kscarbel2 Posted July 20, 2018 Share Posted July 20, 2018 Volvo Group Press Release / October 20, 2017 In Q2 2018 net sales increased by 18% to SEK 103.6 billion (87.9). Adjusted for currency movements and acquired and divested units sales increased by 16%. Adjusted operating income amounted to SEK 11,519 M (8,402), corresponding to an adjusted operating margin of 11.1% (9.6). Adjusted operating income in Q2 2018 excludes a capital gain of SEK 818 M. Reported operating income amounted to SEK 12,337 M (8,402). Currency movements had a positive impact on operating income of SEK 672 M. Diluted earnings per share of SEK 4.53 (2.86). Operating cash flow in the Industrial Operations amounted to SEK 8.3 billion (11.9). CEO’S Comments Demand in our main markets was solid in the second quarter of 2018, and both our vehicle and service business continued to grow at a good pace. Our net sales increased by 18% to SEK 104 billion, we improved the adjusted operating income by SEK 3 billion to SEK 11.5 billion and we reached an adjusted operating margin of 11.1% (9.6). This is the first time that the Volvo Group’s sales have exceeded SEK 100 billion in a single quarter and it is also the first time the operating margin is above 10%. With an operating cash flow of SEK 8.3 billion in the Industrial Operations we continue to have a strong financial position. Our truck business had a good sales development and increased profitability despite a continued stretched situation in parts of the supply chain, primarily in North America. Truck deliveries increased by 14% and net sales by 16% to SEK 65.2 billion. All truck business areas improved their profitability, which contributed to increasing the operating income to SEK 7.2 billion (5.3) with an operating margin of 11.1% (9.4). Demand in the European truck market continued to be on a good level with high freight activity, which supports our customers’ profitability. In North America demand increased strongly, primarily driven by growth in the highway segment. In total, net order intake for trucks increased by 10% globally. Together with our suppliers we are working hard to meet demand and reduce delivery times to our customers. However, given the strong demand, we expect the supply-chain constraints to remain in the near-term. Construction Equipment continued the solid development with both increased sales and improved profitability. High demand in most markets in combination with competitive products contributed to the order intake increase of 41%. Net sales rose by 32% to SEK 24.4 billion and the adjusted operating margin improved to 15.1% (13.3). The increased sales volumes and maintained cost level resulted in a substantial profit increase. Buses’ sales of SEK 6.9 billion were on about the same level as in the preceding year while the operating margin amounted to 3.8% (4.6). Volvo Penta’s sales continued to increase and the growth is paired with improved profitability. Net sales increased by 15% to SEK 3.6 billion and the operating margin improved to 19.9% (15.5) during the seasonally strong second quarter. Our customer financing operations in Financial Services increased the new financing volume and continued to have low credit losses as a result of strict credit approvals and good customer profitability. Return on equity increased to 15.0% (14.0). We continue to invest in new products and technologies to the benefit of our customers. In the second quarter the activity level was high. Among the news was that Mack Trucks will have a fully electric refuse truck in operation in 2019 at one of our major customers in North America, New York City Department of Sanitation. Renault Trucks presented their second generation of fully electric vehicles with a complete range from 3.5 to 26 tonnes for use in cities. Volvo Buses launched the biggest renewal of the European product portfolio for long-distance coaches in more than 20 years. In the US we showcased platooning together with FedEx on a highway in North Carolina. This was the first on-highway demonstration of platooning technology between a major truck manufacturer and a transportation company in the U.S. Volvo Penta demonstrated an advanced system for self-docking; a solution for one of boating’s most stressful maneuvers, with a planned launch in 2020. All of these new products will strengthen our future competitiveness. Our strategy of growing in services is also generating results, and in the quarter the currency-adjusted service sales grew by 8%, with all our business segments improving their performance. We see further potential for growth on the back of investments in increased workshop capacity, growing vehicle populations and higher penetration of service contracts. The Volvo Group is well-invested with strong assets and our strategy serves both our customers and ourselves well. We continue our efforts to improve efficiency in all parts of the Group and in the entire supply chain, and even though we are moving in the right direction there is still potential for improvement. Finding the balance between investing in new technologies and areas with good potential while at the same time maintaining cost consciousness and flexibility will continue to be in focus during the year. Martin Lundstedt President and CEO Volvo Group 2nd Quarter Report - Volvo-Q2-2018--PDF-(PDF, 1.1 MB) Quote Link to comment Share on other sites More sharing options...
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