Volvo (VOLV) Q2 2016 Conference Call

Martin Lundstedt, President and CEO

Declining sales but improved operating profits reflective of cost cutting efforts

“Sales decreased with 7% to 3%, excluding FX and divested units, the underlying performance of the business improved from 7.1% to 7.8%, and in particular then that the Truck business, the global Truck business, reached 10% operating margin excluding the provision we made during June 4, the European Union investigation.”

Volumes lower in the US and higher in Europe

“When it comes to volume development in the second quarter, truck volumes were down with 5% whereoff Volvo down with 9%, in particular the US minus 39% that couldn’t fully be offset by Europe that was up 17%.”

They are positive on Europe with no sign on Brexit effect

“For Europe, we have a continuous good momentum and our expectation is that the market will land on somewhere around 290,000 and that is the forecast that we’re also keeping from quarter one reporting. And as I said, we have no strong signs of Brexit so far.”

Providing quality more important to them than chasing market share.

Main priority now is not really to hunt market shares without maintaining the right quality when it comes to our different deals to our customer base because we have the necessary scale already in the system, but with good quality we will grow eventually also with our customers. And we will grow with quality.

On Construction Equipment

“…we see growth in Europe and we see a slowing North America, specifically on general purpose equipment, larger machines related to oil and gas and mining, and the continuous weak situation in emerging markets and the big volume drop.”