Press releases 2010

During the second quarter, the Volvo Group’s sales continued to increase as a result of the gradual recovery in demand in most of the Group’s markets. At the same time, profitability continued to improve thanks to the sales increase, strict control over our costs and a good productivity development in our industrial system. Adjusted for exchange-rate fluctuations, the Group’s sales rose 31% compared with the second quarter of 2009. Operating income reached SEK 4.8 billion in the second quarter with an operating margin of 6.9%. Operating cash flow in the Industrial Operations was strong and amounted to SEK 8.5 billion.

Volvo Aero has signed an agreement to sell its US subsidiary Volvo Aero Services. The sale is expected to have a negative impact of approximately SEK 200 M on the Volvo Group’s operating income during the second quarter. At the same time, the transaction is expected to have a positive effect of about SEK 400 M on the Group’s net financial debt in the third quarter.

AB Volvo hereby invites the media to a press conference on Thursday, July 22 in conjunction with the release of the Volvo Group’s interim report for the second quarter of 2010.

The Swedish state-owned venture-capital company, Fouriertransform, is investing SEK 20 M in El-Forest AB, in which Volvo Technology Transfer (VTT) is among the principal owners. The investment is being conducted on the basis of a private placement in El-Forest AB and enables the company to commence series production on the world’s first forestry machine powered by energy-efficient series hybrid technology.

Volvo Buses has received an order for 400 city buses for Casablanca in Morocco. One core reason that Volvo secured the order is that the buses have low life cycle costs.

Total deliveries from the Volvo Group’s truck operations in May amounted to 13,577 vehicles. This was an increase of 44% compared with the year-earlier period. Compared to April this year the deliveries increased by 4%.

The Volvo Group’s Indian joint venture company, VE Commercial Vehicles, VECV, is to invest a total of SEK 480 M (INR 2,8 bn) in the production of the Volvo Group’s new global medium-duty engine in India. The investment gives the Volvo Group a complete facility in India for processing and assembling the new medium-duty engine, which will be introduced in the Group’s trucks and buses worldwide in the next few years.

Volvo Buses will now commence serial production of its hybrid bus Volvo 7700 Hybrid and the double-decker Volvo B5L Hybrid. The hybrid bus will reduce fuel consumption by up to 35% and carbon emissions by an equal amount.

Volvo Buses has secured an order for 297 buses to be utilized in the capital of Chile, Santiago. The buses will be used in Transantiago, the city’s efficient public transport system.

Elisabeth Rocke has been appointed the new President of Volvo Business Services, VBS, a business unit within the Volvo Group. She will assume her duties on September 1.