kscarbel2 Posted May 4, 2017 Share Posted May 4, 2017 Volvo Group Press Release / April 25, 2017 In Q1 2017 net sales increased by 8% to SEK 77.4 billion (71.7). Adjusted for currency movements and acquired and divested units sales increased by 4%. Adjusted operating income amounted to SEK 7,029 M (4,459), corresponding to an adjusted operating margin of 9.1% (6.2). Currency movements had a positive impact on operating income of SEK 289 M. Operating cash flow in the Industrial Operations amounted to SEK 1.5 billion (-10.4). UD Trucks launched all-new heavy-duty Quon and medium-duty Croner truck ranges. New Volvo VNR regional haul tractor launched in North America. CEO’S COMMENTS Continued improved profitability In the first quarter, both the Group’s sales and profitability increased. Net sales increased by 8% and amounted to SEK 77.4 billion. Volumes of heavy-duty and medium-duty trucks were down by 4%, which was off-set by 34% higher volumes of construction equipment. The good order trend from the end of last year continued, with order intake for trucks being up by 11% to 55,600 vehicles and order intake for Volvo CE rising 34% to 17,500 machines. The trend with increased services sales also continued with a positive development in all segments and markets. Sales of services grew by 6% currency adjusted, driven by increased focus in our sales and service operations as well as high fleet utilization for our customers. The Group’s adjusted operating income improved to SEK 7.0 billion, with earnings improvements coming from all business areas with the most significant impact from Trucks and Volvo CE. The adjusted operating margin was 9.1%. Demand for trucks in Europe remained high. Our customers continue to benefit from a good freight environment and we see good demand also in the construction segment. When it comes to market shares, we have started the year well, noting a 17.6% share for Volvo and Renault Trucks growing to 8.7%. After the downwards correction in the long haulage segment in 2016, the North American market seems to be bottoming out. We see positive signs of increased order activity. In April, Volvo Trucks launched the new Volvo VNR regional haul tractor, marking the first step in the renewal of the Volvo range in North America. With its modern, ergonomic and more aerodynamic cab, the new vehicle will significantly improve Volvo’s position in the regional haul market. Product features are focused on delivering the maneuverability, productivity and safety that are so important to customers in this segment. Demand for trucks in Japan remained at a high level. With the launch of new heavy- and medium-duty truck ranges with associated services, UD Trucks takes important steps in strengthening its product portfolio. The all-new heavy-duty UD Quon delivers higher levels of performance across features compared to its predecessor and also addresses a broader market by catering to a wider range of customer applications. In addition, UD Trucks extended its product offer aimed specifically at growth markets by complementing the UD Quester heavy-duty range with the all-new UD Croner range of medium-duty trucks. The first quarter also saw growing truck markets in India and China. Both our joint-ventures, VECV and DFCV, increased sales as well as profitability, contributing to the improved earnings for the Group’s truck business. It is also great to note that the European truck segment in Asia is growing, with a 41% volume increase for Volvo Trucks, which holds a strong position in this segment. This development is fuelled by higher commodity prices, which has sparked a recovery in the mining industry as well as a rapid growth of e-commerce in China. Customers operating in these industries value the uptime and productivity that our Volvo trucks deliver. All in all, the improved performance in our trucks business resulted in an operating margin of 9.9%. The recovery in the mining industry is good also for Volvo CE. After years of tough market conditions, the Volvo CE business is growing again, with a sales increase of 30%. Higher sales volumes linked with increased internal efficiency and a lower cost base resulted in an operating margin of 10.0%. Volvo CE is on the right track with the performance improvement plan yielding results. However, we see further opportunities to structurally improve the long-term competitiveness of Volvo CE. Volvo Buses delivered 10% fewer buses and had an operating margin of 1.8%, which was a slight improvement. Volvo Penta grew sales by 15%, while maintaining an operating margin of 15.5%. The Volvo Penta team continues to successfully drive and develop the industrial engine business. Volvo Financial Services’ credit portfolio continued to perform well with low credit losses. Operating income increased and VFS had a return on equity of 13.8%. With the new truck ranges launched this quarter, we take an important step in strengthening our product portfolios in North America, Japan and growth markets in Asia. Our strategy, with brand and business area driven organizations with decentralized accountability, is developing well with an increased focus on driving the service business. We are becoming a faster and more agile organization that is closer to customers. Martin Lundstedt President and CEO Report on the first quarter 2017(PDF, 0.7 MB) Quote Link to comment Share on other sites More sharing options...
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