# Autoliv (ALV) — Financial Analysis

**Exchange:**   
**Coverage as of:** 2026-Q2  
**Updated:** 2026-06-10  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/ALV/thesis · /stocks/ALV/memo

## Financial Snapshot

---
step: 04
title: Financial Quality & Adversarial Sweep
ticker: ALV
company: Autoliv, Inc.
source: coverage-next-full
date: 2026-06-09
---

### Step 04 — Financial Quality & Adversarial Sweep: ALV

#### 1. Income Statement Quality

##### Revenue Recognition
Autoliv recognizes revenue upon transfer of control — typically at point of delivery to the OEM assembly line or at the shipping dock (per customer contract terms). Revenue is not recognized on long-term contract basis; it is transactional per delivery [S1]. This is straightforward for an industrial manufacturer — minimal revenue recognition complexity.

**Quality Assessment: HIGH.** No channel stuffing indicators; revenue tracks OEM LVP with reasonable precision.

##### Non-GAAP Adjustments

Autoliv reports two primary non-GAAP adjustments:

| Item | FY2022 | FY2023 | FY2024 |
|------|--------|--------|--------|
| Capacity Alignment Charges | $207M | $218M | $19M |
| Antitrust & Legal | — | $8M | $8M |
| **Total Non-GAAP Adjustment** | **$207M** | **$226M** | **$27M** |

Capacity alignment charges (FY2022–FY2024) relate to a genuine structural headcount reduction program (targeting 2,000+ indirect employees, mostly in Europe). These are legitimate one-time costs, not recurring — evidenced by the $207M → $218M → $19M step-down as the program completed. GAAP-to-adj. bridge is well-disclosed, precise, and externally verifiable through headcount data.

**Quality Assessment: HIGH.** Non-GAAP adjustments are transparent and declining as the restructuring program completed.

##### Tax Rate Anomalies

FY2023 effective tax rate (20.1%) was unusually low due to deferred tax reversals related to restructuring provisions. FY2024 rate normalized to 26.0%; FY2025 target ~28% [S2]. The FY2023 EPS of $5.72 overstates normalized earnings power by ~$0.30–0.50/share. Adjusted EPS FY2023 ($8.19 adj. vs. $5.72 GAAP) better captures underlying performance.

**Quality Assessment: Note.** FY2023 GAAP NI/EPS depressed by restructuring, but disclosed and visible.

#### 2. Balance Sheet Quality

##### Working Capital
- Receivables (FY2024): $1,993M → DSO ~70 days on $10.4B revenue (normal for automotive tier-1 with 60–90 day OEM payment terms)
- Inventories (FY2024): $921M → inventory turns ~11.3× (COGS / inventory) — healthy for auto parts
- Payables (FY2024): $1,799M → DPO ~77 days — well-managed; Autoliv has supplier leverage
- Working capital trend: improved in FY2024 as supply chain normalization reduced safety stock

##### Goodwill & Intangibles
- Goodwill: portion of $1,375M net goodwill/intangibles (FY2024). Autoliv has made bolt-on acquisitions over decades; no single large acquisition requiring scrutiny since Takata/KSS (which went to JSS). Goodwill has been stable; no impairment indicators visible.

##### Debt Structure
- Short-term debt: $387M (FY2024)
- Long-term debt: $1,522M (FY2024)
- Total debt: $1,909M; Net debt: $1,579M (at $330M cash)
- Debt/EBITDA: ~1.2× (($979M EBIT + $387M D&A) ≈ $1,366M EBITDA; $1,909M / $1,366M ≈ 1.4×)
- Maturities: Autoliv maintains a well-laddered maturity profile through revolving credit facilities and term bonds [S1]

**Quality Assessment: CLEAN.** Balance sheet is solid for the industry; net debt is manageable vs. $1B+ annual OCF.

#### 3. Cash Flow Quality

| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|--------|--------|--------|--------|--------|
| Net Income | $423M | $488M | $646M | $735M |
| OCF | $713M | $982M | $1,059M | $1,157M |
| OCF / NI ratio | 1.69× | 2.01× | 1.64× | 1.57× |
| FCF (OCF–CapEx) | $128M | $409M | $480M | $716M |
| FCF / NI ratio | 0.30× | 0.84× | 0.74× | 0.97× |

OCF consistently exceeds net income — primarily due to D&A ($363–387M/year) exceeding SBC and other non-cash charges. FY2022 FCF was depressed by elevated capex ($585M) and working capital build; FY2024–2025 FCF inflection is genuine, reflecting OCF improvement and capex discipline.

**Capex trajectory:** FY2022 $585M → FY2023 $573M → FY2024 $579M → FY2025 $441M. The FY2025 capex step-down to $441M (4.1% of revenue, below the 5% target) is notable — reflects moderation of new platform tooling investment.

**Quality Assessment: HIGH.** Cash generation is real and improving. FCF conversion inflecting as restructuring costs abated and capex moderated.

#### 4. Adversarial Research Sweep

##### A. Short Seller Activity
No prominent short reports on ALV identified. Short interest: ~4.02M shares (5.37% of float) as of June 2026 — elevated but not extreme for a large-cap industrial [S3]. No active short theses found in public databases.

##### B. Antitrust History
- Autoliv (along with TRW/ZF and Takata) was involved in historical price-fixing investigations in the automotive safety components market (circa 2011–2015). DOJ investigations resulted in guilty pleas and fines from multiple suppliers.
- Autoliv settled and entered deferred prosecution agreements. Ongoing "antitrust related items" costs: $4M (FY2023), $8M (FY2024) — residual tail of historical matters, not new investigations.
- **Risk level: LOW-MODERATE.** Historical matter substantially resolved; residual costs declining. New investigations possible but no current known proceedings.

##### C. Product Liability
- Autoliv's primary product liability risk is defective airbag inflators (the Takata crisis was the catastrophic industry example: 67M+ recalls, 27 deaths attributed to ammonium nitrate inflators).
- Autoliv proactively replaced ammonium nitrate inflators across its product line after Takata's failures became public. Autoliv's inflators are AZIDE-based (alternative propellant technology).
- Product liability accruals are maintained but no major new investigations or class actions disclosed in recent filings.
- **Risk level: MODERATE-ONGOING.** The product liability risk is inherent to safety-critical manufacturing; it is the "Takata risk" that every investor in this sector must model.

##### D. Customer Disputes / Contract Risks
- Autoliv disclosed commercial disputes with certain customers over extraordinary inflation recovery compensation (FY2022–2023). These have largely been resolved through negotiations.
- No material ongoing customer litigation disclosed in recent 10-K.

##### E. China / Governance Risks
- No Autoliv-specific fraud, manipulation, or governance failure identified.
- Swedish-American corporate governance; Stockholm listing imposes additional disclosure standards. Board (11 directors, 10 independent) meets high governance standards.
- Cevian Capital activist presence (12% stake) since early 2025 is a positive governance catalyst — capital return program ($2.5B buyback) emerged at June 2025 CMD [S4].

##### F. Environmental / Legal
- Autoliv disclosed environmental matters (legacy facility cleanup obligations) but these are routine for industrial manufacturers; no material accruals flagged.
- Labor relations: global workforce with union representation in various markets; no disclosed major disputes.

##### Adversarial Sweep Summary
**No material undisclosed risks identified.** Known risks (antitrust tail, product liability, China OEM transition) are disclosed, quantifiable, and actively managed. No short-side thesis found. Governance quality high. Financial statements appear reliable and high quality.

#### 5. Key Statement-Quality Adjustments for Modeling

| Adjustment | FY2022 | FY2023 | FY2024 | Notes |
|-----------|--------|--------|--------|-------|
| Capacity alignment add-back | +$207M | +$218M | +$19M | Restructuring, not recurring |
| Antitrust add-back | — | +$8M | +$8M | Tail of settled matters |
| Tax rate normalization | — | Normalize to ~26% | 26.0% actual | FY2023 rate was 20.1% — abnormally low |
| Adjusted Operating Income | $762M* | $920M | $1,007M | More useful baseline |
| Normalized Net Income (est.) | ~$500M | ~$660M | $646M | FY2023 NI elevated by low tax; FY2024 is clean |

*FY2022 adj. OPM estimated; capacity alignment $207M pre-tax

#### Source Index

| [S1] | SEC 10-K FY2024 — revenue recognition policy, debt schedule, working capital |
| [S2] | SEC 10-K FY2024 — tax rate discussion (MD&A), FY2025 guidance (28% ETR) |
| [S3] | ALV_financials/other/consensus.md — short interest data |
| [S4] | ALV_financials/proxy/governance_and_compensation.md — Cevian Capital stake |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/ALV/fundamental

## Navigation

- Overview: /stocks/ALV
- Financials (this page): /stocks/ALV/financials
- Thesis: /stocks/ALV/thesis
- Investment Memo: /stocks/ALV/memo
- Coverage universe: /stocks