STOCKHOLM, Oct. 17, 2025 /PRNewswire/ --
Q3 2025: Record 3(rd) quarter sales, operating income and EPS
Financial highlights Q3 2025
$2,706 million net sales
5.9% net sales increase
3.9% organic sales growth*
9.9% operating margin
10.0% adjusted operating margin*
$2.28 diluted EPS, 31% increase
$2.32 adjusted diluted EPS*, 26% increase
Full year 2025 guidance
Around 3% organic sales growth
Around 1% FX effect on net sales
Around 10-10.5% adjusted operating margin
Around $1.2 billion operating cash flow
All change figures in this release compare to the same period of the previous year except when stated otherwise
Key business developments in the third quarter of 2025
-- Net sales increased organically* by 3.9%, which was 0.7pp lower than the
global LVP increase of 4.6% (S&P Global Oct 2025). Regional and customer
LVP mix is estimated to have negatively impacted sales by about 1pp,
while tariff compensations added around 0.5pp. We outperformed in Asia
ex. China and Americas and underperformed in China and Europe. Our
organic sales growth* in China to Chinese OEMs was about 8pp higher than
COEM LVP growth. We expect that our record number of new launches will
continue to support our sales performance in China in the fourth quarter.
-- Profitability improved significantly, mainly due to organic sales growth,
successful execution of cost reductions, and positive effects from
supplier settlement and compensation. We estimate that the negative
impact from U.S. tariffs was around 20bps on operating margin, as we
managed to pass on most of the tariff costs to our customers. Operating
income increased by 18% to $267 million and adjusted operating income*
increased by 14% to $271 million. Operating margin was 9.9% and adjusted
operating margin* was 10.0%. ROCE was 25.1% and adjusted ROCE* was 25.5%.
-- Operating cash flow increased by 46%, reflecting improved profit and
working capital. Capital expenditure, net, was significantly reduced, and
free operating cash flow* increased substantially. The leverage ratio* of
1.3x is below our target limit of 1.5x. In the quarter, a dividend of
$0.85 per share (21% increase from Q2 '25) was paid and 0.84 million
shares were repurchased and retired.
*For non-U.S. GAAP measures see enclosed reconciliation tables.
Key Figures
(Dollars in millions, except per share data) Q3 2025 Q3 2024 Change 9M 2025 9M 2024 Change ------------------------- ------- ------- ------ ------- ------- ------- Net sales $2,706 $2,555 5.9 % $7,998 $7,774 2.9 % Operating income 267 226 18 % 769 626 23 % Adjusted operating income(1) 271 237 14 % 777 657 18 % Operating margin 9.9 % 8.9 % 1.0pp 9.6 % 8.1 % 1.6pp Adjusted operating margin(1) 10.0 % 9.3 % 0.7pp 9.7 % 8.5 % 1.3pp Earnings per share - diluted 2.28 1.74 31 % 6.59 4.98 32 % Adjusted earnings per share - diluted(1) 2.32 1.84 26 % 6.67 5.30 26 % Operating cash flow 258 177 46 % 613 639 (4.1) % Return on capital employed(2) 25.1 % 22.9 % 2.2pp 24.9 % 21.2 % 3.8pp Adjusted return on capital employed(1,2) 25.5 % 23.9 % 1.6pp 25.2 % 22.1 % 3.0pp ------------------------- ------- ------- ------ ------- ------- ------- 1) Excluding effects from capacity alignments and antitrust related matters. Non-U.S. GAAP measure, see reconciliation table. 2) Annualized operating income and income from equity method investments, relative to average capital employed.
Comments from Mikael Bratt, President & CEO:
"I am pleased to, once again, report a record breaking quarter. This quarter is the best third quarter so far, for sales, operating income and EPS. The performance was driven by better than expected sales, especially in Americas and Europe, and successful actions to reduce costs and achieve tariff compensation. I am pleased that we had a solid outperformance with the domestic Chinese OEMs. The ramp-up of certain models started slower than expected, but improved gradually during the quarter. We expect increased outperformance in China in Q4.
Driven by increased penetration of automotive safety, our high growth in India continued, accounting for around one third of our global organic growth in the third quarter.
We invest for continued success in China. We started building a second R&D Center in China to support our growing business with Chinese OEMs both in China and globally. In addition, in October we signed a strategic agreement with CATARC, the leading research institution setting standards in China's automotive sector, to jointly advance automotive safety standards and innovation. Furthermore, we recently announced our plans to form a joint venture with HSAE, a leading Chinese automotive electronics developer, to develop and manufacture advanced safety electronics to increase vertical integration of our current product portfolio.
We recovered around 75% of tariff costs in the third quarter, and expect to recover most of what remains in Q4. We continue to closely monitor the situation, and remain adaptive and agile.
Our focus on operational efficiency, commercial excellence and our cost reduction programs continue to yield results. In the quarter, sales grew organically by 4%, gross profit by 14%, operating income by 18% and EPS by 31%. Supported by strong balance sheet control, operating cash flow increased by 46%, and with a lower capex, net, free cash flow improved substantially. As a result, we kept our leverage ratio at 1.3x, despite increasing the dividend by 21% and repurchasing shares for $100 million in the quarter.
We remain confident in achieving our full year guidance of an adjusted operating margin of around 10-10.5%, currently expecting to come in at the midpoint of the range.
Our focus on operational efficiency, commercial excellence and our cost reduction programs continue to yield results. In the quarter, sales grew organically by 4%, gross profit by 14%, operating income by 18% and EPS by 31%. Supported by strong balance sheet control, operating cash flow increased by 46%, and with a lower capex, net, free cash flow improved substantially. As a result, we kept our leverage ratio at 1.3x, despite increasing the dividend by 21% and repurchasing shares for $100 million in the quarter.
We remain confident in achieving our full year guidance of an adjusted operating margin of around 10-10.5%, currently expecting to come in at the midpoint of the range."
Next Report
Autoliv intends to publish the quarterly earnings report for the fourth quarter of 2025 on Friday, January 30, 2026.
Inquiries: Investors and Analysts
Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671
Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614
Inquiries: Media
Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424
Autoliv, Inc. is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on October 17, 2025.
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/autoliv/r/financial-report-july---september-2025,c4251844
The following files are available for download:
https://mb.cision.com/Main/751/4251844/3728531.pdf The full report (PDF)
View original content:https://www.prnewswire.com/news-releases/autoliv-financial-report-july---september-2025-302587535.html
SOURCE Autoliv
(END) Dow Jones Newswires
October 17, 2025 07:40 ET (11:40 GMT)