Financial Summary – Q1’19
- Consolidated Net Sales $494 million
- Net Sales growth (17)%, Organic Sales1 growth (12)%
- Active Safety Net Sales growth (10)%, Organic Sales1 growth (3)%
- Light vehicle production decline low to mid single digits versus 2018
- Organic Sales1 decline in the mid single digits versus 2018
- Currency translation impact on sales unchanged at ~(2)% versus 2018
- Operating loss, cash flow weaker in H1’19, expected improvement in H2’19
- Veoneer Order Book at the beginning of 2019 was more than $19 billion as compared to approximately $16 billion one year earlier
- Q1’19 Order Intake remains strong, LTM approximately $1.2 billion average annual sales with Active Safety at similar levels to 2018
- Market adjustment initiatives are expected to deliver margin and cash flow improvements during the H2’19 and into 2020
- The Company is considering alternatives for a capital markets raise of up to $500 million
Comments from Jan Carlson, Chairman, President and CEO
The future of transportation belongs to Collaborative Driving. We believe that in the not too distant future, the vast majority of all cars sold will be equipped with advanced driving assistance technology. We also believe that Veoneer, with our cutting-edge offering in a broad range of Active Safety products, will be one of the leaders in this emerging industry. However, the speed of this transition is proving more difficult to predict than earlier anticipated. We have to adjust our speed to changing road conditions.
At present, we see changes in the market. The first quarter was weaker than expected. Light vehicle production during the first quarter deteriorated beyond market expectations. In addition, Veoneer sales declined more than the light vehicle production primarily driven by our high-level content on premium car models in current deliveries. This vehicle segment saw a sharper production decline than the general market.
We currently see these trends continuing through 2019, primarily due to weak markets in China and Europe. We still expect the second half, mainly the fourth quarter, to be stronger than the first half of 2019. We now anticipate our organic sales will decline for the full year 2019 as compared to 2018. We experienced continued increasing RD&E costs during the quarter. This w as mainly driven by the complexity of certain projects, change requests from our customers and high level of new hires.
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