November 19, 2019 / 2:53 PM / 22 days ago

Airbag maker Autoliv targets 12% core profit margin in the medium term

STOCKHOLM, Nov 19 (Reuters) - Sweden’s Autoliv , the world’s biggest maker of airbags and seatbelts, set new financial targets on Tuesday, aiming for a core operating margin of around 12% in the medium term, which it specified as up to 3-5 years.

The company, whose competitors include Joyson Safety Systems and ZF, also said it aimed to grow annual organic sales by 3-4% above light vehicle production growth on average in the same period.

Autoliv, issuing a statement ahead of a day of investor presentations at its plant in Ogden, Utah, also said it expected its operating margin would improve in 2020 versus 2019, for which it has forecast a 9% core profit margin. The car industry is in a deep slump, pressured by weak demand and a need to invest in and adapt to electric and self-driving technologies. Autoliv has cut its 2019 growth and margin forecast several times throughout the year.

The company said potential tailwinds for next year included a smaller hit from raw material costs, organic growth from market share gains, and the impact of cost-cutting programmes, while headwinds could include higher depreciation and amortization.

“Considering these potential tailwinds and headwinds we expect a year-over-year improvement in adjusted operating margin, absent unforeseen events,” Autoliv said.

Autoliv’s Sweden-listed stock was down 0.8% by 1431 GMT, roughly unchanged from before the news. (Reporting by Johannes Hellstrom; Editing by Jan Harvey)

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