Volvo Cars
has adjusted its core business ambitions for the coming years, reflecting the
company’s relentless focus on value creation while remaining pragmatic amidst
fluid market conditions.
The
adjusted business ambitions are revealed ahead of Volvo Cars’ Capital Markets
Day which takes place in Gothenburg, Sweden today. During the day, Volvo Cars
will reveal details of its value creation approach, technology roadmap and
product plan for the coming years.
Rather than
aiming for an absolute revenue target, Volvo Cars’ ambition is now to continue
outgrowing the premium car market until 2026, as it has done in recent years.
Given the
increased complexity especially in relation to global trade and tariffs, the
company also aims to achieve an EBIT* margin of 7-8 per cent for the full year
in 2026.
In terms of
free cash flow generation, Volvo Cars continues to aim for cash flow neutrality
in 2024 and 2025, followed by a strong free cash flow from 2026 onwards. From
2026 onwards, Volvo Cars expects to benefit further from its current investment
phase through higher profitability and stronger free cash flow.
The
adjusted revenue and EBIT margin ambitions follow on yesterday’s announcement
around Volvo Cars’ revised electrification ambitions. The company now aims for
50-60 per cent of its global sales by 2025 to consist of electrified cars, so
both plug-in hybrid and fully electric models.
By 2030, it
expects electrified cars to represent between 90-100 per cent of global sales
volumes. The remaining 10 per cent will allow for a limited number of mild
hybrid models to be sold, if needed.
These
adjusted electrification ambitions also lead to new CO2 reduction ambitions,
which remain leading for the automotive industry. Volvo Cars now aims to reduce
its CO2 footprint per car by 30-35 per cent by 2025 versus a 2018 baseline,
which is an important step towards a CO2 reduction per car of 65-75 per cent by
2030.
The company
will continue to work together with its suppliers to bring down emissions from
materials and from its operations, including its supply chain and logistics
networks.
For more
information on the company’s adjusted electrification ambitions, read here.
The company
continues to retain the potential for shareholder distribution once its current
investment phase is concluded. More details will follow closer to that point in
time.
“Volvo
Cars stands at a pivotal and exciting crossroads in our journey. We have been
laying the foundations for the last few years that put us in the strong
position we are in today,” says Jim Rowan, chief executive of Volvo Cars. “The
sharpened business ambitions we announce today further reinforce our commitment
to drive value as a business, while remaining true to our purpose. As I have
said before: business is not a game of perfection, it’s about continuous
progress and adaptation.”
Fr:
Source: Volvo Cars.
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