing
Owned
Nova Goiana
Seatbelts and steering wheels
Leased
Canada
Autoliv Canada, Inc.
Tilbury
Airbag cushions
Owned
VOA Canada, Inc.
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.
Nanjing
Seatbelts
Owned
Autoliv Shenda (Nanjing) Automotive Components Co., Ltd.
Nanjing
Seatbelt webbing
Owned
Autoliv (Shanghai) Vehicle Safety Systems Co., Ltd.
Shanghai
Airbags
Owned
Autoliv Shenda (Tai Cang) Automotive Safety Systems Co.,
Ltd.
Shanghai
Seatbelt webbing
Owned
Autoliv (Jiangsu) Automotive Safety Components Co., Ltd.
Jintan
Propellant, Airbag initiators and
Airbag inflators
Owned
Autoliv (China) Automotive Safety Systems Co., Ltd.
Nantong
Airbag cushions
Owned
Mei-An Autoliv Co., Ltd.
Taipei
Seatbelts and airbags
Leased
Estonia
AS Norma
Tallinn
Seatbelts and belt components
Owned
France
Autoliv France SNC
Gournay-en-Bray
Airbags
Owned
Autoliv Isodelta SAS
Chiré-en-Montreuil
Steering wheels and covers
Owned
Livbag SAS
Pont-de-Buis
Airbag inflators
Owned
N.C.S. Pyrotechnie et Technologies SAS
Survilliers
Airbag initiators and seatbelt
micro gas generators
Owned
Hungary
Autoliv Kft.
Sopronkövesd
Seatbelts
Owned
India
Autoliv India Private Ltd.
Bangalore
Seatbelts, airbags
Owned
Mysore
Seatbelt webbing and Airbag
Cushions
Owned
Badli
Airbags and steering wheels
Leased
Pune
Airbag and Airbag cushions
Leased
Chennai
Airbag inflators
Owned
Indonesia
P.T. 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
26
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.
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.
Cebu
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.
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.
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. Gebze-Subesi
Gebze-Kocaeli
Airbags, Steering wheels and
Seatbelt components
Leased
United Kingdom
Airbags International Ltd
Congleton
Airbag cushions
Owned
USA
Autoliv ASP, Inc.
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
27
AUTOLIV TECHNICAL CENTERS AND CRASH TEST TRACKS
Country/Company
Location
Product(s) supported
China
Autoliv (Shanghai) Vehicle Safety System Technical
Center Co., Ltd.
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. 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.
Jelcz
Airbags applications and platform development
Romania
Autoliv Romania S.R.L.
Brasov
Seatbelts with sled test laboratory
South Korea
Autoliv Corporation
Seoul
Airbags and seatbelts customer applications
and platform development with sled test
laboratory
Sweden
Autoliv Development AB
Vårgårda
Research center
Autoliv Sverige AB
Vårgårda
Airbags customer applications, inflator and
special safety products development with full-
scale test laboratory
USA
Autoliv ASP, Inc.
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
28
Item 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 Safety Disclosures
Not applicable.
29
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder 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”.
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”.
Stock Performance Graph
The graph and table below show the cumulative total shareholder return for our common stock since December 31, 2019. 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.
(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
30
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. 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.
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.
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. 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. 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.
Stock incentive plan
Autoliv employees participate in the Autoliv, Inc. 1997 Stock Incentive Plan, as amended (the “Stock Incentive Plan”) and receive Autoliv
stock-based awards from time to time. Additional information regarding the securities authorized for issuance under the Stock Incentive
Plan is included in Item 12 of this Annual Report.
Autoliv has adopted a Stock Ownership Policy for Executives requiring the Company’s Chief Executive Officer (CEO) to accumulate and
hold the number of Autoliv shares having a value of twice his annual base salary. For other executives, the minimum requirement is, over
time, a holding equal to each executive’s annual base salary.
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.
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. For accounting purposes, shares
repurchased under our stock repurchase programs are recorded based upon the settlement date of the applicable trade.
(2) The average price paid per share in U.S. dollars exclude brokerage commissions and other costs of execution.
(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. 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]
31
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. 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. 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 “Company”) provides automotive safety systems to the automotive industry with a broad range of product offerings,
primarily passive safety systems. 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)
Reported1)
change
Reported1)
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 - diluted2)
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. See section Items affecting comparability and Note 12 to the
Consolidated Financial Statements included herein.
2) Net of treasury shares.
CUSTOMER CALL-OFF VOLATILITY
2024 saw global LVP decline by around 1.2% (according to S&P Global January 2025). Our sales to customers are based on production
schedule order quantities and delivery dates that are communicated to us by our customers, which we refer to as “call-off” plans. We saw
an improvement in call-off volatility in 2024, especially in the second half year. This improvement supported our improvement in operating
efficiency and productivity, including a significant reduction in direct workforce. However, customer call-off volatility remained higher than
pre-pandemic levels, and low customer demand visibility and changes to customer call-offs with short notice still had a negative impact
on our production efficiency and profitability. Geopolitical uncertainties could continue to create a challenging operating environment. We
also see a likelihood that there could be new or increased tariffs or other related trade restrictions imposed in 2025 that may impact our
operations. We continue to closely monitor the situation and are prepared to remain agile in responding to any such developments.
INFLATION
Cost pressures from labor, in our own operations and related to our suppliers' labor costs, had a negative impact on our profitability in
2024. Most of the inflationary cost pressure was offset by customer price and other compensations. Changes in raw material costs had
a limited impact on our profitability in 2024. The Company expects only limited raw material price changes in 2025. We also expect
continued cost pressure from inflation relating mainly to labor, including increased labor costs for our suppliers, especially in Europe and
the Americas. The Company continues to execute on productivity and cost reduction activities to offset these cost pressures, and we
continue to seek inflation compensation from our customers. 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.
32
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%.
Light Vehicle Production1)
2024
2023
Change 2024 vs 2023
(000´)
units
% global
(000´)
units
% global
(000´)
units
%
Americas
16,990
20 %
17,283
20 %
(293 )
(1.7 )%
North America
14,042
16 %
14,386
16 %
(344 )
(2.4 )%
South America
2,948
3.4 %
2,897
3.3 %
51
1.8 %
Europe
16,982
20 %
17,816
20 %
(834 )
(4.7 )%
Asia
50,545
58 %
50,410
57 %
136
0.3 %
China
29,241
34 %
28,069
32 %
1,172
4.2 %
Japan
7,730
8.9 %
8,472
9.7 %
(742 )
(8.8 )%
South Korea
4,073
4.7 %
4,169
4.7 %
(96 )
(2.3 )%
India
5,613
6.5 %
5,393
6.1 %
220
4.1 %
Other Asia
3,888
4.5 %
4,306
4.9 %
(418 )
(9.7 )%
Other
2,191
2.5 %
2,263
2.6 %
(72 )
(3.2 )%
Global Total
86,708
87,772
(1,063 )
(1.2 )%
1) Source: S&P Global, January 2025
The increase in LVP in China of 4.2% was significantly more than what was expected in the beginning of the year, driven mainly by a
multitude of successful launches of new models by domestic Chinese OEMs, especially BYD. The LVP decline of 4.7% in Europe was
impacted by affordability issues and technology uncertainties. The LVP decline in North America LVP was mainly driven by vehicle
inventory corrections. Japan declined by 8.8% impacted by model homologation issues.
The different LVP growth rates for different regions in 2024 was dilutive to global safety content per vehicle (CPV), as LVP in several high
CPV regions declined while LVP increased in some lower CPV regions. The highest CPV region is North America, and its share of global
LVP declined by 0.2pp to 16.2%. The second highest CPV region is Europe, and its share of global LVP declined by 0.7pp, to 19.6%.
The lowest major CPV region is India, which saw its share of LVP increase from 6.1% to 6.5%. CPV in China is below the global average,
and China’s share of global LVP increased from 32.0% to 33.7%. Japan’s share decreased to 8.9% from 9.7%. Additional dilution to
global CPV came from the difference in growth within China, where lower CPV models and segments grew strongly while higher CPV
models and segments growth was limited or negative. LVP growth for Domestic Chinese OEMs with typically lower CPV was 18%
compared to global OEMs with typically higher CPV saw LVP decline by 9.5%. Combined with the regional growth differences, we
estimate this shift in LVP mix contributed negatively to our sales growth by between 2 to 3 pp. The Company estimates that its market
share decreased from around 45% in 2023 to around 44% in 2024. The main reasons for this change are the difference in regional LVP
growth outlined above and that component sales, which is growing fast, especially to BYD, is not part of market share calculation.
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.
Due to more stringent crash test rating requirements, by institutes such as Euro NCAP, increased government regulations and increasing
consumer demand for more safety in emerging markets, the Company sees vehicle manufacturers installing more airbags and more
advanced seatbelt systems in vehicles. This generally takes place when new models are introduced. The safety standards of vehicles
are increasing in China, India, and other growth markets, partially due to new government regulations and crash test rating programs.
This is supporting higher installation rates of airbags and more advanced seatbelts, impacting CPV positively. Commercial customer
recoveries compensating for increased labor costs also added to CPV in 2024, partly offset by negative effects from continued productivity
related pricing pressure from vehicle manufacturers. CPV increased in Japan, Europe and India, was unchanged in North America while
it decreased in China due to the changes in LVP mix outlined above. The changes in regional and model mix diluted global CPV by 2 to
3pp leading to a global CPV that was unchanged compared to 2023. Together with the positive pricing and the execution of the Company's
strong order book, this supported an organic growth (Non-U.S. GAAP measure) of around 1.6pp above growth in global LVP. 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. 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. During 2024, growth was positively affected through recent launches of several new models, including Subaru Forester, Hyundai
Santa Fe, Nissan Kicks, Dacia Duster, Toyota Landcruiser, Zeekr 7z and Toyota 4Runner.
The Company estimates that the sales to Electric Vehicles (not including PHEVs) amounted to around $1.4 billion in 2024.
33
GLOBAL FOOTPRINT WELL ADAPTED TO THE GEOGRAPHIC TREND SHIFT IN AUTOMOTIVE PRODUCTION
The Company's regional sales mix continues to be balanced with 28% of sales in Europe, 33% in the Americas and 19% in Asia, excluding
China in 2024, compared to 27%, 34% and 19%, respectively, in 2023. The Company's sales in the important Chinese market was 19%
of total sales in 2024 compared to 20% in 2023.
The balanced regional sales mix has been achieved through timely investments and strengthening of technical and support capabilities
in growth markets.
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. The order intake in 2024 supports the Company's ability to defend its around 45% sales market share in the
near and medium term. For several years, the automotive industry face some key trends that impacts the industry, notably changes in
technologies as well as geographic growth differences with the emergence of new automakers are particularly visible in China. Autoliv
have therefore increasingly focused resources on developing new products and to strengthen our position with new automakers to capture
the growth opportunities that comes with these changes. This includes long term development agreements with several new automakers
in China in recent years as well as increased investments in capacity and capabilities in India. The order intake from new automakers,
mainly in China and North America, accounted for nearly 1/3 of our total order intake in 2024. We won multiple awards supporting new
market- and industry trends like foldable steering wheels for self-driving vehicles including new types of driver airbags that deploys from
the dashboard or ceiling The 2024 order intake included high win rates with new automakers. In China, the Company estimates that
around 60% of order intake in 2024 was with domestic Chinese OEMs, which supports our expectation that domestic OEMS in China will
continue to increase its share of the Company's sales in China in 2025. New order intake is defined as the sales value of awards for
future business, received within that year. The lifetime value is calculated using detailed assumptions of price and volumes over the years
of production and the exchange rates prevailing at the time of receiving the order.
The lead time from order intake to start of production is typically 1-3 years. During this period the products are engineered into the vehicle
to provide the expected protection for occupants in case of a crash and to meet legal and regulatory requirements, as well as other
requirements from the vehicle manufacturer. This investment in new products is the main factor of RD&E expenses, net. Additionally, the
Company has to build up production capacity, in the form of new lines, to meet future product launches.
In 2024, OEMs sourcing of new business was at the lowest level since 2018 for the industry, as OEMs are reconsidering certain future
product offerings due to geopolitical and technological uncertainties. The Company's order intake share for 2024 continued on a high
level. Even so, the low level of OEM sourcing activity in 2024 resulted in a lower order intake in 2024 for the Company. The estimated
life-time sales for all orders booked in 2024 is around $7.4 billion, compared to around $11.8 billion in 2023. As sourcing of several large
platforms were pushed into 2025, we expect a rebound of OEM sourcing activity and Autoliv order intake in 2025.
STRATEGIC INITIATIVES AND STRUCTURAL IMPROVEMENTS
2024 light vehicle market was impacted by a technological and geopolitical uncertainties with continued high customer call-off volatility
and inflationary pressure on costs for labor. In response, Autoliv management continued to implement strict cost control measures, as
well as initiating significant structural cost reduction measures. In June 2023, the Company communicated a cost reduction framework
which included the intent to reduce our indirect headcount by up to 2,000, and to improve direct labor productivity equivalent to up to a
6,000 direct workforce reduction. 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.
At the end of 2024, around 1,400 of the planned indirect reductions were completed. We also saw positive results on direct labor efficiency
in 2024, especially in the second half year.
The provision, net of reversals, for restructuring activities in 2024 amounted to $18 million compared to $(210) million in 2023. As of
December 31, 2024, the Company had $151 million reserved in its balance sheet related to restructuring compared to $213 million last
year. For more information, see Note 12, 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.
With several hundred projects in implementation or undergoing development, the Company has a high pace in the planning and
implementation of the strategic initiatives and structural improvements. These initiatives are key drivers to the Company's targets and
building the foundation to continue to create shareholder value.
34
IMPROVED EFFICIENCIES THROUGH OPERATIONAL EXCELLENCE
Pricing pressure is an inherent part of the automotive supplier business. Price reductions are generally higher on newer products with
strong volume growth compared to older products, where both the possibilities to re-design the product to reduce costs and market growth
are less. Price reductions can also depend on the business cycle and raw material price development. For the five-year period 2017-
2021, the Company estimates the average reduction of product prices on existing programs to have been in the range of around 2-4%
annually. In 2022, the pricing environment changed to some extent due to high raw material price and cost increases, which led to
renegotiations with customers regarding commercial terms. 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.
A key strategy for Autoliv to be and to remain cost competitive is to reduce labor costs, through continuously implementing productivity
improvement programs, optimizing the Company's production footprint, and instituting restructuring and capacity alignment activities as
well as other actions to address the Company's cost structure.
The Company's productivity improvement target is to achieve at least 5% savings per year. To meet this target, Autoliv has developed a
set of strategies to reduce costs in manufacturing:
•
Autoliv production system (APS) is based on lean manufacturing methodology which aims to continuously increase output
with less resources. APS provides the target conditions and tools to achieve the delivery of goods and services at the right
time, in the right amount, at the required quality and at the lowest cost possible to all the Company's customers.
•
Autoliv One Product One Process (1P1P) strategy focuses on product and process standardization and reducing cost and
complexity. The 1P1P strategy, combined with initiatives to reduce costs for components from external suppliers, ensures
that the Company continuously optimize its supply base footprint, consolidate purchase volumes to fewer suppliers, improve
productivity in the Company's supply chain, standardize components and redesign its products.
•
Strategic Initiatives, including Automation, Digitalization, Supply Chain Management Effectiveness and RD&E Effectiveness.
The Company's historic experience is that the continuous improvement strategies have enabled productivity improvement at or above
its target of 5%. 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. In 2024, however, the Company achieved its 5% productivity target, as gradual improvement in
customer call -off volatility enabled an improved operational efficiency.
The Company foresees opportunities for further productivity on organic sales growth and increased call-off stability when global supply
chains have stabilized at pre-pandemic levels, but also from increasing use of automation in its assembly for lean manufacturing
processes. Additionally, automated cells typically perform the manufacturing process with reduced variability. This results in greater
control and consistency of product quality.
FOCUS ON QUALITY
The number of vehicle recalls in the automotive industry continues on a relatively high level. The Company expects overall recall numbers
to remain high for years to come and, although the Company strives for the highest quality in its processes, it cannot be ruled out that the
Company may also be adversely impacted by a future recall.
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. 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. We consider Joyson Safety Systems, a part
of Ningbo Joyson Electronic Corp., and ZF LIFETEC, a part of ZF Friedrichshafen AG, to be global competitors to Autoliv. In addition,
there are several smaller regional and product specific competitors, especially in China.
The customer landscape is gradually changing, with a multitude of new OEMs emerging in recent years. This is especially prominent
within electric vehicles and in China. In China, domestic OEMs have gained significant market shares and as a group now has larger
market share than global OEMs have in China. Autoliv's sales to domestic OEMs in China has grown rapidly. In 2022, this group
accounted for 22% of Autoliv's sales in China, and in 2024 their share of Autoliv sales in China was 37%. The fastest growing OEM in
China in recent years is BYD. BYD has a uniquely 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. In 2024, the institutional alliance between Renault, Nissan, and Mitsubishi
ended.
35
CAPITAL STRUCTURE
The Company’s net debt stood at $1,554 million on December 31, 2024. This was an increase of $187 million compared to December
31, 2023. 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. 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. 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.
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. 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 November 2024, the Board of
Directors approved the extension of this stock repurchase program through the end of 2025.
In 2024, the Company retired an additional 2 million shares held in Treasury stock. After the retirements, the Company continues to hold
around 2.7 million shares of common stock in treasury.
OUTLOOK FOR 2025
In addition to the assumptions noted below, the Company's guidance for 2025 is mainly based on our customer call-offs, the achievement
of our targeted cost compensation effects and no material changes to tariffs or trade restrictions.
Full year 2025 Guidance
Organic sales growth
Around 2%
Adjusted operating margin1)
Around 10-10.5%
Operating cash flow2)
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.
Full year 2025 Assumptions
LVP growth
Around 0.5% negative
Foreign currency impact on net sales
Around 2% negative
Tax rate3)
Around 28%
3) Excluding unusual tax items.
The forward-looking non-U.S. GAAP financial measures above are provided on a non-U.S. GAAP basis. Autoliv has not provided a U.S.
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. Legal Proceedings and Note 18 Contingent Liabilities to the Consolidated Financial Statements in this Annual Report.
36
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. GAAP measure, see reconciliation table below) by 0.4% compared to the global LVP decrease of 1.2%
(according to S&P Global, Jan 2025). The 1.6pp outperformance was mainly driven by new product launches, and to a lesser extent
higher prices, partly offset by negative customer and model mix.
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
Other2)
$
7,023
$
7,055
(0.5)%
(1.2)%
0.7 %
Seatbelt products and Other2)
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.
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.
Seatbelt Products and Other
Sales for Seatbelt Products and Other declined organically (Non-U.S. GAAP measure, see reconciliation table above) by 0.2% in the
period. Sales decreased organically in China and Europe, while it increased in Asia excluding China and the Americas.
Sales by Region
Years ended December 31,
Components of change in net sales
2024
2023
Reported
change
Currency
effects 1)
Organic 3)
Americas
$
3,424
$
3,526
(2.9)%
(1.2)%
(1.7)%
Europe
2,946
2,877
2.4 %
1.0 %
1.4 %
China
2,010
2,105
(4.5)%
(1.3)%
(3.2)%
Asia excl. China
2,010
1,968
2.2 %
(4.4)%
6.6 %
Total
$
10,390
$
10,475
(0.8)%
(1.2)%
0.4 %
1) Effects from currency translations.
Autoliv’s global sales increased organically (Non-U.S. GAAP measure, see reconciliation table above) by 0.4% in 2024 compared to
2023, which was around 1.6 percentage points better than global LVP (according to S&P Global, January 2025).
Our organic sales growth (Non-U.S. GAAP measure) outperformed LVP growth by 11 percentage points in Asia excluding China
supported by strong outgrowth in India, Japan and South Korea. We outperformed by 6.1 percentage points in Europe due mainly to
product launches and to a smaller extent higher prices, while it was in line with LVP growth in Americas. Our sales growth underperformed
LVP growth by 7.4 percentage points in China. LVP growth in China was tilted to domestic OEMs with typically lower safety content.
Domestic OEM LVP in China grew by 18% while LVP declined by 9.5% for global OEMs in China in 2024. Autoliv's sales to domestic
OEMs increased by 24% in 2024.
2024 Organic Growth (Non-U.S. GAAP measure)
Americas
Europe
China
Asia excl. 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
37
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 income1)
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, diluted2)
8.04
5.72
40 %
Adjusted earnings per share, diluted1,2)
8.32
8.19
2 %
1) Assuming dilution and net of treasury shares.
2) Non-U.S. GAAP Measure.
Gross Profit
In 2024, gross profit increased by $106 million and the gross margin increased by 1.2pp compared to 2023. The improvement was mostly
due to that better customer call-off accuracy supported an improved operational efficiency with around $82 million in lower costs for labor,
premium freight and waste and scrap. The gross profit increase was also, to a lesser extent, supported by positive effects from lower
material costs. The main offsetting factor to the improvement were negative effects of lower sales.
Operating Income
Operating income increased in 2024 by $290 million, mainly due to lower capacity alignment accruals as outlined below, and the increase
in gross profit, as outlined above.
Selling, General and Administrative (S,G&A) expenses increased in 2024 by $30 million. The main reason for the cost increase was
higher costs for personnel, due to high wage inflation. S,G&A costs in relation to sales increased from 4.8% to 5.1%.
Research, Development & Engineering (R,D&E) expenses, net decreased in 2024 by $27 million, Higher engineering income explained
almost the entire improvement. R,D&E, net, in relation to sales decreased from 4.1% to 3.8%. The Company consider a level of around
4% to be representative for its business scope.
Other income (expense), net was an expense of $19 million in 2024 compared to an expense of $207 million in 2023. Almost all of the
$188 million in lower expense was due to lower capacity alignment accruals in 2024 compared to 2023. The high level of capacity
alignment accrual in 2023 relate to a structural efficiency program aiming at reducing indirect headcount by up to 2,000. No significant
further accruals are expected for this program.
Financial and Non-operating Items, net
Costs for Financial and non-operating items, net, costs increased by $27 million in 2024 compared to previous year, mainly due to $14
million in increased interest expense as the result of higher debt and higher interest rates, and $13 million in increased expenses for
Other non-operating items.
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. Discrete tax items, net, decreased the tax rate in 2024 by 4.8pp. In addition, country mix impacted the 2024 tax
rate favorably by 6.1pp compared to the prior year. The Company considers a tax rate in the range of 25%-30% to be within normal
parameters.
38
Net Income and Earnings Per Share
Net income in 2024 increased by $159 million compared to 2023. Earnings per share, diluted increased by $2.32 compared to a year
earlier, where the main drivers were $2.83 from higher operating income and $0.45 from lower number of outstanding shares, diluted,
partly offset by $0.76 from higher taxes and $0.21 from higher financial and non-operating items, net.
The weighted average number of shares outstanding assuming dilution in 2024 was 80.4 million compared to 85.2 million in 2023.
NON-GAAP PERFORMANCE MEASURES
In this annual report, the Company sometimes refers to non-GAAP measures that the Company and securities analysts use in measuring
Autoliv’s performance.
The Company believes that these measures assist management and investors in analyzing trends in the Company’s business for the
reasons given below. Investors should not consider these non-GAAP measures as substitutes for, but rather as additions to, financial
reporting measures prepared in accordance with GAAP.
These non-GAAP measures have been identified, as applicable, in each section of this annual report with tabular presentations provided
below, reconciling them to GAAP.
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. 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 GAAP net sales.
Net debt
The Company, from time to time enters into “debt-related derivatives” (DRDs) as a part of its debt management and as part of efficiently
managing the Company’s overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of
the Company’s debt, therefore we provide this non-U.S. GAAP measure. DRDs are fair value adjustments to the carrying value of the
underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will
be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing
debt up with currency or interest fair values.
Reconciliation of 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. 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.
Reconciliation 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
39
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. The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-
U.S. GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods. Autoliv’s
management uses the ROCE, adjusted ROCE, ROE and adjusted ROE measures for purposes of comparing its financial performance
with the financial performance of other companies in the industry and providing useful information regarding the factors and trends
affecting the Company’s business.
The Company believes ROCE and adjusted ROCE are useful indicators of long-term performance both absolute and relative to the
Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its
peers. The Company’s management believes that ROE is a useful indicator of how well management creates value for its shareholders
through its operating activities and its capital management.
With respect to the Andrews litigation settlement, the Company has treated this specific settlement as a non-recurring charge because of
the unique nature of the lawsuit, including the facts and legal issues involved.
Accordingly, the tables below reconcile from U.S. GAAP to the equivalent non-U.S. GAAP measure.
Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income taxes"
(Dollars in millions)
2024
2023
Income before income taxes (GAAP)
$
875 $
612
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 Income before income taxes
27
230
Adjusted Income before income taxes (Non-GAAP)
$
902 $
842
40
Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income"
(Dollars in millions)
2024
2023
Net income (GAAP)
$
648 $
489
Non-GAAP adjustments:
Less: Capacity alignments
19
218
Less: The Andrews litigation settlement
-
8
Less: Antitrust related items
8
4
Less: Tax on non-GAAP adjustments
(5 )
(20 )
Total non-GAAP adjustments to Net income
22
210
Adjusted Net income (Non-GAAP)
$
670 $
699
Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net income
attributable to controlling interest"
(Dollars in millions)
2024
2023
Net income attributable to controlling interest (GAAP)
$
646 $
488
Non-GAAP adjustments:
Less: Capacity alignments
19
218
Less: The Andrews litigation settlement
0
8
Less: Antitrust related items
8
4
Less: Tax on non-GAAP adjustments
(5 )
(20 )
Total non-GAAP adjustments to Net income attributable to controlling interest
22
210
Adjusted Net income attributable to controlling interest (Non-GAAP)
$
668 $
697
Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital Employed"
2024
2023
Return on capital employed1) (GAAP)
25.0 %
17.7 %
Non-GAAP adjustments:
Less: Capacity alignments
0.4 %
5.1 %
Less: The Andrews litigation settlement
-
0.2 %
Less: Antitrust related items
0.2 %
0.1 %
Total non-GAAP adjustments to Return on capital employed1)
0.6 %
5.3 %
Adjusted Return on capital employed1) (Non-GAAP)
25.6 %
23.1 %
Adjustment on Return on capital employed1) (in millions)
$
27
$
230
1) The average capital employed amount is calculated as an average of the opening balance amount and the closing balance amounts for each
quarter included in the period.
Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity"
2024
2023
Return on total equity1) (GAAP)
27.2 %
19.0 %
Non-GAAP adjustments:
Less: Capacity alignments
0.7 %
7.5 %
Less: The Andrews litigation settlement
-
0.3 %
Less: Antitrust related items
0.3 %
0.1 %
Less: Tax on non-GAAP adjustments
(0.2 %)
(0.7 %)
Total non-GAAP adjustments to Return on total equity1)
0.8 %
7.2 %
Adjusted Return on total equity1) (Non-GAAP)
28.0 %
26.2 %
Adjustment on Return on capital employed1) (in millions)
$
22
$
210
1) The average total equity amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter
included in the period.
41
LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL POSITION
Years ended December 31
(DOLLARS IN MILLIONS)
2024
2023
Net cash provided by operating activities
$
1,059
$
982
Net cash used in investing activities
(563)
(569)
Net cash used in financing activities
(680)
(490)
Effect of exchange rate changes on cash and cash equivalents
16
(20)
Decrease in cash and cash equivalents
(168)
(96)
Cash and cash equivalents at beginning of year
498
594
Cash and cash equivalents at end of year
$
330
$
498
NET CASH PROVIDED BY OPERATING ACTIVITIES
Cash flow from operations, together with available financial resources and credit facilities, is expected to be sufficient to fund the
Company’s anticipated working capital requirements, capital expenditures and future dividend payments.
Net cash provided by operating activities was $1,059 million in 2024 compared to $982 million in 2023. The increase of $77 million in
2024 was mainly due to $159 million in higher net income. The improvement was also a supported by continued reduction of working
capital, although on a smaller scale compared to the 2023 reduction. The improvement of operating assets and liabilities, net in both 2023
and 2024 was mainly a result of improved customer call-off accuracy enabling more precise planning and use of resources as well as a
multi-year working capital efficiency program aiming at improving working capital by $800 million. At the end of 2024, the Company
estimates that around $700 million improvement in working capital has been achieved since the start of the program. The remaining
around $100 million in the program is targeted to be achieved mainly in inventories and is dependent on a continued improvement in
customer call-off accuracy in the years to come.
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.
Payables outstanding in relation to sales was 17% at December 31, 2024 compared to 18% at December 31, 2023.
NET CASH USED IN INVESTING ACTIVITIES
In 2024 and 2023, net cash used in investing activities amounted to $563 million and $569 million, respectively. The Company's investing
activities primarily consist of investments in property, plant and equipment. Net cash generated by operating activities continued to
sufficiently cover capital expenditures for property, plant and equipment.
In relation to net sales, capital expenditures, net was 5.4% compared to 5.4% in previous year. The 5.4% level is slightly above what the
Company expects for the longer term, due to investments in capacity, mainly in Asia, and in footprint optimization, mainly in Europe and
Japan.
Depreciation and amortization totaled $387 million in 2024 compared to $378 million in 2023.
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. The increase
of $190 million in cash used in financial activities was mainly the result of $200 million additional repurchased shares in 2024 as compared
to 2023.
The Company's net issuance of short-term and long-term debt was $94 million in 2024 and $87 million in 2023.
In 2024, the Company paid cash dividends of $219 million. In 2023, the Company paid dividends of $225 million. The Company's dividend
approach has been the same for several years.
The Company repurchased shares to an amount of $552 million and $352 million in 2024 and 2023, respectively. The Company intends
to continue to repurchase shares in accordance with the current authorization until the end of 2025.
INCOME TAXES
The Company has reserves for taxes that may become payable in future periods as a result of tax audits. At any given time, the Company
is undergoing tax audits covering multiple years in several tax jurisdictions. Ultimate outcomes are uncertain but could, in future periods,
have a significant impact on the Company’s cash flows. 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.
42
PENSION ARRANGEMENTS
The Company has defined benefit pension plans covering nearly half of the U.S. employees. 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.
The plans had a total net unamortized actuarial loss before tax of $36 million recorded in Accumulated Other Comprehensive (Loss)
Income in the Consolidated Balance Sheets at December 31, 2024, compared to $34 million at December 31, 2023. The amortization of
the actuarial loss is expected to be $22 million in 2025.
Total pension expense associated with the defined benefit plans was $34 million in 2024 and $21 million in 2023, and is expected to be
$21 million in 2025. The increase in 2024 pension expense was due to the negative impact from curtailment and settlement losses in
mainly Americas.
The Company contributed $29 million to its defined benefit plans in 2024 and $11 million in 2023. The Company expects to contribute
$15 million to these plans in 2025 and is currently projecting a yearly funding at approximately the same level in the subsequent years.
For further information about retirement plans see Note 19, Retirement Plans, to the Consolidated Financial Statements included herein.
EQUITY
During 2024, total equity decreased by $285 million to $2,285 million as of December 31, 2024. 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 Company had a
net debt position (see section Non-U.S. GAAP Performance Measures) at December 31, 2024 and 2023 of $1,554 million and $1,367
million, respectively.
In July 2024, the Company entered into a $125 million bilateral revolving credit facility (Bilateral RCF) with substantially the same terms
as the revolving credit facility (RCF) with the 11 banks (see below). In May 2022, the Company refinanced its existing RCF of $1,100
million. The facility was syndicated among 11 banks and matures May 2029. The Company pays a commitment fee on the undrawn
amount of 0.10%, representing 35% of the applicable margin, which is 0.275% (given the Company’s ratings of "BBB+" from Fitch and
“Baa1” from Moody’s). Borrowings under the facility are unsecured. On December 31, 2024, the Company’s unutilized long-term credit
facilities were $1,225 million, represented by the RCF and the Bilateral RCF. These facilities are not subject to any financial covenants
nor is any other substantial financing of Autoliv.
In February 2024, the Company priced and issued a 5.5-year green bond for a total of €500 million in the Eurobond market. The bond
carries a coupon of 3.625% and matures in August 2029.
In March 2023, the Company priced and issued a 5-year green bond for a total of €500 million in the Eurobond market. The bond carries
a coupon of 4.25% and matures in March 2028.
In June 2020, the Company utilized its SEK 3,000 million facility with Swedish Export Credit Corporation which was signed in May 2020.
The SEK 3,000 million loan mature in May 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. 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. At December 31, 2023, €1,000 million had been issued under this program.
At December 31, 2024 Autoliv’s long-term credit rating from S&P Global Ratings was BBB, from Moody’s Baa1, and from Fitch BBB+. All
ratings with stable outlook. As of February 7, 2025, S&P Global Ratings withdrew the ratings for Autoliv on the Company’s request. The
company aims to maintain a strong investment grade credit rating.
For additional information about the Company's debt and credit arrangements, see Note 14, Debt and Credit Agreements, to the
Consolidated Financial Statements included herein.
43
FACTORING
During 2024 and 2023, the Company sold receivables and discounted notes related to selected customers. These factoring arrangements
increase cash while reducing accounts receivable and customer risks. 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.
NUMBER OF SHARES
At December 31, 2024, 77.7 million shares were outstanding (net of 2.7 million treasury shares), a 6.0% decrease from 82.6 million one
year earlier.
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, the Company also
retired 2,000,000 treasury shares in December 2024. In 2023, the Company repurchased and retired approximately 3.7 million shares
equal to $352 million. During 2022, Autoliv repurchased and retired approximately 1.4 million shares, equal to $115 million. 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. In November 2024, the Board of Directors approved
the extension of the current stock repurchase program through the end of 2025.
Contractual Obligations and Commitments
Contractual obligations include debt, sponsored defined benefit plans, lease and purchase obligations that are enforceable and legally
binding on the Company.
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.
There are no unconditional purchase obligations other than short-term obligations related to inventory, services, tooling, and property,
plant and equipment purchased in the ordinary course of business. Purchase agreements with suppliers entered into in the ordinary
course of business do not generally include fixed quantities. Quantities and delivery dates are established in “call off plans” accessible
electronically for all customers and suppliers involved. Communicated “call off plans” for production material from suppliers are normally
reflected in equivalent commitments from Autoliv customers.
The Company sponsors defined benefit plans that cover a significant portion of the Company's U.S. employees and certain non-U.S.
employees. The pension plans in the U.S. are funded in conformity with the minimum funding requirements of the Pension Protection Act
of 2006. Funding for the Company's pension plans in other countries is based upon plan provisions, actuarial recommendations and/or
statutory requirements. Due to volatility associated with future changes in interest rates and plan asset returns, the Company cannot
predict with reasonable reliability the timing and amounts of future funding requirements. 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.
COMMITMENTS
The Company has entered into a number of unrecognized unconditional purchase agreements relating to Solar Farms in US and China
during 2024, of which none is individually significant for disclosure. Together these agreements have an aggregated termination fee
(discounted) of approximately $51 million as of December 31, 2024.
These Solar Farm agreements have a contract period ranging from 20-25 years. The future payments (undiscounted) relating to these
unrecognized unconditional purchase agreements are in total $62 million to be paid over the following years: 1-3 years: $6 million; 4-5
years: $4 million and; more than 5 years: $52 million.
Risks and Risk Management
The Company is exposed to several categories of risks. They can broadly be categorized as operational risks, strategic risks and financial
risks. Some of the major risks in each category are described below. There are also other risks that could have a material effect on the
Company’s results and financial position, and the description below is not complete but should be read in conjunction with the discussion
of risks described in Item 1A above, which contains a description of the Company's material risks.
As described below, the Company has taken several mitigating actions, applied numerous strategies, adopted policies, and introduced
control and reporting systems to reduce and mitigate these risks. In addition, the Company from time to time identifies and evaluates
emerging or changing risks to the Company in order to ensure that identified risks and related risk management are updated in this fast-
moving environment.
44
Operational Risks
LIGHT VEHICLE PRODUCTION
Around 30% of Autoliv’s costs are fixed; therefore, short-term earnings are dependent on sales volumes and highly dependent on capacity
utilization in the Company’s plants.
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. This moderates the effect of changes in vehicle demand of individual
countries and regions as well as production issues. 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.
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%. To reduce the potential impact of unusual fluctuations in the production of vehicle models supplied by the Company such as
during the financial crisis in 2008-2009 and the COVID-19 pandemic in 2020-2021 – it is also necessary for the Company to be prepared
to quickly adapt the level of permanent employees as well as fixed cost production capacity.
PRICING PRESSURE
Pricing pressure from customers is an inherent part of the automotive components business. The historical extent of price reductions
varies from year to year and takes the form of one time give backs, reductions in direct sales prices and/or discounted reimbursements
for engineering work.
In response, Autoliv is continuously engaged in efforts to reduce costs and to provide customers added value by developing new products.
Generally, the speed by which these cost-reduction programs generate results will, to a large extent, determine the future profitability of
the Company. The various cost-reduction programs are, to a considerable extent, interrelated. 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.
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. 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.
LEGAL
The Company is involved from time to time in regulatory, commercial, and contractual legal proceedings that may be significant, and the
Company’s business may suffer as a result of adverse outcomes of current or future legal proceedings. These claims may include, without
limitation, commercial or contractual disputes, including disputes with the Company’s suppliers and customers, intellectual property
matters, alleged violations of laws, rules or regulations, governmental investigations, personal injury claims, product liability claims,
environmental issues, tax and customs matters, and employment matters.
A substantial legal liability or adverse regulatory outcome and the substantial cost to defend the litigation or regulatory proceedings may
have an adverse effect on the Company’s business, operating results, financial condition, cash flows and reputation.
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 18, Contingent Liabilities, to the
Consolidated Financial Statements included herein and Item 3 – Legal Proceedings.
45
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. 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. 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. 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. As suppliers
become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers
are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. In addition, with global
platforms and procedures, vehicle manufacturers are increasingly evaluating our quality performance on a global basis. Any one or more
quality, warranty or other recall issue(s), including the ones affecting few units and/or having a small financial impact, may cause a vehicle
manufacturer to implement measures which may have a severe impact on the Company’s operations, such as a temporary or prolonged
suspension of new orders or the Company’s ability to bid for new business.
In addition, over time, there is a risk that the number of vehicles affected by a failure or defect will increase significantly (as would the
Company’s costs), since our products often use global designs and are increasingly based on or utilize the same or similar parts,
components, or solutions.
Although quality has always been a central focus in the automotive industry, especially for safety products, our customers and regulators
have become increasingly attentive to quality with even less tolerance for any deviations, which has resulted in an increase in the number
of automotive recalls. This trend is likely to continue as automobile manufacturers introduce even stricter quality requirements and
regulating agencies and other authorities increase the level of scrutiny given to vehicle safety issues. A warranty recall or a product liability
claim brought against the Company in excess of the Company’s insurance may have a material adverse effect on its business and/or
financial results. Vehicle manufacturers are also increasingly requiring their external suppliers to guarantee or warrant their products and
bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the
Company responsible for some or all of the repair or replacement costs of defective products under new vehicle warranties when the
product supplied did not perform as represented. Additionally, a customer may not allow us to bid for expiring or new business until certain
remedial steps have been taken. Accordingly, the future costs of warranty claims by the Company’s customers may be material.
The Company’s warranty reserves are based upon management’s best estimates of amounts necessary to settle future and existing
claims. Management regularly evaluates the appropriateness of these reserves and adjusts them when we believe it is appropriate to do
so. However, the final amounts determined to be due could differ materially from the Company’s recorded estimates. We believe our
established reserves are adequate to cover potential warranty settlements typically seen in our business.
The Company’s strategy is to follow a stringent procedure when developing new products and technologies and to apply a proactive
“zero-defect” quality policy (see section Quality Management). In addition, the Company maintains a program of insurance, which includes
commercial insurance, self-insurance, or a combination of both approaches, for potential recall and product liability claims in amounts
and on terms that it believes are reasonable and prudent based on our prior claims experience. However, such insurance may not be
sufficient to cover every possible claim that can arise in the Company’s businesses, now or in the future, or may not always will be
available should the Company, now or in the future, wish to extend, renew, increase or otherwise adjust such insurance. In recent years,
the cost of recall and product liability insurance as well as the Company’s level of self-insurance and deductibles has increased.
Management’s decision regarding what insurance to procure is also impacted by the cost for such insurance. As a result, the Company
may face material losses in excess of the insurance coverage procured. A substantial recall or liability in excess of coverage levels could
therefore have a material adverse effect on the Company.
ENVIRONMENTAL
Most of the Company’s manufacturing processes consist of the assembly of components. As a result, the environmental impact from the
Company’s plants is generally modest. While the Company’s businesses from time to time are subject to environmental investigations,
there are no material environmental-related cases pending against the Company. Therefore, Autoliv does not incur (or expect to incur)
any material costs or capital expenditures associated with maintaining facilities compliant with U.S. or non-U.S. environmental
requirements. To reduce environmental risk, the Company has implemented an environmental management system in all plants globally
and has adopted an environmental policy (see corporate website www.autoliv.com).
Autoliv is subject to a number of environmental and occupational health and safety laws and regulations. Such requirements are complex
and are generally becoming more stringent over time. There can be no assurance that these requirements will not change in the future,
or that the Company will at all times be in compliance with all such requirements and regulations, despite its intention to be. 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.
46
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. In addition, political conditions leading to trade conflicts and the imposition of
tariffs or other trade barriers between countries in which the Company does business could increase its costs of doing business.
Strategic Risks
REGULATIONS
In addition to vehicle production, the Company’s market is driven by the safety content per vehicle, which is affected by new regulations
and new vehicle rating programs, in addition to consumer demand for new safety technologies.
The most important regulations are the seatbelt installation laws that exist in all vehicle-producing countries. Many countries also have
strict enforcement laws on the wearing of seatbelts. Another significant vehicle safety regulation is the U.S. federal law that, since 1997,
requires frontal airbags for both the driver and the front-seat passenger in all new vehicles sold in the U.S.
In 2007, the U.S. adopted new regulations for head impact and enhanced thorax protection in side impact crashes, which now have been
fully phased-in. 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. Latin America introduced a basic rating program in 2010 followed by ASEAN NCAP in
Southeast Asia in 2011, and Global NCAP is rating vehicles sold in significant emerging markets. 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. 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. 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.
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.
There are also other plans for improved automotive safety through new or changed regulations, both in these countries and others that
could affect the Company’s market. However, there can be no assurance that changes in regulations will not adversely affect the demand
for the Company’s products or, at least, result in a slower increase in the demand for them.
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. 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.
Customer
% of Autoliv sales
% of Global LVP1)
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. In addition, a quality issue, shortcomings in the Company's service to a customer or uncompetitive prices
or products could result in the customer not awarding the Company new business, which will gradually have a negative impact on the
Company's sales when current contracts start to expire.
See also Note 20, Segment Information, to the Consolidated Financial Statements included herein.
47
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. The Company seeks to limit this customer payment risk by invoicing its major customers through their local subsidiaries in
each country, even for global contracts. By invoicing this way, the Company attempts to avoid having the receivables with a multinational
customer group exposed to the risk that a bankruptcy or similar event in one country would put all receivables with such customer group
at risk. In each country, the Company also monitors invoices becoming overdue.
Even so, if a major customer is unable to fulfill its payment obligations, it is likely that the Company would be forced to record a substantial
loss on such receivables.
DEPENDENCE ON SUPPLIERS
The Company relies on internal and/or external suppliers in order to meet its delivery commitments to the customers. In some cases,
suppliers are dictated by the customers. The Company's supply chain organization continually reviews sourcing risks and actively works
on mitigating related supply chain risks.
The Company’s ambition is to maintain an optimal number of suppliers in all significant component technologies.
NEW COMPETITION
Increased competition may result in price reductions, reduced margins and the Company's inability to gain or hold market share. OEMs
rigorously evaluate suppliers on the basis of product quality, price, reliability and delivery as well as engineering capabilities, technical
expertise, product innovation, financial viability, application of lean principles, operational flexibility, customer service, and overall
management. To maintain the Company's competitiveness and position as a market leader, it is important to focus on all these aspects
of supplier evaluation and selection.
Although the market for occupant restraint systems has undergone a significant consolidation during the past ten years, the passive
safety market remains very competitive. 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.
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.
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.
Although the Company believes that its products and technology do not infringe upon the proprietary rights of others, there can be no
assurance that third parties will not assert infringement claims against the Company in the future. Also, there can be no assurance that
any patent now owned by the Company will afford protection against competitors that develop similar technology. As the Company
continues to expand its products and expand into new businesses, it will increase its exposure to intellectual property claims.
Financial Risks
The Company is exposed to financial risks through its operations. To reduce the financial risks and to take advantage of economies of
scale, the Company has a central treasury department supporting operations and management. The treasury department handles
external financial transactions and functions as the Company’s in-house bank for its subsidiaries.
The Board of Directors monitors compliance with the financial risk policy on an on-going basis. For information about specific financial
risks, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk.
48
Significant Accounting Policies and Critical Accounting Estimates
NEW ACCOUNTING STANDARDS
The Company has considered all applicable recently issued accounting standards. The Company has summarized in Note 2, Summary
of Significant Accounting Policies, to the Consolidated Financial Statements each of the recently issued accounting standards and stated
the impact or whether management is continuing to assess the impact.
CRITICAL ACCOUNTING ESTIMATES
The Company’s significant accounting policies are disclosed in Note 2, Summary of Significant Accounting Policies, to the Consolidated
Financial Statements included herein. The application of accounting policies necessarily requires judgments and the use of estimates by
a Company’s management. Actual results could differ from these estimates. 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. The Company considers an accounting estimate to be critical if:
•
It requires management to make assumptions about matters that were uncertain at the time of the estimate, and
•
Changes in the estimate or different estimates that could have been selected would have had a material impact on the
Company's financial condition or results of operations. 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. These might change over time based on the
current facts and circumstances.
REVENUE RECOGNITION
In accordance with ASC 606, Revenue from Contracts with Customers, revenue is measured based on consideration specified in a
contract with a customer, adjusted for any variable consideration (i.e., price concessions) and estimated at contract inception. 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. Negotiations with customers
is an ongoing process and the recognition of variable considerations is impacted by the outcome and timing of these negations. Estimating
variable consideration to be received or paid related to price concessions requires significant judgments by management that affect the
amount of revenue recorded in the financial statements due to the unique facts and circumstances in each of the customer agreements
and the on-going commercial negotiations with the customers. For the year-end 2024 the company recognized an accrual amounting to
$185 million net for variable considerations to be received or paid for variable considerations versus $173 million the year before.
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. If the payments are capitalized, the amounts are amortized
to revenue as the related goods are transferred. 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.
The Company diligently defends itself in such matters and, in addition, carries insurance coverage to the extent reasonably available
against insurable risks.
The Company records liabilities for claims, lawsuits and proceedings when they are probable and it is possible to reasonably estimate
the cost of such liabilities. Legal costs expected to be incurred in connection with a loss contingency are expensed as such costs are
incurred.
A loss contingency is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and
the amount of the loss can be reasonably estimated. 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 continuously assesses the relevant facts and circumstances for on-going litigation matters in its determination of whether
it is probable that an asset has been impaired or a liability has been incurred. The Company also considers its historical experience of
similar matters using significant judgement to make its estimates. For the years ended December 31, 2024 and 2023 management's
estimation process has been consistent and there have not been any material changes to the contingent liabilities recorded during
2024.
For further information, see Note 18 Contingent Liabilities describing the significant on-going claims and lawsuits the company is involved
in.
49
RECALL PROVISIONS AND WARRANTY OBLIGATIONS
The Company records liabilities for product recalls when probable claims are identified and when it is possible to reasonably estimate
costs. Recall costs are costs incurred when the customer decides to formally recall a product due to a known or suspected safety concern.
Product recall costs are estimated based on the expected cost of replacing the product and the customer´s cost of carrying out the recall,
which is affected by the number of vehicles subject to recall and the cost of labor and materials to remove and replace the defective
product. The Company maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of
both approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent
based on our prior claims experience. The Company’s insurance policies generally include coverage of the costs of a recall, although
costs related to replacement parts are generally not covered. Actual costs incurred could differ from the amounts estimated, requiring
adjustments to these reserves in future periods. It is possible that changes in our assumptions or future product recall issues could
materially affect our financial position, results of operations or cash flows.
Estimating warranty obligations requires the Company to forecast the resolution of existing claims and expected future claims on products
sold. The Company bases the estimate on historical trends of units sold and payment amounts, combined with our current understanding
of the status of existing claims and discussions with our customers. These estimates are re-evaluated on an ongoing basis. Actual
warranty obligations could differ from the amounts estimated requiring adjustments to existing reserves in future periods. Due to the
uncertainty and potential volatility of the factors contributing to developing these estimates, changes in our assumptions could materially
affect our results of operations.
The provision recorded for product liabilities for the years ended December 31, 2024 and 2023 were $65 million and $96 million
respectively. The Company continuously assesses the relevant facts and circumstances for on-going product recall matters and considers
its historical experience of similar matters using significant judgement to make its estimates, which are generally supported by external
counsel expertise. For the years ended December 31, 2024 and 2023 respectively management’s estimation process has been consistent
and the ultimate outcome for settled product recall matters during the years ended December 31, 2024 and 2023 as compared to
management estimations have been favorable. The reversal of the reserve in 2024 was related to certain recall issues that were settled
with a favorable outcome.
For further information, see Note 13 Product Related Liabilities and Note 18 Contingent Liabilities.
DEFINED BENEFIT PENSION PLANS
The Company has defined benefit pension plans in thirteen countries. The most significant plans exist in the U.S. 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. 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%. The
discount rate for the U.S. plans has been set based on the rates of return of high-quality fixed-income investments currently available at
the measurement date and are expected to be available during the period the benefits will be paid. 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%.
The table below illustrates the sensitivity of the U.S. net periodic benefit cost and projected U.S. benefit obligation to a 1pp change in the
discount rate and decrease in return on plan assets for the U.S. plans (in millions). The use of actuarial assumptions is an area of
management’s estimate.
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
50
INCOME TAXES
Significant judgment is required in determining the worldwide provision for income taxes. 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. Deferred tax
assets are reduced by the amount of any tax benefits that are not expected to be realized. A valuation allowance is recognized if, based
on the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.
Evaluation of the realizability of deferred tax assets is subject to significant judgment requiring careful consideration of all facts and
circumstances, including key factors such as projected future profitability including tax planning strategies, interpretation of applicable tax
laws and on-going or anticipated tax audits. Deferred net tax assets amounted to $394 million for the year 2024 including a valuation
allowance of $126 million. For 2023 the deferred net tax assets amounted to $394 million including a valuation allowance of $129 million.
The Company evaluates its uncertain tax positions based on enacted tax laws and consideration of all facts and circumstances, including
key factors such as interpretation of applicable tax laws, on-going tax audits or anticipated tax controversies. The unrecognized tax
benefits amounted to $35 million and $83 million respectively for the year 2024 and 2023. The change mainly relates to expiration of
statutes of limitations.
See also the discussion of reserves for uncertain tax positions, and the determination of valuation allowances on the Company's deferred
tax assets in Note 5, Income Taxes, to the Consolidated Financial Statements.
51
Item 7A. Quantitative and Qualitative 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. See also Note 2, Summary of Significant Accounting Policies to the
Consolidated Financial Statements included with this Annual Report for information about how these risks are quantified.
CURRENCY RISKS
1. Transaction Exposure and Revaluation effects
Transaction exposure arises because the cost of a product originates in one currency and the product is sold in another currency.
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 four largest net exposures are U.S. dollars (sell)
against the Mexican Peso, Romanian Lei (buy) against the Euro, U.S. dollars (buy) against Korean Won and U.S. dollars (buy) against
Japanese Yen. Together these currencies accounted for approximately 50% of the Company’s net currency transaction exposure.
Since the Company can only effectively hedge these currency flows in the short term, periodic hedging would only reduce the impact of
fluctuations temporarily. Over time, periodic hedging would postpone but not reduce the impact of fluctuations. 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. Translation Exposure in the Income Statement and Balance Sheet
Another effect of exchange rate fluctuations arises when the income statements of non-U.S. subsidiaries are translated into U.S. dollars.
Outside the U.S., the Company’s most significant currency is the Euro. 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 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.
A translation exposure also arises when the balance sheets of non-U.S. subsidiaries are translated into U.S. dollars. The policy of the
Company is to finance major subsidiaries in the country’s local currency and to minimize the amounts held by subsidiaries in foreign
currency accounts.
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. 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.
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. 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. 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. 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.
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. See Note 14 to the Consolidated Financial Statements included herein.
52
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.
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. 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. The Company
also has established programs for short-term issuance of commercial papers in the Swedish and US markets and short-term credit
agreements, e.g., bank overdrafts and money market loans.
To ensure diversification of debt maturities no more than 20% of the Autoliv Group’s total debt may mature the next 12 months, unless
such maturities (in excess of 20%) are 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.
CAPITAL STRUCTURE AND CREDIT RATING
The overall objective relating to Autoliv’s target capital structure and credit rating is to provide the Company with sufficient flexibility to
manage the inherent risks and cyclicality in Autoliv’s business and allow the Company to realize strategic opportunities and fund growth
initiatives while creating shareholder value.
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.
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. 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. 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.
CALCULATION OF NON-GAAP MEASURE LEVERAGE RATIO
December 31,
2024
2023
Net debt1)
$
1,554
$
1,367
Pension liabilities
153
159
Debt per the Policy
1,708
1,527
Net income2)
648
489
Income taxes2)
227
123
Interest expense, net2,3)
95
80
Other non-operating items, net2)
16
3
Income from equity method investments2)
(7)
(5)
Depreciation and amortization of intangibles2)
387
378
Capacity alignments costs and antitrust related matters2)
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.
53
CREDIT RISK IN FINANCIAL MARKETS
Credit risk refers to the risk of a financial counterparty being unable to fulfill an agreed-upon obligation.
In the Company’s financial operations, credit risk arises when cash is deposited with banks and when entering into forward exchange
agreements, swap contracts or other financial instruments.
The policy of the Company is to work with banks that have a high credit rating and that participate in Autoliv’s financing.
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, 2024, the Company held $31 million in AAA rated money market funds.
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.
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. 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.
Item 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets of Autoliv as of December 31, 2024 and 2023 and the Consolidated Statements of Income,
Comprehensive Income, Cash Flows and Total Equity for each of the three years in the period ended December 31, 2024, the Notes to
the Consolidated Financial Statements, and the Reports of the Independent Registered Public Accounting Firm are included below.
All of the schedules specified under Regulation S-X to be provided by Autoliv have been omitted either because they are not applicable,
are not required or the information required is included in the financial statements or notes thereto.
54
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Autoliv, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Autoliv, Inc. (the Company) as of December 31, 2024 and 2023, the
related consolidated statements of income, comprehensive income, total equity and cash flows for each of the three years in the period
ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and
2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity
with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our
report dated February 20, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were
communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to
the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures
to which they relate.
Revenue recognition
Description of the
Matter
As discussed in Note 2 to the consolidated financial statements, the Company measures revenue based on
consideration specified in a contract with a customer, adjusted for any variable consideration (i.e. price
concessions). Revenue is recognized based on the agreed-upon price at the time of shipment, and sales
incentives, allowances and certain customer payments are recognized as a reduction to revenue at the time of the
commitment to provide such incentives or make such payments.
Auditing revenue recorded for customer contracts containing variable consideration, that are subject to on-going
commercial negotiations for price concessions, was complex and judgmental due to the difficulty in evaluating the
sufficiency of evidence available to assess the existence of and likely outcome of on-going commercial
negotiations.
How We
Addressed the
Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls
over management’s review of customer contracts containing variable consideration. This included testing controls
over management’s process to identify and evaluate the accounting of customer contracts that contain sales
incentives, allowances, and customer payments that impact revenue recognition.
Our audit procedures to assess the Company’s identification of and accounting for contracts containing variable
consideration that are subject to on-going commercial negotiations for price concessions, included, among others,
interviewing and obtaining written representations from executives, within the Company, responsible for such
negotiations with customers and testing a sample of payments and credit memos issued to customers. Our
procedures also included inspecting a sample of customer agreements, and other related supporting
documentation, evaluating the terms therein and assessing the appropriateness of the accounting treatment.
55
Product recall liabilities
Description of the
Matter
As discussed in Notes 2, 13 and 18 to the consolidated financial statements, the Company is exposed to product
liability claims in the event its products fail to perform as represented and such failure results, or is alleged to result,
in bodily injury, and/or property damage or other loss. The Company records liabilities for product recalls when
probable claims are identified and when it is possible to reasonably estimate costs. Provisions for product recalls
are estimated based on the expected cost of replacing the product and the customer’s cost of carrying out the
recall, which is affected by the number of vehicles subject to recall and the cost of labor and materials to remove
and replace the defective product.
Auditing product recall liabilities was complex due to the uncertainty inherent in identifying product recalls, as well
as the assumptions and estimates management uses to calculate the provisions for product recalls. These
significant assumptions and estimates include the nature, likelihood, timing, and anticipated cost of known and
potential claims.
How We
Addressed the
Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls
over the Company’s product recall liabilities process. This included testing controls over management’s process
to identify product recalls and determine the assumptions and estimates used to record product recall liabilities.
To audit product recall liabilities, our audit procedures included, among others, obtaining and reviewing source
documentation, used by the Company to estimate the liability and assessing the reasonableness of assumptions
used by performing independent calculations and sensitivity analyses to identify contrary evidence. We evaluated
the Company’s ability to estimate the product recall liabilities by performing retrospective reviews of management’s
estimates and comparing actual results to previous estimates and judgments made by management. We also
obtained letters from the Company’s internal and external legal counsel addressing material claims against the
Company, if any, and examined relevant third-party automotive safety regulatory information to identify potential
unrecorded product recall liabilities.
/s/ Ernst & Young AB
We have served as the Company's auditor since 1984.
Stockholm, Sweden
February 20, 2025
56
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Autoliv, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Autoliv, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)
(the COSO criteria). In our opinion, Autoliv, Inc. (the Company) maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income,
comprehensive income, total equity and cash flows for each of the three years in the period ended December 31, 2024, and the related
notes and our report dated February 20, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young AB
Stockholm, Sweden
February 20, 2025
57
Consolidated Statements of Income
Years ended December 31,
(DOLLARS AND SHARES IN MILLIONS, EXCEPT PER SHARE DATA)
2024
2023
2022
Net sales
Note 20
$
10,390
$
10,475
$
8,842
Cost of sales
(8,463)
(8,654)
(7,446)
Gross profit
1,927
1,822
1,396
Selling, general and administrative expenses
(530)
(500)
(440)
Research, development and engineering expenses, net
Note 2
(398)
(425)
(390)
Other income (expense), net
Notes 12, 18
(19)
(207)
93
Operating income
979
690
659
Income from equity method investment
Note 8
7
5
3
Interest income
13
13
6
Interest expense
Note 14
(108)
(93)
(60)
Other non-operating items, net
(16)
(3)
(5)
Income before income taxes
875
612
603
Income tax expense
Note 5
(227)
(123)
(178)
Net income
648
489
425
Less: Net income attributable to non-controlling interest
1
1
2
Net income attributable to controlling interest
$
646
$
488
$
423
Earnings per share - basic
$
8.06
$
5.74
$
4.86
Earnings per share - diluted
$
8.04
$
5.72
$
4.85
Weighted average number of shares outstanding, net of
treasury shares (in millions)
80.2
85.0
87.1
Weighted average number of shares outstanding, assuming
dilution and net of treasury shares (in millions)
80.4
85.2
87.2
Cash dividend per share - declared
$
2.74
$
2.66
$
2.58
Cash dividend per share - paid
$
2.74
$
2.66
$
2.58
See Notes to the Consolidated Financial Statements.
58
Consolidated Statements of Comprehensive Income
Years ended December 31,
(DOLLARS IN MILLIONS)
2024
2023
2022
Net income
$
648
$
489
$
425
Other comprehensive income (loss)before tax:
Change in cumulative translation adjustments
(161)
20
(136)
Net change in unrealized components of defined benefit plans
(4)
7
29
Other comprehensive income (loss), before tax
(165)
27
(107)
Tax effect allocated to other comprehensive income (loss)
1
(1)
(9)
Other comprehensive income (loss), net of tax
(164)
25
(116)
Comprehensive income
484
514
309
Less: Comprehensive income attributable to non-controlling interest
1
1
0
Comprehensive income attributable to controlling interest
$
483
$
513
$
309
See Notes to the Consolidated Financial Statements.
59
Consolidated Balance Sheets
At December 31,
(DOLLARS AND SHARES IN MILLIONS)
2024
2023
Assets
Cash and cash equivalents
$
330
$
498
Receivables, net
Note 6
1,993
2,198
Inventories, net
Note 7
921
1,012
Income tax receivable
38
60
Prepaid expenses and accrued income
167
173
Other current assets
Note 13, 18
34
33
Total current assets
3,483
3,974
Property, plant and equipment, net
Note 9
2,239
2,192
Operating lease right-of-use assets
Note 3
158
176
Goodwill and intangible assets, net
Note 10
1,375
1,385
Other non-current assets
Note 8, 18
548
606
Total non-current assets
4,320
4,358
Total assets
7,804
8,332
Liabilities and equity
Short-term debt
Note 14
387
538
Accounts payable
1,799
1,978
Accrued expenses
Notes 12, 13
1,056
1,135
Income tax payable
120
122
Operating lease liabilities, current
Note 3
41
39
Other current liabilities
231
223
Total current liabilities
3,633
4,035
Long-term debt
Note 14
1,522
1,324
Pension liability
Note 19
153
159
Operating lease liabilities, non-current
Note 3
118
135
Other non-current liabilities
92
109
Total non-current liabilities
1,885
1,728
Commitments and contingencies
Note 18
Common stock1)
80
88
Additional paid-in capital
910
1,044
Retained earnings
2,105
2,289
Accumulated other comprehensive loss
Note 15
(659)
(496)
Treasury stock (2.7 and 4.9 million shares, respectively)
(160)
(368)
Total controlling interest’s equity
2,276
2,557
Non-controlling interest
10
13
Total equity
2,285
2,570
Total liabilities and equity
$
7,804
$
8,332
1) Number of shares: 350 million authorized for both years, 80.4 and 87.5 million issued, and 77.7 and 82.6 million outstanding, net of treasury shares, for
2024 and 2023, respectively.
See Notes to the Consolidated Financial Statements.
60
Consolidated Statements of Cash Flows
Years ended December 31,
(DOLLARS IN MILLIONS)
2024
2023
2022
Operating activities
Net income
$
648
$
489
$
425
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization
387
378
363
Gain on divestiture of property
(4 )
—
(80 )
Deferred income taxes
(30 )
(109 )
(40 )
Undistributed earnings from equity method investments, net of dividends
(1 )
(1 )
(1 )
Other, net
7
(10 )
(13 )
Net change in operating assets and liabilities:
Receivables and other assets, gross
114
(213 )
(297 )
Inventories, gross
28
(22 )
(243 )
Accounts payable and accrued expenses
(95 )
426
596
Income taxes
6
43
2
Net cash provided by operating activities
1,059
982
713
Investing activities
Expenditures for property, plant and equipment
(579 )
(573 )
(585 )
Proceeds from sale of property, plant and equipment
17
4
101
Net cash used in investing activities
(563 )
(569 )
(485 )
Financing activities
Net (decrease) increase in other short-term debt
(126 )
61
167
Proceeds from long-term debt
526
559
—
Repayment of long-term debt
(306 )
(533 )
(357 )
Dividends paid
(219 )
(225 )
(224 )
Stock repurchases
(552 )
(352 )
(115 )
Common stock options exercised
1
1
0
Dividends paid to non-controlling interest
(5 )
(1 )
(2 )
Net cash used in financing activities
(680 )
(490 )
(531 )
Effect of exchange rate changes on cash and cash equivalents
16
(20 )
(73 )
Decrease in cash and cash equivalents
(168 )
(96 )
(375 )
Cash and cash equivalents at beginning of year
498
594
969
Cash and cash equivalents at end of year
$
330
$
498
$
594
See Notes to the Consolidated Financial Statements.
61
Consolidated Statements of Total Equity
Accumulated
Additional
other com-
Total parent
Non-
(DOLLARS AND SHARES
Number of
Common
paid in
Retained
prehensive
Treasury
shareholders’
controlling
Total
IN MILLIONS)
shares
stock
capital
earnings
(loss) income1)
stock
equity
interest
equity
Balance at December 31, 2021
103
$
103
$
1,329
$
2,742
$
(408 )
$
(1,133 )
$
2,633
$
15
$
2,648
Comprehensive Income:
Net income
423
423
2
425
Foreign currency translation
(134 )
(134 )
(1 )
(136 )
Pension liability
20
20
20
Total Comprehensive Income
309
0
309
Retired and repurchased shares
(11 )
(11 )
(216 )
(631 )
744
(115 )
(115 )
Stock-based compensation
10
10
10
Cash dividends declared
(225 )
(225 )
(225 )
Dividends paid to non-controlling
interest on subsidiary shares
(2 )
(2 )
Balance at December 31, 2022
91
$
91
$
1,113
$
2,310
$
(522 )
$
(379 )
$
2,613
$
13
$
2,626
Comprehensive Income:
Net income
488
488
1
489
Foreign currency translation
20
20
(0 )
20
Pension liability
6
6
6
Total Comprehensive Income
513
1
514
Retired and repurchased shares
(4 )
(4 )
(70 )
(282 )
(356 )
(356 )
Stock-based compensation
11
11
11
Cash dividends declared
(225 )
(225 )
(225 )
Dividends paid to non-controlling
interest on subsidiary shares
(1 )
(1 )
Balance at December 31, 2023
88
$
88
$
1,044
$
2,289
$
(496 )
$
(368 )
$
2,557
$
13
$
2,570
Comprehensive Income:
Net income
646
646
1
648
Foreign currency translation
(161 )
(161 )
(0 )
(161 )
Pension liability
(3 )
(3 )
(3 )
Total Comprehensive Income
483
1
484
Retired and repurchased shares
(7 )
(7 )
(134 )
(612 )
194
(558 )
(558 )
Stock-based compensation
13
13
13
Cash dividends declared
(219 )
(219 )
(219 )
Dividends paid to non-controlling
interest on subsidiary shares
(5 )
(5 )
Balance at December 31, 2024
80
$
80
$
910
$
2,105
$
(659 )
$
(160 )
$
2,276
$
10
$
2,285
1) See Note 15 for further details – includes tax effects where applicable.
See Notes to the Consolidated Financial Statements.
62
Notes to the Consolidated Financial Statements
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
1. Basis of Presentation
NATURE OF OPERATIONS
Through its operating subsidiaries, the Company is a leading developer, manufacturer and supplier of passive safety systems to the
automotive industry with a broad range of product offerings.
Passive safety systems are primarily meant to improve safety for occupants in a vehicle. Passive safety systems include modules and
components for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, steering wheels and inflator
technologies.
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.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements have been prepared in accordance with United States (U.S.) Generally Accepted Accounting
Principles (GAAP) and include Autoliv, Inc. and all companies over which Autoliv, Inc. directly or indirectly exercises control, which as a
general rule means that the Company owns more than 50% of the voting rights.
Consolidation is also required when the Company has both the power to direct the activities of a variable interest entity (VIE) and the
obligation to absorb losses or the right to receive benefits from the VIE that could be significant to the VIE.
All intercompany accounts and transactions within the Company have been eliminated from the consolidated financial statements.
Investments in affiliated companies in which the Company exercises significant influence over the operations and financial policies, but
does not control, are reported using the equity method of accounting. Generally, the Company owns between 20-50% of such
investments.
SEGMENT REPORTING
In accordance with ASC 280, Segment Reporting, the operating segments are determined based on the information provided to the Chief
Operating Decision Maker (CODM) on a regular basis and used for the purpose of assessing performance and allocating resources within
the Company. The CEO is deemed to be the CODM of Autoliv since he is the person who makes all major decisions on how to allocate
the resources and assess the performance of the Company for both strategic and operational initiatives.
ASC 280 indicates that a component is an operating segment if it meets the following criteria:
•
It engages in business activities from which it may earn revenues and incur expenses.
•
Its operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the segment
and assess its performance.
•
Its discrete financial information is available.
The Company as a whole has met the definition of an operating segment as it engages in business activities from which it may earn
revenues and incur expenses, the consolidated operating results are regularly reviewed by the CEO/CODM to allocate resources and
assess performance, and discrete financial information is available. Additionally, as Autoliv supplies customers on a global basis it also
manages the business on a global basis. Therefore, based on the above analysis, the Company has concluded that the Company is the
single operating and reportable segment under ASC 280, Segment Reporting. For more information on the Company's segment, see
Note 20.
RECLASSIFICATIONS AND ROUNDINGS
Certain prior-year amounts have been reclassified to conform to current year presentation.
Certain amounts in the consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have
been calculated using unrounded amounts.
63
2. Summary of Significant Accounting Policies
USE OF ESTIMATES
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. The accounting
estimates that require management’s most significant judgments include the estimation of variable consideration for the Company's
contracts with customers, valuation of stock-based compensation payments, 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. Actual results could differ from those
estimates.
REVENUE RECOGNITION
In accordance with ASC 606, Revenue from Contracts with Customers, revenue is measured based on consideration specified in a
contract with a customer, adjusted for any variable consideration (i.e., price concessions) and estimated at contract inception. 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 anticipated future pricing strategies. The Company
recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is recorded
to the agreed-upon price at the time of shipment, and sales incentives, allowances and certain payments to customers are recognized as
a reduction to revenue at the time of the commitment to provide such incentives or make these payments are made by the Company.
In addition, from time to time, the Company may make payments to or receive additional consideration from customers in connection with
ongoing and future business. These payments to or cash receipts from customers are generally recognized to revenue at the time of the
commitment unless the payments to customers can be clearly linked to the future business. If the payments to customers are capitalized,
the amounts are amortized to revenue as the related goods are transferred.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and
collected by the Company from a customer, are excluded from revenue.
Shipping and handling costs associated with outbound freight before control of a product has transferred to a customer are accounted for
as a fulfillment cost and are included in cost of sales.
Nature of goods and services
The Company generates revenue from the sale of parts, which includes airbag and seatbelt products and components, to original
equipment manufacturers (“OEMs”).
The Company accounts for individual products separately if they are distinct (i.e., if a product is separately identifiable from other items
and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration for
each of the products, including any price concessions, is based on their stand-alone selling prices. The stand-alone selling prices are
determined based on the cost-plus margin approach.
The Company recognizes revenue for parts primarily at a point in time. For parts with revenue recognized at a point in time, the Company
recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard commercial terms (typically FOB
shipping point).
There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the
Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and
a related asset and associated cost of goods sold and reduction in inventory. However, the financial impact of these contracts is immaterial
considering the very short production cycles and limited inventory days on hand. The contract asset balances with customers, included
in other current assets, amounted to $20 million as of December 31, 2024 and 2023.
The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e., price concessions).
Customers typically pay for the parts based on customary business practices.
64
RESEARCH, DEVELOPMENT AND ENGINEERING, NET (R,D & E)
Research and development and most engineering expenses are expensed as incurred. These expenses are reported net of expense
reimbursements from contracts to perform engineering design and product development fulfillment activities related to the production of
parts. For the years 2024, 2023 and 2022 total reimbursements from customers were $213 million, $192 million and $204 million,
respectively.
Certain engineering expenses related to long-term supply arrangements are capitalized when defined criteria in accordance with ASC
340-10, such as the existence of a contractual guarantee for reimbursement, are met.
Tooling is generally agreed upon as a separate contract or a separate component of an engineering contract, as a pre-production project.
Capitalization of tooling costs is made only when the specific criteria for capitalization of customer funded tooling in accordance with ASC
340-10 is met. As of December 31, 2024 and 2023 the Company had capitalized costs for customer owned tooling as prepaid expenses
amounting to $74 million and $79 million, respectively. Tools owned by the Company that fulfills the criteria for capitalization is reported
as Property, Plant & Equipment (P,P&E). Depreciation on the Company’s own tooling is recognized in the Consolidated Statements of
Income as Cost of sales.
STOCK-BASED COMPENSATION
The compensation costs for all of the Company’s stock-based compensation awards are determined based on the fair value method as
defined in ASC 718, Compensation –Stock Compensation. The Company records the compensation expense for awards under the Stock
Incentive Plan, including Restricted Stock Units (RSUs), Performance Shares (PSUs) and stock options (SOs), over the respective vesting
period. For further details, see Note 17.
INCOME TAXES
Current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current year. In
certain circumstances, payments or refunds may extend beyond twelve months, in such cases amounts would be classified as non-
current taxes payable or receivable. Deferred tax liabilities or assets are recognized for the estimated future tax effects attributable to
temporary differences and carryforwards that result from events that have been recognized in either the financial statements or the tax
returns, but not both. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws.
Deferred tax assets are reduced by the amount of any tax benefits that are not expected to be realized. A valuation allowance is
recognized if, based on the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax asset
will not be realized. Evaluation of the realizability of deferred tax assets is subject to significant judgment requiring careful consideration
of all facts and circumstances. The Company classifies deferred tax assets and liabilities as non-current in the Consolidated Balance
Sheet. Tax assets and liabilities are not offset unless attributable to the same tax jurisdiction and netting is possible according to law and,
as it relates to payables and receivables, expected to take place in the same period.
Tax benefits associated with tax positions taken in the Company’s income tax returns are initially recognized when it is more likely than
not that those tax positions will be sustained upon examination by the relevant taxing authorities. The Company’s evaluation of its tax
benefits is based on the probability of the tax position being upheld if challenged by the taxing authorities (including through negotiation,
appeals, settlement and litigation). Whenever a tax position does not meet the initial recognition criteria, the tax benefit is subsequently
recognized if there is a substantive change in the facts and circumstances that cause a change in judgment concerning the sustainability
of the tax position upon examination by the relevant taxing authorities. In cases where tax benefits meet the initial recognition criterion,
the Company continues, in subsequent periods, to assess its ability to sustain those positions. A previously recognized tax benefit is
derecognized when it is no longer more likely than not that the tax position would be sustained upon examination. Liabilities for
unrecognized tax benefits are classified as non-current unless the payment of the liability is expected to be made within the next 12
months.
EARNINGS PER SHARE
The Company calculates basic earnings per share (EPS) by dividing net income attributable to controlling interest by the weighted-
average number of shares of common stock outstanding for the period (net of treasury shares). The Company’s unvested RSUs and
PSUs, of which some include the right to receive non-forfeitable dividend equivalents, are considered participating securities. The diluted
EPS reflects the potential dilution that could occur if common stock was issued for awards under the Stock Incentive Plan and is calculated
using the treasury stock method. The treasury stock method assumes that the Company uses the proceeds from the exercise of stock
option awards to repurchase ordinary shares at the average market price during the period. For unvested restricted stock, assumed
proceeds under the treasury stock method will include unamortized compensation cost and windfall tax benefits or shortfalls. For further
details, see Notes 17 and 21.
CASH EQUIVALENTS
The Company considers all highly liquid investment instruments purchased with a maturity of three months or less to be cash equivalents.
65
RECEIVABLES AND ALLOWANCE FOR EXPECTED CREDIT LOSSES
Receivables are recorded at the invoice amount, which represents the fair value of the consideration received or receivable.
In addition to individually assess overdue customer balances for expected credit losses, the Company also calculates an allowance that
reflects the expected credit losses on receivables considering both historical experience as well as forward looking assumptions. The
method calculates the expected credit loss for a group of customers by using the customer groups’ average short-term default rates
based on officially published credit ratings and the Company’s historical experience. These default rates are considered the Company’s
best estimate of the customer’s ability to pay. The Company regularly reassess the customer groups and the applied customer group’s
default rates by using its best judgment when considering changes in customer’s credit ratings, customer’s historical payments and loss
experience, current market and economic conditions and the Company’s expectations of future market and economic conditions.
There can be no assurance that the amount ultimately realized for receivables will not be materially different than that assumed in the
calculation of the allowance for expected credit losses.
INVENTORIES
The cost of inventories is computed according to the first-in first-out method (FIFO). Cost includes the cost of materials, direct labor and
the applicable share of manufacturing overhead. Inventories are evaluated based on individual or, in some cases, groups of inventory
items. Reserves are established to reduce the value of inventories to the lower of cost or net realizable value. Net realizable value is the
estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company calculates
provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage.
Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. There can be no
assurance that the amount ultimately realized for inventories will not be materially different than that assumed in the calculation of the
reserves.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment is recorded at historical cost. Construction in progress generally involves short-term projects for which
capitalized interest is not significant. The Company provides for depreciation of property, plant and equipment computed under the
straight-line method over the assets’ estimated useful lives, or in the case of leasehold improvements over the shorter of the useful life
or the lease term. Amortization on finance leases is recognized with depreciation expense in the Consolidated Statements of Income over
the shorter of the assets’ expected life or the lease contract term. Repairs and maintenance are expensed as incurred.
LEASES
In accordance with ASC 842, Leases, the Company recognizes contracts that is, or contains, a lease when the contract conveys the right
to control the use of a physically identified asset for a period of time in exchange for consideration in the balance sheet as a right-of-use
asset and lease liability. The Company recognizes a right-of-use asset and a lease liability at lease commencement. The lease liability
for both finance and operating leases is measured at the present value of the remaining lease payments, discounted at the Company's
incremental borrowing rate (if the implicit interest rate in the lease contract is not readily determinable). The right-of-use asset (ROU) for
finance and operating leases is initially measured at the sum of the initial lease liability plus initial direct costs plus prepaid lease payments
minus lease incentives received. Lease payments include undiscounted fixed payments plus optional payments that are reasonably
certain to be owed. Lease payments do not include variable lease payments other than those that depend on an index or rate. Variable
lease payments that depend on an index or a rate are included in the calculation of lease payments and in the measurement of the lease
liability.
If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The
Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would
have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency.
The Company has elected the practical expedient of not separating lease components from non-lease components for all its classes of
underlying assets. The Company has also elected to recognize the lease payments for short-term leases in its consolidated statement of
income on a straight-line basis over the lease term and recognize the variable lease payments in the period in which the obligation for
those payments is incurred.
Finance lease right-of-use assets are presented together with other property, plant and equipment assets and finance lease liabilities are
presented together with other current and non-current liabilities in the Consolidated Balance Sheets. Finance leases were not material
as of December 31, 2024.
For further details on the Company’s leases, see Note 3.
66
LONG-LIVED ASSET IMPAIRMENT
The Company evaluates the carrying value and useful lives of long-lived assets, other than goodwill and intangible assets, when
indications of impairment are evident or it is likely that the useful lives have decreased, in which case the Company depreciates the assets
over the remaining useful lives. Impairment testing is primarily done by using the cash flow method based on undiscounted future cash
flows. Estimated undiscounted cash flows for a long-lived asset being evaluated for recoverability are compared with the respective
carrying amount of that asset. If the estimated undiscounted cash flows exceed the carrying amount of the assets, the carrying amounts
of the long-lived asset are considered recoverable and an impairment cannot be recorded. However, if the carrying amount of a group of
assets exceeds the undiscounted cash flows, an entity must then measure the long-lived assets’ fair value to determine whether an
impairment loss should be recognized, generally using a discounted cash flow model. Generally, the lowest level of cash flows for
impairment assessment is customer platform level.
GOODWILL AND INTANGIBLE ASSETS
Goodwill represents the excess of the fair value of consideration transferred over the fair value of net assets of businesses acquired.
Goodwill is not amortized but subject to at least an annual review for impairment. Other definite-lived intangible assets, principally related
to acquired technology, are amortized over their useful lives which range from 3 to 25 years.
The Company performs its annual impairment testing in the fourth quarter of each year. Impairment testing is required more often than
annually if an event or circumstance indicates that an impairment, or decline in value, may have occurred. The Company uses either a
qualitative assessment or a quantitative calculation for its impairment testing. The qualitative assessment permits the Company to assess
whether it is more than likely than not (i.e., a likelihood of greater than 50%) that goodwill is impaired. If the Company concludes based
on the qualitative assessment that it is not more likely than not that the fair value of goodwill is less than its carrying amount, it would not
have to quantitatively determine the asset’s fair value. The Company also consider external factors that could affect the significant inputs
used to determine fair value.
In 2024, the Company performed a quantitative impairment test by calculating the fair value of its goodwill. The estimated fair market
value of goodwill is determined by the discounted cash flow method.
There were no impairments of goodwill from 2022 through 2024.
WARRANTIES AND RECALLS
The Company records liabilities for product recalls when probable claims are identified and when it is possible to reasonably estimate
costs. Recall costs are costs incurred when the customer decides to formally recall a product due to a known or suspected safety concern.
Product recall costs are estimated based on the expected cost of replacing the product and the customer´s cost of carrying out the recall,
which is affected by the number of vehicles subject to recall and the cost of labor and materials to remove and replace the defective
product. Insurance receivables, related to recall issues covered by the insurance, are included within other current and non-current assets
in the Consolidated Balance Sheets. Provisions for warranty claims are estimated based on prior experience, likely changes in
performance of newer products and the mix and volume of products sold. The provisions are recorded on an accrual basis.
RESTRUCTURING PROVISIONS
The Company defines restructuring expense to include costs directly associated with rightsizing, exit or disposal activities. Estimates of
restructuring charges are based on information available at the time such charges are recorded. In general, management anticipates that
restructuring activities will be completed within a timeframe such that significant changes to the exit plan are not likely. Due to inherent
uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially
estimated.
PENSION OBLIGATIONS
The Company provides for both defined contribution plans and defined benefit plans. A defined contribution plan generally specifies the
periodic amount that the employer must contribute to the plan and how that amount will be allocated to the eligible employees who perform
services during the same period. A defined benefit pension plan is one that contains pension benefit formulas, which generally determine
the amount of pension benefits that each employee will receive for services performed during a specified period of employment.
The amount recognized as a defined benefit liability is the net total of projected benefit obligation (PBO) minus the fair value of plan
assets (if any) (see Note 19).
67
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 (see Note 13). The
Company diligently defends itself in such matters and, in addition, carries insurance coverage to the extent reasonably available against
insurable risks. The Company records liabilities for claims, lawsuits and proceedings, when they are probable and it is possible to
reasonably estimate the cost of such liabilities. Legal costs expected to be incurred in connection with a loss contingency are expensed
as such costs are incurred.
The Company believes, based on currently available information, that the resolution of outstanding matters, other than any antitrust
related matters described in Note 18 after taking into account recorded liabilities and available insurance coverage, should not have a
material effect on the Company’s financial position or results of operations. However, due to the inherent uncertainty associated with such
matters, there can be no assurance that the final outcomes of these matters will not be materially different than currently estimated.
TRANSLATION OF NON-U.S. SUBSIDIARIES
The assets and liabilities of subsidiaries with functional currency other than U.S. dollars are translated into U.S. dollars based on the
current exchange rate prevailing at each balance sheet date and any resulting translation adjustments are included in accumulated other
comprehensive loss. The assets and liabilities of foreign subsidiaries whose local currency is not their functional currency are remeasured
from their local currency to their functional currency and then translated to U.S. dollars. Revenues and expenses are translated into U.S.
dollars using the average exchange rates prevailing for each period presented.
RECEIVABLES AND LIABILITIES IN NON-FUNCTIONAL CURRENCIES
Receivables and liabilities not denominated in functional currencies are converted at year-end exchange rates. Net transaction losses,
reflected in the Consolidated Statements of Income, amounted to $1 million in 2024, $(30) million in 2023 and $(25) million in 2022, and
are recorded in operating income if they relate to operational receivables and liabilities or are recorded in other non-operating items, net
if they relate to financial receivables and liabilities.
NEW ACCOUNTING STANDARDS
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards
updates (“ASUs”) to the FASB’s Accounting Standards Codification (ASC). The Company considers the applicability and impact of all
ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on
the Company’s consolidated financial statements.
Adoption of New Accounting Standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures,
which improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
The amendments in this update require that a public entity make additional disclosures related to segments if it has them. A public entity
that has a single reportable segment would be required to provide all the disclosures required by the amendments in this update and all
existing segment disclosures in Topic 280. The amendments in this update is effective for fiscal years beginning after December 15,
2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in this
update should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07
in the fourth quarter of 2024.The adoption of this guidance resulted in incremental disclosures in the Company’s financial statements.
See Note 20. Segment Information.
Accounting Standards Issued But Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, to enhance
the transparency and decision usefulness of income tax disclosures as well as improve the effectiveness of income tax disclosures. The
amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation
and (2) provide additional information for reconciling items that meet a quantitative threshold. The amendments in this update also require
that all entities disclose on an annual basis certain detailed information about income taxes paid. The amendments in this update related
to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent
categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.
The amendments allow investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related
tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The amendments
in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments in this
update should be applied on a prospective basis. Retrospective application is permitted. The Company has concluded that ASU 2023-09
will have a material impact on the income tax disclosures to its financial statements. The Company will adopt the amendments in this
update prospectively upon the effective date.
In March 2024, the SEC adopted final rules requiring registrants to disclose climate-related information in their annual reports. The final
rules require information about a registrant’s climate-related risks that have materially impacted, or are reasonably likely to have a material
impact on, its business strategy, results of operations, or financial condition. In addition, under the final rules, certain disclosures related
68
to severe weather events and other natural conditions will be required in a registrant’s audited financial statements. The new requirements
are required on a prospective basis and a phased-in compliance period becomes effective for the Company beginning with its Annual
Report on Form 10-K for the year ending December 31, 2025. However, pending the resolution of legal challenges that were subsequently
filed against these rules, in April 2024, the SEC stayed the effectiveness of the rules. Therefore, the disclosure requirements of these
rules and the timing of their effectiveness is uncertain. The Company is currently assessing the anticipated impact that the rules will have
on its financial statements if and when effective and will implement disclosures upon any such effective dates.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses, to improve financial reporting by requiring additional
information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The
amendments in ASU 2024-03 do not change or remove current expense disclosure requirements. The amendments require that at each
interim and annual reporting period an entity should disclose the amounts of (a) purchase of inventory, (b) employee compensation, (c)
depreciation and (d) intangible asset amortization included in each relevant expense caption. The amendments in ASU 2024-03 are
effective for annual reporting periods beginning after December 1, 2026, and interim reporting periods beginning after December 15,
2027. Early adoption is permitted. The amendments in ASU 2024-03 should be applied either (1) prospectively to financial statements
issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to any or all periods presented in the financial
statements. The Company is currently assessing the impact that ASU 2024-03 will have on its financial statements and will adopt the
amendments in this update prospectively upon the effective date.
3. Leases
The Company has operating leases for offices, manufacturing and research buildings, machinery, cars, data processing and other
equipment. The Company’s leases have remaining lease terms of 1-43 years, some of which include options to extend the leases for up
to 25 years, and some of which include options to terminate the leases within one year.
As of December 31, 2024, the Company has no additional material operating leases that have not yet commenced.
The following tables provide information about the Company’s operating leases. The Company has not identified any material finance
leases as of December 31, 2024; therefore, the finance lease components have not been disclosed in the tables below.
Lease cost
(Dollars in millions)
2024
2023
2022
Operating lease cost
$
47
$
54
$
50
Short-term lease cost
6
8
9
Variable lease cost
6
5
4
Sublease income
(1)
(1)
(1)
Total lease cost
$
58
$
66
$
62
Other information
Year ended or as of
December 31,
(Dollars in millions)
2024
2023
Cash paid for amounts included in the measurement of operating lease liabilities
$
45
$
47
Right-of-use assets obtained in exchange for new operating lease liabilities
27
70
Weighted-average remaining lease term - operating leases
8.9 years
9.4 years
Weighted-average discount rate - operating leases
3.3%
3.2%
Maturities of operating lease liabilities (undiscounted cash flows) are as follows:
(Dollars in millions)
Maturities
2025
$
38
2026
27
2027
21
2028
15
2029
12
Thereafter
72
Total operating lease payments
184
Less imputed interest
(25)
Total operating lease liabilities
$
159
69
4. Fair Value Measurements
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
The carrying value of cash and cash equivalents, accounts receivable, accounts payable, other current liabilities and short-term debt
approximate their fair value because of the short-term maturity of these instruments.
The Company uses derivative financial instruments, “derivatives”, as part of its debt management to mitigate the market risk that occurs
from its exposure to changes in interest and foreign exchange rates. The Company does not enter into derivatives for trading or other
speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial
policy. All derivatives are recognized in the consolidated financial statements at fair value. Certain derivatives are from time to time
designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other derivatives hedge
accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet
the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from
changes in interest and foreign exchange rates.
The degree of judgment utilized in measuring the fair value of the instruments generally correlates to the level of pricing observability.
Pricing observability is impacted by several factors, including the type of asset or liability, whether the asset or liability has an established
market and the characteristics specific to the transaction. Instruments with readily active quoted prices or for which fair value can be
measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized
in measuring fair value. Conversely, assets rarely traded or not quoted will generally have less, or no, pricing observability and a higher
degree of judgment utilized in measuring fair value.
Under U.S. GAAP, there is a disclosure framework hierarchy associated with the level of pricing observability utilized in measuring assets
and liabilities at fair value. The three broad levels defined by the hierarchy are as follows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported
date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently, and items
that are fair valued using other financial instruments, the parameters of which can be directly observed.
Level 3 - Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets
and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant
management judgment or estimation.
The Company’s derivatives are all classified as Level 2 of the fair value hierarchy.
The tables below present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as
of December 31, 2024 and December 31, 2023. The carrying value is the same as the fair value as these instruments are recognized in
the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements (ISDA agreements)
with all derivative counterparties, the fair values in the tables below and in the Consolidated Balance Sheets at December 31, 2024 and
December 31, 2023 have been presented on a gross basis. According to the close-out netting agreements, transaction amounts payable
to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company
choose not to offset are presented below.
DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS
There were no derivatives designated as hedging instruments as of December 31, 2024 and December 31, 2023.
70
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Derivatives not designated as hedging instruments, relate to economic hedges and are marked to market with all amounts recognized in
the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding at December 31, 2024 and
December 31, 2023 were foreign exchange swaps.
For 2024, the Company recognized a gain of $27 million in other non-operating items, net for derivative instruments not designated as
hedging instruments. For 2023, the Company recognized a gain of $2 million. For 2022, the Company recognized a gain of $2 million.
The realized part of the losses referred to above are reported under financing activities in the statement of cash flows. For 2024, 2023
and 2022, the gains and losses recognized as interest expense were immaterial.
DECEMBER 31, 2024
DECEMBER 31, 2023
Fair Value Measurements
Fair Value Measurements
Derivative asset
Derivative liability
Derivative asset
Derivative liability
Nominal
(Other current
(Other current
Nominal
(Other current
(Other current
(Dollars in millions)
volume
assets)
liabilities)
volume
assets)
liabilities)
DERIVATIVES NOT DESIGNATED
AS HEDGING INSTRUMENTS
Foreign exchange swaps, less
than 6 months
$
2,916
1) $
22
2) $
42
3) $
1,895
4) $
22
5) $
12
6)
TOTAL DERIVATIVES NOT
DESIGNATED AS HEDGING
INSTRUMENTS
$
2,916
$
22
$
42
$
1,895
$
22
$
12
1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $2,916 million.
2) Net amount after deducting for offsetting swaps under ISDA agreements is $22 million.
3) Net amount after deducting for offsetting swaps under ISDA agreements is $42 million.
4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $1,895 million.
5) Net amount after deducting for offsetting swaps under ISDA agreements is $22 million.
6) Net amount after deducting for offsetting swaps under ISDA agreements is $12 million.
FAIR VALUE OF DEBT
The fair value of long-term debt is determined either from quoted market prices as provided by participants in the secondary market or
for long-term debt without quoted market prices, estimated using a discounted cash flow method based on the Company’s current
borrowing rates for similar types of financing. The Company has determined that each of these fair value measurements of debt reside
within Level 2 of the fair value hierarchy.
During the first quarter of 2024, the Company issued a second 5.5-year €500 million green Eurobond. During the first quarter of 2023,
the Company issued its first 5-year €500 million green Eurobond.
The fair value and carrying value of debt are summarized in the table below.
DECEMBER 31, 2024
DECEMBER 31, 2023
(Dollars in millions)
CARRYING
VALUE1)
FAIR
VALUE
CARRYING
VALUE1)
FAIR
VALUE
LONG-TERM DEBT
Bonds
$
1,512
$
1,527
$
1,023
$
1,022
Loans
10
10
301
306
TOTAL
$
1,522
$
1,537
$
1,324
$
1,328
SHORT-TERM DEBT
Short-term portion of long-term debt
$
273
$
275
$
297
$
297
Overdrafts and other short-term debt
114
114
241
241
TOTAL
$
387
$
389
$
538
$
538
1) Debt as reported in balance sheet.
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A NON-RECURRING BASIS
In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also has assets and liabilities in its
balance sheet that are measured at fair value on a nonrecurring basis including certain long-lived assets, including equity method
investments, goodwill and other intangible assets, typically as it relates to impairment.
The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-
specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not
available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To
determine the fair value of long-lived assets as of the reporting date, the Company utilizes the projected cash flows expected to be
generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets.
For the period 2022-2024, the Company did not record any material impairment charges on its long-lived assets for its continuing
operations.
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5. Income Taxes
INCOME BEFORE INCOME TAXES (Dollars in millions)
2024
2023
2022
U.S.
$
(51)
$
29
$
(3)
Non-U.S.
926
583
606
Total
$
875
$
612
$
603
PROVISION FOR INCOME TAXES (Dollars in millions)
2024
2023
2022
Current
U.S. federal
$
(6)
$
19
$
32
Non-U.S.
260
210
181
U.S. state and local
3
3
5
Deferred
U.S. federal
(11)
(7)
(20)
Non-U.S.
(16)
(101)
(17)
U.S. state and local
(3)
(1)
(3)
Total income tax expense
$
227
$
123
$
178
EFFECTIVE INCOME TAX RATE (%)
2024
2023
2022
U.S. federal income tax rate
21.0 %
21.0 %
21.0 %
Non-Deductible Expenses
0.9
1.8
0.5
Foreign tax rate variances
2.2
4.6
3.6
Tax credits
(2.1)
(3.9)
(3.5)
Change in Valuation Allowances
0.5
11.6
(1.7)
Changes in tax reserves
(2.1)
2.7
(0.2)
Provision to Return
(1.5)
(0.2)
0.6
Earnings of equity investments
(0.2)
(0.2)
(0.1)
Withholding taxes
5.6
5.2
4.0
State taxes, net of federal benefit
0.0
0.3
0.4
Tax Audits
(0.5)
0.0
1.0
Other Deferred Tax Adjustments1)
0.0
(26.7)
0.0
U.S. FDII Deduction
0.0
(0.4)
0.0
U.S. GILTI Tax
1.9
3.4
3.4
Impact of Translation Rates
0.6
1.1
0.2
Other, net
(0.3)
(0.2)
0.3
Effective income tax rate
26.0 %
20.1 %
29.5 %
1) Deferred tax asset recognized in 2023 due to the transfer of certain assets and operations as part of the Company's restructuring activities.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. On December 31, 2024, the Company had net operating
loss carryforwards (NOL’s) of approximately $363 million, of which approximately $339 million have no expiration date. The remaining
losses expire on various dates through 2033.
Valuation allowances have been established which partially offset the related deferred assets. Such allowances are primarily provided
against NOL’s of companies that have perennially incurred losses, as well as the NOL’s of companies that are start-up operations and
have not established a pattern of profitability. The Company assesses all available evidence, both positive and negative, to determine
the amount of any required valuation allowance. During 2024, the Company recorded valuation allowances against deferred tax assets
of tax losses in certain companies and a partial valuation allowance against the deferred tax asset recognized due to the transfer of
certain assets and operations as part of the Company’s restructuring activities, on the basis of management’s assessment of the amount
of the related deferred tax assets that are not more likely than not to be realized.
The foreign tax rate variance reflects the fact that approximately two-thirds of the Company’s non-U.S. pre-tax income is generated by
business operations located in tax jurisdictions where the tax rate is between 20-30%. The tax rate from quarter to quarter and from year
to year is also impacted by the mix of earnings and tax rates in various jurisdictions compared to the same periods or prior years.
The Company has reserves for income taxes that may become payable in future periods as a result of tax audits. These reserves
represent the Company’s best estimate of the potential liability for tax exposures. Inherent uncertainties exist in estimates of tax exposures
due to changes in tax law, both legislated and concluded through the various jurisdictions’ court systems. The Company files income tax
returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions.
72
The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax
authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized
upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these
recognition and measurement standards. At any given time, the Company is undergoing tax audits in several tax jurisdictions, covering
multiple years. The Company is no longer subject to income tax examination by the U.S. Federal tax authorities for years prior to 2021.
With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax
authorities for years before 2011. The Company is undergoing tax audits in several non-U.S. jurisdictions and several U.S. state
jurisdictions, covering multiple years. As of December 31, 2024, as a result of those tax examinations, the Company is not aware of any
proposed income tax adjustments that would have a material impact on the Company’s financial statements, however, other audits could
result in additional increases or decreases to the unrecognized tax benefits in some future period or periods. The Company believes that
some of these audits will conclude within the next 12 months and that it is reasonably possible the amount of uncertain income tax
positions, including interest, may decrease by $10-$15 million due to settlement of audits and expiration of statutes of limitations.
The Company recognizes interest and potential penalties accrued related to unrecognized tax benefits in tax expense. As of December
31, 2023, the Company had recorded $64 million for unrecognized tax benefits, including $14 million of accrued interest and penalties.
During 2024, the Company recorded a net increase of $3 million to income tax reserves for unrecognized tax benefits related to tax
positions taken in current year. Also, during 2024, the Company recorded a net decrease of $21 million to income tax reserves for
unrecognized tax benefits due to settlement of audits and expiration of statutes of limitations.
The Company had $11 million accrued for the payment of interest and penalties as of December 31, 2024. Of the total unrecognized
tax benefits of $43 million recorded at December 31, 2024, $13 million is classified as current income tax payable, and $30 million is
classified as non-current tax payable included in Other Non-Current Liabilities on the Consolidated Balance Sheets. Substantially all of
these reserves would impact the effective tax rate if released into income.
The following table summarizes the activity related to the Company’s unrecognized tax benefits.
UNRECOGNIZED TAX BENEFITS (Dollars in millions)
2024
2023
2022
Unrecognized tax benefits at beginning of year
$
83
$
67
$
65
Increases as a result of tax positions taken during a prior period
0
8
0
Increases as a result of tax positions taken during the current period
4
7
7
Decreases as a result of tax positions taken during a prior period
(6)
0
0
Decreases relating to settlements with taxing authorities
(6)
0
(4)
Decreases resulting from the lapse of the applicable statute of limitations
(39)
0
0
Translation Difference
(1)
1
(1)
Total unrecognized tax benefits at end of year
$
35
$
83
$
67
The tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities were as
follows.
DEFERRED TAXES(Dollars in millions)
December 31,
2024
2023
2022
Assets
Provisions
$
112
$
126
$
99
Costs capitalized for tax
85
57
43
Other Deferred Tax Asset1)
158
160
—
Property, plant and equipment
30
11
12
Retirement Plans
39
40
42
Tax receivables, principally NOL’s
99
133
123
Deferred tax assets before allowances
523
527
319
Valuation allowances
(126 )
(129 )
(46 )
Total
397
398
273
Liabilities
Distribution taxes
(3 )
(3 )
(3 )
Other
0
(1 )
(2 )
Total
(3 )
(4 )
(5 )
Net deferred tax asset
$
394
$
394
$
268
1) Deferred tax asset recognized in 2023 due to the transfer of certain assets and operations as part of the Company’s restructuring activities,
and is partially offset by the increased valuation allowances.
73
The following table summarizes the activity related to the Company’s valuation allowances (dollars in millions):
VALUATION ALLOWANCES AGAINST DEFERRED TAX ASSETS (Dollars in millions)
December 31,
2024
2023
2022
Allowances at beginning of year
$
129
$
46
$
59
Benefits reserved current year
11
81
14
Benefits recognized current year1)
(6)
(2)
(27)
Translation difference
(8)
4
0
Allowances at end of year
$
126
$
129
$
46
1) Benefits reserved in 2023 include the partial reserve against deferred tax assets recognized in 2023 due to the transfer of certain assets and operations
as part of the Company's restructuring activities. In January 2025 the OECD released Administrative Guidance on Article 9.1 of the Global Anti-Base
Erosion Model Rules which amends the Pillar Two Framework. Jurisdictions that have adopted the Framework may implement and administer their
domestic laws consistent with the Model Rules and guidance. The Guidance eliminates the tax basis in certain deferred tax assets and tax credit
carryforwards for purposes of global minimum tax established under the Framework. The Company is analyzing the latest Guidance and will recognize
any impact in the first quarter of 2025.
6. Receivables
(Dollars in millions)
December 31,
2024
2023
2022
Receivables
$
2,003
$
2,206
$
1,916
Allowance for credit losses at beginning of year
(8 )
(10 )
(8 )
Reversal of (addition to) allowance
(2 )
(2 )
(4 )
Write-off against allowance
0
3
2
Translation difference
0
(0 )
0
Allowance for credit losses at end of year
(10 )
(8 )
(10 )
Total receivables, net of allowance
$
1,993
$
2,198
$
1,907
7. Inventories
(Dollars in millions)
December 31,
2024
2023
2022
Raw material
$
418
$
457
$
445
Work in progress
295
347
350
Finished products
290
296
265
Inventories gross
1,003
1,100
1,060
Inventory reserve at beginning of year
(89 )
(91 )
(91 )
Change in reserve, net
1
3
(6 )
Translation difference
5
(0 )
5
Inventory reserve at end of year
(82 )
(89 )
(91 )
Total inventories, net of reserve
$
921
$
1,012
$
969
8. Other Non-Current Assets
(Dollars in millions)
December 31,
2024
2023
Equity method investments
$
13
$
11
Deferred tax assets
412
433
Income tax receivables
19
22
Insurance receivables
44
75
Other non-current assets
60
66
Total other non-current assets
$
548
$
606
As of December 31, 2024 and 2023, the Company had one equity method investment. The Company owns 49% of Autoliv-Hirotako
Safety Sdn, Bhd (parent and subsidiaries) in Malaysia which it currently does not control, but in which it exercises significant influence
over operations and financial position.
74
9. Property, Plant and Equipment
(Dollars in millions)
December 31,
2024
2023
Estimated life
Land and land improvements
$
127
$
136
n/a to 15
Buildings
1,038
1,065
20-40
Machinery and equipment
4,539
4,545
3-12
Construction in progress
629
548
n/a
Property, plant and equipment
6,334
6,294
Less accumulated depreciation
(4,095)
(4,102)
Net of depreciation
$
2,239
$
2,192
DEPRECIATION INCLUDED IN (Dollars in millions)
2024
2023
2022
Cost of sales
$
347
$
340
$
329
Selling, general and administrative expenses
13
12
11
Research, development and engineering expenses, net
26
24
20
Total
$
385
$
376
$
360
No significant fixed asset impairments related to the Company’s operations were recognized during 2024, 2023 or 2022.
The net book value of machinery and equipment and buildings and land under finance lease contracts recorded at December 31, 2024
and December 31, 2023 were immaterial. The amortization expense related to finance leases is included with depreciation expenses
disclosed in the table above.
10. Goodwill and Intangible Assets
December31,
GOODWILL (Dollars in millions)
2024
2023
Carrying amount at beginning of year
$
1,378
$
1,375
Translation differences
(10 )
2
Carrying amount at end of year
$
1,368
$
1,378
Approximately $1.2 billion of the Company’s goodwill is associated with the 1997 merger of Autoliv AB and the Automotive Safety Products
Division of Morton International, Inc. No goodwill impairment charges were recognized during 2024, 2023 or 2022.
December 31,
AMORTIZABLE INTANGIBLES (Dollars in millions)
2024
2023
Gross carrying amount
$
386
$
391
Accumulated amortization
(379 )
(384 )
Carrying value
$
7
$
7
At December 31, 2024, intangible assets subject to amortization mainly relate to acquired technology. No significant impairments of
intangible assets were recognized during 2024, 2023 or 2022.
Amortization expense related to intangible assets was $2 million, $2 million and $3 million in 2024, 2023 and 2022, respectively. Estimated
future amortization expense is immaterial for all future periods.
11. Supplier Finance Program Obligations
The Company has an agreement with an external payment service provider to facilitate the payments to certain suppliers. The outstanding
obligations confirmed towards the external payment service provider are recorded in Accounts Payable in the Consolidated Balance
Sheet until payment has been effected. The Company has undertaken to make sure the payment is effected on the original invoice
maturity date. The average payment terms during 2024 was 117 days.
The roll-forward of the Company's outstanding obligations confirmed as valid under its supplier finance program for the year ended
December 31, 2024 is as follows (dollars in millions):
As of December 31,
(Dollars in millions)
2024
2023
Confirmed obligations outstanding at beginning of the period
$
345
$
314
Invoices confirmed during the period
1,536
1,436
Confirmed invoices paid during the period
(1,546 )
(1,405 )
Confirmed obligations outstanding at end of the period
$
335
$
345
75
12. Restructuring
Restructuring provisions are made on a case-by-case basis and primarily include severance costs incurred in connection with employee
reductions and plant consolidations. Restructuring costs other than employee related costs are immaterial for all periods presented and
are included in the table below. The Company expects to finance restructuring programs over the next several years through cash
generated from its ongoing operations or through cash available under its existing credit facilities. The Company does not expect that the
execution of these programs will have an adverse impact on its liquidity position. The changes in the employee-related reserves in the
table below have been charged against Other income (expense), net in the Consolidated Statements of Income. The restructuring reserve
balance is included within Accrued expenses in the Consolidated Balance Sheet.
December 31,
(Dollars in millions)
2024
2023
2022
Reserve at beginning of the period
$
213
$
32
$
88
Provision - charge
20
212
17
Provision - reversal
(2 )
(1 )
(4 )
Cash payments
(69 )
(35 )
(64 )
Translation difference
(11 )
7
(5 )
Reserve at end of the period
$
151
$
213
$
32
Of the restructuring charges in 2024 of $20 million, mainly related to the global structural cost reduction program activities initiated in
2023 in Europe. The cash payments of $69 million in 2024, mainly related to restructuring activities in Europe. As of December 31, 2024,
the majority of the restructuring reserve balance is attributed to global structural cost reduction program activities initiated in 2023 in
Europe. The Company does not expect to recognize additional material restructuring charges during 2025 related to on-going
restructuring programs.
The restructuring charges in 2023 of $212 million related to the global structural cost reduction program activities initiated in 2023, primarily
in Europe. Cash payments of $35 million in 2023 mainly related to restructuring activities in Europe.
The restructuring charges in 2022 of $17 million mainly related to footprint optimization activities in Asia and Europe. Cash payments of
$64 million in 2022 were related to the structural efficiency program initiated in 2020, footprint optimization activities initiated in Europe in
2020 and in Asia in 2022.
13. Product Related Liabilities
Autoliv is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and
such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product
risks. Such reserves are related to product performance issues including recall, product liability and warranty issues. The reserve for
product related liabilities is included in accrued expenses on the Consolidated Balance Sheet. For further information, see Note 18.
The Company records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate
costs. Changes in reserve for warranty claims are estimated based on prior experience, likely changes in performance of newer products,
and the mix and volume of the products sold. The changes in reserve are recorded on an accrual basis.
In 2024, the additions to the reserve mainly related to warranty related issues. The reversal of the reserve was related to certain recall
issues that were settled with a favorable outcome. Cash payments were evenly related to warranty and recall related issues. None of
these matters were individually material during 2024.
In 2023, the change in reserve and cash payments mainly related to the Andrews litigation settlement with the reserve partly offset by
reversal of recall related issues. In 2022, the changes in reserve and cash payments mainly related to warranty related issues. None of
which were individually material.
A majority of the Company’s recall related issues as of December 31, 2024 are covered by insurance. Insurance receivables are included
within other current and non-current assets on the Consolidated Balance Sheet. As of December 31, 2024, the Company had total
insurance receivables related to recall issues of $54 million ($81 million as of December 31, 2023).
The table below summarizes the change in the balance sheet position of the product related liabilities (dollars in millions).
December 31,
(Dollars in millions)
2024
2023
2022
Reserve at beginning of the year
$
96
$
145
$
144
Addition to reserve
16
28
21
Reversal of preexisting reserve
(16 )
(3 )
(1 )
Cash payments
(30 )
(74 )
(17 )
Translation difference
(2 )
0
(2 )
Reserve at end of the year
$
65
$
96
$
145
76
14. Debt and Credit Agreements
SHORT-TERM DEBT
As of December 31, 2024 and 2023, total short-term debt was $387 million and 538 million, respectively. As of December 31, 2024, short-
term debt consisted mainly of a $273 million Swedish Export Credit Corporation loan, and $90 million commercial papers.
The Company’s subsidiaries have credit agreements, principally in the form of overdraft facilities with several local banks. Total available
short-term facilities as of December 31, 2024, excluding commercial paper facilities as described below, amounted to $428 million, of
which approximately $24 million was utilized. The weighted average interest rate on total short-term debt outstanding at December 31,
2024 and 2023, excluding the short-term portion of long-term debt, was 5% and 6%, respectively.
LONG-TERM DEBT
As of December 31, 2024 and 2023, total long-term debt was 1,522 million and 1,324 million, respectively.
In February 2024, the Company priced and issued a 5.5-year green bond for a total of €500 million in the Eurobond market. The bond
carries a coupon of 3.625% and matures in August 2029.
In March 2023, the Company priced and issued a 5-year green bond for a total of €500 million in the Eurobond market. The bond
carries a coupon of 4.25% and matures in March 2028.
In June 2020, the Company utilized its SEK 3,000 million facility with Swedish Export Credit Corporation which was signed in May 2020.
The SEK 3,000 million facility matures in 2025 and carries a floating interest rate of 3M STIBOR +1.85%.
In 2014, the Company issued long-term debt securities in a U.S. Private Placement. As of December 31, 2024, the total long-term debt
outstanding from the 2014 issuance of $470 million consist of $285 million aggregate principal amount of 12-year senior notes with an
interest rate of 4.24%, and $185 million aggregate principal amount of 15-year senior notes with an interest rate of 4.44%.
CREDIT FACILITIES
In July 2024, the Company entered into an $125 million bilateral revolving credit facility (Bilateral RCF) with substantially the same terms
as the RCF with the 11 banks (see below). As of December 31, 2024 this facility was not utilized.
In May 2022, the Company refinanced its existing revolving credit facility (RCF) of $1,100 million. The facility was syndicated among 11
banks and matures in May 2029. The Company pays a commitment fee on the undrawn amount of 0.10%, representing 35% of the
applicable margin, which is 0.275% (given the Company’s ratings of “BBB+ from Fitch and “Baa1” from Moody’s). Borrowings under the
facility are unsecured. As of December 31, 2024 this facility was not utilized.
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, 2024, €1,000 million had been issued under this program (see long-term debt
above).
The Company has a $1.0 billion US commercial paper program and a SEK 7 billion (approx. $636 million) Swedish commercial paper
program. At December 31, 2024 the amount outstanding under these programs were $90 million and SEK 0 million, respectively.
The Company is not subject to any financial covenants, i.e., performance related restrictions, in any of its significant long-term borrowings
or commitments.
CREDIT RISK
In the Company’s financial operations, credit risk arises in connection with cash deposits with banks and when entering into forward
exchange agreements, swap contracts or other financial instruments. In order to reduce this risk, deposits and financial instruments are
only entered with a limited number of 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+. The policy of the Company is to work with banks that have a strong credit rating and that participate
in the Company’s financing. In addition to this, deposits of up to an aggregate amount of $2 billion can be placed in U.S. and Swedish
government paper and in certain AAA rated money market funds. As of December 31, 2024, the Company had placed $31 million in
money market funds.
The table below shows debt maturity as cash flow. For a description of hedging instruments used as part of debt management, see the
Financial Instruments section of Note 2 and Note 4.
DEBT PROFILE
Total
PRINCIPAL AMOUNT BY EXPECTED MATURITY
(dollars in millions)
2025
2026
2027
2028
2029
Thereafter
long-
term
Total
Bonds
$
—
$
285
$
—
$
521
$
706
$
—
$ 1,512
$ 1,512
Loans
273
—
10
—
—
10
283
Commercial papers
90
—
—
—
—
—
—
90
Other short-term debt
24
—
—
—
—
—
—
24
Total principal amount
$
387
$
285
$
10
$
521
$
706
$
—
$ 1,522
$ 1,909
77
15. Shareholders’ Equity
The number of shares outstanding as of December 31, 2024 was 77,712,479. During 2024, the Company has repurchased and retired
5,052,938 shares. In addition, the Company also retired 2,000,000 shares from Treasury stock in December 2024.
DIVIDENDS
2024
2023
2022
Cash dividend paid per share
$
2.74
$
2.66
$
2.58
Cash dividend declared per share
$
2.74
$
2.66
$
2.58
OTHER COMPREHENSIVE LOSS / ENDING BALANCE1) (Dollars in millions)
2024
2023
Cumulative translation adjustments
$
(629)
$
(466)
Net pension liability
(31)
(30)
Total (ending balance)
$
(659)
$
(496)
Deferred taxes on the pension liability
$
10
$
10
1) The components of Other Comprehensive Loss are net of any related income tax effects.
Cumulative translation gains of $1 million and $12 million related to liquidated entities during 2024 and 2023 have been recycled and
reported as part of the net change of cumulative translation adjustment in the Comprehensive income statement and Equity statement.
SHARE REPURCHASE PROGRAM
In November 2021, the 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. In November 2024, the Board
of Directors approved the extension of this stock repurchase program through the end of 2025.
During 2024 the Company repurchased and retired 5,052,938 shares for approximately $552 million. During 2023 the Company
repurchased and retired 3,671,252 shares for approximately $352 million. During 2022 the Company repurchased and retired
1,440,572 shares for approximately $115 million. In total, the Company has repurchased 10,164,762 shares under the new stock
repurchase program as of December 31, 2024.
16. Supplemental Cash Flow Information
Payments for interest and income taxes were as follows:
(Dollars in millions)
2024
2023
2022
Interest
$
104
$
80
$
64
Income taxes
207
192
215
17. Stock Incentive Plan
The Company maintains the Autoliv, Inc. 1997 Stock Incentive Plan, as amended (the “Stock Incentive Plan”), pursuant to which it has
granted to eligible employees and non-employee directors stock options (SOs), restricted stock units (RSUs) and performance shares
(PSUs).
The fair value of the RSUs and PSUs is calculated as the grant date fair value of the shares expected to be issued. The RSUs and PSUs
granted in 2024, 2023 and 2022 entitle the grantee to receive dividend equivalents in the form of additional RSUs and PSUs subject to
the same vesting conditions as the underlying RSUs and PSUs. For the grants made during 2024, 2023 and 2022, the fair value of a
RSU and a PSU was calculated by using the closing stock price on the grant date and, with respect to a PSU, assumed target
performance. The grant date fair value for the RSUs and PSUs granted during 2024 was approximately $7 million and approximately $8
million, respectively.
Pursuant to the Company’s non-employee director compensation policy effective May 1, 2024, the Company’s non-employee directors
receive an annual RSU grant having a grant date value equal to $152,500 and the Chairman of the Board of Directors also receives an
additional annual RSU grant having a grant date value equal to $90,000. All RSUs granted to non-employee directors vest in one
installment on the earlier of the next AGM or the first anniversary of the grant date, in each case subject to the grantee’s continued service
as a non-employee director on the vesting date with limited exceptions. The RSUs granted to the Company’s non-employee directors
entitle the grantee to receive dividend equivalents in the form of additional RSUs subject to the same vesting conditions as the underlying
RSUs. The grant date fair value for the RSUs granted in 2024 to the Company’s non-employee directors was approximately $2 million.
78
The source of the shares issued upon vesting of awards is generally from treasury shares. The Stock Incentive Plan provides for the
issuance of up to 9,585,055 common shares for awards. At December 31, 2024, 7,156,026 of these shares have been issued for awards
and 2,429,029 shares remain available for future grants.
In 2015 and earlier, stock awards were granted in the form of SOs and RSUs. All SOs were granted for 10-year terms, had an exercise
price equal to the fair market value per share of common stock at the date of grant, and became exercisable after one year of continued
employment following the grant date. The average grant date fair values of SOs were calculated using the Black-Scholes valuation model.
The Company used historical exercise data for determining the expected life assumption. Expected volatility was based on historical and
implied volatility. All outstanding SOs as of December 31, 2024 have since been exercised or expired.
The Company recorded approximately $16 million, $14 million and $4 million stock-based compensation expense related to RSUs and
PSUs for 2024, 2023 and 2022, respectively. The total compensation cost related to non-vested awards not yet recognized is $17 million
for RSUs and PSs and the weighted average period over which this cost is expected to be recognized is approximately 1.7 years. There
are no remaining unrecognized compensation costs associated with SOs.
Information on the number of RSUs, PSUs and SOs related to the Stock Incentive Plan during the period of 2022 to 2024 is as follows.
RSUs
2024
2023
2022
Weighted average fair value at grant date
$
112.16
$
91.81
$
87.56
Outstanding at beginning of year
189,966
200,764
218,268
Granted
64,601
96,243
85,985
Shares issued
(75,068)
(94,055)
(84,848)
Cancelled/Forfeited/Expired
(5,352)
(12,986)
(18,641)
Outstanding at end of year
174,147
189,966
200,764
The aggregate intrinsic value for RSUs outstanding at December 31, 2024 was approximately $16 million.
PSUs
2024
2023
2022
Weighted average fair value at grant date
$
109.41
$
91.80
$
88.05
Outstanding at beginning of year
111,881
101,828
179,311
Change in performance conditions
147,022
18,211
(69,924)
Granted
79,712
93,962
82,914
Shares issued
(49,509)
(26,331)
(64,397)
Cancelled/Forfeited/Expired
(9,801)
(75,789)
(26,076)
Outstanding at end of year
279,305
111,881
101,828
The PSUs granted include assumptions regarding the ultimate number of shares that will be issued based on the probability of
achievement of the performance conditions. Changes in those assumptions result in changes in the estimated shares to be issued which
is reflected in the “Change in performance conditions” line above.
SOs
Number
of options
Weighted
average
exercise
price
Outstanding at December 31, 2021
49,875
68.71
Exercised
(8,614)
59.28
Cancelled/Forfeited/Expired
(10,150)
70.40
Outstanding at December 31, 2022
31,111
70.77
Exercised
(15,537)
65.12
Cancelled/Forfeited/Expired
(485)
58.63
Outstanding at December 31, 2023
15,089
76.97
Exercised
(10,777)
76.53
Cancelled/Forfeited/Expired
(915)
69.41
Outstanding at December 31, 2024
3,397
80.40
OPTIONS EXERCISABLE
At December 31, 2022
31,111
$
70.77
At December 31, 2023
15,089
76.97
At December 31, 2024
3,397
80.40
79
The following summarizes information about SOs outstanding and exercisable at December 31, 2024:
EXERCISE PRICE
Number
outstanding &
exercisable
Remaining
contract life
(in years)
Weighted
average
exercise
price
$80.40
3,397
0.13
80.40
3,397
0.13
80.40
The total aggregate intrinsic value, which is the difference between the exercise price and $92.98 (closing price per share at December
31, 2024), for all “in the money” SOs, both outstanding and exercisable as of December 31, 2024, was immaterial.
18. Contingent Liabilities
LEGAL PROCEEDINGS
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 and other matters. Litigation is subject
to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, and with the exception of
losses resulting from the antitrust proceedings described below, it is the opinion of management that the various legal proceedings and
investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of
Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability or other losses in
the future.
ANTITRUST MATTERS
Authorities in several jurisdictions have conducted broad, and in some cases, long-running investigations of suspected anti-competitive
behavior among parts suppliers in the global automotive vehicle industry. These investigations included, but are not limited to, the products
that the Company sells. In addition to concluded matters, authorities of other countries, with significant light vehicle manufacturing or
sales may initiate similar investigations. As a result of the outcome of the European Commission investigation of anti-competitive behavior
among suppliers of occupant safety systems that the Company resolved in 2019 (the "EC investigation"), the Company is subject to
multiple subsequent civil disputes with non-governmental third parties stemming from the same facts and circumstances underlying the
EC investigation. The Company is involved in civil litigation in the UK and Germany with respect to alleged anti-competitive behavior that
occurred over a decade ago.
The trial associated with the lawsuit in the UK recently concluded and a ruling in the proceeding is expected imminently. The Company
believes the allegations in the UK are unfounded. An unfavorable outcome could have a material adverse impact on our customer
relationships, business prospects, reputation, operating results, cash flows or financial condition, and our insurance would likely not
mitigate such impact. The Company cannot predict the ultimate outcome of such dispute and is unable to estimate the loss or a range of
loss, or predict the reporting periods in which any such loss may be recorded.
On October 31, 2024, BMW filed a complaint against the Company in Germany claiming damages of €63 million plus interest (for a total
claim of approximately €95 million) related to the conduct at issue in the EC investigation (the "BMW Complaint"). BMW is one of two
European OEMs for which the Company pled guilty in 2017 in relation to the EC investigation. The Company has a period of six months
to respond to the complaint and is currently assessing the viability of the complaint. The Company has determined pursuant to ASC 450
that a loss is reasonably possible with respect to the BMW Complaint. However, the Company continues to evaluate this matter, no
accrual has been made, and the estimated range of potential loss is between €0 and €95 million. The Company cannot predict the ultimate
outcome of the BMW Complaint.
This dispute could result in significant expenses as well as an unfavorable outcome that could have a material adverse impact on our
customer relationships, business prospects, reputation, operating results, cash flows or financial condition, and our insurance would likely
not mitigate such impact. The Company cannot predict the duration, scope, or ultimate outcome of any such disputes.
80
PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY
Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made,
and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a
product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such
(actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage, the Company may also face
product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product
(or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The
Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding
product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle
design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for
contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall
practices. Recall decisions regarding the Company’s products may require a significant amount of judgment by us, our customers and
safety regulators and are influenced by a variety of factors. Once a recall has been made, the cost of a recall is also subject to a significant
amount of judgment and discussions between the Company and its customers. A warranty, recall or product-liability claim brought against
the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also
increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such
products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the
repair or replacement costs of products when the product supplied did not perform as represented by us or expected by the customer in
either a warranty or a recall situation. Accordingly, the future costs of warranty or recall claims by the customers may be material. However,
the Company believes its established reserves are adequate. Autoliv’s warranty reserves are based upon the Company’s best estimates
of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves, and adjusts
them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s
recorded estimates.
In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also
conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having
a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new
orders, which may have a material impact on the Company’s results of operations.
The Company maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of both
approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent based
on our prior claims experience. The Company’s insurance policies generally include coverage of the costs of a recall, although costs
related to replacement parts are generally not covered. In addition, a number of the agreements entered into by the Company, including
the Spin-off Agreements, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage
will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future,
or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance.
As noted in Note 13 above, as of December 31, 2024, the Company has accrued $65 million for total product related liabilities. The
majority of the total product liability accrual as of December 31, 2024, relates to recalls, which are generally covered by insurance.
Insurance receivables for such recall related liabilities total $54 million as of December 31, 2024.
Product Liability:
Autoliv and some of its subsidiaries have been named as one of several defendants in a consolidated class action lawsuit in a multi-
district litigation (In Re: ARC Airbag Inflators Products Liability Litigation MDL, No. 3051) in the Northern District of Georgia. The plaintiffs
in the multi-district litigation (the "ARC Inflator Class Action") brought claims for fraud, breach of warranty, and violations of consumer
protection and trade practices stemming from ARC inflators included in airbag modules that Autoliv or its subsidiaries allegedly supplied
after Autoliv acquired certain Delphi assets (the “Delphi Acquisition”) in December 2009. The Company denies these allegations. Autoliv
is not aware of any performance issues regarding ARC inflators included with its airbags at the directions of its customers that it shipped
following the Delphi Acquisition. The proceedings remain ongoing. The Company has determined pursuant to ASC 450 that a loss is
reasonably possible with respect to the ARC Inflator Class Action. However, the Company continues to evaluate this matter, no accrual
has been made, and no estimated range of potential loss can be determined at this time. The Company cannot predict the ultimate
outcome of the ARC Inflator Class Action.
On September 5, 2023, the National Highway Traffic Safety Administration (“NHTSA”) issued an initial decision to recall approximately
52 million frontal driver and passenger airbag inflators manufactured by ARC and Delphi Automotive Systems because NHTSA
determined that the airbag inflators contain a safety defect resulting in field ruptures. Some of the ARC inflators included in the airbag
modules that Autoliv or its subsidiaries supplied after the Delphi Acquisition were included in such initial decision. NHTSA has yet to
release its final decision. If NHTSA's final decision results in a recall, it is anticipated that such decision will be challenged in US federal
court. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the NHTSA ARC recall.
However, the Company continues to evaluate this matter, no accrual has been made, and no estimated range of potential loss can be
determined at this time. The Company cannot predict the ultimate outcome of the NHTSA ARC recall.
Specific Recalls:
In the fourth quarter of 2020, the Company was made aware of a potential recall by American Honda Motor Co. and the recall of
approximately 449,000 vehicles relating to the malfunction of front seat belt buckles was announced on March 9, 2023 (the “Honda Buckle
Recall”). The Company determined pursuant to ASC 450 that a loss with respect to the Honda Buckle Recall is probable and accrued an
81
amount that is reflected in the total product liability accrual in the fourth quarter of 2020, increased the accrual in the fourth quarter of
2021, and reduced the accrual in the fourth quarter of 2023 based on vehicle repair cost data. Following the accrual increase in the third
quarter of 2024, the amount by which the product liability accrual exceeds the product liability insurance receivable with respect to the
Honda Buckle Recall is approximately $12 million and includes self-insurance retention costs and deductibles. The ultimate loss to the
Company of the Honda Buckle Recall could be materially different from the amount the Company has accrued.
Volvo Car USA, LLC (together with its affiliates, “Volvo”) has recalled approximately 762,000 vehicles relating to the malfunction of
inflators produced by ZF (the “ZF Inflator Recall”). The recalled ZF inflators were included in airbag modules supplied by the Company
only to Volvo. The recall commenced in November 2020 and later expanded in September 2021. Because the Company’s airbags were
involved with the ZF Inflator Recall, the Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to
the ZF Inflator Recall. The Company continues to evaluate this matter with Volvo and ZF and no accrual has been made. Although the
Company currently estimates a range of $0 to $43 million with respect to this potential loss, the Company anticipates that any losses net
of insurance claims and claims against ZF will be immaterial.
Intellectual property:
In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company
does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it may fail to do so. Where the
Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products
which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result
thereof. Such claims could be material.
The table in Note 13 above summarizes the change in the balance sheet position of the product related liabilities for the fiscal year ended
December 31, 2024.
19. Retirement Plans
DEFINED CONTRIBUTION PLANS
Many of the Company’s employees are covered by government sponsored pension and welfare programs. Under the terms of these
programs, the Company makes periodic payments to various government agencies. In addition, in some countries the Company sponsors
or participates in certain non-governmental defined contribution plans. Contributions to defined contribution plans for the years ended
December 31, 2024, 2023 and 2022 were $25 million, $26 million, and $24 million, respectively.
MULTIEMPLOYER PLANS
The Company participates in a multiemployer plan in Sweden. This ITP-2 plan is funded through Alecta and covers employees born
before 1979, for whom it provides a final pay pension benefit based on all service with participating employers. The Company must pay
for wage increases in excess of inflation on service earned with previous employers. The plan also provides disability and family benefits
and is more than 100% funded. The Company´s contributions to this multiemployer plan for the years ended December 31, 2024, 2023
and 2022 were $4 million, $4 million and $6 million, respectively.
DEFINED BENEFIT PLANS
The Company has a number of defined benefit pension plans, both contributory and non-contributory, in the U.S., France, Germany,
India, Japan, Mexico, Philippines, Poland, Sweden, South Korea, Thailand, Turkey and the United Kingdom. There are funded as well as
unfunded plan arrangements which provide retirement benefits to both U.S. and non-U.S. participants.
The main plan is the U.S. plan for which the benefits are based on an average of the employee’s earnings and on credited service earned
through December 31, 2021. In a prior year, the Company closed participation in the Autoliv ASP, Inc. Pension Plan to exclude those
employees hired after December 31, 2003. Within the U.S. there is also a non-qualified restoration plan that provides benefits to
employees whose benefits in the primary U.S. plan are restricted by limitations on the compensation that can be considered in calculating
their benefits. Effective December 31, 2021, the Autoliv ASP, Inc. Pension Plan is frozen to new accruals and, by extension, the non-
qualified restoration plan is also frozen. Settlement accounting has been recognized each quarter in 2024, 2023 and 2022 for the U.S.
plans because the lump-sum payments made to plan participants during 2024, 2023 and 2022 exceeded the sum of service cost and
interest cost.
For the Company’s non-U.S. defined benefit plans the most significant individual plan is in the U.K. The Company has closed participation
in the U.K. defined benefit plan to exclude all employees hired after April 30, 2003 with few members currently accruing benefits.
82
CHANGES IN BENEFIT OBLIGATIONS AND PLAN ASSETS FOR THE YEARS ENDED DECEMBER 31
U.S.
Non-U.S.
(Dollars in millions)
2024
2023
2024
2023
Benefit obligation at beginning of year
$
226
$
227
$
208
$
192
Service cost
—
—
10
9
Interest cost
11
12
12
10
Actuarial (gain) loss due to:
Change in discount rate
(7)
5
(1)
(22)
Experience
(1)
2
6
(1)
Other assumption changes
(8)
2
3
24
Benefits paid
(4)
(4)
(7)
(10)
Plan settlements/curtailments
(12)
(17)
(9)
(2)
Plan amendments
—
—
—
1
Other
—
—
0
0
Translation difference
—
—
(17)
7
Benefit obligation at end of year
$
205
$
226
$
205
$
208
Fair value of plan assets at beginning of year
$
204
$
201
$
70
$
63
Actual return on plan assets
3
24
(4)
3
Company contributions
2
0
27
11
Benefits paid
(4)
(4)
(7)
(10)
Plan settlements
(12)
(17)
(20)
(0)
Translation difference
—
—
(2)
3
Fair value of plan assets at end of year
$
194
$
204
$
64
$
70
Pension liability recognized in the balance sheet
$
11
$
21
$
142
$
138
The U.S. plan provides that benefits may be paid in the form of a lump sum, if so elected by the participant. In order to more accurately
reflect a market-derived pension obligation, Autoliv adjusts the assumed lump sum interest rate to reflect market conditions as of each
December 31. This methodology is consistent with the approach required under the Pension Protection Act of 2006, which provides the
rules for determining minimum funding requirements in the U.S.
COMPONENTS OF NET PERIODIC BENEFIT COST ASSOCIATED WITH THE DEFINED BENEFIT RETIREMENT PLANS FOR THE
YEARS ENDED DECEMBER 31
U.S.
(Dollars in millions)
2024
2023
2022
Service cost
$
—
$
—
$
—
Interest cost
11
12
12
Expected return on plan assets
(12)
(10)
(14)
Amortization of actuarial loss
0
0
0
Settlement loss
1
1
6
Net periodic benefit cost
$
(0)
$
3
$
4
Non-U.S.
(Dollars in millions)
2024
2023
2022
Service cost
$
10
$
9
$
9
Interest cost
12
10
6
Expected return on plan assets
(3)
(3)
(2)
Amortization of prior service costs
1
1
1
Amortization of actuarial loss
1
1
1
Settlement/curtailment (gain) loss
14
0
(8)
Net periodic benefit cost
$
34
$
18
$
7
The service cost and amortization of prior service cost components are reported among other employee compensation costs in the
Consolidated Statements of Income. The remaining components, interest cost, expected returns on plan assets, amortization of actuarial
loss and settlement/curtailment gains (losses), are reported as Other non-operating items, net in the Consolidated Statements of Income.
Amortization of the net actuarial loss from accumulated other comprehensive income is made over the estimated average remaining
lifetime of the plan participants (27 to 31 years) for the U.S. plans, and the estimated average remaining service lives or lifetimes of the
plan participants for the non-U.S. plans, the periods varying over a wide range between the different countries depending on the age of
the population concerned.
83
COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE LOSS BEFORE TAX AS OF DECEMBER 31
U.S.
Non-U.S.
(Dollars in millions)
2024
2023
2024
2023
Net actuarial loss
$
7
$
15
$
29
$
19
Prior service cost
—
—
3
4
Total accumulated other comprehensive loss
recognized in the balance sheet
$
7
$
15
$
33
$
24
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BEFORE TAX FOR THE YEARS ENDED DECEMBER 31
U.S.
Non-U.S.
(Dollars in millions)
2024
2023
2024
2023
Total retirement benefit recognized in accumulated
other comprehensive loss at beginning of year
$
15
$
22
$
24
$
22
Net actuarial loss (gain)
(7)
(6)
16
2
Amortization or curtailment recognition of prior service credit
(cost)
—
—
(1)
(1)
Amortization or settlement recognition of net gain (loss)
(1)
(1)
(4)
(1)
Translation difference
—
—
(2)
2
Total retirement benefit recognized in accumulated
other comprehensive loss at end of year
$
7
$
15
$
33
$
24
The accumulated benefit obligation for the U.S. non-contributory defined benefit pension plans was $205 million and $226 million at
December 31, 2024 and 2023, respectively. The accumulated benefit obligation for the non-U.S. defined benefit pension plans was $161
million and $173 million at December 31, 2024 and 2023, respectively.
Pension plans for which the accumulated benefit obligation (ABO) is notably in excess of the plan assets reside in the following countries:
U.S., Mexico, France, Germany, Japan, South Korea, Sweden, Thailand and Turkey.
PENSION PLANS FOR WHICH ABO EXCEEDS THE FAIR VALUE OF PLAN ASSETS AS OF DECEMBER 31
U.S.
Non-U.S.
(Dollars in millions)
2024
2023
2024
2023
Projected Benefit Obligation (PBO)
$
205 $
226
$
148 $
145
Accumulated Benefit Obligation (ABO)
205
226
110
116
Fair value of plan assets
194
204
2
2
The Company, in consultation with its actuarial advisors, determines certain key assumptions to be used in calculating the projected
benefit obligation and annual net periodic benefit cost.
ASSUMPTIONS USED TO DETERMINE THE BENEFIT OBLIGATIONS AS OF DECEMBER 31
U.S.
Non-U.S.1)
(% Weighted average / % Weighted average range)
2024
2023
2024
2023
Discount rate
5.60
5.13
1.25-11.00
1.00-10.25
Rate of increases in compensation level
n/a
n/a
2.25-5.00
2.25-5.00
1) The % weighted average ranges in the tables above represent significant non-U.S. plans only.
ASSUMPTIONS USED TO DETERMINE THE NET PERIODIC BENEFIT COST FOR THE YEARS ENDED DECEMBER 31
U.S.
(% Weighted average)
2024
2023
2022
Discount rate
5.13
5.41
2.77
Rate of increases in compensation level
n/a
n/a
n/a
Expected long-term rate of return on assets
6.21
5.05
5.05
Non-U.S.1)
(% Weighted average range)
2024
2023
2022
Discount rate
1.00-10.25
0.75-9.75
0.25-8.00
Rate of increases in compensation level
2.25-5.00
2.10-5.00
1.80-5.00
Expected long-term rate of return on assets
4.00-4.95
4.20-4.80
1.70-2.20
1) The % weighted average ranges in the tables above represent significant non-U.S. plans only.
84
The discount rate for the U.S. plans has been set based on the rates of return on high-quality fixed-income investments currently available
at the measurement date and expected to be available during the period the benefits will be paid. The expected timing of cash flows from
the plan has also been considered in selecting the discount rate. In particular, the yields on bonds rated AA or better on the measurement
date have been used to set the discount rate. The discount rate for the U.K. plan has been set based on the weighted average yields on
long-term high-grade corporate bonds and is determined by reference to financial markets on the measurement date.
The expected rate of increase in compensation levels and long-term rate of return on plan assets are determined based on a number of
factors and must take into account long-term expectations and reflect the financial environment in the respective local market. The
expected return on assets for the U.S. and U.K. plans are based on the fair value of the assets as of December 31.
The level of equity exposure is currently targeted at approximately 32% for the primary U.S. plan. The investment objective is to provide
an attractive risk-adjusted return that will ensure the payment of benefits while protecting against the risk of substantial investment losses.
Correlations among the asset classes are used to identify an asset mix that Autoliv believes will provide the most attractive returns. Long-
term return forecasts for each asset class using historical data and other qualitative considerations to adjust for projected economic
forecasts are used to set the expected rate of return for the entire portfolio. The Company has assumed a long-term rate of return on the
U.S. plan assets of 6.21% for calculating the 2024 expense.
The Company has assumed a long-term rate of return on the non-U.S. plan assets in a range of 4.00-4.95% for 2024. The closed U.K.
plan, which has a targeted allocation of almost 100% debt instruments, accounts for approximately 74% of the total non-U.S. plan assets.
Autoliv made contributions to the U.S. plans during 2024 and 2023 amounting to $2 million and $0 million, respectively. Contributions to
the U.K plan during 2024 and 2023 amounted to $2 million and $2 million, respectively. The Company's expected contributions to its U.S.
pension plans in 2025 and the years thereafter are immaterial. For the U.K. pension plan, which is the most significant non-U.S. plan, the
Company expects to contribute $2 million in 2025 and in the years thereafter.
FAIR VALUE OF TOTAL PLAN ASSETS FOR THE YEARS ENDED DECEMBER 31
U.S.
U.S.
Non-U.S.
ASSETS CATEGORY (% Weighted average)
Target
allocation
2024
2023
2024
2023
Equity securities %
32
30
31
0
0
Debt instruments %
68
69
68
63
64
Other assets %
—
1
1
37
36
Total %
100
100
100
100
100
The following table summarizes the fair value of the Company’s U.S. and non-U.S. defined benefit pension plan assets:
Fair value measurement at December 31,
(Dollars in millions)
2024
2023
Assets
Non-U.S. Bonds
Government
$
21
$
24
Corporate
20
21
Insurance Contracts
15
17
Other Investments
6
10
Assets at fair value Level 2
62
71
Investments measured at net asset value
(NAV):
Common collective trusts
195
203
Total
258
$
274
The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value
measurement. Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not
been classified in the fair value hierarchy. Plan assets not measured using the NAV are classified as Level 2 in the table above. Plan
assets measured using the NAV mainly relate to the U.S. defined benefit pension plans and are separately disclosed as Common
collective trusts below the Level 2 assets in the table above.
85
The estimated future benefit payments for the pension benefits reflect expected future service, as appropriate. The amount of benefit
payments in a given year may vary from the projected amount, especially for the U.S. plan since historically this plan pays the majority of
benefits as a lump sum, where the lump sum amounts vary with market interest rates.
PENSION BENEFITS EXPECTED PAYMENTS (dollars in millions)
U.S.
Non-U.S.
2025
$
17
$
15
2026
19
12
2027
17
14
2028
19
14
2029
18
14
Years 2030-2034
84
85
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company currently provides postretirement health care and life insurance benefits to a limited group of U.S. retirees.
In general, the terms of the plans provide that U.S. employees who retire after attaining age 55, with 15 years of service (5 years before
December 31, 2006), are reimbursed for qualified medical expenses up to a maximum annual amount. Spouses for certain retirees are
also eligible for reimbursement under the plan. Life insurance coverage is available for those who elect coverage under the retiree health
plan. During 2014, the plan was amended to move from a self-insured model where employees were charged an estimated premium
based on anticipated plan expenses for continued coverage, to a plan where retirees are provided a fixed contribution to a Health
Retirement Account (HRA). Retirees can use the HRA funds to purchase insurance through a private exchange. Employees hired on or
after January 1, 2004 are not eligible to participate in the plan.
As of December 31, 2024 and 2023, the benefit obligation for postretirement benefit plans other than pensions were $12 million and
$13 million, respectively. The liability for postretirement benefits other than pensions is classified as other non-current liabilities in the
balance sheet. The components of the net periodic benefit costs associated with these plans were immaterial for the years 2024, 2023
and 2022.
The average discount rate used to determine the U.S. postretirement benefit obligation was 5.73% in 2024 and 5.16% in 2023. The
average discount rate used in determining the postretirement benefit cost was 5.16% in 2024, 5.39% in 2023 and 2.91% in 2022.
The accumulated other comprehensive income before tax associated with the postretirement benefit plans other than pensions
recognized in the balance sheet as of December 31, 2024 and 2023 were $6 million and $6 million, respectively. The accumulated other
comprehensive income consisted only of a net actuarial gain component for the years 2024 and 2023.
The estimated future benefit payments for the postretirement benefits, which reflect expected future service as appropriate, are expected
to be immaterial for all the future years.
20. Segment Information
The Company has a single operating and reportable segment which includes Autoliv’s airbag and steering wheels and seatbelt products
and components. The determination of a single operating segment is consistent with the consolidated financial information regularly
provided to the Company’s chief operating decision maker (“CODM”).
The Company’s CEO, as the CODM, uses consolidated, single-segment financial information for purposes of evaluating performance,
making operating decisions and allocating resources.
The Company’s customers consist of all major European, U.S. and Asian automobile manufacturers. Sales to individual customers
representing 10% or more of net sales were:
In 2024: No individual customer representing 10% or more.
In 2023: Renault 10% (including Nissan and Mitsubishi) and Stellantis 10%.
In 2022: Renault 11% (including Nissan and Mitsubishi), Stellantis 11% and VW 10%.
NET SALES BY REGION (Dollars in millions)
2024
2023
2022
China
$
2,010
$
2,105
$
1,883
Asia, excl. China
2,010
1,968
1,638
Americas
3,424
3,526
2,967
Europe
2,946
2,877
2,355
Total
$
10,390
$
10,475
$
8,842
The Company has attributed net sales to the geographic area based on the location of the entity selling the final product.
86
External sales in the U.S. amounted to $2,075 million, $2,342 million and $2,029 million in 2024, 2023 and 2022, respectively. Of the
external sales, exports from the U.S. to other regions amounted to approximately $292 million, $343 million and $298 million in 2024,
2023 and 2022, respectively.
NET SALES BY PRODUCT (Dollars in millions)
2024
2023
2022
Airbag, Steering Wheels1)
$
7,023
$
7,055
$
5,807
Seatbelt Products1)
3,367
3,420
3,035
Total net sales
$
10,390
$
10,475
$
8,842
1) Including Corporate and Other sales.
LONG-LIVED ASSETS (Dollars in millions)
2024
2023
China
$
621
$
592
Asia, excl China
438
408
Americas
541
570
Europe
797
797
Total
$
2,397
$
2,367
Long -lived assets in the table above consists of Property, Plant and Equipment and Operating Lease right-of-use asset. Long-lived assets
in the U.S. amounted to $272 million and $261 million for 2024 and 2023, respectively.
The CODM assesses the Company's performance and decides how to allocate resources based on consolidated net income (loss) in the
Consolidated Statements of Income, which is assessed to be the segment measure of profit or loss. This measure is used to monitor
actual results to evaluate the performance of the segment versus the strategic targets. The segment assets are equal to the assets
presented in the Consolidated Balance Sheets.
The significant expenses that are regularly provided to the CODM are disclosed in the Consolidated Statements of Net Income as a part
of the consolidated net income and are as follows.
Significant segment expenses / income (Dollars in millions)
2024
2023
2022
Total direct costs
$
(7,050 )
$
(7,208 )
$
(6,142 )
Total production overhead costs
(1,413 )
(1,446 )
(1,304 )
Cost of sales
(8,463 )
(8,654 )
(7,446 )
Research, development and engineering expenses (gross)
(612 )
(618 )
(595 )
Engineering income
214
193
205
Research, development and engineering expenses, net
(398 )
(425 )
(390 )
Our other significant segment items that are regularly provided to the CODM include selling, general and administrative expenses, and
other income (expense) which are disclosed as separate line items in the Consolidated Statements of Income. Other expenses consist
of Income from equity method investments, Interest income, Interest expense, Other non-operating items, net and Income taxes, which
are disclosed as separate line items in the Consolidated Statement of income.
21. Earnings Per Share
The computation of basic and diluted earnings per share were as follows (dollars and shares in millions):
2024
2023
2022
Numerator:
Basic and diluted:
Net income attributable to common shareholders
$
646
$
488
$
423
Denominator:
Basic weighted average common stock
80.2
85.0
87.1
Added: Weighted average stock options/share awards
0.2
0.2
0.2
Diluted weighted average common stock
80.4
85.2
87.2
Net earnings per share - basic
$
8.06
$
5.74
$
4.86
Net earnings per share - diluted
$
8.04
$
5.72
$
4.85
Anti-dilutive shares outstanding for the years ended December 31, 2024, 2023 and 2022 were immaterial.
22. Subsequent Events
There were no reportable events subsequent to December 31, 2024.
87
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There have been no changes to and no disagreements with our independent auditors regarding accounting or financial disclosure matters
in our two most recent fiscal years.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation has been carried out by the Company’s management, under the supervision and with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer
and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are
effective.
Internal Control over Financial Reporting
(a) Management’s Annual Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or
under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of
directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those
policies and procedures that:
•
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of the assets of the Company;
•
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company; and
•
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of Autoliv’s internal control over financial reporting as of December 31, 2024. In making this
assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control – Integrated Framework (2013 framework).
Based on our assessment, we believe that, as of December 31, 2024, the Company’s internal control over financial reporting is effective.
(b) Attestation Report of the Registered Public Accounting Firm
Ernst & Young AB has issued an attestation report on the Company’s internal control over financial reporting, which is included herein as
the Report of Independent Registered Public Accounting Firm under Item 8. Financial Statements and Supplementary Data for the year
ended December 31, 2024.
(c) Changes in Internal Control over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15-(f)
and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial reporting.
88
Item 9B. Other Information
On November 7, 2024, Mikael Hagström, Vice President, Corporate Controller, adopted a trading plan intended to satisfy Rule 10b5-1(c)
to sell 50% of his shares of Autoliv, Inc. common stock he would acquire upon the vesting of restricted stock units and performance stock
units in February 2025. These sales are intended to cover vesting taxes and would occur between February 24, 2025 and March 7, 2025.
On November 11, 2024, Jonas Jademyr, Executive Vice President, Quality and Project Management, adopted a trading plan intended to
satisfy Rule 10b5-1(c) to sell 50% of his shares of Autoliv, Inc. common stock he would acquire upon the vesting of restricted stock units
and performance stock units in February 2025. These sales are intended to cover vesting taxes and would occur between February 24,
2025 and March 7, 2025.
On November 11, 2024, Christian Swahn, Executive Vice President, Supply Chain Management, adopted a trading plan intended to
satisfy Rule 10b5-1(c) to sell 50% of his shares of Autoliv, Inc. common stock he would acquire upon the vesting of restricted stock units
and performance stock units in February 2025. These sales are intended to cover vesting taxes and would occur between February 24,
2025 and March 7, 2025.
On November 14, 2024, Anthony Nellis, Executive Vice President, Legal Affairs, General Counsel and Secretary, adopted a trading plan
intended to satisfy Rule 10b5-1(c) to sell, at a set threshold price, up to 25% of his net shares of Autoliv, Inc. common stock he would
acquire upon the vesting of restricted stock units and performance stock units in February 2025 after in-kind tax withholding. Such sales
to occur between (i) February 21, 2025 and March 14, 2025, (ii) April 18, 2025 and June 14, 2025, (iii) July 22, 2025 and September 14,
2025, and (iv) October 21, 2025 and December 14, 2025, subject to certain conditions.
On November 16, 2024, Mikael Bratt, President & Chief Executive Officer, adopted a trading plan intended to satisfy Rule 10b5-1(c) to
sell 50% of his shares of Autoliv, Inc. common stock he would acquire upon the vesting of performance stock units in February 2025.
These sales are intended to cover vesting taxes and would occur between February 24, 2025 and March 7, 2025.
On November 20, 2024, Magnus Jarlegren, President, Autoliv Europe, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell
50% of his shares of Autoliv, Inc. common stock he would acquire upon the vesting of restricted stock units and performance stock units
in February 2025. These sales are intended to cover vesting taxes and would occur between February 24, 2025 and March 7, 2025.
On November 21, 2024, Fabien Dumont, Chief Technology Officer, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell 36%
of his shares of Autoliv, Inc. common stock he would acquire upon the vesting of restricted stock units and performance stock units in
February 2025 and March 2025. These sales are intended to cover vesting taxes and would occur between February 24, 2025 and March
7, 2025 and between March 31, 2025 and April 21, 2025. Fabien Dumont terminated the trading plan on February 12, 2025.
89
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by Item 10. regarding executive officers, directors and nominees for election as directors of Autoliv, Autoliv’s
Audit Committee, Autoliv’s code of ethics, insider trading policies and procedures, and compliance with Section 16(A) of the Securities
Exchange Act is incorporated herein by reference from the information under the captions “Executive Officers of the Company” and
“Proposal 1: Election of Directors”, “Committees of the Board” and “Audit and Risk Committee Report”, “Corporate Governance Guidelines
and Codes of Conduct”, “Insider Trading Policies and Procedures”,and “Delinquent Section 16(a) Reports”, respectively, in the Company’s
2025 Proxy Statement. Information on Board meeting attendance is provided under the caption “Board Meetings” in the 2025 Proxy
Statement and incorporated herein by reference.
Item 11. Executive Compensation
The information required by Item 11. regarding executive compensation for the year ended December 31, 2024 is included under the
caption “Compensation Discussion and Analysis” in the 2025 Proxy Statement and is incorporated herein by reference. The information
required by the same item regarding Leadership Development and Compensation Committee is included in the sections “Leadership
Development and Compensation Committee Interlocks and Insider Participation” and “Leadership Development and Compensation
Committee Report” in the 2025 Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by Item 12. regarding beneficial ownership of Autoliv’s common stock is included under the caption “Security
Ownership of Certain Beneficial Owners and Management” in the 2025 Proxy Statement and is incorporated herein by reference.
Securities Authorized for Issuance Under the Stock Incentive Plan
The following table provides information as of December 31, 2024, about the common stock that may be issued under the Stock Incentive
Plan. The Company does not have any equity compensation plans that have not been approved by its stockholders.
Plan Category
(a) Number of
Securities to
be issued upon
exercise of
outstanding options,
warrants and rights
(b) Weighted-
average exercise
price of outstanding
options, warrants
and rights(2)
(c) Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column
(a))(3)
Equity compensation plans
approved by security
holders (1)
456,849
$
80.40
2,429,029
Equity compensation plans
not approved by security
holders
—
—
—
Total
456,849
$
80.40
2,429,029
(1)
Autoliv, Inc. 1997 Stock Incentive Plan, as amended and restated on May 6, 2009, as amended by Amendment No. 1 dated December 17, 2010
and Amendment No. 2 dated May 8, 2012.
(2)
Excludes restricted stock units and performance shares which convert to shares of common stock for no consideration.
(3)
All such shares are available for issuance pursuant to grants of full-value stock awards.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information regarding the Company’s policy and procedures concerning related party transactions is included under the caption “Related
Person Transactions” in the 2025 Proxy Statement and is incorporated herein by reference. Information regarding director independence
can be found under the caption “Board Independence” in the 2025 Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by Item 9(e) of Schedule 14A regarding principal accounting fees and the information required by Item 14
regarding the pre-approval process of accounting services provided to Autoliv is included under the caption “Proposal 3. Ratification of
Appointment of Independent Registered Public Accounting Firm Appointment” in the 2025 Proxy Statement and is incorporated herein
by reference.
90
PART IV
Item 15. Exhibit and Financial Statement Schedules
(a)
Documents Filed as Part of this Report
(1)
Financial Statements
(i)
Consolidated Statements of Income – Years ended December 31, 2024, 2023 and 2022;
(ii)
Consolidated Statements of Comprehensive Income – Years ended December 31, 2024, 2023 and 2022;
(iii)
Consolidated Balance Sheets – as of December 31, 2024 and 2023;
(iv)
Consolidated Statements of Cash Flows – Years ended December 31, 2024, 2023 and 2022;
(v)
Consolidated Statements of Total Equity – as of December 31, 2024, 2023 and 2022;
(vi)
Notes to Consolidated Financial Statements; and
(vii)
Reports of Independent Registered Public Accounting Firm (PCAOB Auditor ID No. 1433).
(2)
Financial Statement Schedules
All of the schedules specified under Regulation S-X to be provided by Autoliv have been omitted either because they are not applicable,
they are not required, or the information required is included in the financial statements or notes thereto.
(3)
Exhibits
Exhibit
No.
Description
3.1
Autoliv’s Restated Certificate of Incorporation, as amended, incorporated herein by reference to Exhibit 3.1 to the Quarterly
Report on Form 10-Q (File No. 001-12933, filing date April 22, 2015).
3.2
Autoliv’s Third Restated By-Laws, incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File
No. 001-12933, filing date December 18, 2015).
4.1
Indenture, dated March 30, 2009, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein
by reference to Exhibit 4.1 to Autoliv’s Registration Statement on Form 8-A (File No. 001-12933, filing date March 30, 2009)
4.2
Second Supplemental Indenture (including Form of Global Note), dated March 15, 2012, between Autoliv, Inc. and U.S. Bank
National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.
001-12933, filing date March 15, 2012).
4.3
Form of Note Purchase and Guaranty Agreement dated April 23, 2014, among Autoliv ASP, Inc., Autoliv, Inc. and the
purchasers named therein, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No.
001-12933, filing date April 25, 2014).
4.4
Amendment and Waiver 2014 Note Purchase and Guaranty Agreement, dated May 24, 2018 among Autoliv, Inc., Autoliv
ASP, Inc. and the noteholders named therein, incorporated herein by reference to Exhibit 4.4 to the Quarterly Report on Form
10-Q (File No. 001-12933, filing date July 27, 2018).
4.5
Agency Agreement dated June 26, 2018 among Autoliv, Inc., Autoliv ASP Inc. and HSBC Bank PLC, incorporated herein by
reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018).
4.6
Description of Registrant´s Securities, incorporated by reference to Exhibit 4.13 to the Annual Report on Form 10-K (File No.
001-12933, filing date February 19, 2021).
4.7
Amended and Restated Agency Agreement, dated February 22, 2022, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers
named therein, incorporated herein by reference to Exhibit 4.14 to the Quarterly Report on Form 10-Q (File No. 001-12933,
filing date April 22, 2022).
4.8
Base Listing Particulars Agreement, dated March 6, 2024, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named
therein, incorporated herein by reference to Exhibit 4.7 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing
date April 26, 2024).
4.9
Amended and Restated Programme Agreement, dated March 6, 2024, among Autoliv, Inc., Autoliv ASP, Inc. and the
dealers named therein, incorporated herein by reference to Exhibit 4.8 to the Quarterly Report on Form 10-Q (File No. 001-
12933, filing date April 26, 2024).
4.10
General Terms and Conditions for Swedish Depository Receipts in Autoliv, Inc. representing common shares in Autoliv,
Inc., effective as of April 8, 2024, with Skandinaviska Enskilda Banken AB (publ) serving as custodian, incorporated herein
by reference to Exhibit 4.9 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 26, 2024).
91
10.1+
Autoliv, Inc. 1997 Stock Incentive Plan, as amended and restated on May 6, 2009, incorporated herein by reference to
Appendix A of the Definitive Proxy Statement of Autoliv, Inc. on Schedule 14A (filing date March 23, 2009).
10.2+
Amendment No. 1 to the Autoliv, Inc. 1997 Stock Incentive Plan as amended and restated on May 6, 2009, dated December
17, 2010, incorporated herein by reference to Exhibit 10.24 to the Annual Report on Form 10-K (File No. 001-12933, filing
date February 23, 2011).
10.3+
Amendment No. 2 to the Autoliv, Inc. 1997 Stock Incentive Plan, as amended and restated on May 6, 2009, dated May 8,
2012, incorporated herein by reference to Exhibit 10.29 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing
date July 20, 2012).
10.4+
Amendment No. 3 to the Autoliv, Inc. 1997 Stock Incentive Plan, as amended and restated, dated April 24, 2017, incorporated
herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 28, 2017).
10.5
Form of Note Purchase and Guaranty Agreement, dated April 23, 2014, among Autoliv ASP, Inc., Autoliv, Inc. and the
purchasers named therein, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No.
001-12933, filing date April 25, 2014).
10.6+
Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Mikael Bratt, incorporated herein
by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018).
10.7+
Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Anthony J. Nellis, incorporated
herein by reference to Exhibit 10.14 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018).
10.8
Cooperation Agreement, dated March 1, 2019, between Autoliv, Inc. and Cevian Capital II GP Limited, incorporated herein
by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-12933, filing date March 1, 2019).
10.9+
Employment Agreement, dated March 18, 2019, between Autoliv, Inc. and Christian Swahn, incorporated herein by
reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date October 25, 2019).
10.10
Form of Indemnification Agreement between Autoliv, Inc. and its directors and certain of its executive officers, incorporated
herein by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date October 25,
2019).
10.11+
Employment Agreement, dated November 26, 2019 and effective as of March 1, 2020, between Autoliv, Inc. and Fredrik
Westin, incorporated herein by reference to Exhibit 10.56 to the Annual Report on Form 10-K (File No. 001-12933, filing
date February 21, 2020).
10.12
Facility Agreement, dated May 28, 2020, by and among Autoliv AB, as borrower, Autoliv, Inc. and Autoliv ASP, as
guarantors, and AB Svensk Exportkredit, as lender, incorporated herein by reference to Exhibit 10.1 to the Quarterly Report
on Form 10-Q (File No. 001-12933, filing date July 17, 2020).
10.13+
Employment Agreement, dated June 8, 2020 and effective as of June 15, 2020, by between Autoliv, Inc. and Kevin Fox,
incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July
17, 2020).
10.14+
Employment Agreement, effective as of August 17, 2020, by and between Autoliv AB and Mikael Hagström incorporated
herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date October 23,
2020).
10.15+
Employment Agreement, dated October 1, 2020 and effective as of November 1, 2020, by and between Autoliv Inc. and
Colin Naughton incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-12933,
filing date April 23, 2021).
10.16+
Amendment No. 1, effective as of April 1, 2021, to Employment Agreement, effective March 18, 2019, by and between
Autoliv Inc. and Christian Swahn incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q
(File No. 001-12933, filing date April 23, 2021).
10.17+
Employment Agreement, dated December 14, 2021 and effective as of January 19, 2021, by and between Autoliv Inc. and
Sng Yih incorporated herein by reference to Exhibit 10.46 to the Annual Report on Form 10-K (File No. 001-12933, filing
date February 22, 2022).
10.18+
Form of Employee restricted stock units grant agreement (2022) to be used under the Autoliv, Inc 1997 Stock Incentive
Plan, as amended and restated, incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q
(File No. 001-12933, filing date April 22, 2022).
10.19+
Form of Employee performance share units grant agreement (2022) to be used promised under the Autoliv, Inc 1997 Stock
Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form
10-Q (File No. 001-12933, filing date April 22, 2022).
10.20
Facilities Agreement, dated May 23, 2022, among Autoliv, Inc., Autoliv ASP, Inc., Citibank, N.A., London Branch, Mizuho
Bank, Ltd., Skandinaviska Enskilda Banken AB (publ), and the other parties and lenders named therein, incorporated
herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 22, 2022).
92
10.21+
Employment Agreement, dated December 1, 2022 and effective as of January 15, 2023, by and between Autoliv, Inc. and
Jonas Jademyr, incorporated herein by reference to Exhibit 10.37 to the Annual Report on Form 10-K (File No. 001-12933,
filing date February 16, 2023).
10.22+
Form of Non-Employee Director Restricted Stock Unit Grant Agreement (2023) to be used under the Autoliv, Inc. 1997
Stock Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on
Form 10-Q (File No. 001-12933, filing date July 21, 2023).
10.23+
Employment Agreement, dated May 17, 2023, by and between Autoliv, Inc. and Petra Albuschus incorporated herein by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 21, 2023).
10.24+
Amendment No. 1 to Employment Agreement, dated October 1, 2023, by and between Autoliv, Inc. and Colin Naughton
incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date
October 20, 2023).
10.25+
Employment Agreement, dated November 21, 2023, by and between Autoliv Switzerland GmbH and Magnus Jarlegren
incorporated herein by reference to Exhibit 10.37 to the Annual Report on Form 10-K (File No. 001-12933, filing date
February 20, 2024).
10.26+
Form of Employee 2024 restricted stock units grant agreement promised under Autoliv, Inc. 1997 Stock Incentive Plan, as
amended and restated incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-
12933, filing date April 26, 2024).
10.27+
Form of Employee 2024 performance share units grant agreement promised under the Autoliv, Inc. 1997 Stock Incentive
Plan, as amended and restated incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No.
001-12933, filing date April 26, 2024).
10.28+
Autoliv, Inc. Non-Employee Director Compensation Policy effective May 1, 2024 incorporated by reference to Exhibit 10.1
to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 19, 2024).
10.29+
Employment Agreement, effective June 1, 2024, by and between Autoliv, Inc. and Staffan Olsson incorporated herein by
reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 19, 2024).
10.30
Revolving Credit Facility Agreement, dated July 17, 2024, among Autoliv, Inc., Autoliv ASP, and Standard Chartered Bank
incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date
October 18, 2024).
10.31+
Employment Agreement, dated September 13, 2024, by and between Autoliv (Shanghai) Management Co. Ltd. and Fabien
Dumont incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing
date October 18, 2024).
19*
Autoliv Insider Trading Policy.
21*
Autoliv’s List of Subsidiaries.
23*
Consent of Independent Registered Public Accounting Firm.
31.1*
Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended.
31.2*
Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934,
as amended.
32.1*
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.
32.2*
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.
97.1*
Autoliv, Inc. Compensation Recoupment Policy.
101.INS*
Inline XBRL Instance Document – The instance document does not appear in the Interactive Date File because its XBRL
tags are embedded within the inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Document.
104*
Cover Page Interactive Data File (embedded within the inline XBRL document).
* Filed herewith.
+ Management contract or compensatory plan.
† Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and
Exchange Commission.
93
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, as of February 20, 2025.
AUTOLIV, INC.
(Registrant)
By /s/ Fredrik Westin
Fredrik Westin
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated, as of February 20, 2025.
Title
Name
Chairman of the Board of Directors
/s/ Jan Carlson
Jan Carlson
Chief Executive Officer and President (Principal Executive Officer)
/s/ Mikael Bratt
and Director
Mikael Bratt
Chief Financial Officer
/s/ Fredrik Westin
(Principal Financial and Principal Accounting Officer)
Fredrik Westin
Director
/s/ Laurie Brlas
Laurie Brlas
Director
/s/ Hasse Johansson
Hasse Johansson
Director
/s/ Leif Johansson
Leif Johansson
Director
/s/ Adriana Karaboutis
Adriana Karaboutis
Director
/s/ Franz-Josef Kortüm
Franz-Josef Kortüm
Director
/s/ Frédéric Lissalde
Frédéric Lissalde
Director
/s/ Xiaozhi Liu
Xiaozhi Liu
Director
/s/ Gustav Lundgren
Gustav Lundgren
Director
/s/ Martin Lundstedt
Martin Lundstedt
Director
/s/ Thaddeus Senko
Thaddeus Senko
94
Glossary and Definitions
In this report, the following company or industry specific terms and abbreviations are used:
CAPITAL EMPLOYED
Total equity and net debt (net cash).
CAPITAL EXPENDITURES
Investments in property, plant and equipment.
CPV
Content Per Vehicle, i.e. value of the safety products in a vehicle.
EARNINGS PER SHARE
Net income attributable to controlling interest relative to weighted average number of shares (net of treasury shares) assuming dilution
and basic, respectively.
EBITDA
Earnings before interest, taxes, depreciation, and amortization
GROSS MARGIN
Gross profit relative to sales.
MEDIUM AND LOW INCOME MARKETS
Includes all markets except North America, Western Europe, Japan and South Korea.
HEADCOUNT
Employees plus temporary personnel.
HIGH INCOME MARKETS
Includes North America, Western Europe, Japan and South Korea.
INVENTORY OUTSTANDING IN RELATION TO SALES
Outstanding inventory relative to annualized fourth quarter sales.
LEVERAGE RATIO
Debt per the Policy (Net debt adjusted for pension liabilities) in relation to EBITDA per the Policy (Adjusted EBITDA) (Earnings Before
Interest, Taxes, Depreciation and Amortization, other non-operating items, net, income from equity method investments and capacity
alignments), see Item 7 for a calculation of this non-U.S. GAAP measure.
LVP
Light vehicle production of light motor vehicles with a gross weight of up to 3.5 metric tons.
This 10-K includes content supplied by S&P Global; Copyright © Light Vehicle Production Forecast, January 2025. All rights reserved.
S&P Global is a global supplier of independent industry information. The permission to use S&P Global copyrighted reports, data and
information does not constitute an endorsement or approval by S&P Global of the manner, format, context, content, conclusion, opinion
or viewpoint in which S&P Global reports, data and information or its derivations are used or referenced herein.
NET DEBT
Short and long-term debt including debt-related derivatives less cash and cash equivalents, see Non-U.S. GAAP Performance Measures
in Item 7 for a reconciliation of this non-U.S. GAAP measure.
95
NUMBER OF EMPLOYEES
Employees with a continuous employment agreement, recalculated to full time equivalent heads.
OEM
Original Equipment Manufacturer referring to customers assembling new vehicles.
OPERATING MARGIN
Operating income relative to sales.
PAYABLES OUTSTANDING IN RELATION TO SALES
Outstanding payables relative to annualized fourth quarter sales.
RECEIVABLES OUTSTANDING IN RELATION TO SALES
Outstanding receivables relative to annualized fourth quarter sales.
RETURN ON CAPITAL EMPLOYED
Operating income and equity in earnings of affiliates, relative to average capital employed.
RETURN ON TOTAL EQUITY
Net income relative to average total equity.
Multi-Year Financial Summary
(Dollars in millions, except per share data, unaudited)
2024
2023
2022
2021
2020
Sales and Income
Net sales
$10,390
$10,475
$8,842
$8,230
$7,447
Airbags, Steering Wheels and Other 1)
7,023
7,055
5,807
5,380
4,824
Seatbelt Products and Other 1)
3,367
3,420
3,035
2,850
2,623
Operating income
979
690
659
675
382
Net income attributable to controlling interest
646
488
423
435
187
Earnings per share – basic 2)
8.06
5.74
4.86
4.97
2.14
Earnings per share – diluted 2)
8.04
5.72
4.85
4.96
2.14
Gross margin 3)
18.5%
17.4%
15.8%
18.4%
16.7%
S,G&A in relation to sales
(5.1)%
(4.8)%
(4.9)%
(5.3)%
(5.2)%
R,D&E net in relation to sales
(3.8)%
(4.1)%
(4.4)%
(4.7)%
(5.0)%
Operating margin4)
9.4%
6.6%
7.5%
8.2%
5.1%
Adjusted operating margin 5, 6)
9.7%
8.8%
6.8%
8.3%
6.5%
Balance Sheet
Trade working capital 6, 7)
1,115
1,232
1,183
1,332
1,366
Trade working capital in relation to sales 8)
10.7%
11.2%
12.7%
15.7%
13.6%
Receivables outstanding in relation to sales 9)
19.0%
20.0%
20.4%
20.0%
18.1%
Inventory outstanding in relation to sales 10)
8.8%
9.2%
10.4%
9.2%
7.9%
Payables outstanding in relation to sales 11)
17.2%
18.0%
18.1%
13.5%
12.5%
Total equity
2,285
2,570
2,626
2,648
2,423
Total parent shareholders’ equity per share
29.26
30.93
30.30
30.10
27.56
Current assets excluding cash
3,153
3,475
3,119
2,705
3,091
Property, plant and equipment, net
2,239
2,192
1,960
1,855
1,869
Goodwill and Intangible assets
1,375
1,385
1,382
1,395
1,412
Capital employed
3,840
3,937
3,810
3,700
3,637
Net debt6)
1,554
1,367
1,184
1,052
1,214
Total assets
7,804
8,332
7,717
7,537
8,157
Long-term debt
1,522
1,324
1,054
1,662
2,110
Return on capital employed 12)
25.0%
17.7%
17.5%
18.3%
10.0%
Return on total equity 13)
27.2%
19.0%
16.3%
17.1%
9.0%
Total equity ratio
29%
31%
34%
35%
30%
Cash flow and other data
Operating cash flow
1,059
982
713
754
849
Depreciation and amortization
387
378
363
394
371
Capital expenditures, net
563
569
485
454
340
Capital expenditures, net in relation to sales
5.4%
5.4%
5.5%
5.5%
4.6%
Free operating cash flow 6, 14)
497
414
228
300
509
Cash conversion 6, 15)
77%
85%
54%
69%
270%
Direct shareholder return 16)
771
577
339
165
54
Cash dividends paid per share
2.74
2.66
2.58
1.88
0.62
Number of shares outstanding (millions) 17)
77.7
82.6
86.2
87.5
87.4
Number of employees, December 31
59,500
62,900
61,700
55,900
61,000
1) Including Corporate sales 2) Net of treasury shares. 3) Gross profit relative to sales. 4) Operating income relative to sales. 5) Excluding effects from capacity alignments,
antitrust related matters and for FY 2023 the Andrews litigation settlement. 6) Non-GAAP measure, for reconciliation see Financial Report October - December 2024 filed
with Form 8-K on January 31, 2025. 7) Outstanding receivables and outstanding inventory less outstanding payables. 8) Outstanding receivables and outstanding inventory less
outstanding payables relative to annualized fourth quarter sales. 9) Outstanding receivables relative to annualized fourth quarter sales. 10) Outstanding inventory relative to
annualized fourth quarter sales. 11) Outstanding payables relative to annualized fourth quarter sales. 12) Operating income and income from equity method investments,
relative to average capital employed. 13) Income relative to average total equity. 14) Operating cash flow less Capital expenditures, net. 15) Free operating cash flow relative to
Net income. 16) Dividends paid and Shares repurchased. 17) At year end, excluding dilution and net of treasury shares.
77
More Lives Saved
More Life Lived
Each year, Autoliv’s products save
approximately 37,000 lives.