Autoliv Q3 2026: sales slip 0.5%, adjusted margin 9.7%, full-year margin guidance at low end

Autoliv posted net sales of $2,693 million in the third quarter of 2026, a decrease of 0.5% from a year earlier, as organic sales fell 1.1%. Operating income fell 5.0% to $254 million, which the company attributes mainly to the supplier settlement compensation received in the third quarter of 2025, while adjusted operating income fell 3.4% to $262 million. The operating margin was 9.4% and the adjusted operating margin was 9.7%. Diluted earnings per share were $2.13, down 6.8%, and adjusted diluted earnings per share were $2.19, down 5.7%. Return on capital employed was 24.1% and adjusted return on capital employed was 24.4%.

Organic sales fell 1.1%, which was 0.8 percentage points better than the 1.9% global light vehicle production decline cited from Mobility Global for October 2026, driven mainly by strong performance in Asia. Autoliv outperformed light vehicle production in Asia excluding China and in China, was about in line in the Americas and underperformed in EMEA, with regional and customer mix estimated to have cut sales by around 0.9 percentage points. Sales in India grew by nearly 30%, with an 11 percentage point outperformance driven by continued strong market growth in safety content per vehicle, while in China the company outperformed by around 20 percentage points with Chinese OEMs and sales to Chinese OEMs grew by more than 20%. Strong sales growth in Japan helped sales in Asia exceed China in the quarter. To support growing partnerships with Chinese OEMs, innovation capabilities, global competitiveness and long-term growth, Autoliv opened its second R&D center in China during the quarter.

Operating cash flow was $239 million, down from $258 million in 2025, and free operating cash flow was $124 million against $153 million, while the leverage ratio was 1.3x. In the quarter Autoliv paid a dividend of $0.87 per share, or $63 million, and repurchased and retired 1.23 million shares for $150 million; over the last 12 months it has repurchased 4.14 million shares for $500 million and paid $258 million in dividends while keeping its debt leverage ratio unchanged. Cost headwinds increased materially through the year, mainly from raw materials, logistics, recent flooding in Thailand and lower call-off accuracy since the first quarter, and Autoliv says it offset the majority through labor efficiency, material savings from Value Engineering and negotiations with customers and suppliers. The company still expects a strong fourth quarter on an increasing number of product launches and significant raw material recoveries, but the additional headwinds put the full-year adjusted operating margin at around 10.5%, the low end of its around 10.5-11% range.