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GOTHENBURG, Sweden, Feb. 1, 2024 /PRNewswire/ —
Full Year 2023
2023 revenue was SEK 399.3 bn (SEK 330.1 bn in 2022)
Operating profit for 2023 (excluding joint ventures and associates) amounted to SEK 25. 6 billion (SEK 17. 9 billion in 2022).
Operating profit in 2023: SEK 19. 9 billion (SEK 22. 3 billion in 2022)
2023 EBIT margin (excluding joint ventures and associates) 6. 4% (2022: 5. 4%)
2023 EBIT margin 5. 0% (2022: 6. 8%)
Consistent basic profits with consistent percentage in 2023 SEK 4. 38 (2022: SEK 5. 23)
2023 fully electric car sales share at 16 per cent (11 per cent in 2022)
Fourth Quarter 2023
Fourth quarter revenue 109. 4 billion SEK (105. 2 billion SEK in Q4 2022)
Operating profit for the fourth quarter (excluding joint ventures and related companies) amounted to SEK 6. 7 billion (SEK 3. 9 billion in 2022).
Operating profit for the fourth quarter SEK 5. 4 billion (SEK 3. 4 billion in the fourth quarter of 2022)
EBIT margin for the fourth quarter (excluding joint ventures and associates) 6. 1% (3. 7% in the fourth quarter of 2022)
EBIT margin for the fourth quarter 4. 9% (3. 3% in the fourth quarter of 2022)
Q4 Basic earnings per share was 1.04 SEK (0.82 SEK in Q4 2022)
Fourth quarter all-electric vehicle sales share of 16% (18% in the fourth quarter of 2022)
Post-Period Events
Polestar is entering an exciting phase with a strengthened business plan and positioned for future growth.
Volvo Cars’ purpose is to expand its resources on its own ambitious journey.
Volvo Cars is evaluating a potential adjustment to its shareholding in Polestar which may result in Geely Sweden Holdings becoming a significant new shareholder.
Geely will continue to provide comprehensive operational and monetary services to Polestar in the future.
As a result, Volvo Cars will no longer provide additional funding to Polestar. However, Volvo Cars will extend the repayment term of the existing convertible loan by 18 months until the end of 2028.
The strong operational collaboration between Volvo Cars and Polestar in the R&D, manufacturing, service and retail areas continues to bring benefits to both companies.
Volvo Cars had a record-breaking year in 2023 and today reports the highest full-year retail sales, revenues and operating profit in its 97-year history.
A new all-time sales record of 708,716 vehicles helped cash rise 21 percent to SEK 399. 3 billion for the full year 2023. Underlying operating profit of SEK 25. 6 billion, joint ventures and associates, represents an increase of 43 percent. compared to 2022. Operating margin for JVs and related companies is 6. 4%, compared to 5. 4% in 2022.
“2023 is a key milestone in our transformation journey,” said Jim Rowan, Chief Executive Officer. “We had a record-breaking year on many levels, posting the highest retail sales, profits and profits in our company’s 97-year history. We have also achieved several vital milestones in our ongoing transformation, while navigating a complex external environment. So we’ve built a solid foundation for 2024 and beyond. “
The full letter from CEO Jim Rowan, with more main points about the year ahead and the years to come, is included in the interim report of the time and can be found here.
The 2023 results demonstrate Volvo Cars’ ability to maintain premium pricing throughout the year, as well as solid demand for its cars and a robust orderbook, despite ongoing market turbulence.
This functionality also demonstrates the strength of the company’s electrified product portfolio, which includes electric cars such as a wide diversity of plug-in hybrid and mild hybrid models. These hybrid models accounted for a significant majority of the company’s overall global sales in 2023 and will continue to be a key component of its portfolio in the coming years.
The company sold 113,419 fully electric cars in 2023, up 70% from 2022 and representing 16% of its total global sales volume, one of the highest among all former premium automakers. Compared to 2022, Volvo Cars increased its global electric power market consistent with percentage up to 34 cent consistent.
Its percentage of EV sales still corresponds to just two all-electric models and does not yet reflect the full prospects of the new EX30 small SUVs, EX90 giant SUVs or EM90 MPVs, all of which will take the roads seriously in 2024.
In the second half of 2023, Volvo Cars also saw gross profit margins on its electric vehicles quadruple through the end of 2022, to 13%. High lithium prices hit its margins hard in 2022, but the company saw a sharp increase in the underlying. profitability of these vehicles from the second half of 2023 as the decline in lithium prices and the effects of higher prices materialize. The company has also benefited from the efficiency of its own investments.
While there is still a gap in the gross margin of electric vehicles compared to some of their combustion engine vehicles (ICE), this gap is narrowing. The EX30 is expected to generate gross margins of 15 to 20 percent and bring the company closer to that goal. Volvo Cars also expects the upcoming EX90 and EM90 to close the gap between electric vehicle and combustion engine margins.
Looking ahead to 2024
2024 is shaping up to be another big year for Volvo Cars as it continues its product portfolio and drives its transformation to become a fully electric car manufacturer through 2030.
At the end of the fourth quarter of 2023, the first consumers received the new EX30 small SUV. This year, Volvo Cars is striving to increase production of the car and meet the strong demand from visitors, which has exceeded expectations. It is also working hard to ramp up EX30 production to its plant in Ghent, Belgium.
In the first half of 2024, the company will begin production of its new EX90 flagship SUV, with deliveries to consumers starting shortly thereafter. The EX90 represents a significant technological breakthrough with the arrival of Volvo Cars’ next-generation all-electric platform. on which the car is built.
As one of the first entry-level computer-generation cars, the software-defined EX90 represents a significant paradigm shift for Volvo Cars. It’s a car that combines safety, connectivity, know-how and next-generation software into a single product, and reaffirms the company’s position as an industry leader in the ongoing generational transition.
The fully electric EM90 MPV, which Volvo Cars revealed in China in November, has also started production. Like the EX90, the EM90 is an important car for China and shows how serious the company is about succeeding in that market and taking market share.
Together, these three new all-electric vehicles will especially expand Volvo Cars’ product offering internationally and drive it profitably into new demographic and market segments where it was not active in the past.
In addition, Volvo Cars will renew its plug-in hybrid vehicles, which are a gateway to complete electrification. With its fully electric vehicles, this creates a broad and attractive Volvo Cars portfolio for today’s global market.
Volvo Cars expects this to drive its expansion from 2024 and, in particular, increase its share of fully electric cars compared to 2023. In addition, new electric models will further reduce the margin gap between electric cars and internal combustion engine cars by 2024. In terms of overall retail sales for 2024, the company is targeting a higher year-over-year growth rate 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,” said Jim Rowan. “Our strategy is well defined and unambiguous and is the right one for both 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 Transformational Breakthrough
Volvo Cars is now entering a decisive phase in its transformation journey. Not only will it continue to roll out and ramp up production of the EX30, EX90 and EM90 in 2024, but the company is also significantly ramping up other investments that will help it become a leader in next-generation mobility.
In the period up until 2025 Volvo Cars will make the necessary structural and strategic investments that lay the technical foundation for its future success: electrification, software, core computing architectures, advanced connectivity, data capture and analytics, mega casting, next generation e-motor and battery technology, smart cabin technology, and a new advanced manufacturing facility.
This will mean a temporary rise in investment levels, yet these strategically crucial investments will drive significant cost efficiencies in Volvo Cars’ next generation of fully electric cars. They lay the foundation for further profitable growth and increased EV margins.
The company has a strong balance sheet supporting transformative investments, with a liquidity position of SEK 75 billion at the end of 2023, and in the investment stage in 2024-2025, it expects cash flow generation to be relatively neutral.
From 2026 onwards, Volvo Cars expects only one point of investment decline, but also to reap the benefits of this strategy with further expansion and profitability. At this point, this will also generate a strongly positive loose cash flow.
As the company accelerates its transformation, it will place even more emphasis on successful expansion over time and prioritizing price over volume. You’ll build internal efficiencies, a physically powerful capital allocation across our business, and capitalize on your phase one investments.
Polestar update
Polestar enters the next exciting phase of its journey with a strengthened business plan and load metrics, increased enjoyment from its control team and board of directors, and the imminent launch of Polestar 3 and Polestar 4. This combination positions Polestar well for long-term growth. .
As we move forward with our transformation, adding the deployment of large-scale investments in the creation and adoption of new technologies and future-proof production facilities, we aim to develop Volvo Cars and focus our resources on our own ambitious journey.
We are therefore evaluating a conceivable adjustment in Volvo Cars’ stake in Polestar, adding a share distribution to Volvo Cars shareholders. This may lead to Geely Sweden Holdings becoming a significant new shareholder.
Geely will continue to provide all operational and financial to Polestar and, as a result, Volvo Cars will no longer provide additional funding to Polestar. However, we will end the repayment period of the existing convertible loan for 18 months until the end of 2028. This will be subject to appropriate approvals and additional data will be provided in due course.
Volvo Cars’ operational collaboration with Polestar in the R&D spaces
Ambitions clarified
In light of these plans, Volvo Cars has decided to clarify its ambitions that were set out at its IPO. The company stands firm on its strategy around electrification and technological leadership, one of the most ambitious in the industry. Yet by clarifying its ambitions with sharpened metrics, it improves transparency and allows for a better follow-up on its progress.
The company is pushing ahead with its ambition to record an EBIT margin of more than 8% by 2026, and is now doing so based on expected profits of between SEK 550 billion and SEK 600 billion. This clarified ambition further underlines that Volvo Cars is looking to grow in terms of profit and price rather than volume alone, thus focusing even more on successful growth.
Note to editors
Jim Rowan, chief financial officer Johan Ekdahl and chief commercial officer & deputy CEO Björn Annwall will host a livestream on Volvo Cars’ 2023 results for media, investors and analysts at 08:00 CET today. The presentations will be held in English and followed by a Q&A session.
Link to broadcast: https://. volvocars. com
Link for transmission only in China: https://. volvocars. com. cn
It will be conceivable to ask questions during the Q&A consultation after the main presentation. To participate, you can use the online chat to make your query or call. To call, participants will need to log in via the link below and then get the main login points and their individual PIN.
Link to register
This disclosure comprises data that Volvo Car AB (publ) is required to make public in accordance with the EU Market Abuse Regulation (EU No. 596/2014). The data sent for publication, via the contact person, on 01-02-2024 at 07:00 CET.
For further information please contact:
Volvo Cars Media Relations 46 31-59 25media@volvocars. com
Volvo Cars Investor Relations John Hernander 46 31-793 00investors@volvocars. com
The following files are available for download:
https://mb. cision. com/Main/20685/3920573/2576833. pdf
Volvo Cars Q4 and full year report 2023
https://news.cision.com/volvo-car-ab–publ-/i/318777-volvo-ex30-vapour-grey-exterior,c3263158
318777 Volvo EX30 Exterior Vapor Grey
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SOURCE Volvo Car AB (publ)