The board of directors of Autoliv Inc. (ALV”>ALV) recently elected Mr. Lars Nyberg as the new chairman of the company’s board. Currently, Mr. Nyberg is serving as the chairman of DataCard Corporation, a Minnesota-based company that deals with secure ID and card personalization for education, corporate security and many other markets.
Nyberg also holds the office of the President and Chief Executive Officer of TeliaSonera, one of the leading Nordic and Baltic telecommunications companies.
The selection of the new chairman follows the departure of Lars Westerberg from the position of Autoliv’s chairman after serving for nearly 13 years. Under Westerberg, Autoliv’s sales witnessed significant improvement, from $3.5 billion in 1998 to more than $8 billion expected at the end of 2011.
The board also declared a dividend of 45 cents per share for the first quarter of 2012, payable on March 01, 2012 to stockholders of record as of February 15, 2012.
In the last reported quarter, Autoliv recorded profit of $138.4 million or $1.48 per share, down from $140.1 million or $1.51 per share in the year-ago quarter. Consolidated sales appreciated 16% to $2.02 billion, reflecting a 6% upside due to currency translation. Organic sales rose by 9% during the quarter.
The company’s sales were highly influenced by recent vehicle launches and a favorable vehicle mix, particularly relating to Hyundai/KIA and General Motors Company (GM), Ford Motor Co. (F) and Chrysler. These apart, strong demand for side airbags for chest protection as well as for electronics (both passive electronics and active safety systems), and the continued global trend of upgrading seatbelt systems with pretensioners led to the sales growth.
Autoliv has a stable market share in both airbag modules and seat belts in North America, Europe and Asia. The company has continuously expanded in low-cost countries, including Romania and China, in order to cater to the local demand and to consolidate its manufacturing facilities from high-cost countries.
However, the company faces significant customer concentration risks. The company’s top-5 represent about 59% of sales and the top 10 represent 74% of sales.
Due to these factors, the company retains a Zacks #3 Rank, which translates to a Hold rating for the short term (1 to 3 months). We have reiterated our Neutral recommendation on the stock for the long term (more than 6 months).
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