Volvo Car (VOLCAR) Q2 2024 earnings summary

Executive summary

• Achieved record core EBIT of SEK 8.2 bn and core EBIT margin of 8.1% in Q2 2024, with double-digit retail sales growth and record gross margins, especially in BEVs.

• Retail sales grew 15% year-over-year, with electrified vehicles accounting for 48% of sales and BEVs at 26%.

• EX30 became a top-three best-selling BEV in Europe; EX90 production ramped up in the US and China, with first deliveries in Q3.

• Gross margin reached a seven-year high at 22.8%, and BEV gross margin hit a record 20%.

• Cash flow was neutral for the quarter, with strong liquidity and balance sheet maintained.

Financial highlights

• Retail sales grew 15% year-over-year to 179k–205.4k units; revenue was SEK 101.5–102 bn, flat overall but up 3% excluding contract manufacturing.

• Gross margin increased to 22.8% from 19% last year; BEV gross margin rose from 3% to 20% year-over-year.

• Core EBIT margin reached 8.1%, with SEK 8.2 bn in core EBIT (up 28% year-over-year); EBIT (incl. JVs/associates) was SEK 8.0 bn (up 60%).

• Net income increased to SEK 5.7 bn (up 60%); EPS at SEK 1.79.

• Free cash flow was neutral; net cash position at SEK 14.7 bn; liquidity at SEK 63.5–66 bn.

Outlook and guidance

• Full-year retail sales growth guidance set at 12–15%, with neutral free cash flow expected for 2024–25.

• Macroeconomic and geopolitical uncertainties, including tariffs, are expected to impact profitability in the second half of 2024.

• Investment levels remain high in 2024–25, with expectations for reduced investment and stronger free cash flow from 2026 onward.

• EX90 first customer deliveries in Q3; EX30 production to be localized in Belgium in 2025.