Volvo Group reported its latest financial results on Wednesday, revealing a decline in sales due to weakening demand for trucks in Europe. The company faced a challenging 2024 as inflation, geopolitical uncertainty, and market stabilization in key sectors impacted its performance.
Revenue and Profit Drop Amid Market Slowdown
In its full-year 2024 earnings report, Volvo Group reported net sales of SEK 526.8 billion (€45.98 billion), a drop from SEK 552.3 billion (€48.20 billion) in 2023. The primary reason for this decline was the reduced demand for trucks across Europe.
The company’s adjusted operating income for 2024 fell to SEK 65.7 billion (€5.73 billion), down from SEK 78.2 billion (€6.82 billion) in 2023.
For Q4 2024, net sales declined 6% to SEK 138.4 billion (€12.08 billion) from SEK 148 billion (€12.91 billion) in Q4 2023. Adjusted operating income in the quarter also dropped to SEK 14.0 billion (€1.22 billion), compared to SEK 18.5 billion (€1.61 billion) in Q4 2023.
The decline was attributed to slower construction and freight activity in several major markets following years of strong growth. Inflationary pressures and geopolitical instability also contributed to the company’s weaker financial results.
Strategic Innovation and Business Adjustments
Despite the slowdown, Volvo Group remained committed to innovation. CEO Martin Lundstedt highlighted the company’s strong focus on research and development (R&D) in 2024, particularly in Q4, as part of its broader strategy to drive efficiency and sustainability.
“2024 was a year with substantial product launches across Volvo Group and with a high pace in R&D spending, especially in Q4,” Lundstedt stated.
Looking ahead to 2025, the company expects R&D investments to stabilize slightly above 2024 levels. Additionally, Volvo is streamlining its portfolio, strengthening its core business, and forming new partnerships to accelerate the transition toward carbon-neutral and more efficient solutions.
To maintain shareholder value, Volvo announced an ordinary dividend of SEK 8.00 (€0.70) per share and an extra dividend of SEK 10.50 (€0.92) per share.
Volvo Cars Acquires Full Ownership of NOVO Energy AB
In a separate announcement, Volvo Cars confirmed its acquisition of Northvolt AB’s stake in their joint venture, NOVO Energy AB, gaining full ownership of the battery factory project in Gothenburg, Sweden.
The move comes after Volvo Cars announced in October that it needed a new partner to ensure the project stays on track. The financial details of the stake acquisition have not been disclosed, and the transaction is still subject to regulatory approval.
Northvolt AB, struggling with financial challenges, has been selling off non-core businesses and joint ventures to stabilize its financial position. However, the company has signed a framework agreement with Volvo Cars to explore potential future collaborations in North America.
Looking Ahead
Despite the challenges in 2024, Volvo Group remains committed to technological advancements and sustainable mobility solutions. The company’s focus on R&D and strategic restructuring is expected to help it navigate the evolving market landscape while continuing its transition toward greener and more efficient transportation solutions.