Volvo Group - the third quarter 2020

Rhea-AI Summary

Volvo Group reported Q3 2020 net sales of SEK 76.9 billion, a 16% decline compared to last year, primarily due to weaker order intake in the preceding quarter. Adjusted operating income was SEK 7,217 million with a margin of 9.4%. The company noted a strong positive shift in transport activity and customer sentiment, leading to increased orders for trucks and construction equipment. Despite the sales drop, operating cash flow was notably positive at SEK 11,712 million, indicating operational resilience amidst the pandemic.

Positive

• Transport activity and customer sentiment improved toward the end of Q3.
• Increased order intake for trucks, engines, and construction equipment.
• Operating cash flow in Industrial Operations was positive at SEK 11,712 million.

Negative

• Net sales decreased by 16% year-over-year, amounting to SEK 76.9 billion.
• Adjusted operating income dropped to SEK 7,217 million from SEK 10,885 million.
• Diluted earnings per share fell to SEK 2.81 from SEK 3.67.

GOTHENBURG, Sweden, Oct. 16, 2020 /PRNewswire/ -- "In Q3, utilization of trucks and machines gradually improved as COVID-19 restrictions were eased. Towards the end of the quarter transport activity was back on roughly the same level as a year ago in most markets. This led to an improved sentiment among our customers, which is reflected in increased order intake for trucks, engines and construction equipment as well as a gradually improving service business. In the last two quarters, our organization and business partners have shown great volume flexibility by first handling a dramatic volume decline and then a steep recovery with good productivity maintained. However, the weak order intake in the previous quarter impacted the Group's net sales in Q3, which amounted to SEK 76.9 billion - 16% lower than a year ago adjusted for currency. Our service business is more stable, with currency-adjusted revenues coming down by only 1% compared to Q3 last year and with a sequential improvement. Despite the sales decline we achieved an adjusted operating margin of 9.4% (11.0) thanks to significant cost reductions," says Martin Lundstedt, President and CEO.

• In Q3 2020, net sales amounted to SEK 76.9 billion (98.7). Adjusted for currency movements, net sales decreased by 16%.
• Adjusted operating income amounted to SEK 7,217 M (10,885), corresponding to an adjusted operating margin of 9.4% (11.0).
• Reported operating income amounted to SEK 7,508 M (10,885).
• Currency movements had a negative impact on operating income of SEK 1,499 M.
• Diluted earnings per share amounted to SEK 2.81 (3.67).
• Operating cash flow in the Industrial Operations was positive in an amount of SEK 11,712 M (1,831).

Press and Analyst Conference Call. An on-line presentation of the report, followed by a question-and-answer session will be webcast starting at 09.00 CEST. More information is available on the Volvo Group Investor page. 

This information is information that AB Volvo (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07.20 CEST on October 16, 2020.

Aktiebolaget Volvo (publ) 556012-5790
Investor Relations    
SE-405 08 Göteborg, Sweden
Tel +46 31 66 00 00    
www.volvogroup.com

Contact Media Relations:
Claes Eliasson              +46 765 53 72 29

Contacts Investor Relations:
Christer Johansson      +46 739 02 25 22
Johan Bartler                +46 739 02 21 93
Anders Christensson    +46 765 53 59 66

October 16, 2020
 

For more information, please visit volvogroup.com
The Volvo Group drives prosperity through transport and infrastructure solutions, offering trucks, buses, construction equipment, power solutions for marine and industrial applications, financing and services that increase our customers' uptime and productivity. Founded in 1927, the Volvo Group is committed to shaping the future landscape of sustainable transport and infrastructure solutions. The Volvo Group is headquartered in Gothenburg, Sweden, employs almost 100.000 people and serves customers in more than 190 markets. In 2019, net sales amounted to about SEK 432 billion (EUR 40.5 billion). Volvo shares are listed on Nasdaq Stockholm.

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https://mb.cision.com/Main/39/3217160/1319848.pdf	201016-volvo-group-report-q3-2020-eng.pdf
https://news.cision.com/ab-volvo/i/1860x1050-volvo-trucks-vnr-lights,c2839157	1860x1050-volvo-trucks-vnr-lights
https://mb.cision.com/Public/39/3217160/b7a2624b523096ea.pdf	201016-volvo-group-q3-press-release-eng

 

View original content:http://www.prnewswire.com/news-releases/volvo-group--the-third-quarter-2020-301153856.html

SOURCE AB Volvo

FAQ

What were Volvo Group's net sales in Q3 2020?

Volvo Group reported net sales of SEK 76.9 billion in Q3 2020.

How did Volvo Group's adjusted operating income change in Q3 2020?

The adjusted operating income was SEK 7,217 million in Q3 2020, down from SEK 10,885 million.

What was the diluted earnings per share for Volvo Group in Q3 2020?

The diluted earnings per share for Q3 2020 were SEK 2.81.

What factors affected Volvo Group's sales in Q3 2020?

Sales were impacted by weak order intake in the previous quarter, leading to a year-over-year decline.

What improvements did Volvo Group see in Q3 2020 despite sales decline?

Despite the sales decline, Volvo Group noted improved transport activity, customer sentiment, and positive operating cash flow.