Sweden’s Autoliv , the world’s largest airbag and seatbelt maker, reported a bigger-than-expected rise in second-quarter adjusted profit on Friday as sales jumped on the back of product launches and higher prices.
“We saw continued improvement in call-off volatility in the quarter but still higher volatility than pre-pandemic levels. We believe this reflects an improving global supply chain environment for both our customers and suppliers,” Chief Executive Mikael Bratt said.
Shares in the company rose 6% following the report, after being flat ahead of publication.
Abnormally high cost inflation has squeezed Autoliv and other car industry suppliers in recent years, prompting tough price increase negotiations with their customers, which the company said on Friday had been successful
Bratt told Reuters that while he was happy with the results and believed momentum was picking up, the company was still not where it wanted to be on demand.
“I would say that due to the supply issues that have been in our industry, we have some way to go on the demand side,” he said.
Autoliv has in recent years struggled to keep up with high costs and said in May it hoped to turn things around by launching a cost-saving initiative that includes 8,000 job cuts and the closure of several sites in Europe.
“This first step is expected to reduce costs by around USD 25 million in 2024, increasing to around USD 55 million in 2025 and to reach around USD 75 million when fully completed,” the company said on Friday in relation to the savings.
Adjusted operating profit rose over 70% to USD 212 million in the three-months ending June 30, from USD 124 million in the year-earlier period. Analysts polled by Refinitiv had on average forecast a USD 197 million crown profit.
Jefferies said Autoliv delivered a strong second quarter which was above consensus.
The company reiterated its full-year outlook but said it expected its adjusted operating margin to be back-end loaded for the second half of the year due to normal seasonality between the third and fourth quarters.
