STOCKHOLM, Oct. 23, 2026 /PRNewswire/ --
Q3 2026: Solid performance in a tough environment
Financial highlights Q3 2026
$2,693 million net sales, a decrease of 0.5%
1.1% organic sales decrease*
9.4% operating margin, 9.7% adj. operating margin*
$2.13 diluted EPS, a 6.8% decrease
Full year 2026 guidance
Around 0% organic sales growth
Around 2.5% positive FX impact on net sales
Around 10.5% 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 third quarter of 2026
- Net sales decreased organically* by 1.1%, which was 0.8pp higher than the global LVP decrease of 1.9% (Mobility Global, Oct 2026) mainly driven by strong performance in Asia. Regional and customer LVP mix is estimated to have impacted sales negatively by around 0.9pp. Our organic sales* outperformed LVP in Asia excl. China and in China, while it underperformed in EMEA and was about in line with LVP in the Americas. Our strong performance in Asia excl. China was mainly due to India, where we outperformed by 11pp, driven by continued strong market growth in safety content per vehicle, while in China, we outperformed by around 20pp with Chinese OEMs.
- Profitability remained strong. Operating income decreased by 5.0% mainly due to the supplier settlement compensation received in Q3 2025. Adjusted operating income* decreased by 3.4%. Operating margin was 9.4% and adjusted operating margin* was 9.7%. ROCE was 24.1% and adjusted ROCE* was 24.4%.
- Cash flow remained solid. Operating cash flow was $239 million compared to $258 million in 2025. Free operating cash flow* was $124 million compared to $153 million in 2025. The leverage ratio* was 1.3x. In the quarter, a dividend of $0.87 per share was paid and 1.23 million shares were repurchased and retired.
*For Non-GAAP measures see enclosed reconciliation tables.
Key Figures
(Dollars in millions, except per share data) | Q3 2026 | Q3 2025 | Change | 9M 2026 | 9M 2025 | Change |
Net sales | $2,693 | $2,706 | (0.5) % | $8,249 | $7,998 | 3.1 % |
Operating income | 254 | 267 | (5.0) % | 683 | 769 | (11) % |
Adjusted operating income1) | 262 | 271 | (3.4) % | 776 | 777 | (0.1) % |
Operating margin | 9.4 % | 9.9 % | (0.4)pp | 8.3 % | 9.6 % | (1.3)pp |
Adjusted operating margin1) | 9.7 % | 10.0 % | (0.3)pp | 9.4 % | 9.7 % | (0.3)pp |
Earnings per share - diluted | 2.13 | 2.28 | (6.8) % | 5.36 | 6.59 | (19) % |
Adjusted earnings per share - diluted1) | 2.19 | 2.32 | (5.7) % | 6.67 | 6.67 | (0.1) % |
Operating cash flow | 239 | 258 | (7.3) % | 598 | 613 | (2.5) % |
Return on capital employed2) | 24.1 % | 25.1 % | (1.0)pp | 21.5 % | 24.9 % | (3.4)pp |
Adjusted return on capital employed1,2) | 24.4 % | 25.5 % | (1.0)pp | 24.2 % | 25.2 % | (1.0)pp |
Dividends paid | (63) | (65) | (2.7) % | (192) | (173) | 11 % |
Share repurchases | (150) | (100) | 50 % | (350) | (201) | 74 % |
1) Excluding effects from capacity alignments and antitrust related matters. Non-GAAP measure, see reconciliation table. | ||||||
Comments from Mikael Bratt, President & CEO
We continued to deliver well across all key areas in the third quarter. Our sales in India grew by nearly 30% and our sales to Chinese OEMs grew by more than 20%. Strong sales growth in Japan contributed to our sales in Asia exceeding China in the quarter. Globally, our organic sales performance exceeded global LVP by around 1pp, significantly outpacing LVP growth in India, Japan and with Chinese OEMs.
We continued to successfully manage geopolitical developments during the quarter, limiting the effects of tariffs, supply chain challenges and raw material price increases. Well-executed cost reduction initiatives and increased engineering income contributed to a third quarter adjusted operating margin of 9.7%.
Our cash flow remained strong, supporting our ambitious shareholder return strategy. Our leverage ratio of 1.3x was almost unchanged compared with the prior quarter, despite repurchasing around 1.23 million shares for $150 million and paying dividends of $63 million in the quarter. Over the last 12 months, we have repurchased 4.14 million shares for $500 million, in addition to paying $258 million in dividends and keeping our debt leverage ratio unchanged.
To support our growing partnerships with Chinese OEMs, our innovation capabilities, global competitiveness and long term growth, we opened our second R&D center in China in Q3.
The business environment remains uncertain but we anticipate a strong fourth quarter supported by an increasing number of product launches and significant raw material recoveries.
Throughout the year, cost headwinds have increased materially, mainly related to raw materials, logistics, the recent flooding in Thailand and lower call off accuracy since Q1. We have been able to offset the majority of these cost headwinds mainly through labor efficiency, material savings through Value Engineering and successful negotiations with customers and suppliers. However, the additional headwinds narrows our full year adjusted operating margin expectation to around 10.5%, the low end of our range of around 10.5-11%. We continue to expect unchanged organic sales growth and an operating cash flow of around $1.2 billion.
Based on our full year guidance, we continue to expect strong cash flow for the year, which supports our ambition to provide attractive shareholder returns through share repurchases and dividends.
Finally, I would like to invite you to our 2027 Investor Day, which will take place in Shanghai, China, on April 26 and 27, 2027. It will be held in connection with the Auto Shanghai, the largest and most important auto show in the world.
Next Report
Autoliv intends to publish the quarterly earnings report for the fourth quarter of 2026 on Friday, January 29, 2027.
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 CEST on October 23, 2026.
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SOURCE Autoliv
