Cash-flow statement

Chapter in PDF

The operating cash-flow affected by an increase in working capital

During 2013, operating cash flow in the Industrial Operations amounted to a positive SEK 1.5 billion (negative 4.8).

The cash flow within Industrial Operations was positively affected by the operating income and negatively affected by the increased working capital. Accounts receivables increased with SEK 4.8  billion, inventories increased SEK 3.2 billion and the trade payables increased SEK 7.9 billion.

Financial items and paid income taxes had a SEK 4.9 billion negative effect on cash flow within Industrial Operations, mainly through payments of interests and income tax.

Operating cash flow within Customer Finance was a negative SEK 7.6 billion (neg: SEK 14.8 billion), mainly due to increased customer financing-receivables.

The industrial operations’ investments in fixed assets and capitalized R&D during 2013 amounted to SEK 12.2 billion (14.6).

Capital expenditures in Trucks amounted to SEK 8.4 billion (10.7). Capital expenditures within Trucks have also this year to a large extent been driven by investments relating to the extensive product renewal with the completely new Renault Trucks range, new Volvo trucks, new heavy-duty trucks for growth markets, UD Quester, and a new Volvo VM in Brazil. Also Euro 6 emission regulations, and product related investments in production have had a large impact. There are also larger investments in the Kaluga-plant in Russia. During 2013 the Volvo Group continued to invest in the dealer network and workshops, mainly in Europe and Asia (mainly Japan), but also in Latin America.

Capital expenditures for Construction Equipment amounted to SEK 2.3 billion (1.7). The major investments during 2013 related to the new excavator plant in Kaluga, Russia; continuation of the investment program in the North American hub in Shippensburg, where the new sales office has been inaugurated as well as start-up of wheel loader production. The Jinan Technology center in China has been finalized during the year. The product related investments during the year refer mainly to the latest emission regulations in Europe and North America.

The investments in Buses were SEK 0.4 billion (0.3), and in Penta SEK 0.3 billion (0.2).

Investments in Volvo Rents were considerably lower during 2013 than previous year. During 2012 the rental fleet was renewed and expanded, affecting both investments in leasing assets and other assets. Total investments in leasing assets for Industrial operations during 2013 amounted to SEK 1.5 billion (3.6).

During 2014, investments in property, plant and equipment are expected to be on the same level as in 2013. The investments will mainly cover optimization of the industrial footprint, dealer investments and product related tooling; with a large share related to the Volvo Group strategic objectives.

Acquisitions and divestments
In September 2012 AB Volvo increased its shareholding in Deutz AG to just over 25% which had a negative impact on cash flow of  SEK 1.1 billion. 

Acquired and divested operations 2013 had a positive impact on cash flow of SEK 0.9 billion (positive 3.4).  

Financing and dividend
Net borrowings increased cash and cash equivalents by SEK 13.0 billion during 2013 (14.1).

During the year dividend of SEK 6.1 billion, corresponding to SEK 3.00 per share, was paid to the shareholders of AB Volvo.

Change in cash and cash equivalents
The Volvo Group’s cash and cash equivalents increased by SEK 1.8 billion during the year and amounted to SEK 27.0 billion at December 31, 2013.

Refer to Note 29 for principles for preparing the cash flow analysis.