STOCKHOLM, Jan. 30, 2026 /PRNewswire/ -- (NYSE:ALV) and (SSE: ALIV.sdb)

Q4 2025: Our best quarter yet

Financial highlights Q4 2025

$2,817 million net sales

7.7% net sales increase

4.2% organic sales growth*

11.3% operating margin

12.0% adjusted operating margin*

$2.98 diluted EPS, 4% decrease

$3.19 adjusted diluted EPS*, 5% increase

Full year 2026 guidance

Around 0% organic sales growth

Around 1% positive FX effect on net sales

Around 10.5-11.0% 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 fourth quarter of 2025

Net sales increased organically* by 4.2%, which was 2.9pp higher than the global LVP increase of 1.3% (S&P Global Jan 2026) driven mainly by new product launches. Regional and customer LVP mix is estimated to have negatively impacted sales by about 1.5pp, while tariff compensations added around 1pp. We outperformed in all regions; by 5.3pp in China, by 4.8pp in Asia ex. China, by 3.7pp in Americas and by 1.5pp in Europe. Driven mainly by new product launches, our organic sales growth* to Chinese OEMs (COEMs) was close to 40%. We expect continued strong sales performance with COEMs in 2026.
Profitability was strong, with the highest quarterly gross profit and second highest operating income so far. This was mainly due to organic sales growth* and successful execution of cost reductions. Operating income decreased by 9.6% to $319 million and adjusted operating income* decreased by 3.6% to $337 million mainly from lower out-of-period customer compensations and lower engineering income. Operating margin was 11.3% and adjusted operating margin* was 12.0%. ROCE was 30.3% and adjusted ROCE* was 31.8%.
Operating cash flow increased by 30%, to a new quarterly record of $544 million, taking the full year operating cash flow to a new record of $1,157 million. Free operating cash flow* increased substantially and was a record-high for both the quarter and the full year. The leverage ratio* improved to 1.1x, well below our target limit of 1.5x. In the quarter, a dividend of $0.87 per share (2.4% increase from Q3 '25) was paid and 1.26 million shares were repurchased and retired.

*For Non-GAAP measures see enclosed reconciliation tables.

Key Figures

(Dollars in millions, except per share data)	Q4 2025	Q4 2024	Change	FY 2025	FY 2024	Change
Net sales	$2,817	$2,616	7.7 %	$10,815	$10,390	4.1 %
Operating income	319	353	(9.6) %	1,088	979	11 %
Adjusted operating income¹⁾	337	349	(3.6) %	1,114	1,007	11 %
Operating margin	11.3 %	13.5 %	(2.2)pp	10.1 %	9.4 %	0.6pp
Adjusted operating margin¹⁾	12.0 %	13.4 %	(1.4)pp	10.3 %	9.7 %	0.6pp
Earnings per share - diluted	2.98	3.10	(3.8) %	9.55	8.04	19 %
Adjusted earnings per share - diluted¹⁾	3.19	3.05	4.7 %	9.85	8.32	18 %
Operating cash flow	544	420	30 %	1,157	1,059	9.2 %
Return on capital employed²⁾	30.3 %	35.8 %	(5.5)pp	26.4 %	25.0 %	1.5pp
Adjusted return on capital employed^1,2)	31.8 %	35.2 %	(3.4)pp	27.0 %	25.6 %	1.5pp
¹⁾ Excluding effects from capacity alignments and antitrust related matters. Non-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

"We reached new record high sales for a quarter and a full year, driven mainly by strong growth in India and with Chinese OEMs. Sales to COEMs grew by almost 40% in the quarter and by 23% for the full year. Our organic sales growth outperformed LVP in all regions in Q4. We recovered close to 100% of the tariff costs in Q4 and more than 80% for the full year.

Our profit development and balance sheet control resulted in record high operating cash flow and free operating cash flow for both the quarter and the full year. For 2025, operating cash flow was 11% of sales and free operating cash flow was 7% of sales.

Over the past few years, we have taken significant steps to strengthen our position in China with COEMs through investments in footprint and engineering capacity, and by signing several strategic co-operation agreements. This is paying off, evidenced by the fact that 30% of our order intake in 2025 was from COEMs, which includes order intake for COEM production in Europe and the world's first foldable steering wheel for autonomous driving.

In 2025, we reached several significant milestones: operating income exceeded $1 billion for the first time, earnings per share rose above $9 and we paid more than $3 per share in dividends. Our ability to continue delivering attractive shareholder returns remains strong. In the fourth quarter, we accelerated shareholder returns while also improving our leverage ratio - demonstrating both financial strength and disciplined capital management.

Our 2026 guidance, assuming 1% GLVP decline, is organic growth of around 0% and adjusted operating margin of around 10.5-11.0%. We expect Q1 2026 adjusted operating margin to be considerably weaker than Q1 2025, with improvements in the following three quarters.

Our solid position and strong performance in Asia are instrumental to our continued progress. I am confident that together with our demonstrated ability to improve performance in a low-growth environment, we have a solid foundation for continued attractive shareholder returns and a clear path towards our 12% adjusted operating margin target."

Next Report

Autoliv intends to publish the quarterly earnings report for the first quarter of 2026 on Friday, April 17, 2026.

Inquiries: Investors and Analysts

Anders Trapp

Vice President Investor Relations

Tel +46 (0)709 578 171

Henrik Kaar

Director Investor Relations

Tel +46 (0)709 578 114

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 January 30, 2026.

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

https://news.cision.com/autoliv/r/financial-report-october---december-2025,c4300311

The following files are available for download:

https://mb.cision.com/Main/751/4300311/3908321.pdf

The full report (PDF)

View original content:https://www.prnewswire.com/news-releases/autoliv-financial-report-october---december-2025-302675009.html

SOURCE Autoliv

Autoliv: Financial Report October - December 2025