Volvo Cars has in dialogue with its Board of Directors issued the following revised outlook statement for the full year 2020.
‘Considering the uncertain economic outlook, it is challenging to guide on 2020 performance. The weakening market and production disruptions will impact the first half-year results negatively as sales, profit and cash flow are expected to be lower than last year’s, and it will be challenging to recover the impact during the remainder of the year. Despite uncertainty about economic outlook, Volvo Cars continues to invest in new technologies and products to safeguard its long-term future.’
The new outlook statement comes in the light of the ongoing coronavirus outbreak. As the outbreak has spread globally, Volvo Cars has seen negative effects on its business from a weakening market and production disruptions, which are expected to continue as the situation evolves.
On a positive note, in China, Volvo Cars’ four manufacturing plants have reopened after an extended closure period following the Chinese New Year. Current showroom traffic indicates a recovery of the Chinese car market which clearly demonstrates the advantages of a global footprint.
Until the same positive development can be seen in Europe and the US, and in order to safeguard jobs and limit the long-term impact on its business, Volvo Cars has taken actions to temporarily close its manufacturing plants in Europe and the US, and reduce working hours for its office employees.
Volvo Car AB has also approved its annual report with the previously reported strong full-year result for 2019. It has, after a careful assessment of the Group’s liquidity position, decided to declare a dividend to its shareholders of SEK 180 million, whereof SEK 35 million to the preference shareholders and the rest to the main shareholder. An additional dividend will be declared by the Chinese entity Daqing Volvo Car Manufacturing Co.Ltd., amounting to CNY 4 bn which will be equally distributed to its two owners, Geely Holding and Volvo Cars.
The payment of the dividends will be executed in two steps: one at the end of June and one at the end of October 2020.
This information is information that Volvo Car AB (publ) 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 16.00 CET on 26 March, 2020.
Volvo Car Group in 2019
For the 2019 financial year, Volvo Car Group recorded an operating profit of 14.3 BSEK (14.2 BSEK in 2018). Revenue over the period amounted to 274.1 BSEK (252.7 BSEK). For the full year 2019, global sales reached a record 705,452 (642,253) cars, an increase of 9.8 per cent versus 2018. The results underline the comprehensive transformation of Volvo Cars’ finances and operations in recent years, positioning the company for its next growth phase.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected premium car brands in the world, with sales of 705,452 cars in 2019 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding of China since 2010.
In 2019, Volvo Cars employed on average approximately 41,500 (41,500) full-time employees. Volvo Cars’ head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars’ head office for APAC is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China), and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected into a number of business ambitions: for example, by the middle of this decade, it aims for half of its global sales to be fully electric cars and to establish five million direct consumer relationships. Volvo Cars is also committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.