Financial Report July - September 2019
STOCKHOLM, Oct. 23, 2019 --
Financial Summary - Q3'19
- Results better than our expectations with the exception of sales
- Net Sales $462 million
- Net Sales decline 12%, Organic Sales1 decline 10%
- Active Safety Net Sales decline 11%, Organic Sales1 decline 8%
- Operating cash flow $(61) million
- Global LVP decline in the mid to upper single digits versus 2018
- Organic Sales1 decline in the low double digits versus 2018
- Currency translation impact on sales ~(3)% versus 2018
- Operating loss sequential improvement in Q4'19 from Q3'19
- Cash flow before financing activities1 for FY'19 remains on track
- Market adjustment initiatives driving balance sheet efficiencies and cost structure improvements
- 7th vision customer business award with a global OEM
- 1st thermal sensing business award with a leading global OEM for a "mobility as a service" autonomous application
- Introduced scalable system architecture to our product portfolio
- Order intake LTM as of Q3'19 was approximately $1 billion future average annual sales with Active Safety ~80%
Comments from Jan Carlson, Chairman, President and CEO
During the quarter our market adjustment initiatives announced at the beginning of the year started to take effect. Driven by these operational improvements our operating loss was reduced by $15 million sequentially despite lower organic sales. The reduction came primarily through lower RD&E costs achieved through prudent resource management and to a lesser extent by partnering in some engineering related activities in Active Safety. We were also successful in working capital management, particularly in managing accounts receivables and inventories. We will continue to drive our improvement initiatives, including partnering and outsourcing opportunities, as we adapt to the market realities, and drive our own continued development.
In September, we signed our seventh customer for our in-house developed vision technology. This shows that our core development combined with the software developed in Zenuity delivers powerful solutions, creating leading ADAS and collaborative driving functionality for the years to come. In addition, we are currently preparing to introduce our fourth-generation vision technology, as part of a number of our customer launches in 2020 and into 2021.
The automotive industry faced a volatile and challenging quarter, with light vehicle production being weaker than anticipated in July across most of our major markets. Veoneer saw a sharper sales decline than the overall market, as we faced some model phase-outs of certain customer programs and a negative product mix. In addition, positive effects on sales growth from launches of new customer programs are only anticipated to start in 2020.
We see this challenging environment in our industry, to continue for some time. This relates both to an increased volatility in LVP forecasts as well as customer launch schedules and take rates, particularly in China, for products sold as optional features by the OEMs. Specifically, for Veoneer we are proactively managing the inherent risks that come from launching several new customer programs and technologies in a short time span in the quarters to come.
For the next several quarters, our focus is on: successful customer launches heading into 2020 and 2021, market adjustment initiatives to continue to drive efficiencies and improve cash flow, and to continue to win profitable new business.
Thomas Jönsson - EVP Communications & IR, +46-8-527-762-27 or firstname.lastname@example.org and
Ray Pekar - VP Investor Relations, +1-248-794-4537 or email@example.com. Inquiries - Company Corporate website www.veoneer.com.
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, October 23, 2019.
An earnings conference call will be held today, Wednesday, October 23, 2019 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. See also the Non-U.S. GAAP Financial Measures section on page 10 of this earnings release for further disclosures. 1 For all non-U.S. GAAP financial measures, see the reconciliation tables in this earnings release, including the Non-U.S. GAAP Financial Measures section on page 10. See the Non-U.S. GAAP Financial Measures section for further discussion of the forward-looking non-U.S. GAAP financial measures.
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