LONDON, UK / ACCESSWIRE / December 14, 2017 / Active-Investors issued a free report on Autoliv, Inc. (NYSE: ALV), which is readily accessible upon registration at www.active-investors.com/registration-sg/'symbol=ALV as the Company's latest news hit the wire. On December 12, 2017, the Company reported that its Board of Directors had completed the previously announced strategic review of its businesses. Following the completion of the review, the Board has decided that the spin-off of its Electronics business would be in the best interest of all stakeholders. The Electronics business will be established as an independent publicly traded Company in Q3 2018. Sign up now for our free research reports at:
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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Autoliv most recent news is on our radar and we have decided to include it on our blog post. Today's free coverage is available at:
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Commenting on the spin-off, Jan Carlson, Chairman, President and CEO of Autoliv, said:
"With the strategic review concluded we now continue the process with full focus on a successful introduction of our two business segments as stand-alone companies during 2018. We are excited about the strategic opportunities for both our current business segments as separate companies."
In September 2017, the Company had started the strategic review of its organizational structure and explore possibilities of creating two separate companies by splitting its business segments - Passive Safety and Electronics. The idea was to create two publicly traded companies catering to two distinct, growing markets with leading product offerings. The formation of two separate companies will also lead to the creation of value for all its stakeholders including shareholders and customers. The Board concluded that the review reiterated and supported the initial rationale of splitting the Company's business segments into two separate companies.
Way Forward
Autoliv has planned for a cash infusion in the new electronics business to start the spin-off process. Autoliv's aim in making the cash infusion is that the new electronics company maintain a strong investment grade and ensure the transaction is tax-free to shareholders in the US and Sweden. Autoliv plans to file the requisite forms for registration of the new company with the US Securities and Exchange Commission (SEC) in H1 2018. Disclosures to the SEC will include financial information of the electronics business on a stand-alone basis for the fiscal years 2015-2017 and other details regarding the proposed spin-off.
The spin-off will be effectuated when shareholders of Autoliv (including through Swedish Depository Receipts) are paid dividends on the new Electronics Company shares on a pro-rata basis. As of now, the record date for this transaction has not been finalized.
Once the spin-off is completed, the Company's Passive Safety will continue its operations under the Autoliv name and will continue to be listed with the New York Stock Exchange and Nasdaq Stockholm Exchange. The Company plans to debut the electronics business under a new name, to be announced later, and plans to list the Company's share in the US and Sweden stock exchanges. Both companies will continue to be headquartered in Stockholm, Sweden.
The Company plans to complete the splitting of the business in Q3 2018 subject to receiving approvals from the Company's Board, regulatory authorities, market regulators, and fulfillment of other closing conditions. The Company plans to provide updates on the progress achieved at various stages of the implementation of the decision. However, the Company has cautioned that there is no guarantees about the timing of the spin-off or whether the spin-off will take place.
The Company plans to provide full-year Guidance for FY18 for both new companies on a stand-alone basis when it shares its Q4 2017 financial results.
About Autoliv's two business segments
Autoliv's two business segments are distinct and successful businesses with their own growth drivers. The Electronics business covers the Active Safety Products (which includes automotive radars, cameras with driver assist systems, night vision systems and positioning systems), Restraint Control, and Sensing and Brake Systems. Its target market are players in the autonomous driving sector. As per an industry estimate the Safety Electronics market is expected to grow into a $40 billion market in 2025 from the current $20 billion. The Electronics segment expects to corner a major portion of this market and continue to grow into a profitable unit.
The Company's Electronics business has already established itself as a key player in automotive electronics and is a qualified supplier of several OEM's for active safety products. The business unit has also partnered with companies like Volvo Cars (Zenuity), NVIDIA, and LiDAR experts Velodyne for the next generation of highly automated cars. This business unit recorded sales of $2.216 billion in FY16 and plans to reach $3 billion in revenue in 2020.
Autoliv's Passive Safety products include airbag systems, steering wheels, and seatbelts. This market is stable and supported by incremental innovation. However, it requires the highest quality and manufacturing efficiencies. This segment is expected to grow into a $25 billion market in 2025 from the current $20 billion in 2017. During this same time, the Passive Safety segment is expected to outgrow the market and light vehicle production. Passive Safety is a major player with the leading position in this market with a 39% market share in FY16. In the last 2.5 years, Passive Safety's share of order intake has been around 50% or more. Passive Safety recorded sales of $7.9 billion in FY16 and plans to reach revenues of over $10 billion in 2020.
About Autoliv, Inc.
Autoliv is a global leader in automotive safety systems and develops and manufactures automotive safety systems for all major automotive manufacturers in the world. Autoliv has over 80 facilities with 70,000 employees in 27 countries including its Joint Ventures. The Company's sales for FY16 was approximately $10.1 billion.
Stock Performance Snapshot
December 13, 2017 - At Wednesday's closing bell, Autoliv's stock declined 2.40%, ending the trading session at $125.42.
Volume traded for the day: 654.14 thousand shares, which was above the 3-month average volume of 542.86 thousand shares.
Stock performance in the last month - up 1.76%; previous six-month period - up 12.92%; past twelve-month period - up 12.31%; and year-to-date - up 10.84%
After yesterday's close, Autoliv's market cap was at $10.90 billion.
Price to Earnings (P/E) ratio was at 21.61.
The stock has a dividend yield of 1.91%.
The stock is part of the Consumer Goods sector, categorized under the Auto Parts industry. This sector was up 0.4% at the end of the session.
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