Volvo AB sets new financial goals for growth and profitabilityThursday, 22 September 2011
Volvo's board has decided to introduce new financial targets for the Group from 2012 onwards.
The new financial targets is about that annual organic sales growth in truck operations, bus operations, the construction equipment business, and Volvo Penta will be equal to or higher than a weighted average of comparable competitors.
In addition, the operating margin for truck operations, bus operations, the construction equipment business, and Volvo Penta each year to be among the top two when compared with the respective competitors.
For customer financing operations, the current target of an ROE (return on equity) of 12-15 percent and an equity ratio of more than 8 percent is retained.
Volvo Aero has a goal of an ROE of 15-25 per cent. In the calculation of ROE for Volvo Aero, the sector will be attributed the same ratio as the Group's industrial activities.
In the case of targets, the capital structure is to be designed such that the net financial indebtedness of industrial activities including pension liabilities under normal circumstances should be below 40 percent of equity.
"After the realignment and a number of acquisitions, the Volvo Group today the size and geographic breadth needed to become long-term success, "said Chairman Louis Schweitzer in a statement.
The purpose of the new financial targets is reported to be that growth and profitability of the Group's various activities each year must be measured and compared to competitors.
Trucks and buses should be measured against Daimler, Iveco, MAN, Navistar, Paccar, Scania and Sinotruk.
Plant Machinery Operations, VCE, and Penta should be set against Brunswick, CAT, CNH, Cummins, Deere, Hitachi, Komatsu and Terex.
"Growth will be important to continue but the Board is of the opinion that the conditions now in place should be able to bring new profitability for the company and its new president,” Louis Schweitzer continues.
By Scancomark.se Team
The Leading Stocks Quotes Powered by Forexpros - The Leading Financial Portal.