Jump to content

Volvo Group – 2016 3rd Quarter Earnings Report


Recommended Posts

Volvo Group Press Release  /  October 21, 2016

In the third quarter, profitability improved slightly as better underlying performance offset the impact from lower volumes. Sales decreased by 6% to SEK 69 billion. The adjusted operating income amounted to SEK 4.8 billion, corresponding to an operating margin of 7.0% due to a positive cost development and a strong European truck market.

Volumes in our truck business were down in all markets except Europe where activity remained high.

Total deliveries of trucks decreased by 13%.

The downward correction in the North American market continued and there is still a need to take down dealer inventories. Production volumes have gradually been adjusted downwards to meet the lower demand and further steps will be taken.

Expectations of unit growth in other truck markets are limited and therefore focus will be on the service business and continuous improvements. The truck business continued to improve its profitability and the adjusted operating margin increased to 8.2% despite 13% lower volumes.

In September, IAA, Europe’s leading trade show for transport and logistics took place. During the show, the Volvo FH was awarded first position in the prestigious Fehrenkötter-test, with victories in both fuel consumption and total cost of ownership. The multi-brand test stretches over 2.5 years in real-life customer operations and shows a leading position for Volvo FH in Euro 6-execution.

During the quarter Volvo’s fully autonomous truck was the first in the world to be tested in operations deep underground in the Kristineberg Mine in Sweden. The self-driving truck is part of a development project aimed at improving the transport flow and safety in the mine.

Volvo CE operates in a market with continued low demand. Deliveries are the same as last year’s third quarter but sales are down 3%. Operating margin improved slightly to 5.2% despite flat volumes and an un-favorable product mix. On the positive side orders increased slightly across all regions but from low levels in the BRIC regions. We see no immediate increase of demand and continue the internal work to focus on Volvo CE’s strongholds. During the quarter Volvo CE displayed a range of innovations such as a hybrid wheel loader with the potential to improve fuel efficiency by up to 50% and autonomous wheel loader and hauler prototypes.

Volvo Buses’ deliveries were down by 7% in the quarter and while the development was good in Europe, deliveries in Asia and South America declined. The profitability decreased slightly, impacted by negative currency development. Volvo Buses also had a successful week at IAA and showed several new features such as Volvo Dynamic Steering, which benefits the driver by facilitating the operation of the bus. In addition, the market leading range of sustainable public transport solutions attracted a lot of interest.

Volvo Penta continues to have a good performance with a strong operating margin of 14.5%. This is largely due to a strong development in Europe and innovative products, giving Volvo Penta a competitive edge in the market.

Volvo Financial Services is reinforcing activities to deliver bundled solutions to the customer. This is further leveraging VFS contribution to grow the Group’s service business. The credit portfolio continued to perform well and VFS had a return on equity of 13.3%.

Given current market conditions we will continue to have strong focus on cost control and optimized utilization of our regional value-chains.

The outlined strategy, with Brand and Business Area driven organizations with decentralized accountability, continues to develop according to expectations. The aim is to get even more customer-centric organizations by capturing the service potential, simplifying our business portfolios and driving efficiency and motivation through continuous improvements.

Martin Lundstedt, President and CEO


• In Q3 2016, net sales decreased by 6% to SEK 68.3 billion (73.3). When adjusted for currency movements and acquired and divested units, the sales decrease was also 6%.

• Adjusted operating income in Q3 2016 amounted to SEK 4,846 M (5,087), corresponding to an operating margin of 7.0% (6.9). Adjusted operating income includes a provision for the settlement with the European Commission of SEK 190 M in Q3 2016 and restructuring charges of SEK 434 M in Q3 2015.

• Currency movements had a negative impact on operating income of SEK 45 M.

• Operating cash flow in the Industrial Operations was positive in an amount of SEK 2.1 billion (neg. 3.3).



The Numbers

In Q3 2016, sales (deliveries) from Volvo Group’s truck operations amounted to 41,155* units, down 13 percent from 47,338 units in Q3 2015, and down 22 percent from 52,670 units in Q2 2016.

Volvo brand truck sales (overall) fell to 22,353 units globally, down 12 percent from 25,495 units in Q3 2015, and down 21 percent from 28,255 units in Q2 2016.

Volvo brand truck sales in North America plunged to 4,645 units, down 49 percent from 9,147 units in Q3 2015, and down 32 percent from 6,786 units in Q2 2016.

Volvo brand truck sales in Europe rose to 11,585 units, up 23 percent from 9,389 units in Q3 2015, but down 20 percent from 14,430 units in Q2 2016.

Volvo brand truck sales in Africa/Oceania (includes Australia, New Zealand) rose to 1,216 units, nearly unchanged from 1,210 units in Q3 2015, but down 17.5 percent from 1,454 units in Q2 2016.

Mack brand truck sales (overall) plunged to 3,963 units globally, down 40 percent from 6,623 units in Q3 2015, and down 30 percent from 5,588 units in Q2 2016.

Mack brand truck sales in North America plunged to 3,581 units, down 41 percent from 6,105 units in Q3 2015, and down 68 percent from 5,192 units in Q2 2016.

Mack brand truck sales in South America plunged to 146 units, down 49 percent from 287 units in Q3 2015, and down 7 percent from 157 units in Q2 2016.

Mack brand truck sales in Africa/Oceania (includes Australia, New Zealand) rose to 236 units, up 8 percent from 218 units in Q3 2015, but down 0.8 percent from 238 units in Q2 2016.

Renault Truck brand sales (overall) fell to 9,920 units globally, down 5 percent from 10,495 units in Q3 2015, and down 27.3 percent from 13,650 units in Q2 2016

Renault Truck brand sales in Europe fell to 8,925 units, down 1 percent from 9,019 units in Q3 2015, and down 27.5 percent from 12,304 units in Q2 2016

UD (Nissan Diesel) brand sales (overall) rose to 4,919 units, up 4 percent from 4,725 units in Q3 2015, but down 5 percent from 5,177 units in Q2 2016.

UD (Nissan Diesel) brand sales in Asia rose to 4,022 units, up 11 percent from 3,611 units in Q3 2015, but down 3 percent from 4,147 units in Q2 2016.


Total Global Deliveries by Brand

                                  Q3 2016          Q3 2015          % Change       

Volvo                           22,353             25,495             -12

Renault Trucks            9,920             10,495               -5

UD (Nissan Diesel)      4,919               4,725                 4

Mack                            3,963               6,623               -40

Total Deliveries         41,155            47,338               -13


Total Global Deliveries by Truck Size

                                                       Q3 2016          Q3 2015          % Change       

Heavy Duty (>16 metric tons)        34,255             40,831                -16

Medium Duty (7-16 metric tons)    3,328               3,204                    4

Light Duty (<7 metric tons)             3,572               3,303                    8

Total Deliveries                            41,155              47,338                -13


Total Global Deliveries by Region

                                  Q3 2016          Q3 2015          % Change       

Europe                        20,510            18,408                11

North America             8,309             15,329               -46

South America             2,413               3,060               -21

Asia                              6,923                7,173                -3

Africa & Oceania*       3,000                3,368               -11

Total Deliveries         41,155              47,338              -13

* includes Australia, New Zealand


* Excluding Dongfeng, Dongvo (UD China) and VE Commercial Vehicles (Eicher)


For a PDF version of the report, please click here: http://www.volvogroup.com/en-en/events/2016/oct/report-on-the-third-quarter-2016.html#Select%20any%20one%20Anchor%20Name%20from%20below%20list%20%20



Link to comment
Share on other sites

Renault Trucks’ global sales results.....versus the Volvo brand:

January 2015              Renault up 24%           Volvo down 4%

February 2015            Renault up 26%           Volvo down 13%

1st quarter 2015         Renault up 35%           Volvo down 8%

April 2015                   Renault up 12%            Volvo up 9%

May 2015                    Renault up 5%              Volvo down 1%

2nd quarter 2015        Renault up 7%              Volvo down 4%

July 2015                     Renault up 8%              Volvo down 5%

August 2015               Renault up 60%           Volvo down 6%

3rd quarter 2015        Renault up 20%           Volvo down 2%

October 2015              Renault up 16%           Volvo down 1%

November 2015          Renault up 54%           Volvo down 10%

4th quarter 2015         Renault up 29%           Volvo down 7%

Full Year 2015             Renault up 22%           Volvo down 4%

1st quarter 2016         Renault up 8%            Volvo down 8%

2nd quarter 2016        Renault up 12%           Volvo down 9%

3rd quarter 2016        Renault down 5%         Volvo down 12%

Link to comment
Share on other sites

Truck maker Volvo's sales slip across most markets

MarketWatch  /  October 21, 2016

Swedish truck maker Volvo AB posted a 15% decline in third-quarter net profit on Friday due to lower truck sales in all its markets except Europe.

Volvo said net profit for the three months to Aug. 31 totaled 2.59 billion Swedish kronor ($290 million), compared with SEK3.07 billion in the same period last year.

Revenue for the period ending Sept. 30 fell 6% to SEK68.76 billion from SEK73.31 billion last year.

Analysts polled by FactSet had expected revenue of SEK69.6 billion and net profit of SEK3.09 billion.

Volvo said its truck business, which accounts for about two-thirds of total sales, decreased by 13%.

Chief Executive Martin Lundstedt said further steps will be taken to adjust production volumes downwards in North America.

"The downward correction in the North American market continued and there is still a need to take down dealer inventories," Mr. Lundstedt said.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.
  • Create New...