Volvo Group – the fourth quarter and full year 2012

In the fourth quarter the Volvo Group’s net sales declined to SEK 71.8 billion (86.5) as a result of lower economic activity in many of our markets and a continued uncertainty about the future direction that makes our customers more cautious. However, overall we have maintained our market positions with some regional variations. Operating income declined to SEK 1,121 M (6,955). For the full-year 2012, the Volvo Group’s net sales amounted to SEK 303.6 billion (310.4) with an operating income of SEK 17.6 billion (26.9) and an operating margin of 5.8% (8.7).

• In the fourth quarter, net sales decreased by 17% to SEK 71.8 billion (86.5). Adjusted for currency movements and acquired and divested units, sales decreased by 12%.
• The fourth quarter operating income amounted to SEK 1,121 M (6,955) including restructuring charges of SEK 990 M and a positive impact of SEK 254 M from the divestment of Volvo Aero.
• Operating margin in the fourth quarter was 1.6% (8.0).
• In the fourth quarter, basic and diluted earnings per share were SEK 0.39 (2.33).
• In the fourth quarter, operating cash flow in the Industrial Operations was positive in an amount of SEK 4.7 billion (10.7) primarily driven by a SEK 5.4 billion reduction in inventories.
• Net financial debt reduced by SEK 12 billion and equal to 29% of equity in the Industrial Operations.
• The Board of Directors proposes a dividend of SEK 3.00 per share (3.00).
• Volvo Group to become world’s largest heavy-duty truck manufacturer following strategic alliance with Chinese company Dongfeng Motor Group.

“On a Group level the first quarter of 2013 will also be difficult as a result of the low order intake in many markets during the fourth quarter of 2012. Profitability will be affected by low capacity utilization, high spend levels in research and development and costs associated with the launch of new products. However, we expect market conditions to gradually improve during the course of 2013 when economic growth across the world gains momentum.” Olof Persson, President and CEO.

   
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