Earnings release
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Public Financial Report July - September 2026 Stockholm, Sweden, October 23, 2026 (NYSE: ALV and SSE: ALIV.sdb)
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Financial Report July - September 2026 1 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. 2) Annualized operating income and income from equity method investments, relative to average capital employed. 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. 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. 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.
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Financial Report July - September 2026 2 Full year 2026 guidance In addition to the assumptions below and in our business and market update below, our full year 2026 guidance is based on our customer call-offs and the achievement of our targeted cost compensation adjustments with our customers, including no material changes to tariffs or trade restrictions, as compared to what is in effect as of October 15, 2026, as well as no significant changes in the macro-economic environment, changes in customer call-off volatility or significant supply chain disruptions. Full year 2026 Guidance Organic sales growth Around 0% Adjusted operating margin1) Around 10.5% Operating cash flow2) Around $1.2 billion Capex, net, % of sales Around 4% 1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. 2) Excluding unusual items. Full year 2026 Assumptions LVP growth Around 2% negative FX impact on net sales Around 2.5% positive Tax rate3) Around 30% 3) Excluding unusual tax items. The forward-looking Non-GAAP financial measures above are provided on a Non-GAAP basis. Autoliv has not provided a GAAP reconciliation of these measures because items that impact these measures, such as costs and gains related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and Autoliv is unable to determine the probable significance of the unavailable information. Conference call and webcast The earnings conference call will be held at 2:00 p.m. CEST today, October 23, 2026. Information regarding how to participate is available on www.autoliv.com. The presentation slides for the conference call will be available on our website shortly after the publication of this financial report.
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Financial Report July - September 2026 3 Business and market condition update Supply Chain Customer call-off accuracy deteriorated slightly compared to Q3 2025 as well as compared to Q2 2026, driven by development in China. We expect call-off volatility for the full year 2026 on average to be slightly improved compared to 2025. However, the continued significant uncertainty in the geopolitical environment and future changes in tariffs and trade restrictions may lead to more negative call-off volatility. Raw material inflation, geopolitical risks and tariffs Raw material price changes had a negative impact on our profitability in the third quarter, with a gross impact of around $42 million. For the full year 2026, we currently estimate a gross impact of around $120 million from higher raw material prices. We expect to be able to continue to mitigate a majority of this headwind, mainly through internal cost reductions, material mix improvements and commercial negotiations with customers and suppliers. Given the continued uncertainty in the geopolitical environment, tariffs and trade restrictions may contribute to a more adverse inflationary environment. We continue to implement productivity and cost-reduction initiatives to offset these cost pressures. The tariffs imposed in 2025 negatively impacted our profitability in the third quarter of 2026. We achieved customer compensation for more than 80% of the tariff costs, resulting in a net negative impact after compensation of around $6 million, in line with the net impact in the third quarter of 2025. Including the dilution effect, the impact on operating margin was around 35 bps negative. While it is our ambition and expectation to continue passing tariff costs on to our customers, there is significant uncertainty as future recovery levels may vary. For the full year 2026, we estimate the tariff -related dilution on operating margin will be similar to the around 20 bps experienced for full year 2025. Ongoing geopolitical developments, including hostilities in and around the Persian Gulf, have increased uncertainty in the global economic environment. These conditions may affect supply chains, commodity prices, customer demand, and broader market stability. As a result, our current financial guidance reflects the best information available today but may change if these geopolitical dynamics materially affect our operations or the markets in which we operate. We continue to closely monitor both geopolitical developments and the tariff policy environment in order to remain agile and to adjust our commercial and operational responses to any such developments. This report includes content supplied by Mobility Global; Copyright © Light Vehicle Production Forecast, January, July and Oc tober 2026. All rights reserved.
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Financial Report July - September 2026 4 Key Performance Trends Sales Development by region Operating and adjusted* operating income and margins Operating cash flow and capex, net Shareholder returns Return on Capital Employed Cash Conversion* Key definitions ------------------------------------------------------------------------------------------------------------ Adj. operating income and margin*: Operating income adjusted for capacity alignments, antitrust related matters and for FY 2023 the Andrews litigation settlement. Capacity alignments include non- recurring costs related to our structural efficiency and business cycle management programs. Capex, net: Capital Expenditure, net, defined as Expenditures for Property, Plant and Equipment less Proceeds from sale of Property, Plant and Equipment. Cash conversion*: Free operating cash flow* in relation to net income. Free operating cash flow is defined as operating cash flow less capital expenditure, net.
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Financial Report July - September 2026 5 Consolidated sales development Third quarter 2026 Consolidated sales Third quarter Reported change Currency Organic (Dollars in millions) 2026 2025 (U.S. GAAP) effects1) change* Airbags, Steering Wheels and Other2) $1,847 $1,830 0.9% 0.7% 0.2% Seatbelt Products and Other2) 845 875 (3.5)% 0.5% (3.9)% Total $2,693 $2,706 (0.5)% 0.6% (1.1)% Americas $901 $897 0.4% 3.3% (2.9)% EMEA 711 745 (4.5)% (1.6)% (2.9)% Asia excl. China 553 538 2.7% (6.1)% 8.8% China 528 526 0.4% 6.2% (5.8)% Total $2,693 $2,706 (0.5)% 0.6% (1.1)% 1) Effects from currency translations. 2) Including Corporate sales. Sales by product – Airbags, Steering Wheels and Other Sales for Airbags, Steering Wheels and Other grew organically* by 0.2% in the quarter. The largest contributors to the increase were side airbags, center airbags, driver airbags and steering wheels, partly offset by declines for passenger airbags, inflatable curtains and knee airbags. Sales by product – Seatbelt Products and Other Sales for Seatbelt Products and Other declined organically* by 3.9% in the quarter. Sales decreased organically in China, Americas and EMEA while they increased in Asia excluding China. Sales by region Our global organic sales* decreased by 1.1% compared to the global LVP decrease of 1.9% (according to Mobility Global, Oct 2026). The relative outperformance was positively impacted by product launches but negatively impacted by regional and model LVP mix development (around 90 bps). Our organic sales growth* outperformed LVP growth by 2.5pp in Asia excluding China and by 1.1pp in China. We underperformed LVP in EMEA by 3.7pp. Performance in the Americas overall was in line with LVP, while North America delivered stronger results, outperforming LVP by close to 2 percentage points. LVP in China declined by 6.9%, with Global OEMs LVP declining by 25% and Chinese OEMs LVP growing by 1.4%. Autoliv's sales to domestic OEMs increased organically by around 21% while our sales to global OEMs decreased by around 29%. Chinese OEMs accounted for 58% of our sales in China in the quarter, compared to around 46% a year ago. We expect continued strong 2026 sales performance with domestic OEMs. Our strong sales growth in Asia excluding China was mainly due to 29% organic sales growth in India, reflecting strong LVP growth and the trend of increased safety content in vehicles in India. Q3 2026 organic growth* Americas EMEA Asia excl. China China Global Autoliv (2.9)% (2.9)% 8.8% (5.8)% (1.1)% Main growth drivers Honda, Subaru, Toyota Mercedes, JLR, EV OEM Suzuki, Indian OEM, Mazda Chery, Geely, Great Wall Mercedes, Chery, Suzuki Main decline drivers Ford, Stellantis, EV OEM VW, BMW, Stellantis Subaru, Mitsubishi, Ford Honda,VW, BMW VW, Ford, Stellantis Light vehicle production development Change compared to the same period last year according to Mobility Global Q3 2026 Americas EMEA Asia excl. China China Global LVP (Oct 2026) (3.0)% 0.8% 6.4 % (6.9)% (1.9)% LVP (Jul 2026) (2.2)% (0.4)% 2.1% (4.0)% (2.1)%
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Financial Report July - September 2026 6 Consolidated sales development First nine months 2026 Consolidated sales First nine months Reported change Currency Organic (Dollars in millions) 2026 2025 (U.S. GAAP) effects1) change* Airbags, Steering Wheels and Other2) $5,617 $5,395 4.1% 2.8% 1.3% Seatbelt Products and Other2) 2,632 2,603 1.1% 3.1% (2.0)% Total $8,249 $7,998 3.1% 2.9% 0.2% Americas $2,673 $2,639 1.3% 5.1% (3.8)% EMEA 2,378 2,337 1.8% 4.1% (2.3)% Asia excl. China 1,655 1,572 5.3% (5.1)% 10% China 1,542 1,450 6.4% 5.9% 0.5% Total $8,249 $7,998 3.1% 2.9% 0.2% 1) Effects from currency translations. 2) Including Corporate sales. Sales by product – Airbags, Steering Wheels and Other Sales for Airbags, Steering Wheels and Other grew organically* by 1.3% in the period. The largest contributors to the increase were side airbags and center airbags, followed by driver airbags, partly offset by declines for passenger airbags, steering wheels and inflatable curtains. Sales by product – Seatbelt Products and Other Sales for Seatbelt Products and Other declined organically* by 2.0% in the period. Sales decreased organically in Americas, China and EMEA while they increased in Asia excluding China. Sales by region Our global organic sales* increased by 0.2% compared to the global LVP decrease of 0.9% (according to Mobility Global, Oct 2026). The relative outperformance was mainly driven by new product launches. Our organic sales growth outperformed LVP growth by 6.9pp in China and by 4.3pp in Asia excluding China. We underperformed LVP in EMEA by 3.7pp and by 3.5pp in Americas, impacted mainly by negative mix due to high LVP growth in lower content South America and a lower content on some replacement models. LVP in China declined by 6.3%, with Global OEMs LVP declining by 16% and Chinese OEMs LVP decreased by 1.6%. Autoliv's sales to domestic OEMs increased organically by around 31% while our sales to global OEMs decreased by around 21%. Chinese OEMs accounted for 53% of our sales in China in the first nine months of 2026, compared to 41% a year ago. Our strong sales growth in Asia excluding China was mainly due to 34% organic sales growth in India, reflecting strong LVP growth but mainly the trend of increased safety content in vehicles in India. 9M 2026 organic growth* Americas EMEA Asia excl. China China Global Autoliv (3.8)% (2.3)% 10% 0.5% 0.2% Main growth drivers Subaru, Honda, Stellantis Mercedes, EV OEM, Renault Suzuki, Indian OEM, Mazda Chery, Nio, Geely Suzuki, Chery, Nio Main decline drivers Ford, Hyundai, EV OEM VW, Stellantis, BMW Subaru, Ford, Mitsubishi VW, Honda, Mercedes VW, Ford, BMW Change compared to the same period last year according to Mobility Global First nine months 2026 Americas EMEA Asia excl. China China Global LVP (Oct 2026) (0.2)% 1.4% 6.1 % (6.3)% (0.9)% LVP (Jan 2026) (1.1)% (0.9)% 1.9% (1.4)% (0.6)%
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Financial Report July - September 2026 7 Financial development Condensed Income Statement Third quarter First nine months (Dollars in millions, except per share data) 2026 2025 Change 2026 2025 Change Net sales $2,693 $2,706 (0.5)% $8,249 $7,998 3.1% Cost of sales (2,197) (2,184) 0.6% (6,717) (6,496) 3.4% Gross profit 496 522 (5.0)% 1,531 1,502 2.0% S,G&A (138) (137) 0.9% (437) (427) 2.4% R,D&E, net (99) (117) (16)% (341) (319) 6.8% Other income (expense), net (5) (1) 559% (70) 13 n/a Operating income 254 267 (5.0)% 683 769 (11)% Adjusted operating income1) 262 271 (3.4)% 776 777 (0.1)% Financial and non-operating items, net (24) (27) (13)% (97) (76) 28% Income before taxes 230 240 (4.0)% 586 693 (15)% Income taxes (75) (65) 16% (188) (183) 3.0% Net income $155 $175 (11)% $398 $510 (22)% Earnings per share - diluted2) $2.13 $2.28 (6.8)% $5.36 $6.59 (19)% Adjusted earnings per share - diluted1,2) $2.19 $2.32 (5.7)% $6.67 $6.67 (0.1)% Gross margin 18.4% 19.3% (0.9)pp 18.6% 18.8% (0.2)pp S,G&A, in relation to sales (5.1)% (5.1)% (0.1)pp (5.3)% (5.3)% 0.0pp R,D&E, net in relation to sales (3.7)% (4.3)% 0.7pp (4.1)% (4.0)% (0.1)pp 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 Tax Rate 32.5% 26.9% 5.6pp 32.2% 26.4% 5.8pp Other data No. of shares at period-end in millions2) 72.0 76.0 (5.2)% 72.0 76.0 (5.2)% Weighted average no. of shares in millions, basic2) 72.6 76.4 (4.9)% 73.8 77.0 (4.1)% Weighted average no. of shares in millions, diluted2) 72.9 76.7 (5.0)% 74.1 77.3 (4.2)% 1) Non-GAAP measure, excluding effects from capacity alignments and antitrust related matters. See reconciliation table. 2) Net of treasury shares. Third quarter 2026 development Gross profit decreased by $26 million, and gross margin decreased by 0.9pp compared to the prior year. The decrease in gross profit was mainly attributable to the $13 million gross profit impact of the supplier settlement compensation reported in Q3 2025, lower net sales and higher logistics costs. S,G&A costs increased by $1 million compared to the prior year, mainly due to slightly higher IT expenses and professional services costs partly offset by slightly lower personnel costs. S,G&A costs in relation to sales were unchanged at 5.1%. R,D&E, net, costs decreased by $18 million compared to the prior year, mainly due to $26 million of higher engineering income related to timing effects, partly offset by adverse effects from FX translation, IT expenses and personnel costs. R,D&E, net, in relation to sales decreased from 4.3% to 3.7%. Other income (expense), net, was negative $5 million, compared to negative $1 million in the same period last year. The negative $5 million in Q3 2026 consisted mainly of capacity alignment costs related to our restructuring activities in Türkiye. Operating income decreased by $13 million compared to the prior year, mainly due to lower gross profit and higher capacity alignment costs, partly offset by lower R,D&E, net, costs, as outlined above. Adjusted operating income* decreased by $9 million compared to the prior year, mainly due to the lower gross profit, partly offset by lower R,D&E, net, costs, as outlined above. Financial and non-operating items, net, was a negative $24 million compared to a negative $27 million a year earlier. The improvement was mainly due to lower costs for non- operating items mainly related to positive FX effects. Income before taxes decreased by $10 million compared to the prior year, mainly due to lower operating income, partly offset by lower costs for financial and non-operating items, net, as outlined above. Tax rate was 32.5% compared to 26.9% in the prior year. Discrete tax items, net, had an unfavorable impact of 4.9pp in Q3 2026, while discrete tax items, net, had a favorable impact of 1.3pp in Q3 2025. Discrete tax items recorded in Q3 2026 primarily related to negative tax impacts from the closure of tax audits during the quarter. Earnings per share, diluted decreased by $0.15 compared to the prior year. The main drivers were negative impacts of $0.16 from higher taxes and $0.13 from lower operating income partly offset by $0.11 from a lower number of outstanding shares, diluted and $0.05 from lower financial and non-operating items.
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Financial Report July - September 2026 8 First nine months 2026 development Gross profit increased by $30 million while gross margin decreased by 0.2pp compared to the prior year. The drivers behind the gross profit improvement were mainly positive effects of higher sales and positive FX translation effects. This was partly offset by $25 million impact from a supplier compensation booked in Q3 2025 which was reversed in Q2 2026, and asset impairment related to the restructuring activities in Türkiye. S,G&A costs increased by $10 million compared to the prior year, mainly due to negative FX translation effects and higher personnel costs, partly offset by the revision of an estimated credit loss reserve. S,G&A costs in relation to sales were unchanged at 5.3%. R,D&E, net, costs increased by $22 million compared to the prior year, mainly due to higher personnel costs and negative FX translation effects, partly offset by higher engineering income. R,D&E, net, in relation to sales increased from 4.0% to 4.1%. Other income (expense), net, was negative $70 million, compared to positive $13 million in the same period last year. The increase in costs was mainly due to higher capacity alignment costs related to restructuring activities in Türkiye. Operating income decreased by $86 million compared to the prior year, mainly due to higher capacity alignment costs related to restructuring activities in Türkiye, higher R,D&E, net, costs and higher S,G&A costs, partly offset by higher gross profit as outlined above. Adjusted operating income* decreased by $1 million compared to the prior year, due to the higher costs for R,D&E, net and S,G&A offset by the higher gross profit, as outlined above. Financial and non-operating items, net, was negative $97 million compared to negative $76 million a year earlier. The increase in costs was mainly due to higher non-operating items, mainly related to costs associated with restructuring activities in Türkiye and Mexico. Income before taxes decreased by $107 million compared to the prior year, mainly due to lower operating income and higher costs for financial and non-operating items, net, as outlined above. Tax rate was 32.2% compared to 26.4% in the prior year. Discrete tax items, net, for the period had an unfavorable impact of 4.2pp. Discrete tax items, net, for the prior year period had a favorable impact of 1.8pp. Discrete tax items recorded in the first nine months of 2026 primarily related to negative tax impacts from closure of tax audits during the third quarter and negative tax impacts recorded in the first half year from costs recorded for the capacity alignment activities for Autoliv’s manufacturing operations in Türkiye. Earnings per share, diluted decreased by $1.23 compared to the prior year. The main drivers were negative impacts of $0.82 from lower operating income, $0.43 from higher tax and $0.18 from financial and non-operating items, partly offset by $0.22 from a lower number of outstanding shares, diluted.
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Financial Report July - September 2026 9 Selected Cash Flow and Balance Sheet Items Selected Cash Flow items Third quarter First nine months (Dollars in millions) 2026 2025 Change 2026 2025 Change Net income $155 $175 (11)% $398 $510 (22)% Depreciation and amortization 107 103 3.1% 328 299 10% Other non-cash adjustments, net 22 32 (30)% 26 20 26% Changes in operating working capital (45) (53) (15)% (154) (217) (29)% Operating cash flow 239 258 (7.3)% 598 613 (2.5)% Capital expenditure, net1) (115) (106) 8.7% (293) (313) (6.4)% Free operating cash flow2) $124 $153 (18)% $305 $300 1.7% Cash conversion3) 80% 87% (6.9)pp 77% 59% 18pp Shareholder returns - Dividends paid (63) (65) (2.7)% (192) (173) 11% - Share repurchases (150) (100) 50% (350) (201) 74% Cash dividend paid per share $(0.87) $(0.85) 2.6% $(2.61) $(2.25) 16% Capital expenditures, net in relation to sales 4.3% 3.9% 0.4pp 3.6% 3.9% (0.3)pp 1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment. 2) Operating cash flow less Capital expenditure, net. Non-GAAP measure. See enclosed reconciliation table. 3) Free operating cash flow relative to Net income. Non-GAAP measure. See reconciliation table. Selected Balance Sheet items Third quarter (Dollars in millions) 2026 2025 Change Trade working capital1) $1,451 $1,504 (3.6)% Trade working capital in relation to sales2) 13.5% 13.9% (0.4)pp - Receivables outstanding in relation to sales3) 22.5% 21.8% 0.7pp - Inventory outstanding in relation to sales4) 9.5% 9.6% (0.1)pp - Payables outstanding in relation to sales5) 18.5% 17.5% 1.0pp Cash & cash equivalents 197 225 (12)% Gross Debt6) 1,934 2,027 (4.6)% Net Debt7) 1,763 1,772 (0.5)% Capital employed8) 4,233 4,331 (2.3)% Return on capital employed9) 24.1% 25.1% (1.0)pp Total equity 2,470 2,559 (3.5)% Return on total equity10) 25.0% 27.9% (2.8)pp Leverage ratio11) 1.3 1.3 (0.0) 1) Outstanding receivables and outstanding inventory less outstanding payables. Non -GAAP measure, see reconciliation table. 2) Outstanding receivables and outstanding inventory less outstanding payables relative to annualized quarterly sales. Non -GAAP measure, see reconciliation table. Annualized quarterly sales is calculated as the quarterly sales amount multiplied by four. 3) Outstanding receivables relative to annualized quarterly sales. 4) Outstanding inventory relative to annualized quarterly sales. 5) Outstanding payables relative to annualized quarterly sales. 6) Short- and long-term interest-bearing debt. 7) Short- and long-term debt less cash and cash equivalents and debt-related derivatives. Non-GAAP measure. See reconciliation table. 8) Total equity and net debt. 9) Annualized operating income and income from equity method investments, relative to average capital employed. See definitions of "Annualized operating income" in footnote to the reconciliation tables below. 10) Annualized net income relative to average total equity. See definitions of "Annualized net income" in footnote to the reconciliation tables below. 11) Net debt adjusted for pension liabilities in relation to EBITDA. Non -GAAP measure. See reconciliation table. Third quarter 2026 development Changes in operating working capital had a $45 million negative impact on operating cash flow compared to a negative impact of $53 million in the prior year. The $45 million increase in operating working capital resulted mainly from $71 million in higher inventories and $21 million from receivables, net, partly offset by $52 million from accounts payable and accrued liabilities. Operating cash flow decreased by $19 million to $239 million compared to the prior year, mainly because of lower net income, partly offset by a smaller increase in operating working capital compared to last year. Capital expenditure, net, increased by $9 million compared to the prior year. The level of capital expenditure, net, in relation to sales increased to 4.3% versus 3.9% a year earlier. Free operating cash flow* was positive $124 million compared to positive $153 million in the prior year. The decrease was due to lower operating cash flow and higher capital expenditure, net, as outlined above. Cash conversion* defined as free operating cash flow* in relation to net income, was 80% compared to 87% a year earlier.
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Financial Report July - September 2026 10 Trade working capital* in relation to sales decreased from 13.9% to 13.5%. The improvement was mainly driven by higher payables in relation to sales while inventories and receivables to sales were relatively unchanged. Net debt* was $1,763 million as of September 30, 2026, which was $9 million lower than a year earlier. Total equity as of September 30, 2026, decreased by $89 million compared to September 30, 2025. This was mainly due to $505 million in share repurchases, including taxes, and $258 million in dividend payments, partly offset by net income of $623 million. Leverage ratio*: On September 30, 2026, the Company had a leverage ratio of 1.3x compared to 1.3x on September 30, 2025, as the 12 months trailing adjusted EBITDA* increased by $26 million while net debt* per the policy decreased by $1 million. Our target is to have a leverage ratio not higher than 1.5x. First nine months 2026 development Operating cash flow decreased by $15 million to $598 million compared to the prior year, mainly because the lower net income was almost offset by a smaller increase in working capital and higher depreciation. Capital expenditure, net, decreased by $20 million compared to the prior year. The level of capital expenditure, net, in relation to sales was 3.6% versus 3.9% a year earlier. Free operating cash flow* was positive $305 million compared to positive $300 million in the prior year. The increase was mainly due to the lower level of capital expenditure, net. Cash conversion* defined as free operating cash flow* in relation to net income, was 77% compared to 59% a year earlier as free operating cash flow increased while net income decreased. Headcount Sep 30 Jun 30 Sep 30 2026 2026 2025 Total headcount 64,400 63,500 65,200 Whereof: Direct headcount in manufacturing 47,000 46,200 47,900 Indirect headcount 17,400 17,300 17,300 Temporary personnel 13% 11% 9% As of September 30, 2026, total headcount (Full Time Equivalent) decreased by around 800, or 1.3%, compared to a year earlier. The indirect workforce increased by around 100, or 0.6%. The direct workforce decreased by approximately 1,000, or 2.0%, reflecting continued good productivity development. Compared to June 30, 2026, total headcount (Full Time Equivalent) increased by around 900, or 1.4%. Indirect headcount increased by around 100, while direct headcount increased by approximately 800.
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Financial Report July - September 2026 11 Other Items • On September 8, 2026, Autoliv announced it is advancing the development of virtual testing through its Human Body Model (HBM) Safety Suite. The platform is designed to support the development of safer vehicles, with Toyota as the first customer to evaluate its capabilities. • On October 2, 2026, Autoliv announced the appointments of Natalie Draisin and Thomas Manfred Müller to its Research Advisory Board. Natalie Draisin serves as Director of the North American Office and United Nations Representative at FIA Foundation and is an External Affiliate at Johns Hopkins Bloomberg School of Public Health. Thomas Manfred Müller, PhD, is a Board Member, Advisor and Business Angel with extensive international experience across leadership and executive roles at Audi, BMW, Volvo Cars, and Volkswagen Group. • Autoliv today published on its website its Green Financing Framework which has been updated to incorporate the latest market practices and standards, and to support the long-term commitment of the Company to integrate sustainability across the entire organization. • In Q3 2026, Autoliv repurchased and retired 1.23 million shares of common stock at an average price of $121.69 per share under the Autoliv 2029 stock repurchase program. Under this program, repurchases may be made from July 1, 2025 through December 31, 2029. The maximum value of aggregate repurchases under this program is $2.5 billion. Repurchases of stock may be made directly on the NYSE. • Autoliv invites investors, analysts and journalists to an Investor Day in Shanghai, China. It will take place on April 26 and 27, 2027, with management presentations, site visits and a full day at the world's leading auto show, Auto Shanghai 2027. Focus will be on global growth, innovations and key trends shaping China’s automotive industry and Autoliv’s strategy for success in the Chinese market. This includes how we strengthen our relationships with leading Chinese OEMs in China and overseas. Further details regarding agenda and registration will be provided at a later stage. Next Report Autoliv intends to publish the quarterly earnings report for the fourth quarter of 2026 on Friday, January 29, 2027. Footnotes *Non-GAAP measures, see enclosed reconciliation tables. 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. Definitions and SEC Filings Please refer to www.autoliv.com or to our Annual Report for definitions of terms used in this report. Autoliv’s annual report to stockholders, annual report on Form 10-K, quarterly reports on Form 10-Q, proxy statements, management certifications, press releases, current reports on Form 8-K and other documents filed with the SEC can be obtained free of charge from Autoliv at the Company’s address. These documents are also available on the SEC’s website www.sec.gov and on Autoliv’s corporate website www.autoliv.com. This report includes content supplied by Mobility Global; Copyright © Light Vehicle Production Forecast, January, July and October 2026. All rights reserved. Mobility Global is a global supplier of independent industry information. The permission to use Mobility Global copyrighted reports, data and information does not constitute an endorsement or approval by Mobility Global of the manner, format, context, content, conclusion, opinion or viewpoint in which Mobility Global reports, data and information or its derivations are used or referenced herein.
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Financial Report July - September 2026 12 “Safe Harbor Statement” This report contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward- looking statements include those that address activities, events or developments that Autoliv, Inc. or its management believes or anticipates may occur in the future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “estimates”, “expects”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “may”, “likely”, “might”, “would”, “should”, “could”, or the negative of these terms and other comparable terminology, although not all forward- looking statements contain such words. Because these forward- looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: general global and regional economic conditions, including the impact of inflation; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; global supply chain disruptions, including port, transportation, and distribution delays or interruptions; supply chain disruptions, and component shortages specific to the automotive industry or the Company; potential changes to beneficial free trade agreements and regulations, such as the United States-Mexico-Canada Agreement; changes in geopolitical and other economic and political conditions or developments, including inflation, changes trade policies, tariff regimes, and other developments in and by countries in which we do business that could materially impact supply chains, margins, access to capital, or overall business performance; political instability or geopolitical conflicts; changes in general industry or market conditions, including regional economic growth or decline; changes in and the successful execution of our capacity alignment, restructuring, cost reduction, and efficiency initiatives and the market reaction thereto; loss of business from increased competition; volatility or increases in raw material, fuel, and energy costs; changes in consumer and customer preferences for end products; loss of customers or sales; legislative or regulatory changes; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other negotiations with customers, including inflation and tariff compensations; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation, civil judgments or financial penalties and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims, and the availability of insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments or results of tax audits by governmental authorities and changes in our effective tax rate; dependence on key personnel; our ability to meet our sustainability targets, goals and commitments; dependence on and relationships with customers and suppliers; the conditions necessary to achieve our financial targets; and other risks and uncertainties identified under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q and any amendments thereto. For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.
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Financial Report July - September 2026 13 Consolidated Statements of Income Third quarter First nine months Latest 12 Full Year (Dollars in millions, except per share data, unaudited) 2026 2025 2026 2025 months 2025 Airbags, Steering Wheels and Other1) $1,847 $1,830 $5,617 $5,395 $7,524 $7,302 Seatbelt products and Other1) 845 875 2,632 2,603 3,542 3,513 Total net sales 2,693 2,706 8,249 7,998 11,066 10,815 Cost of sales (2,197) (2,184) (6,717) (6,496) (8,963) (8,741) Gross profit 496 522 1,531 1,502 2,104 2,074 Selling, general & administrative expenses (138) (137) (437) (427) (581) (571) Research, development & engineering expenses, net (99) (117) (341) (319) (435) (413) Other income (expense), net (5) (1) (70) 13 (85) (2) Operating income 254 267 683 769 1,003 1,088 Income from equity method investments 0 2 2 4 4 6 Interest income 2 3 7 7 10 10 Interest expense (23) (25) (76) (77) (102) (103) Other non-operating items, net (2) (7) (30) (10) (35) (15) Income before income taxes 230 240 586 693 879 986 Income taxes (75) (65) (188) (183) (256) (250) Net income 155 175 398 510 623 736 Less: Net income attributable to non-controlling interest 0 0 1 1 1 1 Net income attributable to controlling interest $155 $175 $397 $509 $622 $735 Earnings per share - diluted $2.13 $2.28 $5.36 $6.59 $8.36 $9.55 1) Including Corporate sales.
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Financial Report July - September 2026 14 Consolidated Balance Sheets Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Dollars in millions, unaudited) 2026 2026 2026 2025 2025 Assets Cash & cash equivalents $197 $377 $342 $604 $225 Receivables, net 2,422 2,387 2,422 2,236 2,357 Inventories, net 1,020 945 947 992 1,036 Prepaid expenses 229 224 206 212 226 Other current assets 83 76 71 57 102 Total current assets 3,951 4,009 3,987 4,101 3,946 Property, plant & equipment, net 2,349 2,340 2,356 2,417 2,402 Operating leases right-of-use assets 159 157 166 171 167 Goodwill and intangible assets, net 1,398 1,394 1,392 1,386 1,387 Investments and other non-current assets 571 597 567 568 561 Total assets 8,427 8,497 8,468 8,644 8,463 Liabilities and equity Short-term debt 251 350 393 419 654 Accounts payable 1,990 1,982 1,862 2,007 1,889 Accrued liabilities 1,189 1,130 1,024 1,050 1,172 Operating lease liabilities - current 41 41 43 43 44 Other current liabilities 387 394 386 404 383 Total current liabilities 3,859 3,897 3,708 3,923 4,141 Long-term debt 1,683 1,688 1,699 1,734 1,374 Pension liability 175 180 176 169 167 Operating lease liabilities - non-current 113 110 117 122 118 Other non-current liabilities 127 122 125 113 105 Total non-current liabilities 2,098 2,099 2,115 2,138 1,763 Total parent shareholders’ equity 2,459 2,490 2,634 2,572 2,549 Non-controlling interest 11 11 10 10 10 Total equity 2,470 2,501 2,644 2,582 2,559 Total liabilities and equity $8,427 $8,497 $8,468 $8,644 $8,463
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Financial Report July - September 2026 15 Consolidated Statements of Cash Flow Third quarter First nine months Latest 12 Full Year (Dollars in millions, unaudited) 2026 2025 2026 2025 months 2025 Net income $155 $175 $398 $510 $623 $736 Depreciation and amortization 107 103 328 299 437 407 Gain on divestiture of property - - - (6) (0) (6) Other non-cash adjustments, net 22 32 26 26 31 32 Net change in operating working capital: Receivables (23) (4) (128) (170) (55) (98) Other current assets 3 12 (73) (122) 24 (26) Inventories (71) (78) (39) (52) 5 (8) Accounts payable (1) (57) (24) 10 84 119 Accrued liabilities 53 82 129 107 (7) (30) Income taxes (5) (9) (19) 11 0 30 Net cash provided by operating activities 239 258 598 613 1,142 1,157 Expenditures for property, plant and equipment (115) (106) (295) (323) (413) (441) Proceeds from sale of property, plant and equipment 1 1 2 10 10 18 Acquisition of interest in Affiliates (0) - (2) - (2) - Net cash used in investing activities (115) (106) (295) (313) (405) (423) Net (decrease) increase in short term debt (99) (26) 117 247 (120) 11 Decrease in long-term debt - - (285) (311) (285) (311) Increase in long-term debt 10 46 2 122 401 521 Dividends paid (63) (65) (192) (173) (258) (238) Share repurchases (150) (100) (350) (201) (500) (351) Common stock options exercised - - - 0 - 0 Dividend paid to non-controlling interests (0) (1) (0) (1) (0) (1) Net cash used in financing activities (302) (146) (709) (316) (762) (369) Effect of exchange rate changes on cash (2) (18) (1) (89) (2) (90) (Decrease) increase in cash and cash equivalents (180) (12) (407) (105) (28) 274 Cash and cash equivalents at period-start 377 237 604 330 225 330 Cash and cash equivalents at period-end $197 $225 $197 $225 $197 $604
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Financial Report July - September 2026 16 RECONCILIATION OF GAAP TO NON-GAAP MEASURES In this report we sometimes refer to Non-GAAP measures that we and securities analysts use in measuring Autoliv's performance. We believe that these measures assist investors and management in analyzing trends in the Company's business for the reasons given below. Investors should not consider these Non-GAAP measures as substitutes, but rather as additions, to financial reporting measures prepared in accordance with GAAP. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. Components in Sales Increase/Decrease Since the Company historically generates approximately 75% of sales in currencies other than in the reporting currency (i.e., U.S. dollars) and currency rates have been volatile, we analyze the Company's sales trends and performance as changes in organic sales growth. This presents the increase or decrease in the overall U.S. dollar net sales on a comparable basis, allowing separate discussions of the impact of acquisitions/divestitures and exchange rates. The tables on pages 5 and 6 present changes in organic sales growth as reconciled to the change in the total GAAP net sales. Reconciliation of GAAP measure "Working Capital" to Non-GAAP Measure "Trade Working Capital" Due to the need to optimize cash generation to create value for shareholders, management focuses on operationally derived trade working capital as defined in the table below. Trade working capital is an indicator of operational efficiency, which impacts the Company’s ability to return value to shareholders either through dividends or share repurchases. We believe this is useful for readers to understand the efficiency of the Company’ operational capital management. The reconciling items used to derive this measure are, by contrast, managed as part of our overall management of cash and debt, but they are not part of the responsibilities of day-to-day operations management. Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Dollars in millions) 2026 2026 2026 2025 2025 Total current assets $3,951 $4,009 $3,987 $4,101 $3,946 Total current liabilities (3,859) (3,897) (3,708) (3,923) (4,141) Working capital (GAAP) 92 113 278 178 (195) Less: Cash and cash equivalents (197) (377) (342) (604) (225) Prepaid expenses (229) (224) (206) (212) (226) Other current assets (83) (76) (71) (57) (102) Less: Short-term debt 251 350 393 419 654 Accrued liabilities 1,189 1,130 1,024 1,050 1,172 Operating lease liabilities - current 41 41 43 43 44 Other current liabilities 387 394 386 404 383 Trade working capital (Non-GAAP) $1,451 $1,350 $1,506 $1,221 $1,504 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Dollars in millions) 2026 2026 2026 2025 2025 Receivables, net $2,422 $2,387 $2,422 $2,236 $2,357 Inventories, net 1,020 945 947 992 1,036 Accounts payable (1,990) (1,982) (1,862) (2,007) (1,889) Trade working capital (Non-GAAP) $1,451 $1,350 $1,506 $1,221 $1,504 Quarterly sales $2,693 $2,803 $2,753 $2,817 $2,706 Annualized quarterly sales1) 10,770 11,213 11,012 11,269 10,822 Trade working capital (Non-GAAP) in relation to annualized quarterly sales 13.5% 12.0% 13.7% 10.8% 13.9% 1) Calculated as the current quarterly sales multiplied by four.
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Financial Report July - September 2026 17 Dec 31 Dec 31 Dec 31 Dec 31 (Dollars in millions) 2024 2023 2022 2021 Total current assets $3,483 $3,974 $3,714 $3,675 Total current liabilities (3,633) (4,035) (3,642) (2,821) Working capital (GAAP) (150) (61) 72 853 Less: Cash and cash equivalents (330) (498) (594) (969) Prepaid expenses (167) (173) (160) (164) Other current assets (72) (93) (84) (65) Less: Short-term debt 387 538 711 346 Accrued liabilities 1,056 1,135 915 996 Operating lease liabilities - current 41 39 39 38 Other current liabilities 351 345 283 297 Trade working capital (Non-GAAP) $1,115 $1,232 $1,183 $1,332 Dec 31 Dec 31 Dec 31 Dec 31 (Dollars in millions) 2024 2023 2022 2021 Receivables, net $1,993 $2,198 $1,907 $1,699 Inventories, net 921 1,012 969 777 Accounts payable (1,799) (1,978) (1,693) (1,144) Trade working capital (Non-GAAP) $1,115 $1,232 $1,183 $1,332 Quarterly sales $2,616 $2,751 $2,335 $2,119 Annualized quarterly sales1) 10,463 11,006 9,340 8,476 Trade working capital (Non-GAAP) in relation to annualized quarterly sales 10.7% 11.2% 12.7% 15.7% 1) Calculated as the fourth quarterly sales multiplied by four. Net Debt Autoliv from time to time enters into “debt-related derivatives” (DRDs) as a part of its debt management and as part of efficiently managing the Company’s overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of the Company’s debt, therefore, we provide this Non-GAAP measure. DRDs are fair value adjustments to the carrying value of the underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values. Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Dollars in millions) 2026 2026 2026 2025 2025 Short-term debt $251 $350 $393 $419 $654 Long-term debt 1,683 1,688 1,699 1,734 1,374 Total debt (GAAP) 1,934 2,037 2,091 2,153 2,027 Cash & cash equivalents (197) (377) (342) (604) (225) Debt issuance cost/Debt-related derivatives, net 26 34 23 17 (30) Net debt (Non-GAAP) $1,763 $1,695 $1,773 $1,566 $1,772 Dec 31 Dec 31 Dec 31 Dec 31 (Dollars in millions) 2024 2023 2022 2021 Short-term debt $387 $538 $711 $346 Long-term debt 1,522 1,324 1,054 1,662 Total debt (GAAP) 1,909 1,862 1,766 2,008 Cash & cash equivalents (330) (498) (594) (969) Debt issuance cost/Debt-related derivatives, net (24) 3 12 13 Net debt (Non-GAAP) $1,554 $1,367 $1,184 $1,052
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Financial Report July - September 2026 18 Leverage ratio The Non-GAAP measure “net debt” is also used in the Non-GAAP measure “Leverage ratio”. Management uses this measure to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. Autoliv’s policy is to maintain a leverage ratio commensurate with a strong investment grade credit rating. The Company measures its leverage ratio as net debt* adjusted for pension liabilities in relation to adjusted EBITDA*. The long-term target is to maintain a leverage ratio equal to or below 1.5x. Sep 30 Jun 30 Sep 30 (Dollars in millions) 2026 2026 2025 Net debt1) (Non-GAAP) $1,763 $1,695 $1,772 Pension liabilities 175 180 167 Net debt per the Policy (Non-GAAP) $1,938 $1,874 $1,939 Net income2) $623 $643 $754 Income taxes2) 256 246 261 Interest expense, net2, 3) 92 93 94 Other non-operating items, net2) 35 40 20 Income from equity method investments2) (4) (5) (6) Depreciation and amortization of intangibles2) 437 434 397 Capacity alignments2) 110 104 (1) Antitrust related items2) 1 2 5 Other items2) - - - EBITDA per the Policy (Adjusted EBITDA) (Non-GAAP) $1,550 $1,556 $1,524 Leverage ratio (Non-GAAP) 1.3 1.2 1.3 1) Short- and long-term debt less cash and cash equivalents and debt-related derivatives. 2) Latest 12 months. 3) Interest expense, including cost for extinguishment of debt, if any, less interest income.
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Financial Report July - September 2026 19 Reconciliation of GAAP measure "Operating cash flow" to Non-GAAP measures "Free operating cash flow" and "Cash conversion" Management uses the Non-GAAP measure “free operating cash flow” to analyze the amount of cash flow being generated by the Company’s operations after capital expenditure, net. This measure indicates the Company’s cash flow generation level that enables strategic value creation options such as dividends or acquisitions. For details on free operating cash flow, see the reconciliation table below. Management uses the Non-GAAP measure “cash conversion” to analyze the proportion of net income that is converted into free operating cash flow. The measure is a tool to evaluate how efficiently the Company utilizes its resources. For details on cash conversion, see the reconciliation table below. Third quarter First nine months Latest 12 Full Year (Dollars in millions) 2026 2025 2026 2025 months 2025 Net income $155 $175 $398 $510 $623 $736 Depreciation and amortization 107 103 328 299 437 407 Gain on divestiture of property - - - (6) (0) (6) Other, net 22 32 26 26 31 32 Changes in operating working capital, net (45) (53) (154) (217) 51 (12) Operating cash flow (GAAP) 239 258 598 613 1,142 1,157 Expenditures for property, plant and equipment (115) (106) (295) (323) (413) (441) Proceeds from sale of property, plant and equipment 1 1 2 10 10 18 Capital expenditure, net1) (115) (106) (293) (313) (403) (423) Free operating cash flow2) (Non-GAAP) $124 $153 $305 $300 $739 $734 Cash conversion3) (Non-GAAP) 80% 87% 77% 59% 119% 100% 1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment. 2) Operating cash flow less Capital expenditure, net. 3) Free operating cash flow relative to Net income. Full year Full year Full year Full year (Dollars in millions) 2024 2023 2022 2021 Net income $648 $489 $425 $437 Depreciation and amortization 387 378 363 394 Gain on divestiture of property (4) - (80) - Other, net (24) (119) (54) (15) Changes in operating working capital, net 53 235 58 (63) Operating cash flow (GAAP) 1,059 982 713 754 Expenditures for property, plant and equipment (579) (572) (585) (458) Proceeds from sale of property, plant and equipment 17 4 101 4 Capital expenditure, net1) (563) (569) (485) (454) Free operating cash flow2) (Non-GAAP) $497 $414 $228 $300 Cash conversion3) (Non-GAAP) 77% 85% 54% 69% 1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment. 2) Operating cash flow less Capital expenditure, net. 3) Free operating cash flow relative to net income.
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Financial Report July - September 2026 20 Items Affecting Comparability We believe that comparability between periods is improved through the exclusion of certain items. To assist investors in understanding the operating performance of Autoliv's business, it is useful to consider certain GAAP measures exclusive of these items. The following tables reconcile Income before income taxes, Net income attributable to controlling interest, Capital employed, which are inputs utilized to calculate Return on Capital Employed (“ROCE”), adjusted ROCE and Return on Total Equity (“ROE”). The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-U.S. GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods. Autoliv’s management uses the ROCE, adjusted ROCE and ROE measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business. As used by the Company, ROCE is annualized operating income and income from equity method investments, relative to average capital employed. Adjusted ROCE is annualized operating income and income from equity method investments, relative to average capital employed as adjusted to exclude certain non-recurring items. See definitions of "annualized operating income" and "average capital employed" in footnote to the tables below. The Company believes ROCE and adjusted ROCE are useful indicators of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers. ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. See definitions of "annualized income" and "average total equity" in footnote to the tables below. Adjusted ROE is annualized income (loss) relative to average total equity for the periods presented as adjusted to exclude certain non -recurring items. The Company’s management believes that ROE and Adjusted ROE are useful indicators of how well management creates value for its shareholders through its operating activities and its capital management. With respect to the Andrews litigation settlement, the Company has treated this specific settlement as a non -recurring charge because of the unique nature of the lawsuit, including the facts and legal issues involved. Accordingly, the tables below reconcile from GAAP to the equivalent Non-GAAP measures. Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income" Third quarter First nine months Latest 12 Full year (Dollars in millions) 2026 2025 2026 2025 months 2025 Operating income (GAAP) $254 $267 $683 $769 $1,003 $1,088 Non-GAAP adjustments: Capacity alignments 8 2 93 6 110 23 Antitrust related items 0 2 1 3 1 3 Total Non-GAAP adjustments to operating income 8 4 93 8 111 26 Adjusted Operating income (Non-GAAP) $262 $271 $776 $777 $1,113 $1,114 (Dollars in millions) 2024 2023 2022 2021 Operating income (GAAP) $979 $690 $659 $675 Non-GAAP adjustments: Capacity alignments1) 19 218 (61) 8 The Andrews litigation settlement - 8 - - Antitrust related items 8 4 - - Total Non-GAAP adjustments to operating income 27 230 (61) 8 Adjusted Operating income (Non-GAAP) $1,007 $920 $598 $683 1) For 2022, including a gain on divestiture of property of $80 million.
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Financial Report July - September 2026 21 Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin" Third quarter First nine months Latest 12 Full year 2026 2025 2026 2025 months 2025 Operating margin (GAAP) 9.4% 9.9% 8.3% 9.6% 9.1% 10.1% Non-GAAP adjustments: Capacity alignments 0.3% 0.1% 1.1% 0.1% 1.0% 0.2% Antitrust related items 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% Total Non-GAAP adjustments to operating margin 0.3% 0.1% 1.1% 0.1% 1.0% 0.2% Adjusted Operating margin (Non-GAAP) 9.7% 10.0% 9.4% 9.7% 10.1% 10.3% 2024 2023 2022 2021 Operating margin (GAAP) 9.4% 6.6% 7.5% 8.2% Non-GAAP adjustments: Capacity alignments 0.2% 2.1% (0.7)% 0.1% The Andrews litigation settlement - 0.1% - - Antitrust related items 0.1% 0.0% - - Total Non-GAAP adjustments to operating margin 0.3% 2.2% (0.7)% 0.1% Adjusted Operating margin (Non-GAAP) 9.7% 8.8% 6.8% 8.3% Reconciliation of GAAP measure "Other non-operating items, net" to Non-GAAP measure "Adjusted Other non-operating items, net" Third quarter First nine months 2026 2025 2026 2025 Other non-operating items, net (GAAP) $(2) $(7) $(30) $(10) Non-GAAP adjustments: Capacity alignments - non-operating1) (2) - 20 - Total Non-GAAP adjustments to other non-operating items, net (2) - 20 - Adjusted Other non-operating items, net (Non-GAAP) $(5) $(7) $(10) $(10) 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income taxes" Third quarter First nine months (Dollars in millions) 2026 2025 2026 2025 Income before income taxes (GAAP) $230 $240 $586 $693 Non-GAAP adjustments: Capacity alignments - operating 8 2 93 6 Capacity alignments - non-operating1) (2) - 20 - Antitrust related items 0 2 1 3 Total Non-GAAP adjustments to Income before income taxes 5 4 113 8 Adjusted Income before income taxes (Non-GAAP) $236 $244 $700 $702 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income" Third quarter First nine months (Dollars in millions) 2026 2025 2026 2025 Net income (GAAP) $155 $175 $398 $510 Non-GAAP adjustments: Capacity alignments - operating 8 2 93 6 Capacity alignments - non-operating1) (2) - 20 - Antitrust related items 0 2 1 3 Tax on Non-GAAP adjustments (1) (1) (16) (2) Total Non-GAAP adjustments to Net income 4 3 97 7 Adjusted Net income (Non-GAAP) $160 $178 $495 $517 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities.
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Financial Report July - September 2026 22 Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net income attributable to controlling interest" Third quarter First nine months (Dollars in millions) 2026 2025 2026 2025 Net income attributable to controlling interest (GAAP) $155 $175 $397 $509 Non-GAAP adjustments: Capacity alignments - operating 8 2 93 6 Capacity alignments - non-operating1) (2) - 20 - Antitrust related items 0 2 1 3 Tax on Non-GAAP adjustments (1) (1) (16) (2) Total Non-GAAP adjustments to Net income attributable to controlling interest 4 3 97 7 Adjusted Net income attributable to controlling interest (Non-GAAP) $159 $178 $494 $516 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share - diluted" Third quarter First nine months 2026 2025 2026 2025 Earnings per share - diluted (GAAP) $2.13 $2.28 $5.36 $6.59 Non-GAAP adjustments: Capacity alignments - operating 0.10 0.03 1.25 0.07 Capacity alignments - non-operating1) (0.03) - 0.27 - Antitrust related items 0.00 0.02 0.01 0.04 Tax on Non-GAAP adjustments (0.01) (0.01) (0.22) (0.02) Total Non-GAAP adjustments to Earnings per share - diluted 0.06 0.04 1.31 0.09 Adjusted Earnings per share - diluted (Non-GAAP) $2.19 $2.32 $6.67 $6.67 Weighted average number of shares outstanding - diluted 72.9 76.7 74.1 77.3 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital Employed" Third quarter First nine months 2026 2025 2026 2025 Return on capital employed1) (GAAP) 24.1% 25.1% 21.5% 24.9% Non-GAAP adjustments: Capacity alignments - operating 0.3% 0.2% 2.7% 0.2% Antitrust related items 0.0% 0.1% 0.0% 0.1% Total Non-GAAP adjustments to Return on capital employed1) 0.3% 0.3% 2.7% 0.3% Adjusted Return on capital employed1) (Non-GAAP) 24.4% 25.5% 24.2% 25.2% Annualized adjustment2) on Return on capital employed1) $32 $15 $125 $11 1) Annualized operating income and income from equity method investments, relative to average capital employed. The average capi tal employed amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter inc luded in the period. 2) The quarterly annualized adjustment to the operating income and income from equity method investments amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the operating income and income from equity me thod investments amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four.
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Financial Report July - September 2026 23 Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity" Third quarter First nine months 2026 2025 2026 2025 Return on total equity1) (GAAP) 25.0% 27.9% 20.8% 28.1% Non-GAAP adjustments: Capacity alignments - operating 0.4% 0.3% 4.4% 0.3% Capacity alignments - non-operating2) (0.1)% - 0.9% - Antitrust related items 0.0% 0.2% 0.0% 0.1% Tax on Non-GAAP adjustments (0.1)% (0.1)% (0.8)% (0.1)% Total Non-GAAP adjustments to Return on total equity1) 0.2% 0.4% 4.6% 0.3% Adjusted Return on total equity1) (Non-GAAP) 25.2% 28.3% 25.4% 28.4% Annualized adjustment3) on Return on total equity1) $18 $12 $130 $9 1) Annualized net income relative to average total equity. The average total equity amount is calculated as an average of the op ening balance amount and the closing balance amounts for each quarter included in the period. 2) Relates to curtailment loss in connection with restructuring and capacity alignment activities. 3) The quarterly annualized adjustment to net income amount is calculated as the quarterly amount multiplied by four. The year -to-date annualized adjustment to the net income amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four.
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Financial Report July - September 2026 24 (Dollars in millions, except per share data, unaudited) 2025 2024 2023 2022 2021 Sales and Income Net sales $10,815 $10,390 $10,475 $8,842 $8,230 Airbags, Steering Wheels and Other1) 7,302 7,023 7,055 5,807 5,380 Seatbelt Products and Other1) 3,513 3,367 3,420 3,035 2,850 Operating income 1,088 979 690 659 675 Net income attributable to controlling interest 735 646 488 423 435 Earnings per share – basic2) 9.59 8.06 5.74 4.86 4.97 Earnings per share – diluted2) 9.55 8.04 5.72 4.85 4.96 Gross margin3) 19.2% 18.5% 17.4% 15.8% 18.4% S,G&A in relation to sales (5.3)% (5.1)% (4.8)% (4.9)% (5.3)% R,D&E net in relation to sales (3.8)% (3.8)% (4.1)% (4.4)% (4.7)% Operating margin4) 10.1% 9.4% 6.6% 7.5% 8.2% Adjusted operating margin5,6) 10.3% 9.7% 8.8% 6.8% 8.3% Balance Sheet Trade working capital6,7) 1,221 1,115 1,232 1,183 1,332 Trade working capital in relation to sales8) 10.8% 10.7% 11.2% 12.7% 15.7% Receivables outstanding in relation to sales9) 19.8% 19.0% 20.0% 20.4% 20.0% Inventory outstanding in relation to sales10) 8.8% 8.8% 9.2% 10.4% 9.2% Payables outstanding in relation to sales11) 17.8% 17.2% 18.0% 18.1% 13.5% Total equity 2,582 2,285 2,570 2,626 2,648 Total parent shareholders’ equity per share 34.43 29.26 30.93 30.30 30.10 Current assets excluding cash 3,497 3,153 3,475 3,119 2,705 Property, plant and equipment, net 2,417 2,239 2,192 1,960 1,855 Goodwill and Intangible assets 1,386 1,375 1,385 1,382 1,395 Capital employed 4,148 3,840 3,937 3,810 3,700 Net debt6) 1,566 1,554 1,367 1,184 1,052 Total assets 8,644 7,804 8,332 7,717 7,537 Long-term debt 1,734 1,522 1,324 1,054 1,662 Return on capital employed12) 26.4% 25.0% 17.7% 17.5% 18.3% Return on total equity13) 30.0% 27.2% 19.0% 16.3% 17.1% Total equity ratio 30% 29% 31% 34% 35% Cash flow and other data Operating cash flow 1,157 1,059 982 713 754 Depreciation and amortization 407 387 378 363 394 Capital expenditure, net 423 563 569 485 454 Capital expenditure, net in relation to sales 3.9% 5.4% 5.4% 5.5% 5.5% Free operating cash flow6,14) 734 497 414 228 300 Cash conversion6,15) 100% 77% 85% 54% 69% Direct shareholder return16) 590 771 577 339 165 Cash dividends paid per share 3.12 2.74 2.66 2.58 1.88 Number of shares outstanding (millions)17) 74.7 77.7 82.6 86.2 87.5 Number of employees, December 31 58,000 59,500 62,900 61,700 55,900 1) Including Corporate sales. 2) Net of treasury shares. 3) Gross profit relative to sales. 4) Operating income relative to sales. 5) Excluding effects from capacity alignments, antitrust related matters and for FY 2023 the Andrews litigation settlement. 6) Non-GAAP measure, for reconciliation see tables above. 7) Outstanding receivables and outstanding inventory less outstanding payables. 8) Outstanding receivables and outstanding inventory less outstanding payables relative to annualized fourth quarter sales. 9) Outstanding receivables relative to annualized fourth quarter sales. 10)Outstanding inventory relative to annualized fourth quarter sales. 11) Outstanding payables relative to annualized fourth quarter sales. 12) Operating income and income from equity method investments, relative to average capital employed. 13) Income relative to total equity. 14) Operating cash flow less Capital expenditure, net. 15) Free operating cash flow relative to Net income. 16) Dividends paid and Shares repurchased. 17) At year end, excluding dilution and net of treasury shares.