Volvo Cars has announced a landmark achievement for Q2 2024, reporting a record core operating profit of SEK 8.2 billion, a 28% increase compared to the same period in 2023. This stellar performance underscores the company's continued strength and strategic prowess in the face of a complex global landscape.

Key Financial Highlights

- Operating Profit Surge: Volvo Cars' core operating profit (excluding joint ventures and associates) reached SEK 8.2 billion, a remarkable 28% rise year-on-year.

- EBIT Margin Growth: The EBIT margin (excluding joint ventures and associates) soared to 8.1%, up from 6.3% in Q2 2023. Overall, the EBIT margin improved to 7.9%, compared to 4.9% in the previous year.

- Revenue Stability: The company's revenue for Q2 2024 was SEK 101.5 billion, slightly down from SEK 102.2 billion in Q2 2023. This minor decrease reflects reduced income from contract manufacturing and a normalization of sales to rental companies, with core revenues remaining steady.

- Earnings Per Share: Basic earnings per share climbed to SEK 1.79, up from SEK 1.12 in Q2 2023.

Electrification Momentum

Volvo Cars continues to make significant strides in electrification, with electrified vehicles accounting for 48% of total sales in Q2 2024, up from 39% the previous year. The share of fully electric car sales surged to 26%, a notable increase from 16% in Q2 2023. Notably, the EX30 small SUV has emerged as one of Europe's top-selling EVs, and the XC60 plug-i hybrid remains the best-selling PHEV in the region.

Gross Margin Achievements

The company's gross margins improved to 22.8% from 19.0% year-on-year, with EV gross margins reaching a new high of 20%. This reflects Volvo Cars' successful transition towards profitable electrification.

CEO Jim Rowan's Insights

Jim Rowan, Volvo Cars' CEO, commented, “Our record-breaking Q2 2024 performance highlights our ability to deliver strong results despite a challenging geopolitical and economic environment. Our strategic balance, innovative product portfolio, and agility have been key to our success. We continue to grow our market share in Europe and the US while maintaining our position in China, thanks to our disciplined pricing strategy.”

Future Outlook

As Volvo Cars progresses towards full electrification, the company is poised for continued growth. The rollouts of the EM90 MPV and the EX30, alongside the upcoming EX90 flagship SUV, exemplify the company's commitment to an all-electric future. Production of the EX90 has commenced in South Carolina, with further expansion planned in Ghent, Belgium, starting in early 2025.

Despite potential challenges such as EU tariffs on Chinese EVs, Volvo Cars remains confident in its strategic direction. The company anticipates a 12-15% increase in retail sales for 2024, provided there are no major disruptions. Looking further ahead, Volvo Cars expects strong cash flows starting from 2026 as investment scales down and long-term benefits of its strategy materialize.

Volvo Cars' ability to navigate and thrive amidst global uncertainties while leading the charge towards electrification demonstrates its robust operational foundation and forward-thinking approach.

For more info, visit https://www.volvocars.com/