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Volvo Cars reports first quarter operating profit of SEK3.1bn

 

Volvo Cars, the premium car maker, has announced a robust start to 2016, with operating profit for the first three months of the year increasing strongly to SEK3.1bn and the operating profit margin reaching 7.5 per cent, as sales improved in Europe, Asia and the US.

 

The Swedish company reported that global retail sales between January and March rose 11.9 per cent to 120,591 units, compared with 107,721 in 2015, while net revenue increased to SEK41.7bn, up 24 per cent compared with 2015’s SEK33.6bn.

 

The revenue and profit increase was driven primarily by volume and sales mix, specifically the margin-enhancing effects of the all-new XC90 SUV, sales of which hit 20,800 in the first three months of the year.

 

“The new XC90 proves that customers like what they see from the transformed Volvo Cars – one in five new Volvo cars sold in the first quarter was an XC90,” said Håkan Samuelsson, president and chief executive. “We also unveiled the new S90 saloon and V90 estate in the first quarter, and we expect these cars to have a similar positive impact on sales.”

 

Key figures

Q1 2016

Q1 2015

Net revenue, MSEK

41,757

33,651

Operating income, EBIT, MSEK

3,145

-11

Net income, MSEK

2,069

-241

EBITDA, MSEK

5,588

2,237

Cash flow from operating and investing activities, MSEK

-323

-988

EBIT margin, %

7.5

0.0

EBITDA margin, %

13.4

6.6

 

In Western Europe, the company continued its strong performance and reported retail sales of 49,305 units (2015: 43,522), an increase of 13.3 per cent, during the first quarter. Germany, UK, Spain and France were the main drivers behind the positive development.

 

In China, retail sales in the first quarter brought China back to a positive development trajectory, with an increase of 13.4 per cent, reaching 19,636 units (2015: 17,311). The XC60 was the best-selling model, with retail sales of 8,794 (2015: 8,029).

 

In Sweden, previous strong sales trends continued, selling 16,047 (14,093) units and recording an increase of 13.9 per cent.

 

In the US, Volvo Cars’ turnaround continued to gather pace. Sales rose 19.2 per cent compared with the same period last year, to 16,361 (2015: 13,723).

 

“We anticipate the full-year retail sales to increase. The XC90 will, with a whole year of production, be a main driver. During the latter part of the year, the start of production of the S90 and the V90 will also contribute to the increased sales. Based on the volume increase, albeit influenced by launch costs for the new models reaching markets during the year, we anticipate our full-year net revenue and operating income to increase year over year,” said Håkan Samuelsson.

 

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Volvo Car Group in 2015

For the 2015 financial year, Volvo Car Group recorded an operating profit of 6,620 MSEK (2,128 MSEK in 2014). Revenue over the period amounted to 164,043 MSEK (137,590 MSEK). For the full year 2015, global sales reached a record 503,127 cars, an increase of 8 per cent versus 2014. 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 503,127 in 2015 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 2015, Volvo Cars had almost 29,000 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).

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