Full 12 months 2023
- 2023 income was SEK 399.3 bn (SEK 330.1 bn in 2022)
- 2023 working revenue (excl. JVs and associates) was SEK 25.6 bn (SEK 17.9 bn in 2022)
- 2023 working revenue was SEK 19.9 bn (SEK 22.3 bn in 2022)
- 2023 EBIT margin (excl. JVs and associates) was 6.4 per cent (5.4 per cent in 2022)
- 2023 EBIT margin was 5.0 per cent (6.8 per cent in 2022)
- 2023 primary earnings per share was SEK 4.38 (SEK 5.23 in 2022)
- 2023 absolutely electrical automobile gross sales share at 16 per cent (11 per cent in 2022)
Quarter 4, 2023
- This fall income was 109.4 bn SEK (105.2 bn SEK in This fall 2022)
- This fall working revenue (excl. JVs and associates) was SEK 6.7 bn (SEK 3.9 bn in 2022)
- This fall working revenue was 5.4 bn SEK (3.4 bn SEK in This fall 2022)
- This fall EBIT margin (excl. JVs and associates) was 6.1 per cent (3.7 per cent in This fall 2022)
- This fall EBIT margin was 4.9 per cent (3.3 per cent in This fall 2022)
- This fall primary earnings per share was 1.04 SEK (0.82 SEK in This fall 2022)
- This fall absolutely electrical automobile gross sales share at 16 per cent (18 per cent in This fall 2022)
Events after the interval
- Polestar is coming into an thrilling section with a strengthened marketing strategy and positioned for future progress.
- Volvo Cars’ focus is on growing and concentrating its sources by itself formidable journey.
- Volvo Cars is evaluating a possible adjustment to its shareholding in Polestar, which can end in Geely Sweden Holdings changing into a big new shareholder.
- Geely will proceed to offer full operational and monetary assist to Polestar going ahead.
- As a outcome, Volvo Cars will not present additional funding to Polestar. Volvo Cars will, nevertheless, lengthen the reimbursement interval for the present convertible mortgage by 18 months to the tip of 2028.
- Volvo Cars’ and Polestar’s robust operational collaboration throughout R&D, manufacturing, aftersales and business continues to the good thing about each corporations.
Volvo Cars had a record-breaking 12 months in 2023 and right now studies the very best full-year retail gross sales, revenues and working revenue in its 97-year historical past.
A brand new all-time gross sales document of 708,716 automobiles enabled revenues to rise by 21 per cent to SEK 399.3 billion for the total 12 months 2023. The underlying working revenue of SEK 25.6 billion, excluding joint ventures and associates, represents a rise of 43 per cent in contrast with 2022. The working margin excluding JVs and associates got here in at 6.4 per cent, up from 5.4 per cent in 2022.
“2023 was a key milestone in our transformation journey,” mentioned Jim Rowan, Chief Executive of Volvo Cars. “We delivered a record-breaking year on many levels, reporting the highest retail sales, revenues and profits in our company’s 97-year history. We also took several significant steps forward in our ongoing transformation, while navigating a complex external environment. In doing so, we’ve built a solid foundation for 2024 and the years ahead.”
The full CEO letter by Jim Rowan, with extra particulars on the previous 12 months and the years forward, is included within the interim report for the interval and will be found here.
The 2023 outcomes exhibit Volvo Cars’ capacity to keep up premium pricing all year long, in addition to strong demand for its automobiles and a sturdy orderbook, regardless of ongoing market turbulence.
The efficiency additionally demonstrates the power of the corporate’s electrified product portfolio, which accommodates each electrical automobiles in addition to an in depth vary of plug-in and mild-hybrid fashions. These hybrid fashions represented a big majority of the corporate’s complete international gross sales in 2023 and can stay a key factor of its portfolio for the approaching years.
The firm bought 113,419 absolutely electrical automobiles in 2023, a rise of 70 per cent versus 2022 and representing 16 per cent of its complete international gross sales quantity, which was one of many highest amongst all legacy premium carmakers. Compared with 2022, Volvo Cars elevated its international electrical market share by 34 per cent.
Its electrical gross sales share remains to be primarily based on solely two absolutely electrical fashions and doesn’t but mirror the total potential of the brand new EX30 small SUV, EX90 massive SUV or EM90 MPV, all of which is able to hit the roads in earnest throughout 2024.
During the second half of 2023, Volvo Cars additionally noticed gross revenue margins on its electrical automobiles enhance fourfold versus the tip of 2022 to 13 per cent. High lithium costs closely affected its margins in 2022, however the firm noticed a transparent uptick within the underlying profitability of those automobiles from the second half of 2023 as decrease lithium costs and the consequences of elevated pricing materialised. The firm additionally benefited from efficiencies from its personal investments.
While there’s nonetheless a niche in gross margins on the EVs in comparison with a few of its combustion engine (ICE) automobiles, this hole is closing. The EX30 is about to ship gross margins of 15-20 per cent and takes the corporate nearer to that objective. Volvo Cars additionally expects the upcoming EX90 and EM90 to contribute to closing the hole between EV and ICE margins.
Looking forward to 2024
2024 is about to be one other large 12 months for Volvo Cars because it continues to spice up its product portfolio and speed up its transformation in direction of changing into a totally electrical automobile maker by 2030.
At the tip of the fourth quarter of 2023, the primary prospects took supply of the brand new EX30 small SUV. This 12 months, Volvo Cars is targeted on rapidly ramping up manufacturing of this automobile and assembly the robust buyer demand, which has exceeded expectations. The firm can also be working laborious so as to add EX30 manufacturing to its Ghent plant in Belgium.
In the primary half of 2024, the corporate will begin manufacturing of its new EX90 flagship SUV, with buyer deliveries beginning quickly after. The EX90 represents a significant know-how leap with the introduction of Volvo Cars’ next-generation absolutely electrical platform upon which the automobile is constructed.
As one of many first automobiles filled with core computing know-how, the software-defined EX90 represents a big paradigm shift for Volvo Cars. It is a automobile that brings next-generation security, connectivity, knowledge and software program all collectively in a single product, and reaffirms the corporate’s place as an business chief within the ongoing know-how transition.
The absolutely electrical EM90 MPV, which Volvo Cars revealed in China in November, has additionally began manufacturing. Like the EX90, the EM90 is a vital automobile for China and exhibits how critical the corporate is about succeeding in that market and taking market share.
Together, these three new absolutely electrical automobiles will considerably increase Volvo Cars’ product providing across the globe and profitably take it into new demographics and market segments that it has not been energetic in earlier than.
On prime of that, Volvo Cars will refresh its plug-in hybrid automobiles, that are an vital bridge in direction of full electrification. Together with its absolutely electrical automobiles, this creates a broad and enticing Volvo Cars portfolio for right now’s international market.
Volvo Cars expects it will enhance progress from 2024 and can considerably enhance its share of absolutely electrical automobiles versus 2023. In addition, the brand new electrical fashions will assist it to additional shut the margin hole between electrical automobiles and inside combustion engine automobiles in 2024. In phrases of complete 2024 retail gross sales, the corporate goals for a better year-over-year progress fee than in 2023.
“It is my firm belief that the hard work we have put in during 2022 and 2023 positions us to meet our objectives for the years ahead,” mentioned Jim Rowan. “Our strategy is well defined and unambiguous, and is the right one for Volvo Cars, our customers and the environment. Our results, order book and key performance metrics prove as much, and our customers clearly like what they see.”
A decisive transformation section
Volvo Cars is now coming into a decisive section in its transformation journey. Not solely will it proceed to roll out and ramp up manufacturing of the EX30, EX90 and EM90 in 2024, however the firm can also be considerably ramping up different investments that may assist it change into a pacesetter in next-generation mobility.
In the interval up till 2025, Volvo Cars will make the required structural and strategic investments that lay the technical basis for its future success: electrification, software program, core computing architectures, superior connectivity, knowledge seize and analytics, mega casting, next-generation e-motor and battery know-how, good cabin know-how, and a brand new superior manufacturing facility.
This will imply a short lived rise in funding ranges, but these strategically essential investments will drive vital value efficiencies in Volvo Cars’ subsequent era of absolutely electrical automobiles. They lay the muse for additional worthwhile progress and elevated EV margins.
The firm has a robust steadiness sheet supporting the transformative investments, with a liquidity place of SEK 75 bn as of year-end 2023, and throughout the funding section in 2024-25 it expects the free money stream era to be comparatively impartial.
From 2026 and onwards, Volvo Cars not solely expects the extent of investments to say no however to reap the advantages of this technique with greater progress and profitability. It will even at this level generate a robust optimistic free money stream.
As the corporate accelerates its transformation, it is going to put much more emphasis on driving worthwhile progress over time and prioritising worth over quantity. It will double down on inside effectivity, guarantee sturdy capital allocation throughout our enterprise and capitalise on its section one investments.
Polestar replace
Polestar is coming into the subsequent thrilling section of its journey with a strengthened marketing strategy and value actions, added expertise to its government administration crew and board of administrators, in addition to the upcoming rollout of Polestar 3 and Polestar 4. This mixture positions Polestar effectively for future progress.
As we transfer into the subsequent section of our transformation, together with deploying large-scale investments within the creation and adoption of latest applied sciences and future-fit manufacturing services, our focus is on growing Volvo Cars and concentrating our sources on our personal formidable journey.
We are subsequently evaluating a possible adjustment to Volvo Cars’ shareholding in Polestar, together with a distribution of shares to Volvo Cars shareholders. This could end in Geely Sweden Holdings changing into a big new shareholder.
Geely will proceed to offer full operational and monetary assist to Polestar going ahead, and, in consequence, Volvo Cars will not present additional funding to Polestar. We will, nevertheless, lengthen the reimbursement interval for the present convertible mortgage by 18 months to the tip of 2028. This will probably be topic to related approvals and additional info will probably be supplied in the end.
Volvo Cars’ and Polestar’s robust operational collaboration throughout R&D, manufacturing, aftersales and business will proceed to the profit of each corporations.
Clarified ambitions
In gentle of those plans, Volvo Cars has determined to make clear its ambitions that have been set out at its IPO. The firm stands agency on its technique round electrification and technological management, one of the formidable within the business. Yet by clarifying its ambitions with sharpened metrics, it improves transparency and permits for a greater follow-up on its progress.
The firm stays agency on its ambition to report an EBIT margin above 8 per cent for 2026, and now achieve this primarily based on anticipated revenues between SEK 550-600 billion. This clarified ambition additional underlines that Volvo Cars seeks to develop when it comes to revenues and worth somewhat than on quantity alone, thereby focusing much more on worthwhile progress.
Note to editors
- Chief Executive, Jim Rowan, Chief Financial Officer, Johan Ekdahl, and Chief Commercial Officer and Deputy CEO, Björn Annwall, will host a livestream on Volvo Cars’ 2023 outcomes for media, buyers and analysts at 08:00 CET right now. The displays will probably be held in English and adopted by a Q&A session.
Link for livestream: https://live.volvocars.com
China-only hyperlink for livestream: https://live.volvocars.com.cn
It will probably be potential to ask questions throughout the Q&A session following the principle presentation. To take part, you’ll be able to both use the chat operate on-line to sort your query or you’ll be able to name in. To name in, members have to register through the hyperlink under and can then obtain the dial-in particulars and particular person PIN.
Link to Polestar press release
This disclosure accommodates info that Volvo Car AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The info was submitted for publication, via the company of the contact particular person, on 01-02-2024 07:00 CET.