Volvo Cars* (VOLCAR B:STO) today posted a core operating profit (EBIT), excluding joint ventures and associates, of SEK 5.7 billion for Q3 2024, compared to SEK 6.1B for Q3 2023. Gross margins at 20.5% for the third quarter were “in line with the company’s underlying operational gross margins for the first half of 2024.” Revenues for the period amounted to SEK 93 billion and the core EBIT margin was 6.2%. Free cash flow was flat at SEK -0.4 billion. In September of 2024, Volvo Cars said it aims to outgrow the premium car market* and generate a core EBIT margin of 7-8%, as well as strong free cash flows from 2026 onward. It also said that it was scrapping its goal of becoming fully electric by 2030, scaling back its target to between 90% and 100%.
“However, achieving these ambitions will not be straightforward since the weakness in the market has recently accelerated – a fact also echoed in revised industry forecasts for 2024 and 2025 by third-party analysts. Overall industry demand continues to soften and is now affecting the premium segment. Our journey towards 2026 will not be linear, as our industry is facing an increasingly volatile environment,” said Jim Rowan, chief executive for Volvo Cars. “Macroeconomic headwinds are intensifying, as is geopolitical complexity. Despite these challenges we demonstrated resilience during the third quarter of 2024, which is reflected in our overall financial performance.”
“Given this accelerating weakness in the market and Volvo Cars’ focus on safeguarding value over volume, the company expects minimal volume growth during the fourth quarter. As a result, it now anticipates full-year sales growth of 7-8%, instead of its earlier forecast of 12-15%,” Volvo said. Today Volvo Car AB closed at SEK 22.49, only 0.47% above its 52-week low of 22.38 set on 16 October 2024.
Volvo Cars Q3 2024 Highlights and Lowlights
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- Q3 operating profit (excluding JVs and associates) was SEK 5.7 bn, vs SEK 6.1 bn in Q3 2023.
- Q3 operating profit was 5.8 bn SEK, vs SEK 4.5 bn in Q3 2023.
- Q3 EBIT margin (excl. JVs and associates) was 6.2%, vs 6.7% in Q3 2023.
- Q3 EBIT margin was 6.2%, vs 4.8% in Q3 2023.
- Q3 revenue was 93 bn SEK, vs 92 bn SEK in Q3 2023.
- Q3 electrified share of sales at 48%, vs 34% in Q3 2023.
- Q3 fully electric car sales share at 25%, vs 13% in Q3 2023.
*Volvo Cars is a subsidiary of Geely Holding, which owns ~ 78.7% of the company’s outstanding shares. Geely Holding, a Chinese multinational enterprise, bought Volvo from Ford Motor in 2010.
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