Volvo Group Net Sales Grow 27 Percent in Second Quarter

Volvo Group last week reported that sales in the second quarter ended June 30, continued to increase on a gradual recovery in demand in most of its markets. Net sales in the quarter increased 27 percent to SEK 68.8 billion (about U.S. 9.41 billion) from SEK 54.0 billion (U.S. $7.39 billion) in the year-ago period.

Second-quarter operating income amounted to SEK 4.77 billion (U.S. $652.6 million) including a write-down of assets in Volvo Aero Services amounting to SEK 223 million (U.S. $30.5 million) from a loss of SEK 6.88 billion (U.S. $941.7 million) in the second quarter of 2009. Operating margin in the second quarter was 6.9 percent, an improvement from a negative 12.8 percent in the year-ago quarter.

In the second quarter basic and diluted earnings per share amounted to SEK 1.55 (U.S. $0.21), an improvement over negative SEK 2.75 (U.S. $0.38) a year ago.

According to the company, profitability continues to improve thanks to the sales increase, strict control over costs and a good productivity development in its industrial system. Adjusted for exchange-rate fluctuations, the group’s sales rose 31 percent compared with the second quarter of 2009. Operating income reached SEK 4.8 billion (U.S. $656.7 million) in the second quarter with an operating margin of 6.9 percent. Operating cash flow in the Industrial Operations was strong and amounted to SEK 8.5 billion (U.S. $1.16 billion), an improvement from negative SEK 2.9 billion (U.S. $396.8 million) in the same period last year.

“In the near term, we will focus on ensuring that planned production increases in most of our manufacturing facilities run as efficiently as possible, with minimum capital being tied up,” said Leif Johansson, president and CEO. “The pace in the recovery in demand has been rather moderate, which is positive as it gives us a good opportunity to continue with the activities that contribute to further increasing productivity and efficiency. In this area, employees in all parts of our operations have made significant contributions.”

Headquartered in Göteborg, Sweden, the Volvo Group is one of the world’s leading manufacturers of trucks, buses and construction equipment, drive systems for marine and industrial applications, aerospace components and services. The Group also provides complete solutions for financing and service. The Volvo Group, which employs about 100,000 people, has production facilities in 19 countries and sells its products in more than 180 markets.

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