* Autoliv ponders use of cash pile
* Swedish company leader in car safety equipment
* Europe market soft, America, China better
By Helena Soderpalm and Niklas Pollard
STOCKHOLM, March 26 Autoliv, the
world's biggest maker of car safety equipment, is on the look
out for acquisitions in new high-tech areas, enticed by strong
growth prospects for products that can help cars to avoid
Chief Executive Jan Carlson said Autoliv was keen to expand
into this new technology that includes sensors and radar but
that there were few companies willing to sell.
"This is a growth area and many see opportunities and growth
and therefore they don't sell," he said in an interview. "There
are always discussions back and forth, but there is nothing
So-called "active" car safety technology as opposed to
"passive" seatbelts and airbags is widely considered to be the
future in this business.
Various new products being developed mainly by small
specialist companies can help to prevent accidents. It is a
priority for car makers such as Autoliv's domestic customer
Volvo Car Corp.
"We're looking a lot at the sensor field. But we're also
looking at electronic stability control and chassis systems,"
said Carlson, referring to technology that allows a car to
independently avoid a collision.
The company has money to spend, with net cash of $361
million at the year-end. But analysts have raised the question
of whether some of this could be handed back to shareholders.
"So far, the board has prioritised raising the dividend and
building a strong balance sheet so we can make acquisitions when
they come," Carlson said.
The company has 3.2 million shares remaining of a share
buyback mandate that it has not used since September 2008 when
the financial crisis made keeping a strong balance sheet key.
Autoliv has been able to weather the downturn in Europe
since then because of the global spread of its business.
But the firm has felt the impact of a steep drop in car
sales in Europe due to a squeeze on consumer spending that has
led to big losses for the car industry.
In January, Autoliv said sales in the first quarter of 2013
were likely to fall four percent due to weakness in Europe.
Autoliv generates nearly 30 percent of its sales in Europe,
where the impact of the euro zone debt crisis has exposed the
overcapacity in the region's auto industry.
"There are few positive signs in terms of coming to grips
with the situation (industry overcapacity)," Carlson said. "I
respect that it is difficult, but if the demand is not there
that doesn't help. You have got to handle the problem anyway."
He said the North American and Chinese markets remained
healthier than those in Europe.
"That means one part of the world is suffering a big fall
while another is seeing a pretty big rise," Carlson said. "It is
a matter of pressing the accelerator and the brake at the same
Carlson said Autoliv was sticking to its financial guidance
which estimates a four percent fall in sales and an operating
margin of about 8 percent in the first quarter. For the full
year, the company expects sales growth of 2-4 percent at a
margin of about 9 percent.