Financial Report July - September 2018 - Veoneer

STOCKHOLM, Oct. 25, 2018 /PRNewswire/ --

Financial Summary – Q3'18

• Consolidated Net Sales $526 million
• Net Sales growth (7)%
• Organic Sales* growth (5)%
• Operating Margin (11)%
• Order Intake ~$1.1 billion Q3 LTM average annual sales    

2018 Outlook and Targets Update

• FY'18 Consolidated Net Sales growth (4)%
• Q4'18 RD&E increase ~$20 million from Q3'18 levels
• Downside risk to 2020 total Sales target, Active Safety on-track
• 1 to 2 year delay to achieve 0 to 5% Operating Income target
• Upside potential to 2022 total Sales target, mainly Active Safety

Business Highlights

• Active Safety Organic Sales* growth of 6%
• Continued increases in customer bidding, technical qualifications and new business awards during the quarter
• "Hiring of 370 engineers in RD&E during the quarter
• Continued strong Order Intake in early Q4'18 - currently more than $1.3 billion LTM average annual sales

Key Figures
For Key Figures summary table, please refer to attached file below.

Comments from Jan Carlson, Chairman, President and CEO:

We continue to see very rapid developments in the Active Safety market - new partnerships are being formed, new products introduced and for every model year an increasing number of new cars have Active Safety features available. It remains a dynamic and fast-growing market which means more long-term opportunities for Veoneer. However, the volatile nature of this evolving market and light vehicle fluctuations make the precise timing of its development difficult to predict. Considering this, we see the need to provide some updates on our progress towards our previously announced targets.

Based on the attractiveness of our Active Safety portfolio and strong customer relationships, we see a potential upside to our $4 billion 2022 total sales target, particularly for the $2 billion Active Safety sales target. We are encouraged by the fact that Active Safety, the growth engine of the company continues to look very strong. In fact, Veoneer's current total order intake for the last twelve months (LTM) is more than $1.3 billion average annual sales, with the majority coming from Active Safety.

To support the continued high order intake, the advanced system business we have already won, and further investment in long-term leadership in Active Safety, we intend to further increase our investments in RD&E. This investment decision for future growth means that we now anticipate reaching our 0-5% operating income target one to two years later than previously communicated.

In the short-term, we see some delays in the start of production and slower ramp-ups of certain customer models along with some slight delays in expected business. These developments result in downside risk to our 2020 total sales target and we are therefore likely to reach $3 billion in total sales slightly later than previously anticipated. Despite this, Active Safety remains on-track to exceed $1 billion in sales in 2020.

Although the near-term slowdown in light vehicle production is affecting our 2018 sales, we saw several positive developments in the third quarter. Our order intake remained strong, we secured business for advanced future technologies and we had our first dedicated software feature sale.

We secured a contract for an advanced electronic control unit for Robo-taxis with a major global OEM and we also introduced to the market an advanced super computer "Zeus" for Autonomous Driving together with our partners Zenuity and NVIDIA.

We are well on track to fulfill our vision of being the trusted leader in mobility, while delivering long-term value to our employees, customers and shareholders.

An earnings conference call will be held today, October 25, 2018 at 15:00 CET. To follow the webcast or to obtain the phone number/pin code, please see www.veoneer.com. The slide deck will be available on our website prior to the earnings conference call. See also the MD&A in the Form 10-Q report and the Non-U.S. GAAP Financial Measures section on page 9 of this earnings release for further disclosures.

* For these non-U.S. GAAP financial measures, and any others marked with an " * " throughout this earnings release, see the reconciliation tables in this earnings release, including the Non-U.S. GAAP Financial Measures section on page 9. See the Non-U.S. GAAP Financial Measures section for further discussion of the forward-looking organic sales non-U.S. GAAP financial measure.

This report is information that Veoneer, Inc. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the EVP Communications and IR set out above, at 12:15 CET on Thursday October 25, 2018.
Inquiries – Corporate website www.veoneer.com.

Contacts:
Thomas Jonsson – EVP Communications & IR, +46-8-527-762-27 or [email protected] and Ray Pekar – VP Investor Relations, +1-248-794-4537 or [email protected].

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SOURCE Veoneer