New financial targets for AB Volvo
In September it was announced that the Board of Directors of AB Volvo had decided to implement new financial targets for the Volvo Group starting in 2012. The new targets have been set in order to enable the growth and profitability of the various operations to be measured and benchmarked annually against relevant competitors.
The financial targets for the Group are as follows:
- The annual organic sales growth for the truck, bus and construction equipment operations, as well as Volvo Penta, shall be equal to or exceed a weighted-average for comparable competitors.
- Each year, the operating margin for the truck, bus and construction equipment operations, as well as Volvo Penta, shall be ranked among the top two companies when benchmarked against relevant competitors.
- For Customer Finance Operations, the existing targets of 12-15% return of equity (ROE) and an equity/assets ratio exceeding 8% stand firm. Volvo Aero has an ROE target of 15-25%. When calculating the ROE, Volvo Aero will be assigned the same equity/assets ratio as that for the Group’s Industrial Operations.
- The capital structure target is set to a net debt, including provisions for post-employment benefits, for the Industrial Operations of a maximum of 40% of shareholders’ equity under normal conditions.
Volvo Group restructures its truck business and launches new organization
In October it was announced that the Volvo Group is to have a new organization which better utilizes the global potential of the brands and products within the truck operations. For example, the sales and marketing of all of the truck companies will be organized in three regional organizational units, directly under the CEO. In the same manner, all product development and production of trucks and engines will be placed in two new central organizational units under the CEO. Production, product planning and product development for the non-truck business areas will remain with their respective business area. The new organization will be in place as of January 1, 2012.