Mainly based on our customer call-offs, we expect organic sales for the third quarter of 2017 to increase in the range of 0-2% compared to the same quarter of 2016. Effects from currency translations are expected to be negligible, resulting in a consolidated sales growth in the range of 0-2%. The adjusted operating margin, excluding costs for capacity alignments and antitrust related matters, is expected to be in the 7.5-8.0% range.

The expectation for the full year 2017 adjusted operating margin remains around 8.5%, excluding costs for capacity alignments and antitrust related matters. The indication for the full year organic sales growth is now around 2%, which is lower than the previous indication of around 4%. Currency translations and M&A activities are expected to have a combined positive effect of around 1%, resulting in a consolidated sales increase of around 3%.

The projected tax rate, excluding any discrete items, for the full year 2017, is expected to be around 30% and is subject to change due to any discrete or nonrecurring events that may occur.

We expect the operational cash flow for the full year 2017 to remain strong and to be more than $0.8 billion, excluding antitrust related matters and any other discrete items. Supporting our growth strategy, capital expenditures are expected to be in the range of 5-6% of sales for the full year, while R,D&E investments, net are expected to be above 7.0% of sales for the full year, an increase from our previous indication of “high end of 6.5-7.0% range”.

The forward looking non-U.S. GAAP financial measures above are provided on a non-U.S. GAAP basis. Autoliv has not provided a U.S. GAAP reconciliation of these measures because items that impact these measures, such as costs related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and Autoliv is unable to determine the probable significance of the unavailable information.

Consolidated net sales decreased by 1.3% compared to the same quarter of 2016 with an organic growth* of 0.2% and negative currency translation of 1.5%. All regions except Americas grew organically, with Japan and India as key drivers while North America’s sales declined 6.3% organically*. Adjusted operating margin*, excluding costs for capacity alignments and antitrust related matters, decreased by 20bps to 8.4%, compared to the same quarter of 2016, as the effects of planned higher investments for growth, primarily in R,D&E, net, was not fully offset by improved operating performance and favorable currency effects. EPS, diluted, decreased by 13% to $1.47, as compared to the same quarter of 2016,

mainly due to negative effects from discrete tax items and higher R,D&E, net, partly offset by positive effects from higher gross profit and capacity alignments and antitrust related matters. Operating cash flow of $179 million was $77 million higher than the same quarter prior year due to reduced working capital driven by favorable timing effects. Net debt* was $587 million, compared to $438 million a year ago. The increase in net debt relates mainly to share repurchases and our investment in Zenuity. The leverage ratio* increased from 0.5x the same quarter 2016 to 0.7x as a result of the higher net debt.

Consolidated Passive Safety segment sales decreased by 0.6% to $1,983 million. Excluding negative currency translation effects, the organic sales growth* was 0.8%, which can be compared to an unchanged LVP according to IHS.

Airbag sales had solid organic growth* from inflatable curtains in China, passenger airbags in Japan and steering wheels in Japan and China. Sales declined organically for inflatable curtains and chest airbags in

Americas, passenger airbags in China and Europe, and steering wheels in Americas.

Seatbelt sales declined organically* in Americas, China and Europe, while it grew organically in Japan and Rest of Asia.

Inflator replacement sales affected the segment’s organic sales growth* positively by around 0.7pp.

Compared to the same period last year, the operating income improved slightly despite higher investments in R,D&E, net, as well as other costs supporting the near term growth, and increased raw material costs. These

cost increases were more than offset by less net impact from capacity alignments and antitrust related matters as well as from improved operational efficiencies.

Passive Safety has successfully focused on improving operational performance, with increased efficiency in several areas, including production, engineering and logistics. This focus continues and includes our work with the wave of new launches that begins towards the end of this year.

Passive Safety managed to record another quarter with double digit margins, despite continued high costs for growth. We still expect the costs for growth relative to sales to be close to its peak.

We have made proactive adjustments to adapt to softer markets with lower LVP in China and North America, and further changes may be made, if necessary.

More resources are being applied to prepare for the increase in launches that are scheduled towards the end of the year and into 2018. We are making every effort to ensure that these projects remain on track to be launched on time and within targeted cost and quality parameters aiming at delivering a cost effective sales growth that outpaces the light vehicle production.

Consolidated Electronics segment sales decreased by 3.2% to $579 million compared to the same quarter 2016. Excluding negative currency translation effects, the organic sales decline* was 1.2%.

Restraint Control and Sensing sales (mainly airbag control modules and remote sensing units) declined organically* largely due to Mazda in Japan, Ford and Hyundai in Americas and Opel and Land Rover in Europe, partly offset by increases for Nissan and Geely in China.

The organic sales increase* for Active Safety (mainly automotive radars, night vision systems, cameras with driver assist systems and positioning systems) was

positively impacted by double-digit organic sales growth* of radar and camera systems (especially due to models from Honda, Mercedes and FCA) and negatively impacted by sales declines for positioning systems in North America as well as the ramp-down of our internally developed brake control system in China.

Brake Systems organic sales* was adversely affected by model changes, notably Honda CR-V, and a reclassification of certain revenues from gross to net basis, as outlined in Autoliv’s Financial Report for October – December 2016.

The operating margin declined primarily due to significantly higher investments in R,D&E, net,

supporting long term growth. Headcount increased by 767.

Following the launch of the Zenuity joint venture in April, Electronics has further strengthened its position. Under the agreement with Velodyne, Autoliv will develop and market a scalable and auto-grade LiDAR sensor using Velodyne’s core 3D software technology and proprietary LiDAR ASIC engine. We see material business opportunities in LiDAR, including Robo-Taxis.

As part of the co-operation with NVIDIA, Autoliv, Volvo Cars and Zenuity will use NVIDIA’s AI computing platform as the foundation for advanced software development for next generation self-driving car technologies.

Complementing our innovation strategy, we made an investment commitment in Autotech Ventures as one way of staying at the forefront of emerging trends and provide opportunities to capitalize on external innovations,

including autonomous driving. In the quarter, Electronics booked a handful of small orders in Active Safety with Asian and Western OEMs, including one new customer and one vision order. The larger active safety orders we target in 2017 are towards the end of the year, most likely in the fourth quarter and we are therefore so far in 2017 on a lower order intake level than what we recorded in 2016.

Adapting to fast changing technologies and customer demands, we continue to invest in technology competence, and our R,D&E headcount has increased by more than 700 the past year. We are thereby well prepared to support our customers in the ongoing race towards the world’s first autonomous driving car.

The organic sales growth* of 0.2% in the quarter was mainly driven by the organic growth in Japan, India, South America and China. The inflator replacement sales impacted organic growth positively by about 0.6pp. Light vehicle production was flat, according to IHS.

The organic sales increase* from Autoliv’s companies in China was mainly driven by the global OEMs, primarily Mercedes and Nissan as well as inflator replacement sales, partly offset by lower sales to Hyundai/Kia and PSA. Organic sales to the domestic OEMs was flat, with higher sales to Geely and GAC, offset mainly by declines with Great Wall, Haima and FAW.

Organic sales growth* from Autoliv’s companies in Japan was driven by the Japanese OEMs, in particular Toyota and Nissan.

Organic sales growth* from Autoliv’s companies in the Rest of Asia was driven by strong sales development in India, mainly to Hyundai, Suzuki and Tata. Sales in South Korea grew with Hyundai and Renault.

Sales from Autoliv’s companies in Americas declined organically* by 5.3%. North America declined by more than 6% organically, driven primarily by unfavorable platform shifts with GM and decreased demand from FCA. South America grew organically by 40%, primarily with Fiat, Renault, Chevrolet and Ford.

Despite the adverse effect from fewer working days due to the Easter holiday, Autoliv’s companies in Europe grew organically* by 0.5%. This was mainly driven by Mercedes and Volvo, partly offset by lower sales to Opel and BMW.

The gross profit for the second quarter of 2017 was $9 million higher than in the same quarter of 2016. The gross margin improved by 0.6pp to 21.0%, from 20.4% in the same quarter of 2016, mainly as a result of improved operational performance and favorable currency effects. This was partly offset by costs related to the investments for capacity and growth as well as negative impact from raw material prices.

Research, Development & Engineering (R,D&E) expenses net, in support of our growth strategy, increased by $19 million compared to the same quarter in the prior year as we continued to invest in technology competence and capacity. The decrease in amortization expense is driven by the M/A-COM impairment reported in our first quarter 2017 report, which reduced the ongoing amortization, and the finalization of the ANBS purchase price allocation, which resulted in more of the value being allocated to non-amortizable goodwill.

Other income (expense), net, includes mainly positive impacts from provision reserve reversals, compared to same period prior year, which consisted primarily of costs for capacity alignments and antitrust related matters.

Operating income increased by $4 million to $216 million, corresponding to a reported operating margin of 8.5% of sales, compared to 8.2% of sales in the same quarter of 2016. Adjusted operating margin*, excluding costs for capacity alignments and antitrust related matters, was 8.4% of sales compared to 8.6% of sales for the same period in 2016. The decrease was mainly driven by the planned higher investments for growth, primarily in R,D&E, net, which more than offset the positive effects from

improved gross margin and lower amortization of intangibles.

Income before taxes decreased by $10 million compared to the same quarter of the previous year, driven primarily by our share of the equity method loss in Zenuity of about negative $8 million as well as unfavorable non-operating currency effects offset by higher operating income. Net income attributable to controlling interest was $130 million, a decrease of $19 million from the second quarter of 2016.

The effective tax rate in the second quarter of 2017 was 32.6% compared to 25.9% in the same quarter of 2016. Discrete tax items, net had an unfavorable impact of 7.8pp whereas in the same quarter of 2016 discrete tax items, net had a favorable impact of 1.2pp. The tax rate in the second quarter of 2017 was negatively impacted by recording valuation allowances on specific deferred tax assets compared to the second quarter of 2016.

Earnings per share (EPS) assuming dilution decreased by 13% to $1.47 compared to $1.68 for the same period one year ago. The main negative items affecting EPS were 19 cents from discrete tax items, net, 6 cents from equity method investments, 5 cents from currency translation and 2 cents from lower adjusted operating income*. This was partly offset by 11 cents from capacity alignments and antitrust related matters. The adjusted EPS* assuming dilution was $1.44 compared to $1.75 for the same period one year ago.

The weighted average number of shares outstanding assuming dilution was 88.1 million compared to 88.4 million in the second quarter of 2016.

Cash flow from operations amounted to $179 million compared to $103 million in the same quarter of 2016. The increase was primarily related to the decrease in working capital due to favorable timing effects.

Cash flow before financing* was negative $71 million, primarily driven by our investment in Zenuity, compared to negative $28 million during the same quarter of 2016. Capital expenditures, net, of $138 million were $39 million more than depreciation and amortization expense during the quarter and $9 million more than capital expenditures, net during the second quarter of 2016.

Working capital decreased to 14% of sales from 17% of sales on June 30, 2016 and operating working capital* as a percentage of sales was 7.3%, up from 7.1% on June 30, 2016. The Company targets that operating working capital in relation to the last 12-month sales should not exceed 10%.

Accounts receivable in relation to sales was 75 days outstanding, compared to 70 days outstanding on December 31, 2016 and 75 days outstanding on June 30, 2016. Days inventory outstanding was 32 days, compared to 31 days on December 31, 2016 and 30 days on June 30, 2016.

The Company’s net debt position* increased by $275 million during the quarter to $587 million at June 30, 2017, mainly due to share repurchases and our investment in Zenuity. Gross interest-bearing debt decreased during the quarter by $37 million to $1,512 million.

Autoliv’s policy is to maintain a leverage ratio* commensurate with a strong investment grade credit rating. The Company measures its leverage ratio as net debt* adjusted for pension liabilities in relation to EBITDA (earnings before interest, taxes, depreciation and amortization). The long-term target is to maintain a leverage ratio of around 1x within a range of 0.5x to 1.5x. As of June 30, 2017, the Company had a leverage ratio of 0.7x.

During the quarter, total equity increased by $5 million to $4,112 million, mainly due to $128 million from net income and positive currency translations of $86 million. The increase was partly offset by $157 million from share repurchases and $53 million in dividends. Total parent shareholders’ equity was $3,860 million corresponding to $44.42 per share.

Compared to March 31, 2017, total headcount (permanent employees and temporary personnel) decreased by 355, despite increasing by 343 in R,D&E.

Compared to a year ago, headcount increased by 2,760, about half of the increase in R,D&E.

Consolidated net sales increased by 2.9% compared to the same period of 2016 with an organic growth* of 2.3%, positive acquisition effects of 2.4% and negative currency translation of around 1.8%. All regions except Americas grew organically, with Europe, Japan and India as key drivers while North America’s sales declined 2.8% organically*. Adjusted operating margin*, excluding costs for capacity alignments and antitrust related matters, decreased by 40bps to 8.4%, compared to the same period in 2016, as the effects of planned higher investments for growth, primarily in R,D&E, net, was not fully offset by higher sales, improved operational

performance and favorable currency effects. EPS, diluted, decreased by 3% to $3.10, as compared to the same period 2016. Operating cash flow of $329 million was $26 million higher than the same period last year due to lower working capital driven by favorable timing effects. Net debt* was $587 million, compared to $438 million a year ago and $313 million at year-end 2016. The main reason for the increase in net debt in 2017 is the share repurchases and our investment in Zenuity. The leverage ratio* increased from 0.4x on December 31, 2016, to 0.7x due to the increased net debt.

Consolidated Passive Safety segment sales increased by 1.0% to $4,024 million. Excluding negative currency translation effects, the organic sales growth* was 2.7%.

Airbag sales had solid organic growth* in the first six months in Asia, especially in Japan, China and India. Also Europe and South America showed organic growth, while North American sales declined organically.

Seatbelt sales organic growth* in the first six months came mainly from Europe and Japan while organic sales in North America, South Korea and China declined slightly.

Inflator replacement sales affected the segment’s organic sales growth* for the first six months positively by around 0.2pp.

Compared to the same period last year, the operating income was positively impacted by higher sales and lower costs for capacity alignments while higher investments in R,D&E, net, as well as other costs supporting near term

growth, and increased raw material costs had a negative effect. Despite this, the operating margin reached 10.3%.

Consolidated Electronics segment sales increased for the first six months of 2017 by 10.2% to $1,162 million compared to the same period 2016. Excluding acquisition effects and negative currency translation effects, the organic sales growth* was 0.6%.

Restraint Control and Sensing organic sales* (mainly airbag control modules and remote sensing units) declined in Japan and North America but increased in China, South Korea and India.

The organic sales increase* for Active Safety (mainly automotive radars, night vision systems, cameras with driver assist systems and positioning systems) was

positively impacted by double-digit organic sales growth of radar and camera systems, and negatively impacted by sales declines for positioning systems in North America as well as the ramp-down of our internally developed brake control system in China.

Brake Systems organic sales* was adversely affected by model changes, notably Honda CR-V, and a reclassification of certain revenues from gross to net basis, as outlined in Autoliv’s Financial Report for October – December 2016.

The operating margin declined primarily due to higher investments in R,D&E, net, and the consolidation of the ANBS joint venture, which was included for the full six months of 2017 versus only three months of 2016 first

half year. Headcount increased by 767 compared to the same period last year, of which virtually all were within R,D&E.

The organic sales growth* of 2.3% in the first six months of 2017 was mainly driven by the organic growth in Europe, Japan and India. The inflator replacement sales impacted organic growth positively by less than 0.2pp. Light vehicle production grew by 2.8%, according to IHS.

The organic sales increase* from Autoliv’s companies in China was mainly driven by the global OEMs, primarily Mercedes and Renault/Nissan, partly offset by Hyundai/Kia. Organic sales to the domestic OEMs declined slightly, primarily caused by lower sales to Baojun which was partly offset by strong sales to models from Geely and GAC.

Organic sales growth* from Autoliv’s companies in Japan was driven by the Japanese OEMs, in particular Toyota, Mitsubishi and Nissan. Offsetting effects are seen with decreasing inflator replacement sales.

Organic sales growth* from Autoliv’s companies in the Rest of Asia was driven by strong sales development in India, mainly to Hyundai and Suzuki. Sales in South Korea increased slightly, driven by Hyundai and Renault.

Sales from Autoliv’s companies in Americas declined organically* by 2.0%. North America declined close to 3% organically, driven primarily by D-3, especially GM and Ford. South America grew organically by 38%, primarily with Fiat, Chevrolet and Renault. Inflator replacement sales contributed positively by 0.6pp to organic growth.

The 4.2% organic sales growth* in the period from Autoliv’s companies in Europe was mainly driven by Mercedes, Volvo and Active Safety products. Offsetting effects were mainly seen with Opel, PSA and BMW.

The gross profit for the first six months of 2017 increased by $51 million, mainly a result of higher sales. The gross margin increased by 0.4pp compared to the same period in 2016, mainly as a result of higher organic sales*, improved operational performance and favorable currency effects. These positive effects were partly offset by costs related to the investments for capacity and growth as well as negative impact from raw material prices.

Selling, General and Administrative (S,G&A) expenses increased approximately in line with sales. Because we continued to invest in technology competence and capacity, Research, Development & Engineering (R,D&E) expenses, net increased by $53 million, or 16%, compared to the same period prior year, amounting to 7.5% of sales compared to 6.7% of sales in the same period in 2016. The increase in amortization expense is driven by the M/A-COM impairment.

Other income (expense), net in 2017 was positively impacted by a reduced earn-out liability and provision reserve reversals, compared to the same period prior year consisting primarily of capacity alignment charges and antitrust related matters.

Operating income increased by $16 million to $434 million, or 8.4% of sales, for the first half of the year, an increase of 0.1pp compared to the same period in the prior year. Adjusted operating margin*, excluding costs for capacity

alignments and antitrust matters, was 8.4% of sales compared to 8.8% of sales for the same period in 2016. The positive effect from the improved gross margin was more than offset by the planned higher investments, mainly related to R,D&E, net, and capacity to support the future growth.

Income before taxes decreased by $6 million compared to the same period the previous year, primarily due to our share of the equity method loss in Zenuity and unfavorable non-operating currency effects partly offset by higher operating income. Net income attributable to controlling interest was $274 million, a decrease of $8 million from the same period 2016.

The effective tax rate in the first six months of 2017 was 29.7% compared to 27.8% in the same period in 2016. Discrete tax items, net had an unfavorable impact of 3.7pp whereas in the same period of 2016 discrete tax items, net had an unfavorable impact of 0.2pp. The tax rate in the first six months 2017 was negatively impacted by recording valuation allowances on specific deferred tax assets compared to the same period of 2016.

Earnings per share (EPS) assuming dilution decreased by 3% to $3.10 compared to $3.19 for the same period one year ago. The main negative items affecting EPS were 15 cents from discrete tax items, net, 10 cents from currency translation, and 6 cents from equity method investments. This was partly offset by 24 cents from capacity alignment and antitrust related matters. The adjusted EPS*

assuming dilution was $3.09 compared to $3.41 for the same period one year ago.

The weighted average number of shares outstanding assuming dilution was 88.3 million compared to 88.4 million in the first six months 2016.

Cash flow from operations amounted to $329 million compared to $303 million in the first six months 2016. The increase was primarily related to the decrease in working capital.

Cash flow before financing* was negative $43 million compared to negative $146 million during the same period 2016, mainly due to the ANBS acquisition in 2016. Capital expenditures, net, of $260 million were $45 million more than depreciation and amortization expense during the first six months 2017 and $39 million more than capital expenditures, net during the first six months 2016.

The Company’s net debt position* increased by $273 million to $587 million compared to December 31, 2016, mainly due to share repurchases and our investment in Zenuity. Gross interest-bearing debt decreased by $31 million to $1,512 million compared to December 31, 2016.

For the first six months, total equity increased by $186 million to $4,112 million, mainly due to $270 million from net income and positive currency translations of $174 million. The increase was partly offset by share repurchases of $157 million and $106 million in dividends. Total parent shareholders’ equity was $3,860 million corresponding to $44.42 per share.

On May 9, 2017, the Company declared a quarterly dividend to shareholders of 60 cents per share for the third quarter 2017, with the following payment schedule:

Next Report

Autoliv intends to publish the quarterly earnings report for the third quarter of 2017 on Thursday, October 26, 2017.

Inquiries: Investors and Analysts

Anders Trapp

Vice President Investor Relations

Tel +46 (0)8 58 72 06 71

Inquiries: Media

Thomas Jönsson

Group Vice President Corporate Communications

Tel +46 (0)8 58 72 06 27

This information is information that Autoliv, Inc. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on July 21, 2017.

Footnotes

*Non-U.S. GAAP measure, see enclosed reconciliation tables.

Definitions and SEC Filings

Please refer to www.autoliv.com or to our Annual Report for definitions of terms used in this report. Autoliv’s annual report to stockholders, annual report on Form 10‑K, quarterly reports on Form 10‑Q, proxy statements, management certifications, press releases, current reports on Form 8-K and other documents filed with the SEC can be obtained free of charge from Autoliv at the Company’s address. These documents are also available at the SEC’s website www.sec.gov and at Autoliv’s corporate website www.autoliv.com.

This report contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. or its management believes or anticipates may occur in the future. All forward-looking statements, including without limitation, management’s examination of historical operating trends and data, as well as estimates of future sales, operating margin, cash flow, effective tax rate or other future operating performance or financial results, are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “estimates”, “expects”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “may”, “likely”, “might”, “would”, “should”, “could”, or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words. Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation, changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier, changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignment, restructuring and cost reduction initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel and energy costs; changes in consumer and

customer preferences for end products; customer losses; changes in regulatory conditions; customer bankruptcies, consolidations, or restructurings; divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; component shortages; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto; (including the resolution of the Toyota recall); higher expenses for our pension and other postretirement benefits, including higher funding requirements for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; political conditions; dependence on and relationships with customers and suppliers; and other risks and uncertainties identified under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Reports and Quarterly Reports on Forms 10-K and 10-Q and any amendments thereto. For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.