Volvo Cars, the premium car maker, has reported a robust 66 per cent increase in operating profit in 2016 to SEK11.0bn compared to SEK6.6bn in 2015, as global sales hit a new record of 534,332 cars.
Net revenue for the period increased 10 per cent to SEK180.7bn compared to SEK164.0bn in 2015 while the operating profit margin improved significantly from 4 per cent in 2015 to 6.1 per cent in 2016.
The results provide the latest proof that Volvo’s ongoing financial and operational transformation is gathering pace. Global sales rose 6.2 per cent, underpinned by an 11.5 increase in China and an 18.1 rise in the US, Volvo’s two largest individual sales markets.
“Volvo is going from strength to strength,” said Håkan Samuelsson, president and chief executive. “The new models are successful, sales are at record levels and profits are up substantially reflecting the contribution of all our employees. On the back of these achievements, I foresee that 2017 will also be a record year in terms of sales.”
The last financial year was an important one for Volvo Cars.
For the first time in its 89 year history, it conducted a €500m bond issue in May, followed in November by a SEK3bn bond issue. In December, it raised a further SEK5bn from the sale of equity to three institutions.
On the operational front, Volvo Cars completed the roll-out of its top-of-the-range 90 series during 2016, successfully repositioning the brand as a genuine premium competitor.
Volvo Cars also announced two significant new alliances in 2016 that reinforce its leading position in autonomous driving, connectivity and safety.
In August, it joined forces with Uber, the ride-sharing company, to develop next generation autonomous driving cars. In September it announced plans to create a new joint venture with Autoliv, the worldwide leader in automotive safety systems, to develop autonomous driving software, the first time a leading premium car maker has joined forces with a tier one supplier to develop new ADAS and AD technologies.
“With these alliances, Volvo Cars is positioning itself for coming changes in the automotive industry. These themes of sustainable profitability, rising sales and new business initiatives will be continued in 2017,” said Mr Samuelsson.
Volvo Car Group in 2016
For the 2016 financial year, Volvo Car Group recorded an operating profit of 11,014 MSEK (6,620 MSEK in 2015). Revenue over the period amounted to 180,672 MSEK (164,043 MSEK). For the full year 2016, global sales reached a record 534,332 cars, an increase of 6.2 per cent versus 2015. The record sales and operating profit cleared the way for Volvo Car Group to continue investing in its global transformation plan.
About Volvo Car Group
Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 534,332 cars in 2016 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.
As of December 2016, Volvo Cars had over 31,000 employees worldwide. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).