- Turnover for Q1 amounted to SEK 93.9 billion (SEK 95.7 billion Q1 2023)
- Operating profit for Q1 (excluding JVs and associated companies) amounted to SEK 6.8 billion (SEK 6.3 billion Q1 2023)
- The EBIT margin for Q1 (excluding JVs and associated companies) amounted to 7.2 percent (6.6 percent Q1 2023)
- Earnings per share before dilution for Q1 amounted to SEK 1.12 (SEK 1.21 Q1 2023)
- The sales share of fully electric cars in Q1 was 21 percent (18 percent Q1 2023)
Volvo Cars today reports an operating profit excluding JVs and associated companies of SEK 6.8 billion for the first quarter of 2024. This is an increase of 8 percent compared to the same period last year. The corresponding EBIT margin landed at 7.2 percent compared to 6.6 percent for the same quarter in 2023.
Volvo Cars’ quarterly report for the first quarter of 2024 can be read here.
In the first quarter, sales rose 12 percent year-over-year to 182,687 cars, with a new single-month sales record in March. Strong development in Europe and the US contributed to the company’s sales growth, and Volvo Cars recorded new sales records for the first quarter in 11 markets, including Germany, France, the Netherlands, Canada and Turkey.
Sales for the first quarter amounted to SEK 93.9 billion, compared to SEK 95.7 billion in the first quarter of 2023, mainly affected by lower revenue from contract manufacturing. Turnover was also affected by currency effects and the sales mix, even though the company maintained good price discipline during the quarter.
During the quarter, 41 percent of the company’s global volume consisted of plug-in hybrids and all-electric cars, while the share of all-electric cars rose to 21 percent compared to 18 percent last year. This shows that Volvo Cars is on its way to the goal for 2024, to increase sales volumes by at least 15%. This is done with a balanced product strategy in the premium class that offers both competitive fully electric cars and attractive plug-in and mild hybrids. During the first quarter, Volvo Cars was the third largest in electric car sales in Europe, while the XC60 was the best-selling plug-in hybrid in the region.
During the first quarter, the gross margin on Volvo Cars’ electric cars increased to 16 percent compared to 7 percent in the same quarter last year. This is among the highest in the industry and reflects strong demand for the new Volvo EX30 SUV, which is expected to deliver gross margins of 15-20 percent, but also improved margins on the EX40 and EC40. Volvo Cars will continue to work hard to further reduce the margin gap for cars with combustion engines.
“We have had a strong start to the year and the results for the first quarter lay a solid foundation for the coming year,” says Jim Rowan, CEO of Volvo Cars. “During the quarter, we posted double-digit volume growth, set a single-month sales record in March, and continued to increase production and customer deliveries of the EX30. We reported improved gross margins on our all-electric cars that reached 16 percent and increased our sales share of electric cars to 21 percent.”
“At the same time, we secured the support of our shareholders to transfer the majority of our shareholding in Polestar, which allows us to focus fully on Volvo Cars’ core business,” adds Jim Rowan. “To ensure good liquidity in the company, we continue to focus on costs and capital allocation. I am confident that these actions will make 2024 another significant year in our ongoing transformation.”
EX30 drives profitable growth
The first quarter’s results confirm the growth opportunities with EX30. In just a few months, EX30 has lived up to its promise of driving profitable growth while winning numerous awards. It was recently named the 2024 World Urban Car of the Year and won the Red Dot ‘Best of the Best’ design award.
In the first three months, thousands of customers from all over Europe got behind the wheel of the new Volvo EX30, and many more are waiting in line when, in the coming weeks and months, Volvo Cars starts delivering these cars to countries such as the US, China, South Korea and Canada. This means that the EX30 will be sold in over 90 countries by the end of the year.
In addition to the EX30, Volvo Cars has now also started manufacturing the EM90 for the Chinese market, where the first customer deliveries were made in March. During the first half of this year, the company will also begin production of the flagship SUV EX90. This means that in 2024, Volvo Cars will add three new electric car models to the market in three different segments, all with the company’s latest technology.
In addition, Volvo Cars will continue to offer attractive plug-ins and mild hybrids in the premium segment for several years to come. This is part of Volvo Car’s balanced product strategy. The company has recently updated several of these models, which it will continue to do.
The free cash flow during the quarter amounted, as calculated, to -12 billion SEK, driven by increased production and a stock build-up of EX30, combined with the seasonally lower cash flow during the first quarter. Volvo Cars continues to focus on internal efficiency and takes cost measures where possible, while the company ensures capital allocation within the business that supports the investments.
As a result, the company expects neutral free cash flow in 2024 and 2025. From 2026 onwards, Volvo Cars expects to deliver strong cash flows as the pace of investment slows and the company begins to reap the long-term benefits of its strategy, with higher revenues and profitability.
Volvo Cars’ shareholders also recently approved the company’s plan to reduce its shareholding in Polestar from 48 to 18 percent. Volvo Cars considers this a good and natural opportunity for a change in its relationship with Polestar. This means that Volvo Cars can fully focus on its own investment plans, while Geely has announced that it will take over full responsibility for the continued operational financing of Polestar. The close collaboration between Polestar and Volvo Cars in various areas continues, to the benefit of both companies.
Looking ahead
Volvo Cars expects demand for its cars to remain robust in the coming quarters in line with its target of full-year sales growth of at least 15 percent. The company also expects the cash flow to improve in the coming quarters and supports the ambition of a neutral free cash flow for the full year.
Volvo Cars has a continued strong focus on achieving profitable growth and expects 2024 to be another stable year after the record year 2023. At the same time, the company is aware that the outside world remains challenging, as geopolitical uncertainty and macroeconomic headwinds persist.
Volvo Cars is convinced that the balanced product portfolio of both fully electric cars and world-class plug-in and mild hybrids, combined with a strengthened focus on cost measures, will help the company navigate these challenges. This positions the company to reach the turnover target of between SEK 550–600 billion and an EBIT margin above 8 percent* during 2026.
“Our strategic planning and execution is working well and our balanced approach positions us well to deliver on the transformation journey,” says Jim Rowan. “It gives us the opportunity to react faster and more efficiently to a changing demand from the market.”
Volvo Car’s balanced strategy focuses on five areas:
- Product – competitive offers with cars in many sizes and segments: 30, 40, 60 and 90 series – SUVs, sedans and hatchbacks and MPVs. Everything to meet customers’ needs.
- Propulsion – mild hybrids, plug-in hybrids and fully electric cars.
- Production – manufacturing facilities in all regions: Asia, Europe and USA. This aspect has become more important as the conditions for trade continue to change globally.
- Pricing – a balanced price discipline in the model range, via the Core, Plus and Ultra variants.
- Partnership – carefully balanced choices between investments in own development and collaborations with some of the world’s leading technology companies, such as NVIDIA, Qualcomm, Google and Apple. Volvo Cars has also built a strong network of dealer and service partners in all regions, with more than 2,200 dealer partners worldwide
“The balanced approach to our strategy has developed over several years and positions us well globally,” says Jim Rowan. “It is a decisive factor for continued growth. As I have said many times in my career: running a business is not about perfection but about continuous improvement. Our balanced strategy makes it possible.”
*excl. results from shares in JVs and associated companies.
This information is such that Volvo Car AB (publ) is obliged to make public according to the EU’s market abuse regulation (EU no. 596/2014). The information was submitted, through the provision of the specified contact person, for publication on 2024-04-24 07:00 CET.
For more information, please contact:
Volvo Cars Media Relations
+46 31-59 65 25
[email protected]
Volvo Cars Investor Relations
John Hernander
+46 31-793 94 00
[email protected]
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Volvo Cars 2023
For the full year 2023, Volvo Car Group reported a record operating profit (excl. JVs and associated companies) of SEK 25.6 billion. Turnover in 2023 amounted to a record high of SEK 399.3 billion, while global sales reached a record of 708,716 cars.
About Volvo Car Group
Volvo Cars was founded in 1927. Today it is one of the most well-known and respected car brands in the world, with sales to customers in more than 100 countries. Volvo Cars is listed on Nasdaq Stockholm, where it trades under the ticker “VOLCAR B”.
“For life. To give people the freedom to travel in a personal, sustainable and safe way.” This goal is reflected in Volvo Cars’ ambition to produce only electric cars by 2030 and in its commitment to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.
In December 2023, Volvo Cars had approximately 43,400 full-time employees. Volvo Cars’ headquarters, product development, marketing and administration are mainly located in Gothenburg. Volvo Cars’ production facilities are located in Gothenburg, Ghent (Belgium), South Carolina (USA), Chengdu, Daqing and Taizhou (China). The company also has R&D and design centers in Gothenburg and Shanghai (China).
Tags: Volvo Cars reports percent increase operating profit core business quarter SEK billion
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