Volvo Group – the fourth quarter 2013

The fourth quarter for the Volvo Group was characterized by a high activity level, with a number of product launches. We have entered into 2014 with a new product portfolio that will strengthen the Group’s competitiveness. During 2013, extra costs associated with the product renewal put pressure on the Group’s profitability, and this was also the case in the fourth quarter. In the fourth quarter, the Group’s net sales rose 8% year-on-year, and amounted to SEK 76.6 billion with an operating margin of 4.0% adjusted for restructuring charges and the write-down of Volvo Rents. The seasonally good operating cash flow of SEK 10.3 billion in our Industrial Operations contributed to the strengthening of our financial position.

• In the fourth quarter, net sales increased by 8% to SEK 76.6 billion (70.8). Adjusted for currency movements and acquired and divested units net sales increased by 13%.
• The fourth quarter operating income amounted to SEK 3,077 M (2,190) excluding restructuring charges of SEK 581 M (990) and a write-down of Volvo Rents of SEK 1,500 M. Including restructuring charges and the write-down operating income amounted to SEK 996 M (1,200). Currency exchange rates had a negative impact of SEK 1,007 M.
• Operating margin in the fourth quarter was 4.0% (3.1) excluding restructuring charges and the write-down of Volvo Rents. Including restructuring charges and the write-down operating margin amounted to 1.3% (1.7).
• In the fourth quarter, diluted earnings per share were SEK 0.24 (0.40).
• In the fourth quarter, operating cash flow in the Industrial Operations was positive in an amount of SEK 10.3 billion (4.7), which contributed to a reduction of the net financial debt-to-equity-ratio to 29.0%.
• The Board of Directors proposes a dividend of SEK 3.00 per share (3.00).
• Structural reduction of white-collar employees by 4,400 planned, including the previously announced reduction of 2,000 consultants and employees, of which a majority will be implemented during 2014.

“The year we have left behind us was characterized by extensive product launches, which involved a lot of hard work in all parts of the Group and an elevated cost level. Although we still have a couple of quarters ahead of us before we are completely through the Group’s largest product renewal ever, this year will be characterized by efficiency improvements, including a reduction in activities and costs, as well as personnel reductions. This will play an important part in the work to achieve the Group’s strategic and financial targets,” says Olof Persson, President and CEO.

For an English PDF version of the report, please click here: Volvo Group Q4 2013 PDF

For a mobile version of the report please click here: Volvo Group Q4 2013 Mobile

AB Volvo (publ) may be required to disclose the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 07.20 a.m. February 6, 2014.

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