Annual Report 2020
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Annual Report 2020 veoneer.com Convenient, Safe Driving for Everyone We believe that a step-by-step approach to globally, over half of which are pedestrians and vulnerable road users. Veoneer’s products and solutions prevent traffic accidents autonomy is the way to increase convenience and, when accidents are unavoidable, our restraint control systems and traffic safety. We call it collaborative help mitigate the effects of a crash. We create trust in mobility. driving. Improved safety can no longer be just an option. We democra- tize safety through a scalable architecture, where the same base Collaborative driving blends the best of human drivers and machine technology platform can be used from basic driver assistance solu- intelligence for Advanced Driving Assistance Systems into a tions up to fully autonomous driving on highways and in traffic jam sophisticated driving system, where the human driver is interact- situations. This approach helps lowering the R&D costs and means ing with intelligent technology. High performance driver state anal- that increased safety becomes affordable for more people. In 2030, ysis is used to monitor levels of attention, distraction, drowsiness, the vast majority of all cars sold will have advanced safety soft- engagement and impairment, with warning and intervention strat- ware and hardware that provide collaborative interaction with the egies developed using human factors and behavioral research to driver. keep the human driver in the loop. We Innovate Trust Scalable Architecture Today, lack of trust is a major roadblock for adoption of currently 2024 available vehicle technology. Consumer surveys show that drivers often turn off safety features such as lane-keeping assist because 2022 they beep too often. At the other end of the spectrum, we know that some drivers can over-trust technology, resulting in severe 2020 • Adds+ crashes. Humans must trust automated systems to make the right • Incremental Safety Adds+ decisions. In return, these systems must decipher a human • • L2++ evolution Scalability & driver’s readiness to intervene, as well as respond to a range of • • Collaborative driving configurability driver skill levels and human emotions. When humans and ma- stack • Re-usability chines collaborate seamlessly, that is when we successfully have • 5* NCAP • SLAM Premium Safety • L2+Cruising innovated trust. • L2 supervised cruising & ASP2.x Democratize Safety connected features ASP1.x According to the World Health Organization, annually almost 1.4 Z1 million lives are lost and 50 million people are injured on roads 2 Veoneer, Inc. is a worldwide leader in automotive technology. Our purpose is Creating to create trust in mobility. We design, manufacture and sell state-of-the-art software, hardware and systems for occupant protection, advanced driving assistance systems, and collaborative and automated driving to vehicle manufacturers globally. Headquartered in Stockholm, Sweden, Veoneer Trust in became an independent, publicly traded company in 2018, listed on the Mobility New York Stock Exchange and on the Nasdaq Stockholm. Canada Markham Germany Sweden Unterschleissheim Stockholm Niederwern Vårgårda Holzgerlingen Linköping Kitzingen Göteborg Skellefteå Korea Hwaseong-shi Japan France Romania Hiroshima Yokohama USA Cergy-Pontoise Timisoara Southfield, MI Saint-Etienne-du-Rouvray Iasi Goleta, CA Italy Lowell, MA Turin Novi, Mi San Jose, CA India Findlay, OH Bangalore China Shanghai Production Plant Changsha Engineering Site 7,543 11 6 22 ASSOCIATES COUNTRIES MANUFACTURING SITES TECHNICAL CENTERS $1.37 Bn NET SALES Sales by Product Sales by Customer Sales by Region Other Brake Other 1% Systems 5% Daimler Asia Volvo 16% 20% Europe BMW 3% 25% 4% 41% Chinese Domestic 5% 12% Hyundai/Kia 5% 49% RNM 45% 6% 11% 34% FCA 7% 11% Active Safety Restraint Control Ford Americas Systems GM Honda 2 3 Dear Shareholder 2020 was a year unlike any other. The COVID-19 pandemic and its Covid-19, unfortunately including tragic losses of associates, and consequences occupied the thoughts and actions of an entire my thoughts goes to all who have been personally touched by the world and for Veoneer, just as for the world at large, health and pandemic and have lost near and dear ones. safety emerged as the primary focus of all activities. Second to the health effects were the economic consequences. The auto- Current Trends in Automotive motive industry was not immune, and the second quarter of the In 2020 the strength of the trend toward electrification surprised year saw global car production almost cut in half compared to many and this transition will continue to be rapid. In automation the year before, after which a strong rebound commenced, one the trend is equally strong, but maybe slightly more multifaceted. which is still on-going. Fundamentally this rebound has been On one hand the efforts toward fully autonomous driving are a positive development which on the flip side is also creating continuing, but refocusing towards last the mile delivery and challenges for global supply chains and logistics. robo-taxis in well-defined geofenced areas. The general-purpose I am grateful for the efforts and support from all our asso- self-driving car is still many years away. At the same time, the ciates and the commitment from our shareholders and other trend toward more driver support and collaborative driving is stakeholders during this unique year. It has allowed Veoneer to stronger than ever. New constellations are being formed almost stick to its plans from the beginning of the year, showing organic on a weekly basis and billions of dollars are being invested into growth, improving financials, deliver new technologies and key this trend, which promises to make driving safer, more conven- vehicle launches and being able to set a stake in the ground for ient and more environmentally friendly. We continue to see the the timing of reaching positive cash flow and operating income. Active Safety market grow strongly, at least the next decade. Underlying all these developments are the rise of software Covid -19 Actions as an increasing force in the automotive industry. It takes many In February, we initiated our crisis response by creating health shapes and forms in everything from infotainment and radically and operational crisis management teams. This included strict improved connectivity to software for perception and driving health protocols and measures at all our facilities to avoid the policy, which enables decision making and actuation in the areas spread of the virus within Veoneer. In addition, daily reviews to of Active Safety, collaborative and autonomous driving. secure our operations and logistics allowed Veoneer to meet commitments to our customers while ensuring the health and Veoneer’s Focus and Financial Performance safety of our associates. We also initiated work at home, where Veoneer is at the center of the trend of automation. We are 100% at the peak more than 4,000 of Veoneer’s associates were work- focused on creating hardware, software, systems and solutions ing remotely. The initial actions turned out to be effective and we for safer and more convenient driving. We have been consistent have by and large retained the same type of Covid-19 measures in following an evolutionary strategy. We see that automakers throughout the year and into 2021. This has allowed us to keep are gradually introducing more and more Active Safety technol- our operations relatively unaffected, while at the same time we ogy every year; they also introduce it across broader sections of have kept building for the future. We have also had some cases of their vehicle programs. We are supporting our OEM customers *Non-U.S. GAAP measure. See Annual Report on Form 10-K for more information. Veoneer 2020 January February May Collaborative Driving Collaborative Driving on Divestiture 2019 GM Supplier on public streets in Las public streets in Stockholm. of VNBS of the Year Vegas at CES 2020 Part of SAFER conference. Winner 4 in this development and we are also driving it from a new prod- million, which was significantly better than our anticipation at uct creation perspective. As a consequence of regulatory trends the beginning of the pandemic. and customer needs, we are further sharpening our focus to be: A leading component supplier of a full suite of Restraint Control Sustainability Program and Active Safety products, including vision, radar, electronic Our ultimate sustainability commitment lies in our company pur- control units, driving monitoring, thermal sensing and lidar. A pose, “Creating Trust in Mobility”. Trusted technology means safe leading developer of a full suite of software for ADAS, collabora- technology and the next step in a meaningful reduction of the 1.4 tive and automated driving. A system integrator with the ability million traffic deaths lies in preventing accidents to occur in the to industrialize and integrate our own as well as third party prod- first place – something all our technologies contribute to. ucts in millions of vehicles annually in an effective way. As a young company, we continue to develop our sustainabil- ity program. Since its inception the program has had four clear During 2020 we took critical strategic steps to further develop focus areas: our people, our customers, our business partners our portfolio and competitive position: and the environment. During 2020, we added climate as a spe- • We dissolved Zenuity, our software JV with Volvo Cars, and cific focus area. We also initiated a sustainability forum with more than 200 software engineers became part of Veoneer, participants from all parts of Veoneer reporting into the exec- utive management team that reports on sustainability matters • We exited the brake control business, as we did not see to the Board of Directors, which have ultimate oversight of the brake control becoming an integral part of future Active program. Everything related to sustainability can be found in our Safety solutions, dedicated Sustainability Report.