Outlook

Mainly based on our customer call-offs we expect organic sales for the first quarter of 2016 to grow by more than 10% compared to the same quarter of 2015. The first quarter of 2016 includes approximately 3 more working days compared to 2015, increasing the year-over-year organic growth estimate by around 5pp. Currency translations and M&A are expected to have a combined negative effect of close to 4%, resulting in a consolidated sales growth of around 7%. The adjusted operating margin, excluding costs for capacity alignments and antitrust related matters, is expected to be around 8.5%.

The expectation for the full year 2016 is for an organic sales growth of around 5%. Currency translations are expected to have a 3% negative effect, resulting in a consolidated sales increase of more than 2%.

The expectation for the full-year adjusted operating margin is more than 9%, excluding costs for capacity alignments and antitrust related matters.

The quarterly guidance and annual expectations for 2016 exclude any effects from the planned joint venture with Nissin Kogyo, now expected to close around the end of the first quarter 2016.

Autoliv has agreements with several OEMs for supply of replacement airbag inflators. Based on customer agreements and our own expectations, we now estimate delivery volumes of up to 20 million units for the period 2015 to 2017, around half of the previously estimated 2016 volumes are now expected for 2017. There is also potential for additional delivery volumes in 2017. It remains too early in this evolving situation to be able to estimate final volumes.

The projected tax rate, excluding any discrete items, for the full year 2016, is expected to be around 29% and is subject to change due to any other discrete or nonrecurring events that may occur.

We expect the operational cash flow for the full year to remain strong and to be around $0.8 billion excluding antitrust related matters and any other discrete items. Capital expenditures in support of our growth strategy are expected to be at the high end of our historic range of 4-5% of sales for the full year.

RD&E investments, net are expected to be in the higher end of the 6-6.5% range.

Consolidated sales increased by 7% to $2,520 million compared to $2,354 million in the same quarter 2014. Excluding negative currency translation effects of $170 million, and positive M&A

effects from our recent acquisition of the MACOM business of $20 million, the organic sales growth* was 13.4%, compared to the organic sales growth of “around 9%” expected at the beginning of the quarter.

The organic sales growth* of airbag products (including steering wheels) was driven by inflatable curtains in all major regions as well as increased replacement inflator sales in North America and Japan.

The organic sales growth* in seatbelt products was primarily a result of sales growth in Europe. The trend of higher sales for more advanced and higher value-added seatbelt systems continued globally.

Organic sales* for passive safety electronics products (mainly airbag control modules and remote sensing units) grew strongly in China and North America.

The strong organic sales growth* for active safety products (automotive radars, night vision systems, cameras with driver assist systems, positioning systems and brake control systems) was driven by radar systems, primarily in North America and brake control business in China. Sales of vision systems to BMW also contributed.

The organic sales growth* of more than 13% in the quarter was mainly a result of double-digit organic growth* in all regions except the Rest of Asia. The inflator replacement program also contributed.

Autoliv’s sales in Asia in the quarter were almost $885 million.

Sales from Autoliv’s companies in China increased organically* by close to 12% in the quarter. This was a result of 13% growth in the light vehicle production (LVP) driven partly by tax incentives. Autoliv’s organic sales* increase was particularly driven by models from Hyundai/Kia, Ford and Baojun.

Organic sales* from Autoliv’s companies in Japan increased by close to 31% in the quarter. The sales increase was driven by models from Toyota, Mazda and Honda as well as inflator replacement sales.

Organic sales* from Autoliv’s companies in the Rest of Asia (RoA) grew by more than 1% in the quarter. This was driven by a strong sales increase in India, particularly for models from Hyundai, as well as increase for models from Mitsubishi in Thailand. The growth was partly offset by an organic sales decline in South Korea particularly for models from Samsung, Chevrolet and Hyundai/Kia.

For Autoliv’s companies in the Americas, the sales development was mixed for the quarter. In North America, strong organic sales growth* of 17% was mainly driven by models from Ford, Honda and General Motors as well as the inflator replacement program. Active safety sales to Mercedes and GM also contributed. Sales in South America (Brazil) declined due to a 29% drop in LVP.

The strong organic sales growth* of more than 12% in the quarter from Autoliv’s companies in Europe was driven by sales increases for a number of OEMs, particularly models from Hyundai/Kia, Renault, VW and Ford.

The gross profit for the fourth quarter 2015 was $53 million higher than the same quarter in 2014. The gross margin improved 0.8pp to 20.7%, from 19.9% in the same quarter of 2014, mainly as a result of the higher organic sales, favorable currency effects, positive product mix and raw material savings, partly offset by costs related to new launches and investments for growth in the quarter.

Selling, General and Administrative (S,G&A) expenses increased by $2 million to $108 million.

Research, Development & Engineering (R,D&E) expenses, net increased by $4 million compared to the same quarter of the previous year.

Operating income increased by $65 million to $281 million, or 11.2% of sales. In the fourth quarter of 2014 costs related to capacity alignment and antitrust related matters reduced the operating income by $21 million or 0.9pp. Adjusted operating margin*, excluding costs for capacity alignment and antitrust related matters, was 11.1% of sales for the fourth quarter of 2015 compared to 10.1% of sales for the same period in 2014. The increase was primarily driven by the organic sales growth, positive product mix, raw material savings and favorable currency transaction effects.

Income before taxes increased by $62 million. Income attributable to controlling interest was $186 million, an increase of $37 million from the fourth quarter of 2014.

The effective tax rate in the fourth quarter of 2015 was 29.8% compared to 27.2% in the same quarter of 2014. Discrete tax items, net had an unfavorable impact of 0.8pp compared to the same quarter of 2014 when discrete tax items, net decreased the tax rate by 3.1pp. The tax rate in 2015 was negatively impacted by an unfavorable mix of earnings and tax rates in various jurisdictions compared to 2014.

Earnings per share (EPS) was $2.10 compared to $1.65 for the same period one year ago. The EPS was positively affected by 44 cents from higher operating income, 18 cents by lower costs for capacity alignment and antitrust related matters and 4 cents by lower number of shares outstanding. These positive effects were offset mainly by 10 cents from negative currency translations and 8 cents from higher effective tax rate. The adjusted EPS assuming dilution was $2.08 compared to $1.81 for the same period one year ago.

The weighted average number of shares outstanding assuming dilution was 88.3 million compared to 89.9 million in the fourth quarter of 2014 mainly due to our share repurchase program.

Cash Flow and Balance Sheet

Cash flow from operations amounted to a record $321 million compared to $229 million in the same quarter of 2014. The increase was primarily related to the increase in net income and timing in operating working capital.

Cash flow before financing* was $202 million compared to $104 million during the same quarter of 2014. Capital expenditures, net, of $116 million were $26 million more than depreciation and amortization expense during the quarter and $12 million less than capital expenditures during the fourth quarter of 2014.

During the quarter, operating working capital* as a percentage of sales was 6.2%, down from 6.9% on September 30, 2015. The Company targets that working capital in relation to the last 12-month sales should not exceed 10%.

Accounts receivable decreased in relation to sales to 65 days outstanding from 71 days outstanding on September 30, 2015 and from 68 days outstanding on December 31, 2014. Days inventory outstanding was 29 days, down from 33 days on September 30, 2015 and from 30 days on December 31, 2014.

The Company’s net debt position* decreased by $163 million during the quarter to $202 million at December 31, 2015. Gross interest-bearing debt decreased by $14 million to $1,539 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 (cash)* 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 December 31, 2015, the Company had a leverage ratio of 0.4x.

During the quarter, total equity increased by $149 million to $3,468 million due to $186 million from net income $27 million from pension liabilities and $8 million from common stock incentives. The increase was partly offset by $49 million from dividends and $22 million from currency translations. Total parent shareholders’ equity was $3,456 million corresponding to $39.22 per share.

During the three month period from October to December 2015, global LVP is estimated by IHS to have grown by close to 4% compared to the same period in 2014. This was an increase of close to 5pp from IHS’s expectation at the beginning of the quarter.

In China, which accounts for around 17% of Autoliv’s sales, LVP increased by more than 13%, around 14pp more than in the October estimate.

In Japan, which accounts for around 7% of Autoliv’s sales, LVP increased by 1%, more than 4pp better than the October estimate.

In the RoA, which represents 10% of Autoliv’s sales, LVP increased by more than 3%, 3pp better than the October estimate.

In the Americas, which accounts for more than one third of Autoliv’s sales, LVP declined by almost 4%. In North America, LVP increased close to 2%. In South America, the decline was close to 29%. Both in line with the respective October estimates.

In Europe, where Autoliv currently generates almost one third of its sales, LVP increased by more than 4%, which was 3pp better than the October estimate. In Western Europe, LVP grew by close to 7%, almost 3pp better than the October estimate. In Eastern Europe, LVP declined by less than 1%, 4pp better than the October estimate.

Compared to September 30, 2015 total headcount (permanent employees and temporary personnel) increased by 2,275

people. This was primarily a result of the higher than expected growth in the quarter and the continued hiring of software engineers, primarily to our active safety business.

Commencing with the period starting January 1, 2015, the Company reports its results under two segments, Passive Safety and Electronics. Passive Safety includes Autoliv’s airbag and seatbelt businesses, while Electronics integrates into one

segment all of Autoliv’s electronics resources and expertise in both passive safety electronics and active safety. Corporate sales and income, capital expenditure and depreciation and amortization for the reportable segments can be found in the tables on page 21 of this report.

Consolidated segment sales increased by close to 5% to $2,068 million compared to $1,972 million in the same quarter of 2014. Excluding negative currency translation effects of $146 million, the organic sales growth* was more than 12%. All

major regions showed organic growth in the quarter. The higher margin was a result of benefits from the higher organic sales, positive product mix and favorable raw material prices compared to the same quarter last year.

Consolidated segment sales were up close to 17% compared to the same quarter of 2014. Excluding negative currency translation effects of $25 million, the organic sales growth* was more than 18%. The organic sales growth* in Electronics was a result of the 29% organic sales growth* in active safety

coming primarily from North America and China. Sales for passive safety electronics also grew as a result of sales increases in China, North America and RoA.

The headcount increase in Passive Safety was primarily related to the higher than expected organic growth* in the quarter. In

Electronics the increase primarily related to the continued hiring of software engineers to our active safety business as well as growth in the passive electronics business.

Sales of airbag products (including steering wheels) were favorably impacted by higher sales of replacement inflators, inflatable curtains and steering wheels.

Sales of seatbelt products were particularly strong in Europe and North America. The global trend towards more advanced and higher value-added seatbelt systems continued globally.

Organic sales* for passive safety electronics products (mainly airbag control modules and remote sensing units) grew primarily from higher sales in China and South Korea.

The strong increase in sales of active safety products (automotive radars, night vision systems, cameras with driver assist systems, positioning systems and brake control systems) resulted particularly from higher sales of radar related products primarily as a result of Mercedes’ increased demand for driver assistance products. Sales of vision systems to BMW also contributed.

For the full year 2015, sales in the Americas represent 35% of total sales, Asia (China, Japan, RoA) 34%, and Europe 31%. Sales continue to be balanced across the regions. Organic growth* was particularly strong in Europe, North America and Japan.

Sales from Autoliv’s companies in China grew organically* by more than 2%. This was the result of strong sales to certain local OEMs, partly mitigated by lower sales to certain global OEM’s.

Organic sales* from Autoliv’s companies in Japan grew by close to 10%. The growth was primarily driven by sales of replacement inflators. Strong sales of models from Toyota and Nissan also contributed.

Organic sales* from Autoliv’s companies in the RoA grew by more than 6%. The growth was driven by strong sales growth

in India driven by models from Hyundai and in Thailand, primarily with models from Mitsubishi. A slight sales growth in South Korea was primarily the result of sales to models from Hyundai/Kia.

Organic sales* from Autoliv’s companies in the Americas increased by more than 9% and were positively impacted by sales growth to non-US OEMs in North America, mainly models from Hyundai/Kia, Mercedes, and Honda. Sales of replacement inflators also contributed positively to the growth.

Organic sales* from Autoliv’s companies in Europe increased rapidly by close to 10%. Models from VW, Ford, Mercedes, Hyundai/Kia, Fiat-Chrysler and Renault were the strongest contributors to growth.

Gross profit for the full year 2015 increased by more than $40 million, compared to the same period last year, primarily as a result of higher gross margin. Gross margin increased by 0.6pp compared to the same period of 2014, mainly as a result of higher organic sales, favorable currency effects, positive product mix and raw material savings, partially offset by costs related to the investments for capacity and growth.

Selling, General and Administrative (S,G&A) expenses decreased by more than $3 million.

Research, Development & Engineering (R,D&E) expenses, net decreased by close to $12 million compared to prior year. At comparable currency rates, the increase in R,D&E, net was more than $30 million mainly driven by increased cost in Electronics.

Operating income increased by around $5 million to $728 million and the operating margin by 0.1pp to 7.9%. The slight increase in the operating margin was mainly due to the higher organic sales*. Excluding costs for capacity alignment and antitrust related matters (including antitrust settlements) the adjusted operating margin* was 9.7%, up from 9.1% compared to prior year, mainly as a result of higher organic sales, favorable currency effects, positive product mix and raw material savings, partially offset by costs related to the investments for capacity and growth.

Income before taxes increased by close to $9 million to $676 million, $4 million more than the increase in operating income.

Net income attributable to controlling interest amounted to $457 million compared to $468 million for the full year 2014. Income tax expense was $218 million compared to $198 million in 2014. The effective tax rate was 32.3% compared to 29.7% for the full year 2014. Discrete tax items, net, were not material for the full year 2015, compared to 2014 when discrete tax items, net decreased the tax rate by 0.7pp.

EPS amounted to $5.17 assuming dilution compared to $5.06 for 2014.

The weighted average number of shares outstanding assuming dilution decreased to 88.4 million compared to 92.4 million for the full year 2014.

In 2015 operations generated $751 million in cash. Cash flow before financing* was $159 million. This compares to $713 million and $260 million, respectively, for the full year 2014. The decrease in cash flow before financing was the result of M&A activities during the year totaling $128 million.

Capital expenditures, net amounted to $450 million and depreciation and amortization totaled $319 million compared to $453 million and $305 million, respectively, for the full year 2014.

Autoliv’s net debt increased by $140 million to $202 million compared to December 31, 2014, primarily as a result of share repurchases, antitrust related settlements and M&A activities.

Total equity increased by $26 million compared to December 31, 2014, due to net income of $457 million, pension liabilities of $32 million and common stock incentives of $29 million. These positive effects were mainly offset by $197 million from dividends, $188 million from negative currency translation effects, and $104 million from repurchased shares.

For the full year 2015, global LVP is estimated by IHS to have increased by 1.5% compared to the full year 2014. This is close to 1pp less than IHS’s expectation from the beginning of the year.

In China, which accounts for around 17% of Autoliv’s sales, LVP grew by close to 5%, a decrease of more than 2pp compared to the January 2015 estimate.

In Japan, which accounts for around 7% of Autoliv’s sales, LVP declined by 5%, close to 1pp worse than the January 2015 estimate.

In the RoA, which accounts for 10% of Autoliv’s sales, LVP increased by more than 2%, compared to an increase of 5% expected at the beginning of 2015.

In the Americas, which makes up more than one third of Autoliv’s sales, LVP decreased by close to 2%, a decrease of more than 4pp compared to IHS’s growth expectation of more than 2% from the beginning of the year. In North America, the increase was close to 3%, which was almost in line with expectations from the beginning of the year. In South America, the decrease was close to 21%, close to 21pp worse than the January 2015 estimate.

In Europe, where Autoliv currently generates almost one third of its sales, LVP grew by almost 4%, which was more than 4pp better than IHS’s estimate in January. In Western Europe, LVP grew by close to 7%, 5pp better than estimated at the beginning of the year. In Eastern Europe, LVP decreased by more than 1%, more than 3pp better than the January 2015 estimate.

Consolidated segment sales declined by more than 2% to $7,621 million compared to $7,800 million in the full year 2014. Excluding negative currency translation effects of $720 million, the organic sales growth* was close to 7%. The

reported operating margin for the segment was negatively affected by the antitrust related matters and restructuring costs, primarily related to the on-going European capacity alignment program.

Consolidated segment sales grew by close to 7% compared to the full year 2014. Excluding negative currency translation effects of $122 million, the organic sales growth* was close to 13%. The organic sales growth* in Electronics was a result of the 31% organic sales growth* in active safety mainly from radar system sales to Mercedes and vision system sales to BMW.

Organic sales* of passive safety electronics grew by more than 5%. The lower margin was a result of higher R,D&E costs, net at comparable currency rates and negative currency transaction effects.

The increase in passive safety headcount from December 31, 2014 was in direct labor, which was needed to handle the

organic sales growth in the segment. The increase in Electronics headcount from December 31, 2014 came mainly from the planned hiring of electronics engineers.

Other Items

Dividends

On December 18, 2015, the Company declared a quarterly dividend to shareholders of 56 cents per share for the first quarter 2016 with the following payment schedule:

Next Report

Autoliv intends to publish the quarterly earnings report for the first quarter of 2016 on Friday, April 29, 2016.

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 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. 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 decline; changes in and the successful execution of our capacity alignment, restructuring and cost reduction initiatives discussed herein 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, restructurings or 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; pricing negotiations with customers; successful integration of acquisitions and operations of joint ventures; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needed for our pension plans work stoppages or other labor issues; possible adverse results of pending or future litigation; our ability to protect our intellectual property rights or infringement claims; 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.