Volvo Cars reports 8 per cent increase in Q1 2024 core operating profit to SEK 6.8 billion
- Q1 revenue was SEK 93.9 bn (SEK 95.7 bn in Q1 2023)
- Q1 operating income (excl. JVs and associates) was SEK 6.8 bn (SEK 6.3 bn in Q1 2023)
- Q1 EBIT margin (excl. JVs and associates) was 7.2 per cent (6.6 per cent in Q1 2023)
- Q1 Basic earnings per share was SEK 1.12 (
SEK 1.21 in Q1 2023) - Q1 fully electric car sales share at 21 per cent (18 per cent in Q1 2023)
The interim report for the first quarter results can be found here.
During the first quarter, retail sales rose by 12 per cent year-on-year to 182,687 cars, with a new all-time sales record for a single month in March. A strong performance in
Revenue for the period came in at
41 per cent of
First-quarter gross margins on the company's EVs improved to 16 per cent from 7 per cent in the same quarter last year, which is among the best in the industry. This reflects the strong customer demand for the new Volvo EX30 SUV, which is set to bring in gross margins of 15-20 per cent, as well as improved margins on the EX40 and EC40 models. Volvo Cars will continue to work diligently to further close the margin gap with combustion engine-powered cars.
"We have had a strong start to the year, with our first quarter results laying a solid foundation for the year ahead," says
"At the same time, we secured shareholder support to distribute a majority of our shareholding in Polestar, allowing us to fully focus on our core operations," adds
EX30 as a crucial growth driver
Its first quarter performance demonstrates the prospects of the EX30. In only a few months, the EX30 has lived up to its promise of being a profitable growth driver for the company's business while collecting numerous awards – most recently it won the 2024 World
In the first three months of 2024, thousands of customers across
Along with the EX30, the company has now also started producing the fully electric EM90 MPV for
At the same time, it will continue to offer very attractive plug-in hybrids and mild hybrids for years to come, as part of its balanced premium product strategy. The company has updated several of those models recently and will continue to do so.
Free cash flow in the quarter came in as planned at SEK –12 bn due to increased production and build-up of EX30 inventory, in addition to usually seasonally lower cash flow in Q1. Volvo Cars continues to focus on internal efficiency and takes cost actions where it can, while ensuring capital allocation across its business to support its investments.
As a result, the company expects free cash flow generation to be neutral in 2024 and 2025. From 2026 onwards, it expects to deliver strong cash flows as the scale of investments declines and it starts reaping the long-term benefits of its strategy with higher revenue and profitability.
Volvo Cars shareholders recently also approved the company's plan to lower its shareholding in Polestar to 18 per cent from 48 per cent. Volvo Cars believes this is a good and natural moment for a transition of its relationship with Polestar, which allows it to fully focus on its own investment plans, while
Looking ahead
Volvo Cars expects demand for its cars to remain robust in coming quarters and in line with its guidance of full-year sales growth of at least 15 per cent. The company also expects cash flow to improve in coming quarters which should enable it to be cash-neutral for the full year.
Volvo Cars remains firmly focused on achieving profitable growth and expects 2024 to be another solid year after the record year of 2023. At the same time, the company is mindful that the external environment continues to be challenging, as geopolitical uncertainties and macroeconomic headwinds remain.
Volvo Cars believes that its balanced product portfolio of fully electric cars and world class plug-in and mild hybrids, along with its increased focus on cost actions, will help it navigate these headwinds. That positions the company to achieve its ambitions of revenues of between
"Our strategic planning and execution are working well and our balanced approach positions us to deliver on our transformation journey," says
- Product – a strong competitive offer with cars in many sizes and segments: 30, 40, 60 and 90 range, SUVs, sedans, wagons and MPVs, to meet the various needs of its global customer base.
- Propulsion – mild hybrids, plug-in electric hybrids and fully electric cars.
-
Production
– manufacturing facilities in every region:
Asia ,Europe and theUSA . This aspect has become more important as the trade environment continue to change across the world. - Pricing – balanced price discipline across its various model choices, via its Core, Plus or Ultra variants.
- Partnerships – carefully balanced its choices between investing in internal development and building key partnerships with some of the world's leading tech companies, such as NVIDIA, Qualcomm, Google and Apple. It has also developed a strong retail and service dealership structure in all regions, with over 2,200 retail partners across the globe.
"This balanced approach to our strategy has been created over many years and it positions us well globally," says
*EBIT excl. JVs and associates
This disclosure contains information that
For further information please contact:
Volvo Cars Media Relations
+46 31-59 65 25
media@volvocars.com
Volvo Cars Investor Relations
+46 31-793 94 00
investors@volvocars.com
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The following files are available for download:
Volvo Cars Q1 report 2024 |
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Light version-SKW 127 EX40 |
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