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Volvo Group – six months ended June 30, 2009

For the Volvo Group, the second quarter of 2009 remained difficult in terms of earnings in the wake of the exceptionally rapid decline in demand that followed the crisis in the financial system. The Group was, however, successful in reducing inventories, which contributed to a positive development in working capital.

• In the second quarter net sales decreased to SEK 54.0 billion (80.3). Adjusted for currency, sales during the second quarter of 2009 were at the same level as during the first quarter
• The second quarter operating loss amounted to SEK 6,883 M (Income 7,186)
• Operating income was negatively affected by SEK 3.2 billion in increased provisions for credit losses and residual value commitments, lay-off related costs and write-downs on inventories as well as costs associated with an agreement with UAW regarding healthcare benefits for retirees
• In the second quarter basic and diluted earnings per share amounted to a negative SEK 2.75 (Positive 2.53)
• In the second quarter, operating cash flow in the Industrial Operations was negative in an amount of SEK 2.9 billion (Positive 4.9). Cash flow was positively impacted by a SEK 5.8 billion reduction of inventories
• Liquidity position strengthened to SEK 63.5 billion, of which liquid assets of SEK 32.5 billion and unutilized credit facilities of SEK 31 billion

“After the strong growth of recent years, both through acquisitions and organically, the Volvo Group now has sufficient critical mass to be globally competitive. In the next few years, the focus will be directed toward strengthening profitability by increasing productivity and internal efficiency,” says Leif Johansson, President and CEO.

Find the full report under Interim reports

July 21, 2009

Contacts Investor Relations:
Christer Johansson, +46 31 66 13 34
Patrik Stenberg, +46 31 66 13 36
Anders Christensson, +46 31 66 11 91
John Hartwell, +1 212 418 7432