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Report of the month

May 2008

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Autoliv Stockholm, Sweden (+ Delaware, U.S.A.) Report Facts Company name: Autoliv Inc. Fiscal year end: December 31, 2007 Report title: Driven for life Chairman of the Board: Lars Westerberg President and CEO: Jan Carlson Number of books: 1 Report length: 66 pages + covers Auditors: Ernst & Young AB Design: N/A E-mail: info@autoliv.com	Report Rating 4/5 (Rating scale below) Profile-Mission (Excerpts, as from the report) Autoliv’s vision is to substantially reduce traffic accidents, fatalities and injuries Autoliv’s sales have risen at an average rate of 7.6% per year (…) since 1997. Autoliv now accounts for more than one third of the global market for occupant restraints (i.e. airbags, seatbelts and related safety electronics).. (Annual Report p 6) (Italics are own company's words) Key Figures Sales: $ 6,769 million Operating income: $ 502 million Net income: $ 288 million Earnings per share: $ 3.68 Dividend per share: $ 1.54 Return on equity: 12% Return on capital employed: 15% Debt to capital: 33% (Source: figures sourced from the annual report) Some Competitors Delphi Denso Robert Bosch Visteon Valeo TRW Automotive

Top gear > Packs it economically -70 pages covers included put it among the shortest annuals. But never at the expense of quantity and quality of information. > A Quick Ride Through Autoliv gives an immediate and diversified Overview: growth drivers, patents, customer mix, quality management, capital efficiency… > Strong at the steering wheel: the new CEO sets his priority list, checks it out, and backs it up with no less than eleven charts (from move to low-cost countries to cash flows to shareholder returns). > No so many reports disclose the percentage and name of major customers. > Special chapter about Value-Creating Cash Flow including five targets and their achievement (see selected page).

Good drive > An issue- and theme-driven book: Global Presence, Value Systems Solutions, Service and Commitment, System Capabilities, Quality Excellence: all going to the point in a plainly written style, under a title that sums up the mission: Driven for life. > Risks and Risk Management fairly addresses most encountered factors, as well as specific problems faced on the road, such as Light Vehicle Production, Component Costs, Dependence on Customers and Suppliers, debt. > Selected Financial Data include major key ratios, yet could be extended.

Reversing > Sometimes tend to emulate U.S. bad (report) driving habits: successive year-on-year comparisons, balance sheet over two years, non-GAAP conformity text, critical accounting policies separated from the “main” ones, segments almost pushed into the trunk (note 19)… > Governance matters much underdeveloped. Board portraits look like ID pictures left too long on the back seat. > Design and layout are plainly functional.

Responsible driving? > The safety issue -and solutions provided by the company- pervades the book and is not insulated, thanks to examples, facts, figures, charts. Still, clearer targets and a more formal “progress report” would do it further.

How does the company report in key areas? What are the main report pluses and minuses? The Report Scan gives an overview of strengths and weaknesses, and scores each item. Contact e.com@reportwatch.net

Selected Page (p 24 of Autoliv Annual Report 2007)	Rating Scale 5 First-Rate 4.5 Excellent 4 Very good 3.5 Sound 3 Average 2.5 Uneven 2 Common 1.5 Substandard 1 Poor 0.5 Uncompetitive The rating is based on ReportWatch internal desk research and does not take into account the independent Rating Panel’s judgment.