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ANNUAL REPOR T 1 994
Autoliv
You r safety, ou r cancern
CONTENTS
1994 in Brief ......... !
President's Statement... ... 2
The M arket ...... ~~ 4
Air Bags ... -.. 6
Side Impact Air Bags ... 8
Seat Belts ... lO Research and Development ... 12
Autoliv in the World ... 14
The Autoliv Share and General Meeting of Shareholders ... 16
Board of Directors, Auditors and Senior Management.. ... 18
Group Overview ... 19
Consolidated statement ofIncome ... 20
Consolidated statement of Changes in Financial Position ... 20
Consolidated Balance Sheet.. ... 21
Accounting Principles and Principles of Valuation ... 22
Notes to the Consolidated Financial statements ... 24
Parent Company Accounts ...... 28
Proposed Allocation of Profit.. ...... 32
Auditors' Report ...... -33
Addresses ... 34
Multi-Year Summary and Definitions ... ~ 36
AutoJiv AB (pubJ.) Registration Number 556036-1981
(Figures in braekets denote 1993 data; negative numbers are indicated by a minus sign.)
MSEK 9000 8000 7000 6000 5000 4000 3000 2000 1000
o
' SALES
&,833
1991 1992 1993 Akbap
1994 in Brief
• Successful public offering
• Good profit and sales growth
• Strengthened market position
• Commercial shipments started of side impact air bags
• First air bag order in the United states received
• Technical center and new plant under construction in Great Britain
• Decision to invest in a technical center in the United states
• Robust global expansion of technical resources
• A seeond joint venture formed in China
• Decision on partial ownership of seat belt company in Malaysia
INCOME SEFORE TAXES PROFITABILtTY•
MSE~
8,M7
700 25
600 500 zo
400 15 115
300 10
200 U17
100
1994 o o
1991 1992 1993 1994 1991 1992 1993 1994
• Seatbelb
Swedish-based Auto liv is on e of the world' s leading gro u ps for a i r bags, seat belts and other equipment for passenger safety in automobiles.
Sales have grown by 34% annually over the last ten years, to SEK 9 billion.
The Group has 20 plants in 11 countries and 16 partially owned campanies in another nine countries.
The number of employees is 5,700 and l, 700 in partiall y owned companies.
The Autoliv share is Iisted on the Stockholm Stock Exchange since J une 1994.
AUTOliV 1994 0
President/s Statement
The public offering of our stock got a warm reception and was oversubscribe·d more than four times. Towards the end of the year, we and ou r advisers, Enskilda Corporate and Merrill Lynch, could also revel overthe nominatian of Autol iv' s stock offer i ng as The European Equity Deal of the Y ear.
I nstituti ans in the U n i te d states owned more than one third of the shares outstanding at year-end 1994. About one fourth of the shares we re in Sweden, pri- marily with major investors, while the remalnder was mainly held by inves- tors in Europe, especially in Great Britain.
I t isthus not on ly our operations that are highly international, but our owner- ship structure is also broadly based.
Another important milestone during 1994 was that we we re fi rst i n the world to sh i p side impact air bags. This occurred during Summer, when shipments for Volvo's 850 rnadel were initiated. This breakthrough has aroused much atten- tian and has led to increased interest in improved side collision protection all over the world. This has led to new
orders from, a mo ng others, on e of the large American auto makers. This is ou r first order for air bags in the United states and is therefore an important step in galningentry to the huge U.S.
m arket.
SOLID SALES INCREASE Ou r long-time ettorts in developing new products, such as air bags and belt pre- tensioners, in close cooperation with leading auto manufacturers, was the main reason behind an increase in sales of 68 percent
In ten years the G roup's sales have grown from MSEK480 to close to SEK 9 billion, which means an annual com- pounded growth rate of 34 percent
Good growth of sales in 1994wasalso due to start-up of shipments of air bags to the French auto makers, all ofwhich are among our big customers. The in- crease is also explained by a higher rate of installation of air bags in Ger- many, G reat B rita in and S candinavia, where we al rea dy in 1993 achieved sueeessful sales.
Sales of seat belts rase by 19 percent, despite the fact that ear sales in Europe, our most important market, rase by on ly 6 percent This is explained by high- er per-ear product val u e thanks to a greater rate of installation of belt pre- tensioners.
The markets outside Sweden account for 94 percent of sales of the Autoliv Group.
STRONG PROFIT GROWTH Consolidated net income after taxes more than trebled in 1994, rising to MSEI(430 (125}*. Income before taxes was MSEK 680 (240}. The improve- ments are mainly due to highersales vol u mes, productivity gains, and a high- er rate of capita l turnoveras weil as to the introduction of new, more east effi cient components in ou r systems.
The return on shareholders' equity rase from 19 percent to 26 percent, roughly the same leve l as achieved by ou r
most important competitors.
*Figures in braekets refer to previous year.
1994 was thus a successful year for Autoliv. We must thank o ur dedicated, high ly skilled and responsible staff for making this possible.
AUTO SAFETY, A GROWTH AREA
About 25 million air bags were shipped to the world' s auto manufacturing indus- try during 1994. The potential world mar- ket is 80 million frontal air bags, based on an annual productian of vehicles of approximately 50 million. About three fourths of these vehicles are manufac- tured in Europe, the United States and Japan.
In four to five years at least three quar- ters of all new cars in the high ly indus- trialized countries will be equipped with dual air bags for frontal collision pro- tection, which means that the market will morethandouble. Pricesarefalling, however, sothemarket will only grow by approximately 15 percent annually in monetary terms. The total world market for seat belts and air bags was worth about SEI< 50 billion in 1994.
It is still too early to make predietians with any certainty as to the market for side impact protection systems. Based on the great market interest so far, how- ever, it is not inconceivable that this mar- ket could be worth several billion SEI<at the end of the millennium. And then the re is the great market potential as a result of the need for protection against whip-lash. These injuries to the neck can occur in rear end collisions. Also the new advanced systems for centrolling various protective devices under deve-
lopment will cgntribute to rapid growth of the world market for passenger safety.
BUSINESS CONCEPT Autoliv shall develop, manufacture and market systems and components for ear occupantsafety. In this area the Group is one of the four leading campanies in the world. Ou r goal is to be a systems suppliet and cooperation partner for the auto manufacturers, that is a special- ist company satisfyi ng all of ou r cus- tomers' needs for ear occupant safety equipment.
GOAL AND STRATEGY Autoliv has as its goal to be a world leaderwithin its area of operations. The following can be said to be the corner- stones characterizing ou r ambitions:
• Technicalleadership in systems for frontal collision protection, and in new areas such as improved protection for side collisions, rear-end collisions and rollovers.
• A global presence allowing us to serve the needs of ou r customers for techni- cal support in all countries where they have and intend to establish vehicle manufacturing operations.
• Cost efficiency through adequate ver- tical integration, continuous product simplifications, automation and util- ization of low-cost countries for laber- intensive production.
• Reliability through a high level of qual- ity, dependable shipments and building long-term customer relationships.
OUTLOOK
Autoliv's market position in Europe is strong, both in terms of seat belts and air bags. In the United States we made large market investments during 1993 and 1994, and these continue in 1995.
Important orders have been received from leading American auto makers.
In South East Asia ou r market position was strengthened du ring the year, and two additional joint venture agree- ments we re concluded. Japan and south Korea represent a considetable growth potential for Autoliv.
Opportunities for expansion in new geographical markets, combined with the launching of new products, provide a p ramising outlook for ou r business.
There are also factors that have neg- ative impact on Autoliv, however. Sup- pliers of raw materials show no signs of being able to keep rising prices in check.
At the same time our customers dis- play great resistance in allowing us to compensate for higher raw material prices.
Even though increased price com- petition, in combination with price in- creases for raw materials, can dampen future profit growth, I believe that Autoliv's future outlook remains good.
Gunnar Bark
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AUTOLJV H94 0
The Marl<et
N o public statistical data on the markets for seat belts and air bags exist. In ou r opinion, the world market for these products was worth approximately SEK 50 billion in 1994. The market grew by an estimated 25 percent over 1993.
THE SEAT BEL T MARKET
The size of the seat belt market is deter- mined by the world's productian of cars and the delivery value per ear.
The delivery value per ear is expected to increase as the proportion of belt systems with belt pretensioners in- creases. More cars are also equipped with three retraetor belts in the rear seat The increased delivery value per ear should be seen against the background of a trend towards lower prices, which for seat belts have gone down by same percentage points.
For Autoliv auto productian in Europe is of crucial importance. According to av a i l ab le industry statistics, European auto productian is expected to i nerease by approximately 5 percent per year until 1997.
New markets in South East Asia, Eastern Europe and South America
have so far had limited impact on Auto- 1 iv' s sales. Not on ly has the demand for equipment for passenger safety been weak, but these marketsare served by joint ventures, which are not consolidated in Autoliv's accounts.
THE AIR BAG MARKET The size of the air bag market is currently determined mostly by the installati.on rate for air bags for frontal collisions, and by auto productian in the United States, Europe and Japan.
In the United States, 85 percent of all mode l 1995 vehicles wi Il have a driver air bag and 60 percent will have a front seat passenger air bag. Within two years, the rate of installation is expec- ted to approach 100 percent. In 1990 that figure was 30 percent for the dri- ver side.
The rate of installation in Europe has also grown rapidly from almost zero in 1990 to an estimated 30 percent in 1993 on the driver side and about 8 percent on the passenger side. By 1994 the penetration is estimated to be about 40 percent and 15 percent, respectively.
The installation rate was lessthan 5 percent on cars sold in Japan during 1994.
On the other hand, Japanese cars ex- ported to North America were equipped with air bags to a very high degree, and Japanese auto makers have an- nounced that they will install air bags al so in cars made for their home market.
AUTOLIV'S MARKETS Autoliv's decisive and early efforts in seat belts and air bags, as weil as important innovations and earparate acquisitions, have had the effect of making Autoliv one of the largest manufacturers of equip- ment for ear occupant restraint systems in the world. We estimate Autoliv's combined market share for seat belts and air bags to be approximately 45 percent in Europe and just short of 20 percent in the world.
Autoliv has also expanded its opera- tions tomarkets outside Europe. Market- leading positions have been achieved in Australia and New Zealand.
In the United States, Autoliv North America has shipped seat belts to Chrysler since 1993. In 1994 the com- pany received an order for seat belts from Ford. An order for side impact air bags was also received. In order to further strengthen the position in the United States, Autoliv will build an advanced
AUTOLIV'S MOST IM PORTANT PRODUCTS ARE SEAT BELTS AND AIR BAGS. THES E PRODUCTS ARE SOLD BY AUTOLIV'S OWN COMPANIES AND BY JOINT VEN- TURE$ WORLDWIDE. AUTOLIV ALSO SUPPLIES INTEGRATED CHILD SEATS.
technical center in the Detroit area.
This investment al so includes p remises for manufacturing a i r bags.
The Japanese market is served by two joint ventures. One of these began making seat belts in 1988 and the other started productian of air bags in 1994.
Last year a liaison office was al so estab- lished in Yokohama to coordinate Auto- liv's contacts with Japanese auto manu- facturers.
In other parts of the world, Autoliv has achieved good market coverage in coun- tries where the Company has establ ished joint ventures. Among these countries are India, China, Mexico, South Africa, Taiwan and Turkey. During 1994 a seeond Chinese joint venture was formed -in Northern China- and a decision was made for partial ownership of a seat belt company in Malaysia.
The European markets tagether accounted for approximately 90 per- cent of sales, with 6 percent of sales on the Swedish market.
CUSTOMERS
Several of the world's largest auto makers are Autoliv customers, and par- ticularly those campanies who have invested heavily in passenger safety.
The most important customers are Audi, BMW, Chrysler, Citroefn, Ford, General Motors/Opel, Mercedes-Benz, Mitsubishi, Nissan, Peugeot, Renault, Rover, Saab, Seat, Suzuki, Toyota, Volkswagen and Volvo.
In addition, Autol iv has development contracts with other auto makers, to whom commercial shipments have not yet begun.
Autoliv typically accounts for between 25 and 75 percent of the purchases of seat belts and air bags by the above men- tio ned customers.
In the development of a new ear model, which takes several years, Auto- liv in many cases acts as a partner in development. This means that Autoliv takes the initiative for new, safety enhancement p ro du cts and ass u mes responsibility for adapting and evalu- ating these systems.
COMPETITION
Innovative new products, high quality and reliability are important means of com- petition, tagether with quick delivery and manufacturing in close proximity to the client. Price competition in this market is also intense.
Larger Autoliv competitors are the U.S.
campanies TRW and Al lied Signal, and the Japanese company Takata. These campanies- much like Autoliv- offer both sea t belts and a i r bags.
This competitive advantage becomes increasingly important, since the devel- opment is in the direction of integrated systems where the sea t belt pretensioners and the a i r bag gas generators are activ- a te d by the same sensor system. T h is competitive advantage will become even mo re important i n the next ph ase of development, when different kinds of protection for frontal collisions and side collisions, rear-end collisions and roilovers will be controlied by a common, "intel-
ligent", electronic system.
Other competitors in the air bag area are primarily manufacturers of rocket propellant, auto steering wheels and instrument panels. The most import- ant competitors of this type are M arton in the United States and Petri in Germany.
AUTOLlV 1994 [Il
Air Bags
Air bags began to be installed on a limited scale in American cars in the beginning of the 1970's.
It was not unti llegislation on so-ca lied passive restraints for ear occupant sate- ty was introduced, however, that sales too k off at the end of the 1980's. Pas- sive restraints mean air bags or auto- matic seat belts.
In 1991 the laws in the United States were made more stringent by calling for air bags for the driver as weil as the front seat passenger in all cars and light vehicles sold after September l, 1998.
PROTECTION EFFECT A i r bags in the front sea t are estimated to reduce the number of fatalities in frontal collisions by 15-25 percent. The most efficient protection is obtained, if the seat belt is combined with an air bag.
The number of fatalities in frontal col- lisions can then be reduced by 45-55 per- cent.
I n the U n i t ed states mo re t han
200,000 air bags have been deployed in connecti on with au to accidents. The experience is favorable and the risks are insignificant if instructions are fol- lowed.
PRODUCTS
Autoliv introduced its first air bag sys- tem in 1990. The system is designed to fulfilt requirements in the United States, where all states do not have laws making the use of seat betts mandatory. The bag must therefore be relatively large.
Volumes of up to 70 liters on the driver side and 160 liters on the passenger side are not uncommon. Almost all of Autoliv's competitors sel l such systems only- also outside the United States.
Autoliv has also developed a special air bag system for markets where wearing seat belts is mandatory. In this Eurobag system the bags are 30-45 liters on the driver side and 60-100 liter on the passenger side. Also, an- other type of propellant is used for inflation. Tagether with seat belts, the system is as efficient as the traditional
system. At the same time the price is lower, the systems are lighter and less bulky.
An air bag system generally consists of an electronic contro l unit with a sen- sor, a modul e with a gas generator, and a bag with a cover for the steering wheel or the instrument panel.
In most cases Autoliv delivers the entire system, adapted to the individu- al ear model. In some cases Autoliv supplies only the air bag module. In other cases the modute is de livered fully assembled in a steering wheel.
In 1994 Autoliv shipped more than
three million air bag modules (not inclu- ding side impact modules), campared to just over one million in 1993.
SENSORS AND ELECTRONICS The sensor reacts to changes in speed. For frontal im p act a i r bags, Autol iv u ses electronic sensors almost exclusively.
The electronic sensor is also able, to- gether with an electronic centroi unit, to determine what is a serious collision,
when the bag should be released, and what is merely a nuisance bumping-into some- thing in a parking Iot or a driveway. The sensor and the control unit are usually located in the passenger campartment or
in the air bag module.
If the ear has seat belts with pyro- technical belt pretensioners, these can be connected to the air bag electronics.
Both safety systems arethen integrated with each other, which provides for the best protection effect.
The electronic equipment is made by suppli ers to Au to liv specifications. One of thesuppli ers is Autoliv's new joint ven- ture Sagem-Autol iv in France.
GAS GENERATORs
The gas generators, or inflators, inflate the air bag. This is generally done by gas from a pyrotechnical propellant, which is ignited when the gas generator ignitor is activated by the electronic centroi unit. If the propellant is sodium azide, the gas generators have heavy duty fil ters to prevent ashes to escape inta the
bag and to cool the gas. Autoliv buys this type of gas generator from externa!
suppliers.
Autoliv has developed two proprietary types of gas generators. I n Eurotlator the propellant is based on Alfred Nobel's combination of nitroglycerine and nitro- cellulose. The gas generator has been developed by Livbag, Autoliv's joint venture with S. N. P. E. (S ociete N a tia- nale des Poudres et d'Explosifs S A). Liv- bag is also the sole manufacturer of Euroflator. This gas generator is used in Autoliv's Eurobag system.
Autoliv is now also in a position to offer Varioflator, a so-called hybrid gas gener- ator which inflates the bag with cam- pressed argon gas and a small amount of gas from a pyrotechnical propellant.
Autoliv's hybrid gas generators will be manufactured and sold by its subsidi- ary Autoflator, which was formed in 1994.
AIR BAGS
The air bag is made of nylon. It has valves to provide sufficientgivefor a
"soft landing" for the occupant. The bag is folded at ou r factories in a precise man- ner to take up as little room as possible and to inflate quickly.
Autoliv's subsidiary Airbags Inter- national in G reat Britain has developed an advanced and cost-efficient method that makesit possible to weave the bag in one piece rather than sewing tagether p unehed pieces of text i le. Thispatented method can be used for large as weil as small bags.
Same of Autoliv's bags are sewn by suppliers in the traditional man ner.
COVERS
The air bags are placed behind covers on the steering wheel and instrument panel.
Even if these covers are made by other manufacturers, they must be designed in cooperation with Autoliv and must be manufactured to Autoliv specifications.
In the future some covers will be made by Autoliv's own plants.
AUTOLIV 1'1~4 0
Side lmpact Air Bags
After five yearsofintense research and development work, partly with Volvo, we were happy to announ- ce in 1994 that this auto manufarturer started to install our side impact air bags in its 850 model. These were the first commercial deliveries in the world of side impact air bags.
Several auto makers have shown g reat interest for Autol iv' s side coli i- sion protection. One American manu- facturer, for instance, has placed an order for future del i very for on e of its models. Volvowill also introduce side impact air bags as standard equip- ment on all its 850 rnadel and 960 model cars.
S ide collisions account for 20 percent of all ear accident injuries, but for more than 35 percent of serious injuries. The interest for side impact protection is also due to new legislative requirements in the United States. All new cars sold in America from 1997 must be able to withstand a side collision at 30 mph (50 km/h) without serious injury to pas-
sengers. Many of today's cars probably do not meet the requirements without side impact air bags.
PROTECTIVE EFFECT
Side impact air bags mainly proteet the upper bodies of drivers and front sea t passengers in side collisions. This is accompl is hed by keeping the persons away from the impact zone and by the air bag dampening the blow of the col- lapsing door. The protection for the head is al so improved.
According to independent tests, the risk of serious injury to the upper body is reduced by 20 percent with Au tal iv' s side impact air bag. Thesetests were per- formed with Volvo 850 cars, which pro- vide effective protection to side colii- sians even without side impact air bags.
The tests were performed both with and without side impact air bags.
In comparative side collision tests per- formed by the German motor organ- ization ADAC, using also other highly acclaimed cars, the loads on test dummy
in the Volvo 850 ear equipped with Autoliv's side impact air bag, was clear- ly the lowest and far below highest acceptable values.
PRODUCTS
The side impact air bag systems deliv- ered so far by Autol iv are enti re ly pyro- technical, which makesit possible to inflate the bag within the required 12 thousands of a second. <In a frontal collision the corresponding time is 40 thousands of a second.)
Each system consists of a sensor, pyrotechnical leads and <1 bag with gas generators. Au tal iv del ivers complete systems, which are installed by the maker of the front seats.
Autoliv also has special side impact protection for the head in development and these systems have begun to be p resented to customers.
THE SENSOR
The sensor is activated if the speed of a colliding vehicle exceeds 20 km/h. The
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force from this vehicle (or from trees and other fixed objects in single accidents) impacts through the door. When the inside of the door hits the sensor, the firing pin in the sensor hits a pyro- techn i c al ign i to r.
The sensor is protected by a cover to prevent it from being accfdentally activated.
The placement of the sensor, and the manner in which it is attached, is crucial to the exact function of the system. The sensor is located inside the door side where the risk of serious personal injury from side collision is greatest
PYROTECHNICAL LEADS
The sensor impulse is led by a very fast flame inside fine tu bes with thin layers of pyrotechnical propellant.
Both the pyrotechnical leads and the sensor are manufactured by suppliers to Autoliv specifications.
THE SIDE IMPACT AIR BAG
The bag module is mounted in the back- rest of the front seats. The bag is infla- ted by gas generators from Livbag, Auto- liv's joint venture in pyrotechnics. The propellant is a faster variant of the propellant used in Autoliv's Euroflator. The gas generators are connected to a "pres- sure chamber" which contro l s the infla- tion.
The bag has a volume of 12 liters and is made of nylon. I t is ventilated to be soft and have the right amount of give.
The first aeeident with a ear equipped with Autofivs side impaet air bags oeeured on a Texas highway when a ear got on the wrong side of the road and swerved into the side of the pictured Volvo. The driver of the offending vehie/e was treated in intensive care, while the driver of the ear with the side impact air bag eseaped without serious injury.
AUTOLIV 1994 ~
Seat Belts
Two-point seat belts were intro- duced in the 1950's. static three- point seat belts were introduced in the 1960's and were followed by the three-point retractor belts in the 1970's.
Du ring the 1970's and 1980's the use of seat belts became law in the front seats in most European countries and in Aus- tralia, New Zealand and Japan. Now the requirement also app'lies in most of these countries to the rear seat.
In the United States passive safety sys tems in the front seat are mandatory, which means seat belts operating auto- matically, or air bags.
PROTECTION EFFECT
According to a va i l ab le statistics, the risk of serious injury or death is reduced by 40 percent if conventional three- point seat belts are used. As opposed to air bags, seat belts also provide protec- tion in rollover accidents, and to a les- ser degree al so in the case of side colii- sians and rear-end collisions.
In collisions at high speed the seat belt can cause rib injuries and abdom- inal injuries due to the very large forces at work, especially if the belt is in the wrong position or is too loose. These risks are minimized with the system devel- oped by Autoliv, which among other things incorporates a belt pretensioner.
The modern seat belts manufactured
~ AUTOLIV 1.04
by Autoliv have been developed to restrain the occupant in the seat in the event of a collision. The seat belts are also inten- ded to distribute the force of the colli- sion to the stronge r parts of the body, such as the breast bane and the pelvis banes.
The most advanced components of Autoliv's seat belt systems are belt buckles, belt retractors, bel t grabbers, belt pretensioners and height adjusters.
These components are manufactured by Autol iv and are based on proprietary research and development. The seat belt webbings are manufactured by sup- pliers.
In 1994 Autol iv shipped mo re than 30 million belt systems, whereof about 8 mil- lion were equipped with belt preten- sioners.
THE BELT BUCKLE
The belt buckle consists of a locking tongue attached to the belt webbing and a lock body attached to the ear' s body or to the seat. The buckle must be ab le to withstand a strain of two tons. It must al so be easy to open, even when the belt is tight, which could be the case if an occupant is left hanging in the belt after an accident.
THE BELT RETRACTOR
The bel t retractor stores the bel t webbing and keeps f t properl y tensioned. In a coli i- sion, the retractor locks the belt, thus pre- venting the occupant from being thrust forward.
THE BELT GRABBE R
Autoliv has developed various belt retrac- tors with lmproved safety, comfort and efficiency. One of the latest innovations, the belt grabber, prevents the so-called film-roll effect, that is the belt being pulled out when the loops of rolled-up
bel t are tensianed upon impact.
THE BELT PRETENSIONER
Occupants have a better chance of mak- ing it in a collision the less they are thrust forward and if the belt doesn't catch them with a jerk. Autoliv has therefore developed beft pretensioners attached to the belt buckle. Autoliv also offers belt pretensioner integrated with the belt retractor. At the very moment the occupant is thrust fonNardin a colii- si on, the belt pretensioner tightens the bel t.
Belt pretensioners can tighten the belt up to about 15 cm. This is either accomplished by a steel spring activated
by a mechanical sensor, or by a small pyrotechnical charge. The pyrotechnical belt tensioner is activated by means of an electronic sensor, typically the same sensor as in the car's air bag system.
THE HEIGHT ADJUSTER
The height adjuster increases the belt's protection effect since the belt is correctly positioned in height at the c o Il i si on, that is across the rib-cage and on the shoulder regardless of how tall the occupant is.
AUTOLIV 1994 [ID
Research and Development
AUTOLIV TECHNICAL ADVISORY BOARD:
HERMANN ÄPPEL YNGVE HÅLAND
Doctor ofTechnology, V.P. Research, Autoliv Professor, Technical University of Berlin, Germany
GuNNAR BARK President & C. E.O., Au to liv
BERTIL ÄLOMAN (Chairman)
STURE ÄNDERSSON V.P. Engineering, Autoliv
Traffic accidents cost about half a million people their lives annual- ly, half of whom are ear occu- pants. The number of seriously injured is ab out ten t i mes as high.
Accidents not only cause a great measure of human sufferi ng, bu t al so large expenses for care, rehabilitation and lost income. Even in such a small country as Sweden, these costs amount to SEI< 20-25 billion per year according to the standard estimates made by the Swedish Road Administration. There is thus a dire need for measures to improve safety.
Autoliv's product development is based on the Group's collection of col- lision data and injury statistics, and on Autol iv' s own research results. Reports from independent researchers at uni- versities and seats of higher technolo- gical learning also constitute a signifi- cant base.
The Group's research is conducted in close consultation with "The Autoliv Technical Advisory Board", made up of so me of the world' s leading experts in
@] AUTOLIV 1H4
Professor Emeritus, Chalmers University of Technology, Sweden
traffic safety and bio-mechanical re- search. In this way Autol iv has identified a nu m ber of areas given priority i n the Group's research and product devel- opment.
In 1994 Autoliv invested nearly half a billion S EK, or about 5 percent of sales, in research, development and application engineering. About 600 persons in the Group are active in this area, with another 100 persons in joint ven tures.
The G roup's research is conducted at Autoliv Research in Vårgårda, Sweden, while the development work is concen- trated to Autoliv's technical centers in Sweden, Germany and France. Du ring 1995 technical centers are also being con- structed in Great Britain and the United States. Part of Autol iv 's strategy is to establish technical centers in the most important markets in order for devel- opment to be close to the l argest cus- tomers, allowing Autoliv to function as the i r development partner.
Autoliv's technical centers include crash safety laboratories, where crash
MURRAY MACKAY
Professor, Birmingham University, Great Britain
tests can be performed at speeds up to 80 km/h. Thesetests are performed with cars weighing up to two tons, or with crash s leds. At the German l ab o ra tory alone, same 100 brand new cars are crash tested annually. Mathematical crash simulations are performed in parallel with crash tests.
Two joint ventures have been formed to ad d special ist competence i n pyro- technics and electronics to Autoliv's arsenal.
In pyrotechnics, Livbag was formed in 1990 to develop propellants for belt pretension ers and gas generators for air bag systems. Autoliv and the French ammunition company S.N.P.E. (Soci- ete Nationale des Poudres et d'Explosifs) own 50 percent each of Livbag.
In electronics, Sagem Autoliv was formed i n 1994 to develop and manu- facture electronic control units for air bag systems. Autoliv and the French electronics group SAGEM (Societe d' Ap p l ications Generales d'Eiectricite et de Mecanique), each has a 50 percent stake in the company.
..
lmportant areas of development
PROTECTION FOR SIDE COLLISIONS
S ide coli isions (in el ud i ng side coli isions aga i n st trees and other fix ed objects) account for ab out 35 percent of all fatal or serious personal injuries in cars.
The side impact air bag Autoliv is cur- rently shipping, and which primarily proteets the thorax, will be comple- mented with side impact protection for the head. Two such systems are under development, ITS (lnflatable Tubular Structure) and a pyrotechnical curtain.
PROTECTION AGAINST WHIPLASH INJURIES Rear-end collisions seldom lead to fatal injuries, but they account for mo re than 25 percent of all personal injuries in cars.
In many cases, such accidents lead to injuries to the neck with Iong-sometimes permanent- convalescence and inability to work. The costs to society, as the human suffering, are therefore great. The market potential for effective protection against whiplash injuries is therefore judged as significant.
ROLLOVER PROTECTION
Seat belts and air bags have been devel- oped primarily to proteet ear occupants in frontal collislons.
Improvements are therefore needed to provide better proteetlon in rollover type situations. Autoliv is investigating the possibilities for introducing such systems.
NEW GAS GENERATORs
Starting in 1995, Autoliv offers three types of gas generators, or inflators. First, pur- chased gas generators for air bag systems following the American standard; second, Euroflators from Livbag; third, hybrid gas generators for all markets from the newly started subsidiary Autoflator.
8oth Livbag and Autoflator perform intense research and development in the i r respective areas to develop mo re cost-efficient and environmentally friendly gas generators.
Another objective underlying these research efforts is to contro l how rapidly and forcefully an air bag should be inflated, depending mainly on how vi o lent the impact is.
AUTOLIV 1994 ~
The Autoliv Share and General Meeting of Shareholders
The Autoliv share is l isted on the so- ca l led O-list of the Stockholm Stock Exchange since June 9, 1994.
Until year-end 1994, a total of 16.9 million Autoliv shares worth SEK3.9 bil- lion had been traded. With that, Auto- liv accou n te d f o r 1.1 percent of the total trading volume on the stockhalm Stock Exchange, and was the twenty- second most traded issue during the period in question.
The offering price was SEI< 180 for institutional investors and SEI< 171 for private individuals. The first paid quo- tatian was SEK 179, while the highest price for the year was SEK 303, December 22, and the lowest price paid was SEK 165, July 4.
THE L.ARGEIT SHAREHOLDERS
Skand1a (Sweden) FJarde AP-fonden (Sweden) fJMF Pensionsforsaknog (Sweden) CREF (USA)
Cap1tal Guardian Trust (USA) 7,638 other shareholders
·-··· ~ ----··. ···--... ·--~ ---- Total December 31, 1994
DtSTRIBUTION OF SHAREHOLDING*
Ownwl~ fUnberof01111ef'S
<500 shares 6,794
501-1,000 301
1,001·5,000 262
5,001·20,000 132
20,001·50,000 65
50,001-100,000 38
100,001· 51
' ~ ... h···----•· - ···-·. ······-· .. ____ --~ ---~---····
Total, December 31, 1994 7,643
'Regtmred IMit1 VI'C or ~ISWed
At year-end the price was SEK 286.
Atthat stock price, Autoliv's market capitalization was SEI<7.9 billion.
SHARE CAPITALAND NOMBER OF SHARES The number of shares outstanding on December 31, 1994 was 27.5 million and the share capital stood at MSEI<550.
The share capital was increased in con- nectionwith the public offering by MSEI<
50 by the issuance of 2.5 million new shares.
All shares entitle their holders to one vote at the General Meeting of Share- holders and all shares have the same rights with respect to the Company's assets and profit. Nobody can vote for mo re than
l'bnber~ Pwcentqe ~
... llwe ciJ)Ital
~-····-----·--···-·----~-~ ..
975,900 3.5
925,000 3.4
900,000 3.3
881,300 3.2
649,700 2.4
23,168,100 84.2
27,500,000 100.0
Percentac• TOieWierOMI PerCMWa~•
88.9 946,842 3.4
3.9 264,115 1.1
3.4 701,044 2.5
1.7 1,490,750 54
0.9 2,216,811 8.1
0.5 2,733,190 9.9
0.7 19,147,248 69.6 1000 27,500,000 100.0
20 percent of the shares represented at the Shareholders' Meeting.
DIVIDEND
The Board of Diredors recommend a divi- dend of SEK3.00 per share. May 2 is pro- posedas record date and May 9 as dis-
bursement date. Q
SHAREHOLDERS
The number of shareholders, either with shares registered with the seeurities Register Centre (VPC) or with a Swedish nominee, was about 7, 700 on December 31, 1994.
The proportion of institutional and corporate ownership (other than closely held entities> is large and estimated to be mo re than 90 percent The table to the left shows the largest shareholders.
Shareholders in the United States own more than one third of Autoliv's stock. Shareholders in Sweden own 25 percent, whi le the remainder is hel d by shareholders in the rest of Europe, primarily Great Britain.
ANALYSES
The following banks and seeurities bro- kers have published reports on Autoliv during 1994.
Alfred Berg Bikuben
Cheuvreux de Virieu Enskilda Corporate FIBA Nordie Seeurltles Föreningsbanken HoareGovett Hägglöt & Pensbach
James Capel Kleinwort Benson
Merrill Lynch Union Bank of Switzerland WASA Banken Öhmans fondkommission
