Outlook

Mainly based on our customer call-offs, we expect organic sales for the first quarter of 2017 to grow by more than 3% compared to the same quarter of 2016. Currency translations and M&A activities are expected to have a combined positive effect of around 2%, resulting in a consolidated sales growth of more than 5%. The adjusted operating margin, excluding costs for capacity alignments and antitrust related matters, is expected to be around 8%.

The expectation for the full year 2017 is for an organic sales growth of around 4%. Currency translations and M&A activities are expected to have a combined negative effect of around 2%, resulting in a consolidated sales increase of around 2%. The expectation for the full year adjusted operating margin is around 8.5%, excluding costs for capacity alignments and antitrust related matters. This includes costs related to strong mid-term consolidated sales growth.

Since 2015, Autoliv has agreements with several OEMs for replacement airbag inflators. Based on customer agreements and its own expectations, the Company currently expects deliveries of up to 30 million units during the period 2015 to 2018. This situation continues to evolve and estimates will be updated as necessary.

We see potential for deliveries also beyond 2018.

The projected tax rate, excluding any discrete items, for the full year 2017, is expected to be around 32% 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 2017 to remain strong and to be more than $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 the 5-6% of sales range for the full year. R,D&E investments, net are expected to be at the high end of the 6.5-7.0% range of sales for the full year.

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 sales increased by 3.3% to $2,604 million** compared to $2,520 million in the same quarter of 2015. (See Footnotes for additional information on brake control system sales). Excluding negative currency translation effects of $55 million and the effects from M&A activities, the organic sales growth* was 1.1%,

compared to the expectation at the beginning of the quarter of a “flat” quarterly organic sales. The fourth quarter of 2016 included approximately three less working days compared to 2015, decreasing the year-over-year organic growth* by around 5pp.

The organic sales decline* of airbag products (including steering wheels) was driven mainly by lower inflator replacement sales and lower airbag sales in the Americas. This was partially mitigated by growth in sales of steering wheels in China and Europe as well as inflatable curtains in Japan.

The organic sales growth* in seatbelt products was primarily a result of sales growth in China. 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 rapidly in China and Rest of Asia.

The organic sales decline* for active safety products (automotive radars, night vision systems, cameras with driver assist systems and positioning systems) was due to sales declines for positioning systems in North America, partially offset by double-digit organic sales growth* of radar and camera systems in Europe, and camera systems and ADAS ECUs in North America. Sales of brake control systems were in line with expectations from the beginning of the quarter.

The organic sales growth* of 1.1% in the quarter was mainly a result of double-digit organic growth in China and the Rest of Asia. The growth was partially offset by a decline in North America, while Europe and Japan showed moderate organic growth. The inflator replacement sales impacted organic growth* negatively by about 1pp.

For the first time ever, Autoliv’s quarterly sales in Asia surpassed $1 billion.

Sales from Autoliv’s companies in China increased organically* by more than 12% in the quarter. This was a result of 14.7% growth in the light vehicle production partly driven by tax incentives. Autoliv’s organic sales increase was primarily driven by local OEMs, particularly models from Great Wall and Geely. Global OEMs also contributed, particularly models from Hyundai/Kia.

Organic sales* from Autoliv’s companies in Japan increased by close to 2% in the quarter. The increase was driven by models from Nissan, Mitsubishi and Toyota. Lower sales of replacement inflators partly offset the organic growth.

Organic sales* from Autoliv’s companies in the Rest of Asia (RoA) grew by close to 11% in the quarter. This was driven by a strong sales increase in India, particularly for models from Hyundai, Suzuki and Tata, as well as an increase in South Korea with models from Hyundai/Kia.

Sales from Autoliv’s companies in the Americas declined organically* by close to 7%. Organic sales growth* in South America (Brazil) was close to 34%. In North America, sales declined organically* by more than 7%, mainly driven by declines for models from Ford, FCA and General Motors, as well as lower sales of replacement inflators.

The modest organic sales growth* in the quarter from Autoliv’s companies in Europe was positively impacted by sales increases to a number of OEMs, particularly models from Renault, FCA, Mercedes and Hyundai/Kia. Growth in sales of active safety products to Mercedes also contributed. Sales declines for models from BMW, PSA and GM contributed negatively to the organic sales growth.

The gross profit for the fourth quarter 2016 was $14 million higher than the same quarter in 2015. The gross margin declined by 0.2pp to 20.5% compared to the same quarter in 2015, mainly as a result of costs related to investments for growth in the quarter, partially offset by higher sales and positive currency effects.

Selling, General and Administrative (S,G&A) expenses increased by $18 million compared to the same quarter of the previous year.

Research, Development & Engineering (R,D&E) expenses, net increased by $24 million compared to the same quarter of the previous year.

Operating income decreased by $43 million to $239 million, or 9.2% of sales, compared to 11.2% of sales in the same quarter of 2015. Adjusted operating margin*, excluding costs for capacity alignment and antitrust related matters, was 9.3% of sales for the fourth quarter of 2016 compared to 11.1% of sales for the same period in 2015. In addition to the gross margin decline, the decrease was primarily driven by higher R,D&E, net and S,G&A to support future growth as well as acquisition effects.

Income before taxes decreased by $37 million compared to the same quarter of the previous year. Net income

attributable to controlling interest was $148 million, a decrease of $38 million from the fourth quarter of 2015.

The effective tax rate in the fourth quarter of 2016 was 36.7% compared to 29.8% in the same quarter of 2015. Discrete tax items, net had an unfavorable impact of 2.5pp whereas in the same quarter of 2015 discrete tax items, net had an unfavorable impact of 0.8pp. Discrete items in the fourth quarter consisted of several items including a fourth quarter tax law change in Spain and the settlement of a tax controversy in Turkey. The tax rate in the fourth quarter of 2016 was negatively impacted by an unfavorable mix of earnings and tax rates in various jurisdictions compared to the fourth quarter of 2015.

Earnings per share (EPS) assuming dilution was $1.67 compared to $2.10 for the same period one year ago. The negative items affecting EPS were mainly 21 cents from lower operating income, 13 cents from higher effective tax rate and 6 cents from higher costs for capacity alignment and antitrust related matters. The adjusted EPS* assuming dilution was $1.71 compared to $2.08 for the same period one year ago.

The weighted average number of shares outstanding assuming dilution was 88.5 million compared to 88.3 million in the fourth quarter of 2015.

Cash Flow and Balance Sheet

Cash flow from operations amounted to $294 million compared to $321 million in the same quarter of 2015. The decrease was primarily related to the decrease in net income.

Cash flow before financing* was $135 million compared to $202 million during the same quarter of 2015. Capital expenditures, net, of $159 million were $56 million more than depreciation and amortization expense during the quarter and $43 million more than capital expenditures, net during the fourth quarter of 2015.

During the quarter, working capital decreased to 15% of sales from 17% of sales on September 30, 2016 and operating working capital* as a percentage of sales was 5.7%, down from 6.6% on September 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 decreased to 70 days outstanding from 74 days outstanding on September 30, 2016 but increased from 65 days outstanding on December 31, 2015. Days inventory outstanding was 31 days, down from 34 days on

September 30, 2016 but up from 29 days on December 31, 2015.

The Company’s net debt position* decreased by $46 million during the quarter to $313 million at December 31, 2016. Gross interest-bearing debt decreased during the quarter by $1 million to $1,543 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 December 31, 2016, the Company had a leverage ratio of 0.4x.

During the quarter, total equity decreased by $111 million to $3,926 million, mainly due to negative currency translations of $191 million, $51 million from dividends and $21 million from pension liabilities. The decrease was partly offset by $144 million from net income. Total parent shareholders’ equity was $3,677 million corresponding to $41.69 per share.

During the three-month period from October to December 2016, global LVP is estimated by IHS to have grown by more than 7% compared to the same period in 2015. This was an increase of almost 7pp from IHS’s expectation at the beginning of the quarter.

In China, which accounts for around 18% of Autoliv’s sales, LVP increased by close to 15%, almost 17pp more than in the October estimate.

In Japan, which accounts for around 9% of Autoliv’s sales, LVP increased by more than 2%, almost 3pp higher than the October estimate.

In the RoA, which represents about 9% of Autoliv’s sales, LVP increased by almost 3%, 4pp better than the October estimate.

In the Americas, which accounts for about one third of Autoliv’s sales, LVP grew by almost 2%, about 1pp more than in the October estimate. In North America, LVP increased by about 1%, in line with the October estimate. In South America, LVP grew by 5%, close to 4pp higher than in the October estimate.

In Europe, where Autoliv currently generates around 30% of its sales, LVP increased by close to 3%, which was about twice the October estimate. In Western Europe, LVP grew by close to 1%, in line with the October estimate. In Eastern Europe, LVP grew by about 7%, 5pp better than the October estimate.

Compared to September 30, 2016 total headcount (permanent employees and temporary personnel) increased by 1,515 people. This was primarily a result of

the growth in sales and order intake in the quarter as well as the continued hiring of engineers.

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, active safety and brake control systems. 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 decreased by 1.6% to $2,035 million compared to $2,068 million in the same quarter of 2015. Excluding negative currency translation effects of $47 million, the organic sales growth* was almost 1%. Strong organic growth in China was offset by

a decline in North America in the quarter. The operating margin decline was primarily a result of higher investments in R,D&E, net, as well as other costs to support future growth.

Consolidated segment sales were significantly higher compared to the same quarter of 2015, primarily due to the inclusion of Autoliv-Nissin Brake Systems (ANBS). The organic sales growth* was more than 3%, driven by strong organic sales growth in Passive Safety

Electronics coming primarily from China and South Korea. The lower operating margin was mainly a result of higher costs to support future growth as well as costs relating to the formation of ANBS.

The headcount increase in Passive Safety was primarily related to the growth in sales and order intake in the quarter. In Electronics, the increase was primarily related

to the continued hiring of software engineers in the active safety business as well as growth in the passive safety electronics business.

Sales of airbag products (including steering wheels) were favorably impacted by higher sales of inflatable curtains in Japan and Europe, and steering wheels, especially in Europe.

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

The growth in organic sales* for passive safety electronics products (mainly airbag control modules and remote sensing units) was due to growth across most regions, particularly in China.

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

Sales of brake control systems were in line with our expectations from the start of operations of ANBS in the beginning of the second quarter of 2016.

For the full year 2016, sales in Asia (China, Japan, RoA) represent 36% of total sales, the Americas 34% and Europe 30%. Sales continue to be balanced across the regions. Organic growth* was particularly strong in Europe, China, Japan and India.

Sales from Autoliv’s companies in China grew organically* by close to 14%, driven primarily by Asian OEMs and local OEMs, particularly Great Wall’s Haval models with high Autoliv content.

Organic sales* from Autoliv’s companies in Japan grew by more than 7%. The increase was primarily driven by models from Toyota and Nissan, partly offset by lower replacement inflator business.

Organic sales* from Autoliv’s companies in the RoA grew by close to 5%. This was primarily driven by strong organic sales growth in India and Thailand, partly offset by lower organic sales in South Korea.

Organic sales* from Autoliv’s companies in the Americas increased by more than 2%, with North America growing more than 2% and South America about 5%. Primary drivers were sales to Honda, Mercedes and Hyundai/Kia. Sales of replacement inflators also contributed.

Organic sales* from Autoliv’s companies in Europe grew by close to 10%. Models from Hyundai/Kia, Renault, Mercedes and FCA were the main growth contributors.

Gross profit for the full year 2016 increased by around $213 million, compared to the prior year, primarily as a result of higher sales. Gross margin increased by 0.3pp compared to 2015, mainly as a result of higher organic sales*, favorable currency effects and raw material savings, partially offset by costs related to investments for capacity and growth.

Selling, General and Administrative (S,G&A) expenses increased by close to $65 million as compared to the prior year.

Research, Development & Engineering (R,D&E) expenses, net increased by more than $127 million compared to the prior year.

Operating income increased by close to $120 million to $848 million and the operating margin increased by 0.5pp to 8.4%. In 2015, the operating margin was negatively affected by high costs related to the ongoing capacity alignments and for settlements of antitrust related matters.

Excluding costs for capacity alignment and antitrust related matters (but including antitrust settlements) the adjusted operating margin* was 8.8%, down from 9.7% compared to the prior year, mostly as a result of higher R,D&E, net, and other costs related to investments for capacity and growth as well as acquisition effects. This was partially offset by higher organic sales.

Compared to the prior year, income before taxes increased by more than $128 million to $804 million, $8 million more than the increase in operating income.

Net income attributable to controlling interest amounted to $567 million compared to $457 million for the full year 2015. Income tax expense was $242 million compared to $218 million in 2015. The effective tax rate was 30.1% compared to 32.3% for the full year 2015. Discrete tax items, net, had an unfavorable impact of 0.6pp for the full year 2016 while discrete tax items, net, were not material for the full year 2015.

EPS amounted to $6.42 assuming dilution compared to $5.17 for 2015. The EPS increase was positively affected by lower costs for capacity alignments and antitrust related matters of $1.15 and 25 cents from effective tax rate. This was partly offset by 16 cents from currency translations.

The weighted average number of shares outstanding assuming dilution was unchanged at 88.4 million compared to the full year 2015.

In 2016, operations generated $868 million in cash. Cash flow before financing* was $142 million. This compares to $751 million and $159 million, respectively, for the full year 2015. The decrease in cash flow before financing was the result of increased M&A activities and capital expenditures, net, during the year.

Capital expenditures, net amounted to $499 million and depreciation and amortization was $383 million compared to $450 million and $319 million, respectively, for the full year 2015.

Autoliv’s net debt* increased by $112 million to $313 million compared to December 31, 2015.

Total equity increased by $458 million compared to December 31, 2015, mainly due to $562 million from net income and $252 million from the recognition of a minority interest in ANBS. These effects were partly offset by $206 million for dividends and $155 million from currency translations.

For the full year 2016, global LVP is estimated by IHS to have increased by almost 5% compared to the full year 2015. This is almost 2pp more than IHS’s expectation from the beginning of the year.

In China, which accounts for around 18% of Autoliv’s sales, LVP grew by close to 14%, an increase of 8pp compared to the January 2016 estimate.

In Japan, which accounts for around 9% of Autoliv’s sales, LVP was flat, compared to an increase of almost 2% expected in the January 2016 estimate.

In the RoA, which accounts for 9% of Autoliv’s sales, LVP was flat, compared to an increase of more than 2% expected at the beginning of 2016.

In the Americas, which makes up about one third of Autoliv’s sales, LVP was flat, a decrease of more than

2pp compared to IHS’s growth expectation of more than 2% from the beginning of the year. In North America, the increase was close to 2%, which was less than half of the growth expected at the beginning of the year. In South America, the decrease was 10%, compared to the almost 9% decline expected in the January 2016 estimate.

In Europe, where Autoliv currently generates about 30% of its sales, LVP grew by almost 3%, which was more than 1pp better than IHS’s estimate in January. In Western Europe, LVP grew by close to 4%, more than 1pp better than estimated at the beginning of the year. In Eastern Europe, LVP increased by 1%, 1pp better than the January 2016 estimate.

Consolidated segment sales grew by close to 4% to $7,919 million compared to $7,621 million in the full year 2015. Excluding negative currency translation effects of more than $161 million, the organic sales growth* was 6%. The organic sales growth was mainly due to higher sales in Europe, China, Japan, North America and India.

The improvement in operating margin is primarily because costs relating to antitrust matters (including settlements) and capacity alignments (particularly the European capacity alignment program) were higher in 2015 than in 2016.

Consolidated sales increased by close to 40% compared to the full year 2015. Excluding acquisition effects from ANBS and MACOM of $426 million and negative currency translation effects of more than $11 million, the

organic sales growth* was more than 13%. The lower operating margin was mainly a result of costs relating to the formation of ANBS and higher costs for R,D&E, net, partially offset by higher organic sales.

The increase in passive safety headcount from December 31, 2015 was driven by growth in both sales and order intake. The increase in Electronics headcount

from December 31, 2015 was mainly due to the integration of ANBS and hiring of R,D&E engineers in support of future growth.

Other Items

Dividends

On November 3, 2016, the Company declared a quarterly dividend to shareholders of 58 cents per share for the first quarter 2017 with the following payment schedule:

Next Report

Autoliv intends to publish the quarterly earnings report for the first quarter of 2017 on Friday, April 28, 2017.

Inquiries

Anders Trapp

Vice President Investor Relations

Tel +46 (0)8 58 72 06 71

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 contact person set out above, at 12.00 CET on February 2, 2017.

Footnotes

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

**During the second and third quarter of 2016, the Company recorded revenues for a specific contractual arrangement within Brake Control Systems on a gross revenue basis. Based on a detailed review of the arrangement and in accordance with ASC 605-45 Principal Agent Considerations, the Company has determined that recording revenues for such contractual arrangement on a net basis rather than a gross basis better reflects the Company’s role in the arrangement. At December 31, 2016, the Company has presented these amounts on a net basis instead of a gross basis. The Company concluded that the change in presentation was not material to the Company’s 2016 consolidated financial statements as it had no impact on our operating income since it is a reclassification from revenues to offset the cost of sales related to this transaction. The year-to-date adjustment included gross revenues related to the second and third quarters amounting to $10.5 million and $11.3 million, respectively.

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, statements regarding the expected consummation of the joint venture with Volvo Cars, 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. 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 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; continued uncertainty in 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; (including the ultimate resolution of the ongoing Toyota recall); 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.