Exhibit 99.1

                , 2018

Dear Autoliv, Inc. Stockholder:

On December 12, 2017, we announced that, following the conclusion of a strategic review by our Board of Directors, we intend to spin-off our Electronics business segment, creating a new, independent publicly traded company called Veoneer, Inc. (“Veoneer”).

Over the last decade, our Electronics business has grown and matured next to our world leading Passive Safety business and today we have two distinct, successful businesses, each with its own unique business drivers. The spin-off will better position both companies to address two distinct, growing markets with leading product offerings.

Our Electronics segment is a leader in the active safety market with one of the broadest and most advanced product portfolios in the industry today, which includes automotive radars, cameras with driver assist systems, night vision systems, and positioning systems. It is a market leader in restraint control systems and an ambitious niche player in brake control systems.

The remaining business will build on its global leadership in the passive safety market, which consists of airbag systems, steering wheels and seatbelts. Standalone, the passive safety business will have increased opportunities to further optimize its performance.

Upon completion of the spin-off, our stockholders will have an interest in both Autoliv and Veoneer. To implement the spin-off, Autoliv has transfered the Electronics business to Veoneer and its subsidiaries and will distribute 100% of the outstanding shares of common stock of Veoneer on a pro rata basis to existing holders of common shares of Autoliv, including shares represented by Swedish Depository Receipts (“SDRs”). As discussed in this information statement, the intent is for this distribution to be tax free to stockholders both in the US and Sweden. As a result of the distribution, each Autoliv stockholder and Autoliv SDR holder will receive one share of common stock of Veoneer or Veoneer SDR for every one share of common stock or SDR of Autoliv held on the applicable record date for the distribution.

No vote of Autoliv stockholders is required for the distribution. You do not need to take any action to receive shares of Veoneer common stock to which you are entitled as an Autoliv stockholder or Autoliv SDR holder, and you do not need to pay any consideration or surrender or exchange your Autoliv shares or SDRs.

I encourage you to read the attached information statement, which is being provided to all Autoliv stockholders who hold shares of Autoliv common stock (including shares represented by SDRs) on the record date for common stockholders for the distribution. The information statement describes the spin-off in detail and contains important business and financial information about Veoneer.

I believe the spin-off provides immense opportunities for our businesses and our stockholders, as we work to continue building long-term stockholder value. Thank you for your continuing support of Autoliv, and we look forward to your future support of both companies.

Sincerely,

Jan Carlson

Chairman, President and Chief Executive Officer

                , 2018

Dear Future Veoneer, Inc. Stockholder:

It is my pleasure to welcome you as a future stockholder of our company, Veoneer, Inc. (“Veoneer”). Following the distribution of all of the outstanding shares of Veoneer common stock by Autoliv, Inc. to its stockholders, Veoneer will be an independent, publicly traded company focused on saving lives, improving the driving experience and leading the way towards autonomous driving with our innovative technologies.

Veoneer is one of the leaders in the active safety market, with one of the broadest and most advanced product portfolios in the industry. Over the last two years we have further positioned Veoneer to be a major player in automotive electronics, by developing a competitive product portfolio, becoming a qualified supplier with a high number of automobile manufacturers and entering into important strategic partnerships with companies like Volvo Cars, NVIDIA and Velodyne to develop the next generation of highly automated cars.

Veoneer’s product offerings consist of active safety products such as automotive radars, cameras with driver assist systems, night vision systems and positioning systems, restraint control systems and brake systems. It is estimated that the total available market for active safety electronics will grow from around $20 billion in 2017 to more than $40 billion in 2025. As an independent company, we will be able to pursue a growth strategy focused on innovation, cost structure and business model optimization to allow us to capture a significant portion of that growth while continuously improving our profitability.

We expect our common stock will be listed in the U.S. on the New York Stock Exchange under the symbol “VNE” and our Swedish Depository Receipts will be listed on Nasdaq Stockholm under the symbol “VNE SDB” in connection with the distribution of Veoneer common stock by Autoliv.

We invite you to learn more about Veoneer by reviewing the enclosed information statement. We are excited by the great opportunities that lay in front of us. We thank you in advance for your support as a holder of our common stock.

Sincerely,

Jan Carlson

Chief Executive Officer

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

SUBJECT TO COMPLETION, DATED JUNE 4, 2018

INFORMATION STATEMENT

Veoneer, Inc.

Common Stock

par value $1.00 per share

This information statement is being sent to you in connection with the spin-off of Veoneer, Inc. (“Veoneer”) from Autoliv, Inc. (“Autoliv”), following which Veoneer will be an independent, publicly traded company. References to “Veoneer,” “we,” “us,” or “the Company” refer to the combined entities, assets and liabilities that constitute the Electronics business of Autoliv, subject to certain exceptions. References to “Autoliv” refer to Autoliv and its consolidated subsidiaries, which prior to the distribution, but not after such date, includes the business and operations of Veoneer. Autoliv will complete the spin-off by distributing all of the outstanding shares of Veoneer common stock on a pro rata basis to the holders of Autoliv common stock. We expect that the spin-off generally should be tax-free to Autoliv stockholders for U.S. federal income tax purposes and tax exempt for Swedish tax purposes, except to the extent of cash received in lieu of fractional shares. Each Autoliv stockholder and Autoliv Swedish Depository Receipt (“SDR”) holder will receive one share of Veoneer common stock or one Veoneer SDR for every one share of Autoliv common stock or SDR held by such person on the applicable record date. The distribution of shares will be made in book-entry form only. Autoliv will not distribute any fractional shares of Veoneer common stock. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate net cash proceeds from the sales pro rata to each holder who would otherwise have been entitled to receive a fractional share in the distribution. The distribution will be effective on June 29, 2018. After the distribution is completed, we will be an independent, publicly traded company.

No vote or other action of Autoliv stockholders is required in connection with the spin-off. We are not asking you for a proxy and you should not send us a proxy. Autoliv stockholders or SDR holders will not be required to pay any consideration for the shares of Veoneer common stock or Veoneer SDRs they receive in the spin-off, and they will not be required to surrender or exchange their Autoliv common stock or Autoliv SDRs, as applicable, or take any other action in connection with the spin-off.

All of the outstanding shares of Veoneer common stock are currently owned, directly or indirectly, by Autoliv. Accordingly, there is no current trading market for Veoneer common stock. We expect, however, that a limited trading market for Veoneer common stock, commonly known as a “when-issued” trading market, will develop in the U.S. at least one trading day prior to the common stock record date for the distribution, and we expect “regular-way” trading of Veoneer common stock will begin the first trading day after the distribution date. There will not be “when-issued” trading in Veoneer SDRs in Sweden. We intend to list Veoneer common stock on the New York Stock Exchange under the ticker symbol “VNE” and Veoneer SDRs on Nasdaq Stockholm under the ticker symbol “VNE SDB”.

In reviewing this information statement, you should carefully consider the matters described in the section entitled “Risk Factors” in this information statement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement is not an offer to sell, or a solicitation of an offer to buy, any securities.

This information statement was first made available to Autoliv stockholders on or about                , 2018.

The date of this information statement is                , 2018.

TABLE OF CONTENTS

SUMMARY	1
RISK FACTORS	22
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS	46
THE SPIN-OFF	47
TRADING MARKET	53
CAPITALIZATION	55
SELECTED HISTORICAL COMBINED FINANCIAL DATA	56
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS	57
BUSINESS	63
PROPERTIES	89
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	92
MANAGEMENT	122
EXECUTIVE AND DIRECTOR COMPENSATION	130
CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS	163
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	169
DESCRIPTION OF CAPITAL STOCK	172
SWEDISH DEPOSITORY RECEIPTS	178
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES	183
MATERIAL SWEDISH INCOME TAX CONSEQUENCES	188
CERTAIN INFORMATION REQUIRED BY SWEDISH LAW	192
WHERE YOU CAN FIND MORE INFORMATION	194
INDEX TO FINANCIAL STATEMENTS	F-1

SUMMARY

This summary highlights information contained in this information statement and provides an overview of our company, our separation from Autoliv and the distribution of our common stock by Autoliv to its stockholders. For a more complete understanding of our business and the spin-off, you should read this entire information statement carefully, particularly the discussion set forth under “Risk Factors” and our audited historical combined financial statements, our unaudited pro forma condensed combined financial statements and the respective notes to those statements included in this information statement.

Veoneer, Inc.

Business

Veoneer is a global leader in the design, development, sale and manufacture of automotive safety electronics¹ and has operated for almost four years as a segment within Autoliv (“Electronics”). Based on our heritage of Autoliv’s vision of “Saving Lives,” our safety systems are designed to make driving safer and easier, more comfortable and convenient and to intervene before a collision. Veoneer endeavors to prevent vehicle accidents or reduce the severity of impact in the event a crash is unavoidable. We further intend to develop human centric systems that benefit vehicle occupants. We do this by being an expert partner to our customers. Our pure-play focus in safety electronics places the Company in a strong position to deliver integrated Advanced Driver Assistance System (“ADAS”) and Highly Automated Driving (“HAD”) solutions towards Autonomous Driving (“AD”) with focus on Quality and Manufacturing Excellence.

We provide advanced active safety sensors used for ADAS, HAD and AD solutions, such as vision and radar systems, ADAS Electronic Control Units (“ECUs”), night vision and positioning systems. Through Zenuity, our joint venture with Volvo Cars, we develop an advanced software stack for vehicle decision control for ADAS, HAD and AD solutions. In addition, we offer driver monitoring systems, LiDAR sensors and other technologies critical for AD solutions by leveraging our partnership network and internally developed intellectual property. We also provide Restraint Control Systems such as ECUs and crash sensors for deployment of airbags and seatbelt pretensioners in the event of a collision. Lastly, Autoliv-Nissin Brake Systems (“ANBS”), our joint venture with Nissin Kogyo, provides brake control and actuation systems, and has developed strong capabilities in regenerative braking, which is important for not only hybrid and electric vehicles but also for vehicle platforms where customers prioritize weight reduction and improved fuel economy over other features.

Our innovation and technology leadership, relentless focus on quality and safety along with a strong global footprint and diversified customer base, including most major global automotive Original Equipment Manufacturers (“OEMs”), are all trademarks of our Autoliv DNA. OEMs are seeking to manufacture vehicles that meet and exceed increasingly stringent safety test ratings around the world, to satisfy consumer demands for increased vehicle safety through more advanced driver assist features and enhanced comfort and convenience towards AD.

Veoneer’s Competitive Strengths

Veoneer’s competitive strengths derive from combining deep industry expertise and understanding of our markets, our history of industry firsts and ability to commercialize new innovations, our dedication to quality and

¹  The Company’s calculations are based on information on revenues of automotive safety electronics competitors, of which the largest market participants (Aptiv, Bosch, Continental, Denso, Magna, Valeo and ZF) have been analyzed with publicly available information, such as the latest available annual reports, press releases and other information available on company websites.

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robustness, and our long-standing customer relationships. We believe these qualities will allow Veoneer to capitalize on the industry mega trends and highly attractive market opportunities as we complete our separation from Autoliv and develop and grow our business on an independent, standalone basis.

• Strong Positions in Highly Attractive Markets: Veoneer is a pure-play company in the highly attractive light vehicle safety electronics product area, with a leading market share in restraint control systems (25%), a high market share in the fragmented active safety market (16%) and an emerging market position in our recently founded brake systems (4%) unit.² A significant portion of our portfolio is directly exposed to and benefitting from the high growth active safety and autonomous driving markets, which are both expected to grow significantly over the coming years. Veoneer estimates its Total Addressable Market to growth by a 10% CAGR from 2017 through 2025.³

• Best-in-Class Quality and Reliability Attracting Global OEM Customer Base: We have over 20 OEM customers, and supply most of the top 12 global OEMs with ADAS solutions. These customer relationships have been forged over a long period and through our Autoliv heritage, our highest quality standards and our proven reliability as demonstrated through our superior recall track record. This is further secured through our innovation and technology leadership and integrated product offering.

• Integrated ADAS and Autonomy Systems Solutions: We recently complemented our product offerings of individual hardware components with full-suite ADAS and end-to-end self-driving system solutions, ranging from vision and radar hardware, over raw sensor data to decision-making algorithms and vehicle actuators. Our integrated system solutions allow OEMs to reduce their need for several suppliers within vehicle safety electronics. We source the decision and control software expertise for our advanced driver assistance and autonomous driving systems from Zenuity and the partnership network built around Zenuity which includes Volvo Cars, Velodyne LiDAR, NVIDIA, Seeing Machines, Neonode, Ericsson and TomTom. Two key recent milestones achieved by Zenuity are deep learning integration and automotive grade commercialization.

• Proven Track Record of Commercializing Many of the World’s First Safety Innovations: We continuously operate at the forefront of innovation, having brought many world’s first safety solutions to the market. For example, in 2008, we integrated the electronic stability control inertial sensors with control electronics for airbags and other restraint systems (integrating active and passive safety). In 2011, we developed a system that combines controls for vehicle brakes with controls for vehicle restraints. In 2012, we introduced the world’s first automated emergency braking for both vision and radar. In 2016, we introduced the third-generation night vision solutions, the world’s first night vision system that can detect traffic danger and living things in total darkness or fog.

• Strong Visibility on Near and Long-Term Profitable Growth: We are increasingly competitive in customer requests for proposal, which we believe will translate into order intake, revenue and improving our profitability going forward. In addition, we see a significant long-term growth potential through our scalable business model, underpinned by advanced automotive safety technologies and strong customer relationships. We believe our lean organizational setup and flexible cost structure will

²  The Company’s market share estimates are based on internal market intelligence on geographies, OEMs and their vehicle models in the product areas where the Company competes along with light vehicle production data from IHS database.

³  The Company’s calculations for market estimates per product group are based on light vehicle production data from IHS database as of February 2018, supplemented by the Company’s internal market intelligence on prices and penetration rates of each expected Active Safety product and about light vehicle production based on publicly available information and history operating in the market.

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allow for consistent earnings growth and strong cash flow. This increased competitiveness stems from our investment and product development efforts over the past few years. These investments include hiring significant additional engineering personnel, increasing our R,D&E expenses and increasing capital expenditures. The increase in expenses has produced some losses in recent years. For additional information see “Business—Financial Performance.”

• The Right Talent and Organization with a Winning Mindset

• Tailored Organizational Setup, Nimble Strategy and Operational and Strategic Flexibility: We operate with a dedicated culture centered around agility, collaboration, empowerment and speed, with a highly skilled engineering workforce, enabling agile business processes and an ability to respond quickly in response to customer and market demands, which is key for obtaining engineering resources and partnerships needed to succeed.

• Quality and Quantity of People: We have a highly skilled workforce of approximately 7,500 employees, including over 3,500 engineers, of which more than two-thirds are software engineers. We have approximately 600 software engineers focused on vision, and our Zenuity joint venture has approximately 475. Our workforce and access to Zenuity’s work force through our joint venture provides us with significant strategic flexibility to deploy human capital towards new innovative projects.

• Experienced Leadership Team with Proven Track Record: We expect to have a strong management team with extensive experience within the industry. Through the combination of their longstanding customer relationships, proven track record in operations management and deep industry knowledge, the leadership team will position us for future value creation.

Strategy

Veoneer’s ambition is to be the leading dedicated automotive safety electronics company in the world, with a sharp focus to the fast-growing market for ADAS and autonomous driving as well as the restraint and brake control markets.

Core elements of our strategy include:

• Flawless Delivery—Leveraging technical expertise to deliver high quality solutions with robustness, precision and scalability.

• Customer-Centric Collaboration—Working together with customers, using speed and agility to create OEM and end user optimized solution.

• Human-Centric Innovation—Working with the individual as a starting point for innovation, focusing on how technology can be used to create innovative solutions that people trust and use.

By focusing on our addressable market segments and by executing on our three core strategies Veoneer will be able to:

• Capture a significant part of the growing ADAS and autonomous driving market.

• Be cost competitive by staying at the forefront of technology innovation and driving manufacturing excellence.

• Have the agility and flexibility needed in a rapidly changing automotive market, including ability to address M&A and changing customer requirements in a timely and effective manner.

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Summary Risk Factors

There are a number of risks related to our business and the spin-off and related transactions, including the risks listed below. These and other risks related to our business and the spin-off are discussed in greater detail under the heading “Risk Factors” in this information statement. You should read and consider all of these risks carefully.

RISKS RELATED TO THE COMPANY

Risks Related to Our Business

• The cyclical nature of automotive sales and production can adversely affect our business.

• Growth rates in safety content per vehicle could affect our results in the future.

• We operate in highly competitive markets.

• We operate in a developing product market that may be subject to greater uncertainty and fluctuations in levels of competition than a more mature market.

• Autonomous driving involves complex technology and requires a number of different hardware and software competencies and technologies and there is a risk that these competencies or technologies will not develop at a sufficient pace to address marketplace needs.

• We may not be able to protect our proprietary technology and intellectual property rights, which could result in the loss of our rights or increased costs.

• The discontinuation, lack of commercial success, or loss of business with respect to a particular vehicle model for which are a significant supplier could reduce our sales and harm our profitability.

• We may incur material losses and costs as a result of product liability, warranty and recall claims that may be brought against us or our customers.

• Escalating pricing pressures from our customers may adversely affect our business.

• We could experience disruption in our supply or delivery chain, which could cause one or more of our customers to halt or delay production.

• We are subject to risks associated with the development and implementation of new manufacturing process technology.

• Work stoppages or other labor issues at our customers’ facilities or at our facilities could adversely affect our operations.

• Changes in the source, cost, availability of and regulations pertaining to raw materials and components may adversely affect our profit margins.

• Our business could be materially and adversely affected if we lost any of our largest customers or if they were unable to pay their invoices.

• Our inability to effectively manage the timing, quality and costs of new program launches could adversely affect our financial performance.

• Changes in our product mix may impact our financial performance.

• We may be involved from time to time in legal proceedings and our business may suffer as a result of adverse outcomes of future legal proceedings.

• We may have exposure to greater than anticipated tax liabilities.

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• Our ability to operate our company effectively could be impaired if we fail to attract and retain key personnel.

• A prolonged recession and/or a downturn in our industry could adversely affect our business and require us to seek additional sources of financing to continue our operations.

• Impairment charges relating to our assets, goodwill and other intangible assets could adversely affect our financial performance.

• We face risks related to our defined benefit pension plans and employee benefit plans, including the need for additional funding as well as higher costs and liabilities.

• Increases in IT security threats, the sophistication of computer crime and our reliance on global data centers could expose our systems, networks, solutions and services to risks.

• Our business is exposed to risks inherent in international operations.

• Our business in China is subject to aggressive competition and is sensitive to economic and market conditions.

• We are exposed to exchange rate risks.

• We face risks in connection with identifying, completing and integrating acquisitions.

• Risks associated with joint venture partnerships and other collaborations may adversely affect our business and financial results.

• We are uncertain whether we will be able to obtain the consent of Nissin Kogyo, our ANBS joint venture partner, with respect to the spin-off.

• If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired.

• We may not be able to respond quickly enough to changes in technology and technological risks and to develop our intellectual property into commercially viable products.

• If the rate of consumer acceptance of active safety technology slows or decreases, our business, results of operations and financial condition would be adversely affected.

• Our use of open source software may restrict how we use or distribute our products or require that we release the source code of certain products subject to those licenses.

• Our business may be adversely affected by laws or regulations, including international, environmental, occupational health and safety or other governmental regulations, including automotive safety regulations.

Risks Related to the Spin-Off

• The spin-off may not be completed on the terms or timeline currently contemplated, if at all.

• We have no history of operating as an independent, stand-alone company, and our historical and pro forma financial information may not be representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.

• Our ability to meet our capital needs may be harmed by the loss of financial support from Autoliv and it may be more difficult for us to obtain financing following the spin-off.

• As an independent, publicly traded company, we may not enjoy the same benefits that we did as a segment of Autoliv.

• The combined post-spin-off value of Autoliv and our common stock may not equal or exceed the pre-separation value of Autoliv common stock.

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• We may not achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely affect our business.

• We may be responsible for U.S. federal income tax liabilities that relate to the distribution.

• The distribution of shares to stockholders of Autoliv that are tax resident in Sweden may result in taxation on the received dividend.

• Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the separation and distribution.

• As we build our information technology infrastructure and transition our data to our own systems, we could incur substantial additional costs and experience temporary business interruptions.

• Autoliv may fail to perform under various agreements that have or will be executed in connection with the spin-off.

• We may fail to have the necessary systems, services, and assets in place at the necessary time.

• The spin-off may result in disruptions to, and negatively impact our relationships with, our customers, prospective customers and other business partners.

• Potential indemnification liabilities to Autoliv or a refusal of Autoliv to indemnify us pursuant to the Distribution Agreement could materially adversely affect us.

• We may be unable to take certain actions after the spin-off because such actions could jeopardize the tax-free status of the spin-off, and such restrictions could be significant.

• The spin-off and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements.

• After the spin-off, certain of our officers and directors may have actual or potential conflicts of interest because of their service as executive officers or directors of Autoliv.

• We may have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements related to the spin-off.

RISKS RELATED TO OUR SECURITIES

Risks Related to Investing in Our Securities

• Our board of directors may change significant corporate policies without stockholder approval.

• Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.

• Our certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for certain disputes.

• There is no existing market for our common stock and a trading market that will provide you with adequate liquidity may not develop for our common stock. In addition, once our common stock begins trading, the market price and trading volume of our common stock may fluctuate widely.

• Future issuances of common stock by us may cause the market price of our common stock to decline.

• Your ownership in our stock may be diluted by additional equity issuances.

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• We have no current plans to pay cash dividends on our common stock, and certain factors could limit our ability to pay dividends in the future.

• If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.

Risks Related to an Investment in our Swedish Depository Receipts (SDRs)

• Veoneer SDR holders do not have the same rights as our stockholders.

• The trading market for Veoneer SDRs may be limited in the future.

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The Spin-Off

Overview

On December 12, 2017, Autoliv announced its intention to separate its Electronics segment into an independent, publicly traded company following the completion of a strategic review by its board of directors.

In advance of the spin-off, Autoliv completed a series of internal transactions, in which it transferred its Electronics business to us. We refer to these transactions as the “internal reorganization.” In connection with the internal reorganization, Autoliv and Veoneer entered into a master transfer agreement to allocate the assets and liabilities between each company as well as a transition services agreement pursuant to which certain services are being provided by each company on an interim basis following the internal reorganization. See “Certain Relationships and Related Persons Transactions.”

Before the spin-off, we will enter into a distribution agreement and several other agreements with Autoliv related to employee, tax and other matters. These agreements will govern the relationship between us and Autoliv after completion of the spin-off and will set forth certain terms, requirements and conditions to the completion of the spin-off. See “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off.”

In order to effect the spin-off, Autoliv will distribute all of the outstanding shares of our common stock on a pro rata basis to the holders of shares of Autoliv’s common stock. We refer to this pro rata distribution as the “distribution,” and we refer to the completion of the separation of the businesses into two independent, publicly traded companies as the “spin-off.”

The distribution of Veoneer common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. In addition, Autoliv has the right to delay or not to complete the spin-off if, at any time prior to the distribution, the board of directors of Autoliv determines, in its absolute and sole discretion, that the spin-off is not then in the best interests of Autoliv or its stockholders or other constituents, that a sale or other alternative is in the best interests of Autoliv or its stockholders or other constituents, or that market conditions or other circumstances are such that it is not advisable at that time to separate Veoneer from Autoliv. See “The Spin-Off—Conditions to the Distribution.”

Capital Injection From Autoliv

In connection with our spin-off from Autoliv, we expect that Autoliv will provide us with total cash liquidity of approximately $1.0 billion (funded through a mixture of new external funding and existing cash at Autoliv). The capital contribution from Autoliv will help fund our planned operations until we reach positive cash flow. The cash will be used for ongoing working capital requirements and capital expenditures and takes into account our on-going investments in joint ventures, particularly Zenuity, as well as certain anticipated business combinations. We will not have additional debt as a result of the transaction with Autoliv.

Questions and Answers about the Spin-Off

The following provides only a summary of the terms of the spin-off. For a more detailed description of the matters described below, see “The Spin-Off.”

Q: What is the spin-off?

A: The spin-off is a series of transactions by which Veoneer will separate from Autoliv and become an independent, publicly traded company. In advance of the spin-off, Autoliv completed an internal reorganization to become a separate entity within Autoliv. As part of the spin-off, Autoliv will distribute to

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Autoliv’s stockholders all of the outstanding shares of our common stock. Following the spin-off, Veoneer will be an independent, publicly traded company, and Autoliv will not retain any ownership interest in Veoneer.

Q: What will I receive in the spin-off?

A: As a holder of Autoliv common stock, you will retain your Autoliv shares and will receive one share of Veoneer common stock for every one share of Autoliv common stock you own as of the common stock record date (defined below). However, if you hold your Autoliv shares via a brokerage account and sell shares of Autoliv common stock in the “regular-way” market (described below) after the common stock record date and on or before the distribution date, you also will be selling the right to receive the shares of our common stock in connection with the spin-off. As a holder of Autoliv SDRs, you will retain your Autoliv SDRs and will receive one Veoneer SDR for every one Autoliv SDR you own as of the SDR record date (defined below). The number of shares of Autoliv common stock or SDRs you own and your proportionate interest in Autoliv will not change as a result of the spin-off. See “The Spin-Off—Manner of Effecting the Spin-Off.”

Q: When is the record date for the distribution?

A: The record date for the distribution for holders of Autoliv common stock is June 12, 2018 (the “common stock record date”). The record date for the distribution for holders of Autoliv SDRs is July 2, 2018 (the “SDR record date”). The common stock record date and the SDR record date are referred to together as the “record dates.”

Q: What is Veoneer?

A: Veoneer is currently a wholly-owned subsidiary of Autoliv that comprises Autoliv’s Electronics business. Veoneer’s shares will be distributed to Autoliv stockholders at the time the spin-off is completed. After the spin-off is completed, Veoneer will be an independent, publicly traded company.

Q: Why is the separation of Veoneer from Autoliv structured as a spin-off?

A: Autoliv determined, and continues to believe, that a spin-off is the most efficient way to accomplish a separation of the Electronics business from Autoliv for various reasons, including: (i) a spin-off is generally expected to be a tax-free distribution of Veoneer common stock to Autoliv stockholders and (ii) a spin-off offers a higher degree of certainty of completion in a timely manner, lessening disruption to current business operations. After consideration of strategic alternatives, Autoliv believes that a tax-free spin-off will enhance the long-term value of both Autoliv and Veoneer See “The Spin-Off—Reasons for the Spin-Off.”

Q: Can Autoliv decide to cancel the distribution of our common stock even if all the conditions have been met?

A: Yes. The distribution is subject to the satisfaction or waiver of certain conditions. See “The Spin-Off—Conditions to the Distribution.” Even if all conditions to the distribution are satisfied, Autoliv has the legal right to terminate and abandon the distribution at any time prior to the effectiveness of the distribution.

Q: What is being distributed in the spin-off?

A: Approximately 87 million shares of Veoneer common stock will be distributed in the spin-off, based on the number of shares of Autoliv common stock outstanding as of May 21, 2018, and assuming a distribution ratio of one to one. The actual number of shares of Veoneer common stock to be distributed will be calculated on the common stock record date. The shares of Veoneer common stock to be distributed by Autoliv will constitute all of the issued and outstanding shares of Veoneer common stock immediately prior to the distribution. See “Description of Capital Stock—Common Stock.”

Q: When will the distribution occur?

A: The distribution date of the spin-off is June 29, 2018. We expect that it will take the distribution agent, acting on behalf of Autoliv, one business day after the distribution date to fully distribute the shares of

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Veoneer common stock to Autoliv stockholders. We expect that it will take approximately one full trading day after the distribution date for Autoliv SDR holders to receive in their accounts Veoneer SDRs.

Q: What do I have to do to participate in the spin-off?

A: Nothing. You are not required to take any action, although we urge you to read this entire document carefully. No stockholder approval of the distribution is required or sought. You are not being asked for a proxy. No action is required on your part to receive your shares of Veoneer stock or Veoneer SDRs. You will neither be required to pay anything for the new shares or SDRs nor be required to surrender any shares of Autoliv common stock or SDRs to participate in the spin-off.

Q: How will outstanding equity awards held by Autoliv or Veoneer employees be affected as a result of the spin-off?

A: The Employee Matters Agreement entered into between Autoliv and Veoneer in connection with the spin-off will generally provide for the conversion of the outstanding awards granted under the Autoliv equity compensation programs into adjusted awards relating to both shares of Autoliv and Veoneer common stock. The adjusted awards generally will be subject to the same or equivalent vesting conditions and other terms that applied to the applicable original Autoliv award immediately before the distribution. See “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off—Employee Matters Agreement.”

Q: How will fractional shares be treated in the spin-off?

A: Fractional shares of Veoneer common stock will not be distributed. Fractional shares of Veoneer common stock to which Autoliv stockholders of record would otherwise be entitled will be aggregated and sold in the public market by the distribution agent at prevailing market prices. The distribution agent, in its sole discretion, will determine when, how and through which broker-dealers, provided that such broker-dealers are not affiliates of Autoliv or Veoneer, and at what prices to sell these shares. The aggregate net cash proceeds of the sales will be distributed ratably to those stockholders who would otherwise have received fractional shares of Veoneer common stock. See “The Spin-Off—Treatment of Fractional Shares” for a more detailed explanation. Receipt by a stockholder of proceeds from these sales in lieu of a fractional share generally will result in a taxable gain or loss to those stockholders for U.S. federal income tax purposes and Swedish income tax purposes. Each stockholder entitled to receive cash proceeds from these shares should consult his, her or its own tax advisor as to such stockholder’s particular circumstances. We describe the material U.S. federal income tax consequences of the distribution in more detail under “Material U.S. Federal Income Tax Consequences” and the material Swedish income tax consequences of the distribution in more detail under “Material Swedish Income Tax Consequences.”

Q: Why has Autoliv determined to undertake the spin-off?

A: Autoliv’s board of directors has determined that the spin-off is in the best interests of Autoliv, its stockholders and other constituents because Autoliv believes the spin-off will provide the following key benefits:

• Financial Resources. The businesses that Autoliv and Veoneer will separately conduct have very different capital needs, and the spin-off will allow each company to raise and invest capital in its business in a time and manner appropriate for its distinct strategy and business needs. Specifically, the electronics business will no longer have to compete for capital allocation with the passive safety business.

• Different Independent Strategic Needs. The spin-off will provide each company with increased flexibility to pursue independent strategic and financial plans and strategic partnerships without having to consider the potential impact on the business of the other company, as well as enable each company to use its stock as currency for acquisitions in the same or ancillary businesses.

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• Attraction and Retention of Talent. The businesses that Autoliv and Veoneer will separately conduct have different risk and reward profiles, which results in different work environments and cultures. The spin-off will allow each company to compete more effectively for the best talent in the space in which it operates by implementing a work environment and culture that is oriented to the business it conducts without consideration of the impact of such environment or culture on the business that the other company will be conducting.

• Employee Incentives. The spin-off will facilitate incentive compensation arrangements for employees more closely tied to the performance of the relevant company’s business and can thereby enhance employee hiring and retention by, among other things, improving alignment of management and employee incentives with performance and growth objectives.

• Enhanced Strategic and Management Focus. The spin-off will allow each company to focus on and more effectively pursue distinct product portfolios, operating priorities and strategies, and markets and marketing strategies, pursue different opportunities for long-term growth and profitability, and align operating priorities and financial objectives with the specific needs of the business it is conducting. The spin-off is intended to allow each company to adapt more quickly to changing markets and customer expectations and dynamics.

• Potential Increased Stock Value. The evaluation of separate investment characteristics, including risks, performance, and future prospects of the respective businesses, is expected to enhance the investment opportunities provided to investors by two separate companies. Should that occur, each company would be in a better position to utilize its stock as currency for acquisitions and to incentivize its employees.

Q: What are the material U.S. federal income tax consequences of the spin-off?

A: The spin-off is conditioned on the receipt of an opinion of Alston & Bird LLP, Autoliv’s U.S. tax counsel, confirming that the distribution, together with certain related transactions, should qualify as a transaction that is tax-free under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986 (the “Code”). Accordingly, for U.S. federal income tax purposes, you generally should not recognize any gain or loss as a result of the distribution, except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of Veoneer common stock. Although Autoliv has no current intention to do so, such condition is solely for the benefit of Autoliv and its stockholders and may be waived by Autoliv in its sole discretion. The material U.S. federal income tax consequences of the spin-off are described in detail under “Material U.S. Federal Income Tax Consequences.”

Q: What are the material Swedish income tax consequences of the spin-off?

A: The spin-off is conditioned on the receipt of written advice from Deloitte Sweden, Autoliv’s Swedish tax advisor, regarding the qualification of the distribution, together with certain related transactions, as a transaction that is generally tax exempt for Swedish income tax purposes under the “Lex-ASEA rule.” Although Autoliv has no current intention to do so, such condition is solely for the benefit of Autoliv and its stockholders and may be waived by Autoliv in its sole discretion. The material Swedish tax consequences of the spin-off are described in detail under “Material Swedish Income Tax Consequences.”

Q: Will the Veoneer common stock be listed on a U.S. stock exchange?

A: Yes. Although there is not currently a public market for Veoneer common stock, before completion of the spin-off, Veoneer will apply to list its common stock on the New York Stock Exchange (the “NYSE”) under the symbol “VNE.” It is anticipated that trading of Veoneer common stock will commence on a “when-issued” basis on the NYSE at least one trading day prior to the common stock record date. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. “When-issued” trades generally settle within three trading days after the distribution date. On the first trading day following the distribution date, any “when-issued” trading with respect to Veoneer common

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stock will end, and “regular-way” trading will begin. “Regular-way” trading refers to trading after a security has been issued and typically involves a transaction that settles on the second full trading day following the date of the transaction. See “Trading Market.”

Q: Will the Veoneer SDRs be listed on Nasdaq Stockholm?

A: Yes. Veoneer will apply to list its SDRs on Nasdaq Stockholm under the symbol “VNE SDB.” Trading of Veoneer SDRs on Nasdaq Stockholm is expected to begin on the same day trading of Veoneer common stock begins on the NYSE. There will be no “when-issued” trading in Veoneer SDRs. Autoliv SDR holders that wish to participate in “when-issued” trading will need to cancel their Autoliv SDRs registered with Euroclear in order to trade their underlying shares of Autoliv common stock on the NYSE. See “Trading Market.”

Q: Will my shares of Autoliv common stock or my Autoliv SDRs continue to trade?

A: Yes. Shares of Autoliv common stock will continue to be listed and trade on the NYSE under the symbol “ALV.” Autoliv’s SDRs will continue to trade on Nasdaq Stockholm under the symbol “ALIV SDB.”

Q: If I sell, on or before the distribution date, shares of Autoliv common stock that I held on the common stock record date, am I still entitled to receive shares of Veoneer common stock distributable with respect to the shares of Autoliv common stock I sold?

A: Beginning on or shortly before the common stock record date and continuing through the distribution date for the spin-off, Autoliv common stock will begin to trade in two markets on the NYSE: a “regular-way” market and an “ex-distribution” market. If you hold shares of Autoliv common stock in a brokerage account as of the common stock record date and choose to sell those shares in the “regular-way” market after the common stock record date and on or before the distribution date, you will also be selling the right to receive the shares of our common stock in connection with the spin-off. However, if you hold shares of Autoliv common stock as of the common stock record date and choose to sell those shares in the “ex-distribution” market after the common stock record date and on or before the distribution date, you will still receive the shares of our common stock in connection with the spin-off. Autoliv SDRs will continue to trade “regular-way” only.

Q: Will the spin-off affect the trading price of my Autoliv common stock?

A: Yes. As a result of the distribution, Autoliv expects the trading price of its shares of common stock immediately following the distribution to be lower than the “regular-way” trading price of such shares immediately prior to the distribution because the trading price will no longer reflect the value of the Electronics business. There can be no assurance that the aggregate market value of the Autoliv shares of common stock and our shares of common stock following the spin-off will be higher or lower than the market value of Autoliv shares of common stock if the spin-off and distribution did not occur.

Q: What financing transactions or capital injections will be undertaken in connection with the spin-off?

A: In connection with our spin-off from Autoliv, we expect that Autoliv will provide us with total cash liquidity of approximately $1.0 billion (funded through a mixture of new external funding and existing cash at Autoliv). The capital contribution from Autoliv will help fund our planned operations until we reach positive cash flow. The cash will be used for ongoing working capital requirements and capital expenditures and takes into account our on-going investments in joint ventures, particularly Zenuity, as well as certain anticipated business combinations. We will not have any additional debt as a result of the transaction with Autoliv.

Q: Who will comprise the senior management team and board of directors of Veoneer after the spin-off?

A: Our senior management team will be led by Jan Carlson, as our Chief Executive Officer, Mathias Hermansson as our Chief Financial Officer and Johan Löfvenholm, as our Chief Operating Officer. Our

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board of directors will consist of Jan Carlson, Robert W. Alspaugh, James M. Ringler, Kazuhiko Sakamuto, Wolfgang Ziebart, Mary Cummings, Mark Durcan and Jonas Synnergren. See “Management” for information on our executive officers and board of directors.

Q: What will the relationship be between Autoliv and Veoneer after the spin-off?

A: Following the spin-off, we will be an independent, publicly traded company, and Autoliv will have no continuing stock ownership interest in us. We entered into a Master Transfer Agreement with Autoliv in connection with completing the internal reorganization pursuant to which various assets, liabilities, rights and obligations were allocated between Autoliv and us. We will also enter into a Distribution Agreement and several other agreements with Autoliv related to employee, tax and other matters. These agreements also will include arrangements with respect to transitional services to be provided between Autoliv and Veoneer after the spin-off. The Master Transfer Agreement and Distribution Agreement provide, in general, that we will indemnify Autoliv against any and all liabilities arising out of our business as constituted in connection with the spin-off, subject to certain exceptions, and any other liabilities and obligations assumed by us, and that Autoliv will indemnify us against any and all liabilities arising out of the businesses of Autoliv as constituted in connection with the spin-off, subject to certain exceptions, and any other liabilities and obligations assumed by Autoliv.

Q: What are the risks associated with the spin-off?

A: There are a number of risks associated with the spin-off and ownership of our common stock. These risks are discussed under “Risk Factors.”

Q: Where can I get more information?

A. If you have any questions relating to the mechanics of the distribution, you should contact the distribution agent at:

Computershare Trust Company, N.A.

250 Royall Street, Canton, MA 02021

Attention: Corporate Actions

Phone: 1-800-546-5141(within USA, US territories and Canada)

            1-781-575-2765 (outside USA, US territories and Canada)

            +46 (0)7 712 46400 (SDR holders)

If you have questions relating to the spin-off, you should contact the information agent at:

Georgeson

1290 Avenue of the Americas, 9th Floor, New York, NY 10104

Phone: 866-741-9588

Before completion of the spin-off, if you have any questions relating to the spin-off, you should contact Autoliv at:

Autoliv, Inc.

Investor Relations

Box 70381, 107 24 Stockholm, Sweden

Phone: +46 (0)8 587 20627

After completion of the spin-off, if you have any questions relating to Veoneer, you should contact Veoneer at:

Veoneer, Inc.

Investor Relations

Box 13089, SE-103 02, Stockholm, Sweden

Phone: +46 (0)8 527 76200

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Summary of the Spin-Off

Distributing Company	Autoliv, Inc., a Delaware corporation. After the distribution, Autoliv will not own any shares of Veoneer common stock.
Distributed Company	Veoneer, Inc., a Delaware corporation. After the spin-off, Veoneer will be an independent, publicly traded company.
Distributed Securities	All of the outstanding shares of Veoneer common stock owned by Autoliv, which will be 100% of the Veoneer common stock issued and outstanding immediately prior to the distribution.
Record Dates	The common stock record date is June 12, 2018. The SDR record date is July 2, 2018.
Distribution Date	The distribution date is June 29, 2018.
Internal Reorganization	As part of the preparation for the spin-off, Autoliv completed an internal reorganization, pursuant to which, among other things and subject to limited exceptions:
	•   all of the assets and liabilities (including whether accrued, contingent or otherwise, subject to certain exceptions) associated with Autoliv’s Electronics business, which consists of active safety products, restraint control and sensing and braking systems as described herein, were retained by or transferred to us or our subsidiaries; and
	•   all other assets and liabilities (including whether accrued, contingent or otherwise, subject to certain exceptions) of Autoliv were retained by or transferred to Autoliv or its subsidiaries (other than us and our subsidiaries).
	After completion of the spin-off:
	•   we will be an independent, publicly traded company and will operate Autoliv’s Electronics business; and
	•   Autoliv will continue to be an independent, publicly traded company and continue to own and operate its passive safety business.
	For additional information regarding the Master Transfer Agreement, see “The Spin-Off” and “Certain Relationships and Related Persons Transactions—Master Transfer Agreement.”
Distribution Ratio	Each holder of Autoliv common stock will receive one share of Veoneer common stock for every one share of Autoliv common stock held as of the common stock record date.
	However, if a stockholder holds shares of Autoliv common stock via a brokerage account and sells such shares in the “regular-way” market after the common stock record date and on or before the distribution date, such holder will also be selling the right to receive the shares of Veoneer common stock in the distribution. Holders of Autoliv SDRs will receive one Veoneer SDR for every one Autoliv SDR held as of the SDR record date.

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	Immediately following the spin-off, Veoneer expects to have approximately 1,500 record holders of shares of common stock and approximately 87 million shares of common stock outstanding, based on the number of stockholders and outstanding shares of Autoliv common stock on May 21, 2018 and the distribution ratio. The actual number of shares to be distributed will be determined on the common stock record date and will reflect any repurchases of shares of Autoliv common stock and issuances of shares of Autoliv common stock in respect of awards under Autoliv equity-based incentive plans between the date the Autoliv board of directors declares the dividend for the distribution and the common stock record date.
The Distribution	On the distribution date, Autoliv will release the shares of Veoneer common stock to the distribution agent for distribution to Autoliv stockholders. The distribution of shares will be made in book-entry form only, which means that no physical share certificates will be issued. It is expected that it will take the distribution agent one business day after the distribution date to issue shares of Veoneer common stock to you by way of direct registration in book-entry form. If you hold your shares through a bank or brokerage firm, your bank or brokerage firm will credit your account for the shares. Trading of our shares will not be affected during that time. You will not be required to make any payment, surrender or exchange your shares of Autoliv common stock or Autoliv SDRs or take any other action to receive your shares of Veoneer common stock or Veoneer SDRs.
Distribution Agent and Transfer Agent	Computershare Trust Company, N.A.
Information Agent	Georgeson.
Veoneer SDRs	In the distribution, we expect to deposit all or a portion of the shares of our common stock with Skandinaviska Enskilda Banken AB (publ), or the Custodian, pursuant to a Custodian Agreement between us and the Custodian (the “Veoneer Custodian Agreement”). The Custodian will then issue and deliver Veoneer SDRs representing the shares of our common stock. The Custodian’s business is conducted in accordance with the Swedish Companies Act (2005:551), the Swedish Banking and Financing Business Act (2004:297) and the Swedish Securities Market Act (2007:528). The Custodian (registration number 502032-9081) is a Swedish public limited liability company registered with the Swedish Companies Registration Office on December 29, 1971. The Custodian’s registered office is located at Kungsträdgårdsgatan 8, SE-106 40 Stockholm, Sweden. The shares of our common stock to be deposited with and held by the Custodian will be represented by SDRs and registered in the book-entry system administered by Euroclear Sweden AB, Box 191, SE-101 23 Stockholm, in accordance with the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479) on the VPC accounts designated by the Veoneer SDR holders. No certificates

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	representing Veoneer SDRs will be issued. In connection with the spin-off, a Swedish prospectus will be made available to Autoliv SDR holders who will receive Veoneer SDRs in the spin-off. The prospectus will be based on the Registration Statement on Form 10 with some modifications required by Swedish law as well as with a wrap with additional information.
Fractional Shares	The distribution agent will not distribute any fractional shares of Veoneer common stock to Autoliv stockholders. Fractional shares of Veoneer common stock to which Autoliv stockholders of record would otherwise be entitled will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of the sales will be distributed ratably to those stockholders who would otherwise have received fractional shares of Veoneer common stock. Receipt of the proceeds from these sales generally will result in a taxable gain or loss to those stockholders for U.S. federal income tax purposes and Swedish income tax purposes. Each stockholder entitled to receive cash proceeds from these shares should consult his, her or its own tax advisor as to such stockholder’s particular circumstances. The material U.S. federal income tax consequences of the distribution are described in more detail under “Material U.S. Federal Income Tax Consequences.” The material Swedish income tax consequences of the distribution are described in more detail under “Material Swedish Income Tax Consequences.”
Conditions to the Distribution	Completion of the spin-off is subject to the satisfaction or waiver by Autoliv of the following conditions:
	•   the final approval by the board of directors of Autoliv of the spin-off and all related transactions and the determination of the common stock record date, which approval may be given or withheld in its absolute and sole discretion;
	•   the completion of the internal reorganization;
	•   our Registration Statement on Form 10, of which this information statement forms a part, shall have been declared effective by the Securities and Exchange Commission (the “SEC”), no stop order suspending the effectiveness thereof shall be in effect, no proceedings for such purpose shall be pending before or threatened by the SEC, and this information statement shall have been provided to the Autoliv stockholders;
	•   the prospectus for our SDRs shall have been approved by and registered with the Swedish Financial Supervisory Authority (“SFSA”);
	•   Veoneer common stock shall have been approved for listing on the NYSE, subject to official notice of distribution;

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•   Veoneer SDRs shall have been approved for listing on Nasdaq Stockholm, subject to customary conditions;

•   Autoliv shall have received an opinion from Alston & Bird LLP, in form and substance satisfactory to Autoliv, to the effect that the spin-off, together with certain related transactions, should qualify as a transaction that is tax free under Sections 368(a)(1)(D) and 355 of the Code;

•   Autoliv shall have received written advice from Deloitte Sweden to the effect that the spin-off is generally tax exempt for Swedish income tax purposes under the Lex-ASEA rule;

•   prior to the distribution date, the Autoliv board of directors shall have obtained an opinion from a nationally recognized valuation firm, in form and substance satisfactory to Autoliv, with respect to the capital adequacy and solvency of Autoliv after giving effect to the spin-off;

•   all material governmental approvals and other consents necessary to consummate the spin-off shall have been received;

•   no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the spin-off shall be pending, threatened, issued or in effect, and no other event shall have occurred or failed to occur that prevents the consummation of all or any portion of the spin-off;

•   any required actions and filings with regard to state securities and blue sky laws of the U.S. (and any comparable laws under any foreign jurisdictions) will have been taken and, where applicable, will have become effective or been accepted;

•   each of the Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Amended and Restated Transition Services and the other ancillary agreements shall have been executed by each party;

•   all necessary actions shall have been taken to cause the board of directors of Veoneer to consist of the individuals identified in this information statement as directors of Veoneer;

•   all necessary actions shall have been taken to cause the officers of Veoneer to be the individuals identified as such in this information statement;

•   all necessary actions shall have been taken to adopt the form certificate of incorporation and bylaws filed by Veoneer with the SEC as exhibits to the Registration Statement on Form 10, of which this information statement forms a part; and

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	•   no other events or developments shall have occurred or failed to occur that, in the judgment of the board of directors of Autoliv, would result in the distribution having a material adverse effect on Autoliv or its stockholders.
	The fulfillment of the foregoing conditions will not create any obligation on the part of Autoliv to effect the spin-off. We are not aware of any material federal, foreign or state regulatory requirements that must be complied with or any material approvals that must be obtained, other than compliance with SEC and SFSA rules and regulations, approval for listing on the NYSE and Nasdaq Stockholm, the approval and publication of the Swedish Prospectus by the SFSA and the declaration of effectiveness of the Registration Statement on Form 10, of which this information statement forms a part, by the SEC, in connection with the distribution. Autoliv has the right not to complete the spin-off if, at any time prior to the distribution, the board of directors of Autoliv determines, in its sole and absolute discretion, that the spin-off is not then in the best interests of Autoliv or its stockholders or other constituents, that a sale or other alternative is in the best interests of Autoliv or its stockholders or other constituents, or that market conditions or other circumstances are such that it is not advisable at that time to separate Veoneer from Autoliv. For more information, see “The Spin-Off—Conditions to the Distribution.”
Trading Markets and Symbols	We intend to list Veoneer common stock on the NYSE under the ticker symbol “VNE” and our SDRs on Nasdaq Stockholm under the ticker symbol “VNE SDB.” We anticipate that in the U.S., at least one trading day prior to the common stock record date, trading of shares of Veoneer common stock will begin on a “when-issued” basis on the NYSE and will continue up to and including the distribution date, and we expect “regular-way” trading of Veoneer common stock will begin the first trading day after the distribution date. We also anticipate that, at least one trading day prior to the common stock record date, there will be two markets in Autoliv common stock in the U.S.: (i) a “regular-way” market on which shares of Autoliv common stock will trade with an entitlement for the purchaser of Autoliv common stock to shares of Veoneer common stock to be distributed pursuant to the distribution; and (ii) an “ex-distribution” market on which shares of Autoliv common stock will trade without an entitlement for the purchaser of Autoliv common stock to shares of Veoneer common stock pursuant to the distribution. Holders of Autoliv SDRs cannot participate in “when-issued” trading. Autoliv SDR holders that wish to participate in “when-issued” trading will need to cancel their Autoliv SDRs registered with Euroclear in order to trade their underlying shares of Autoliv common stock on the New York Stock Exchange and participate in “when-issued” trading. On Nasdaq Stockholm, trading in Veoneer SDRs is expected to begin on the same day Veoneer common stock begins trading on the NYSE. For more information, see “Trading Market.”

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Tax Consequences of the Spin-Off	In connection with the distribution, Autoliv expects to receive an opinion of Alston & Bird LLP, U.S. tax counsel to Autoliv, substantially to the effect that, subject to certain qualifications and limitations, for U.S. federal income tax purposes, the distribution, together with certain related transactions, generally should qualify as a transaction that is tax-free under Sections 368(a)(1)(D) and 355 of the Code. Deloitte Sweden will provide written advice regarding the qualification of the distribution, together with certain related transactions, as a transaction that is generally tax exempt for Swedish income tax purposes under the “Lex-ASEA rule.” See “Material U.S. Federal Income Tax Consequences” and “Material Swedish Income Tax Consequences.”
	Each stockholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the spin-off to such stockholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws.
Relationship with Autoliv
After the Spin-Off	We will enter into several agreements with Autoliv related to the spin-off. We entered into the Master Transfer Agreement with Autoliv in connection with the internal reorganization to provide for the allocation between us and Autoliv of assets, liabilities, rights and obligations of the Electronics business. We also entered into a transition services agreement with Autoliv pursuant to which certain services are being provided by each company on an interim basis following the internal reorganization. As part of the spin-off, we will enter into a Distribution Agreement with Autoliv that will establish the rights and obligations between and among the parties following the distribution. We also intend to enter into an Employee Matters Agreement which is intended to set forth the agreements among us and Autoliv concerning certain employee, compensation and benefit-related matters. Further, we intend to enter into a Tax Matters Agreement with Autoliv regarding the sharing of taxes incurred before and after completion of the spin-off, certain indemnification rights with respect to tax matters and certain restrictions on our conduct following the distribution intended to preserve the tax-free status of the spin-off. We also intend to enter into an Amended and Restated Transition Services Agreement with Autoliv pursuant to which certain services will be provided by the parties on an interim basis following the spin-off. We describe these arrangements in greater detail under “Certain Relationships and Related Persons Transactions – Agreements with Autoliv Related to the Spin-Off,” and describe some of the risks of these arrangements under “Risk Factors—Risks Related to the Company – Risks Related to the Spin-Off.”
Financing Transactions	In connection with the spin-off, we anticipate that Autoliv will make a material cash contribution to us that will be sufficient to fund our planned operations through 2022. See “The Spin-Off—Financing Transactions.”

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Risk Factors We face both general and specific risks and uncertainties relating to our business, our relationship with Autoliv and our being an independent, publicly traded company. We also are subject to risks relating to the spin-off. You should carefully read the risk factors set forth in the section entitled “Risk Factors” in this information statement.

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Summary Historical and Unaudited Pro Forma Combined Financial Data

The following summary financial data reflect the combined operations of Veoneer. Veoneer derived the summary combined statement of operations data for the fiscal years ended December 31, 2017, 2016 and 2015 and the summary combined balance sheet data as of December 31, 2017 and 2016 as set forth below, from its audited combined financial statements, which are included in the “Index to Financial Statements” section of this information statement. The historical results do not necessarily indicate the results expected for any future period.

The following summary unaudited pro forma financial data has been derived from the historical Combined Financial Statements and the Combined Unaudited Interim Financial Statements of Veoneer included in the “Index to Financial Statements” section of this information statement. The unaudited pro forma balance sheet data gives effect to the spin-off and related transactions described below as if they had occurred on March 31, 2018. The unaudited pro forma statement of operations data for the three months ended March 31, 2018 and year ended December 31, 2017 gives effect to the spin-off and related transactions described below as if they occurred as of January 1, 2017, the first day of the last fiscal year. The unaudited pro forma Combined Financial Statements are for informational purposes only and do not purport to represent what Veoneer’s financial position and results of operations actually would have been had the spin-off and related transactions occurred on the dates indicated, or to project Veoneer’s financial performance for any future period.

To ensure a full understanding of this financial information, you should read the summary combined financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Combined Financial Statements” and the historical combined financial statements and accompanying notes included in the “Index to Financial Statements” section of this information statement.

(in millions)

	As of and for the three months ended March 31,						As of and for the year ended December 31,
	Pro Forma 2018			2018			Pro Forma 2017			2017			2016			2015
	(unaudited)			(unaudited)			(unaudited)
Operating Results:
Net sales	$	594.3		$	594.3		$	2,322.2		$	2,322.2		$	2,218.3		$	1,588.6
Operating (loss)(1)		(15.6	)		(16.0	)		(280.3	)		(282.7	)		(24.8	)		(8.4	)
Net (loss)		(36.7	)		(37.0	)		(342.1	)		(344.3	)		(60.1	)		(30.0	)
Net (loss) attributable to controlling interest		(32.0	)		(32.3	)		(214.8	)		(217.0	)		(53.1	)		(30.0	)
Financial Position:
Total Assets	$	2,771.4			1,760.6			N/A			1,662.5			1,739.1			1,059.1
Total Debt(2)		(37.3	)		(60.0	)		N/A			(62.2	)		(14.6	)		(0.0	)

(1) Includes costs for goodwill impairment of $234.2 in 2017.

(2) Includes short-term debt and related party long-term debt as of March 31, 2018, related party long-term debt as of December 31, 2017 and related party short-term debt and related party long-term debt as of December 31, 2016.

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RISK FACTORS

Owning our common stock involves a high degree of risk. You should consider carefully the following risk factors and all other information contained in this information statement. If any of the following risks, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial but are in fact material, occur, our business, liquidity, financial condition and results of operations could be materially and adversely affected. If this were to happen, the market price of our common stock could decline significantly, and you could lose all or a part of the value of your ownership in our common stock. Some statements in this information statement, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section in this information statement entitled “Special Note About Forward-Looking Statements.”

RISKS RELATED TO THE COMPANY

Risks Related to Our Business

The cyclical nature of automotive sales and production can adversely affect our business.

Our business is directly related to light vehicle production (“LVP”) in the global market and by our customers, and automotive sales and LVP are the most important drivers for our sales. Automotive sales and production are highly cyclical and can be affected by general or regional economic or industry conditions or uncertainty, the level of consumer demand, recalls and other safety issues, labor relations issues, technological changes, fuel prices and availability, vehicle safety regulations and other regulatory requirements, governmental initiatives, trade agreements, political volatility, especially in energy producing countries and growth markets, changes in interest rate levels and credit availability and other factors. At various times some regions around the world may be more particularly impacted by these factors than other regions. Economic declines that result in a significant reduction in automotive sales and production by our customers have in the past had, and may in the future have, a material adverse effect on our business, results of operations and financial condition.

Our sales are also affected by inventory levels of our customers. We cannot predict when our customers will decide to either increase or reduce inventory levels or whether new inventory levels will approximate historical inventory levels. This may exacerbate variability in our sales and financial condition. Uncertainty regarding inventory levels may be exacerbated by consumer financing programs initiated or terminated by our customers or governments as such changes may affect the timing of their sales. Most of our products are technologically complex and innovative and there can be a significant amount of time between design and production. Thus, we are subject to the risk that our customers cancel or postpone a contract in the time period that it takes us to begin production of a particular product.

Changes in automotive sales and LVP and/or customers’ inventory levels will have an impact on our earnings guidance and estimates. In addition, we base our growth projections in part on business awards made by our customers. However, actual production orders from our customers may not approximate the awarded business. Any significant reduction in automotive sales and/or LVP by our customers, whether due to general economic conditions or any other factors relevant to sales or LVP, will likely have a material adverse effect on our business, results of operations and financial condition.

Growth rates in safety content per vehicle, which may be impacted by changes in consumer trends and political decisions, could affect our results in the future.

Vehicles produced in different markets may have various safety content values. For now, our products are typically found in vehicles with higher safety content. Because growth in global LVP is highly concentrated in markets such as China and India, our operating results may suffer if the safety content per vehicle remains low in our growth markets. As safety content per vehicle is also an indicator of our sales development, should recent trends continue, the average value of safety systems per vehicle could decline.

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We operate in highly competitive markets.

The markets in which we operate are highly competitive. We compete with a number of companies that design, produce and sell similar products. Among other factors, our products compete on the basis of price, quality, manufacturing and distribution capability, design and performance, technological innovation, delivery and service. Some of our competitors are subsidiaries (or divisions, units or similar) of companies that are larger and have greater financial and other resources than us. Some of our competitors may also have a “preferred status” as a result of special relationships or ownership interests with certain customers. Our ability to compete successfully depends, in large part, on our ability to innovate and manufacture products that have commercial success with consumers, differentiating our products from those of our competitors, delivering quality products in the time frames required by our customers, and achieving best-cost production.

Our ability to maintain and improve existing products, while successfully developing and introducing distinctive new and enhanced products that anticipate changing customer and consumer preferences and capitalize upon emerging technologies will be a significant factor in our ability to be competitive. If we are unsuccessful or are less successful than our competitors in predicting the course of market development, developing innovative products, processes, and/or use of materials or adapting to new technologies or evolving regulatory, industry or customer requirements, we may be placed at a competitive disadvantage. There is a risk that our investments in research and development initiatives will not lead to successful new products and a corresponding increase in revenue. We may also encounter increased competition in the future from existing or new competitors. The inability to compete successfully could have material adverse effect on our business, results of operations and financial condition.

We operate in a developing market that may be subject to greater uncertainty and fluctuations in levels of competition than a more mature market.

The field of active safety is a developing segment in the automotive industry. The number of competitors shows risk of increasing as suppliers from outside the traditional automotive industry, such as Microsoft, Google, Apple, Argo, Uber, Lyft, Samsung, Panasonic, Here, Tesla, Intel, NVIDIA and other technology companies, consider the business opportunities presented by autonomous driving. Products and services provided by companies outside the automotive industry may also reduce demand for our products. For example, there has been an increase in consumer preferences for mobility on demand services, such as car- and ride-sharing, as opposed to automobile ownership, which may result in a long term reduction in the number of vehicles per capita. In most markets, active safety products are considered to be premium equipment rather than standard automotive safety items, which can create significant volatility in demand for certain of our product.

Our products may require significant resources to develop both hardware and software solutions, which are of increasing importance in this area. There is an increasing trend towards partnerships between companies with complementary hardware and software solutions. The high development cost in active safety limits the number of technical solutions that can be pursued by most Tier 1 suppliers, leading to risk of exposure to a disruptive technology different than those being developed by us. A significant part of our business is focused on developing autonomous driving technology, which requires significant amounts of resources devoted to researching and developing innovative products and processes. For example, we have focused significant resources on developing Zenuity, our joint venture with Volvo Cars, which is aimed at developing software solutions for autonomous driving. There is a risk that Zenuity or our other autonomous driving projects will not be able to deliver a competitive product. If we fail to develop and deliver innovative and competitive products, our business, results of operations and financial condition could be materially adversely effected.

Autonomous driving involves complex technology and requires a number of different hardware and software competencies and technologies and there is a risk that these competencies or technologies will not develop at a sufficient pace to address marketplace needs.

Autonomous driving requires various types of sensor technology, including cameras, radar and LIDAR technology as well as software technology to control such sensors. These technologies are under various stages of

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development and marketplace acceptance. There is a risk that these technological solutions will not develop at a sufficient pace to gain acceptance with our customers. If we are unable to develop our autonomous driving solutions fast enough to keep pace with the market, our future business prospects, results of operations and financial condition could be materially adversely affected.

There are also challenges to develop autonomous driving solutions that are outside of our control, including regulatory requirements from state and federal agencies, cybersecurity and privacy concerns, product liability concerns and perceptions of drivers regarding autonomous driving capabilities and solutions. There is a risk that these challenges will not be overcome, which could have a material adverse effect on our business, results of operations and financial condition.

We may not be able to protect our proprietary technology and intellectual property rights, which could result in the loss of our rights or increased costs.

We depend on a number of proprietary technologies and intellectual property to develop our products. There is a risk that our products and technology infringe the proprietary rights of others, and that third parties may assert infringement claims against us in the future. Additionally, we and our joint ventures license from third parties proprietary technology covered by patents, and there is a risk that any such patents will be challenged, invalidated or circumvented. Such licenses may also be non-exclusive, meaning our competition may also be able to access such technology. Further, we expect to continue to expand our products and services and may expand into new businesses, including through acquisitions, joint ventures and joint development agreements, which could increase our exposure to patent and other intellectual property claims from competitors and other parties. If claims alleging patent, copyright or trademark infringement are brought against us and are successfully prosecuted against us, they could result in substantial costs. If a successful claim is made against us, our business, results of operation and financial condition could be materially adversely affected. In addition, certain of our products utilize components that are developed by third parties and licensed to us or our joint ventures. If claims alleging patent, copyright or trademark infringement are brought against such licensors and successfully prosecuted, they could result in substantial costs, and we may not be able to replace the functions provided by these licensors. Alternate sources for the technology currently licensed to us or our joint ventures may not be available in a timely manner, may not provide the same functions as currently provided or may be more expensive than products currently used.

We may develop proprietary information through our in-house research and development efforts, consulting arrangements or research collaborations with other entities or organizations. There is a risk that our attempts to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions, with our employees, consultants, contractors, scientific advisors and third parties are unsuccessful. Even if agreements are entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. If we develop an increasing amount of our intellectual property through collaborations and development agreements, more of the technology we depend on could be subject to risks related to protecting these rights. Any of the risks related to our proprietary technology described above could have a material adverse effect on our business, results of operations and financial condition.

The discontinuation, lack of commercial success, or loss of business with respect to a particular vehicle model for which we are a significant supplier could reduce our sales and harm our profitability.

A number of our customer contracts require us to supply a customer’s annual requirements for a particular vehicle model and assembly facilities, rather than for manufacturing a specific quantity of products. Such contracts range from one year to the life of the model, which is generally four to seven years. These contracts are often subject to renegotiation, sometimes as frequent as on an annual basis, which may affect product pricing,

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and generally may be terminated by our customers at any time. Therefore, the discontinuation of, the loss of business with respect to, or a lack of commercial success of a particular vehicle model or brand for which we are a significant supplier could reduce our sales and harm our profitability.

We may incur material losses and costs as a result of product liability, warranty and recall claims that may be brought against us or our customers.

We face risks related to product liability claims, warranty claims and recalls in the event that any of our products actually or allegedly are defective, fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. We may not be able to anticipate all of the possible performance or reliability problems that could arise with our products after they are released to the market. Additionally, increasing regulation and reporting requirements regarding potentially defective products, particularly in the U.S., may increase the possibility that we become involved in additional product liability or recall investigations or claims. There is a risk that our product liability and product recall insurance will not provide adequate coverage against potential claims, such insurance is available in the appropriate markets or that we will be able to obtain such insurance on acceptable terms in the future. There is also a risk that Autoliv or one of our customers may be unable or unwilling to indemnify us for product liability, warranty or recall claims although they are contractually obligated to do so or we may be required to indemnify Autoliv or such customer for such claims, which may significantly increase our exposure and potential loss with respect to any such claims. There is a risk that our current and future investments in our engineering, design, and quality infrastructure will be insufficient and that our products could suffer from defects or other deficiencies or that we will experience material warranty claims or additional product recalls. In the future, we could experience additional material warranty or product liability losses and incur significant costs to process and defend these claims.

Escalating pricing pressures from our customers may adversely affect our business.

The automotive industry has experienced increasingly aggressive pricing pressure from customers for many years. This trend is partly attributable to the major automobile manufacturers’ strong purchasing power. As an automotive component manufacturer, we may be expected to quote fixed prices or be forced to accept prices with annual price reduction commitments for long-term sales arrangements or discounted reimbursements for engineering work. Price reductions may impact our sales and profit margins. Our future profitability will depend upon, among other things, our ability to continuously reduce our cost per unit and maintain our cost structure. Our profitability is also influenced by our success in designing and marketing technological improvements in automotive safety systems. If we are unable to offset continued price reductions, these price reductions could have a material adverse effect on our business, results of operations and financial condition.

We could experience disruption in our supply or delivery chain, which could cause one or more of our customers to halt or delay production.

We, as with other component manufactures in the automotive industry, ship our products to customer vehicle assembly facilities throughout the world on a “just-in-time” basis in order for our customers to maintain low inventory levels. Our suppliers (external suppliers as well as our own production sites) use a similar method in providing raw materials to us. This “just-in-time” method makes the logistics supply chain in our industry very complex and vulnerable to disruptions. Disruptions in our supply chain, such as large recalls or field actions impacting our suppliers, facility closures, strikes, electrical outages, natural disasters or other logistical or mechanical failures, could inhibit our ability to timely deliver on orders. We may experience disruptions if there are delays in customs processing, including if we are unable to obtain government authorization to export or import certain of materials. When we fail to timely deliver, we may have to absorb our own costs for identifying and resolving the ultimate problem as well as expeditiously producing and shipping replacement components or products. Generally, we must also carry the costs associated with “catching up,” such as overtime and premium freight.

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Additionally, if we are the cause of a customer being forced to halt production, the customer may seek to recoup all of its losses and expenses from us. These losses and expenses could be very significant and may include consequential losses such as lost profits. Where a customer halts production because of another supplier failing to deliver on time, we may not be fully compensated, if at all. Thus, any such supply chain disruptions could severely impact our operations and/or those of our customers and force us to halt production for prolonged periods of time which could expose us to material claims for compensation and have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks associated with the development and implementation of new manufacturing process technology.

We may not be successful or efficient in developing or implementing new production processes. We are continually engaged in the transition from our existing process to the next-generation process technology. This consistent innovation involves significant expense and carries inherent risks, including difficulties in designing and developing next-generation process technologies, development and production timing delays, lower than anticipated manufacturing yields, and product defects and errors. Production issues can lead to increased costs and may affect our ability to meet product demand, which could have a material adverse effect on our business, results of operations and financial condition.

Work stoppages or other labor issues at our customers’ facilities or at our facilities could adversely affect our operations.

Because the automotive industry relies heavily on “just-in-time” delivery of components during the assembly and manufacture of vehicles, a work stoppage at one or more of our facilities could have material adverse effects on the business. Similarly, if any of our customers were to experience a work stoppage, that customer may halt or limit the purchase of our products, or a work stoppage at another supplier could interrupt production at one of our customers’ facilities which would have the same effect. A work stoppage at one or more of our facilities or our customers’ facilities could cause us to shut down production facilities supplying these products, which could have a material adverse effect on our business, results of operations and financial condition.

Changes in the source, cost, availability of and regulations pertaining to raw materials and components may adversely affect our profit margins.

Our business uses a broad range of raw materials and components in the manufacture of our products, many of which are generally available from a number of qualified suppliers. Our industry may be affected from time to time by limited supplies or price fluctuations of certain key components and materials. Price fluctuations may intensify or occur with greater frequency as demand for our principal raw materials and components is significantly impacted by demand in emerging markets. Commercial negotiations with our customers and suppliers may not offset the adverse impact of higher raw material, energy and commodity costs. Even where we are able to pass price increases along to our customer, there may be a lapse of time before we are able to do so such that we must absorb the cost increase. Some of our suppliers may not be able to handle the volatility in commodity costs, which could cause them to experience supply disruptions resulting in delivery or production delays by our suppliers. Risks associated with the cost and availability of raw materials and components could have a material adverse effect on our business, results of operations and financial condition.

The SEC requires companies that manufacture products containing certain minerals and their derivatives that are, known as “conflict minerals,” originating from the Democratic Republic of Congo or adjoining countries to diligence and report the source of such materials. There are significant consequences associated with complying with these requirements, including diligence efforts to determine the sources of conflict minerals used in our products, changes to our processes or supplies as a result of such diligence and our ability to source “conflict free” materials. Accordingly, these rules could have a material adverse effect on our business, results of operations and financial condition.

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Our business could be materially and adversely affected if we lost our largest customers or if they were unable to pay their invoices.

We are dependent on a few large customers with strong purchasing power. Business with any given customer is typically split into several contracts (either on the basis of one contract per vehicle model or on a broader platform basis). The loss of business from our major customers (whether by lower overall demand for vehicles, cancellation of existing contracts or the failure to award us new business) could have a material adverse effect on our business, results of operations and financial condition.

Customers may put us on a “new business hold,” which would limit our ability to quote or be awarded all or part of their future vehicle contracts if quality or other issues arise in the vehicles for which we were a supplier. Such new business holds range in length and scope and are generally accompanied by a certain set of remedial conditions that must be met before we are eligible to bid for new business. Meeting any such conditions within the prescribed timeframe may require additional Company resources. A failure to satisfy any such conditions may have a materially adverse impact on our financial results in the long term. Additionally, we have no fixed volume commitments from our customers. Thus, even if we have won a bid for business from a customer there are no guaranteed purchase volumes.

There is a risk that one or more of our major customers could be unable to pay our invoices as they become due or that a customer will simply refuse to make such payments given its financial difficulties. If a major customer would enter into bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of legal or other modification, or if a major customer otherwise successfully procures protection against us legally enforcing its obligations, it is likely that we will be forced to record a substantial loss.

Our inability to effectively manage the timing, quality and costs of new program launches could adversely affect our financial performance.

To compete effectively in the automotive supply industry, we must be able to launch new products to meet our customers’ timing, performance and quality standards. Certain state of the art products we launch may need to be developed on an especially accelerated time frame for speed-to-market. There is a risk that we will not be able to install and certify the equipment needed to produce products for new programs in time for the start of production, or that the transitioning of our manufacturing facilities and resources to full production for such new programs will not impact production rates or other operational efficiency measures at our facilities. In addition, there is a risk that our customers will not execute on schedule the launch of their new product programs, for which we might supply products. Additionally, as a “Tier 1” automotive supplier (meaning a company that supplies directly to the automobile manufacturers), we must effectively coordinate the activities of numerous suppliers in order to launch programs successfully. Given the complexity of new program launches, especially involving new and innovative technologies, we may experience difficulties managing product quality, timeliness and associated costs. These risks with new technologies are increased when the customer relationship is new and the customer is subject to the same pressures on product quality and timeliness. In addition, new program launches require a significant ramp up of costs; however, the sales related to these new programs generally are dependent upon the timing and success of the introduction of new vehicles by our customers. Our inability to effectively manage the timing, quality and costs of these new program launches could have a material adverse effect on our business, results of operations and financial condition.

Changes in our product mix may impact our financial performance.

We sell products that have varying profit margins. Our financial performance can be impacted depending on the mix of products we sell during a given period. Our earnings guidance and estimates assume a certain geographic sales mix as well as a product sales mix. There is a risk that the mix of offerings by our customers and demand for such offerings could have an unfavorable impact on revenue. If actual results vary from this projected geographic and product mix of sales, our results of operations and financial condition could be materially adversely affected.

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We may be involved from time to time in legal proceedings and our business may suffer as a result of adverse outcomes of future legal proceedings.

We may be from time to time involved in litigation, regulatory proceedings and commercial or contractual disputes that may be significant. These matters may include, without limitation, disputes with our suppliers and customers, intellectual property claims, stockholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and value added tax (VAT) disputes and employment and tax issues. In such matters, government agencies or private parties may seek to recover from us very large, indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive damages) or seek to limit our operations in some way. There is a risk that claims may be asserted against us and their magnitude may remain unknown for long periods of time. These types of lawsuits could require significant management time and attention and a substantial legal liability or adverse regulatory outcome and the substantial expenses to defend the litigation or regulatory proceedings may have a material adverse effect on our customer relationships, business prospects, reputation, operating results, cash flows and financial condition. There is a risk that such proceedings and claims will have a material adverse impact on our profitability and consolidated financial position or that our established reserves or our available insurance will be adequate to mitigate such impact.

We may have exposure to greater than anticipated tax liabilities.

The determination of our worldwide provision for income taxes and other tax liabilities requires estimation and significant judgment, and there are many transactions and calculations where the ultimate tax determination is uncertain. As a multinational corporation, we are subject to tax in multiple U.S. and foreign tax jurisdictions. Our determination of our tax liability is always subject to audit and review by applicable domestic and foreign tax authorities, and we are currently undergoing a number of investigations, audits and reviews by taxing authorities throughout the world. Any adverse outcome of any such audit or review could have a negative effect on our business and the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made. There is a risk that our established reserves, which are based on assumptions and estimates that we believe are reasonable to cover such eventualities, may prove to be insufficient. In addition, our future income taxes could be adversely affected by earnings being lower than anticipated (or by the incurrence of losses) in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

Our ability to operate our company effectively could be impaired if we fail to attract and retain key personnel.

We compete in a market that involves rapidly changing technological and other developments, which requires us to attract and employ a workforce with broad expertise and intellectual capital. Our ability to operate our business and implement our strategies effectively depends, in part, on the efforts of our executive officers and other key employees. In addition, our future success will depend on, among other factors, our ability to attract, develop and retain other qualified personnel, particularly engineers and other employees with software and technical expertise. The loss of the services of any of our key employees or the failure to attract or retain other qualified personnel could have a material adverse effect on our business.

A prolonged recession and/or a downturn in our industry could adversely affect our business and require us to seek additional sources of financing to continue our operations, which may not be available to us or be available only on materially different terms than what has historically been available.

Our ability to generate cash from our operations is highly dependent on regional and global economic conditions, automotive sales and LVP. A prolonged downturn in or uncertainty relating to global or regional economic conditions, a downturn in the automotive industry or LVP are conditions that could adversely impact

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our business. Such adverse impacts could require us to shut down plants or result in impairment charges, restructuring actions or changes in our valuation allowances against deferred tax assets, which could be material to our financial condition and results of operations. If global economic conditions deteriorate or economic uncertainty increases, our customers and potential customers may experience deterioration of their businesses, which may result in the delay or cancellation of plans to purchase our products.

A prolonged downturn in global economic conditions or LVP would likely result in us experiencing a significantly negative cash flow. Similarly, if cash losses for customer defaults rise sharply, we would experience a negative cash flow. Such negative cash flow could result in our having insufficient funds to continue our operations unless we can procure external financing, which may not be possible. These risks could be exacerbated by instability in the global credit markets and global economic pressure. If external financing is unavailable to us when necessary, we may have insufficient funds to continue our operations.

Impairment charges relating to our assets, goodwill and other intangible assets could adversely affect our financial performance.

If one or more of our customers’ facilities cease production or decrease their production volumes, the assets we carry related to our facilities serving such customers may decrease in value because we may no longer be able to utilize or realize them as intended. Where such decreases are significant, such impairments may have a materially adverse impact on our financial results. Impairment of goodwill and other identifiable intangible assets may result from, among other things, deterioration in our performance and especially the cash flow performance of these goodwill assets, adverse market conditions and adverse changes in applicable laws or regulations. If there are changes in these circumstances or the other variables associated with the estimates, judgments and assumptions relating to the valuation of goodwill, when assessing the valuation of our goodwill items, we may determine that it is appropriate to write down a portion of our goodwill or intangible assets and record related non-cash impairment charges. In the event that we determine that we are required to write-down a portion of our goodwill items and other intangible assets and thereby record related non-cash impairment charges, our business, results of operations and financial condition could be materially adversely effected.

For example, in the fourth quarter of 2017, Veoneer recognized an impairment charge of $234 million, pre-tax, which represented the full goodwill amount related to ANBS. The impairment loss was due to a lower than originally anticipated sales development in ANBS. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We face risks related to our defined benefit pension plans and employee benefit plans, including the need for additional funding as well as higher costs and liabilities.

Our defined benefit pension plans or employee benefit plans may require additional funding or give rise to higher related costs and liabilities which, in some circumstances, could reach material amounts and negatively affect our results of operations. We are required to make certain year-end assumptions regarding our pension plans. Our pension obligations are dependent on several factors, including factors outside our control such as changes in interest rates, the market performance of the diversified investments underlying the pension plans, actuarial data and adjustments and an increase in the minimum funding requirements or other regulatory changes governing the plans. Adverse equity market conditions and volatility in the credit market may have an unfavorable impact on the value of our pension assets and our future estimated pension liabilities. Internal factors such as an adjustment to the level of benefits provided under the plans may also lead to an increase in our pension liability. There are also uncertainties as Veoneer settles certain benefit plan relationships with Autoliv. If these or other internal and external risks were to occur, alone or in combination, our required contributions to the plans and the costs and net liabilities associated with the plans could increase substantially and have a material effect on our business.

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Increases in IT security threats, the sophistication of computer crime and our reliance on global data centers could expose our systems, networks, solutions and services to risks.

Our ability to keep our business operating effectively depends on the functional and efficient operation of information technology and telecommunications systems. If we experience a problem with the functioning of an important IT system or a security breach or cyberattack of our IT systems, the resulting disruption could adversely affect our business. We and certain of our third-party vendors collect and store personal information in connection with human resources operations and other aspects of our business. The secure operation of these information technology networks and systems and the proper processing and maintenance of this information are critical to our business operations.

Disruptions and attacks on our IT systems could result in the leakage of our or our customers’ confidential information, including our financial data and intellectual property, improper use of our systems and networks, manipulation and destruction of data, production downtimes and both internal and external supply shortages, which could have a material adverse effect on our business, results of operations and financial condition.

We rely on third parties to provide or maintain some of our IT systems, data centers and related services and do not exercise direct control over these systems. There is a risk that security measures implemented at our own and at third party locations may not be sufficient and that our IT systems, data centers and cloud services are vulnerable to disruptions, including those resulting from natural disasters, cyberattacks or failures in third party-provided services. Cyberattacks have become increasingly frequent, sophisticated and globally widespread and could target software embedded in our products. Embedded software code could be compromised during software development or manufacturing processes or within the car itself. Cyberattacks on our products within the car can lead to malfunction or complete damage of the products, which could result into loss of control of the car and its safety features. To the extent that any disruption or security breach results in a misappropriation, loss or damage to our data, or an inappropriate disclosure of our confidential information or our customer’s information, it could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against us and ultimately harm our business. In addition, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future.

Our business is exposed to risks inherent in international operations.

We currently conduct operations in various countries and jurisdictions, including locating certain of our manufacturing and distribution facilities internationally, which subjects us to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. International sales and operations subject us to certain risks inherent in doing business abroad, including exposure to local economic and political conditions, foreign tax consequences, issues with enforcing legal agreements, currency controls, imposition of tariffs, and preferences of foreign nations for domestically manufactured products. These risks could have a material adverse effect on our business, results of operation and financial condition.

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act makes broad and complex changes to the Code, including, inter alia, reducing the U.S. federal corporate income tax rate from 35% to 21%, creating new taxes on certain foreign sourced earnings and a new minimum tax calculated on certain U.S. outbound payments. We are still waiting on guidance from the U.S. Treasury Department, based on the statutory language, and it is therefore a risk that such changes will have an adverse effect on our business, results of operations of financial condition. Changes in tax laws or policies by foreign jurisdictions could result in a higher effective tax rate on our worldwide earnings and such change could have a material adverse effect on our business, results of operations and financial condition.

In addition, the current U.S. administration has created uncertainty about the future relationship between the U.S. and certain of its trading partners, including with respect to the trade policies, treaties, government regulations and tariffs that could apply to trade between the U.S. and other nations. Policy change or continued uncertainty could depress economic activity and restrict our access to suppliers or customers and could have a material adverse effect on our business, results of operations and financial condition.

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Our business in China is subject to aggressive competition and is sensitive to economic and market conditions.

We operate in the highly competitive automotive supply market in China and face competition from both international and smaller domestic manufacturers. We anticipate that additional competitors, both international and domestic, may seek to enter the Chinese market resulting in increased competition. Increased competition may result in price reductions, reduced margins and our inability to gain or hold market share. There have been periods of increased market volatility and moderation in the levels of economic growth in China, which resulted in periods of lower automotive production growth rates in China than those previously experienced. If we are unable to maintain our position in the Chinese market, the pace of growth slows or vehicle sales in China decrease, our business, results of operations and financial condition could be materially adversely effected.

We are exposed to exchange rate risks.

We have currency exposures related to buying, selling and financing in currencies other than the local currencies of the countries in which we operate. We are particularly vulnerable to a strong U.S. dollar as certain raw materials and components are sourced in U.S. dollars while sales are also currently in other currencies, like the Euro. Our risks include:

• transaction exposure, which arises because the cost of a product originates in one currency and the product is sold in another currency;

• revaluation effects, which arise from valuation of assets denominated in other currencies than the reporting currency of each unit;

• translation exposure in the income statement, which arises when the income statements of non-U.S. subsidiaries are translated into U.S. dollars;

• translation exposure in the balance sheet, which arises when the balance sheets of non-U.S. subsidiaries are translated into U.S. dollars; and

• changes in the reported U.S. dollar amounts of cash flows.

For example, in 2017 the Company’s gross transaction exposure was approximately $0.8 billion, with a net exposure of $0.6 billion due to counter-flows. The four largest net exposures were the purchase of U.S. Dollar against Korean Won, sale of Euro against Swedish Krona, sale of U.S. Dollar against Chinese Renminbi and sale of U.S. Dollar against Canadian Dollar. Together these currency pairs accounted for approximately 56% of the Company’s net currency transaction exposure. These exchange rate risks could have a material adverse effect on our business, results of operations and financial condition.

We face risks in connection with identifying, completing and integrating acquisitions.

Our business’s growth has been enhanced through strategic opportunities, including acquisitions of businesses, products and technologies, and joint development agreements. We may continue to identify and engage in strategic opportunities. We may not be able to successfully identify suitable acquisition candidates or complete transactions on acceptable terms, integrate acquired operations into our existing operations or expand into new markets. Our failure to identify suitable strategic opportunities may restrict our ability to grow our business. These strategic opportunities also involve numerous additional risks to us and our investors, including risks related to retaining acquired management and employees, difficulties in integrating the acquired technology, products, operations and personnel with our existing business, assumption of contingent liabilities, and potentially adverse financial impact of acquisitions. Consequently, there is a risk that the acquisitions and other transactions may not result in revenue growth, operational synergies or service or technology enhancements, which could have a material adverse effect on our business, results of operations and financial condition.

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Risks associated with joint venture partnerships and other collaborations may adversely affect our business and financial results.

Certain of our operations are currently conducted through joint ventures and joint development agreements, and we may enter into additional joint ventures and collaborations in the future. We conduct certain research and product development in collaboration with other companies and organizations. Our joint venture and collaboration partners may at any time have economic, business or legal interests or goals that are inconsistent with our goals or with the goals of the joint venture. Additionally, our products and technologies may from time to time overlap with certain aspects of the technologies developed with our joint venture and collaboration partners which may cause the parties to consider the impact on the agreements. Disagreements with our business partners may impede our ability to maximize the benefits of our partnerships. We may have difficulty resolving disputes with or claims against our joint venture partners, which could lead to us bearing liability for claims that we are not responsible for. Our research and development collaborations may not be successful in developing the intended product or technology. We may decide or be required to pay certain costs or make capital investments to fund the operations of our joint ventures. Our joint venture partners may be unable or unwilling to meet their economic or other obligations under the operative documents, and we may fulfill those obligations alone to ensure the ongoing success of a joint venture or dissolve and liquidate a joint venture. Our interest in a joint venture may be subject to contractual and other limitations and we may be required to seek our partner’s consent to take certain actions with respect to the joint venture or collaboration. The spin-off and related transactions may require us to obtain the consent of certain of our strategic partners pursuant to our agreements with them. Failure to obtain any required consents could jeopardize the continued existence of our joint ventures or strategic collaborations. The above risks, if realized, could have a material adverse effect on our business, results of operations and financial condition.

We are uncertain whether we will be able to obtain the consent of Nissin Kogyo, our ANBS joint venture partner, with respect to the spin-off.

In the case of a change-in-control of one party, the joint venture agreement governing ANBS provides the other party with a right to purchase the other party’s interest in the joint venture or sell its interest to the other party. The spin-off will result in a change-in-control of Veoneer, which will allow our ANBS joint venture partner, Nissin Kogyo, to have the right to purchase our equity interest in ANBS. If this occurs, the joint venture agreement would terminate and our ANBS joint venture would be dissolved. We have asked Nissin Kogyo to agree to refrain from exercising this right and consent to our change-in-control, but Nissin Kogyo has not yet provided its consent or agreement to refrain from exercising its right and we are uncertain whether it will. If Nissin Kogyo elects to exercise its right to purchase our equity interests in the joint venture as a result of the change-in-control, then we would no longer have our brake systems product area, which consists of ANBS. Additionally, we would lose all revenue associated with our brake systems products and may need to make arrangements with customers for any outstanding orders. Our Brake Systems reporting segment would also no longer exist and we would just report financial results in one segment—Electronics. If Veoneer is required to purchase Nissin Kogyo’s interest in the joint venture, Veoneer would be required to utilize a portion of its existing cash liquidity (based on an appraised value of the joint venture that would be conducted) to purchase such interest. The loss of our equity interests in ANBS or the termination of ANBS could have a material adverse effect on our business, results of operations and financial condition. For all additional details, see “Business—Joint Venture Agreements—ANBS Joint Venture Agreement.”

If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired.

We have developed a considerable amount of proprietary technology related to automotive safety systems and rely on a number of patents to protect such technology. Our intellectual property plays an important role in maintaining our competitive position in a number of the markets we serve. In addition to our in-house research and development efforts, we may seek to acquire rights to new intellectual property through corporate acquisitions, asset acquisitions, licensing and joint venture arrangements.

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Developments or assertions by or against us relating to intellectual property rights could negatively impact our business. If we are not able to protect our patents, trademarks, or other intellectual property and our proprietary rights and technology against infringement and unauthorized use we could lose those rights and incur substantial costs policing and defending those rights. We also generate license revenue from these patents, which we may lose if we do not adequately protect our intellectual property and proprietary rights. Our means of protecting our intellectual property, proprietary rights and technology may not be adequate, and our competitors may independently develop technologies that are similar or superior to our proprietary technologies, duplicate our technologies, or design around the patents we own or license. In addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of the U.S. If we cannot protect our proprietary technology, we could experience a material adverse effect on our business, results of operations and financial condition.

We may not be able to respond quickly enough to changes in technology and technological risks and to develop our intellectual property into commercially viable products.

Changes in legislative, regulatory or industry requirements or in competitive technologies may render certain of our products obsolete or less attractive to our customers. We currently license certain proprietary technology to third parties and, if such technology becomes obsolete or less attractive, those licensees could terminate our license agreements, which could adversely affect our results of operations. Our ability to anticipate changes in technology and regulatory standards and to successfully develop and introduce new and enhanced products on a timely basis will be a significant factor in our ability to be competitive. There is a risk that we will not be able to achieve the technological advances that may be necessary for us to be competitive or that certain of our products will become obsolete. We are also subject to the risks generally associated with new product introductions and applications, including lack of market acceptance, delays in product development and failure of products to operate properly. As part of our business strategy, we may from time to time seek to acquire businesses or assets that provide us with additional intellectual property. We may experience problems integrating acquired technologies into our existing technologies and products, and such acquired intellectual property may be subject to known or contingent liabilities such as infringement claims. These risks could have a material adverse effect on our business, results of operations and financial condition.

The sale of our active safety products is determined, in part, by consumer acceptance of these technologies. If the rate of consumer acceptance of active safety technology slows or decreases, our business, results of operations and financial condition would be adversely affected.

Our future operating results are dependent on consumer acceptance and adoption of active safety technologies. Market acceptance of active safety technology depends upon many factors, including regulatory requirements and safety standards, cost and driver preferences. If consumer acceptance of active safety technologies does not increase, sales of our products could also be adversely affected.

Some of our products and technologies may use “open source” software, which may restrict how we use or distribute our products or require that we release the source code of certain products subject to those licenses.

Some of our products and technologies may incorporate software licensed under so-called “open source” licenses. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on origin of the software. Additionally, open source licenses typically require that source code subject to the license be made available to the public and that any modifications or derivative works to open source software continue to be licensed under open source licenses. These open source licenses typically mandate that proprietary software, when combined in specific ways with open source software, become subject to the open source license. If we combine our proprietary software in such a way with open source software, we could be required to release the source code of our proprietary software. Few courts have interpreted open source licenses, and the manner in which these licenses may be interpreted and enforced is therefore subject to some uncertainty.

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If these risks materialize, they could have a material adverse effect on our business, results of operations and financial condition.

Our business may be adversely affected by laws or regulations, including international, environmental, occupational health and safety or other governmental regulations.

We are subject to various federal, state, local and foreign laws and regulations, including those related to the requirements of environmental, occupational health and safety, financial and other matters. We cannot predict the substance or impact of pending or future legislation or regulations, or the application thereof. The introduction of new laws or regulations or changes in existing laws or regulations, or the interpretations thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our, operating results, cash flows and financial condition. Our operations are subject to environmental and safety laws and regulations governing, among other things, emissions to air, discharges to waters and the generation, handling, storage, transportation, treatment and disposal of waste and other materials. The operation of automotive parts manufacturing facilities entails risks in these areas, and there is a risk that we will incur material costs or liabilities as a result. Additionally, environmental laws, regulations, and permits and the enforcement thereof change frequently and have tended to become increasingly stringent over time, which may necessitate substantial capital expenditures or operating costs or may require changes of production processes.

Due to our global operations, we are also subject to many laws governing our activities in other countries (including, but not limited to, the Foreign Corrupt Practices Act, and other anti-bribery regulations in foreign jurisdictions where we do business, and the U.S. Export Administration Act), which prohibit improper payments to government officials and restrict where and how we can do business, what information or products we can supply to certain countries and what information we can provide to authorities in governmental authorities.

There is a risk that our policies and procedures will not protect us from the reckless acts of our employees or representatives, particularly in the case of recently acquired operations that may not have significant training in applicable compliance policies and procedures. Any costs, liabilities, and obligations that we incur relating to such regulations could have a material adverse effect on our business, results of operations and financial condition.

Our business may be adversely affected by changes in automotive safety regulations or concerns that drive further regulation of the automobile safety market.

Government vehicle safety regulations are a key driver in our business. Historically, these regulations have imposed ever more stringent safety regulations for vehicles. Safety regulations have a positive impact on driver awareness and acceptance of active safety products and technology. These more stringent safety regulations often require vehicles to have more safety content per vehicle and more advanced safety products, including active safety technology, which has thus been a driver of growth in our business.

These regulations are subject to change based on a number of factors that are not within our control, including new scientific or medical data, adverse publicity regarding autonomous vehicles or technology, domestic and foreign political developments or considerations, and litigation relating to our products and our competitors’ products. Changes in government regulations in response to these and other considerations could have a severe impact on our business. If government priorities shift and we are unable to adapt to changing regulations, our business may suffer material adverse effects. The regulatory obligation of complying with safety regulations could increase as federal and local regulators impose more stringent compliance and reporting requirements in response to product recalls and safety issues in our industry.

The regulatory obligation of complying with safety regulations could increase as federal and local regulators impose more stringent compliance and reporting requirements in response to product recalls, safety issues and product innovations in our industry. In the U.S., we are subject to the existing Transportation Recall

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Enhancement, Accountability and Documentation (TREAD) Act, which requires manufacturers to comply with “Early Warning” requirements by reporting to the National Highway Traffic Safety Administration (“NHTSA”) information related to defects or reports of injury related to their products. TREAD imposes criminal liability for violating such requirements if a defect subsequently causes death or bodily injury. In addition, the National Traffic and Motor Vehicle Safety Act authorizes NHTSA to require a manufacturer to recall and repair vehicles that contain safety defects or fail to comply with federal motor vehicle safety standards. The U.S. Department of Transportation issued regulations in 2016 that require manufacturers of certain autonomous vehicles to provide documentation covering specific topics to regulators, such as how automated systems detect objects on the road, how information is displayed to drivers, what cybersecurity measures are in place and the methods used to test the design and validation of autonomous driving systems.

As our technologies advance and develop beyond traditional automotive products, we may be subject to regulatory regimes beyond traditional vehicle safety rules and requirements. As a result, we may not identify all regulatory licenses or permits required for our products, or our products may operate beyond the scope of the licenses and permits we have obtained. Failing to obtain the required licenses, permits or other regulatory authorizations could result in investigations, fines or other penalties or proceedings. If any of the regulatory risks described above materialized, they could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to the Spin-Off

The spin-off may not be completed on the terms or timeline currently contemplated, if at all.

We are actively engaged in planning for the spin-off from Autoliv. We expect to incur expenses in connection with the spin-off and any delays in the anticipated completion of the distribution may increase these expenses. Unanticipated developments could delay or negatively affect the distribution, including those related to the filing and effectiveness of appropriate filings with the SEC, the listing of our common stock and SDRs on a trading market, obtaining the tax opinion regarding the tax-free nature of the spin-off and receiving any required regulatory approvals. In addition, Autoliv’s board of directors may, in its absolute and sole discretion, decide at any time prior to the consummation of the spin-off not to proceed with the spin-off. Therefore, there is a risk that the spin-off will not be completed. Until the consummation of the spin-off, Autoliv’s board of directors will have the sole and absolute discretion to determine and change the terms of the spin-off, including the establishment of the common stock record date and distribution date or the waiver by Autoliv in its absolute and sole discretion of any conditions.

We have no history of operating as an independent, stand-alone company, and our historical and pro forma financial information and forecasts may not be representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

Our historical information in this information statement refers to our business as operated by and integrated with Autoliv. Our historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of Autoliv. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below.

Prior to the spin-off, our business has been operated by Autoliv as part of its broader corporate organization, rather than as an independent company. Autoliv or one of its affiliates performed various corporate functions for us, such as legal, accounting, treasury, internal auditing, and human resources and also provided our IT and other corporate infrastructure. Our historical and pro forma financial results reflect allocations of corporate expenses from Autoliv for such functions and are likely to be less than the expenses we would have incurred had we

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operated as a separate publicly traded company. Following the spin-off, our costs related to such functions previously performed by Autoliv are expected to increase. Autoliv will provide some of these functions to us pursuant to a transition services agreement, as described in “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off.” We will need to make investments to replicate or outsource from other providers certain facilities, systems, infrastructure, and personnel to which we will no longer have access after our spin-off from Autoliv. These initiatives to develop our independent ability to operate without access to Autoliv’s existing operational and administrative infrastructure will have a cost to implement. We may not be able to operate our business efficiently or at comparable costs, and our profitability may decline.

Other significant changes may occur in our cost structure, management, financing and business operations, as compared to the past financial performance of our business, as a result of operating as a company separate from Autoliv. These risks could, individually or in the aggregate, have a material adverse effect on our business, results of operations and financial condition.

Our ability to meet our capital needs may be harmed by the loss of financial support from Autoliv and it may be more difficult for us to obtain financing following the spin-off.

The loss of financial support from Autoliv could harm our ability to meet our capital needs. Autoliv can currently provide certain capital that may be needed in excess of the amounts generated by our operating activities. Prior to the spin-off, Autoliv intends to contribute cash that will fund our operations for approximately four years following the spin-off. There is a risk that Autoliv will not be able to obtain sufficient cash to fund our operations.

After the spin-off, we expect to obtain any funds needed in excess of the amounts contributed by Autoliv and generated by our operating activities through the capital markets, bank financing, strategic relationships or other arrangements. After the completion of the spin-off, the cost of capital for us will be higher than Autoliv’s cost of capital prior to the spin-off. Given the smaller relative size of our company, as compared to Autoliv after the spin-off, we may incur higher debt servicing and other costs relating to new indebtedness than we would have otherwise incurred as a part of Autoliv. As a stand-alone company, the cost of our financing also will depend on other factors such as our performance and financial market conditions generally. Further, there is a risk that we will not be able to obtain capital market financing or credit on favorable terms, or at all, in the future. There is a risk that our ability to meet our capital needs, including servicing our own debt, will be harmed by the loss of financial support from Autoliv, which could have a material adverse effect on our business, results of operations and financial condition.

As an independent, publicly traded company, we may not enjoy the same benefits that we did as a segment of Autoliv.

Currently, our business is integrated with the other businesses of Autoliv. Thus, we have been able to use Autoliv’s size and purchasing power in procuring various goods and services and have shared economies of scope and scale in costs, employees, supplier relationships and customer relationships. Following the spin-off, we will be a smaller and less diversified company than Autoliv, and will not have access to financial and other resources comparable to those of Autoliv prior to the spin-off. As a stand-alone company, we may not have similar diversity or integration opportunities and may not have similar purchasing power or access to capital markets. The transition agreements we will enter into with Autoliv may not fully capture the benefits we have enjoyed as a result of being integrated with Autoliv and may result in us paying higher amounts than in the past for these services. As a stand-alone company, we may be unable to obtain goods and services at the prices and terms obtained prior to the spin-off, which could decrease our overall profitability. This could have a material adverse effect on our business, results of operations and financial condition following the completion of the spin-off.

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The combined post-spin-off value of Autoliv and our common stock may not equal or exceed the pre-spin-off value of Autoliv common stock.

As a result of the distribution, Autoliv expects the trading price of Autoliv common stock immediately following the distribution to be lower than the “regular-way” trading price of such common stock immediately prior to the distribution because the trading price will no longer reflect the value of the Electronics business held by us. There is a risk that the aggregate market value of the Autoliv common stock and our common stock following the spin-off may be higher or lower than the market value of Autoliv common stock immediately prior to the spin-off.

We may not achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely affect our business.

We may not be able to achieve the full strategic and financial benefits expected to result from the spin-off, or such benefits may be delayed or not occur at all. We may not achieve these benefits for a variety of reasons, including, among others:

• the actions required to separate Veoneer and Autoliv’s respective businesses could disrupt our and Autoliv’s operations;

• certain costs and liabilities that were otherwise less significant to Autoliv as a whole will be more significant for us and Autoliv as stand-alone companies;

• the spin-off will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing our business;

• we will incur costs in connection with the transition to being a stand-alone public company that will include accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring or reassigning Autoliv personnel, costs related to establishing a new brand identity in the marketplace and costs to separate information systems;

• following the spin-off, we may be more susceptible to market fluctuations and other adverse events than if it were still a part of Autoliv;

• following the spin-off, our business will be less diversified than Autoliv’s business prior to the spin-off; and

• the other actions required to separate the companies’ respective businesses could disrupt our operations.

If we fail to achieve some or all of the benefits expected to result from the spin-off, or if such benefits are delayed, our business, financial condition and results of operations could be materially adversely effected.

We may be responsible for U.S. federal income tax liabilities that relate to the distribution.

The spin-off is conditioned on the receipt of an opinion of Autoliv’s tax counsel to the effect that the distribution of our common stock, together with certain related transactions, should qualify as a transaction that is tax-free under Sections 368(a)(1)(D) and 355 of the Code. The opinion will be based on and rely on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of Autoliv and the Company, including those relating to the past and future conduct of Autoliv and the Company. If any of these representations, statements or undertakings are, or become, inaccurate or incomplete, or if Autoliv or the Company breach any of their respective covenants in the spin-off documents, the opinion of counsel may be invalid and the conclusions reached therein could be jeopardized. Notwithstanding the opinion of counsel, the IRS could determine that the distribution, together with certain related transactions, should be treated as a taxable transaction if the IRS determines that any of these representations, assumptions, or undertakings upon which such opinion was based are incorrect or have been violated or if the IRS disagrees with the conclusions in the

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opinion of counsel. An opinion of counsel is not binding on the IRS or any court and there is a risk that the IRS not challenge the conclusions reached in the opinion. The IRS will not provide any opinion in advance of the spin-off that our proposed transaction will be tax-free.

If the distribution, together with certain related transactions, failed to qualify as a transaction that is generally tax-free under Sections 368(a)(1)(D) and 355 of the Code, Autoliv would recognize taxable gain as if it had sold our common stock in a taxable sale for its fair market value, Autoliv stockholders who receive our common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares, and we could incur significant liabilities. For more information, please refer to “Material U.S. Federal Income Tax Consequences.” In addition, if the spin-off is not tax-free, Veoneer would be responsible for tax liabilities as allocated by the Tax Matters Agreement. See “Certain Relationships and Related Persons Transactions–Agreements with Autoliv Related to the Spin-Off–Tax Matters Agreement.”

Even if the spin-off otherwise qualifies as a tax-free transaction for U.S. federal income tax purposes, the distribution will be taxable to Autoliv if there are (or have been) one or more acquisitions (including issuances) of our stock or the stock of Autoliv, representing 50% or more, measured by vote or value, of the stock of any such corporation and the acquisition or acquisitions are deemed to be part of a plan or series of related transactions that include the distribution. Any acquisition of our common stock within two years before or after the distribution (with exceptions, including public trading by less-than-5% stockholders and certain compensatory stock issuances) generally will be presumed to be part of such a plan unless that presumption is rebutted. The resulting tax liability would be substantial, and under U.S. Treasury regulations, each member of the Autoliv group at the time of the spin-off (including us and our subsidiaries) would be jointly and severally liable for the resulting U.S. federal income tax liability.

We will agree to not enter into certain transactions that could cause any portion of the spin-off to be taxable to Autoliv, including under Section 355(e) of the Code. Pursuant to the Tax Matters Agreement, we also will agree to indemnify Autoliv for any tax liabilities resulting from such transactions or other actions we take, and Autoliv will agree to indemnify us for any tax liabilities resulting from transactions entered into by Autoliv. These obligations may discourage, delay or prevent a change of control of our company, which could have a materially adverse effect on our business. For additional details, see “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off—Tax Matters Agreement.”

The distribution of shares to stockholders of Autoliv that are tax resident in Sweden may result in taxation on the received dividend.

Unless waived by Autoliv, the spin-off is conditioned on the receipt of advice from our Swedish tax advisors that the distribution of our common stock should be tax exempt under the “Lex - ASEA rule.” This advice is not binding on the Swedish Tax Agency (Skatteverket). Accordingly, the Swedish Tax Agency may reach conclusions with respect to the spin-off that are different from the conclusions reached in the advice from our tax advisors. This advice will be based on certain factual statements and representations, which, if incomplete or untrue in any material respect, could alter the conclusions.

If the distribution fails to be tax exempt under the “Lex - ASEA rule,” individuals and limited liability companies that are stockholders in Autoliv would be subject to Swedish tax on the receipt of stock as a taxable dividend. If the distribution is taxable, for individuals, all capital income such as dividends and capital gains are taxed in the capital income category subject to a 30 percent tax rate. For limited liability companies all income, including taxable capital gains and dividends, is generally taxed as income from business operations at a rate of 22 percent. Stockholders other than individuals and limited liability companies would be subject to tax depending on, inter alia, the legal and tax characteristics of the stockholder from a Swedish perspective. Neither Autoliv nor we should be subject to tax even if the “Lex - ASEA rule” does not apply. For more information, please refer to “Material Swedish Tax Consequences.”

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Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the spin-off and distribution.

Our financial results previously were included within the consolidated results of Autoliv. Thus, we were not directly subject to reporting and other requirements of the U.S. Securities Exchange Act of 1934, as amended, or Exchange Act. As a result of the spin-off, we will be directly subject to reporting and other obligations under the Exchange Act. Beginning with our Annual Report on Form 10-K for fiscal year 2019, we will be required to fully comply with Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, which will require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. These reporting and other obligations may place significant demands on management, administrative and operational resources, including accounting systems and resources.

The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. Under the Sarbanes-Oxley Act, we are required to maintain effective disclosure controls and procedures and internal controls over financial reporting. We may need to upgrade our systems, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff due to these requirements. It is likely we will incur additional annual expenses for the purpose of addressing these requirements. If we are unable to implement these systems and processes in a timely and effective fashion, our ability to comply with financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. Any failure to achieve and maintain effective internal controls could have a material adverse effect on our business, results of operations and financial condition.

We could incur substantial additional costs and experience temporary business interruptions as we install and implement our information technology infrastructure and transition our data to our own systems.

In connection with the spin-off, we will install and implement information technology infrastructure to support certain of our business functions, including accounting and reporting, manufacturing process control and distribution. We may incur temporary interruptions in business operations if we cannot transition effectively from Autoliv’s existing transactional and operational systems, data centers and the transition services that support these functions as we replace these systems. We may not be successful in implementing our new systems and transitioning data, and may incur substantially higher costs for implementation than currently anticipated. Our failure to avoid operational interruptions as we implement the new systems and replaces Autoliv’s information technology services, or our failure to implement the new systems and replace Autoliv’s services successfully, and any substantially higher costs could disrupt our business and have a material adverse effect on our business, financial condition and results of operations.

Autoliv may fail to perform under various agreements that have or will be executed in connection with the spin-off.

In connection with the internal reorganization and spin-off, we will enter into a Master Transfer Agreement, Distribution Agreement and Transition Services Agreement with Autoliv and will also enter into various other agreements, including a Tax Matters Agreement and an Employee Matters Agreement. The Master Transfer Agreement, the Distribution Agreement and the Tax Matters Agreement and the Employee Matters Agreement will determine the allocation of assets and liabilities between the companies following the completion of the spin-off and will include any necessary indemnifications related to liabilities and obligations. The Transition Services Agreement will provide for the performance of certain services by each company for the benefit of the other for a limited period of time after the internal reorganization and the spin-off, as applicable. We will rely on Autoliv to satisfy its performance and payment obligations under these agreements. If Autoliv is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses.

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We may fail to have the necessary systems, services, and assets in place at the necessary time.

Historically, we have relied on financial, administrative and other resources of Autoliv to operate our business. We are in the process of creating our own, or engaging third parties to provide, systems and services to replace many of the systems and services that Autoliv currently provides to us and/or will provide to us under the Transition Services Agreement. However, we may not be successful in timely implementing these systems and services or in transitioning from Autoliv’s systems to our own systems, and may pay more for such systems and services that we currently pay or that we will pay under the Transition Services Agreement. For a more detailed description, see “Certain Relationships and Related Persons Transactions—Transition Services Agreement” The services provided under the Transition Services Agreement may not be sufficient to meet our actual needs. In addition, we may face difficulty in separating our assets from those of Autoliv and acquiring assets and resources necessary to operate our business. Any failure or significant downtime in our administrative or other systems, or lack of necessary assets and resources, could have a material adverse effect on our business, results of operations and financial condition.

The spin-off may result in disruptions to, and negatively impact our relationships with, our customers, prospective customers and other business partners.

Uncertainty related to the proposed spin-off may lead customers and other parties with which we currently do business or may do business in the future to terminate or attempt to negotiate changes in our existing business relationships, or cause them to consider entering into business relationships with parties other than us. These disruptions could have a material adverse effect on our business, results of operations and financial condition. The effect of such disruptions could be exacerbated by any delays in the completion of the spin-off.

Moreover, some of our customers, prospective customers, suppliers or other companies with whom we conduct business may need assurances that our financial stability on a stand-alone basis is sufficient to satisfy their requirements for doing or continuing to do business with them. Any failure of parties to be satisfied with our financial stability could have a material adverse effect on our business, results of operations and financial condition.

Potential indemnification liabilities to Autoliv or a refusal of Autoliv to indemnify us pursuant to the Distribution Agreement could materially adversely affect us.

The Distribution Agreement with Autoliv will provide for, among other things, the principal corporate transactions required to effect the distribution, certain conditions to the distribution and provisions governing the relationship between us and Autoliv with respect to and resulting from the completion of the spin-off. The Distribution Agreement will also provide for indemnification obligations designed to make the Company financially responsible for substantially all liabilities that may exist relating to its business activities, whether incurred prior to or after the completion of the internal reorganization, as well as those obligations of Autoliv assumed by us pursuant to the Master Transfer Agreement; provided, however, certain warranty, recall and product liabilities for Electronics products manufactured prior to the completion of the internal reorganization will be retained by Autoliv and Autoliv will indemnify us for any losses associated with such warranty, recall or product liabilities. If we are required to indemnify Autoliv under the circumstances set forth in the Distribution Agreement, we may be subject to substantial liabilities. See “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off.”

We may be unable to take certain actions after the spin-off because such actions could jeopardize the tax-free status of the spin-off, and such restrictions could be significant.

To preserve the tax-free treatment of the spin-off, for the initial two-year period following the spin-off, we are prohibited, except in limited circumstances, from taking or failing to take certain actions that would prevent the spin-off and related transactions from being tax-free, including: (1) entering into any transaction pursuant to which

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our stock would be acquired, whether by merger or otherwise; (2) issuing any equity securities or securities that could possibly be converted into our equity securities; (3) selling or otherwise disposing of substantially all of our assets; or (4) repurchasing our equity securities. These restrictions may limit our ability to issue equity and to pursue strategic transactions or engage in new business or other transactions that may maximize the value of our business. In addition, if we take, or fail to take, actions that prevent the spin-off and related transactions from being tax-free, we could be liable for the adverse tax consequences resulting from such actions. For a more detailed description, see “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off—Tax Matters Agreement.”

The spin-off and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements.

The spin-off could be challenged under various state and federal fraudulent conveyance laws. An unpaid creditor or an entity vested with the power of such creditor (such as a trustee or debtor-in-possession in a bankruptcy) could claim that Autoliv did not receive fair consideration or reasonably equivalent value in the spin-off, and that the spin-off left Autoliv insolvent or with unreasonably small capital or that Autoliv intended or believed it would incur debts beyond its ability to pay such debts as they mature. If a court were to agree with such a plaintiff, then such court could void the spin-off as a fraudulent transfer and could impose a number of different remedies, including without limitation, returning our assets or your shares in our company to Autoliv or providing Autoliv with a claim for money damages against us in an amount equal to the difference between the consideration received by Autoliv and the fair market value of our company at the time of the spin-off. No assurance can be given as to what standard a court would apply to determine insolvency or that a court would determine that Autoliv was solvent at the time of or after giving effect to the spin-off, including the distribution of our common stock.

After the spin-off, certain of our officers and directors may have actual or potential conflicts of interest because of their service as executive officers or directors of Autoliv.

Certain of our directors and officers may own Autoliv common stock and equity awards if they previously served in positions with Autoliv. Following the spin-off, even though our board of directors will consist of a majority of directors who are independent, some of our directors may continue to have a financial interest in Autoliv common stock and equity awards. Continuing ownership of Autoliv common stock and equity awards, or service as a director at both companies could create, or appear to create, potential conflicts of interest for our directors and officers with prior or continuing positions with Autoliv if we have disagreements with Autoliv about the agreements between us that continue or face decisions that could have different implications for us and Autoliv.

We may have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements related to the spin-off.

We expect that the agreements related to the spin-off, including the Master Transfer Agreement, the Distribution Agreement, the Employee Matters Agreement, the Tax Matters Agreement, the Transition Services Agreement and any other agreements, will be negotiated in the context of our spin-off from Autoliv while we are still part of Autoliv. Accordingly, these agreements may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties. The terms of the agreements being negotiated in the context of our spin-off are related to, among other things, allocations of assets and liabilities, rights and indemnification and other obligations between Autoliv and us. To the extent that certain terms of those agreements provide for rights and obligations that could have been procured from third parties, we may have received better terms from third parties. There is a risk that we may incur greater costs or be subject to greater potential liability pursuant to our agreements with Autoliv for certain rights and obligations that could have been procured from unaffiliated third parties. See “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off.”

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RISKS RELATED TO OUR SECURITIES

Risks Related to Investing in Our Securities

Our board of directors may change significant corporate policies without stockholder approval.

Our financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, will be determined by our board of directors. These policies may be amended or revised at any time and from time to time at the discretion of our board of directors without a vote of our stockholders. In addition, our board of directors may change our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements. A change in these policies could have a material adverse effect on our business, results of operations, financial condition, the per share trading price of our common stock and our ability to satisfy our debt service obligations and to pay dividends to our stockholders.

Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.

Our certificate of incorporation and bylaws will contain provisions that may make the merger or acquisition of the Company more difficult without the approval of our board of directors. Among other things:

• although we will not have a stockholder rights plan, our certificate of incorporation would allow us to authorize the issuance of undesignated preferred stock in connection with a stockholder rights plan or otherwise, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;

• we will have a classified board of directors, and any director may be removed only for cause and only by the affirmative vote of at least 75% of the voting power of all the then-outstanding shares of voting stock;

• our board of directors will be expressly authorized to make, alter or repeal our bylaws and our stockholders may only amend our bylaws by the affirmative vote of at least 80% of the voting power of all the then-outstanding shares of voting stock;

• our certificate of incorporation and bylaws will permit only our board of directors to call special meetings of stockholders;

• our certificate of incorporation and bylaws will not permit stockholder action by written consent; and

• our bylaws will establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

Further, as a Delaware corporation, we are subject to provisions of Delaware law, which may impair a takeover attempt that our stockholders may find beneficial. These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, including actions that our stockholders may deem advantageous, or negatively affect the trading price of our common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.

Our certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our current or former directors, officers or stockholders

Our certificate of incorporation will provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action

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or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our stockholders, directors, officers or other employees to us or to our stockholders, (iii) any action asserting a claim arising out of or pursuant to the Delaware General Corporation Law, (iv) the certificate of incorporation or amended and bylaws, or (v) any action asserting a claim government by the internal affairs doctrine. At our first annual meeting of stockholders following the spin-off, we intend to ask our stockholders to vote on whether to keep this provision in our certificate of incorporation. This choice of forum provision may only be amended by the affirmative vote of at least 80% of the voting power of all the outstanding shares of common stock entitled to vote, which may have the effect of making this provision difficult to repeal by our stockholders. Any person or entity purchasing or otherwise holding any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provision in our restated certificate of incorporation related to choice of forum. This provision may have the effect of discouraging lawsuits against our directors, officers or employees by limiting our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes.

There is no existing market for our common stock and a trading market that will provide you with adequate liquidity may not develop for our common stock. In addition, once our common stock begins trading, the market price and trading volume of our common stock may fluctuate widely.

There is no current trading market for our common stock. Our common stock distributed in the spin-off will be trading publicly for the first time. We expect that a limited trading market for our common stock, commonly known as a “when-issued” trading market, will develop in the U.S. at least one trading day prior to the common stock record date, and we expect “regular-way” trading of our common stock will begin the first trading day after the distribution date. There is a risk that an active trading market for our common stock will not develop or be sustained in the future. The lack of an active trading market may make it more difficult for you to sell your shares and could lead to our share price being depressed or more volatile.

For many reasons, including the risks identified in this information statement, the market price of our common stock following the spin-off may be more volatile than the market price of Autoliv common stock before the spin-off. These factors may result in short-term or long-term negative pressure on the value of our common stock.

We cannot predict the prices at which our common stock may trade after the spin-off. The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to:

• a shift in our investor base;

• our quarterly or annual earnings, or those of comparable companies;

• actual or anticipated fluctuations in our operating results;

• our ability to obtain financing as needed;

• changes in laws and regulations affecting our business;

• changes in accounting standards, policies, guidance, interpretations or principles;

• announcements by us or our competitors of significant investments, acquisitions or dispositions;

• the failure of securities analysts to cover our common stock after the spin-off;

• changes in earnings estimates by securities analysts or our ability to meet those estimates;

• the operating performance and stock price of comparable companies;

• overall market fluctuations;

• a decline in the automotive markets; and

• general economic conditions and other external factors.

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Future issuances of common stock by us may cause the market price of our common stock to decline.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales could occur, could substantially decrease the market price of our common stock. Upon consummation of the spin-off, substantially all of the outstanding shares of our common stock will be available for resale in the public market. The market price of our common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them.

In connection with the spin-off, we expect to adopt an equity incentive plan in which our employees, non-employee directors and other service providers may participate, under which an aggregate of 3,000,000 shares of our common stock will be available for future issuance, plus a number of shares to satisfy equity-based awards that are outstanding under Autoliv’s Amended and Restated Stock Incentive Plan on the distribution date that will be converted into awards that will be exercisable for shares of our common stock. The number of shares subject to such converted awards will be based on a 5-day average closing price before and after the spin-off. The actual number of shares of the Company’s common stock subject to converted awards is therefore not determinable until after the spin-off. See “The Spin-Off—Treatment of Outstanding Equity Awards.” We will file a registration statement on Form S-8 under the Securities Act to register shares of our common stock or securities convertible into or exchangeable for shares of our common stock issued pursuant to our equity incentive plan. Accordingly, shares registered under such registration statements will be available for sale in the open market.

Your ownership in our stock may be diluted by additional equity issuances.

Your percentage ownership in our common stock could be diluted in the future as a result of equity issuances for acquisitions, capital market transactions or otherwise, including any equity awards that we grant to our directors, officers and employees. Such awards could have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock. In addition, our Certificate of Incorporation will authorize us to issue, without the approval of our stockholders, one or more classes or series of preferred shares having such designation, powers, preferences and relative, participating, optional and other special rights as our board of directors generally may determine. The terms of one or more classes or series of preferred shares could dilute the voting power or reduce the value of our common stock.

We have no current plans to pay cash dividends on our common stock, and certain factors could limit our ability to pay dividends in the future.

The declaration, amount and payment of any future dividends on shares of common stock will be at the absolute and sole discretion of our board of directors. Our board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of indebtedness we or our subsidiaries incur in the future. We have no current plans to pay any cash dividends.

If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our common stock or our industry, or the shares of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our common stock could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose viability in the market, which in turn could cause our share price or trading volume to decline.

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Risks Related to an Investment in our SDRs

Veoneer SDR holders do not have the same rights as our stockholders.

A Veoneer SDR holder will not have equivalent rights as our holders of common stock, whose rights are governed by U.S. federal law and the Delaware General Corporation Law. The rights of Veoneer SDR holders will be set forth and described in to the General Terms and Conditions for Swedish Depository Receipts in Veoneer (the “General Terms and Conditions”). Although the General Terms and Conditions will generally allow Veoneer SDR holders to vote in general meetings of stockholders or to be entitled to dividends as if they held our shares of common stock directly, the rights of Veoneer SDR holders differ in some instances from the rights of Veoneer stockholders. In particular, Veoneer SDR holders do not have the ability to nominate directors for election or bring proposals before our annual meeting to the extent provided for in our governing documents or by applicable U.S state or federal law. Additionally, Veoneer SDR holders may not be able to enforce their rights under the General Terms and Conditions in relation to their SDRs in the same manner as one of our stockholders could with respect to our shares of common stock under applicable U.S. law.

The trading market for Veoneer SDRs may be limited in the future.

There is no current trading market for Veoneer SDRs. There is a risk that a trading market for Veoneer SDRs will not develop or be sustained in the future. Veoneer SDRs that will be traded in Stockholm are not equivalent to a Swedish security being traded on Nasdaq Stockholm. Specifically, Veoneer SDRs represent shares of a U.S. company and are not themselves shares of stock. The lack of an active trading market may make it more difficult for you to sell your Veoneer SDRs and could lead to the price of Veoneer SDRs being depressed or more volatile.

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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This information statement contains statements that are not historical facts but rather forward-looking statements. Such forward-looking statements include those that address activities, events or developments that Veoneer or its management believes or anticipates may occur in the future. All forward-looking statements including without limitation, statements regarding management’s examination of historical operating trends and data, estimates of future sales, operating margin, cash flow, effective tax rate or other future operating performance or financial results, the completion and timing of the proposed spin-off, and the expected strategic operational and competitive benefits of the proposed spin-off are based upon our current expectations, various assumptions and/or 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: our spin-off from Autoliv and our ability to operate as a stand-alone public company; our ability to achieve the intended benefits from our spin-off with Autoliv; potential business conflicts of interest with Autoliv; 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 or decline; changes in and the successful execution of our capacity alignment: restructuring and cost reduction initiatives 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 or restructuring; 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; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of future litigation, regulatory actions or investigations or infringement claims; our ability to protect our intellectual property rights; 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 captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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THE SPIN-OFF

Background and Overview

On December 12, 2017, Autoliv announced its intention to spin off its Electronics segment into an independent, publicly traded company called Veoneer following the completion of a strategic review by its board of directors. In preparation for the spin-off, Autoliv completed the internal reorganization, in which it transferred its Electronics business to us. To complete the spin-off, Autoliv will distribute to its stockholders all of the outstanding shares of our common stock. The distribution will occur on the distribution date, which is expected to be June 29, 2018. Each holder of Autoliv common stock will receive one share of Veoneer common stock for every one share of Autoliv common stock held as of the close of business on June 12, 2018, the common stock record date. However, if a holder of Autoliv common stock holds shares via a brokerage account and sells shares in the “regular-way” market after the common stock record date and on or before the distribution date, the holder will also be selling the right to receive the shares of our common stock in connection with the spin-off. Each holder of Autoliv SDRs will receive one Veoneer SDR for every one Autoliv SDR held as of the close of business on July 2, 2018, the SDR record date. Autoliv stockholders will receive cash in lieu of any fractional shares of our common stock that they would have received after application of this ratio. You will not be required to make any payment, surrender or exchange your shares of Autoliv common stock or Autoliv SDRs or take any other action to receive your shares of our common stock or our SDRs in the distribution.

The distribution of our common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. In addition, Autoliv has the right not to complete the spin-off if, at any time prior to the distribution, the board of directors of Autoliv determines, in its absolute and sole discretion, that the spin-off is not then in the best interests of Autoliv or its stockholders or other constituents, that a sale or other alternative is in the best interests of Autoliv or its stockholders or other constituents or that it is not advisable for us to separate from Autoliv at that time. See “—Conditions to the Distribution.”

Reasons for the Spin-Off

Autoliv’s board of directors believes that separating the Electronics business from Autoliv’s passive safety business is in the best interests of Autoliv and its stockholders for a number of reasons, including:

• Financial Resources. The businesses that Autoliv and we will separately conduct have very different capital needs, and the spin-off will allow each company to raise and invest capital in its business in a time and manner appropriate for its distinct strategy and business needs and facilitating a more efficient allocation of capital. Specifically, the electronics business will no longer have to compete for capital allocation with the passive safety business.

• Different Independent Strategic Needs. The spin-off will provide each company with increased flexibility to pursue independent strategic and financial plans and strategic partnerships without having to consider the potential impact on the business of the other company, as well as enable each company to use its stock as currency for acquisitions in the same or ancillary businesses. The spin-off will allow each company to adapt more quickly to changing markets and customer expectations and dynamics.

• Attraction and Retention of Talent. The businesses that Autoliv and we will separately conduct have different risk and reward profiles, which results in different work environments and cultures. The spin-off will allow each company to compete more effectively for the best talent in the space in which it operates by implementing a work environment and culture that is oriented to the business it conducts without consideration of the impact of such environment or culture on the business that the other company will be conducting. Our operating practices will be focused on agility, collaboration, empowerment and speed in order to compete for the best talent against technology and software development companies.

• Employee Incentives. The spin-off will facilitate incentive compensation arrangements for employees more closely tied to the performance of the relevant company’s business and can thereby enhance

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employee hiring and retention by, among other things, improving alignment of management and employee incentives with performance and growth objectives.

• Enhanced Strategic and Management Focus. The spin-off will allow each company to focus on and more effectively pursue distinct product portfolios, operating priorities and strategies, markets and marketing strategies and different opportunities for long-term growth and profitability and align with the specific needs of the business it is conducting. Specifically, Autoliv will continue to focus on developing and producing passive safety products. We will pursue growth and innovation in the active safety, electronics and autonomous driving areas. The separation is intended to allow each company to adapt more quickly to changing markets and customer expectations and dynamics.

• Potential Increased Stock Value. The evaluation of separate investment characteristics, including risks, performance, and future prospects of the respective businesses, is expected to enhance the investment opportunities provided to investors by two separate companies. Should this occur, each company would be in a better position to utilize its stock as currency for acquisitions and to incentivize its employees.

Autoliv’s board of directors also considered a number of potentially negative factors in evaluating the spin-off, including:

• The potential loss of operating synergies from operating as a consolidated entity.

• As part of Autoliv, the enterprise technology infrastructure, software, services and financing businesses have historically benefitted from Autoliv’s size and purchasing power in procuring various goods and services. We may also incur costs for certain functions previously performed by Autoliv, such as legal, accounting, treasury, internal auditing, and human resources and information technology and other administrative services, that are higher than the amounts reflected in our historical combined financial statements, which could cause our financial performance to be adversely affected.

• We will incur costs in the transition to being a standalone public company, which include accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring or reassigning our personnel, costs related to establishing a new brand identity in the marketplace and costs to separate Autoliv’s information systems.

• The potential disruptions to our business as a result of the spin-off.

• To preserve the tax-free treatment of the separation and the distribution for U.S. federal income tax purposes, under the Tax Matters Agreement that we will enter into with Autoliv, we will be restricted from taking actions that may cause the separation and distribution to be taxable to Autoliv for U.S. federal income tax purposes. These restrictions may limit for a period of time our ability to pursue certain strategic transactions and equity issuances or engage in other transactions that might increase the value of our business.

Autoliv’s board of directors determined that the benefits of establishing us as an independent, publicly traded company outweighed these factors.

The anticipated benefits of the spin-off are based on a number of assumptions, and there can be no assurance that such benefits will materialize to the extent anticipated, or at all. In the event the spin-off does not result in such benefits, the costs associated with the spin-off could have a material adverse effect on each company individually and in the aggregate. For more information about the risks associated with the spin-off, see “Risk Factors—Risks Related to the Company—Risks Related to the Spin-Off.”

Manner of Effecting the Spin-Off

Internal Reorganization

In preparation for the spin-off, Autoliv and its subsidiaries completed the internal reorganization and transferred to the Company the entities, assets, liabilities and obligations that the Company will hold following

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the spin-off. The internal reorganization included stock and asset transfers, dividends, contributions and similar transactions, and included formation of new subsidiaries in U.S. and non-U.S. jurisdictions to own and operate the Electronics businesses in such jurisdictions. Among other things, the internal reorganization resulted in the Company owning, directly or indirectly, the operations comprising, and the entities that conduct, Autoliv’s Electronics business, which has historically operated as a distinct operating segment. See the historical Combined Financial Statements included in this information statement for additional details on the historical assets, liabilities and obligations of the Electronics business.

Distribution of Shares of Our Common Stock

The general terms and conditions relating to the completion of the distribution to effect the spin-off will be set forth in a Distribution Agreement between us and Autoliv. Under the Distribution Agreement, the distribution will be effective on June 29, 2018, the distribution date. As a result of the spin-off, on the distribution date, each holder of Autoliv common stock will receive one share of Veoneer common stock for every one share of Autoliv common stock that he, she or it owns as of 5:00 p.m. Eastern Time, on June 12, 2018, the common stock record date. However, if a holder of Autoliv common stock holds shares via a brokerage account and chooses to sell its shares in the “regular-way” market after the common stock record date and on or before the distribution date, such holder will also be selling the right to receive the shares of Veoneer common stock in connection with the spin-off. The actual number of shares to be distributed will be determined based on the number of shares of Autoliv common stock expected to be outstanding as of the common stock record date and will be reduced to the extent that cash payments are to be made in lieu of the issuance of fractional shares of our common stock. The actual number of shares of our common stock to be distributed will be calculated on the common stock record date. The shares of our common stock to be distributed by Autoliv will constitute all of the issued and outstanding shares of our common stock immediately prior to the distribution. The distribution will not affect the number of outstanding shares of Autoliv common stock or any rights of Autoliv stockholders. We intend for Computershare Trust Company, N.A., or Computershare, to serve as the settlement and distribution agent in connection with the distribution. The address for Computershare is 250 Royall Street, Attention: Corporate Actions, Canton, MA, 02021.

On the distribution date, Autoliv will release the shares of our common stock to our distribution agent to distribute to Autoliv stockholders. If you own shares of Autoliv common stock as of the close of business on the common stock record date for the distribution, shares of our common stock that you are entitled to receive in the distribution will be issued electronically, as of the distribution date, to you in direct registration in book-entry. If you are a registered holder, Computershare will mail you a direct registration account statement that reflects your shares of the Company’s common stock. If you hold your shares through a bank or brokerage firm, your bank or brokerage firm will credit your account for the shares. Book-entry form refers to a method of recording share ownership when no physical share certificates are issued to stockholders, as is the case in this distribution. It may take the distribution agent up to one week to issue shares of our common stock to registered Autoliv stockholders by way of direct registration in book-entry form.

Commencing on or shortly after the distribution date, if you hold physical stock certificates that represent your shares of Autoliv common stock or “book-entry” shares and you are the registered holder of such shares or the shares represented by those certificates, the distribution agent will mail to you an account statement that indicates the number of shares of Veoneer’s common stock that have been registered in book-entry form in your name.

Swedish Depository Receipts

As of May 21, 2018 there were 63,944,179 Autoliv SDRs outstanding, each representing one share of Autoliv common stock. Each Autoliv SDR was issued under the General Terms and Conditions for Swedish Depository Receipts in Autoliv, Inc. effective as of March 23, 2016, and the Custodian Agreement dated as of April 28, 1997, among Autoliv, Inc. and Skandinaviska Enskilda Banken AB (publ) serving as custodian (the

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“Autoliv Custodian”) and represents to the registered holders of such Autoliv SDRs, one share of Autoliv common stock (each a “Deposited Share”) deposited with the Autoliv Custodian.

We will establish a SDR program (the “Veoneer SDR Program”) pursuant to a Custodian Agreement, which is to be entered into among Veoneer and Skandinaviska Enskilda Banken AB (publ), as custodian (the “Veoneer Custodian”). The general terms and conditions for Veoneer SDRs will be agreed upon with the Veoneer Custodian. At the distribution of shares of Veoneer’s common stock, Autoliv will deliver through its custodian the shares of Veoneer common stock deliverable in the form of Veoneer SDRs with respect to the Deposited Shares held by the Autoliv Custodian on behalf of Autoliv SDR holders. Subject to compliance with the provisions of the Veoneer Custodian Agreement and the Autoliv Custodian Agreement, the Veoneer Custodian will issue the pro rata amount of Veoneer SDRs to the holders of Autoliv SDRs entitled thereto.

It is anticipated that Autoliv SDR holders will be entitled to receive Veoneer SDRs for each Autoliv SDR held as of the SDR record date established by the Autoliv Custodian for the distribution of Veoneer SDRs, with the same ratio as applicable to the distribution of our shares of common stock to holders of Autoliv shares, see “–Distribution of Shares of Our Common Stock.” Autoliv SDR holders will receive cash in lieu of any fractional Veoneer SDRs that they would have received after application of this ratio. In connection with the spin-off, we will make a Swedish prospectus available to Autoliv SDR holders entitled to receive Veoneer SDRs in the distribution. The prospectus will be based on the Registration Statement on Form 10 with some modifications required by Swedish law as well with a wrap with additional information.

The last day Autoliv SDRs will represent shares of Autoliv common stock including the right to the distribution of Veoneer SDRs is expected to be June 28, 2018. The first day Autoliv SDRs will represent Autoliv common stock excluding the right to the distribution of Veoneer SDRs is expected to be June 29, 2018. The SDR record date for the right to receive Veoneer SDRs is expected to be July 2, 2018. The date of delivery of Veoneer SDRs to Autoliv SDR holders on the SDR record date is expected to be July 3, 2018. Veoneer SDRs are expected to begin trading on the same day Veoneer common stock begins trading on the NYSE.

Persons holding Autoliv SDRs through a bank, broker or other nominee should contact such entity regarding the receipt of the Veoneer SDRs to which they may be entitled. Autoliv SDRs holders (other than the nominee of The Depository Trust Company) will receive the Veoneer SDRs in book-entry form as soon as practicable after the distribution of our shares of common stock. Autoliv SDR holders will not be charged any fees or expenses in connection with the distribution.

Treatment of Outstanding Equity Awards

The Employee Matters Agreement will generally provide for the conversion of the outstanding awards granted under the Autoliv equity compensation programs into adjusted awards relating to both shares of Autoliv and Veoneer common stock. It is expected that the adjusted awards generally will be subject to the same or equivalent vesting conditions and other terms that applied to the applicable original Autoliv award immediately before the distribution. For more information see “Certain Relationships and Related Persons Transactions—Agreements with Autoliv Related to the Spin-Off—Employee Matters Agreement.”

Treatment of Fractional Shares

The distribution agent will not distribute any fractional shares of our common stock to Autoliv stockholders. Instead, as soon as practicable on or after the distribution date, the distribution agent will aggregate fractional shares of our common stock to which Autoliv stockholders of record would otherwise be entitled into whole shares, sell them in the open market at the prevailing market prices and then distribute the aggregate net sale proceeds ratably to Autoliv stockholders who would otherwise have been entitled to receive fractional shares of our common stock. The amount of this payment will depend on the prices at which the distribution agent sells the

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aggregated fractional shares of our common stock in the open market shortly after the distribution date and will be reduced by any amount required to be withheld for tax purposes and any brokerage fees and other expenses incurred in connection with these sales of fractional shares. Receipt of the proceeds from these sales generally will result in a taxable gain or loss to those Autoliv stockholders. Each stockholder entitled to receive cash proceeds from these shares should consult his, her or its own tax advisor as to the stockholder’s particular circumstances. The tax consequences of the distribution are described in more detail under “Material U.S. Federal Income Tax Consequences” and “Material Swedish Income Tax Consequences” below.

Results of the Distribution

After the distribution, we will be an independent, publicly traded company. We will enter into a Distribution Agreement and other related agreements with Autoliv to effect the distribution and provide a framework for Veoneer’s relationship with Autoliv after the spin-off. These agreements, in addition to the Master Transfer Agreement entered into in connection with the internal reorganization, will provide for the allocation between Autoliv and Veoneer of Autoliv’s assets, liabilities and obligations attributable to periods prior to the internal reorganization and will govern the relationship between Veoneer and Autoliv after the spin-off. For a more detailed description of these agreements, see “Certain Relationships and Related Persons Transactions—Agreements Related to the Spin-Off.”

Capital Injection From Autoliv

In connection with our spin-off from Autoliv, we expect that Autoliv will provide us with total cash liquidity of approximately $1.0 billion (funded through a mixture of new external funding and existing cash at Autoliv). The capital contribution from Autoliv will help fund our planned operations until we reach positive cash flow. The cash will be used for ongoing working capital requirements and capital expenditures and takes into account our on-going investments in joint ventures, particularly Zenuity as well as certain anticipated business combinations. We will not have any additional debt as a result of the transaction with Autoliv.

Conditions to the Distribution

The distribution of shares of our common stock by Autoliv is subject to the satisfaction (or waiver by Autoliv in its absolute and sole discretion) of the following conditions:

• the final approval by the board of directors of Autoliv of the spin-off and all related transactions and the determination of the common stock record date, which approval may be given or withheld at its absolute and sole discretion;

• the completion of the internal reorganization;

• the SEC shall have declared effective our Registration Statement on Form 10, of which this information statement is a part, under the Exchange Act, and no stop order relating to the registration statement shall be in effect, and this information statement shall have been provided to Autoliv’s stockholders;

• the Swedish Prospectus shall have been approved by and registered with the Swedish Financial Supervisory Authority;

• shares of our common stock shall have been accepted for listing on the NYSE and Veoneer SDRs shall have been accepted for listing on Nasdaq Stockholm, subject to customary conditions;

• Autoliv shall have received an opinion from Autoliv’s outside U.S. legal counsel regarding the qualification of the distribution, together with certain related transactions, as a transaction that should be generally tax-free, for U.S. federal income tax purposes;

• Autoliv shall have received advice from Autoliv’s outside Swedish tax advisor regarding the qualification of the distribution, together with certain related transactions, as a transaction that is generally tax exempt for Swedish income tax purposes under the Lex-ASEA rule;

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• prior to the distribution date, Autoliv’s board of directors shall have obtained an opinion from a nationally recognized valuation firm, in form and substance satisfactory to Autoliv, with respect to the capital adequacy and solvency of Autoliv after giving effect to the spin-off;

• all material governmental and regulatory approvals necessary to consummate the distribution and to permit the operation of the Electronics business after the spin-off substantially as it is conducted prior to the spin-off have been received and continue to be in full force and effect;

• any required actions and filings with regard to state securities and blue sky laws of the U.S. (and any comparable laws under any foreign jurisdictions) will have been taken and, where applicable, will have become effective or been accepted;

• no order, injunction, decree or regulation issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the completion of the spin-off is in effect, and no other event outside the control of Autoliv has occurred or failed to occur that prevents the completion of the spin-off;

• the transaction agreements relating to the spin-off have been duly executed and delivered by the parties;

• all necessary actions shall have been taken to cause the board of directors of the Company to consist of the individuals identified in this information statement as directors of the Company;

• all necessary actions shall have been taken to cause the officers of the Company to be the individuals identified as such in this information statement;

• all necessary actions shall have been taken to adopt the forms of amended and restated certificate of incorporation and bylaws filed by the Company with the SEC as exhibits to the Registration Statement on Form 10, of which this information statement forms a part; and

• no other events or developments shall have occurred or failed to occur that, in the judgment of the board of directors of Autoliv, would result in the distribution having a material adverse effect on Autoliv or its stockholders.

Autoliv has the right not to complete the spin-off if, at any time prior to the distribution, the board of directors of Autoliv determines, in its absolute and sole discretion, that the spin-off is not then in the best interests of Autoliv or its stockholders or other constituents, that a sale or other alternative is in the best interests of determines or its stockholders or other constituents or that it is not advisable for the Electronics business to be separated from Autoliv at that time. In the event the board of directors of Autoliv determines to waive a material condition to the distribution, modify a material term of the distribution or not to proceed with the spin-off, Autoliv intends to promptly issue a press release or other public announcement and file a Current Report on Form 8-K to report such event.

Reasons for Furnishing this Information Statement

This information statement is being furnished solely to provide information to Autoliv stockholders that are entitled to receive shares of our common stock in the spin-off. This information statement is not, and is not to be construed as, an inducement or encouragement to buy, hold or sell any of our securities or any securities of Autoliv. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither Autoliv nor we undertake any obligation to update the information except in the normal course of our respective public disclosure obligations.

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TRADING MARKET

Market for Our Common Stock

There is currently no public market for our common stock and an active trading market may not develop or may not be sustained. We anticipate that trading of our common stock will commence on a “when-issued” basis on the NYSE at least one trading day prior to the common stock record date and continue through the distribution date. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. When-issued trades generally settle within three trading days after the distribution date. If you own Autoliv shares as of 5:00 p.m., Eastern Time on the common stock record date, you will be entitled to shares of our common stock distributed pursuant to the spin-off. You may trade this entitlement to shares of our common stock, without the Autoliv shares you own, on the when-issued market. On the first trading day following the distribution date, any when-issued trading with respect to our common stock will end and “regular-way” trading will begin. It is also anticipated that, at least one trading day prior to the common stock record date and continuing up to and including the distribution date, there will be two markets in Autoliv shares in the U.S: (i) a “regular-way” market; and (ii) an “ex-distribution” market. Shares of Autoliv shares that trade on the regular-way market will trade with an entitlement to shares of our common stock distributed pursuant to the distribution. Shares that trade on the ex-distribution market will trade without an entitlement to shares of our common stock distributed pursuant to the distribution. Therefore, if you sell Autoliv shares in the regular-way market up to and including the distribution date, you will be selling your right to receive shares of our common stock in the distribution. However, if you own Autoliv shares as of 5:00 p.m., Eastern Time on the common stock record date and sell those shares on the ex-distribution market up to and including the distribution date, you will still receive the shares of our common stock that you would otherwise receive pursuant to the distribution.

There will not be “when-issued” trading in Veoneer SDRs on Nasdaq Stockholm. Autoliv SDR holders that wish to participate in “when-issued” trading in Veoneer common stock or trade shares in Autoliv common stock with the entitlement to receive Veoneer shares on the “regular-way” market or without the entitlement to receive Veoneer shares on the “ex-distribution” market, would need to cancel their Autoliv SDRs to be able to participate in such trading. The last day Autoliv SDR holders may cancel their SDRs before a stop on cancellations is implemented is expected to be June 20, 2018. The ability to cancel Autoliv SDRs is expected to resume on July 6, 2018. While the stop on cancellations is implemented it will not be possible to cancel Autoliv SDRs. Additionally, a suspension of issuances of Autoliv SDRs is expected to begin on June 8, 2018. Issuances are expected to resume on July 6, 2018. Autoliv SDR holders should contact their banks or brokers well in advance of the common stock record date for further information regarding such SDR cancellation process. It is expected that trading in Veoneer SDRs on Nasdaq Stockholm will begin on July 2, 2018 and the allocation of Veoneer SDRs is expected to be completed on July 3, 2018. If Veoneer SDRs are not available in the accounts of Autoliv SDR holders entitled to receive Veoneer SDRs until July 3, 2018, an Autoliv SDR holder will not be able to sell the Veoneer SDRs he or she is entitled to until the Veoneer SDRs are available in the holder’s securities account.

We intend to list our common stock on the NYSE under the ticker symbol “VNE” and our SDRs on Nasdaq Stockholm under the ticker symbol “VNE SDB,” provided our applications for listing are approved. We will announce our when-issued trading symbol when and if it becomes available.

Neither we nor Autoliv can assure you as to the trading price of Autoliv shares or our common stock after the spin-off, or as to whether the combined trading prices of our common stock and Autoliv shares after the spin-off will equal or exceed the trading prices of Autoliv shares prior to the spin-off. The trading price of our common stock may fluctuate significantly following the spin-off. See “Risk Factors—Risks Related to Our Securities” for more detail.

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Transferability of Shares of our Common Stock

The shares of our common stock distributed to holders of shares of Autoliv common stock will be freely transferable without registration under the Securities Act, except for common stock received by persons who may be deemed to be our “affiliates” under the Securities Act. Persons who may be deemed to be our affiliates after the spin-off generally include individuals or entities that control, are controlled by or are under common control with us and may include our directors, executive officers or principal stockholders. Our affiliates will be permitted to sell their common stock only pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, such as the exemptions afforded by Rule 144 thereunder.

In the future, we may adopt new equity-based compensation plans and issue stock-based awards. We currently expect to file a registration statement to register shares to be issued under these equity plans. Shares issued pursuant to awards after the effective date of that registration statement, other than shares issued to affiliates, generally will be freely tradable without further registration under the Securities Act.

Except for our common stock distributed in the distribution and employee-based equity awards, none of our equity securities will be outstanding immediately after the spin-off.

Dividend Policy

We have no current plans to pay any cash dividends. The payment of any dividends in the future, and the timing and amount thereof, to our stockholders will fall within the absolute and sole discretion of our board of directors and will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements, regulatory constraints, ability to gain access to capital markets and other factors that our board of directors deems relevant. We cannot guarantee that we will pay a dividend in the future and, even if we determine to pay any dividend in the future, there can be no assurance that we will continue to pay any dividends. No dividend has been paid for the fiscal years 2017, 2016 or 2015.

54

CAPITALIZATION

The following table presents our historical cash and capitalization at March 31, 2018 and our pro forma cash and capitalization at that date reflecting the pro forma adjustments described in the notes to our unaudited pro forma condensed combined balance sheet as if the spin-off and distribution, including any financing transactions that we expect to enter into in connection with the spin-off, had occurred on March 31, 2018. You can find an explanation of the pro forma adjustments made to our historical combined financial statements under “Unaudited Pro Forma Condensed Combined Financial Statements.” You should review the following table in conjunction with our “Unaudited Pro Forma Condensed Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical combined financial statements and accompanying notes included elsewhere in this information statement. See “Index to Financial Statements.”

We are providing the capitalization table below for informational purposes only. It should not be construed to be indicative of our capitalization or financial condition had the spin-off been completed on the date assumed. The capitalization table below may not reflect the capitalization or financial condition that would have resulted had we operated as a standalone public company at that date and is not necessarily indicative of our future capitalization or financial position.

	As of March 31, 2018 (in millions)
	Historical (unaudited)		Pro Forma (unaudited)
Cash and Cash Equivalents	$	—	$	1,000.0
Indebtedness:
Short-term debt	$	23.8	$	23.8
Related party long-term debt		36.2		13.5
Total Indebtedness	$	60.0	$	37.3
Equity:
Common stock, par value $1.00 per share on a pro forma basis		—		87.5
Additional paid-in capital		—		1,863.1
Net parent investment		917.0		—
Accumulated other comprehensive income		0.4		0.4
Non-controlling interest		120.5		120.5
Total invested equity	$	1,037.9	$	2,071.5
Total Capitalization	$	1,097.9	$	2,108.8

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SELECTED HISTORICAL COMBINED FINANCIAL DATA

(DOLLARS IN MILLIONS)

The following selected financial data reflect the combined operations of Veoneer. Veoneer derived the selected combined statement of operations data for the fiscal years ended December 31, 2017, 2016 and 2015 and the selected combined balance sheet data as of December 31, 2017 and 2016 as set forth below, from its audited combined financial statements, which are included in the “Index to Financial Statements” section of this information statement. Veoneer derived the selected combined income statement data for the fiscal years ended December 31, 2014 and 2013 and the selected combined balance sheet data as of December 31, 2015, 2014 and 2013 from the underlying financial records, which were derived from the financial records of Veoneer and are not included in this information statement. Veoneer derived the selected combined statement of income data for the three months ended March 31, 2018 and 2017 and selected combined balance sheet data as of March 31, 2018, from its unaudited condensed combined financial statements, included elsewhere in this information statement. Veoneer derived the selected combined balance sheet data as of March 31, 2017 from the underlying financial records, which are not included in this information statement. The financial data as of and for the years ended December 31, 2014 and 2013 and as of and for the three months ended March 31, 2018 are unaudited. The unaudited financial data have been prepared on the same basis as the audited combined financial data and, in the opinion of our management, include all adjustments, consisting of only recurring adjustments, necessary for the fair presentation of the data set forth in this information statement. The historical results do not necessarily indicate the results expected for any future period. To ensure a full understanding, you should read the selected combined financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included in the “Index to Financial Statements” section of this information statement.

	As of and for the three months ended March 31,						As of and for the Year Ended December 31,
	2018			2017			2017			2016			2015			2014			2013
	(unaudited)			(unaudited)												(unaudited)			(unaudited)
Operating Results:
Net Sales	$	594.3		$	583.3		$	2,322.2		$	2,218.3		$	1,588.6		$	1,488.9		$	1,258.6
Operating Income / (loss)(1)		(16.0	)		(10.4	)		(282.7	)		(24.8	)		(8.4	)		29.6			38.1
Net Income / (loss)		(37.0	)		(22.0	)		(344.3	)		(60.1	)		(30.0	)		20.7			26.7
Net Income / (loss) attributable to controlling interest		(32.3	)		(19.8	)		(217.0	)		(53.1	)		(30.0	)		20.7			26.7
Capital Expenditures		(30.9	)		(27.3	)		(110.0	)		(102.5	)		(53.4	)		(64.1	)		(57.4	)
Depreciation and Amortization		(27.9	)		(40.4	)		(118.8	)		(105.5	)		(53.1	)		(45.1	)		(38.5	)
Financial Position:
Total Assets		1,760.6			1,726.7			1,662.5			1,739.1			1,059.1			758.0			646.3
Total Debt(2)		(60.0	)		(24.0	)		(62.2	)		(14.6	)		(0.0	)		(0.4	)		(0.7	)

(1) Includes costs for goodwill impairment of $234.2 in 2017.

(2) Includes short-term debt and related party long-term debt as of March 31, 2018, related party long-term debt as of December 31, 2017 and related party short-term debt and related party long-term debt as of December 31, 2016.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following Unaudited Pro Forma Condensed Combined Financial Statements illustrate the financial impacts of the spin-off and the related transactions described below. The Unaudited Pro Forma Combined Balance Sheet gives effect to the spin-off and related transactions described below as if they had occurred on March 31, 2018. The Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2018 and for the year ended December 31, 2017 give effect to the spin-off and related transactions described below as if they occurred as of January 1, 2017, the first day of the last fiscal year.

The Unaudited Pro Forma Condensed Combined Balance Sheet and Statements of Operations have been derived from the historical Combined Financial Statements and the Unaudited Condensed Combined Financial Statements of Veoneer included in the “Index to Financial Statements” section of this information statement. These adjustments give effect to events that are (i) directly attributable to the distribution and related transaction agreements, (ii) factually supportable, and (iii) with respect to the Statement of Operations, expected to have a continuing impact on Veoneer, such as:

• the transfer from Autoliv to Veoneer of the assets and liabilities that comprise Veoneer’s business;

• total cash liquidity of $1.0 billion to be provided by Autoliv to us (funded through approximately $700 million of new debt issued by Autoliv for which we have no obligation and approximately $300 million of existing cash at Autoliv). The capital contribution from Autoliv will help fund our planned operations until we reach positive cash flow. The cash will be used for ongoing working capital requirements and capital expenditures and takes into account Veoneer’s on-going investments in joint ventures, particularly Zenuity, as well as certain anticipated business combinations. Veoneer will not have any additional debt as a result of the transaction with Autoliv;

• the issuance of approximately 87.5 million Veoneer shares of common stock; and

• the impact of the Intercompany Price Reduction Program Agreement; and

• the indemnifications as described in the Master Transfer Agreement.

The Unaudited Pro Forma Condensed Combined Financial Statements are for informational purposes only and do not purport to represent what Veoneer’s financial position and results of operations actually would have been had the spin-off and related transactions occurred on the dates indicated, or to project Veoneer’s financial performance for any future period. The Unaudited Pro Forma Condensed Combined Financial Statements are based on information and facts, which are described in the accompanying notes.

The Veoneer historical financial information, which was the basis for the Unaudited Pro Forma Condensed Combined Financial Statements, was prepared on a carve-out basis, as Veoneer was not operated as a separate, independent company for the periods presented. Accordingly, such financial information reflects an allocation of certain corporate costs for corporate administrative services, including general corporate expenses related to tax, treasury, finance, audit, risk management, legal, information technology, human resources, shareholder relations, compliance, shared services, insurance, employee benefits, incentives and stock-based compensation. To operate as an independent public company, we expect to incur costs to replace those services previously provided by Autoliv in addition to incremental standalone costs. Due to the scope and complexity of these activities, the amount and timing of these incremental costs could vary and, consequently, are not included in the pro forma adjustments.

Management assessed the impact of the Transition Services Agreement (TSA), the Tax Matters Agreement, and the Employee Matters Agreement. Due to the variability of the services and related charges, which can vary under the terms of the TSA, as well as the lack of ability to determine the historical allocated costs that the TSA would replace, management determined that any incremental adjustment for the impact of the TSA is not factually supportable.

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Autoliv will pay certain non-recurring third-party costs and expenses related to the spin-off. Such non-recurring amounts will include fees for financial advisors, outside legal and accounting fees, costs to separate information technology systems and other similar costs. After the spin-off, each party will generally bear its own costs and expenses.

The Unaudited Pro Forma Condensed Combined Financial Statements reported below should be read in conjunction with the section herein entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the historical audited combined annual and Unaudited Condensed Combined Financial Statements and the corresponding notes included in the “Index to Financial Statements” section of this information statement.

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VEONEER

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2017

(in millions, except share and per share data)	Historical			Pro Forma Adjustments				Pro Forma
Net sales	$	2,322.2		$				$	2,322.2
Cost of sales		(1,856.6	)		0.1		(F)		(1,856.5	)
Gross profit		465.6			0.1				465.7
Selling, general and administrative expenses		(110.0	)		1.1		(F)		(108.9	)
Research, development and engineering expenses, net		(375.4	)		1.2		(F)		(374.2	)
Goodwill, impairment charge		(234.2	)						(234.2	)
Amortization of intangibles		(37.0	)						(37.0	)
Other income, net		8.3							8.3
Operating loss		(282.7	)		2.4				(280.3	)
Loss from equity method investments		(30.7	)						(30.7	)
Interest income		0.3							0.3
Interest expense		(0.3	)						(0.3	)
Other non-operating items, net		(0.8	)						(0.8	)
Loss before income taxes		(314.2	)		2.4				(311.8	)
Income tax expense		(30.1	)		(0.2	)	(B)		(30.3	)
Net loss		(344.3	)		2.2				(342.1	)
Less: Net loss attributable to non-controlling interest		(127.3	)						(127.3	)
Net loss attributable to controlling interest	$	(217.0	)	$	2.2			$	(214.8	)
Loss per share
Basic and diluted		n/a					(C),(D)		(2.45	)
Weighted-average shares outstanding		n/a					(C),(D)		87.50

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VEONEER

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2018

(in millions, except share and per share data)	Historical			Pro Forma Adjustments				Pro Forma
Net sales	$	594.3		$				$	594.3
Cost of sales		(482.6	)		—		(F)		(482.6	)
Gross profit		111.7			—				111.7
Selling, general and administrative expenses		(30.8	)		0.1		(F)		(30.7	)
Research, development and engineering expenses, net		(106.1	)		0.3		(F)		(105.8	)
Amortization of intangibles		(5.3	)						(5.3	)
Other income, net		14.5							14.5
Operating loss		(16.0	)		0.4				(15.6	)
Loss from equity method investments		(14.0	)						(14.0	)
Interest income		0.1							0.1
Interest expense		(0.2	)						(0.2	)
Other non-operating items, net		0.1							0.1
Loss before income taxes		(30.0	)		0.4				(29.6	)
Income tax expense		(7.0	)		(0.1	)	(B)		(7.1	)
Net loss		(37.0	)		0.3				(36.7	)
Less: Net loss attributable to non-controlling interest		(4.7	)						(4.7	)
Net loss attributable to controlling interest	$	(32.3	)	$	0.3			$	(32.0	)
Loss per share
Basic and diluted		n/a					(C),(D)		(0.37	)
Weighted-average shares outstanding		n/a					(C),(D)		87.50

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VEONEER

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 31, 2018

(in millions, except share and per share data)	Historical		Pro Forma Adjustments				Pro Forma
Assets
Cash and cash equivalents	$	—		$1,000.0		(E)	$	1,000.0
Receivables, net		503.8						503.8
Inventories, net		160.7						160.7
Prepaid expenses and other current assets		40.8		12.1		(I)		52.9
Total current assets		705.3		1,012.1				1,717.4
Property, plant and equipment, net		398.1						398.1
Investments and other non-current assets		244.6		(1.3	)	(B)		243.3
Goodwill		291.5						291.5
Intangible assets, net		121.1						121.1
Total assets	$	1,760.6	$	1,010.8			$	2,771.4
Liabilities and equity
Accounts payable	$	325.3	$				$	325.3
Related party payables		5.6		(0.1	)	(H),(A)		5.5
Accrued expenses		213.2						213.2
Income tax payable		42.0						42.0
Other current liabilities		35.8						35.8
Short-term debt		23.8						23.8
Total current liabilities	$	645.7	$	(0.1	)		$	645.6
Related party long-term debt	$	36.2		(22.7	)	(H)	$	13.5
Pension liability		14.4						14.4
Other non-current liabilities		26.4						26.4
Total non-current liabilities	$	77.0	$	(22.7	)		$	54.3
Commitments and contingencies
Parent Equity
Common stock (par value $1.00)		—		87.5		(G)		87.5
Additional paid in capital		—		1,863.1		(E)(G)		1,863.1
Net parent investment		917.0		(917.0	)	(G)		—
Accumulated other comprehensive income		0.4						0.4
Total Parent Equity		917.4		1,033.6				1,951.0
Non-controlling interest		120.5						120.5
Total Parent Equity and non-controlling interests		1,037.9		1,033.6				2,071.5
Total liabilities, Parent Equity and non-controlling interests	$	1,760.6	$	1,010.8			$	2,771.4

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(A) On April 1, 2018, Autoliv-Nissin Brake Systems (“ANBS”), a 51% owned subsidiary of Veoneer, entered into an Intercompany Price Reduction Program agreement with Autoliv to reimburse Autoliv $5.5 million for certain amounts provided to a Veoneer customer by Autoliv.

(B) Reflects the tax effects of the pro forma adjustments at the applicable statutory income tax rates in the respective jurisdictions. The effective tax rate of Veoneer could be different (either higher or lower) depending on activities subsequent to the distribution.

(C) The issuance of approximately 87.5 million Veoneer shares of common stock (as initially estimated); actual shares distributed will be based on the number of shares of Autoliv common stock outstanding as of the common stock record date, assuming a distribution ratio of one Veoneer share for every one Autoliv share outstanding as of the close of business on this date.

(D) The weighted average shares do not include an estimated 0.1 million shares for outstanding options and restricted stock awards that are antidilutive. This calculation may not be indicative of the dilutive effect that will actually result from Veoneer stock-based awards issued in connection with the replacement of outstanding Autoliv stock-based awards. The actual number of dilutive common shares underlying Veoneer stock-based awards issued with the replacement of outstanding Autoliv stock-based awards will not be determined until the distribution date or shortly thereafter.

(E) The total cash liquidity of approximately $1.0 billion (funded through approximately $700 million and $300 million of new debt and existing cash at Autoliv, respectively, provided by Autoliv to Veoneer).

(F) Reflects the removal of multi-employer pension plan and other postretirement benefit plan charges/credits incurred during the historical period for plans that will remain with Autoliv as a direct result of Veoneer separating from Autoliv.

(G) On the distribution date, Autoliv net investment in Veoneer will be re-designated as Veoneer Shareholders’ Equity and will be allocated between Veoneer shares of common stock (par value of $1.00 per share) and additional paid in capital based on the number of Veoneer shares of common stock outstanding at the distribution date.

	As of
Effect of Spin-off	March 31, 2018
Cash contribution from Veoneer (E)	$	1,000.0
Elimination of Veoneer net parent investment		917.0
Settlement of related party payables (H)		5.6
Settlement of related party debt with Autoliv (H)		22.7
Indemnification asset for product liabilities, warranties and recalls net of insurance receivable (I)		12.1
Reimbursement to Autoliv for certain amounts provided to a Veoneer customer by Autoliv (A)		(5.5	)
Tax impact		(1.3	)
Veoneer ordinary shares		(87.5	)
Additional paid in capital	$	1,863.1

(H) Reflects the $5.6 million settlement of certain intercompany agreements between Veoneer and Autoliv pursuant to the separation and distribution agreement as well as the related party debt with Autoliv of $22.7 million. These amounts are comprised principally of intercompany financing payables and receivables stemming from Autoliv’s and Veoneer’s shared cash management and treasury program. Following the separation, Veoneer will perform its own cash management and treasury functions.

(I) Pursuant to the Master Transfer Agreement, Autoliv will indemnify Veoneer for all the warranties, recalls and product liabilities for the products manufactured before April 1, 2018. As such, Veoneer has included a receivable from Autoliv for the related liability net of insurance receivables.

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BUSINESS

Overview

Veoneer is a global leader in the design, development, sale and manufacture of automotive safety electronics⁴ and has operated for almost four years as the Electronics segment within Autoliv. Based on the heritage of Autoliv’s vision of “Saving Lives”, our safety systems are designed to make driving safer and easier, more comfortable and convenient and to intervene before a collision.

Veoneer endeavors to prevent vehicle accidents or reduce the severity of impact in the event a crash is unavoidable. We further intend to develop human centric systems that benefit vehicle occupants. We do this by being an expert partner to our customers. Our pure-play focus in safety electronics places the Company in a strong position to deliver integrated Advanced Driver Assistance System (“ADAS”) and Highly Automated Driving (“HAD”) solutions towards Autonomous Driving (“AD”) with a relentless focus on Quality and Manufacturing Excellence.

We provide advanced active safety sensors, used for ADAS, HAD and AD solutions, such as vision and radar systems, ADAS Electronic Control Units (“ECUs”), night vision and positioning systems. Through Zenuity, our joint venture with Volvo Cars, we develop an advanced software stack for vehicle decision control for ADAS, HAD and AD solutions. In addition, we offer driver monitoring systems, LiDAR sensors and other technologies critical for AD solutions by leveraging our partnership network and internally developed intellectual property.

We also provide Restraint Control Systems such as ECUs and crash sensors for deployment of airbags and seatbelt pretensioners in the event of a collision. Lastly, Autoliv-Nissin Brake Systems (“ANBS”), our joint venture with Nissin Kogyo, provides brake control and actuation systems, and has developed strong capabilities in regenerative braking, which is important for not only hybrid and electric vehicles but also for vehicle platforms where customers prioritize weight reduction and improved fuel economy over other features.

Our innovation and technology leadership, relentless focus on quality and safety along with a strong global footprint and diversified customer base, including most major global automotive Original Equipment Manufacturers (“OEMs”)⁵, are all trademarks of our Autoliv DNA. OEMs are seeking to manufacture vehicles that meet and exceed increasingly stringent safety test ratings around the world to satisfy consumer demands for increased vehicle safety through more advanced driver assist features and enhanced comfort and convenience towards AD.

We believe that Veoneer is well-positioned to benefit from the three mega trends which are transforming and shaping the future of the automotive industry and will drive a significant increase in the safety electronics content per vehicle:

• Automated Driving and Connectivity: We believe ADAS is one of the fastest growing product areas within the automotive industry. OEMs are increasingly using ADAS as a key differentiator by being early to market with different ADAS solutions. This development is driven by consumer demand for these new solutions as well as the OEM’s drive for new innovations as a competitive differentiator. The trend is further supported by the rising influence of national and international safety organizations that issue safety test ratings, making manufacturers include active safety features in their new or revamped car models. As safety organizations continue to increase the features and functions of ADAS

⁴  The Company’s calculations are based on information on revenues of automotive safety electronics competitors, of which the largest market participants (Aptiv, Bosch, Continental, Denso, Magna, Valeo and ZF) have been analysed with publicly available information, such as the latest available annual reports, press releases and other information available on company websites.

⁵  See further detail in Customers section below.

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applications required to maintain high safety ratings, we expect that ADAS will eventually become standard equipment on most vehicle models and the Total Addressable Market (“TAM”) for our products will continue to expand significantly over the next several decades.

• New Mobility: AD will significantly increase the number of active safety products and software, requiring ADAS technology innovations of higher complexity. Full AD (Level 4/5 autonomy) will be achieved in several steps, beginning with the Level 1/2 autonomy features available today. Level 3 autonomy and higher will require additional sensing hardware and computing power, as well as significantly more advanced sensor fusion algorithms and increased Human Machine Interface (“HMI”). Over time we believe the cost of these technologies will become well within acceptable automotive industry levels. This should facilitate the migration of the technology from robo-taxis to premium brands and eventually mass-market car models.

• Clean Mobility: The number of new electric and hybrid vehicles will increase significantly over the upcoming decades as OEMs implement more efficient vehicle propulsion drivetrain alternatives to traditional Internal Combustion Engines (“ICE”). Within the automotive industry there is a general industry trend toward brake-by-wire systems which control many of the brake functions, traditionally performed by pure mechanical and hydraulic actuators. Electric (“EV”) and Hybrid (“HEV”) vehicles are among the early adopters of this type of brake actuation systems, where the recovery of energy during braking, regenerative braking, is a source to extend the range in EV and to lower fuel consumptions in HEV or even traditional ICE vehicles.

Overview of SAE’s International’s Automation Levels

Sources: Company information, National Highway Traffic Safety Administration.

Company Evolution

Veoneer has evolved from a producer of passive safety electronics at inception in the late 1990’s, to a complete safety electronics systems provider, integrating resources and expertise in active safety products, restraint control systems, and brake systems into one organization. This is the result of several acquisitions, joint ventures and organic growth.

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Veoneer Revenue Development since Inception⁶ within Autoliv

Source: Internal Company historical financial reporting of the Electronics products and publicly available information regarding Autoliv’s Electronics acquisitions, divestitures and joint ventures.

Historically the Company has delivered strong growth, with revenue reaching $2.3 billion in 2017, corresponding to a CAGR of 21% from 2015 (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Definitions”). In particular, there has been an increase in demand for our active safety products across major automotive OEMs, especially in Europe and North America.

Over the past five years, Veoneer has evolved into a global, diversified entity, serving customers in Europe, the Americas and Asia. Historically Europe has been in the forefront of ADAS growth through premium brands and the evolving European New Car Assessment Program (“Euro NCAP”) test rating system, with North America and Asia following. ADAS demand has been a key driver of growth for Veoneer.

We have significantly increased our ADAS presence through consistent Research, Development and Engineering (“R,D&E”) investment along with strategic acquisitions and technology collaborations to enhance our product portfolio and engineering capabilities. A significant part of our business is focused on developing autonomous driving technology, which requires significant amounts of resources devoted to researching and developing innovative products and processes. The R,D&E cost for Veoneer has continued to increase over the last three years due to the increased pace of innovation in the industry and the competitive nature of this secular growth market opportunity. Some of our competitors are larger and have greater financial and other resources than us, which may provide them with competitive advantages. For the period from 2015 to 2017 R,D&E increased approximately $162 million and the loss from the Zenuity software joint venture, recorded in equity method investments, was approximately $31 million. This combined cost increase of around $193 million, more than offset the net operating profit leverage from organic sales growth of around $120 million. Consequently, the loss before taxes increased around $72 million for the period from 2015 to 2017, when excluding the one-time impact of the goodwill impairment charge of $234 million in 2017 related to the Autoliv Nissin Brake Systems joint venture.

⁶  External revenue 1997-2013, net revenue for period 2013-2017.

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Before 2014, we based our mono vision product offering on Mobileye software; however, in 2013, we made a strategic decision to develop our vision software internally. As a consequence, the cooperation with Mobileye for new business ended. We launched our internally developed mono and stereo vision solutions, including our internally developed software, on the Mercedes E-class in the fall of 2015 and on the S-class in 2016.

Veoneer has emerged as the largest pure-play supplier (by revenue) in automotive safety electronics⁷ and has been able to recruit highly qualified engineers to secure and maintain our technology leadership with continuous innovation. The number of engineering personnel has almost doubled from 1,796 to 3,576 over the last two fiscal years, of which 72% are software engineers.

Revenue Breakdown – 2017A

Source: 2017 Veoneer Combined Financial Statements Note 18 and Company internal financial reporting.

Products and Product Areas

We are a global leader in automotive safety electronics,⁸ offering integrated products and system solutions in three product areas: active safety, restraint control systems and brake systems. Our brake systems product area consists of ANBS. In addition, within our active safety product area we provide ADAS and AD software solutions for vehicle decision and control through our Zenuity joint venture. Approximately one third of our revenues are generated from our active safety products.

As our business has grown, we have introduced multiple industry firsts, underpinning our ability to commercialize new technological innovations. In 2008, we became the first company to integrate the Electronic Stability Control (“ESC”) inertia sensors with the control electronics for airbags and other restraint systems, integrating active and passive safety; in 2012, we introduced the world’s first Automated Emergency Braking (“AEB”) for both vision and radar; in 2014, we developed the world’s first system that combines the controls for vehicle brakes with the controls for vehicle restraints; and in 2016, we introduced the world’s first four-corner radar system that involves pre-triggering the passive safety for side impact protection.

⁷  The Company’s calculations based on information regarding the larger (by revenue) listed safety electronics supplier is Aptiv which is not purely focused on safety related products, in Electrical/ Electronic Architecture division, as reported in publicly available reports.

⁸  The Company’s calculations are based on information regarding revenues of automotive safety electronics competitors, of which the largest market participants have been analysed with publicly available information, such as the latest available annual reports, press releases as well as other available information on the companies’ websites.

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The frequency of our technology innovations has increased notably over the recent years to address the rapid development of the market and increasing customer requirements.

Overview of Our Innovations⁹

Source: Company internal.

Our Autonomous Driving Ecosystem

Together with several strategic partners, we have developed a comprehensive ecosystem for ADAS and HAD, enabling Veoneer to offer OEMs full system capabilities covering all the key levels towards AD. These partnerships and strategic collaborations are the building blocks for our future development of products for the rapidly changing automotive industry.

Our non-exclusive partners include: NVIDIA for its artificial intelligence based car computing platform, Velodyne for LiDAR sensor development, Seeing Machines for driver monitoring algorithms and MIT AgeLab for artificial intelligence supported human machine interface technology algorithms. In addition, we have partnered with Ericsson for cloud solutions and TomTom for baseline high-definition maps through our Zenuity joint venture.

⁹  All innovations depicted in this chart are currently, or have been, in production.

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Lastly, Zenuity is an exclusive 50/50 Joint Venture with Volvo Cars to develop decision and control sensor fusion software solutions for ADAS and HAD towards AD.

Financial Reporting Segments

Veoneer reports its financial results in two segments: Electronics and Brake Systems. Our Electronics reporting segment consists of our active safety and restraint control systems product areas. Our Brake Systems reporting segment consists of our brake systems product area, which are those products developed by ANBS.

Electronics Segment ($1,850.5 million sales in 2017; 80% of Veoneer Sales)

Active Safety ($777.7 million sales in 2017; 34% of Veoneer sales): Active safety systems are designed to intervene before a collision to make accidents avoidable or reduce the severity of the crash, in addition to making driving easier as well as more comfortable and convenient.

We develop radar and vision technologies (including Veoneer’s internally developed vision algorithms for both mono and stereo vision) to make driving safer and easier by monitoring the environment around the vehicle with features that adjust engine output and steering or braking to avoid accidents. The goal of active safety technologies is to provide early warnings to alert drivers, so they can take timely and appropriate action, or trigger intelligent systems that affect the vehicle’s motion using braking and steering to avoid accidents. Active safety systems can also improve the effectiveness of the restraint control systems which combine hazard information with traditional crash sensing methods.

Active safety functions include: Autonomous Emergency Braking, which brakes a vehicle autonomously; Adaptive Cruise Control, which keeps and adjusts the vehicle’s pre-set speed to keep a pre-set distance from vehicles ahead; Queue Assist, which takes control of braking and acceleration in slow-moving traffic; Forward Collision Warning; Blind Spot Detection; Rear Cross-Traffic Assist; Lane Departure Warning; Traffic Sign Detection; Light Source Recognition; Driver Monitoring for attention and drowsiness; Vehicle-to-Vehicle and Vehicle-to-Infrastructure communication; and Night Driving Assist.

Key systems used in the active safety functions and the Company’s capabilities, currently provided to the market or under active development, include:

• Vision Systems: Vision systems are critical to driver assistance and safety functions, and support the driver in collision avoidance and mitigating severity in the event of an accident. Using our algorithms, the camera looks at the road ahead for other vehicles, road signs, lane markings and other key elements and provides information and warnings if the car is approaching a potentially hazardous traffic situation. Vision systems are used in applications such as road-sign recognition, lane detection along

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with forward and pedestrian collision warnings. We offer both forward looking mono- and stereo-vision systems:

• The mono-vision system is a forward-looking camera that is mounted behind the windshield in front of the rear-view mirror. Images are interpreted by algorithms that help identify objects and assist the driver with warnings or actuations such as lane keeping and automatic braking of the vehicle. Mono-vision systems provide a significant level of accident reductions targeting 5-star safety levels.

• Stereo-vision system technology goes a step further and measures the entire driving environment in 3D. The system is capable of acting on any object without classification. Stereo vison also provides free-space recognition, road surface measurement down to millimeter level accuracy, which is important to OEMs to improve safety and comfort and provides depth perception for distance calculations due to the 3D capability.

Next generation vision systems and algorithms such as our fourth-generation mono- and stereo-cameras, which are currently under development and planned for production in 2019, will support AD and NCAP 2020. Fifth generation vision systems which are in the early planning stages, intended for production in 2022, will offer more than five times higher image resolution than the current generations as well as offer multiple camera solutions. Selected customers for our vision systems include Geely, Mercedes-Benz, Volvo Cars and one additional Asian OEM.

• Radar Systems: Radar systems capture and analyze driving conditions and alert the driver to potentially dangerous events, and can take control of the vehicle if the driver does not take timely, appropriate action. The radar systems are used in functions such as adaptive cruise control and automatic emergency braking. Radar is important because it provides superior performance in poor weather conditions such as rain and fog and other situations with poor visibility. Fused with vision systems, higher levels of functional safety are possible allowing a wider range of operating conditions. Our radar sensor portfolio includes: 25GHz ultra-wide band radar, 24 GHz narrow band radar, and 77GHz corner, front, and ultra-short-range radars. Selected customers for our radar systems include FCA, Geely, GM, Honda, Mercedes-Benz, Renault-Nissan and Volvo Cars.

• ADAS ECUs: ADAS ECUs are an emerging product within the active safety market and are precursors to the autonomous vehicles of the future. Today, a limited number of OEMs are using separate ADAS ECUs, as most of the ADAS functionalities can be done in an integrated sensor-ECU. With future ADAS and AD systems increasing in complexity, the need for multi-sensor solutions and subsequently higher processing capabilities is expected to lead to more OEMs installing separate ADAS ECUs in their vehicles. Over time, we might also see a trend towards less intelligent sensors as most of the data processing will instead be able to be performed in the ADAS ECU.

In the ADAS ECU, large quantities of data from the vehicle’s different sensors is validated and analyzed. Advanced algorithms can then act in real time to warn the driver and control the vehicle throttle, braking and steering torque to follow a desired trajectory for fully automated driving. We believe one of the biggest challenges self-driving cars will have to overcome is being able to react to the randomness of traffic flow, other drivers, and the fact that no two driving situations are ever the same.

By using deep learning (artificial intelligence) and sensor fusion, algorithms in the ADAS ECU can likely be improved in such a way that the vehicle will be able to make better decisions than a human driver could. This processing must be done with multiple levels of redundancy to ensure the highest level of safety. The computing demands of driverless vehicles are 50 to 100 times more intensive than the most advanced vehicle today. Meeting these demands will be the major challenge in developing the next generation of ADAS ECUs, including data processing.

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In 2016, we launched the world’s first ADAS ECU for mass production in Mercedes-Benz’s new E-class. We provide a similar solution to the updated Mercedes-Benz S-class.

• Night Vision Systems: Using passive infrared technology, our night vision system identifies if pedestrians, animals or certain other hazards are present in the danger zone of a vehicle, and alerts the driver. Our night vision system is the key component in “dynamic light spot” pedestrian illumination system, which allows more time for drivers to identify potential hazards at distances beyond normal head-lights. Our fourth-generation night vision system, expected in 2020, will have improved field of view and detection distances, reduction in size, weight and cost featuring enhanced algorithms for pedestrian, animal and vehicle detection, as well as supporting night time automatic emergency braking solutions. Selected customers of the night vision system include Audi, Bentley, BMW, Cadillac, Citroen, GM, Lamborghini, Mercedes-Benz, PSA, Porsche, Rolls Royce and Volkswagen.

• Safety Domain ECUs: As active and passive safety features become more advanced, having dedicated ECUs for the various features increases the complexity and cost of the vehicle architecture. The Safety Domain ECU replaces multiple dedicated ECUs across the vehicle by combining all active and passive safety ECUs into one powerful domain controller. This requires a highly powerful processor, able to execute simultaneous computing. Techniques such as virtualization enables the safe and secure separation of computing tasks, as the other controllers are not affected if one virtual controller fails.

• LiDAR: In 2017 we agreed to collaborate with Velodyne to expand and commercialize our LiDAR development. LiDAR is expected to be an important sensor technology for the future development of AD systems. Under the current agreement with Velodyne, we will act as the Tier-1 supplier to the OEMs for the Velodyne LiDAR sensors. We will provide project management services, product validation and verification capabilities and system/interface packaging in supplying automotive-grade LiDAR systems to the OEMs. Our LiDAR product roadmap includes first providing it to test fleets of the OEMs and the robo-taxis market followed by developing a solid-state design for the consumer vehicle market.

• Driver Monitoring: We have been developing solutions to address driver distraction and fatigue as they relate to traditional driving situations and driver attention for hands-free driving. In 2017, we entered into an agreement with Seeing Machines to accelerate this effort. This technology is expected to be necessary to achieve a 5-star NCAP rating in Europe in 2022 as well as Level 3 autonomy solutions worldwide. Our non-exclusive agreement with Seeing Machines utilizes their reference design to market under a license and allows us the ability to build hardware and feature level solutions on top of Seeing Machines’ world leading head pose, gaze and recognition data outputs.

• RoadScape ™: Our RoadScape™ product line offers highly accurate satellite positioning along with world leading dead reckoning capabilities for increased precision in urban areas. Building on this, RoadScape™ provides a digital representation of the road ahead that can be further enhanced through probe data in the field and cloud connectivity. Finally, adding RoadScape™ communication technology to the vehicle allows for vehicle-to-vehicle, infrastructure and cloud connectivity for premonition and situational awareness in ADAS and AD.

• Human Machine Interaction (“HMI”): Genuine two-way communication between vehicle and driver is critical to building driver trust and enhancing the driver experience. Veoneer’s Learning Intelligent Vehicle (“LIV”) is an artificial intelligence-equipped research vehicle that can understand and respond to context. LIV uses external and internal sensing combined with complex algorithmic Artificial Intelligence to create a unified contextual picture of what is going on with the occupants, vehicle, and driving situation, and then act and serve as a “co-pilot” to communicate with drivers and passengers. Veoneer will use LIV to learn more about task delegation, shared control, driver-vehicle collaboration; innovate ways to increase driver understanding of an autonomous system; and continually improve the system’s understanding of its human co-travelers.

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Overview of Zenuity

In April 2017, we established Zenuity, our 50/50 joint venture with Volvo Cars to develop decision making software for ADAS and AD.

All ADAS and AD features are based on a recommended reference architecture for customers that require a system level solution. In March 2018, Zenuity was selected by Geely as supplier for Geely’s Level 3 project, which includes ADAS electronic control units and software, radar systems, as well as mono vision and stereo vision camera systems.

At the end of 2017, Zenuity had a team of over 500 employees and consultants, of which 90% are software engineers who have the necessary skills to develop these technologies. We expect to supply customers with Zenuity software beginning in 2019.

As described earlier, Veoneer, through our own product capabilities and extensive partnership network, have one of the broadest ADAS and AD product portfolio offerings, which include all major sensing technologies, decision making software, positioning and mapping technologies and cloud solutions.¹⁰

Our product portfolio has been significantly expanded over the recent years (as illustrated below) from individual hardware sensing components to a full range of key functions and capabilities as outlined below. This enables us to address our customer needs today, and likely in the future, by offering the entire spectrum of ADAS and AD solutions.

Active Safety Capabilities of Veoneer Today

¹⁰  The Company’s calculations are based on information on product portfolios of automotive safety electronics competitors, of which the largest market participants (Aptiv, Bosch, Continental, Denso, Magna, Valeo and ZF) have been analysed with publicly available information, such as the most recently annual reports, press releases and other relevant information available on company websites.

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Active Safety Capabilities of Veoneer in 2013

Restraint Control Systems ($1,072.8 million sales in 2017; 46% of Veoneer sales): The restraint control system is the brain triggering a vehicle’s passive safety system in a crash situation. Restraint control systems consist of a restraint ECU and related remote crash sensors, including acceleration and pressure sensors. The ECU’s algorithms decide when a seatbelt pretensioner should be triggered and an airbag system should be deployed.

The ECU is mounted centrally in the vehicle, well protected in the event of a crash, and is supported by crash sensors mounted in the door beam, the pillar between the doors, the rocker panel, and/or in various locations at the front and rear of the vehicle. These “satellite” crash sensors provide acceleration data to enable early and appropriate deployment of the airbags and seatbelt pretensioners within milliseconds of a vehicle crash.

The ECU also contains certain sensors that are common with the brake system. We were the first to offer this type of solution, providing savings through the reduction in multiple sensors for measuring yaw rate, and consolidating this information on the vehicle data bus. Additionally, the restraint control system is capable of recording details of what happened before and during a crash event using an Event Data Recorder (“EDR”) with the restraint control ECU.

Selected customers include Fiat, Ford, Geely, GM, Great Wall, Hyundai/Kia, Jaguar Land Rover, Mazda, PSA, Renault/Nissan, Suzuki and Volvo Cars.

Brake Systems Segment (consisting of ANBS) ($475.9 million sales in 2017; 20% of Veoneer sales)

ANBS is our fully consolidated 51/49 joint venture established with Nissin Kogyo in 2016 for brake actuation and brake control systems. ANBS provides products for both traditional and new braking systems, which we see as building blocks, in the actuator area, towards HAD.

ANBS supplies brake systems including the brake booster, hydraulic proportioning valves and the electronic control module with sensors. The control module can modulate the brake pressure applied on each wheel individually to maintain optimum braking and offer features like ESC, Anti-locking Brakes (“ABS”) and Traction Control System.

For traditional brakes, vacuum produced by the ICE is necessary to amplify the force applied by the driver’s foot to convert it into hydraulic pressure to decelerate the vehicle. New drivetrains, such as HEV and EV, do not provide the same source of energy for boosting the brake input from the driver. Therefore, ANBS has developed new servo-assisted and integrated brake control systems that can work independent of the type of drivetrain used.

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To improve the overall efficiency of vehicles, ANBS new braking systems also provides the opportunity to recover brake energy using electric motors as generators to charge batteries. This contrasts with conventional braking systems, where the excess kinetic energy is converted to unwanted and wasted heat by friction in the brakes.

ANBS currently produces brake systems capable of coping with regenerative braking and have developed an upgraded Electronic Brake Boost system for market introduction during the end of 2019. This system integrates the hydraulic brake modulator with the electronic brake control unit and the brake fluid reservoir into a single unit (so called “one box” design). Scalability and cost competitiveness of this technology qualifies ANBS to participate in the growth of brake-by-wire systems needed for regenerative braking while delivering superior braking performance to support the growing need for external brake requests such as AEB and other functionalities.

In January 2017, we announced that ANBS is expanding its customer base beyond its primary customer Honda, winning lifetime contract order value of more than $1 billion for our new braking system with a Detroit based OEM on a major vehicle platform. Production for this awarded business is currently scheduled to begin in 2020. There is no minimum purchase value associated with this awarded business. The agreement will be governed by the OEM’s general terms and conditions and Veoneer and such OEM will enter into a commercial and program agreement that will set forth the specific commercial terms and functional requirements with respect to this order. As is customary with other agreements with our customers, we expect that the contract may be terminated at any time by the OEM. The program life cycle is estimated to be six years. We received a second major order from the same OEM at the end of 2017. The main opportunities we see in brake systems stem from its capabilities in regenerative braking technology, which works well with combustion engine vehicles but is even more suitable for HEV and EV. We see significant opportunities to expand outside the current customer base, especially in combination with our strong customer relationships and global footprint.

In addition, in 2017 Autoliv decided to exit non-strategic products acquired relating to clutch and rear toe control product lines in the third and fourth quarters of 2017, respectively. These two products amount to approximately $30 million in annual revenue that is being phased out as the contracts expire, with approximately $20 million of the decline being realized by 2020.

Acquisition, Partnership and Collaboration History over Last Three Years

Our success and comprehensive product portfolio has partly been driven by acquisitions and partnerships, both critical elements to succeed within the multifaceted safety electronics industry, and to remain competitive against existing and new entrants looking to enter the market. These partnerships and collaborations have a strategic importance in the near and long term to develop additional autonomous driving building blocks and bring potential products to market in future years.

Acquisitions and Joint Ventures

• February 2018: Zenuity announced the acquisition of Beyonav intellectual property and trademarks, a technology services company delivering innovative location-based solutions that go beyond traditional applications of navigation technology.

• November 2017: We acquired Fotonic, a Swedish company with expertise in LiDAR and Time of Flight cameras, building on our collaboration with Velodyne that was established in June 2017. This acquisition adds to our portfolio the collaboration capabilities within LiDAR sensors, leveraging on our expertise in manufacturing and validation.

• April 2017: We launched Zenuity, a strategic 50/50 joint venture with Volvo Cars. This JV is an industry first where an OEM and Tier-1 supplier, both recognized as pioneers in automotive safety, formed a company to develop ADAS software towards AD. Zenuity develops a software platform for

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AD and ADAS purposes, with the potential to become an integrated AD solution. Since formation, Zenuity has formed partnerships with Ericsson and TomTom to be able to provide fully integrated solutions to customers. Details of these partnerships are outlined below.

• April 2016: We formed ANBS, a 51/49 joint venture with Nissin Kogyo, a Japanese supplier of both traditional and new brake systems. The joint venture is consolidated by Veoneer. In January 2017, we announced that ANBS expanded its customer base beyond Honda, winning a lifetime contract order value of more than $1 billion for our new braking system with a Detroit-based OEM.

• August 2015: We acquired MACOM’s automotive business, a supplier of GPS modules along with radio frequency and antenna products, to expand M/A-COM’s capabilities into active safety and augment our positioning, V2X (“Vehicle-to-Vehicle and Vehicle-to-Infrastructure”) and mapping capabilities.

Partnerships, Collaborations and Supplier Agreements

• January 2018: Zenuity announced a non-exclusive collaboration with TomTom, to provide reference map architecture for the “Zenuity Connected Roadview” system for autonomous vehicles. TomTom’s High Definition (“HD”) Maps will power the localization, perception and path planning in the Zenuity AD software stack, in combination with on-vehicle sensors such as cameras, radar and LiDAR, to create continuously updated maps.

• October 2017: We announced a non-exclusive collaboration with Massachusetts Institute of Technology AgeLab to develop deep learning algorithms that enable effective communication and transfer of control between driver and vehicle. This includes sensing driver gaze, emotion, cognitive load, drowsiness, hand position, posture, and fusing this information with the perception of the driving environment to create safe, reliable vehicles that drivers can learn to trust.

• September 2017: Zenuity announced a non-exclusive collaboration with Ericsson. The aim is to develop the Zenuity connected cloud, where Ericsson will contribute its “Internet of Things” accelerator platform, aiming to integrate in-vehicle software and systems with connected safety data from other vehicles and infrastructure to potentially provide Over-the-Air (“OTA”) real time updates across the vehicle fleet.

• August 2017: We announced a non-exclusive collaboration with Seeing Machines, a pioneer in computer vision based human sensing technologies, to develop next generation Driver Monitoring Systems (“DMS”) for autonomous vehicles.

• July 2017: We announced a non-exclusive collaboration with Velodyne to sell various LiDAR sensors as the Tier-1 supplier to the OEMs. Under the current agreement with Velodyne, we will act as the Tier-1 supplier to the OEMs for the Velodyne LiDAR sensors. We will provide project management services, product validation and verification capabilities and system/interface packaging in supplying automotive-grade LiDAR systems to the OEMs.

• June 2017: We announced a non-exclusive early stage collaboration with NVIDIA, in combination with Zenuity, providing Veoneer and Zenuity with pre-commercial access to NVIDIA’s AI computing platform for autonomous driving. Actual production vehicles utilizing said platform are not planned for sale before 2021.

Market Overview and Competitive Landscape

The automotive production value chain is split among OEMs such as General Motors, Toyota and Volkswagen and automotive suppliers, such as ourselves, Aptiv, Bosch, Continental, Denso, Magna, Valeo and ZF. Veoneer acts mainly as a Tier-1 supplier to OEMs, meaning that we sell products directly to OEMs.

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Automotive Supplier Market Overview

Our underlying market is driven by two primary factors: Global Light Vehicle Production (“LVP”) and Content Per Vehicle (“CPV”), whereby CPV is the clear market driver of our TAM.

• Light Vehicle Production: Over the last two decades, LVP has increased at an average annual growth rate of around 3% despite the cyclical nature of the automotive industry. LVP is expected to grow to around 96 million in 2019, and 107 million in 2025, from approximately 92 million in 2017.¹¹ The market is undergoing a shift from traditional ICE vehicles, to HEVs and EVs, as emission regulation becomes more stringent, and battery technology continues to evolve.

• Content Per Vehicle: Unlike LVP, we can directly influence the CPV by introducing new technologies to the market. Looking ahead, we expect that safety CPV growth will primarily be driven by active safety content (including software), with total active safety market growing from approximately $50 per vehicle in 2017 to around $225 per vehicle in 2025,¹² representing a CAGR of roughly 21% from 2017 to 2025, as the demand for advanced active safety features grows.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Trends, Uncertainties and Opportunities” for additional information related to recent trends in LVP and CPV.

Market for Our Products

Our TAM consists of our three product areas: active safety, restraint control systems and brake systems. Our TAM is approximately $20 billion in 2017, and we believe it will grow by a 10% CAGR until 2025.¹³

1) TAM (Total Addressable Market).

2) Active Safety Market includes Radar (Front/Side/Rear), Forward looking Cameras (Mono/Stereo/Night Vision), Other (Advanced Driver Assist, Electronic Control Unit, LiDAR).

¹¹  IHS Light Vehicle Production Database as of February 2018.

¹²  Based on the Company’s insights and estimates on prices and penetration rates of each Active Safety product available in 2017 and expected to be available in 2025.

¹³  The Company’s calculations for market estimates per product group are based on light vehicle production data from IHS database as of February 2018, supplemented by the Company’s internal market intelligence on prices and penetration rates of each expected Active Safety product and about light vehicle production based on publicly available information and history operating in the market.

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We estimate our market share in 2017 is around 11%,¹⁴ where our market is characterized as relatively fragmented with many large cap automotive tier 1 suppliers who also compete in many other product lines, other than automotive safety electronics.

Our Estimated Market Shares - 2017A

Source: The Company’s market share estimates are based on internal market intelligence on geographies, OEMs and vehicle models in the products the Company competes along with vehicle production data from the IHS database.

Electronics Segment

Active Safety: Active safety consists of radar, night vision, front-view mono and stereo vision cameras and ADAS ECUs. This field is one of the fastest growing areas of vehicle equipment, as illustrated on the previous page. We estimate our Active Safety market to grow from $5 billion in 2017 to around $11 billion in 2020¹⁵ which amounts to a 32% CAGR. We estimate our Active Safety market will continue to grow to approximately $24 billion in 2025¹⁶ which amounts to approximately a 22% CAGR from 2017. This strong market growth is driven by the rapidly increasing penetration of ADAS and AD capabilities in vehicles. As illustrated below, IHS forecasts that approximately 70% of all global vehicle sales will be either semi or fully autonomous by 2029, while nearly all remaining vehicles will have some level of ADAS features.

¹⁴  The Company’s market share estimates are based on internal market intelligence on geographies, OEMs and their vehicle models in the product areas where the Company competes along with light vehicle production data from the IHS database.

¹⁵  The Company’s calculations for Active Safety market estimates are based on light vehicle production data from IHS database as of February 2018, supplemented by the Company’s internal market intelligence on prices and penetration rates of each expected Active Safety product.

¹⁶  The Company’s calculations for Active Safety market estimates are based on light vehicle production data from IHS database as of February 2018, supplemented by the Company’s internal market intelligence on prices and penetration rates of each expected Active Safety product.

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Share of Vehicle Sales by Level of Autonomy

Source: IHS Automotive, Morgan Stanley Research

The Active Safety market growth is reflected in Active Safety CPV, which we expect to grow from approximately $50 in 2017 to approximately $225 in 2025.¹⁷

Increasing Levels of Software in the Future are Required to Enhance Safety

Source: Based on the Company’s internal market intelligence on prices & penetration rates of each product under the Company’s Safety Electronics market definition (including Active Safety, Restraint Control Systems and Brake Systems).

Active Safety Competitive Landscape

The active safety market is highly fragmented and highly competitive. Competition is based primarily on technology, innovation, quality, delivery and price. Our future success will depend on our ability to develop advanced hardware and software technologies and to maintain or improve on our already strong competitive position over our existing and any new competitors.¹⁸ Main competitors in active safety include Aptiv, Bosch, Continental, Denso, Magna, Valeo, ZF, and Intel/Mobileye.

¹⁷  Based on the Company’s insights and estimates on prices & penetration rates of each Active Safety product available in 2017 and expected to be available in 2025.

¹⁸  The Company’s calculations are based on information on product portfolios of automotive safety electronics competitors, of which the largest (Aptiv, Bosch, Continental, Denso, Magna, Valeo and ZF) have been analysed with publicly available information, such as the most recent annual reports, press releases, and other information available on company websites.

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On a broader scale, we have seen significant shifts in our competitive landscape over the last several years. Technology companies have increased their presence and influence in automotive safety electronics, either through acquisitions or forming “ecosystems” around certain technologies with OEMs and other suppliers. This has led to new industry entrants like Apple, Google, Intel, NVIDIA, Qualcomm and Uber, which also provide partnership or customer opportunities for Veoneer hardware and software solutions.

Active Safety Market Position

Through acquisitions, technology partnerships with customers and licensing agreements, we have continuously added key building blocks and have obtained a market share of more than 16% in active safety in 2017.¹⁹ Zenuity has since inception formed several partnerships to establish a full-suite ecosystem, and competes with peer ecosystems such as the BMW/Intel/Mobileye collaboration.

Restraint Control Systems

The market for restraint control systems remains relatively fragmented with both traditional electronics suppliers and some passive safety suppliers. Over the past years, we have seen our market share increase mainly due to cost efficient integration solutions and strong customer relationships built on quality and technology advancements. Currently we are the leading supplier of Restraint Control Systems with a market share of around 25% in 2017.²⁰ Our largest competitors include Bosch, Continental, Denso and ZF.

The total restraint control systems market amounted to approximately $3.8 billion in 2017, and is expected to decrease by around a 1% CAGR until 2025.²¹ We believe that the restraint control systems will play an integral role in a larger integration trend towards centralized Safety Domain Controllers in the future. In addition, our strong market position in restraint control systems will provide opportunities to become a leading supplier in the ADAS ECU and eventually the Safety Domain Controller market.

Brake Systems Segment

Brake systems consists of brake control ECUs, including ABS and ESC as well as the brake apply unit. We estimate the total brake systems market amounted to around $12 billion in 2017, with a projected CAGR of 4% through to 2022.²² The main growth driver is higher installation rates of ESC systems in China, South America and other emerging countries in Asia. Another major growth driver is more advanced and complex servo assisted systems and regenerative braking systems for HEVs and EVs. The ability to regenerate kinetic energy through

¹⁹  The Company’s Active Safety market share estimates are based on vehicle production data from IHS database and the Company’s market insights based on publicly available information and history operating in the market.

²⁰  The Company’s Restraint Control Systems market share estimates are based on vehicle production data from IHS database and the Company’s market insights based on publicly available information and history operating in the market.

²¹  The Company’s calculations for Restraint Control Systems market estimates are based on vehicle production data from IHS database as of February 2018, supplemented by the Company’s own market insight about vehicle production based on publicly available information and history operating in the market, coupled with the Company’s insights and estimates on prices and penetration rates of each expected Restraint Control Systems product.

²²  The Company’s calculations for Brake Systems market estimates are based on vehicle production data from IHS database as of February 2018, supplemented by the Company’s own market insight about vehicle production based on publicly available information and history operating in the market, coupled with the Company’s insights and estimates on prices and penetration rates of each expected Brake Systems product.

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braking is of growing importance as vehicle powertrains are becoming increasingly electrified. We estimate that ANBS had a market share of just above 4% in 2017.²³ Main competitors of ANBS include ADVICS, Bosch, Continental, Mando and ZF.

Research & Development and IP

Our ability to maintain our position at the forefront of technological innovations and to serve customers on a local-for-local basis will be differentiating factors to our success. Therefore, we maintain one of the broadest global networks of technical engineering centers across all major automotive regions to develop and provide advanced products, processes and manufacturing support for our manufacturing sites, and to provide our customers with local engineering capabilities and design development on a global basis.

As of December 31, 2017, we had 3,576 scientists, engineers and technicians around the world, of which approximately 72% are software engineers. We had 3,193 engineers in Electronics, of which 2,182 are in Active Safety, 1,011 are in Restraint Control Systems, and 383 are in Brake Systems.

We currently own approximately 600 active patents and have approximately 600 pending patent applications in the US and other jurisdictions. The active patents will expire between 2018 and 2037. We believe these patents provide meaningful protection for our products and technical innovations, but we do not believe that the loss or expiration of any specific patent would have a material effect on our business. We have registered the name Veoneer as a trademark in Sweden and are pursuing registration in other markets of interest. Depending on the jurisdiction, trademarks are generally valid as long as they are in use or their registrations are properly maintained and they have not been found to have become generic.

We are actively pursuing opportunities to commercialize and license our technology to the automotive industries, and we selectively utilize other companies’ licenses through sublicenses in order to support our business interests. These activities foster optimization of intellectual property rights.

We consider our patents, trademarks and licenses, as a whole, to be material to our business. However, we do not consider our business, or any of our business segments, to be materially dependent upon any individual patent, trademark or license.

Engineering Global Presence

Our total research and development expenses, including engineering, net of customer reimbursements, were $375 million, $300 million and $214 million for the years ended December 31, 2017, 2016 and 2015, respectively. In addition, Zenuity has ramped up operations since inception in April 2017, recruiting more than 300 employees and consultants. Zenuity’s total expenses were $61 million in 2017, representing the last nine months of the year. These expenses were mainly related to research and development. We expect the Zenuity team to exceed 600 employees and consultants by the end of 2018.

We believe that our engineering and technical expertise, together with our emphasis on continuing research and development, allows us to use the latest technologies, materials and processes to solve problems for our customers and to bring new, innovative products to market. We believe that continued engineering activities are critical to maintaining our pipeline of technologically advanced products.

Given our strong financial discipline, we seek to effectively manage fixed costs and efficiently rationalize capital spending by evaluating the market and profit potential of existing and new customer programs, including investments in innovation and technology. We maintain our engineering activities around our focused product portfolio and allocate our capital and resources to those products and distinctive technologies.

²³  The Company’s Brake Systems market share estimates are based on vehicle production data from IHS database and the Company’s market insights based on publicly available information and history operating in the market.

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Customers

Veoneer serves most of the world’s major automotive OEMs, and is not dependent on one single customer. Our customer base has consistently increased and diversified over the last five years, mainly driven by our active safety product offerings and ANBS JV.

In 2013, we served 16 OEMs and our top five customers represented approximately 70% of sales. In 2017, we served a total of 16 customers and our largest customers were Honda (21% of sales), Daimler (17% of sales), Hyundai/Kia (12% of sales) and Ford (12% of sales). Some of the concentration is driven by the concentration in the automotive industry, with the five largest OEMs in 2017 accounting for 49% of global LVP and the ten largest for 74%.²⁴

Our number of active safety customers has rapidly increased over the last two years across all product types. Due to our recently enhanced active safety capabilities, we are now on the bid list of more than 10 customers per product type, and have doubled our sourced customer awards from seven in 2015, to 14 today.

We typically supply products to our OEM customers through written contracts or purchase orders, which are generally governed by general terms and conditions established by each OEM. These arrangements include terms regarding price, quality, technology and delivery. Although it may vary from customer to customer, our customer contracts generally require us to supply a customer’s annual requirements for a particular vehicle model and assembly facilities, rather than for manufacturing a specific quantity of products. Such contracts range from one year to the life of the model, which is generally four to seven years. Because we produce products for a broad cross section of vehicle models, we are not overly reliant on any one vehicle model or one particular product.

These contracts are often subject to renegotiation, sometimes as frequent as on an annual basis, which may affect product pricing. In general, these arrangements with our customers provide that the customer can terminate them if we do not meet specified quality, delivery and cost requirements. Although these arrangements may be terminated at any time by our customers (but not by us), such terminations have historically been minimal and have not had a material impact on our results of operations. However, if terminations do occur in the future or if production under a contract winds down earlier than expected, then such event could have a material impact on our results of operations. The arrangements typically provide that we are subject to a warranty on the products supplied; in most cases, the duration of such warranty is coterminous with the warranty offered by the OEM to the end-user of the vehicle. We may also be obligated to share in all or a part of recall costs if the OEM recalls its vehicles for defects attributable to our products.

²⁴  IHS Light Vehicle Production Database as of January 2018.

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Customer Overview of Veoneer Today

Source: Company information and IHS automotive database as of December 2017. Customers shown represent >90% of light vehicle production.

Active Safety Customer Overview of Veoneer in 2015

Source: Company information and IHS automotive database as of December 2015. Customers shown represent >90% of light vehicle production.

Employees

As of December 31, 2017, we had a total of 7,485 employees, with 3,576 in engineering, 2,232 in production and 1,323 in production overhead, with the remainder employed in management, general and administrative functions. Within engineering, approximately 72% of employees worked as software engineers.

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In addition, Zenuity had 502 employees and consultants at the end of 2017, whereof approximately 90% worked as software developers. In 2017, approximately 800 engineers were hired by Veoneer and approximately 200 were hired by Zenuity.

Veoneer Headcount Dec-2017

Source: Company information.

We consider our relationship with our personnel to be strong. We have not had any disputes which are significant or had a lasting impact on our relationship with our employees, customer perception of our employee practices or our business results.

Major unions to which some of our employees belong in Europe include: IG Metall in Germany; Unite the union in the United Kingdom; Confédération Générale des Travailleurs, Confédération Française Démocratique du Travail, and Force Ouvrière in France; If Metall, Unionen, Sveriges Ingenjörer and Akademikerföreningen in Sweden.

In addition, our employees in other regions are represented by the following unions: Unifor and the International Association of Machinists and Aerospace Workers (“IAM”) in Canada and Autoliv Nissin Brake Systems Roudou Kumiai in Japan.

In many European countries and in Canada, wages, salaries and general working conditions are negotiated with local unions and/or are subject to centrally negotiated collective bargaining agreements. The terms of our various agreements with unions typically range between 1-3 years. Some of our subsidiaries in Europe and Canada must negotiate with the applicable local unions with respect to important changes in operations, working and employment conditions. Twice a year, members of the Company’s management conduct a meeting with the European Works Council (“EWC”) to provide employee representatives with important information about the Company and a forum for the exchange of ideas and opinions.

In many Asia Pacific countries, the central or regional governments provide guidance each year for salary adjustments or statutory minimum wage for workers. Our employees may join associations in accordance with local legislation and rules, although the level of unionization varies significantly throughout our operations.

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Manufacturing/R&D Footprint

As of December 31, 2017, we owned or leased 10 manufacturing sites and 14 technical centres. We have a presence in 10 countries. The following table shows the regional distribution of our manufacturing and technical sites:

	North America		Europe, Middle East & Africa		Asia Pacific		Total
Total Manufacturing Sites		3		2		5		10
Total Technical Sites		3		5		6		14
Zenuity Technical Sites.		1		2		0		3
Total Sites		7		9		11		27

Our global scale enables us to engineer globally and manufacture locally to serve our global and local OEMs as illustrated on the map below as of December 31, 2017.

Source: Company information

Financial Performance

Sales for Veoneer in 2017 of $2.3B increased by a 21% CAGR since 2015 when Autoliv commenced reporting the Electronics business as a segment. During this period, the positive operating leverage from the organic growth contributed to the increase in gross margin from 17.5% in 2015 to 20.0% in 2017.

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During the period 2015 to 2017, Veoneer more than doubled its engineering employees to keep pace with the rapid advancements in innovation and technology in Active Safety. This has resulted in an increase in R,D&E from $214 million in 2015 to $375 million in 2017. Since R,D&E increased at a faster rate than sales, R,D&E increased from 13.4% to 16.2% as a percentage of sales.

Source: Company internal financial reporting.

For the same period (2015-2017), excluding the one-time non-cash impairment charge related to the braking systems JV in 2017, R,D&E increases have essentially offset the improvements in gross margin. The result is a slight decline in operating margin since 2015 mainly due to an increase in the amortization of intangibles related to acquisitions of 1%. Capital expenditures have increased since 2015 to support the organic growth.

See also Management’s Discussion and Analysis of Financial Condition and Results of Operations and Combined Financial Statements for Veoneer, Inc.

Inventory and Working Capital

We, as with other component manufactures in the automotive industry, ship our products to customer vehicle assembly facilities throughout the world on a “just-in-time” basis for our customers to maintain low inventory levels. Our suppliers (external suppliers as well as our own production sites) use a similar method in providing raw materials to us.

Sources and Availability of Raw Materials

We procure our raw material and components from a variety of suppliers around the world. Generally, we seek to obtain materials in the region in which our products are manufactured to minimize transportation, currency risks and other costs. The most significant raw materials we use to manufacture our products are various electrical components and ferrous metals for brake systems. As of December 31, 2017, we have not experienced any significant shortages of raw materials and normally do not carry inventories of such raw materials more than those reasonably required to meet our production and shipping schedules.

Commodity cost volatility is a challenge for us and our industry. We are continually seeking to manage these costs using a combination of strategies, including working with our suppliers to mitigate costs, seeking alternative product designs and material specifications, combining our purchase requirements with our customers and/or suppliers, changing suppliers, hedging certain commodities and other means. Our overall success in passing commodity cost increases on to our customers has been limited. We will continue our efforts to pass market-driven commodity cost increases to our customers in an effort to mitigate all or some of the adverse earnings impacts, including by seeking to renegotiate terms as contracts with our customers expire.

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Seasonality

Our business is moderately seasonal. Our European customers generally reduce production during the months of July and August and for one week in December. Our North American customers historically reduce production during the month of July and halt operations for approximately one week in December. Our Chinese customers generally reduce production during the Chinese New Year period in February. Shut-down periods in the rest of the world generally vary by country. In addition, automotive production is traditionally reduced in the months of July, August and September due to the launch of parts production for new vehicle models. Accordingly, our results reflect this seasonality. In addition, engineering income tends to be skewed towards fourth quarter.

Environmental Compliance

Most of the Company’s manufacturing processes consist of the assembly of components. As a result, the environmental impact from the Company’s plants is generally modest. While the Company’s businesses from time to time are subject to environmental investigations, there are no material environmental-related cases pending against the Company. Therefore, Veoneer does not incur (or expect to incur) any material costs or capital expenditures associated with maintaining facilities compliant with U.S. or non-U.S. environmental requirements. To reduce environmental risk, the Company has implemented an environmental management system in all plants globally and has adopted an environmental policy.

We are subject to various U.S. federal, state and local, and non-U.S., laws and regulations, including those related to environmental, health and safety, financial and other matters. We cannot predict the substance or impact of pending or future legislation or regulations, or the application thereof. The introduction of new laws or regulations or changes in existing laws or regulations that impact our business, or the interpretations thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our financial condition, operating results and cash flows.

We are subject to various environmental regulations governing, among other things: (i) the generation, storage, handling, use, transportation, presence of, or exposure to hazardous materials; (ii) the emission and discharge of hazardous materials into the ground, air or water; (iii) the incorporation of certain chemical substances into our products, including electronic equipment; and (iv) the health and safety of our employees.

We are also required to obtain permits from governmental authorities for certain of our operations.

Dependency on Government Contracts

We are not dependent on government contracts. Some R&D projects are partly financed by certain government agencies.

Legal Proceedings

We may be involved in various claims and lawsuits arising in the ordinary course of business, some of which may include claims for substantial sums, including disputes with our customers or suppliers, intellectual property claims, government investigations, environmental issues, customs disputes and employment and tax issues. Liabilities related to some of these matters may be covered by insurance with solvent insurance carriers. For those matters not covered by insurance, which include commercial matters and regulatory matters, we will recognize a liability when we believe the loss is probable and can be reasonably estimated. The ultimate results of claims and litigation cannot be predicted with certainty. We currently believe that the ultimate outcome of any such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations in a particular period or our ability to run our business as currently conducted.

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Detailed information related to legal proceedings we are or may be involved in can be found in Note 15, Contingent Liabilities to the Combined Financial Statements. Other than as set out in Note 15, we are not, and have not been, party to any legal or arbitration proceedings during the last twelve months which may have a material adverse effect on our consolidated financial position or results of operations.

Joint Venture Agreements

Zenuity Joint Venture Agreement

Zenuity operates pursuant to the Joint Venture Agreement, dated April 18, 2017 (the “Zenuity JV Agreement”), between Volvo Car Corporation (“Volvo Cars”) and a subsidiary of Autoliv. The parties entered into a number of related agreements in connection with forming the joint venture, including an investment agreement, commercialization agreements and intellectual property license and assignment agreements pursuant to which Volvo Cars and Autoliv transferred certain intellectual property rights to Zenuity.

In connection with the internal reorganization, Autoliv’s interest in Zenuity and agreements related to the business were transferred to Veoneer Sweden AB, a wholly-owned subsidiary of Veoneer, which is a subsidiary of Autoliv. As a result, Zenuity is 50% owned by Volvo Cars and 50% owned by Veoneer. Generally, a party may not transfer its interest in Zenuity to a third party without the prior written consent of the other party, except that both parties may transfer their interest to an affiliate, provided that the transferring party guarantees the obligations of the transferee.

The Zenuity JV Agreement describes the scope of the business activities of Zenuity, which is to develop automotive driver assistance and highly autonomous driving software solutions that can be supplied to Volvo Cars and other potential customers. In addition, Zenuity conducts research within the areas of human factors, vehicle environments and computer techniques to develop algorithms for driving assistance or automated driving. Zenuity owns and licenses certain intellectual property rights pursuant to commercialization agreements between the parties. Veoneer is the exclusive supplier and distribution channel for all Zenuity’s products sold to third parties; however, there is no exclusivity toward any customer or the owners. Volvo Cars can source such products directly from Zenuity.

The Zenuity JV Agreement provides that the board of directors of Zenuity is ultimately responsible for managing the business. The board consists of four directors and two deputy directors. Each party has the right to nominate two directors and one deputy director, and the chairmanship of the board will alternate between the parties every two years. The board is responsible for appointing the managing director and the chief financial officer, who oversee the daily operation of Zenuity. Zenuity holds general meetings of shareholders as required by applicable law and as specified in the Zenuity JV Agreement. Each party shall exercise its voting rights in a manner consistent with the Zenuity JV Agreement.

The parties to the Zenuity JV Agreement made initial capital contributions to Zenuity in accordance with an investment agreement between the parties at the time of formation. Zenuity developed a business plan at formation detailing future cash flow projections, including investments in RD&E. This business plan also provided indications of anticipated future funding needs. Any amounts agreed to be funded by Volvo Cars and Veoneer in the future will be funded 50% each by Volvo Cars and Veoneer. On March 27, 2018, each party contributed additional capital of SEK 600 million (approximately $71 million) in cash. The parties will consider additional capital injections from time to time as the need arises in relation to the business plan, although there are no requirements that any such capital injections be made. Zenuity is primarily funded by its equity and internally generated funds and borrowing from external lenders. The Zenuity JV Agreement provides that any distribution of profits to the parties is to be made in proportion to their ownership of shares in Zenuity and only if, following the distribution, there would be sufficient cash available to conduct the business.

If a party commits a material breach of the Zenuity JV Agreement and does not remedy such breach within 20 business days of receiving notice of breach from the other party, the non-breaching party may request

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redemption of shares held by the defaulting party in accordance with the procedure set forth in the Zenuity JV Agreement. Unless otherwise agreed by the parties, the redemption price will be at a discount to the value of the defaulting party’s shares. If a party is subject to a change of control, the other party will have the right to redeem the shares of the party subject to the change of control, except in cases where the change of control is occurring at the level of the top parent company. Volvo Cars has provided its consent to the change of control pursuant to the Zenuity JV Agreement so long as Veoneer continues to provide it with updates and other information regarding the spin-off. A party has the right to purchase shares of the other party at 100% of the value of the shares if such party is declared bankrupt or is insolvent.

Decisions by the board require unanimous approval of all directors participating in a meeting and decisions by shareholders require unanimous approval of representatives of both parties given at the general meeting. In the event that the board or shareholders are unable to come to a decision within 15 business days of a matter first being considered, one party may choose to refer the matter to a committee consisting of senior officers of each party for consultation and negotiation. If the committee cannot resolve the matter within 30 business days of the referral, any discussions or proposals with respect to the matter will not proceed unless required by law or obligations to a third party.

The Zenuity JV Agreement has an initial term of 20 years, and will automatically renew for consecutive 10 year terms, unless a party provides a written notice of termination at least three years prior to a renewal period. If a party is no longer a shareholder of Zenuity, the Zenuity JV Agreement will automatically terminate in respect of such party.

During the term of the Zenuity JV Agreement, the parties agree to not, and to cause their affiliates to not, engage in businesses or activities that would compete with those conducted by Zenuity, subject to certain exceptions set forth in the Zenuity JV Agreement. During the term of the Zenuity JV Agreement, the parties agree to not solicit employees of Zenuity. The Zenuity JV Agreement contains customary mutual confidentiality provisions.

The Zenuity JV Agreement is governed by Swedish law. Any disputes arising out of the Zenuity JV Agreement will be settled by arbitration administered by the Arbitration Institute of the Stockholm Chamber of Commerce. The seat of arbitration shall be in Gothenburg, Sweden.

ANBS Joint Venture Agreement

Brake Systems was formed by and operates pursuant to a number of agreements entered into between certain affiliates of each of Autoliv and Nissin Kogyo Ltd., Co. (“Nissin”), including a Share Purchase Agreement, dated September 9, 2015 (the “ANBS SPA”), and a Joint Venture Agreement, dated March 7, 2016 (the “ANBS JV Agreement”). The ANBS JV Agreement sets forth the agreements between Autoliv and Nissin with respect to the ownership, capitalization, governance and operations of Brake Systems. It provides that Autoliv owns 51% of each of the entities that comprise Brake Systems and Nissin owns the remaining 49% of each entity. In connection with the internal reorganization, Autoliv’s ownership of each of the entities that comprise Brake Systems was transferred by Autoliv and its subsidiaries to Veoneer and its subsidiaries.

The ANBS JV Agreement provides that Brake Systems is governed by a steering committee of five members, three of which are appointed by Veoneer US, a subsidiary of Veoneer, and two of which are appointed by Nissin. Veoneer US has the right to appoint the chairman of the steering committee. The steering committee has, to the fullest extent permitted by applicable law, the complete authority and discretion to manage and control the business of Brake Systems in accordance with the management structure set forth in the ANBS JV Agreement, including the authority to appoint officers and delegate authority to such officers. At the discretion of the steering committee, the parties may be required to cause their affiliates that comprise Brake Systems to make additional capital contributions on a pro rata basis based on the share of equity interests held by each party. The parties are entitled to proportional quarterly distributions in an amount sufficient to cover taxes and yearly distributions totaling at least 50% of the business’s total consolidated net cash flow.

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The ANBS JV Agreement contains customary mutual representations and warranties and obligates each party to cause its affiliates to indemnify its respective shareholders, directors, officers, employees and agents. The ANBS JV Agreement contains mutual confidentiality provisions, pursuant to which each party may not during the term of the ANBS JV Agreement and for three years thereafter, use or disclose any confidential information or trade secrets of Brake Systems, subject to certain standard exceptions. During the term of the ANBS JV Agreement and for three years thereafter, each party agrees to not solicit for employment any employee of Brake Systems without the written consent of the other party, unless a former employee has not been employed by Brake Systems for at least six months. Each party must provide prompt notice to the other upon a change-in-control, and must obtain advance written consent of any transfer of its interests in Brake Systems. Please see “Risk Factors—Risks Related to Our Business—We are uncertain whether we will be able to obtain the consent of Nissin Kogyo, our ANBS joint venture partner, with respect to the spin-off” for additional information.

In the event the parties or steering committee are or is unable to agree on and resolve a matter requiring unanimous approval related to the management or operation of the business, Veoneer may offer to both sell to Nissin or purchase from Nissin all of its equity interests in Brake Systems. If Veoneer does not make such offer, Nissin may offer to both sell to Veoneer or purchase from Veoneer all of its equity interests in Brake Systems. Such offer to sell or purchase must be at the appraised fair value of the portion of the equity interests to be sold or purchased and must include (i) a statement that a condition to purchase shall be the absolute indemnity by the purchaser of the seller arising out of any guarantee by the seller of any debt of the business, (ii) a statement that the purchase price shall be payable in cash at closing, and (iii) a statement that the offer constitutes both an offer to sell the equity interests owned by the offeror and offer to purchase the equity interests owned by the offeree. Such an offer will be irrevocable for forty-five days and the offeree must accept either the offer to purchase or sell (the “Buy-Sell Option”). The ANBS JV Agreement will terminate at the time either party does not own any interest in Brake Systems as a result of the Buy-Sell Option or the Appraised Exit (defined below).

In certain circumstances, either party may exercise a right to purchase the equity interests held by the other party or sell the equity interests held by the exercising party. The exercising party must seek an appraisal of the fair market value of the business and purchase or sell its equity interest for an amount calculated as set forth in the ANBS JV Agreement (the “Appraised Exit”). The Appraised Exit right of one party is triggered by the change-in-control of the other party or an on-going material breach by the other party. In the event of a change-in-control of one party, the other party has 60 days after delivery of notice of change-in-control to exercise its Appraised Exit right. If the exercising party exercises its Appraised Exit right, it may elect to purchase the other party’s equity interests for an amount equal to 90% of the appraised value or sell its equity interests for an amount equal to 110% of the appraised value. An appraisal pursuant to the ANBS JV Agreement has not been conducted. Nissin may also exercise its Appraised Exit right if it determines there has been a fundamental breakdown in the relationship between the parties following (i) the adoption of any material change to the business plan by the Steering Committee without any supporting votes from the members appointed by Nissin or (ii) the adoption of any material change to the compensation paid to the employees of Brake Systems or any subsidiaries without any supporting votes from Steering Committee members appointed by Nissin.

The ANBS JV Agreement is governed by Japanese law, and any claims between the parties must be finally settled by arbitration before a tribunal in Singapore.

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PROPERTIES

Veoneer’s principal executive offices are located at Klarabergsviadukten 70, Section C6, SE-111 64, Stockholm, Sweden. Veoneer’s various businesses operate in a number of production facilities and offices. Veoneer believes that its properties are adequately maintained and suitable for their intended use and that the Company’s production facilities have adequate capacity for the Company’s current and foreseeable needs. All of Veoneer’s production facilities and offices are owned or leased by operating (either subsidiary or joint venture) companies.

VEONEER MANUFACTURING FACILITIES

Country/ Company	Location of Facility	Reporting Segment(s)	Items Produced at Facility	Owned/ Leased
Canada
Veoneer Electronics Canada, Inc.	Markham	Electronics	Airbag electronics, radar sensors	Leased
China
Veoneer (China) Electronics Co., Ltd.	Shanghai	Electronics	Airbag electronics, radar sensors	Owned
Autoliv Nissin Brake Systems (Zhongshan) Co., Ltd	Zhongshan	Brake Control Systems	Brake control systems	Owned
France
Veoneer Electronics SAS	Saint-Etienne du Rouvray	Electronics	Airbag electronics, ADAS ECUs	Owned
Japan
Autoliv Nissin Brake	Ueda	Brake Control Systems	Brake control systems	Leased
Systems Japan Co., Ltd	Shimo-Muroga	Brake Control Systems	Brake control systems	Leased
	Saku City	Brake Control Systems	Brake control systems	Leased
Sweden
Autoliv Sverige AB	Vårgårda	Electronics	Airbag electronics, vision cameras and radar	Owned
USA
Autoliv ASP, Inc.	Goleta	Electronics	Night vision	Leased
Autoliv Nissin Brake Systems America LLC	Findlay	Brake Control Systems	Brake control systems	Leased
	Southfield	Brake Control Systems	Brake control systems	Leased

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TECHNICAL CENTERS

Country / Company	Location	Reporting Segment(s)	Product(s) Supported
China
Autoliv (Shanghai) Vehicle Safety System Technical Center Co., Ltd.	Shanghai	Electronics	Electronics customer applications and platform development with full-scale test laboratory
France
Veoneer Electronics SAS	Cergy-Pontoise	Electronics	Electronics platform development and customer applications
Germany
Autoliv B.V. & Co. KG	Dachau	Electronics	Electronics customer applications and platform development with full-scale test laboratory
India
Autoliv India Private Ltd.	Bangalore	Electronics	Electronics for passive and active safety
Japan
Autoliv Japan Ltd.	Hiroshima	Electronics	Electronics platform development
	Yokohama	Electronics	Electronics platform development
Autoliv Nissin Brake Systems Japan Co., Ltd.	Tochigi	Brake Systems	Brake control systems
Romania
Autoliv Romania S.R.L.	Timisoara	Electronics	Electronics for passive and active safety
South Korea
Autoliv Corporation	Seoul	Electronics	Electronics customer applications and platform development
Sweden
Autoliv Development AB	Vårgårda	Electronics	Research center
Autoliv Sverige AB	Linköping	Electronics	Electronics platform development

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USA
Autoliv ASP Inc.	Southfield	Electronics	Brake control systems, electronics customer application and platform development
	Lowell	Electronics	Electronics platform development
	Goleta	Electronics	Night vision development

Our joint venture, Zenuity, leases technical centers in Munich, Germany, Göteborg, Sweden and Farmington Hills, Michigan, USA.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis presented below refer to and should be read in conjunction with the audited combined and unaudited condensed combined financial statements and the corresponding notes and the selected historical combined financial data, each included elsewhere in this information statement. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements, which are described in detail in the section entitled “Special Note About Forward-Looking Statements”. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see the “Risk Factors” section for a discussion of the uncertainties, risks and assumptions associated with these statements.

Introduction

The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help you understand the business operations and financial condition of Veoneer, Inc. (“we”, “our”, or “the Company”). This MD&A is presented in the following sections:

• Executive Overview

• Trends, Uncertainties and Opportunities

• Results of Operations

• Liquidity and Capital Resources

• Off-Balance Sheet Arrangements and Other Matters

• Non-U.S. GAAP Financial Measures

• Significant Accounting Policies and Critical Accounting Estimates

• Quantitative and Qualitative Disclosure about Market Risk

Veoneer, Inc. (“Veoneer” or the “Company”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden. In early third quarter 2018 it is expected to be spun-off from Autoliv, Inc. The Company functions as a holding corporation and owns two principal operating subsidiaries, Veoneer AB and Veoneer US, Inc.

Veoneer is a global leader in the design, development, sale and manufacture of automotive safety electronics²⁵ with a focus on innovation, quality and manufacturing excellence. Veoneer has operated for almost four years as a segment within Autoliv (“Electronics”). Based on the Autoliv heritage, Veoneer Safety Systems are designed to make driving safer and easier, more comfortable and convenient for the end consumer and to intervene before a collision. Veoneer endeavors to prevent vehicle accidents or reduce the severity of impact, in the event a crash is unavoidable. Through our customer focus, being an expert partner with our customers, we intend to develop human centric systems that benefit vehicle occupants.

Veoneer’s current product offering includes automotive radars, mono and stereo vision cameras, night vision systems, positioning systems, ADAS (advanced driver assist systems) electronic control units, passive safety electronics (airbag control units and crash sensors), brake control systems and a complete software offering towards highly automated driving (HAD) and eventually autonomous driving (AD). In addition, we offer driver monitoring systems, LiDAR sensors, RoadScape positioning and other technologies critical for HAD and AD solutions by leveraging our partnership network and internally developed intellectual property.

Veoneer’s filings with the SEC 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 (i.e. generally the same day as the filing).

²⁵  The Company’s calculations are based on information on revenues of automotive safety electronics competitors, of which the largest market participants (Aptiv, Bosch, Continental, Denso, Magna, Valeo and ZF) have been analyzed with publicly available information, such as the latest available annual reports, press releases and other information available on company websites.

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Shares of Veoneer common stock are expected to trade on the New York Stock Exchange under the symbol “VNE”. Swedish Depository Receipts representing shares of Veoneer common stock are expected to trade on Nasdaq Stockholm under the symbol “VNE SDB.”

Executive Overview

The planned spin-off of Autoliv’s Electronics segment is on track with trading in Veoneer, Inc. stock expected to begin early in the third quarter of 2018. Veoneer’s leadership positions were announced on March 22, 2018 and the internal reorganization of Autoliv and Veoneer was achieved on April 1, 2018. The internal reorganization resulted in the transfer of assets, liabilities and operations of Autoliv’s Electronics business on a global basis to our separate legal entities. Autoliv also announced Investor Days to be held in Stockholm and New York in late May and early June, respectively.

The first quarter was a solid start to 2018 for Veoneer with record sales of $0.6 billion while the operating margin was in line with our internal expectations, which includes planned increases in engineering costs to support our future sales targets. Our operating cash flow was also on track with internal expectations.

Veoneer’s strong momentum in Active Safety continues, with both stronger than expected core Active Safety sales growth and a milestone ADAS order with Geely, which includes Zenuity software along with the Veoneer hardware sensor suite of cameras, radars and ADAS electronic control units. While recent events in our industry around ADAS and AD are very unfortunate, these are reminders of the importance of system validations and to always have a mindset of quality first.

The product launch readiness for new programs in 2019 for Veoneer are generally on track and order intake remained strong during the first quarter of 2018. With quality as Veoneer’s top priority, the Company continues to execute on our spin-off plan while staying focused on creating trust in mobility and creating value for its stakeholders.

During fiscal 2017, Veoneer generated revenue of $2.3 billion, making the Company the largest pure-play listed automotive safety electronics company today.²⁵ Our business is well diversified across geographic regions, product areas and customers. In fiscal 2017, 35% of our revenue was derived from Americas, 29% from Europe and 36% from Asia. In terms of product areas, 46% of our revenue came from restraint control systems, 34% from active safety products and 20% from brake systems. No single customer accounted for more than 21% of our revenue and our top five customers accounted for a total of approximately 70% of our revenue.

²⁵  Larger (by revenue) listed safety electronics players are Aptiv, which is not purely focused on safety related products, in particular in Electrical/Electronic Architecture division, and Gentex, which is not purely focused on the automotive end-market, as it also provides products to the aerospace industry.

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Veoneer has a market share in Restraint Control Systems (25%), a high market share in the fragmented Active Safety market (16%) and an emerging market position in our recently founded Brake Systems (4%) unit.²⁶ Our active safety portfolio is directly exposed to and benefitting from the high growth in advanced driver assistance and autonomous driving markets, which are expected to grow by a 22% CAGR from 2017 through 2025.²⁷

Basis of Presentation

The discussion below relates to the financial position and results of operations of a combination of entities under common control that have been “carved out” of Autoliv’s consolidated financial statements. The preparation of the combined financial statements required considerable judgment of management and reflect significant assumptions and allocations that management of Autoliv and Veoneer believe are reasonable. The historical combined financial statements reflect our historical financial position, results of operations and cash flows, in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Refer to Note 1, Basis of Presentation and Note 2, Summary of Significant Accounting Policies, to the annual audited Combined Financial Statements and the Unaudited Condensed Combined Financial Statements included herein for additional information.

Veoneer reports its financial results in two segments: Electronics and Brake Systems. Our Electronics reporting segment consists of our active safety and restraint control systems product areas. Our Brake Systems reporting segment consists of our brake systems product area, which are those products developed by our Autoliv Nissin Brake Systems joint venture. For additional details regarding the impact the spin-off may have on our Brake Systems reporting segment, see “Risk Factors—Risks Related to the Company—We are uncertain whether we will be able to obtain the consent of Nissin Kogyo, our ANBS joint venture partner, with respect to the spin-off” and the description of our ANBS joint venture under “Business Description.”

Non-U.S. GAAP financial measures

Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for “Organic Sales” and “Adjusted Operating Margin” within the Non-U.S. GAAP Financial Measures section. 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.

²⁶  The Company’s market share estimates are based on vehicle production data from IHS database and Company’s market insights of the respective markets based on publicly available information and history operating in the market.

²⁷  The Company’s calculations for the Active Safety market estimates are based on vehicle production data from IHS database as of February 2018, supplemented by the Company’s own market insight about vehicle production based on publicly available information and history operating in the market, coupled with the Company’s insights and estimates on prices and penetration rates of each expected Active Safety product.

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Trends, Uncertainties and Opportunities

Key Market Growth Drivers

Content Per Vehicle. Consumer research highlights increasing demand for higher safety standards in cars. Additionally, there are several significant trends that will have a positive influence on overall CPV, which is the clear market driver of our TAM, including:

• Increasingly Stringent Safety Test Standards and Government Regulations: The European New Car Assessment Programme (“NCAP”) continuously updates its test program to include more active safety technologies to help the European Union reach its target of cutting road fatalities by 50% by 2020, compared to 2010.²⁸ Also the U.S. National Highway Traffic Safety Administration (“NHTSA”) intends to ensure that its safety rating program continues to encourage automakers to develop and adopt active safety technologies where the end consumer and society at large will benefit. Inspired by this, 20 major OEMs selling LV on the US market have voluntarily agreed to implement autonomous emergency-braking systems and forward-collision warning systems as standard equipment on new vehicles produced by 2022.²⁹ OEMs seek to demonstrate that their new and refreshed car models satisfy the NCAP’s highest rating, typically five stars, generally an important decision criteria for consumers when purchasing a new vehicle. We expect that global NCAPs will continue to add specific ADAS applications to their evaluation criteria over the next several years, led by the European NCAP. We believe that this global rollout will lead to more harmonized requirements across key geographic areas. In addition, more stringent NCAP regulations drive OEMs to install more airbags and more advanced seatbelt systems in their vehicles, increasing the demand for more advanced Restraint Control Systems.

• Industry Focus on Achieving Autonomous Driving: There is an ongoing evolution of collision avoidance technologies and an industry focus on achieving ADAS, Highly Automated Driving (“HAD”) and, ultimately, some form of AD. All levels of AD will require technology innovations of higher complexity, significantly increasing CPV. Full autonomous driving (Level 4/5 autonomy) cannot be achieved in one step. We expect there will be several technological innovations that are likely to revolutionize the driving experience. As an example, today there are solutions involving hands-free-capable driving at highway speeds and in congested traffic situations. Two additional solutions, which we believe could launch in 2019, are the inclusion of country road and city traffic capabilities. The latter solutions should require only minor additional sensing hardware, but significant algorithmic software advances and initially may only be available for certain geo-fenced areas.

• “Vision Zero”, UN’s Decade of Action for Road Safety and Similar Initiatives: Society is increasingly focused on reducing traffic fatalities. We believe that active safety technologies will play a key role in achieving this vision, as the systems intervene before accidents occur.

• Demographic Trends: There are additional growth drivers from various demographic trends, e.g., urbanization, aging driver populations adding demand for autonomous features and increased safety focus in Emerging Markets as GDP per capita expands.

• Trend towards electric and hybrid vehicles: The main opportunities we see in brake systems stem from its capabilities in regenerative braking technology, which works well with combustion engine vehicles but is even more suitable for electric and hybrid vehicles. We see significant opportunities to expand outside the current customer base, especially in combination with our global reach and strong customer relationships.

²⁸  European Transport Safety Council – 5th EU Road Safety Action Programme 2020-2030.

²⁹  Insurance Institute for Highway Safety Highway Loss Data Institute – Press Release 17 March 2016.

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Our TAM consists of three product areas: Active Safety, Restraint Control Systems and Brake Systems. The TAM is approximately $20 billion in 2017, and we estimate it will grow by a 10% CAGR through 2025 to approximately $43 billion.³⁰

Light Vehicle Production. Our business is directly related to automotive LVP by our OEM customers. Automotive light vehicle sales depend on a number of different factors, including global and regional economic conditions as well as consumer buying behaviors in certain markets.

Full-year 2017 global light vehicle production hit a new record, the eighth consecutive year, increasing with slightly more than 2%. In 2016, the LVP grew by 5% and in 2015, the year-over-year growth in LVP was more than 1%.³¹

The main markets contributing to the global LVP growth in 2017 are China and Europe. China, the largest LVP market, grew by around 17% or 3.8 million light vehicles (“LV”) from 2015 to 2017. However, in 2017, we saw a more moderate growth of around 2%, partly as result of the pull forward effect from the tax incentives on smaller vehicles in 2016. In China, LVP is expected to continue to grow, but more in line with global LVP. In Europe, which is an important market for advanced automotive safety systems, LVP increased by more than 6% or by approximately 1.3 million LVs during the same three-year period. In North America, LVP declined by close to 5% or 0.8 million units in 2017 as LV sales declined for the first time since the recession in 2009-2010 and we experienced a reduction in vehicle inventories as car manufacturers adapted inventory levels to support lower vehicle sales targets. Despite the negative impact from North America, the market has maintained an overall growth rate of around 7% for the period from 2015 to 2017. Additionally, LVP in Japan grew by more than 5% over the same period.³²

Due to the nature of our products, our sales are determined by the production levels for the individual vehicle models for which Veoneer is a supplier and the market penetration rate of our products. The most important markets for Veoneer’s products today are North America, Europe, China, Japan and South Korea.

Market Strategies and Opportunities

Technologically advanced product portfolio. Our product offering has evolved from individual hardware components towards a full-suite of ADAS and automated driving system solutions. These range from vision and radar hardware to decision-making algorithms and software to vehicle actuation. Our integrated system solutions allow OEMs to reduce their need for several suppliers within vehicle safety electronics. We source the decision and control making software and other elements of our autonomous driving systems from our JV with Volvo Cars, Zenuity, and our partnership network built around it, including Velodyne LiDAR, NVIDIA, Seeing Machines, TomTom and Ericsson.

Research, Development & Engineering. Our history and culture of innovation have enabled us to develop significant intellectual property and design and development expertise to provide high-quality, technologically advanced products that meet and exceed our customers’ demands for safety, durability and performance. This is evidenced by our track record of introducing multiple industry firsts, underpinning our ability to commercialize new technology innovations. For example, in 2008, we integrated the ESC inertial motion sensors with electronic controls for airbags and other restraint systems (integrating active and passive safety). In 2011, we developed a system that combines controls for vehicle brakes with controls for vehicle restraints. In 2013, we introduced the

³⁰  The Company’s calculations for market estimates are based on vehicle production data from IHS database as of February 2018, supplemented by the Company’s own market insight about vehicle production based on publicly available information and history operating in the market, coupled with the Company’s insights and estimates on prices and penetration rates of each expected product in the respective vertical.

³¹  IHS Light Vehicle Production Database as of February 2018.

³²  IHS Light Vehicle Production Database as of February 2018.

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industry first Autonomous Emergency Braking for both radar and vision and in 2016, we introduced the third-generation night vision solutions, the world’s first night vision system that can detect traffic danger and living things in total darkness or fog.

We have a team of approximately 3,600 scientists, engineers and technicians across 14 technical centers globally. In addition, as of December 2017, Zenuity had a team of 502 employees and consultants, of which approximately 90% are software engineers.

In addition to having our own researchers, Veoneer provides funding for several scientists at universities and independent research institutes to work on special projects, such as researchers in the Advanced Vehicle Technologies Consortium led by MIT.

During the past three years we have substantially increased our investments in research and development, including support for new business awards. In 2017, we invested $375 million in R,D&E, a 76% increase from 2015.

Market Uncertainties

Automotive Safety Regulation. Government automotive safety regulations have imposed ever more stringent safety regulations for vehicles and are a key driver in our business. These regulations are subject to change based on several factors that are not within our control, including new scientific or medical data, adverse publicity regarding autonomous vehicles or technology, domestic or foreign political developments or considerations and litigation relating to our products and our competitors’ products. Though increasing automotive safety regulation may generate higher demand for our products, we may not be able to take advantage of such demand if we are unable to anticipate regulatory changes and adapt quickly enough to meet such new regulatory standards or requirements.

Technology Uncertainties. The sale of our active safety products is determined, in part, by consumer acceptance and adoption of these technologies. Market acceptance of active safety technology depends upon many factors, including driver preference and perception, safety performance, cost and regulatory requirements related to such technologies. These factors may impact the ultimate market acceptance of ADAS, AD and HAD technologies. The performance, reputation and consumer acceptance of similar or complementary products of our competitors may impact the sales of our products. We must be able to anticipate changes in technology and develop and introduce new and enhanced products that can be differentiated in the market from the products of our competitors.

OEM Product Recalls. The number of vehicles recalled globally by OEMs has reached historically high levels. These recalls may either be initiated voluntarily by the OEMs or influenced or ordered by regulatory agencies. Given the sensitivity to safety issues in the automotive industry, including increased focus on potential problems from regulators and consumers, the number of automotive recalls may remain above historical levels over the near future. The Company’s strategy is to follow stringent internal procedures when developing new products and technologies and to apply a proactive “zero-defect” quality policy. The Company’s products have been involved in less than 1% of all recalls in automotive safety electronics since 2010.³³

Pricing. Pricing pressure from customers is an inherent part of the automotive components business. The extent of price reductions varies from year to year and takes the form of one time give backs, reductions in direct sales prices or discounted reimbursements for engineering work.

New competition. Increased competition may result in price reductions, reduced margins and our inability to gain or maintain market share. OEMs rigorously evaluate suppliers based on product quality, price, reliability and delivery as well as engineering capabilities, technical expertise, product innovation, financial viability, application of lean principles, operational flexibility, customer service and overall management. To maintain our

³³  Company market insights based on publicly available information and history operating in the market.

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competitiveness and position, it is important to focus on these aspects of our customers’ evaluation and selection criteria for a Tier 1 supplier.

The largest growth opportunities are expected to be in the active safety systems market, which include many of the traditional Tier 1 automotive suppliers. As this industry is subject to rapid evolution and changes in technology, other non-traditional automotive suppliers may enter this attractive market. Additionally, there is no guarantee our customers will adopt our new products or technologies.

Results of Operations

Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017

Market overview

Light Vehicle Production Development

Change vs. same quarter last year

	China			Japan			RoA			Americas			Europe			Total
LVP1)		(2.4	)%		(0.1	)%		1.1	%		(0.5	)%		(0.1	)%		(0.6	)%

1) Source: IHS April 17, 2018.

During the first quarter of 2018, the global light vehicle production declined by 0.6% mainly due to lower production in China where the tax incentive programs on certain vehicles, which has been in place for several years, expired on December 31, 2017. Within the Americas, North America declined by 2.7% while South America increased by 11.9% (Source: IHS April 17, 2018).

Consolidated Net Sales

The Company has substantial operations outside the U.S. and presently around 65% of its sales are denominated in currencies other than the U.S. dollar. This makes the Company and its performance in regions outside the U.S. sensitive to changes in U.S. dollar exchange rates when translated. The measure “Organic sales” presents the increase or decrease in the Company’s overall U.S. dollar net sales on a comparative basis, allowing separate discussion of the impacts by segment, of acquisitions/divestitures and exchange rate fluctuations and our ongoing core operations and results. The reconciliations provided in the section entitled “Non-U.S. GAAP Measures” present the change in “Organic sales” reconciled to the change in the total net sales as can be derived from our unaudited condensed consolidated financial statements.

The following table shows the Company’s consolidated net sales by segment and other for the first quarter of 2018 and 2017:

Net Sales by Segment

		Three months ended									Components of Change in Net Sales
		March 31, 2018			March 31, 2017			Reported change			Currency effects1)			Organic
Dollars in Millions		Unaudited			Unaudited			Based on Unaudited			Unaudited			Unaudited
Electronics		$	480.9		$	462.9			3.9	%		6.3	%		(2.4	)%
Whereof	Restraint Control Systems	$	267.7		$	271.3			(1.3	)%		6.8	%		(8.1	)%
	Active Safety	$	213.2		$	191.6			11.3	%		5.5	%		5.8	%
Brake Systems		$	113.6		$	121.9			(6.8	)%		4.6	%		(11.4	)%
Intersegment sales		$	(0.2	)	$	(1.5	)		—			—			—
Veoneer net sales		$	594.3		$	583.3			1.9	%		5.9	%		(4.0	)%

1) Effects from currency translations.

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Net sales increased by 1.9% to $594 million for the first quarter of 2018 as compared to the first quarter of 2017. Excluding acquisition effects and positive currency translation effects, the decline in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was 4.0%.

Restraint Control Systems (mainly airbag control modules and remote crash sensing units) sales declined by 1.3%. The decrease in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) of 8.1%, was mainly driven by sales declines in South Korea and China with Hyundai/Kia along with GM and Nissan in North America and Mazda in Japan. The organic sales decline impact was mostly mitigated by a positive currency translation effect of 6.8%.

Active Safety (mainly automotive radars, cameras with driver assist systems and night vision systems) sales increased by 11.3% compared to the same quarter in 2017. The change was driven by an increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) of 5.8%. The Active Safety growth was positively impacted by almost 10% organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) increase in our core active safety products (including automotive radars, cameras with driver assist systems and ADAS-ECU) especially with models Mercedes, Honda and FCA. This was partially offset by the ramp-down of the current GPS business with Ford in North America as well as the ramp-down of our internally developed brake systems with Baojun in China. In addition, currency translation effects were a benefit of 5.5% over the same period last year.

Brake Systems sales declined by 6.8%, mainly due to the organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) decline of 11.4%, primarily with Honda in North America which was partially offset by a favorable currency translation effect of 4.6%.

Electronics Segment Performance

	Three months Ended March 31
Dollars in millions	2018 Unaudited			2017 Unaudited			Reported Change Based on Unaudited			Organic Change1) Unaudited
Electronics Sales	$	480.9		$	462.9			3.9	%		(2.4	)%
Electronics operating (loss)	$	(1.1	)	$	(2.6	)		57.7	%
Electronics operating margin (%)		(0.2	)		(0.6	)		0.4	%
Electronics headcount		6,077			5,292			14.8	%

1) Non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation

The operating loss in the Electronics Segment decreased by $1.5 million to $1.1 million in 2018 due to favorable operating leverage on gross profit and net currency effects which was partially offset by planned higher investments in R,D&E.

Brake Systems Segment Performance

	Three months Ended March 31
Dollars in millions	2018 Unaudited			2017 Unaudited			Reported Change Based on Unaudited			Organic Change1) Unaudited
Brake Systems Sales	$	113.6		$	121.9			(6.8	)%		(11.4	)%
Brake Systems operating (loss)	$	(7.7	)	$	(1.9	)		(305.3	)%
Brake Systems operating margin (%)		(6.8	)		(1.6	)		(5.2	)%
Brake Systems headcount		1,490			1,642			(9.3	)%

1) Non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation

The operating loss in Brake Systems increased by $5.8 million in the first quarter 2018 compared to 2017, mainly due to the negative operating leverage on gross profit related to the organic sales decline of around $14 million (non-U.S. GAAP Measure, see “Non-U.S. GAAP Measures” section for reconciliation).

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Net Sales by Region

	Three Months Ended March 31							Components of Change in Net Sales
	2018 Sales		2017 Sales		Reported change			Currency effects1)			Organic
Dollars in Millions	Unaudited		Unaudited		Based on Unaudited			Unaudited			Unaudited
Asia	$	210.9	$	207.2		1.8	%		7.1	%		(5.3	)%
Americas	$	192.6	$	215.5		(10.6	)%		0.0	%		(10.6	)%
Europe	$	190.8	$	160.6		18.8	%		12.2	%		6.6	%
Veoneer net sales	$	594.3	$	583.3		1.9	%		5.9	%		(4.0	)%

1) Effects from currency translations.

Sales from Veoneer’s companies in Asia increased by 1.8%, which was mainly driven by the favorable currency translation of 7.1%. The effect was partially offset by a decrease in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) of 5.3%. The decline was as a result of lower Restraint Control Systems sales to Hyundai/Kia in China and South Korea, together with Mazda in Japan and the continued ramp-down of our internally developed brake systems with Baojun in China and lower Brake Systems sales due to vehicle model changes, notably with Honda. This was partly offset by higher sales of Brake Systems to Honda in Japan, Active Safety Systems in China and Restraint Control Systems to Suzuki in India.

Sales from Veoneer’s companies in Americas decreased by 10.6% due to the decline in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation). Sales were negatively impacted by sales declines for Brake Systems to Honda and ramp-down with current GPS business with Ford as well as declining sales of Restraint Control Systems to GM and Nissan.

Sales from Veoneer’s companies in Europe increased by 18.8%, partially driven by an increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) of 6.6%. Active safety was the main contributor to the organic sales increase, specifically with core active safety products (including automotive radars, cameras with driver assist systems and ADAS-ECU) primarily with models from Mercedes and FCA. Favorable currency effects were 12.2% for the first quarter mainly due to the weakening US dollar when compared to the same period in 2017.

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Veoneer Performance

	Three Months ended March 31						Change
(Dollars in millions, except per share data)	2018			2017			D			%
	Unaudited			Unaudited			Based on Unaudited
Net sales	$	594.3		$	583.3		$	11.0			1.9	%
Cost of sales	$	(482.6	)	$	(469.9	)	$	(12.7	)		2.7	%
% of sales		(81.2	)%		(80.6	)%		(0.6	)%
Gross profit	$	111.7		$	113.4		$	(1.7	)		(1.5	)%
% of sales		18.8	%		19.4	%		(0.6	)%
S,G&A	$	(30.8	)	$	(29.4	)	$	(1.4	)		4.8	%
% of sales		(5.2	)%		(5.0	)%		(0.2	)%
R,D&E, net	$	(106.1	)	$	(87.5	)	$	(18.6	)		21.3	%
% of sales		(17.9	)%		(15.0	)%		(2.9	)%
Amortization of intangibles	$	(5.3	)	$	(19.1	)	$	13.8			(72.3	)%
% of sales		(0.9	)%		(3.3	)%		2.4	%
Other income (expense), net	$	14.5		$	12.2		$	2.3			18.9	%
% of sales		2.4	%		2.1	%		0.3	%
Operating loss	$	(16.0	)	$	(10.4	)	$	(5.6	)		53.8	%
% of sales		(2.7	)%		(1.8	)%		(0.9	)%
Loss from equity method investments	$	(14.0	)	$	—		$	(14.0	)		n.a.
Net interest income (expense)	$	(0.1	)	$	—		$	(0.1	)		n.a.
Other non-operating items, net	$	0.1		$	(0.6	)	$	0.7			(116.7	)%
Loss before taxes	$	(30.0	)	$	(11.0	)	$	(19.0	)		172.7	%
Income tax expense	$	(7.0	)	$	(11.0	)	$	(4.0	)		(36.3	)%
Net loss	$	(37.0	)	$	(22.0	)	$	(15.0	)		68.2	%
Less Net (loss) attributable to non-controlling interest	$	(4.7	)	$	(2.2	)	$	(2.5	)		113.6	%
Net loss attributable to controlling interest	$	(32.3	)	$	(19.8	)	$	(12.5	)		63.1	%

Cost of Sales/Gross Profit

The gross profit for the first quarter 2018 decreased by $1.7 million when compared to the prior year due to the organic sales decline and the product recall discussed in footnote 14 of the Unaudited Condensed Combined Financial Statements.

Operating Loss

The operating loss and operating margin in the first quarter of around $16 million and (2.7)%, respectively, decreased by $5.6 million and 0.9% primarily due to the product recall discussed in footnote 14 of the Unaudited Condensed Combined Financial Statements when compared to the same quarter last year. Planned higher investments in R,D&E, net as we continue to invest in technology, competence and capacity to support strong customer order intake and new products were essentially offset by lower amortization of intangibles (related to M/A-COM for which we recorded an impairment of intangibles through amortization in the first quarter 2017) and higher other income related to the gain recorded associated with the reduction in the earn-out liability based on our assessment of fair value. Such gain was higher in 2018 vs. 2017 (see Note 5 of the Notes to the Unaudited Condensed Combined Financial Statements for these purchase accounting effects from the M/A-COM acquisition). S,G&A remained relatively unchanged compared to the same period in 2017.

Equity method investments

The equity method investment loss for the first quarter increased by $14 million due to Veoneer’s 50% share of the Zenuity joint venture which was formed in April of 2017.

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Net interest expense

Net interest expense for the first quarter increased by $0.1 million to $0.1 million compared to 2017.

Income Tax

The income tax provision for the first quarter of 2018 was $7.0 million compared to $11.0 million in the same quarter of 2017. The tax expense in the first quarter of 2018 was primarily impacted by a reduction in the pre-tax earnings of our profitable subsidiaries, a change in the mix of earnings of our profitable subsidiaries and a $0.4 million net discrete benefit recorded during the quarter related to changes in our valuation allowance assessment for our US entity and one of our non-US entities.

Net Loss

The net loss attributable to controlling interest amounted to approximately $37 million for the first quarter as compared to a net loss of $22 million for the same period last year. Increased investment in R,D&E, product recall and the equity method loss relating to Zenuity were partially offset by lower amortization of intangibles.

Fiscal Year 2017 Compared to Fiscal Year 2016

Net Sales by Segment

											Components of Change in Net Sales
		2017 Sales (MUSD)			2016 Sales (MUSD)			Reported change			Acquisitions/ Divestitures			Currency effects1)			Organic
		Audited			Audited			Based on Audited			Unaudited			Unaudited			Unaudited
Electronics		$	1,850.5		$	1,836.5			0.8	%		—			0.2	%		0.6	%
Whereof:	Restraint Control Systems	$	1,072.8		$	1,096.7			(2.2	)%		—			0.3	%		(2.5	)%
	Active Safety	$	777.7		$	739.8			5.2	%		—			0.1	%		5.1	%
Brake Systems		$	475.9		$	391.1			21.6	%		30.8	%		(1.8	)%		(7.4	)%
Intersegment sales			(4.2	)		(9.3	)		—			—			—			—
Veoneer sales		$	2,322.2		$	2,218.3			4.7	%		5.4	%		(0.1	)%		(0.6	)%

1) Effects from currency translations.

Net sales increased for the full year 2017 by 4.7% to $2,322 million as compared to 2016. Excluding acquisition effects and negative currency translation effects, the decline in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was 0.6%.

Restraint Control Systems (mainly airbag control modules and remote crash sensing units) sales declined by 2.2%. The decrease in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was 2.5%, mainly driven by decline in North America, Japan and South Korea, partly mitigated by increased sales in China and India.

Active Safety (mainly automotive radars, cameras with driver assist systems and night vision systems) sales increased by 5.2% compared to 2016, all driven by an increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation). The growth for Active Safety was positively impacted by double-digit organic increase in sales of core active safety products (including automotive radars, cameras with driver assist systems and ADAS-ECU), and negatively impacted by sales declines for positioning systems in North America as well as the ramp-down of our internally developed brake systems in China.

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Brake Systems sales increased by 21.6%, mainly driven by a full year of operations for ANBS in 2017 in comparison to 2016 when it was acquired. This change in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was adversely affected by changes in vehicle models, notably with Honda, that did not incorporate our products.

Electronics Performance

Dollars in millions	2017 Audited			2016 Audited			Reported Change Based on Audited			Organic Change1) Unaudited
Electronics Sales	$	1,850.5		$	1,836.5			0.8	%		0.6	%
Electronics operating income	$	(13.7	)	$	11.1			(223.4	)%
Electronics operating margin		(0.7	)%		0.6	%		(1.3	)%
Electronics headcount		5,898			5,045			16.9	%

1) Non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation

The operating income in Electronics declined from $11.1 million in 2016 to an operating loss of $13.7 million in 2017, mainly because of continued high investments in RD&E, net, for future growth.

Brake Systems Performance

Dollars in millions	2017 Audited			2016 Audited			Reported Change Based on Audited			Organic Change1) Unaudited
Brake Systems Sales	$	475.9		$	391.1			21.6	%		(7.4	)%
Brake Systems operating income	$	(247.2	)	$	(12.0	)		1960.0	%
Brake Systems operating margin		(51.9	)%		(3.1	)%		(48.8	)%
Brake Systems headcount		1,586			1,733			(8.5	)%

1) Non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation

The operating loss in Brake Systems increased by around $235 million in 2017 compared to 2016 mainly due to a goodwill impairment charge of approximately $234 million. Excluding the impairment charge, operating loss was comparable to 2016.

Net Sales by Region

								Components of Change in Net Sales
	2017 Sales (MUSD)		2016 Sales (MUSD)		Reported change			Acquisitions/ Divestitures			Currency effects1)			Organic
	Audited		Audited		Based on Audited			Unaudited			Unaudited			Unaudited
Asia	$	847.4	$	787.5		7.6	%		10.7	%		(1.1	)%		(2.0	)%
Americas	$	812.3	$	832.4		(2.5	)%		4.3	%		0.0	%		(6.8	)%
Europe	$	662.5	$	598.4		10.8	%		0.0	%		1.0	%		9.8	%
Global	$	2,322.2	$	2,218.3		4.7	%		5.4	%		(0.1	)%		(0.6	)%

1) Effects from currency translations.

Sales from Veoneer’s companies in Asia increased by 7.6%, of which the decrease in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was 2.0%. Sales declined as result of lower sales of Restraint Control Systems in Japan and South Korea, ramp-down of our internally developed brake system in China and lower sales of Brake Systems due to vehicle model changes, notably with Honda. This was partly offset by higher sales of Restraint Control Systems in China and India.

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Sales from Veoneer’s companies in Americas decreased by 2.5%, of which the decrease in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) from Veoneer’s companies in the Americas was 6.8%. Sales were negatively impacted by sales declines for positioning systems to Ford as well as declining sales of Restraint Control Systems to GM.

Sales from Veoneer’s companies in Europe increased by 10.8%, mainly driven by an increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) of 9.8%. Active safety was the main contributor to the organic sales increase. Specifically, cameras with driver assist systems showed strong growth.

Veoneer Performance

	Years ended December 31						Change
(Dollars in millions, except per share data)	2017			2016			D			%
	Audited			Audited			Based on Audited
Net sales	$	2,322.2		$	2,218.3		$	103.9			4.7	%
Cost of sales	$	(1,856.6	)	$	(1,795.1	)	$	(61.5	)		3.4	%
% of sales		(80.0	)%		(80.9	)%		0.9	%
Gross profit	$	465.6		$	423.2		$	42.4			10.0	%
% of sales		20.0	%		19.1	%		0.9	%
S,G&A	$	(110.0	)	$	(109.8	)	$	(0.2	)		0.2	%
% of sales		(4.7	)%		(4.9	)%		0.2	%
R,D&E, net	$	(375.4	)	$	(299.7	)	$	(75.7	)		25.3	%
% of sales		(16.2	)%		(13.5	)%		(2.7	)%
Goodwill impairment charge	$	(234.2	)		0.0		$	(234.2	)		n.a.
% of sales		(10.1	)%		0.0	%		(10.1	)%
Amortization of intangibles	$	(37.0	)	$	(34.5	)	$	(2.5	)		7.2	%
% of sales		(1.6	)%		(1.6	)%		(0.0	)%
Other income (expense), net	$	8.3		$	(4.0	)	$	12.3			(307.5	)%
% of sales		0.4	%		(0.2	)%		0.6	%
Operating loss	$	(282.7	)	$	(24.8	)	$	(257.9	)		1,039.9	%
% of sales		(12.2	)%		(1.1	)%		(11.1	)%
Loss from equity method investments	$	(30.7	)	$	—		$	(30.7	)		n.a.
Net interest income (expense)	$	0.0		$	(0.1	)	$	0.1			(100.0	)%
Other non-operating items, net	$	(0.8	)	$	3.1		$	(3.9	)		(125.8	)%
Loss before taxes	$	(314.2	)	$	(21.8	)	$	(292.4	)		1,341.3	%
Income tax expense		(30.1	)	$	(38.3	)	$	8.2			(21.4	)%
Net loss	$	(344.3	)	$	(60.1	)	$	(284.2	)		472.9	%
Net loss attributable to non-controlling interest		(127.3	)		(7.0	)		(120.3	)		1,718.6	%
Net loss attributable to controlling interest	$	(217.0	)	$	(53.1	)	$	(163.9	)		308.7	%

Cost of Sales/Gross Profit

The gross profit for the full year 2017 increased by $42 million, compared to the prior year, as result of higher sales, driven primarily by sales increases for Active Safety and acquisition effects. The improved gross margin was mainly due to lower direct material costs, partly offset by higher costs related to investments for capacity and growth.

Operating Loss

Operating loss increased by around $258 million to $(283) million and the operating margin declined by 11.1% to (12.2)% mainly due to a goodwill impairment charge of approximately $234 million in the fourth

104

quarter of 2017 as described below. Excluding the impairment charge, the operating loss was $(49) million and the negative 2.1% operating margin was a result of continued high investments in R,D&E, net for future growth partly offset by improved gross margin.

Selling, General and Administrative (S,G&A) remained unchanged compared to the prior year. R,D&E expenses, net increased by $76 million compared to the prior year due to our continued investment in technology, competence and capacity to support strong customer order intake and new products. The decrease in Other income (expense), net was primarily impacted by reduction of contingent consideration liability. See Note 3, Business Combinations, to the Combined Financial Statements included herein.

In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill amount of $234 million related to the joint venture Autoliv Nissin Brake Systems (ANBS), which was due to a lower than originally anticipated sales development.

Net interest expense

Net interest expense decreased by $0.1 million to $0.0 million compared to 2016.

Income Tax

Our provision for income taxes for the years ended December 31, 2017 and 2016 was approximately $30 million and $38 million, respectively. The decrease in the provision for income taxes was due primarily to a reduction in the earnings of our profitable non-US subsidiaries and an increase in tax credits.

Net Loss

Net loss attributable to controlling interest amounted to approximately $217 million compared to a net loss of $53 million for the full year 2016. The increase in net loss for 2017 compared to 2016 was mainly due to the goodwill impairment, the increased investment in R,D&E and the equity method loss relating to Zenuity.

Fiscal Year 2016 Compared to Fiscal Year 2015

Net Sales by Segment

										Components Of Change In Net Sales
		2016 Sales (MUSD)			2015 Sales (MUSD)		Reported change			Acquisitions/ Divestitures			Currency effects1)			Organic
		Audited			Audited		Based on Audited			Unaudited			Unaudited			Unaudited
Electronics		$	1,836.5		$	1,588.6		15.6	%		2.2	%		(0.7	)%		14.1	%
Whereof:	Restraint Control Systems	$	1,096.7		$	977.5		12.2	%		—			(0.6	)%		12.8	%
	Active Safety	$	739.8		$	611.1		21.1	%		5.7	%		(0.9	)%		16.3	%
Brake Systems		$	391.1		$	—		—			100.0	%		0.0	%		0.0	%
Intersegment sales			(9.3	)		—		—			—			—			—
Veoneer sales		$	2,218.3		$	1,588.6		39.6	%		26.3	%		(0.7	)%		14.0	%

1) Effects from currency translations.

Consolidated Veoneer sales increased for the full year 2016 by 39.6% to $2,218 million compared to the same period in 2015 primarily due to acquisition of ANBS, which comprises our Brake Systems JV with Nissin Kogyo. Excluding acquisition effects and negative currency translation effects, the increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was 14.0%, generated by double-digit organic sales growth rate in all product areas.

105

Restraint Control Systems sales (mainly airbag control modules and remote crash sensing units) increased by 12.2% compared to 2015, mainly driven by an increase in organic sales of 12.8% (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation ) across most regions, in particularly due to strong performance in China.

Active Safety (mainly automotive radars, cameras with driver assist systems and night vision systems) sales increased by 21.1% compared to 2015, with a 16.3% increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) primarily generated by strong sales development with radar products in North America and camera and radar products in Europe, largely due to the increased demand for driving assistance at Mercedes. Sales of camera systems to BMW also contributed.

Sales of Brake Systems were in line with our expectations from the start of operations of ANBS in the beginning of the second quarter of 2016.

Electronics Performance

Dollars in millions	2016 Audited			2015 Audited			Reported Change Based on Audited			Organic Change1) Unaudited
Electronics Sales	$	1,836.5		$	1,588.6			15.6	%		14.1	%
Electronics operating income	$	11.1		$	6.6			68.2	%
Electronics operating margin		0.6	%		0.4	%		0.2	%
Electronics headcount		5,045			4,080			23.7	%

1) Non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation

Operating income in Electronics increased by $5 million in 2016 compared to 2015, mainly due to organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) growth and improved gross margin partly offset by higher costs for R,D&E, net.

Brake Systems Performance

Dollars in millions	2016 Audited			2015 Audited		Change		Organic Change1) Unaudited
Brake Systems Sales	$	391.1		$	—		—		—
Brake Systems operating income	$	(12.0	)	$	—		—
Brake Systems operating margin		(3.1	)%		—		—
Brake Systems headcount		1,733			—		—

1) Non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation

Brake Systems were consolidated from April 1, 2016.

Net Sales by Region

								Components Of Change In Net Sales
	2016 Sales (MUSD)		2015 Sales (MUSD)		Reported change			Acquisitions/ Divestitures			Currency effects1)			Organic
	Audited		Audited		Based on Audited			Unaudited			Unaudited			Unaudited
Asia	$	787.5	$	421.2		87.0	%		63.6	%		(1.4	)%		24.8	%
Americas	$	832.4	$	651.2		27.8	%		23.1	%		0.0	%		4.8	%
Europe	$	598.4	$	516.2		15.9	%		0.0	%		(1.0	)%		16.9	%
Global	$	2,218.3	$	1,588.6		39.6	%		26.3	%		(0.7	)%		14.0	%

1) Effects from currency translations.

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Sales from Veoneer’s companies in Asia increased by 87.0%, primarily due to the inclusion of ANBS. The 24.8% increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) was mainly driven by Restraint Control System sales in China and South Korea.

In the Americas, consolidated sales were 27.8% higher compared to 2015, primarily due to the inclusion of ANBS, which began operations in 2016 and comprises our Brake Systems segment. The 4.8% increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) from Veoneer’s companies was primarily driven by higher sales of radar products.

Sales from Veoneer’s companies in Europe increased by 15.9%, mainly driven by an increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) of 16.9%, mainly due to higher sales of active safety products. Currency translation had a small negative effect.

Veoneer Performance

	Years ended December 31						Change
(Dollars in millions, except per share data)	2016			2015			D			%
	Audited			Audited			Based on Audited
Net sales	$	2,218.3		$	1,588.6		$	629.7			39.6	%
Cost of sales	$	(1,795.1	)	$	(1,310.2	)	$	(484.9	)		37.0	%
% of sales		(80.9	)%		(82.5	)%		1.6	%
Gross profit	$	423.2		$	278.4		$	144.8			52.0	%
% of sales		19.1	%		17.5	%		1.6	%
S,G&A	$	(109.8	)	$	(68.0	)	$	(41.8	)		61.5	%
% of sales		(4.9	)%		(4.3	)%		(0.6	)%
R,D&E, net	$	(299.7	)	$	(213.6	)	$	(86.1	)		40.3	%
% of sales		(13.5	)%		(13.4	)%		(0.1	)%
Amortization of intangibles	$	(34.5	)	$	(9.8	)	$	(24.7	)		252.0	%
% of sales		(1.6	)%		(0.6	)%		(1.0	)%
Other income (expense), net	$	(4.0	)	$	4.6		$	(8.6	)		(187.0	)%
% of sales		(0.2	)%		0.3	%		(0.5	)%
Operating loss	$	(24.8	)	$	(8.4	)	$	(16.4	)		195.2	%
% of sales		(1.1	)%		(0.5	)%		(0.6	)%
Net interest income (expense)	$	(0.1	)	$	(0.3	)	$	0.2			66.7	%
Other non-operating items, net	$	3.1		$	0.5		$	2.6			520.0	%
Loss before taxes	$	(21.8	)	$	(8.2	)	$	(13.6	)		165.9	%
Income tax expense		(38.3	)	$	(21.8	)	$	(16.5	)		75.7	%
Net loss	$	(60.1	)	$	(30.0	)	$	(30.1	)		100.3	%
Net loss attributable to non-controlling interest		(7.0	)		0.0			(7.0	)		n.a.
Net loss attributable to controlling interest	$	(53.1	)	$	(30.0	)	$	(23.1	)		77.0	%

Cost of Sales/Gross Profit

The gross profit for the full year 2016 increased by $145 million, as compared to the prior year, primarily driven by higher sales and higher gross margin. The gross margin increased by 1.6% compared to 2015, mainly due to the increase in organic sales (non-U.S. GAAP measure, see “Non-U.S. GAAP Measures” section for reconciliation) and lower direct material costs.

107

Operating Loss

The operating loss increased by approximately $16 million to minus $25 million and the operating margin decreased by 0.6% to (1.1)%. In 2016, the operating margin was negatively affected by costs related to the formation of ANBS and higher costs for R,D&E, net partly offset by higher organic sales.

Selling, General and Administration (S,G&A) expenses increased by $42 million mainly driven by higher personnel costs including acquisition effects.

The increase in R,D&E net was primarily related to high order intake, support of new projects and investments to deliver on growth opportunities.

Amortization of intangibles increased by $25 million due to the full year impact in 2016 of amortization of intangible assets associated with the acquisition of MACOM’s automotive business in 2015, and amortization of intangible assets related to the joint venture, ANBS, which closed at end of the first quarter 2016. See Note 3, Business Combinations, to the Combined Financial Statements included herein.

Other income (expense), net was around $9 million lower than prior year mainly due to an insurance reimbursement in 2015 and one-time severance arrangements.

Income Tax

Our provision for income taxes for the years ended December 31, 2016 and 2015 was approximately $38 million and $22 million, respectively. The increase in the provision for income taxes was due primarily to an increase in the earnings of our profitable non-US subsidiaries.

Net Loss

Net loss attributable to controlling interest amounted to approximately $53 million compared to a loss of $30 million for the full year 2015, mainly due to the higher SG&A and amortization expenses associated with ANBS as well as increased investment in R, D&E.

Liquidity and Capital Resources

	Three Months Ended March 31
(Dollars in Millions)	2018			2017			Change
	Unaudited			Unaudited			D
Net cash (used in) provided by operating activities	$	(78.7	)	$	7.6		$	(86.3	)
Net cash used in investing activities		(24.9	)		(16.4	)		(8.5	)
Net cash provided by financing activities		103.6			8.8			(94.8	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—
(Increase) / (decrease) in cash and cash equivalents		—			—			—
Cash and cash equivalents at beginning of year		—			—			—
Cash and cash equivalents at end of year	$	—		$	—		$	—

Net Cash (Used in) Provided by Operating Activities

Net Cash used in operating activities during the first quarter of 2018 of around $79 million was approximately $86 million higher than the same period last year mainly due to timing related to working capital items.

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Net Cash Used in Investing Activities

In the first quarter cash used in investing activities amounted to $25 million. Our investing activities primarily consist of investments in property, plant and equipment and acquisition of businesses, net of cash. During the first quarter of 2018, the Company contributed $71.5 million to the Zenuity joint venture which was offset by the re-payment of related party receivables of $76.0 million. For the same period last year, our investing activities were $16 million. The increase is mainly due to slightly higher capital expenditures net.

Net Cash Provided by Financing Activities

For the first quarter of 2018 and 2017, respectively, cash provided by financing activities amounted to $104 million and $9 million, respectively. During the three month period ended March 31, 2018, the Company borrowed $23.5 million to pay off related party debt. In addition, funding has been provided by Autoliv to support the Company’s investments in future growth activities.

Capital Expenditures

Capital expenditures (see “Definitions” section below), gross was $31 million in in the first quarter 2018 as compared to $27 million in 2017, corresponding to 5.2% and 4.6% of net sales, respectively.

Significant Legal Matters

For discussion of legal matters we are involved in, see Note 14, Contingent Liabilities, to the Unaudited Condensed Combined Financial Statements included herein.

Foreign Earnings

Substantially all of the Company’s non-U.S. earnings are permanently reinvested outside the U.S. The permanently reinvested earnings are not planned to be repatriated to the U.S. as they will be used to fund ongoing operations in Sweden.

Income Taxes

The Company has reserves for taxes that may become payable in future periods because of tax audits. At any given time, the Company may be subject to tax audits covering multiple years in several tax jurisdictions. Ultimate outcomes are uncertain but could, in future periods, have a significant impact on the Company’s cash flows. See Note 6, Income Taxes, to the Unaudited Condensed Combined Financial Statements included herein.

	Years ended December 31
(DOLLARS IN MILLIONS)	2017			2016			2015
	Audited			Audited			Audited
Net cash (used in) provided by operating activities	$	(1.2	)	$	(7.3	)	$	18.9
Net cash used in investing activities		(230.4	)		(335.4	)		(202.3	)
Net cash provided by financing activities		231.6			342.7			183.4
Effect of exchange rate changes on cash and cash equivalents		—			—			—
(Increase) / (decrease) in cash and cash equivalents		—			—			—
Cash and cash equivalents at beginning of year		—			—			—
Cash and cash equivalents at end of year	$	—		$	—		$	—

Net Cash (Used in) Provided by Operating Activities

Cash used in operating activities was $(1) million in 2017 and $(7) million in 2016. Cash provided by operating activities was $19 million in 2015.

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Days receivables outstanding (see “Definitions” section below) were 74 at December 31, 2017, compared to 73 at December 31, 2016.

Days inventory outstanding (see “Definitions” section below) were 31 at December 31, 2017, compared to 29 at December 31, 2016.

Net Cash Used in Investing Activities

In 2017, 2016 and 2015, cash used in investing activities amounted to $230 million, $335 million and $202 million, respectively. Our investing activities primarily consist of investments in property, plant and equipment and acquisition of businesses, net of cash.

Net Cash Provided by Financing Activities

For the years 2017, 2016 and 2015 cash provided by financing activities amounted to $232 million, $343 million and $183 million, respectively. Cash has been provided by Autoliv to support the Company’s investments in future growth activities.

Capital Expenditures

Capital expenditures (see “Definitions” section below), gross was $110 million in 2017, $103 million in 2016 and $53 million in 2015, corresponding to 4.7%, 4.6%, and 3.3% of net sales, respectively.

Business Combinations, Acquisitions and Divestments

Historically, we have made many acquisitions. We focus on two principal growth areas around our core business with the greatest potential, active safety systems and growth markets.

On November 1, 2017, we completed the acquisition of all the shares in Fotonic i Norden dp AB (Fotonic), headquartered in Stockholm and Skellefteå in Sweden. The preliminary acquisition date fair value of the total consideration transferred was $16.9 million, consisting of a $14.5 million cash payment and $2.4 million deferred purchase consideration, payable at the 18 months anniversary of the closing date. The deferred purchase consideration reflects the holdback amount as stipulated in the share purchase agreement. The transaction has been accounted for as a business combination.

In April 2017, we formed Zenuity, our 50% owned joint venture with Volvo Cars. Zenuity, headquartered in Gothenburg, Sweden, develops software solutions for ADAS, HAD and AD applications. Veoneer is the exclusive supplier of and distribution channel for all Zenuity products sold to third parties. As part of the agreement, Autoliv invested about $111.5 million into the joint venture as an upfront cash payment for Veoneer’s 50% share. In March 2018, we, together with our co-owner, contributed 600 MSEK (approximately $71 million) cash each into Zenuity in funding for future capital needs.

In March 2016, we acquired a 51% interest in the entities that form ANBS for approximately $263 million in cash. ANBS designs, manufactures and sells products in the brake and actuation systems business. Nissin Kogyo retained a 49% interest in the entities that formed ANBS. Veoneer has management and operational control of ANBS and consolidates the results of operation and balance sheet from ANBS. The transaction has been accounted for as a business combination. The recognized goodwill of $234.7 million as of March 31, 2016, reflects expected synergies from combining Veoneer’s global reach and customer base with Nissin Kogyo’s world leading expertise (including workforce) and technology in brake and actuation systems (for more information, see Note 3, Business Combinations, to the Combined Financial Statements included herein). In the fourth quarter of 2017, we recognized an impairment charge of the full goodwill amount of $234.2 million related to ANBS. The Company estimated the fair value of ANBS using the discounted cash flow method taking

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into account expected long-term operating cash-flow performance. The primary driver of the goodwill impairment was due to the lower than expected long-term operating cash flow performance of the business unit as of the measurement period. We also assessed any potential impairment of acquired ANBS intangible assets comparing the undiscounted future cash flows to the carrying value of the assets. The undiscounted cash flow test indicated no impairment of the acquired intangible assets.

In August 2015, we acquired the “Automotive Solutions” business of M/A-COM Technology Solutions Holdings, Inc. (MACOM), which is a carve-out of the automotive business of MACOM, through the acquisition of all of the shares of M/A-COM Auto Solutions, Inc., for total consideration of approximately $138.5 million including earn-outs. The transaction has been accounted for as a business combination. The recognized goodwill of approximately $85 million mainly reflects the expected synergies from combining the Active Safety operations of the Company and the acquired “Automotive solutions” business from MACOM. The goodwill is expected to be fully deductible for tax purposes. From the date of acquisition through December 31, 2015, the MACOM business reported net sales of $30 million.

Significant Legal Matters

For discussion of legal matters we are involved in, see Note 15, Contingent Liabilities, to the Combined Financial Statements included herein.

Foreign Earnings

Substantially all of the Company’s non-U.S. earnings are permanently reinvested outside the U.S. The permanently reinvested earnings are not planned to be repatriated to the U.S. as they will be used to fund ongoing operations in Sweden.

Income Taxes

The Company has reserves for taxes that may become payable in future periods because of tax audits. At any given time, the Company may be subject to tax audits covering multiple years in several tax jurisdictions. Ultimate outcomes are uncertain but could, in future periods, have a significant impact on the Company’s cash flows. See Note 5, Income Taxes, to the Combined Financial Statements included herein.

Overview of Capital Structure

Related to the spin-off from Autoliv, we expect that Autoliv will provide total cash liquidity of approximately $1.0 billion, (funded through a mixture of new external funding obtained by Autoliv and existing cash at Autoliv). The capital contribution from Autoliv will help fund our planned operations until Veoneer reaches positive cash flow. The capital injection will be used for ongoing working capital requirements and capital expenditures and considers on-going investments in joint ventures, particularly Zenuity, as well as certain anticipated business combinations. Veoneer will not have any additional debt resulting from the transaction with Autoliv. We have based our cash sufficiency estimate on assumptions that may prove to be incorrect. If our assumptions prove to be incorrect, we could consume our available capital resources sooner than we currently expect or in excess of amounts that we currently expect, which could adversely affect our development activities. To the extent we generate more cash flow than expected, we may consider using this cash flow for undertaking new capital investment projects, strategic acquisitions, and return capital to shareholders and/or general corporate purposes.

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Contractual Obligations and Commitments

The table below reflects our contractual obligations as of December 31, 2017. As of March 31, 2018, the Company’s future contractual obligations have not changed materially.

AGGREGATE CONTRACTUAL OBLIGATIONS 1)	Payments due by Period
(DOLLARS IN MILLIONS)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Related party long-term debt		62.2		—		51.2		11.0		—
Operating lease obligations		21.6		7.9		10.1		3.5		0.1
Build-to-suit lease obligations		77.7		0.6		9.1		9.5		58.5
Pension contribution requirements 2)		4.8		4.8		—		—		—
Other non-current liabilities reflected on the balance sheet		18.1				16.5		0.1		1.5
Unconditional purchase obligations		20.0		10.0		10.0
Total	$	204.4	$	23.3	$	96.9	$	24.1	$	60.1

1) Excludes contingent liabilities arising from litigation, arbitration, regulatory actions or income taxes

2) Expected contributions for funded and unfunded defined benefit plans exclude payments beyond 2018

Contractual obligations include related party long-term debt, lease and purchase obligations that are enforceable and legally binding on the Company. Non-controlling interest is not included in this table.

Related party long-term debt: The related party debt obligations include two debt facilities between the Company and Autoliv as well as capital lease obligations. The capital lease obligations mainly relate to property and plants in Japan and are between Autoliv Nissin Brake Systems (a 51% owned subsidiary) and Nissin Kogyo. See Note 19, Relationship with Parent and Related Entities, to the Combined Financial Statements included herein.

Operating lease obligations: The Company leases certain offices, manufacturing and research buildings, machinery, automobiles and data processing and other equipment. Such operating leases, some of which are non-cancelable and include renewals, expire on various dates. See Note 16, Commitments, to the Combined Financial Statements included herein.

Build-to-suit lease obligations: The Company has entered into build-to-lease arrangements for certain buildings during 2017. See Note 16, Commitments, to the Combined Financial Statements included herein.

Pension contribution requirements: The Company sponsors defined benefit plans that cover eligible employees in Japan, Canada, and France. In 2018, the expected contribution to all plans, including direct payments to retirees, is $4.8 million, of which the major contribution is $3.2 million for our Canada pension plans. Due to volatility associated with future changes in interest rates and plan asset returns, the Company cannot predict with reasonable reliability the timing and amounts of future funding requirements, and therefore the above excludes payments beyond 2018. We may elect to make contributions in excess of the minimum funding requirements for the Japan, Canada, and France plans in response to investment performance and changes in interest rates, or when we believe that it is financially advantageous to do so and based on other capital requirements. This contribution amount does not include plans considered to be multiemployer with Autoliv. See Note 2, Summary of Significant Accounting Policies, and Note 17, Retirement Plans, to the Combined Financial Statements included herein.

Excluded from the above are expected contributions of less than $0.2 million due in 2018 with respect to our other post-employment benefit (OPEB) plan, which represent the expected benefit payments to participants as costs are incurred. See Note 17, Retirement Plans, to the Combined Financial Statements included herein.

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Other non-current liabilities reflected on the balance sheet: The Company has an earn-out payment related to the MACOM acquisition amounting to $14 million to be paid in year 2020 if the earn-out criteria are met as well as a holdback amount related to the Fotonic acquisition to be paid in 2019. See Note 3, Business Combinations, to the Combined Financial Statements included herein.

Unconditional purchase obligations: During the year ended December 31, 2017, the Company entered into an unconditional purchase obligation with $10 million to be paid in each of the 2018 and 2019 years. This amount will be reimbursed by Zenuity. There are no obligations other than short-term obligations related to inventory, services, tooling, and property, plant and equipment purchased in the ordinary course of business.

Autotech Venture Fund

On June 30, 2017, Veoneer committed to make a $15 million investment in Autotech Fund I, L.P. pursuant to a limited partnership agreement, and, as a limited partner, will periodically make capital contributions toward this total commitment amount. During the second half of 2017, Veoneer has in total contributed $3.8 million to the fund. The initial term of the fund is set to expire on December 31, 2025. This fund focuses broadly on the automotive industry and complements the Company’s innovation strategy, particularly in the areas of active safety and autonomous driving. Under the limited partnership agreement, the general partner has the sole and exclusive right to manage, control, and conduct the affairs of the fund.

Off-Balance Sheet Arrangements and Other Matters

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.

Non-U.S. GAAP Financial Measures

Organic Sales