Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Volvo AB (VLVLY, Financial) maintained market leadership in Europe with a truck market share exceeding 20%, reaching 20.1%.
- Order intake for full electric vehicles increased by 138%, driven by Renault Trucks and SDLG machines in China.
- Volvo AB (VLVLY) reported a strong financial position with a net cash position of SEK77.9 billion.
- Volvo Buses launched the new Volvo 7800 Electric in Mexico, marking the first electric bus model manufactured in the country.
- Volvo Financial Services reported stable earnings with new business volumes reaching SEK24.9 billion.
Negative Points
- Net sales declined by 7% year-over-year, with vehicle sales dropping by 8% due to lower volumes.
- The North American market faced increased uncertainty, leading to a reduction in the forecast from 300,000 to 275,000 units.
- Volvo Trucks in North America experienced under-absorption in production due to the changeover to a new truck platform.
- Construction Equipment sales were down 10% due to lower volumes in Europe and North America.
- The adjusted operating income was negatively impacted by reduced volumes and negative product and brand mix within Construction Equipment.
Q & A Highlights
Q: On the investment side, will we see a similar rate of increase in investments for the rest of the year as we saw in Q1?
A: Mats Backman, CFO, stated that the investment level will be somewhat higher, driven by the assembly plant in Mexico. The increase seen in Q1 is primarily due to this project, and similar impacts are expected throughout the year.
Q: Have strong order levels in Europe continued into the second quarter?
A: Martin Lundstedt, CEO, confirmed that the order levels in Europe have largely followed the same positive pattern as seen in Q1, continuing at similar levels into the second quarter.
Q: Regarding North American trucks, what measures are being taken given the market sentiment, and when do you expect to be in balance with demand?
A: Martin Lundstedt explained that adjustments are being made to align production with demand, particularly in North America. The company is preparing for further adjustments due to market uncertainty and aims to balance demand by reducing production levels for both Volvo and Mack trucks.
Q: Can you explain the factors behind the margin pressure in Construction Equipment, and should we expect a better mix going forward?
A: Mats Backman attributed the margin pressure to a high proportion of SDLG deliveries, which impacted the mix. However, with strong order intake for Volvo products, improvements in the mix are expected in the future.
Q: How should we think about the Mack Pioneer in relation to the 25% market share target in North America, and can it help improve margins?
A: Martin Lundstedt highlighted that the Mack Pioneer is a significant platform change aimed at re-entering the long-haul segment. The new platform is expected to improve Mack's market share and margins by leveraging a modular system and addressing supply chain constraints.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
