Volvo Group (VOLV) investor relations material

Strategic direction and market outlook

• Focus has shifted from purely growth to building resilience alongside growth, leveraging a broad portfolio and global presence to navigate cyclical markets, geopolitical uncertainty, and energy transition challenges.

• Customer-centricity is emphasized, with leadership engaging in thousands of direct conversations to tailor solutions and build trust, driving both revenue and loyalty.

• Decentralized decision-making, strong cost control, and flexibility tools are prioritized to drive speed, execution, and earnings resilience.

• Continuous portfolio review, including divestments, investments, and new business models, supports adaptability and performance.

• The transition to zero-emission solutions is guided by a four-pillar approach: decarbonization, resilience, competitiveness, and national security.

Financial performance and capital allocation

• Margin expansion and reduced volatility have been achieved through operational resilience, service growth, and decentralized decision-making.

• Service business has grown at a 5% CAGR, now contributing high profitability and stability, with recurring revenues from service contracts and a growing installed base.

• Operating margins have consistently exceeded 10% in recent years, with a focus on maintaining double-digit margins.

• Capital allocation remains disciplined, balancing investments in innovation and operations with consistent and increasing dividends, supported by a strong balance sheet and high returns on capital employed (~25%).

• Net sales in 2025 reached SEK 479 billion (EUR 43 billion), reflecting robust performance.

Growth opportunities and business development

• Targeting growth in on-road freight, construction, urban logistics, mining, agriculture, and defense, with tailored strategies for each segment.

• On-road segment leads with high margins, market share gains in Europe and Brazil, and a strong push to replicate this in North America through new products, expanded capacity, and dealer investments.

• Service business expansion, including predictive maintenance, financing, and digital services, is a key lever for growth.

• Retail network strengthening and regional value chain investments accelerate market growth and customer proximity.

• Bolt-on acquisitions and retail expansion are expected to further drive growth and resilience, especially in services and recurring revenues.