2021 half-year financial results – record performance

We had a record first six months in terms of sales, driven by strong demand for our SUVs and our Recharge-badged electrified cars. Today, we’re happy to report that our strong performance has also translated into a strong financial result.

To briefly recap our sales in the first half: we sold 380,757 cars around the globe. This was the best half-year performance in our history. It’s an increase of 41 per cent compared to the pandemic affected period in 2020 – and the company also saw strong growth of 12 per cent compared to the first six months of 2019 – a more relevant comparison without the pandemic disruption. Our 12-month rolling sales volume is approximately 775,000 cars, just shy of the 800,000 target we set 10 years ago.

Selling all those new cars generated revenue of 141 billion SEK, an increase of 26.3 per cent. Those better sales and revenues also translated into a higher profit, which was boosted further by cost efficiencies and positive results at our affiliated companies. The operating profit of 13.2 billion SEK is the best we ever reported for a financial half year. The operating margin came in at 9.4 per cent.

Not everything went our way: the global shortage of semiconductors posed a challenge to us in the first half. But we adapted production and shifted priorities in line with customer demand in all plants, which meant that we could reduce the impact on customer deliveries.

“The company continued to grow strongly despite the industry-wide semiconductor shortage, but more importantly, we demonstrated that we are a leader of the ongoing transformation in the automotive industry,” said Håkan Samuelsson, chief executive of Volvo Cars.

Throughout the first half we also took additional steps towards our all-electric future. Recharge cars are now a quarter of our global volumes, and that makes us the leader among traditional premium car makers when it comes to share of sales for chargeable cars.

As part of the move towards full electrification, we launched our second fully electric model, the Volvo C40 Recharge. At the same time, we firmed up our strategy of online sales to meet changing consumer behaviour. From now on, all fully electric models will be available exclusively through volvocars.com, and customers can order at their place of preference; from their home, at a Volvo studio, or together with a retailer. We are now operational with online sales in several markets, with transparent and flexible consumer offerings including care packages of service, wear and tear, as well as insurance. Volvo Cars’ subscription offering, Care by Volvo, had a fivefold increase in the first six months to over 10,000 contracts.

Securing sustainable batteries is key for our company’s transformation. Volvo Cars is therefore planning to join forces with Northvolt as a strategic partner for joint development and manufacturing of next generation battery cells.

To ensure focus on electrification, we’re also carving out our internal combustion engine operations into a new unit, Aurobay, in which Geely Holding will be a main shareholder. Through Aurobay, Volvo Cars will realise synergies as well as secure a supply of competitive combustion engines for our hybrid powertrains until our company is fully electric.

In May, our Board announced that it is evaluating a possible initial public offering (IPO) on Nasdaq Stockholm. The evaluation process continues.

Håkan Samuelsson said: “Volvo Cars has a decade-long track record of successful transformation. The car industry is changing more than ever and we have a strong determination to be the fastest transformer.”