PDF Volvo Car GROUP
Volvo Car GROUP
Interim report THIRD quarter and first nine months 2017
VVOOLLVVOO CCAARR AGBRO(PUUPBL .) (556810?8988) IINNTTEERRIIMM RREEPPOORRTT TTHHIIRRDD QQUUAARRTTEERR AANNDD FFIIRRSSTT NNIINNEE MMOONNTTHHSS 22001177, GOTHENBURG OCTOBER 26TH 2017
THIRD QUARTER
?Retail sales increased by 10.6 per cent to
135,831 (122,766) units ?Net revenue increased by 18.4 per cent to
MSEK 48,880 (41,273) ?Operating income (EBIT) increased by 77.5 per
cent to MSEK 3,669 (2,067) ?Net income increased by 89.4 per cent to
MSEK 2,513 (1,327) ?Cash flow from operating and investing
activities at MSEK -4,357 (921) ? Electrification strategy announced ?Further investments in US operations
announced ?Launch of the new XC40 and of Care by Volvo
FIRST NINE MONTHS
?Retail sales increased by 9.0 per cent to 413,472 (379,329) units
?Net revenue increased by 18.9 per cent to MSEK 149,250 (125,519)
?Operating income (EBIT) increased by 36.4 per cent to MSEK 10,445 (7,659)
?Net income increased by 42.1 per cent to MSEK 7,262 (5,111)
?Cash flow from operating and investing activities at MSEK -7,503 (-2,254)
? Full SUV line up launched ? Upgraded credit rating ?Volvo Cars recognised on the 2017 list of the
World's Most Ethical Company? by the Ethisphere Institute
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VOLVO CAR GROUP INTERIM REPORT THIRD QUARTER AND FIRST NINE MONTHS 2017
Key figures
Net revenue, MSEK Research and development expenses, MSEK Operating income (EBIT), MSEK Net income, MSEK EBITDA, MSEK Cash flow from operating and investing activities, MSEK Gross margin, % EBIT margin, % EBITDA margin, % Net Cash (Net debt if positive)
Q3 2017
48,880 -2,612 3,669 2,513 6,588 -4,357
24.4 7.5
13.5 -8,253
Q3 2016
41,273 -2,767 2,067 1,327 4,767
921 21.9
5.0 11.5 -5,722
Retail sales (units)
Europe China US Other Retail sales total
Q3 2017
64,027 30,427 22,861 18,516 135,831
Q3 2016
60,832 22,699 21,878 17,357 122,766
Wholesales1) Production
128,841 134,540
118,797 114,766
1)Wholesales refers to new car sales to dealers and other customers including own units and rentals.
First nine months 2017
149,250 -8,214 10,445 7,262 19,312 -7,503 23.2 7.0 12.9 -8,253
First nine months 2017
219,840 82,341 56,963 54,328
413,472
416,915 441,625
First nine months 2016
125,519 ?7,892 7,659 5,111 15,506 ?2,254 22.6 6.1 12.4 -5,722
First nine months 2016
207,058 63,387 58,532 50,352 379,329
376,843 381,968
Full year 2016
180,902 ?10,174 11,014
7,460 21,541
6,515 21.4 6.1 11.9
-18,873
Full year 2016
290,925 90,930 82,726 69,751
534,332
536,211 533,156
All amounts are in MSEK unless otherwise stated. Amounts in brackets refer to the same period for the preceding year, unless otherwise stated. All performance measures are further described on page 20.
This report contains statements concerning, among other things, Volvo Car Group's financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent Volvo Car Group's future expectations. Volvo Car Group believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, however, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. Such important factors include, but may not be limited to: Volvo Car Group's market position, growth in the automotive industry, and the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of Volvo Car Group, its associated companies and joint ventures, and the automotive industry in general. Forward-looking statements speak only as of the date they were made and, other than as required by applicable law, Volvo Car Group undertakes no obligation to update any of them in light of new information or future events.
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VOLVO CAR GROUP INTERIM REPORT THIRD QUARTER AND FIRST NINE MONTHS 2017
ceo COMMENT
Volvo Cars has delivered another quarter of sales growth and increased net revenue, building on the good progress in the first half of the year. The growth in net revenue was driven by the positive sales development in all markets and an improved sales mix as a result of increased sales of the new S and V90 as well as the XC60. As a result, the operating profit and the EBIT margin also improved, demonstrating progress in line with our goals of maintaining sustainable profit levels and being a truly global company with an attractive model line-up in all regions.
We see strong demand for our products even in regions where markets are softening. In China, we have seen a strong growth in sales and our local manufacturing footprint supports our local expansion. The US has been showing signs of recovery since the beginning of the year, when our sales was impacted by delivery constraints. European sales showed good growth with the XC60 continuing to be our best-selling model.
The start of production and roll out of the new XC60 has been successful and from December we will stop producing the XC60 Classic. Our global manufacturing structure gives us the flexibility to gradually shift production from one location to another depending on demand. Consistent with this we have decided to increase our investment in the Charleston manufacturing plant that is now under construction in the US. The plant will produce the new S60 as well as the next generation XC90. It will serve both the US and the international markets in a similar way as has been successfully implemented in Daqing, China, for the S90.
In September we entered into a new segment on the SUV market by launching our new small XC40 SUV. It will be produced in Gent, Belgium, and in Luqiao, China. With the XC40 alongside the XC60 and XC90 we are, for the first time, covering the whole SUV segment making Volvo one of the most SUV focused companies in the industry. The SUV market remains one of the fastest growing in the industry.
With the launch of the XC40 we also introduced a new model of car ownership with the Care by Volvo subscription service. Care by Volvo redefines the traditional model of car ownership and introduces a transparent monthly subscription which will include digital concierge services and e-commerce ordering.
I am also very proud that we have been recognised by the United Nations for our ground-breaking electrification strategy, unveiled in July, stating that all models launched from 2019 will have hybrid or fully electric propulsion. We think this is the right future for Volvo Cars and this recognition confirms that we are leading the way on this important journey. Our recent announce-
ment about our new brand in Polestar, with a state-of-the-art manufacturing facility in Chengdu, China, reinforces that we are committed to deliver on this strategy.
For the full year 2017, I anticipate continuous growth in line with the previous nine months along with more exciting news about our cars and service products. The results so far demonstrate that we are heading in the right direction.
H?kan Samuelsson CEO
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VOLVO CAR GROUP INTERIM REPORT THIRD QUARTER AND FIRST NINE MONTHS 2017
The Volvo Car Group
Volvo Car AB (publ.), with its registered office in Gothenburg, is majority owned (99 per cent) by Geely Sweden Holdings AB, owned by Shanghai Geely Zhaoyuan International Investment Co., Ltd., registered in Shanghai, China, owned by Zhejiang Geely Holding Group Ltd., registered in Hangzhou, China.
Volvo Car AB (publ.) holds shares in its subsidiary Volvo Car Corporation and provides the Group with certain financing solutions. Volvo Car AB (publ.) indirectly, through Volvo Car Corporation and its subsidiaries, operates in the automotive industry with business relating to the design, development, manufacturing, marketing and sales of cars and thereto related services. Volvo Car Group and its global operations are referred to as "Volvo Cars".
Sales development
Volvo Cars' global retail sales increased by 9.0 per cent to 413,472 (379,329) units and wholesale increased by 10.6 per cent to 416,915 (376,843) units during the first nine months of 2017. The XC60 Classic together with the new XC60 were the best-selling models, followed by the V40/V40 Cross Country. Strong demand for the 90 series contributed to Volvo Cars' sales growth.
Volvo Cars' third quarter retail sales increased by 10.6 per cent to 135,831 (122,766) units. The sales growth was supported by strong momentum in China. Wholesale increased by 8.5 per cent to 128,841 (118,797) units. Continued strong demand for the 90 series and the launch of the new XC60 were driving factors in the company's sales growth.
Europe Total sales of passenger cars (EU+EFTA) increased by 3.6 per cent in the first nine months. The improvement was reflected in Volvo Cars' major European markets, with a sales increase in the
overall market in Sweden of 3.1 per cent, Germany 2.2 per cent, and Italy 9.0 per cent. The exception was the United Kingdom, which recorded a decline in sales of 3.9 per cent year-on-year.
Volvo Cars reported a retail sales increase of 6.2 per cent to 219,840 (207,058) units in the first nine months of 2017. Sales was supported by stronger demand for the 90 series, as well as the XC60.
In the third quarter, Volvo Cars increased its retail sales by 5.3 per cent to 64,027 (60,832) units. With a 19 per cent increase, Sweden (15,381 units) was the fastest growing market in Europe, followed by Germany, with 7.5 per cent sales increase (9,124 units). By overall sales ? the UK was second strongest despite declining with the overall UK market.
China The Chinese passenger car market grew by 2.4 per cent in the first nine months. Sales in the SUV segment increased by 16.1
Retail sales (units)
Europe China US Other Retail sales total
Wholesales Production
Q3 2017
64,027 30,427 22,861 18,516 135,831
128,841 134,540
Q3 2016
60,832 22,699 21,878 17,357 122,766
118,797 114,766
Change %
5.3 34.0
4.5 6.7 10.6
8.5 17.2
First nine months 2017
219,840 82,341 56,963 54,328
413,472
416,915 441,625
First nine months 2016
207,058 63,387 58,532 50,352 379,329
376,843 381,968
Change %
6.2 29.9 -2.7
7.9 9.0
10.6 15.6
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