VOLVO GROUP – The Fourth Quarter 2014

The Volvo Group, in its Fourth Quarter was showered with a significant reduction in the Group's cost base. This was accounted for by its underlying profitability improvement in it's truck business and persistent traction in the activities it undertook to improve efficiency. On the Contrary however, turbulences were experienced in the construction equipment business, resulting in the deterioration of multiple markets situated outside North America.
• The Fourth Quarter saw net sales amounting to SEK 77.5 billion to 76.6 billion adjustible to currency translation. On the other hand, the sales of acquired and divested units dipped by a whooping 4%.

• Provisions corresponding to the EU antitrust investigation and the expected credit losses in China combined to create a negative impact on the operating income, resulting in a total loss of SEK 4,450 Million.

• The operating income which arose out of Charges incurred through restructuring and provisions (apart from the ones mentioned above) amounted to SEK 3,021 M. This was sublty more compared to last year's operating income of SEK 3,077 M (excluding a write-down of Volvo Rents of SEK 1,500 M), corresponding to an operating margin of 3.9% (4.0). Currency exchange rates played a positive role by impacting SEK 373 M.

•The cash inflows from Industrial Operations amounted to an optimistic value of SEK 10.6 (10.3 approximated to currency changes). This resulted in the reduction of the net financial debt to 14% of equity in the Industrial Operations.

• Intakes in truck orders saw a pleasant increase by 16% while this was contrasted with a fall in the intake of construction equipment orders by 33%.

• The Board of Directors have also proposed a dividend of SEK 3.00 per share (3.00).

“Our work towards further improving operational performance and lower cost levels has good traction, and we can look back at a year of significant change and many improvement activities that are now paying off. Going forward, we still have a lot of hard work ahead of us, but continue to have a good momentum in our activities to improve efficiency and reduce costs across the Group,” says Olof Persson, President and CEO.

Source: Autobei