Volvo's net sales rose 24.8% to SEK131.4bn in the first quarter. Reported operating profit, including restructuring costs, almost doubled, coming in at SEK17.1bn. Growth was largely driven by the core Trucks business, as well as Construction Equipment.
Performance was significantly better than the market expected.
More detailed quarterly results are expected on 20 April.
The shares rose 7% following the announcement.
View the latest Volvo share price and how to deal
Our view
First things first. This isn't the car company you might be thinking of. Today, Volvo is a truck and industrial equipment giant. There are millions of Volvo trucks, buses and machines rumbling around.
The transport specialist has come out swinging in the first quarter. Expectation-beating results have put the worst of fears around cost inflation and wider supply chain issues to bed. It was only January when we heard these problems were expected to dent performance this year, so we're looking forward to getting some more detail on how this about-turn has been orchestrated.
Looking longer-term we admire the group's high barriers to entry - Volvo's manufacturing and supply chains are enormous, expensive and complex, helping to protect market share. Volvo has enviable visibility over demand. The order intake for trucks was well over 200,000 last year as customers replaced old trucks and expanded their fleets.
Volvo not only produces vehicles, but services them. A 24/7 global servicing support network is a serious asset. If your truckful of goods is stuck somewhere, you need to have faith it can get moving ASAP. That feeds into more reliable revenue. Services currently make up a small part of overall revenues, and is expected to increase to over 50% by 2030. We think this target is achievable.
The group's also benefiting from booming e-commerce (those extra online orders mean increased need for logistics). Volvo is also a leader in the electrification of heavy-duty vehicles, including trucks and buses. Volvo wants over 35% of its vehicle sales to be electric by 2030. We view being a front-runner of sustainable haulage a real plus point.
The steadier style of Volvo's revenue means it's able to pay dividends, supporting a 6.2% dividend yield. Please remember nothing is guaranteed. Overseas dividends can be subject to withholding tax which might not be reclaimable.
We view Volvo as a steady-Eddie with longer-term growth potential. While we can't knock progress, the wider economic environment remains uncertain so ups and downs along the way can't be ruled out.
Volvo key facts
All ratios are sourced from Refinitiv. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn't be looked at on their own - it's important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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