Oct 23, 2026 earnings call — Q3 results and narrowed margin outlook
Autoliv narrowed full-year adjusted operating margin guidance to around 10.5%.
Revenue $2.7B (est $2.7B) · EPS $2.19 (est $2.23)
Key quotes
"To address these headwinds, we have taken a broad range of commercial operations and cost efficiency actions including improving direct labor productivity through optimization, and continuous improvement initiative."
"In China, we delivered outperformance of around 1 percentage point mainly because our sales growth to Chinese OEMs exceeded their light vehicle production growth by almost 20 percentage points."
"Over the last 12 months, we returned approximately 760 million US dollar to shareholders through dividends and share repurchases."
Analyst Q&A 11
EMEA underperformance reasons
Q (Tom Narayan · RBC): Why did EMEA underperform the market this quarter and was it related to Chinese exports to Europe?
A: Management did not answer this specific EMEA underperformance question in this exchange of the transcript.
Raw material costs into 2027
Q (Tom Narayan · RBC): Will the raw material cost increases that hit 2026 also bleed into 2027, or can recoveries cover them?
A: They would not give 2027 details now and said those will be discussed at the Q4 earnings call. They expect raw materials to be as challenging in 2027 as in 2026, so there is no clear headwind or tailwind identified yet.
"I would say that, I mean, when it comes to raw materials, I would say that we expect it to be as challenging in 2027 as it has been in 2026." — Mikael Bratt (CEO)
Q4 margin drivers and China exports
Q (Emmanuel Rosner · Wolfe): How confident are you in the drivers of the Q4 margin step-up and are recoveries already secured? Also, how much of China business is for export and how would export restrictions affect you?
A: They said Q4 is the stronger quarter and they enter it with confidence, supported by engineering income, higher sales and an extra 1 million units sequentially. They said customer compensation and tariff recovery have good momentum; on China they said export and domestic vehicles use the same product and their global footprint lets them support customers who want or need to localize production.
China growth and inflation components
Q (Evercore): Will China organic growth turn positive in Q4 and 2027? Also, how much of the 180 basis points was Thailand flooding or logistics one-offs?
A: On China, they would not give exact numbers but remain confident they will continue to grow with Chinese OEMs despite negative light vehicle production. On Thailand and logistics, they said Thailand had no material impact in Q4 given insurance coverage, while some divisions saw double digit logistics cost increases and they are taking optimization steps but passing those costs on is difficult.
"Connected to the Thailand flooding, we see we can call it not material impact in our results in Q4, Of course, this is considering coverage for from our property damage and business interruption insurance." — Monika Grama (CFO)
Margin lower end and new safety products
Q (Winnie Dong · Deutsche Bank): What specifically pushed guidance to the lower end, and what is the opportunity for mobility safety solutions outside vehicles?
A: They said higher-than-expected cost pressure across the board is why they sit at the lower end, and raw materials are expected to remain a headwind into 2027. On mobility safety solutions, they have a dedicated team working on high and low voltage leads, are growing the business but call it a startup phase and will provide details once volumes are meaningful.
"it is a little bit of a you could say, startup phase right now, but interesting opportunities in the midterm for sure." — Mikael Bratt (CEO)
2027 product activity and Europe stoppages
Q (Jose Asumendi · GBM): Will 2027 have more product launches than 2026, are there any substantial production stoppages in Europe in November, and will raw material negotiations spill into 2027 or be closed in 2026?
A: Management did not answer these questions in this exchange; the analyst's questions were asked but the reply appears in the following exchange.
Europe stoppages and raw material visibility
Q (Jose Asumendi · GBM): Are you seeing any production stoppages in Europe or signs that raw material negotiations will spill into 2027?
A: They said no indications of stoppages and no visibility of abnormal activity at this time, noting European inventory levels look balanced. They remain watchful but see nothing to point out now and expect to be okay as an industry.
"we have no visibility or indications at this point in time." — Mikael Bratt (CEO)
Engineering income and R&D outlook
Q (Agnieszka Vilela · Nordea): How much did engineering income beat expectations and will it stay positive in Q4? Also what R&D net-of-sales should we expect into 2027?
A: They confirmed engineering income will be a positive contributor in Q4 and expect sequential improvement. For the longer term they expect net R&D relative to sales to be similar to the previous period, with no major change to announce now.
"Connected to Q4, Q4, as we guided, we expect a sequential improvement and engineering income increase is 1 of the drivers of this improvement." — Monika Grama (CFO)
Timing of 2027 launches
Q (Hampus Engellau · Handelsbanken): Are 2027 product launches back-loaded, front-loaded, or spread through the year?
A: They said there is no dramatic phasing and launches are not heavily concentrated in any single quarter. The timing shows normal quarter-to-quarter fluctuation similar to prior years.
"I think it is not any dramatic phasing on it." — Mikael Bratt (CEO)
Q4 confidence and guidance floor
Q (BofA): What gives confidence for the Q4 acceleration and should we treat 10.5% as a floor or could full-year be below that? Also why did China turn negative organically in Q3?
A: They said they enter Q4 with clear activities lined up—higher sales, tariff and customer compensation, and improvement efforts—with momentum from stronger Q3 helping the case. On the floor, they said the range reflected market uncertainty and while the ambition remains to reach 12%, they cannot guarantee a fixed floor because outcomes depend on external circumstances; on China they pointed to light vehicle production and export dynamics as the cause of quarter-to-quarter changes.
"We enter now Q4 with, I should say, the confidence of the fact that we have very clear activities lined up here for the fourth quarter to support the numbers here." — Mikael Bratt (CEO)
Mitigation actions and lower CapEx drivers
Q (Itay Michaeli · TD Cowen): Did mitigation actions pull forward future initiatives and could that affect the path to 12% margin? Also what drove the lower CapEx-to-sales guidance and is it sustainable?
A: They said no, the mitigation actions are part of continuous activity plans and long-term efforts (including a Turkey initiative) to secure growth and offset headwinds, and new technology and productivity gains support the trajectory to 12%. On CapEx, they said the lower guidance is phasing-related and reflects prioritization of higher-payback projects and accelerated investment in Q3.
"we constantly work with our activities plan to make sure that we have, enough activities to secure our growth journey as well as making sure that we can offset new headwinds that comes our way." — Mikael Bratt (CEO)