Volvo Group – the second quarter 2014
When we summarize the market development for the second quarter and begin with the Truck operation, we can conclude that our business in North America and Japan had positive trends in market shares, volumes and capacity utilization. Following the weak first quarter, the European market recovered gradually during the second quarter, but the improvement started somewhat later than we had anticipated. During the quarter, the Brazilian market developed as we anticipated, with lower order intake and sales. With respect to Construction Equipment, the second quarter has been characterized by a considerable decline in the Chinese market.
• In the second quarter net sales amounted to SEK 72.6 billion (72.8). Adjusted for currency movements and acquired and divested units sales decreased by 1%.
• The second quarter operating income amounted to SEK 4,325 M (3,279) excluding restructuring charges of SEK 762 M (16). The operating income includes a positive effect totaling SEK 1,041 M from a capital gain on the sale of commercial real estate and the release of a provision for Volvo Rents. Currency exchange rates had a negative impact of SEK 176 M.
• Operating margin in the second quarter was 6.0% (4.5) excluding restructuring charges and 4.9% (4.5) including restructuring charges.
• In the second quarter diluted earnings per share were SEK 1.22 (0.99).
• In the second quarter operating cash flow in the Industrial Operations amounted to SEK 4.0 billion (4.1).
“With the closing of the second quarter, we are halfway in the strategy program that will continue until the end of 2015 and which shall increase the Volvo Group’s profitability. The program is progressing according to plan and we are beginning to see positive effects from all the decisions we made in 2012 and 2013. We are slightly ahead of plan with respect to our objective of increasing the gross margin on our trucks through improved price realization, while we will strengthen our focus on lowering our operating costs,” says Olof Persson, President and CEO.
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