Q2 2026: Positive momentum continued in second quarter
STOCKHOLM, July 17, 2026 /PRNewswire/ --
Financial highlights Q2 2026
$2,803 million net sales, increase of 3.3%
1.0% organic sales growth*
6.8% operating margin, 9.6% adj. operating margin*
$1.35 diluted EPS, 38% decrease
Full year 2026 guidance
Around 0% organic sales growth
Around 2.5% positive FX impact on net sales
Around 10.5-11% 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 second quarter of 2026
- Net sales increased organically* by 1.0%, which was 1.3pp higher than the global LVP decrease of 0.3% (S&P Global July 2026) mainly driven by strong performance in Asia. Regional and customer LVP mix is estimated to have impacted sales negatively by about 0.6pp. Our organic sales growth* outperformed LVP significantly in China and in Asia excl. China, underperformed slightly in EMEA and more markedly in Americas. Our strong performance in Asia excl. China was mainly due to India, where we outperformed by 20pp, driven by continued strong market growth in safety content per vehicle, while our China performance was due to more than 40pp outperformance with Chinese OEMs.
- Underlying profitability remained strong. Operating income decreased substantially due to previously communicated restructuring activities in Türkiye. Adjusted operating income* increased by 7.3%, despite adverse effects from FX and raw material prices, mainly due to well executed direct material cost savings. Operating margin was 6.8% and adjusted operating margin* was 9.6%. ROCE was 17.9% and adjusted ROCE* was 24.9%.
- Cash flow was the best for a second quarter so far with operating cash flow improving from $277 million to $434 million, mainly driven by strong underlying profitability and a normalization of working capital. Free operating cash flow* more than doubled to $340 million. The leverage ratio* improved to 1.2x. In the quarter, a dividend of $0.87 per share was paid and 1.65 million shares were repurchased and retired.
*For Non-GAAP measures see enclosed reconciliation tables.
Key Figures
(Dollars in millions, except per share data) | Q2 2026 | Q2 2025 | Change | 6M 2026 | 6M 2025 | Change |
Net sales | $2,803 | $2,714 | 3.3 % | $5,556 | $5,292 | 5.0 % |
Operating income | 192 | 247 | (22) % | 429 | 502 | (14) % |
Adjusted operating income1) | 270 | 251 | 7.3 % | 515 | 506 | 1.7 % |
Operating margin | 6.8 % | 9.1 % | (2.3)pp | 7.7 % | 9.5 % | (1.8)pp |
Adjusted operating margin1) | 9.6 % | 9.3 % | 0.4pp | 9.3 % | 9.6 % | (0.3)pp |
Earnings per share - diluted | 1.35 | 2.16 | (38) % | 3.24 | 4.31 | (25) % |
Adjusted earnings per share - diluted1) | 2.43 | 2.21 | 10 % | 4.49 | 4.36 | 2.9 % |
Operating cash flow | 434 | 277 | 57 % | 359 | 355 | 1.1 % |
Return on capital employed2) | 17.9 % | 23.8 % | (5.8)pp | 20.3 % | 24.8 % | (4.5)pp |
Adjusted return on capital employed1,2) | 24.9 % | 24.1 % | 0.8pp | 24.1 % | 25.0 % | (0.9)pp |
Dividends paid | (64) | (54) | 19 % | (130) | (108) | 20 % |
Share repurchases | (200) | (51) | 293 % | (200) | (101) | 97 % |
1) Excluding effects from capacity alignments and antitrust related matters. Non-GAAP measure, see reconciliation table. | ||||||
Comments from Mikael Bratt, President & CEO
Through focused execution, we maintained the positive momentum from the first quarter. Globally, our sales grew organically more than 1pp faster than global LVP, outgrowing LVP significantly in Asia. Our sales to Chinese OEMs grew by more than 40%, and Chinese OEMs accounted for 55% of our sales in China, compared to 40% a year ago. Our opportunities with Chinese OEMs were further solidified by signing new strategic cooperation agreements with both Great Wall Motor and XPENG. Sales in India continued to grow by more than 35%.
Well executed cost reduction activities supported a continued improvement of underlying profitability, with adjusted operating margin increasing to 9.6%.
I am pleased that our cash flow improved in line with our expectations, resulting in record operating cash flow for a second quarter, and supporting our ambitious shareholder return strategy. Our leverage ratio improved to 1.2x, despite repurchasing around 1.65 million shares, equal to $200 million, in the quarter.
In line with our ambition to ensure long-term competitiveness and align production capacity with market demand, we continue to optimize our footprint. In the quarter, we announced that we will discontinue manufacturing operations in Türkiye.
We continued to manage geopolitical developments successfully in the quarter, limiting the effects of tariffs, supply chain challenges and raw material price increases.
The business environment remains uncertain but our current best estimate for the remainder of the year is to reiterate our full year 2026 guidance of about unchanged organic sales growth, adjusted operating margin of around 10.5-11% and operating cash flow of around 1.2 billion. This is based on the assumption that LVP will decline by around 2.5%.
Customer compensations and other mitigation initiatives are expected to have limited impact in Q3, but significantly greater contribution in Q4. Therefore, we expect third quarter adjusted operating margin to be around the first half 2026 level, with a significant improvement in Q4.
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, including share repurchases of $300-500 million in 2026.
Next Report
Autoliv intends to publish the quarterly earnings report for the third quarter of 2026 on Friday, October 23, 2026.
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 CET on July 17, 2026.
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