Volvo Cars credit rating upgraded by Standard & Poor’s
Volvo Cars, the premium car maker, has had its credit rating upgraded by Standard & Poor’s, the global credit rating agency, from BB with a positive outlook to BB+ with a stable outlook, underlining S&P’s faith in its ongoing global financial and operational transformation.
The new rating places Volvo Cars one step below an investment grade rating.
Volvo Cars is also rated Ba2 with a stable outlook by Moody’s Investors Service, a global credit rating agency.
Volvo Cars has been implementing a broad transformation plan since it was acquired by Zhejiang Geely Holdings, the Chinese industrial holding company, in 2010. This transformation has seen it return to sustainable profitability and achieve a series of record sales years.
S&P’s decision to upgrade the company’s rating highlights its faith in the credibility of Volvo’s ongoing transformation. The company expects to report another record sales year in 2017.
Volvo Cars reported an operating profit of SEK3.5 billion for the first three months of the year, up 11 per cent from SEK3.1 billion during the same period last year. The increase was mainly driven by strong demand for the company’s XC60 and 90 series cars.
It said its first quarter operating profit margin was 7.3 per cent, down from 7.5 per cent last year. Profitability was partly offset by costs related to the launch of the new 90 series cars and the new XC60, as well as continuous investments in new technologies and a rising number of employees. Since the first quarter of 2016, Volvo Cars has welcomed almost 5,000 new employees, bringing the total global work force to 33,000.
Global retail sales increased by 7.1 per cent to 129,148 cars in the January to March period, resulting in a first quarter revenue of SEK47.6 billion, up 13 per cent from SEK42.0 billion last year.
This information is information that Volvo Car AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 10.45 CET on May 10, 2017.
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).