“The second quarter of 2020 was characterized by the COVID-19 pandemic and its negative effects on society and economic development. Measures adopted by countries to control the spread had a significant impact on our production and supply chain as well as on demand for our products and services. Our net sales decreased by 39% to SEK 73.2 billion. After having been standing still in April, production was gradually restarted in May and is currently running well thanks to great efforts by our colleagues and suppliers. We also took forceful actions to reduce activities and costs, including salary reductions, temporary layoffs as part of governmental programs and a reduction of purchased services. All of these activities contributed to the Volvo Group achieving an adjusted operating income of SEK 3.3 billion (15.1) with a margin of 4.5% (12.5),” says Martin Lundstedt, President and CEO.
Severe impact from COVID-19-related effects on both sales and earnings.
- In Q2 2020, net sales amounted to SEK 73.2 billion (120.7). Adjusted for currency movements, net sales decreased by 38%.
- Adjusted operating income amounted to SEK 3,272 M (15,105), corresponding to an adjusted operating margin of 4.5% (12.5).
- Reported operating income amounted to SEK 388 M (15,105).
- Operating income in Q2 includes restructuring charges of SEK 3,200 M related to the previously announced cost-reduction measures, which are expected to generate annual savings in the same magnitude with the majority taking effect during the first half of 2021.
- Currency movements had a positive impact on operating income of SEK 341 M.
- Diluted earnings per share amounted to SEK -0.14 (+5.47).
- Operating cash flow in the Industrial Operations was negative in an amount of SEK 5,718 M (positive SEK 13,867 M).
SOURCE: Volvo Group
