Financial Summary - Q1'21
STOCKHOLM, April 28, 2021 /PRNewswire/ --
- Financial results in-line with internal expectations despite supply chain challenges
- Net Sales $419 million, Organic Sales1 increase 17%
- Active Safety Net Sales increase 27%, Organic Sales increase 18%
- Operating cash flow $(110) million.
- Cash balance $645 million
Outlook - FY'21 (unchanged from Q4, 2020 report)
- Organic Sales1 growth YoY is expected to exceed 25%
- Active Safety Organic Sales1 growth YoY is expected to be ~45%
- Currency translation impact is expected to be ~3%
- Operating loss is expected to improve in 2021 from 2020, Cash balance is expected to exceed $400 million at 2021 year-end
- Order intake in 2021 is expected to increase from 2020
- Organic Sales outperformed the global LVP by ~4pp for Q1'21, expect outperformance of mid-teens for full year 2021
- Semiconductor supply shortages creates industry delivery and cost challenges
- Significant regional mix shifts in Light Vehicle Production during the quarter weaker North America and Europe, stronger China
- Veoneer's ADAS and AD software unit Arriver is on-track with first functions running on Qualcomm Snapdragon platform
- Polestar 2, featuring Veoneer's Active Safety system achieved highest rating of all vehicles in Euro NCAP's safety test
- Important new Active Safety system business award in China, including fourth generation vision, perception software and radar
- Order intake over the Last Twelve Months (LTM) was ~$400 million of average annual sales at the end of Q1'21
Comments from Jan Carlson, Chairman, President and CEO
Veoneer executed well in the quarter. Disruptions from semiconductor shortages, and our continued build up for growth, added extra costs which we were able to offset by efficiencies gained through our on-going market adjustment initiatives (MAIs). This outcome puts us well on track to achieve our full year outlook first presented in early February. We are also on track to increase our order intake compared to 2020, with our main expected order awards scheduled for the second half of the year.
We took a cautious view to the LVP in the beginning of the quarter which proved to be basically correct. While global LVP growth was only slightly lower than IHS January forecast, the regional mix shifted significantly. LVP in North America and Europe which make up more than 75% of Veoneer's sales were down close to 14% and 3% respectively. China, which made up 28% of the LVP in the quarter, but only 13% of Veoneer sales, was up by 11%, all compared to IHS's expectation from the beginning of the quarter. Our content per vehicle as compared to the LVP is currently more than four times higher in Europe and North America than in China, therefore this geographic mix shift had a temporary adverse effect on our sales growth and gross margin.
The automotive industry is going through a turbulent period. The COVID-19 pandemic is on-going in most regions, and we continue to put health and safety first. At the same time continued semiconductor supply constraints disrupted deliveries and the global supply chain. In conjunction with these developments the underlying demand for cars continues to be strong. To date we have managed this multifaceted development well, and I am pleased that we, despite the on-going delivery disruptions, are able to reiterate our full year outlook and that the MAI's continue to have positive effects on our cost base. We anticipate that disruptions will continue during the second quarter and then gradually decrease, and as first mentioned in our fourth quarter earnings announcement, we therefore foresee the positive effects on our operating leverage from our sales growth mainly taking effect in the second half of the year.
Our collaboration with Qualcomm is progressing very well and Arriver, our new software business, has now started its operations. The technology development is according to our joint plans and the first Arriver perception and drive policy software is now running on the Qualcomm Snapdragon Ride platform, a true milestone. During the quarter the Polestar 2, which runs the current generation of Arriver software, became the number one car in Euro NCAP's safety test - another proof point that we are on track to create a leading global challenger for Active Safety systems and software.
These developments are the result of the strong execution of the entire Veoneer team and I would like to take this opportunity to thank all of Veoneer's associates for their focus and persistence in these volatile times.
Thomas Jönsson - EVP Communications & IR, +46 8 527 762 27 or firstname.lastname@example.org
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 12:00 CET on Wednesday, April 28, 2021.
An earnings conference call will be held today, Wednesday, April 28, 2021 at 14:00 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. 1For all Non-U.S. GAAP financial measures, see the reconciliation tables in this earnings release, including the Non-U.S. GAAP Financial Measures section for further discussion of the forward-looking Non-U.S. GAAP financial measures on page 8.
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