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Autoliv Inc ALV

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Autoliv Presents Solid Medium- and Long-Term Targets at Capital Markets Day; $94 FVE Unchanged

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

After reviewing narrow-moat Autoliv’s revenue and margin targets from its capital markets day, our $94 fair value estimate is unchanged. From 2022 to 2024, management targets revenue growth at 4 percentage points above the growth of global light vehicle production. This compares to 3-4 percentage points growth over market forecast at its November 2019 capital markets day, covering a medium-term three to five years. Beyond 2024, management’s objective is 4%-6% organic revenue growth, which we surmise is slightly better by at least 2 percentage points versus the previous target for “growth at least in line with the market.” Our long-term global light-vehicle demand forecast is for 1%-3% average annual growth. Using 2019 as the base year, we model an average of 6% revenue growth over our five-year forecast, including an 11% rebound in 2021, followed by a return to more normalized global light-vehicle production in 2023. Our Stage I Autoliv revenue growth forecast is roughly 4 percentage points above the midpoint of our long-term demand forecast.

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Company Profile

Business Description

Autoliv is the global leader in passive safety components and systems for the auto industry. Products include seat belts, frontal air bags, side-impact air bags, air bag inflators, and steering wheels. The Renault-Nissan-Mitsubishi alliance is the company's largest customer at 13% of 2020 revenue, with Volkswagen and Stellantis accounting for 11% each. At 31% of 2020 revenue, the Americas was Autoliv's largest geographic region, followed by Europe at 28%, China at 21%, and Japan at 10%.

Klarabergsviadukten 70, Box 70381, Section B7
Stockholm, SE-107 24, Sweden
T +46 858720600
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 62,000