Photo credits @ Volvo Trucks

Volvo Trucks lowers European forecasts for 2024 after 2023 results

AB Volvo, the Swedish truck maker, exceeded fourth-quarter profit expectations but faced challenges with weak order intake and adjusted production levels amid softening demand, anticipating a tougher 2024 for the trucking market, particularly in Europe; it was revealed on Friday when the company published its financial report for the fourth quarter and full year 2023.

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In the fourth quarter of 2023, Volvo Trucks continued to demonstrate its financial prowess. Net sales for Q4 increased by 10% to SEK 148.1 billion (approx 13 billion euros), or 8% when adjusted for currency movements.

The adjusted operating income for Q4 stood at SEK 18,384 million (approx 1.6 million euros), with an adjusted operating margin of 12.4%, showcasing a significant improvement from the previous year.

Reported operating income reached SEK 16,894 million (1,49 million euros), with positive currency movements contributing SEK 1,106 million (97.9 million euros) to the operating income.

Earnings per share for Q4 stood at SEK 5.93, underscoring the strong financial performance during this period. Operating cash flow in the Industrial Operations for Q4 amounted to SEK 22,655 million, further reinforcing Volvo Trucks’ robust financial position.

For the full year 2023, Volvo Trucks reported a substantial increase in net sales, reaching SEK 553 billion (48.8 billion euros), representing a nearly SEK 80 billion (approx 7 billion euros) increment from the previous fiscal year.

The adjusted operating income also witnessed an impressive boost, reaching SEK 77.6 billion (approx 6.8 billion euros), a substantial improvement from SEK 50.5 billion (approx 4.4 billion euros) in the preceding year.

The adjusted operating margin rose to an impressive 14.0%, up from 10.7%.

Furthermore, the return on capital employed in the Industrial Operations saw a significant increase, reaching 36.7%, compared to 27.4% in the previous year.

These results were achieved despite a year that was characterised by political turmoil, continued supply changes and cost inflation, said Martin Lundstedt, President and CEO, at the press conference.

However, these difficulties have clearly had an impact on the company, as it has revised down its forecasts for the European heavy truck market this year to 280,000 registrations for the region, down from 290,000 previously.