Swedish truck maker Volvo AB (VOLVb.ST) announced on Wednesday that it aims to strengthen earnings resilience and drive shareholder returns through cost control, decentralized decision making and growth in services, as it faces geopolitical uncertainty and technological change.
Chief Executive Martin Lundstedt told investors at the company's Capital Markets Day that demand for transport and infrastructure solutions would continue to grow, despite regionalization and rapid technological shifts.
Volvo expects its Trucks segment and Volvo Construction Equipment to outperform historical growth rates. Renault Trucks aims to double light-duty volume, while Volvo Penta plans to double revenue in coming years.
Volvo Autonomous Solutions is targeting driverless on-highway operations by the first quarter of 2027 and has an ambition to approach approximately $3 billion in revenues within five years.
Earnings resilience is expected to be supported by flexibility tools, disciplined pricing and consistent cost control.
By Growing the service business, recurring revenues and support earnings is anticipated to increase over the business cycle.
In a trading update, Chief Financial Officer Mats Backman noted that business activity remained solid and customer demand and deliveries in Europe were stable at good levels. In North America, demand remained strong with production gradually increasing. Cost inflation is trending upward while high utilization of customers' trucks and machines supports service activity.
The group's investments in R&D and capital expenditure have laid the foundation for continued technology leadership while maintaining a high return on capital employed.
On the Stockholm Stock Exchange, shares of Volvo were losing 0.88 percent, changing hands at 316.10 Swedish Kroner.
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