Volvo (1K) | Hold | CMD: From resilience to growth

Research evidence excerpt

Volvo (1K) | Hold | CMD: From resilience to growth

Volvo Hold | Target Price: SEK335.00

Growth is becoming the main focus.

A recurring theme throughout the CMD was that Volvo believes it has largely completed the

heavy lifting required to improve resilience and profitability. The focus is now increasingly on

growth.

In Trucks, management highlighted opportunities to continue gaining market share in North

America following the successful launch of the new product range. Market share trends have

already been supportive, particularly in vocational segments, while the company also sees

significant opportunities in long-haul applications where its new products are gaining

traction.

Volvo Construction Equipment delivered a similar message, emphasising long-term growth

opportunities in construction, mining and quarrying. Management highlighted that structural

demand drivers remain attractive and that Volvo today is better positioned to invest through

the cycle than in previous downturns.

At the same time, management spent relatively little time discussing why VCE has not grown

faster in recent years. While weak end markets are clearly part of the explanation, questions

remain around competitive dynamics, particularly in developing markets where Chinese

manufacturers continue to expand.

Services remain a key valued driver.

Services remain one of Volvo's most important growth and resilience levers. Management

highlighted that the service portfolio has grown substantially over recent years and continues

to increase recurring revenues while reducing cyclicality.

The strategy remains centred on increasing customer lifetime value through broader service

offerings, stronger retail capabilities and closer customer relationships. This is particularly