Autoliv’s (NYSE:ALV) Q3 2024 results show resilience despite headwinds, with net sales dipping by 1.6% to $2.555 billion and organic sales slipping by 0.8%. Yet, the company managed to hold steady with an 8.9% operating margin, thanks to aggressive cost-cutting and efficiency gains. While Autoliv saw solid growth in Europe and Asia (excluding China), China’s performance lagged, largely because of a shift towards lower safety content models. Despite this setback, the company saw a striking 18% boost in sales to domestic Chinese OEMs, doubling the local LVP growth.
The global light vehicle production slump persisted, with a 4.8% drop in Q3, but Autoliv outperformed the market by 4 percentage points. This outperformance wasn’t a flukeit came from a year-long push to streamline operations, including a 6% cut in headcount. These moves helped cushion the impact of a $14 million supplier settlement charge and inflationary cost pressures, keeping the company’s profitability on track.
Looking ahead, Autoliv has tempered its expectations for 2024, targeting 1% organic growth amid a tough market landscape. The company is sticking to its 9.5-10% adjusted operating margin goal and aims to deliver $1.1 billion in operating cash flow. Autoliv’s financial health remains solid, with a leverage ratio at 1.4x, allowing the company to maintain robust shareholder returns through dividends and buybackseven as it navigates the choppy waters of the automotive industry.
This article first appeared on GuruFocus.