The Volvo Group has in recent years gone through a substantial restructuring process in order to reduce structural costs and increase efficiency and is currently in a phase where focus is on organic growth and improved profitability through continuous improvement and innovation.
A clear and straightforward operating margin target supports the efforts to drive performance across the Group through the business cycle. The target also aligns with the way the Group and its business areas are challenged and measured internally. The Board’s target is for the Group’s operating margin to exceed 10% measured over a business cycle.
A debt-free industrial balance sheet, excluding pension and lease liabilities, enables the Volvo Group to better manage cyclicality in a capital-intensive industry and to secure competitive cost of funds for the Financial Services’ operation.