The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the United States Securities and Exchange Commission (the “SEC”) on February 19, 2026. Unless otherwise noted, all dollar amounts are in millions. Autoliv, Inc. (“Autoliv” or the “Company”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden. The Company functions as a holding corporation and owns two principal operating subsidiaries, Autoliv AB and Autoliv ASP, Inc. Through its operating subsidiaries, Autoliv is a supplier of automotive safety systems with a broad range of product offerings, including modules and components for passenger and driver airbags, side airbags, curtain airbags, seatbelts, steering wheels, and pedestrian protection systems. Autoliv’s filings with the SEC, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements, and all of our other reports and statements, and amendments thereto, are available free of charge on our corporate website at www.autoliv.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC (generally the same day as the filing). The primary exchange market for Autoliv’s securities is the New York Stock Exchange ("NYSE") where Autoliv’s common stock trades under the symbol “ALV”. Autoliv’s Swedish Depositary Receipts ("SDRs") are traded on Nasdaq Stockholm’s list for large market cap companies under the symbol “ALIV SDB”. Options in SDRs trade on Nasdaq Stockholm under the name “Autoliv SDB”. Options in Autoliv shares are traded on Nasdaq OMX PHLX and on NYSE Amex Options under the symbol “ALV”. Autoliv’s fiscal year ends on December 31. Non-U.S. GAAP financial measures Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for “Organic sales,” “Free operating cash flow,” “Cash conversion,” “Net debt,” “Leverage ratio,” “Adjusted net income,” “Adjusted operating income,” “Adjusted operating margin,” “Adjusted other non-operating items, net,” “Adjusted earnings per share, diluted,” “Adjusted return on capital employed,” and “Adjusted return on total equity” provided below. Management believes that these non-U.S. GAAP financial measures provide supplemental information to investors regarding the performance of the Company’s business and assist investors in analyzing trends in the Company's business. Additional descriptions regarding management’s use of these financial measures are included below. Investors should consider these non-U.S. GAAP financial measures in addition to, rather than as substitutes for, financial reporting measures prepared in accordance with U.S. GAAP. These historical non-U.S. GAAP financial measures have been identified as applicable in each section of this report with a tabular presentation reconciling them to the most directly comparable U.S. GAAP financial measures. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. 18 EXECUTIVE OVERVIEW Through focused execution, we maintained the positive momentum from the first quarter. Globally, our sales grew organically more than 1pp faster than global LVP, outgrowing LVP significantly in Asia. Our sales to Chinese OEMs grew by more than 40%, and Chinese OEMs accounted for 55% of our sales in China, compared to 40% a year ago. Our opportunities with Chinese OEMs were further solidified by signing new strategic cooperation agreements with both Great Wall Motor and XPENG. Sales in India continued to grow by more than 35%. Well executed cost reduction activities supported a continued improvement of underlying profitability, with adjusted operating margin (Non-GAAP measure, see reconciliation table below) increasing to 9.6%. We are pleased that our cash flow improved in line with our expectations, resulting in record operating cash flow for a second quarter, and supporting our ambitious shareholder return strategy. Our leverage ratio (Non-GAAP measure, see reconciliation table below) improved to 1.2x, despite repurchasing around 1.65 million shares, equal to $200 million, in the quarter. In line with our ambition to ensure long-term competitiveness and align production capacity with market demand, we continue to optimize our footprint. In the quarter, we announced that we will discontinue manufacturing operations in Türkiye. We continued to manage geopolitical developments successfully in the quarter, limiting the effects of tariffs, supply chain challenges and raw material price increases. The business environment remains uncertain but our current best estimate for the remainder of the year is to reiterate our full year 2026 guidance of about unchanged organic sales growth (Non-GAAP measure), adjusted operating margin (Non-GAAP measure) of around 10.5-11% and operating cash flow of around 1.2 billion. This is based on the assumption that LVP will decline by around 2.5%. Customer compensations and other mitigation initiatives are expected to have limited impact in the third quarter, but significantly greater contribution in the fourth quarter. Therefore, we expect third quarter adjusted operating margin to be around the first half 2026 level, with a significant improvement in the fourth quarter. Based on our full year guidance, we continue to expect strong cash flow for the year, which supports our ambition to provide attractive shareholder returns, including share repurchases of $300-500 million in 2026. Financial highlights in the three months period ended June 30, 2026 Change figures below compare to the same period of the previous year, except when stated otherwise. $2,803 million net sales, increase of 3.3% 1.0% organic sales growth (non-GAAP measure, see reconciliation table below) 6.8% operating margin, 9.6% adj. operating margin (non-GAAP measure, see reconciliation table below) $1.35 diluted EPS, 38% decrease Key business developments in the three months period ended June 30, 2026 Change figures below compare to the same period of the previous year, except when stated otherwise. Net sales increased organically (non-GAAP measure, see reconciliation table below) by 1.0%, which was 1.3pp higher than the global LVP decrease of 0.3% (S&P Global July 2026) mainly driven by strong performance in Asia. Regional and customer LVP mix is estimated to have impacted sales negatively by about 0.6pp. Our organic sales growth (non-GAAP measure) outperformed LVP significantly in China and in Asia excl. China, underperformed slightly in EMEA and more markedly in Americas. Our strong performance in Asia excl. China was mainly due to India, where we outperformed by 20pp, driven by continued strong market growth in safety content per vehicle, while our China performance was due to more than 40pp outperformance with Chinese OEMs. Underlying profitability remained strong. Operating income decreased substantially due to previously communicated restructuring activities in Türkiye. Adjusted operating income (non-GAAP measure, see reconciliation table below) increased by 7.3%, despite adverse effects from foreign currency exchange rates and raw material prices, mainly due to well executed direct material cost savings. Operating margin was 6.8% and adjusted operating margin (non-GAAP measure, see reconciliation table below) was 9.6%. ROCE was 17.9% and adjusted ROCE (non-GAAP measure, see reconciliation table below) was 24.9%. Cash flow was the best for a second quarter so far with operating cash flow improving from $277 million to $434 million, mainly driven by strong underlying profitability and a normalization of working capital. Free operating cash flow (non-GAAP measure, see reconciliation table below) more than doubled to $340 million. The leverage ratio (non-GAAP measure, see reconciliation table below) improved to 1.2x. In the quarter, a dividend of $0.87 per share was paid and 1.65 million shares were repurchased and retired. 19 Business and market condition update Supply Chain Call-off accuracy improved somewhat compared to the second quarter of 2025, but declined slightly versus the first quarter of 2026, mainly driven by light vehicle market developments in China. Call-off volatility remains higher than pre-pandemic levels. Low customer demand visibility and changes in customer call-offs with short notice continued to have some negative impact on our production efficiency and profitability. We expect call-off volatility for the full year 2026 on average to be slightly improved compared to 2025 but still remain higher than pre-pandemic levels. However, the continued significant uncertainty in the geopolitical environment and future changes in tariffs and trade restrictions may lead to more negative call-off volatility. Raw material inflation, geopolitical risks and tariffs Raw material price changes had a negative impact on our profitability in the second quarter, with a gross impact of around $21 million. For the full year 2026, our current assessment is for around $110 million gross impact from higher raw material prices. We expect to be able to mitigate a majority of this headwind, mainly through internal cost reductions, material mix improvements and commercial negotiations with customers and suppliers. Given the continued uncertainty in the geopolitical environment, the effects of tariffs and trade restrictions may lead to a more adverse inflation environment. We continue to execute on productivity and cost reduction initiatives to offset these cost pressures. The new tariffs imposed in 2025 negatively impacted our profitability in the second quarter of 2026. We achieved customer compensation for more than 80% of the tariff costs, resulting in a net negative impact after compensation of around $7 million, which was in line with the net amount in Q2 2025. Including the dilution effect, the impact on operating margin was around 35bps negative. The recovery of tariffs related to the U.S. Supreme Court's ruling regarding the International Emergency Economic Powers Act had a net positive effect of around $3 million. While it is our ambition and expectation to continue passing tariff costs on to our customers, there is significant uncertainty as future recovery levels may vary. For the full year 2026, we estimate the tariff-related dilution on operating margin will be similar to the around 20bps for full year 2025. Ongoing geopolitical developments, including the hostilities in and around the Persian Gulf, have added uncertainty into the global economic environment. These conditions may affect supply chains, commodity prices, customer demand, and broader market stability. As a result, our current financial guidance reflects the best information available today but may change should these geopolitical dynamics materially impact our operations or the markets in which we operate. We continue to closely monitor both geopolitical developments and the tariff policy environment in order to remain agile and to adjust our commercial and operational responses to any such developments. Autoliv to discontinue manufacturing operations in Türkiye On May 8, 2026, Autoliv announced an update to its strategy to align production capacity with future EMEA market requirements. As part of this strategy, Autoliv will gradually discontinue its manufacturing operations in Türkiye, which include the production of steering wheels, airbags, and seatbelts, to continue optimizing its manufacturing footprint and ensure long-term competitiveness and operational sustainability. This discontinuation is expected to affect approximately 2,200 employees. Production in Türkiye will be moved to Autoliv's other existing facilities in the EMEA region. The complete closure is anticipated in the first half of 2028. The Company expects to record restructuring charges of approximately $142 million in total, of which $90 million was recognized in the second quarter of 2026. Cash outflow is expected to be approximately $129 million, with a limited impact on the 2026 cash flow. The Company expects to achieve estimated annual pre-tax savings of $40 million, beginning in 2027, reaching the full run-rate benefit in 2028. 20 RESULTS OF OPERATIONS Overview The following table shows some of the key ratios management uses internally to analyze the Company's current and future financial performance and core operations as well as to identify trends in the Company’s financial conditions and results of operations. The Company has provided this information to investors to assist in meaningful comparisons of past and present operating results and to assist in highlighting the results of ongoing core operations. These ratios are more fully explained below and should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K and the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q. The Company's management uses the Return on capital employed (ROCE) and Return on total equity (ROE) measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business. As used by the Company, ROCE is annualized operating income and income from equity method investments relative to average capital employed. The Company believes ROCE is a useful indicator of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers. ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. The Company’s management believes that ROE is a useful indicator of how well management creates value for its shareholders through its operating activities and its capital management. KEY RATIOS (Dollars in millions, except per share data) Three Months Ended Six Months Ended or As of June 30, or As of June 30, 2026 2025 2026 2025 Receivables outstanding relative to sales, %1) 21.3 % 21.6 % - - Inventory outstanding relative to sales, %2) 8.4 % 8.8 % - - Payables outstanding relative to sales, %3) 17.7 % 17.9 % - - Gross margin, %4) 18.2 % 18.5 % 18.6 % 18.5 % Operating margin, %5) 6.8 % 9.1 % 7.7 % 9.5 % Capital employed6) 4,195 4,231 - - Net debt7) 1,695 1,752 - - Return on total equity, %8) 15.6 % 27.7 % 18.8 % 28.2 % Return on capital employed, %9) 17.9 % 23.8 % 20.3 % 24.8 % Headcount at period-end10) 63,500 65,100 - - 1) Outstanding receivables relative to annualized quarterly sales. 2) Outstanding inventory relative to annualized quarterly sales. 3) Outstanding payables relative to annualized quarterly sales. 4) Gross profit relative to sales. 5) Operating income relative to sales. 6) Total equity and net debt. 7) Net debt adjusted for pension liabilities in relation to EBITDA. See tabular presentation reconciling this non-GAAP measure to GAAP below. 8) Net income relative to average total equity. 9) Operating income and income from equity method investments, relative to average capital employed. 10) Employees plus temporary, hourly personnel. 21 three months period ended June 30, 2026 COMPARED WITH three months period ended June 30, 2025 Consolidated Sales Development (dollars in millions) Three Months Ended June 30, Components of change in net sales 2026 2025 Reported change Currency effects 1) Organic 3) Airbags, Steering Wheels and Other2) $ 1,906 $ 1,812 5.2 % 2.2 % 3.0 % Seatbelt Products and Other2) 897 902 (0.5 )% 2.4 % (3.0 )% Total $ 2,803 $ 2,714 3.3 % 2.3 % 1.0 % Americas $ 910 $ 891 2.1 % 5.4 % (3.3 )% EMEA 832 828 0.4 % 2.7 % (2.2 )% Asia excl. China 539 519 4.0 % (7.3 )% 11 % China 522 477 9.6 % 6.2 % 3.4 % Total $ 2,803 $ 2,714 3.3 % 2.3 % 1.0 % 1) Effects from currency translations. 2) Including Corporate sales. 3) Non-GAAP measure. Sales by product - Airbags, Steering Wheels and Other Sales for Airbags, Steering Wheels and Other grew organically (non-GAAP measure, see reconciliation table above) by 3.0% in the quarter. The largest contributors to the increase were side airbags and center airbags, followed by driver airbags, inflatable curtains and knee airbags, partly offset by declines for steering wheels and passenger airbags. Sales by product - Seatbelts and Other Sales for Seatbelt Products and Other declined organically (non-GAAP measure, see reconciliation table above) by 3.0% in the quarter. Sales decreased organically (non-GAAP measure) in Americas, China and EMEA while it increased in Asia excluding China. Sales by region Our global organic sales (non-GAAP measure, see reconciliation table above) increased by 1.0% compared to the global LVP decrease of 0.3% (according to S&P Global, July 2026). The relative outperformance was positively impacted by product launches but negatively impacted by regional and model LVP mix development (around 60bps). Our organic sales growth (non-GAAP measure) outperformed LVP growth by 7.3pp in China and by 5.9pp in Asia excluding China. We underperformed LVP in EMEA by 1.0pp and by 4.9pp in Americas, impacted mainly by lower top line effect from tariffs, negative mix due to high LVP growth in lower content South America and a lower content on some replacement models. LVP in China declined by 4.0%, with Global OEMs LVP declining by 19% and Chinese OEMs LVP growing by 3.1%. Autoliv's sales to domestic OEMs increased organically (non-GAAP measure) by around 44% while our sales to global OEMs decreased by around 24%. Chinese OEMs accounted for 55% of our sales in China in the quarter, compared to around 40% a year ago. We expect continued strong sales growth in China in 2026, driven mainly by our performance with domestic OEMs. Our strong sales growth in Asia excluding China was mainly due to 36% organic sales growth (non-GAAP measure) in India, reflecting LVP growth but mainly the trend of increased safety content in vehicles in India. Second quarter of 2026 organic growth1) Americas EMEA Asia excl. China China Global Autoliv (3.3)% (2.2)% 11.3% 3.4% 1.0 % Main growth drivers Stellantis, Subaru, Honda Mercedes, Renault, JLR Suzuki, Mazda, Indian OEM Chery, Nio, Geely Chery, Suzuki, Nio Main decline drivers Ford, Hyundai, Nissan VW, BMW, Stellantis Subaru, Ford, Isuzu VW, Honda, Mercedes VW, Ford, Hyundai 1) Non-GAAP measure. Light Vehicle Production Development Change second quarter of 2026 versus second quarter of 2025 Americas EMEA Asia excl. China China Global LVP1) 1.6 % (1.2)% 5.4 % (4.0)% (0.3)% 1) Source: S&P Global, July 2026. 22 Earnings Three Months Ended June 30, (Dollars in millions, except per share data) 2026 2025 Change Net Sales $ 2,803 $ 2,714 3.3 % Gross profit 509 501 1.5 % % of sales 18.2 % 18.5 % (0.3 )pp S, G&A (138 ) (145 ) (4.9 )% % of sales (4.9 )% (5.4 )% 0.4 pp R, D&E, net (122 ) (107 ) 14 % % of sales (4.4 )% (3.9 )% (0.4 )pp Other income (expense), net (56 ) (1 ) n/a Operating income 192 247 (22 )% % of sales 6.8 % 9.1 % (2.3 )pp Adjusted operating income1) 270 251 7.3 % % of sales 9.6 % 9.3 % 0.4 pp Financial and non-operating items, net (38 ) (27 ) 44 % Income before taxes 154 221 (30 )% Income taxes (53 ) (53 ) (0.2 )% Tax rate 34.5 % 24.1 % 10.4 pp Net income 101 168 (40 )% Earnings per share, diluted2) 1.35 2.16 (38 )% Adjusted earnings per share, diluted1,2) 2.43 2.21 10 % 1) Non-GAAP measure, excluding effects from capacity alignments and antitrust related matters. 2) Net of treasury shares. Second quarter of 2026 financial development Gross profit increased by $8 million and gross margin decreased by 0.3pp compared to the prior year. The drivers behind the gross profit improvement were mainly positive foreign currency translation effects and lower costs for materials. This was partly offset by $13 million in costs for a supplier compensation reversal and $9 million in asset impairment related to the restructuring activities in Türkiye. S,G&A costs decreased by $7 million compared to the prior year, mainly due to $8 million from revised estimated credit loss reserve and $1 million in lower personnel costs, partly offset by $3 million in negative foreign currency translation effects and higher legal costs. S,G&A costs in relation to sales decreased from 5.4% to 4.9%. R,D&E, net, costs increased by $15 million compared to the prior year, mainly due to $5 million in lower engineering income related to timing effects, $4 million in higher personnel costs due to wage inflation and $3 million in negative foreign currency translation effects. R,D&E, net, in relation to sales increased from 3.9% to 4.4%. Other income (expense), net, was negative $56 million, compared to negative $1 million in the same period last year. The $56 million in the second quarter of 2026 consists mainly of around $66 million in capacity alignments related to our restructuring activities in Türkiye partly offset by around $10 million in government income in India. Operating income decreased by $55 million compared to the prior year, mainly due to higher capacity alignment costs related to restructuring activities in Türkiye and higher R,D&E, net, costs, partly offset by higher gross profit and lower S,G&A costs as outlined above. Adjusted operating income (non-GAAP measure, see reconciliation table below) increased by $18 million compared to the prior year, due to the higher gross profit and lower S,G&A costs as outlined above. Financial and non-operating items, net, was a negative $38 million compared to a negative $27 million a year earlier. The cost increase was driven by $12 million in higher costs for non-operating items mainly related to costs associated with restructuring activities in Türkiye. Income before taxes decreased by $67 million compared to the prior year, mainly due to the lower operating income and higher costs for financial and non-operating items, net, as outlined above. 23 Tax rate was 34.5% compared to 24.1% the prior year. Discrete tax items, net, had an unfavorable impact of 5.4pp in the second quarter of 2026, while discrete tax items, net, in the second quarter of 2025 had a favorable impact of 4.3pp. Discrete tax items recorded in the second quarter of 2026 primarily related to negative tax impacts from costs recorded for the capacity alignment for Autoliv’s manufacturing operations in Türkiye. Earnings per share, diluted decreased by $0.81 compared to the prior year. The main drivers were $0.55 from lower operating income, $0.21 from higher taxes and $0.11 from financial and non-operating items, partly offset by $0.05 from lower number of outstanding shares, diluted. six months period ended June 30, 2026 COMPARED WITH six months period ended June 30, 2025 Consolidated Sales Development (dollars in millions) Six Months Ended June 30, Components of change in net sales 2026 2025 Reported change Currency effects 1) Organic 3) Airbags, Steering Wheels and Other2) $ 3,769 $ 3,565 5.7 % 3.9 % 1.8 % Seatbelt Products and Other2) 1,787 1,727 3.5 % 4.5 % (1.0 )% Total $ 5,556 $ 5,292 5.0 % 4.1 % 0.9 % Six Months Ended June 30, Components of change in net sales 2026 2025 Reported change Currency effects 1) Organic 3) Americas $ 1,773 $ 1,742 1.7 % 6.0 % (4.2 )% EMEA 1,667 1,592 4.7 % 6.7 % (2.0 )% Asia excl. China 1,102 1,034 6.6 % (4.6 )% 11 % China 1,014 924 9.8 % 5.7 % 4.1 % Total $ 5,556 $ 5,292 5.0 % 4.1 % 0.9 % 1) Effects from currency translations. 2) Including Corporate sales. 3) Non-GAAP measure. Sales by product - Airbags, Steering Wheels and Other Sales for Airbags, Steering Wheels and Other grew organically (non-GAAP measure, see reconciliation table above) by 1.8% in the period. The largest contributors to the increase were side airbags and center airbags, followed by driver airbags, partly offset by declines for passenger airbags and steering wheels. Sales by product - Seatbelts and Other Sales for Seatbelt Products and Other declined organically (non-GAAP measure, see reconciliation table above) by 1.0% in the period. Sales decreased organically (non-GAAP measure) in Americas, China and EMEA while it increased in Asia excluding China. Sales by region Our global organic sales (non-GAAP measure, see reconciliation table above) increased by 0.9% compared to the global LVP decrease of 1.0% (according to S&P Global, July 2026). The relative outperformance was mainly driven by new product launches. Our organic sales growth outperformed LVP growth by 10pp in China and by 5.8pp in Asia excluding China. We underperformed LVP in EMEA by 1.8pp and by 5.1pp in Americas, impacted mainly by lower top line effect from tariffs, negative mix due to high LVP growth in lower content in South America and a lower content on some replacement models. LVP in China declined by 6.0%, with Global OEMs LVP declining by 12% and Chinese OEMs LVP decreased by 3.1%. Autoliv's sales to domestic OEMs increased organically (non-GAAP measure) by around 37% while our sales to global OEMs decreased by around 17%. Chinese OEMs accounted for 51% of our sales in China in the first half year of 2026, compared to 39% a year ago. Our strong sales growth in Asia excluding China was mainly due to 37% organic sales growth in India, reflecting LVP growth but mainly the trend of increased safety content in vehicles in India. 24 First six months of 2026 organic growth1) Americas EMEA Asia excl. China China Global Autoliv (4.2)% (2.0)% 11.2 % 4.1% 0.9 % Main growth drivers Stellantis, Subaru, Honda Mercedes, Renault, Volvo Suzuki, Indian OEM, Mazda Chery, Nio, Geely Suzuki, Chery, Nio Main decline drivers Ford, Hyundai, GM VW, Hyundai, Ford Subaru, Ford, Isuzu VW, Honda, Mercedes VW, Ford, Toyota 1) Non-GAAP measure. Light Vehicle Production Development Change first six months of 2026 versus first six months of 2025 Americas EMEA Asia excl. China China Global LVP1) 0.9 % (0.3)% 5.5 % (6.0)% (1.0)% 1) Source: S&P Global, July 2026. Earnings Six Months Ended June 30, (Dollars in millions, except per share data) 2026 2025 Change Net Sales $ 5,556 $ 5,292 5.0 % Gross profit 1,035 980 5.7 % % of sales 18.6 % 18.5 % 0.1 pp S, G&A (299 ) (290 ) 3.1 % % of sales (5.4 )% (5.5 )% 0.1 pp R, D&E, net (242 ) (202 ) 19.9 % % of sales (4.4 )% (3.8 )% (0.5 )pp Other income (expense), net (65 ) 14 n/a Operating income 429 502 (14 )% % of sales 7.7 % 9.5 % (1.8 )pp Adjusted operating income1) 515 506 1.7 % % of sales 9.3 % 9.6 % (0.3 )pp Financial and non-operating items, net (73 ) (48 ) 52 % Income before taxes 356 453 (22 )% Income taxes (113 ) (118 ) (4.1 )% Tax rate 31.9 % 26.1 % 5.8 pp Net income 242 335 (28 )% Earnings per share, diluted2) 3.24 4.31 (25 )% Adjusted earnings per share, diluted1,2) 4.49 4.36 2.9 % 1) Non-GAAP measure, excluding effects from capacity alignments and antitrust related matters. 2) Net of treasury shares. First six months of 2026 financial development Gross profit increased by $56 million and gross margin increased by 0.1pp compared to the prior year. The drivers behind the gross profit improvement were mainly positive foreign currency translation effects and lower costs for materials. This was partly offset by costs for a supplier compensation reversal and asset impairment related to the restructuring activities in Türkiye. S,G&A costs increased by $9 million compared to the prior year, mainly due to negative foreign currency translation effects and higher personnel costs, partly offset by reversal of estimated credit loss reserve. S,G&A costs in relation to sales decreased from 5.5% to 5.4%. R,D&E, net, costs increased by $40 million compared to the prior year, mainly due to lower engineering income, higher personnel costs and negative foreign currency translation effects. R,D&E, net, in relation to sales increased from 3.8% to 4.4%. Other income (expense), net, was negative $65 million, compared to positive $14 million in the same period last year. The increase in costs were mainly due to higher capacity alignment costs related to restructuring activities in Türkiye. Operating income decreased by $73 million compared to the prior year, mainly due to higher capacity alignment costs related to restructuring activities in Türkiye, higher R,D&E, net, costs and higher S,G&A costs, partly offset by higher gross profit as outlined above. 25 Adjusted operating income (non-GAAP measure, see reconciliation table below) increased by $8 million compared to the prior year, due to the higher gross profit, partly offset by the higher costs for R,D&E, net and S,G&A. Financial and non-operating items, net, was negative $73 million compared to negative $48 million a year earlier. The cost increase comes from higher costs for non-operating items mainly related to costs associated with restructuring activities in Türkiye and Mexico. Income before taxes decreased by $98 million compared to the prior year, mainly due to the lower operating income and higher costs for financial and non-operating items, net, as outlined above. Tax rate was 31.9% compared to 26.1% the prior year. Discrete tax items, net, for the period had an unfavorable impact of 3.7pp. Discrete tax items, net, for the prior year period had a favorable impact of 2.1pp. Discrete tax items recorded in the first six months of 2026 primarily related to negative tax impacts from costs recorded for the capacity alignment for Autoliv’s manufacturing operations in Türkiye. Earnings per share, diluted decreased by $1.07 compared to the prior year. The main drivers were $0.69 from lower operating income, $0.26 from higher tax and $0.23 from financial and non-operating items, partly offset by $0.12 from lower number of outstanding shares, diluted. LIQUIDITY AND CAPITAL RESOURCES The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows. The Company’s future contractual obligations have not changed materially from the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026. Second quarter of 2026 development Changes in operating working capital impacted operating cash flow by $240 million positive compared to $15 million positive in the prior year. The $240 million decrease in operating working capital comes mainly from $120 million from accounts payable, $35 million from receivables, net, and $48 million from accrued severance and restructuring costs. The decrease in operating working capital is mainly due to an expected normalization of working capital following the increase seen in the first quarter, which was related to high level of sales in March 2026 and other temporary effects. Operating cash flow increased by $157 million to $434 million compared to the prior year, mainly because of the decrease in operating working capital outlined above, partly offset by a lower net income. Capital expenditure, net, decreased by $20 million compared to the prior year. The level of capital expenditure, net, in relation to sales declined to 3.4% versus 4.2% a year earlier. The lower level of capital expenditure, net is mainly related to the lower activity level of footprint optimization and less capacity expansion. Free operating cash flow (non-GAAP measure, see reconciliation table below) was positive $340 million compared to positive $163 million in the prior year. The increase was due to the higher operating cash flow and lower capital expenditure, net, as outlined above. Cash conversion (non-GAAP measure, see reconciliation table below), defined as free operating cash flow (non-GAAP measure) in relation to net income, was 338% compared to 97% a year earlier as free operating cash flow was increased while net income decreased. Net debt (non-GAAP measure, see reconciliation table below) was $1,695 million as of June 30, 2026, which was $57 million lower than a year earlier. Total equity as of June 30, 2026, increased by $21 million compared to June 30, 2025. This was mainly due to net income of $643 million and $27 million in other positive effects, partly offset by $454 million in share repurchases, including taxes, and $194 million in dividend payments. Leverage ratio (non-GAAP measure, see reconciliation table below): On June 30, 2026, the Company had a leverage ratio of 1.2x compared to 1.3x on June 30, 2025, as the 12 months trailing adjusted EBITDA (non-GAAP measure, see reconciliation table below) increased by $73 million while net debt (non-GAAP measure) per the policy decreased by $44 million. Our target is to have a leverage ratio not higher than 1.5x. 26 First six months of 2026 development Operating cash flow increased by $4 million to $359 million compared to the prior year, mainly because the positive effects from working capital and depreciations were almost offset by the lower net income. Capital expenditure, net, decreased by $29 million compared to the prior year. The level of capital expenditure, net, in relation to sales was 3.2% versus 3.9% a year earlier. The lower level of capital expenditure, net was mainly related to the lower activity level of footprint optimization and less capacity expansion. Free operating cash flow (non-GAAP measure, see reconciliation table below) was positive $180 million compared to positive $147 million in the prior year. The increase was mainly due to the lower level of capital expenditure, net. Cash conversion (non-GAAP measure, see reconciliation table below) defined as free operating cash flow (non-GAAP measure) in relation to net income, was 74% compared to 44% a year earlier as free operating cash flow increased while net income decreased. NON-U.S. GAAP MEASURES The Company believes that comparability between periods is improved through the exclusion of certain items. To assist investors in understanding the operating performance of Autoliv's business, it is useful to consider certain GAAP measures exclusive of these items. The following tables reconcile Income before income taxes, Net income attributable to controlling interest and Capital employed, which are inputs utilized to calculate Return On Capital Employed (“ROCE”), adjusted ROCE, Return On Total Equity (“ROE”), and adjusted ROE. The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods. Autoliv’s management uses the ROCE, adjusted ROCE, ROE and adjusted ROE measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business. As used by the Company, ROCE is annualized operating income and income from equity method investments, relative to average capital employed. Adjusted ROCE is annualized operating income and income from equity method investments, relative to average capital employed as adjusted to exclude certain non-recurring items. See definitions of "annualized operating income" and "average capital employed" in footnote to the tables below. The Company believes ROCE and adjusted ROCE are useful indicators of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers. ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. See definitions of "annualized income" "and "average total equity" in footnote to the tables below. Adjusted ROE is annualized income (loss) relative to average total equity for the periods presented as adjusted to exclude certain non-recurring items. The Company’s management believes that ROE and adjusted ROE are useful indicators of how well management creates value for its shareholders through its operating activities and its capital management. Accordingly, the tables below reconcile from GAAP to the equivalent non-GAAP measure. Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income" Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2026 2025 2026 2025 Operating income (GAAP) $ 192 $ 247 $ 429 $ 502 Non-GAAP adjustments: Less: Capacity alignments 77 1 85 3 Less: Antitrust related items 0 3 0 1 Total non-GAAP adjustments to operating income 78 4 86 5 Adjusted Operating income (Non-GAAP) $ 270 $ 251 $ 515 $ 506 Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin" Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating margin (GAAP) 6.8 % 9.1 % 7.7 % 9.5 % Non-GAAP adjustments: Less: Capacity alignments 2.8 % 0.0 % 1.5 % 0.1 % Less: Antitrust related items 0.0 % 0.1 % 0.0 % 0.0 % Total non-GAAP adjustments to operating margin 2.8 % 0.1 % 1.5 % 0.1 % Adjusted Operating margin (Non-GAAP) 9.6 % 9.3 % 9.3 % 9.6 % 27 Reconciliation of GAAP measure "Other non-operating items, net" to Non-GAAP measure "Adjusted Other non-operating items, net" Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2026 2025 2026 2025 Other non-operating items, net (GAAP) $ (15 ) $ (3 ) $ (27 ) $ (3 ) Non-GAAP adjustments: Less: Capacity alignments - non-operating1) 14 - 22 0 Total non-GAAP adjustments to Other non-operating items, net 14 - 22 0 Adjusted Other non-operating items, net (Non-GAAP) $ (2 ) $ (3 ) $ (5 ) $ (3 ) 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income taxes" Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2026 2025 2026 2025 Income before income taxes (GAAP) $ 154 $ 221 $ 356 $ 453 Non-GAAP adjustments: Less: Capacity alignments - operating 77 1 85 3 Less: Capacity alignments - non-operating1) 14 - 22 - Less: Antitrust related items 0 3 0 1 Total non-GAAP adjustments to Income before income taxes 91 4 108 5 Adjusted Income before income taxes (Non-GAAP) $ 245 $ 225 $ 464 $ 458 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income" Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2026 2025 2026 2025 Net income (GAAP) $ 101 $ 168 $ 242 $ 335 Non-GAAP adjustments: Less: Capacity alignments - operating 77 1 85 3 Less: Capacity alignments - non-operating1) 14 - 22 - Less: Antitrust related items 0 3 0 1 Less: Tax on non-GAAP adjustments (11 ) (1 ) (15 ) (1 ) Total non-GAAP adjustments to Net income 80 3 93 4 Adjusted Net income (Non-GAAP) $ 181 $ 171 $ 335 $ 339 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net income attributable to controlling interest" Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2026 2025 2026 2025 Net income attributable to controlling interest (GAAP) $ 100 $ 167 $ 242 $ 334 Non-GAAP adjustments: Less: Capacity alignments - operating 77 1 85 3 Less: Capacity alignments - non-operating1) 14 - 22 - Less: Antitrust related items 0 3 0 1 Less: Tax on non-GAAP adjustments (11 ) (1 ) (15 ) (1 ) Total non-GAAP adjustments to Net income attributable to controlling interest 80 3 93 4 Adjusted Net income attributable to controlling interest (Non-GAAP) $ 181 $ 170 $ 334 $ 338 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. 28 Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share - diluted" Three Months Ended June 30, Six Months Ended June 30, (Per share data) 2026 2025 2026 2025 Earnings per share - diluted (GAAP) $ 1.35 $ 2.16 $ 3.24 $ 4.31 Non-GAAP adjustments: Less: Capacity alignments - operating 1.04 0.02 1.14 0.04 Less: Capacity alignments - non-operating1) 0.18 - 0.30 - Less: Antitrust related items 0.00 0.03 0.00 0.02 Less: Tax on non-GAAP adjustments (0.15 ) (0.01 ) (0.20 ) (0.01 ) Total non-GAAP adjustments to Earnings per share - diluted 1.08 0.04 1.25 0.05 Adjusted Earnings per share - diluted (Non-GAAP) $ 2.43 $ 2.21 $ 4.49 $ 4.36 Weighted average number of shares outstanding - diluted 74.2 77.3 74.5 77.5 1) Relates to curtailment loss in connection with restructuring and capacity alignment activities. Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital Employed" Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Return on capital employed1) (GAAP) 17.9 % 23.8 % 20.3 % 24.8 % Non-GAAP adjustments: Less: Capacity alignments - operating 6.9 % 0.1 % 3.8 % 0.2 % Less: Antitrust related items 0.0 % 0.2 % 0.0 % 0.1 % Total non-GAAP adjustments to Return on capital employed1) 7.0 % 0.4 % 3.9 % 0.2 % Adjusted Return on capital employed1) (Non-GAAP) 24.9 % 24.1 % 24.1 % 25.0 % Annualized adjustment2) on Return on capital employed1) $ 311 $ 16 $ 216 $ 9 1) Annualized operating income and income from equity method investments, relative to average capital employed. The average capital employed amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period. 2) The quarterly annualized adjustment to the operating income and income from equity method investments amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the operating income and income from equity method investments amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four. Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity" Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Return on total equity1) (GAAP) 15.6 % 27.7 % 18.8 % 28.2 % Non-GAAP adjustments: Less: Capacity alignments - operating 11.6 % 0.2 % 6.3 % 0.3 % Less: Capacity alignments - non-operating2) 2.0 % - 1.7 % - Less: Antitrust related items 0.0 % 0.4 % 0.0 % 0.1 % Less: Tax on non-GAAP adjustments (1.6 )% (0.1 )% (1.1 )% (0.1 )% Total non-GAAP adjustments to Return on total equity1) 12.0 % 0.5 % 6.9 % 0.3 % Adjusted Return on total equity1) (Non-GAAP) 27.6 % 28.2 % 25.7 % 28.5 % Annualized adjustment3) on Return on total equity1) $ 321 $ 13 $ 186 $ 8 1) Annualized net income relative to average total equity. The average total equity amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period. 2) Relates to curtailment loss in connection with restructuring and capacity alignment activities. 3) The quarterly annualized adjustment to net income amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the net income amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four. 29 Autoliv from time to time enters into “debt-related derivatives” (DRDs) as a part of its debt management and as part of efficiently managing the Company’s overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of the Company’s debt, therefore we provide this non-U.S. GAAP measure. DRDs are fair value adjustments to the carrying value of the underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values. Reconciliation of GAAP financial measure to non-GAAP measure “Net debt” (Dollars in millions) June 30, 2026 March 31, 2026 June 30, 2025 Short-term debt $ 350 $ 393 $ 679 Long-term debt 1,688 1,699 1,372 Total debt 2,037 2,091 2,051 Cash and cash equivalents (377 ) (342 ) (237 ) Debt issuance cost/Debt-related derivatives, net 34 23 (62 ) Net debt (non-GAAP) $ 1,695 $ 1,773 $ 1,752 The non-GAAP measure “Net debt” is also used in the non-GAAP measure “Leverage ratio”. Management uses the non-GAAP measure “Leverage Ratio” to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. It is Autoliv’s target to operate with a leverage ratio (sum of net debt plus pension liabilities divided by adjusted EBITDA) of 1.5x or below. For details and calculation of leverage ratio (non-GAAP measure), refer to the table below. Calculation of non-GAAP measure “Leverage ratio” (Dollars in millions) (Dollars in millions) June 30, 2026 March 31, 2026 June 30, 2025 Net debt1) (non-GAAP) $ 1,695 $ 1,773 $ 1,752 Pension liabilities 180 176 167 Net debt per the Policy (non-GAAP) 1,874 1,949 1,919 Net income2) 643 710 717 Income taxes 2) 246 246 255 Interest expense, net2,3) 93 93 96 Other non-operating items, net2) 40 28 19 Income from equity method investments2) (5 ) (6 ) (6 ) Depreciation and amortization of intangibles2) 434 419 390 Capacity alignments2) 104 28 6 Antitrust related items2) 2 4 6 Other items2) — — — EBITDA per the Policy (Adjusted EBITDA) (non-GAAP) $ 1,556 $ 1,523 $ 1,483 Leverage ratio (non-GAAP) 1.2 1.3 1.3 1) Net debt (non-U.S. GAAP measure) is short- and long-term debt and debt-related derivatives, less cash and cash equivalents. 2) Latest 12-months. 3) Interest expense, net including cost for extinguishment of debt, if any, less interest income. 30 Management uses the non-GAAP measure “free operating cash flow” to analyze the amount of cash flow being generated by the Company’s operations after capital expenditure, net. This measure indicates the Company’s cash flow generation level that enables strategic value creation options such as dividends or acquisitions. For details on the calculation of free operating cash flow, see the table below. Management uses the non-GAAP measure “cash conversion” to analyze the proportion of net income that is converted into free operating cash flow. The measure is a tool to evaluate how efficiently the Company utilizes its resources. For details on cash conversion, see the table below. Reconciliation of GAAP measure "Operating cash flow" to non-GAAP measures "Free operating cash flow" and "Cash conversion" (Dollars in millions) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 101 $ 168 $ 242 $ 335 Changes in operating working capital 240 15 (108 ) (164 ) Depreciation and amortization 115 100 222 195 Gain on divestiture of property — — 0 (6 ) Other, net (21 ) (5 ) 3 (6 ) Operating cash flow (GAAP) 434 277 359 355 Expenditures for property, plant and equipment (95 ) (115 ) (180 ) (217 ) Proceeds from sale of property, plant and equipment 0 1 1 9 Capital expenditure, net1) (95 ) (114 ) (178 ) (208 ) Free operating cash flow2) (non-GAAP) $ 340 $ 163 $ 180 $ 147 Cash conversion3) (non-GAAP) 338 % 97 % 74 % 44 % 1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment. 2) Operating cash flow less Capital expenditures, net. 3) Free operating cash flow relative to Net income. Headcount June 30, 2026 March 31, 2026 June 30, 2025 Total headcount 63,500 64,100 65,100 Whereof: Direct personnel in manufacturing 46,200 46,700 48,000 Indirect personnel 17,300 17,400 17,100 Temporary personnel 11 % 10 % 9.3 % As of June 30, 2026, total headcount (Full Time Equivalent) decreased by around 1,600, or 2.5%, compared to a year earlier. The indirect workforce increased by around 200, or 1.1%, mainly reflecting a change in headcount reporting classification, moving around 300 people from direct to indirect. The direct workforce decreased by approximately 1,800, or 3.7%. The decrease was supported by improved customer call-off accuracy, which enabled us to accelerate operating efficiency improvements, and also reflected the reclassification mentioned above. Compared to March 31, 2026, total headcount (Full Time Equivalent) decreased by around 600, or 0.9%. Indirect headcount decreased by around 100, while direct headcount decreased by approximately 500. 31 Full year 2026 guidance In addition to the assumptions below and in our business and market update above, our full year 2026 guidance is based on our customer call-offs and the achievement of our targeted cost compensation adjustments with our customers, including no material changes to tariffs or trade restrictions, as compared to what is in effect as of July 9, 2026, as well as no significant changes in the macro-economic environment, changes in customer call-off volatility or significant supply chain disruptions. Full year 2026 Guidance Organic sales growth Around 0% Adjusted operating margin 1) Around 10.5-11% Operating cash flow 2) Around $1.2 billion Capital expenditures, net % of sales Less than 5% 1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. 2) Excluding unusual items. Full year 2026 Assumptions LVP growth Around 2.5% negative Foreign currency impact on net sales Around 2.5% positive Tax rate3) Around 30% 3) Excluding unusual tax items. This report includes content supplied by S&P Global; Copyright © Light Vehicle Production Forecast, January, April and July 2026. All rights reserved. The forward-looking non-GAAP financial measures above are provided on a non-GAAP basis. The Company has not provided a GAAP reconciliation of these measures because items that impact these measures, such as costs and gains 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 the Company is unable to determine the probable significance of the unavailable information. Other Items •On May 8, 2026, Autoliv announced that it will discontinue its manufacturing operations in Türkiye. •On June 3, 2026, Autoliv inaugurated the Autoliv Innovation Center in Vårgårda, Sweden. It is a significant step to accelerate the development of life-saving mobility solutions through the Autoliv Innovation Center - a new global platform designed to speed up innovation, collaboration, and development of advanced safety technologies. •On June 26, 2026, Autoliv announced that Kevin Fox notified the Company that he is resigning as the President, Autoliv Americas for personal reasons. He will remain in his current position through August 31, 2026, and thereafter will serve as executive senior advisor to the CEO through February 28, 2027, to support the transition to his successor, unless otherwise agreed by the parties. •On July 6, 2026, Autoliv announced that Great Wall Motor (GWM), a leading Chinese automotive manufacturer, and Autoliv (Shanghai) Management Co., Ltd signed a Global Strategic Cooperation Framework Agreement. The agreement marks a new phase in the companies' long-term global partnership. •On July 7, 2026, Autoliv announced that XPENG Inc., a leading Chinese physical AI technology company with a growing international presence and innovations in smart electric vehicles, autonomous driving and humanoid robots, and Autoliv (Shanghai) Management Co., Ltd. signed a strategic cooperation framework agreement to support the development of safer mobility solutions for global markets. Under the agreement, Autoliv and XPENG will expand collaboration across several key areas, including technology development, digitalization, supply chain coordination, sustainability, and global business expansion, combining Autoliv's worldwide safety expertise with XPENG's innovation in smart electric mobility. •In the second quarter of 2026, Autoliv repurchased and retired 1.65 million shares of common stock at an average price of $121.43 per share, for a total of approximately $200 million under the Autoliv 2029 stock repurchase program. Under this program, repurchases may be made from July 1, 2025 through December 31, 2029. The maximum value of aggregate repurchases under this program is $2.5 billion. Repurchases of stock may be made directly on the NYSE. 32