OM:VOLV B

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, North America, South America, Asia, Africa, and Oceania.


Snowflake Analysis

Excellent balance sheet and good value.


Similar Companies

Share Price & News

How has AB Volvo's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VOLV B's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.5%

VOLV B

1.4%

SE Machinery

0.9%

SE Market


1 Year Return

7.1%

VOLV B

20.6%

SE Machinery

8.5%

SE Market

Return vs Industry: VOLV B underperformed the Swedish Machinery industry which returned 21.3% over the past year.

Return vs Market: VOLV B underperformed the Swedish Market which returned 8.3% over the past year.


Shareholder returns

VOLV BIndustryMarket
7 Day1.5%1.4%0.9%
30 Day15.1%12.1%8.5%
90 Day33.9%29.6%21.0%
1 Year7.1%7.1%21.7%20.6%10.1%8.5%
3 Year19.1%8.2%38.1%18.0%23.4%10.3%
5 Year75.4%50.0%89.4%52.3%37.3%10.4%

Price Volatility Vs. Market

How volatile is AB Volvo's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AB Volvo undervalued compared to its fair value and its price relative to the market?

10.7x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: VOLV B (SEK157.45) is trading above our estimate of fair value (SEK115.98)

Significantly Below Fair Value: VOLV B is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: VOLV B is good value based on its PE Ratio (10.7x) compared to the SE Machinery industry average (18x).

PE vs Market: VOLV B is good value based on its PE Ratio (10.7x) compared to the Swedish market (19.9x).


Price to Earnings Growth Ratio

PEG Ratio: VOLV B is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: VOLV B is good value based on its PB Ratio (2.2x) compared to the SE Machinery industry average (2.8x).


Next Steps

Future Growth

How is AB Volvo forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

26.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VOLV B's forecast earnings growth (26.5% per year) is above the savings rate (0.5%).

Earnings vs Market: VOLV B's earnings (26.5% per year) are forecast to grow faster than the Swedish market (17.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: VOLV B's revenue (5.5% per year) is forecast to grow slower than the Swedish market (6.2% per year).

High Growth Revenue: VOLV B's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VOLV B's Return on Equity is forecast to be low in 3 years time (14.7%).


Next Steps

Past Performance

How has AB Volvo performed over the past 5 years?

27.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VOLV B has high quality earnings.

Growing Profit Margin: VOLV B's current net profit margins (7.2%) are lower than last year (7.3%).


Past Earnings Growth Analysis

Earnings Trend: VOLV B's earnings have grown significantly by 27.9% per year over the past 5 years.

Accelerating Growth: VOLV B's earnings growth over the past year (0.1%) is below its 5-year average (27.9% per year).

Earnings vs Industry: VOLV B earnings growth over the past year (0.1%) exceeded the Machinery industry -7.2%.


Return on Equity

High ROE: Whilst VOLV B's Return on Equity (20.34%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is AB Volvo's financial position?


Financial Position Analysis

Short Term Liabilities: VOLV B's short term assets (SEK302.6B) exceed its short term liabilities (SEK220.4B).

Long Term Liabilities: VOLV B's short term assets (SEK302.6B) exceed its long term liabilities (SEK180.5B).


Debt to Equity History and Analysis

Debt Level: VOLV B's debt to equity ratio (110.9%) is considered high.

Reducing Debt: VOLV B's debt to equity ratio has reduced from 189.2% to 110.9% over the past 5 years.

Debt Coverage: VOLV B's debt is well covered by operating cash flow (21.2%).

Interest Coverage: VOLV B's interest payments on its debt are well covered by EBIT (38.9x coverage).


Balance Sheet


Next Steps

Dividend

What is AB Volvo current dividend yield, its reliability and sustainability?

3.49%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: VOLV B's dividend (3.49%) is higher than the bottom 25% of dividend payers in the Swedish market (1.49%).

High Dividend: VOLV B's dividend (3.49%) is low compared to the top 25% of dividend payers in the Swedish market (4.97%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VOLV B has been paying a dividend for less than 10 years.

Growing Dividend: VOLV B's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.4%), VOLV B's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VOLV B's dividends in 3 years are forecast to be covered by earnings (65.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

Martin Lundstedt (53yo)

4.75yrs

Tenure

kr51,609,960

Compensation

Mr. Martin Lundstedt, M.Sc., has been the Chief Executive Officer, President and Member of the Group Executive Board at AB Volvo (publ) since October 22, 2015. Mr. Lundstedt served as the Chief Executive O ...


CEO Compensation Analysis

Compensation vs Market: Martin's total compensation ($USD5.65M) is above average for companies of similar size in the Swedish market ($USD2.66M).

Compensation vs Earnings: Martin's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Martin Lundstedt
CEO, President4.75yrskr51.61m0.0094% SEK30.2m
Jan Ytterberg
Executive VP of Group Finance2.5yrsno data0.00010% SEK320.1k
Martin Weissburg
Executive VP4.33yrsno data0.0055% SEK17.6m
Joachim Rosenberg
Executive VPno datano data0.0094% SEK30.0m
Kina Wileke
Executive VP of Group Communication & Member of the Group Executive Board2.5yrsno data0.00075% SEK2.4m
Bruno Blin
Executive VP4.33yrsno data0.0012% SEK4.0m
Sofia Frändberg
EVP of Group Legal & Compliance7.25yrsno data0.0034% SEK10.9m
Jan Gurander
Deputy CEO & Member of the Group Executive Board6.5yrsno data0.0036% SEK11.6m
Scott Rafkin
Executive VP0.50yrno data0.0022% SEK7.1m
Roger Alm
Member of Group Executive Board1.5yrsno data0.00076% SEK2.4m
Jan Ohlsson
Executive VP of Group Trucks Operations & Member of Group Executive Board4.25yrsno data0.0022% SEK7.2m
Andrea Fuder
Chief Purchasing Officer3.5yrsno data0.0019% SEK6.0m

4.3yrs

Average Tenure

56.5yo

Average Age

Experienced Management: VOLV B's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Martin Lundstedt
CEO, President4.75yrskr51.61m0.0094% SEK30.2m
Joachim Rosenberg
Executive VPno datano data0.0094% SEK30.0m
Eckhard Cordes
Independent Director5.25yrsno datano data
James Griffith
Independent Director6.25yrsno data0.0020% SEK6.3m
Matti Alahuhta
Independent Director6.25yrsno data0.0072% SEK23.0m
Carl-Henric Svanberg
Independent Chairman8.25yrsno data0.098% SEK314.8m
Hanne de Mora
Independent Director10.25yrsno data0.00090% SEK2.9m
Paul Vikner
Vice Chairman - Mack Trucks Inc12.25yrsno datano data
Kathryn Marinello
Independent Director6.25yrsno datano data
Lars Ask
Employee Representative Director4.25yrsno datano data
Mikael Sällström
Employee Representative Director10.83yrsno data0.000010% SEK32.0k
Mats Henning
Employee Representative Director6.17yrsno data0.000040% SEK128.0k

6.3yrs

Average Tenure

62.5yo

Average Age

Experienced Board: VOLV B's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: VOLV B insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

AB Volvo (publ)'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AB Volvo (publ)
  • Ticker: VOLV B
  • Exchange: OM
  • Founded: 1915
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: kr320.054b
  • Shares outstanding: 2.03b
  • Website: https://www.volvogroup.com

Number of Employees


Location

  • AB Volvo (publ)
  • Gropegårdsgatan 2
  • Gothenburg
  • Västra Götaland County
  • 417 15
  • Sweden

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
0HTPLSE (London Stock Exchange)YesSeries B SharesGBSEKNov 1984
VOLV BOM (OMX Nordic Exchange Stockholm)YesSeries B SharesSESEKNov 1984
VOLV.FOTCPK (Pink Sheets LLC)YesSeries B SharesUSUSDNov 1984
VOL1DB (Deutsche Boerse AG)YesSeries B SharesDEEURNov 1984
VOLVBSBATS-CHIXE (BATS 'Chi-X Europe')YesSeries B SharesGBSEKNov 1984
VOLVBSEP (The Stock Exchange Prague Co. Ltd.)YesSeries B SharesCZCZKNov 1984
0MHWLSE (London Stock Exchange)Series A SharesGBSEKJan 1988
VOLV AOM (OMX Nordic Exchange Stockholm)Series A SharesSESEKJan 1988
VOLA.FOTCPK (Pink Sheets LLC)Series A SharesUSUSDJan 1988
VOL3DB (Deutsche Boerse AG)Series A SharesDEEURJan 1988
VOLVASBATS-CHIXE (BATS 'Chi-X Europe')Series A SharesGBSEKJan 1988
VLVL.YOTCPK (Pink Sheets LLC)UNSP ADR EACH REP 1 ORD SHSUSUSDJan 2016
VOL4DB (Deutsche Boerse AG)UNSP ADR EACH REP 1 ORD SHSDEEURJan 2016

Biography

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, North America, South America, Asia, Africa, and Oceania. The company offers trucks for long-haulage, construction, and distribution purposes under the Volvo, UD Trucks, Renault Trucks, Mack, Eicher, and Dongfeng brands; and city and intercity buses, coaches, and bus chassis, as well as associated transport systems under the Prevost and Nova Bus brands. It also provides construction equipment, including excavators, articulated haulers, wheel loaders, road construction machines, and compact equipment under the brand names of Volvo, SDLG, and Terex Trucks. In addition, the company offers engines and power solutions for leisure and commercial boats, as well as for power generation, industrial, and off-road applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repair, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Samsung SDI Co to develop battery packs for its electric trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/14 20:51
End of Day Share Price2020/07/14 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.