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Research Tree provides access to ongoing research coverage, media content and regulatory news on VOLVO AB-B SHS. We currently have 19 research reports from 1 professional analysts.
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VOLVO AB-B SHS
VOLVO AB-B SHS
Truck delivery fall accelerates in Q3, but prices stabilise
21 Oct 16
The group’s consolidated accounts showed a Q3 revenue fall of 6.2% to SEK68.8bn which brought the ytd number to SEK219bn, a fall of 5.8%. Simultaneously, the EBIT numbers were SEK4.66bn (unchanged) and SEK13.8bn (-27%), respectively. While the 9M profit number is slightly ahead of our expectation (€13.35bn), the sales number is marginally lower (SEK221.8bn).
$75m disposal gain limited John Deere’s Q3 and 9M profit setback
19 Aug 16
The revenue decline of both the Agricultural and Construction Equipment divisions accelerated in Q3. The former division saw its turnover falling by 11% to $4.70bn in the last quarter (through to July) and by 7% to just above $14bn in the 9M. The respective numbers for Construction Equipment were -24% to $1.16bn and -21% to $3.7bn. In spite of this, Agricultural Equipment achieved a 21% EBIT gain to $571m in the last quarter but the operating result was down by 4% to $1.33bn in the 9M. However, these numbers include the above disposal gain from the listing of SiteOne Landscapes, in which Deere continues to own a 24% stake. Agricultural Equipment saw its EBIT falling by 58% to $54m in Q3 and by 58% to $197m in 9M. Finally, Financial Services suffered an operating profit setback of 20% to $191m in Q3 and of 26% to $545m in 9M. Management blames the lack of volume and negative currency impacts for the revenue and profit falls of the two manufacturing divisions. In addition, it blames less-favourable financing spreads, a higher provision for credit losses, and higher losses on lease residual values for the profit decline of Financial Services.
Continuously deteriorating Caterpillar numbers
26 Jul 16
The company saw its revenue falling by 16% to $10.3bn in Q2 which brought the H1 number to $18.4bn, a fall of 22%. The respective EBIT numbers were $785m (-41%) and $1.28bn (-58%). As these numbers are no better than management had expected in April, it is now seeing the full-year numbers coming in at the bottom end of the indicated range. The resources industries (-29% to $1.46bn) and energy & transportation (-20% to $3.75bn) have continuously been the weak spots in the last quarter whereas the revenue drop was more moderate from the construction industries (-8% to $4.43bn). In fact, divisional revenue started to recover in APAC (+12% to $892m) and was unchanged at just above $1bn in EMEA. In regional terms, Latin American revenue fell by another 31% to $884m while the rate of decline was in the vicinity of 15% in North America (to $5.0bn), EMEA (to $2.49bn) and APAC (to $1.94bn).
Rather poor H1 16 numbers might require further restructurings
19 Jul 16
Volvo showed accelerating rates of decline for Q2 compared to Q1 16 while we had expected a moderation. Consolidated revenue fell by 5.6% to SEK151bn in H1 which is marginally below our projected SEK155bn. However, EBIT of SEK9.1bn (-35%) is clearly lower than our anticipated SEK10.7bn. The truck division showed a 5.0% delivery fall to 98,780 vehicles while divisional revenue fell by 7.7% to just above SEK100bn. Consequently, the ASP fell by 2.9% to SEK1,016k. Finally, cash from operations (based on management’s definition) collapsed by 69% to SEK2.9bn which is the result of a very poor Q1.
Volvo adds another SEK2.3bn to provisions for having fixed prices
30 Jun 16
In the context of the EU investigation into price fixings of truck producers, the company had created a provision of SEK3.8bn in Q4 15 and it now adds another SEK2.3bn. Management seems to be worried that the previous provision is insufficient. The EU’s investigation is still ongoing and Volvo says that it is ‘fully’ cooperating. Hence, we are surprised that the number keeps going up.
Deere’s revenue and profits continuously under pressure
20 May 16
The group released Q2 15/16 numbers (FYE 31 October) and these show a continuing downward trend, in particular for its Construction & Forestry division and for Financial Services. While revenue of the Agricultural & Turf division was almost unchanged in Q2 (-0.4% to $5.74bn), revenue of Construction & Forestry fell by 16% to $1.37bn. Turnover of Financial Services was also almost unchanged (-2% to $117m). All of these variations were less strong in Q2 compared to Q1. However, divisional operating earnings deteriorated faster in Q2 in both Construction & Forestry (-61% to $74m) and Financial Services (-40% to $160m), whereas the profit slump was small at -4% to $614m in Agricultural & Turf. Management blames higher losses on lease residual values for the profit collapse of Financial Services, whereas the profit fall in Construction & Forestry is simply the result of falling volumes. For the full fiscal year, management expects retail sales of agricultural machinery to fall in all regions around the world. The rate of decline is expected to come in between 15% and 20% in both North and Latin America and to be unchanged or show a fall of up to 5% in both Western Europe and Asia. Volvo’s Construction Equipment division is expected to suffer a revenue fall of 5% and an EBIT drop of 14%. Taking a look at Deere’s numbers suggests that the expected profit fall is probably alright, but the revenue fall will possibly be sharper.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
Focused on the long term
08 Dec 16
These are rare events but it is nice to see a management use its public listing advantageously to trade short-term dilution in EPS for the optionality of asymmetric upside in the long term. With over £10m already in the balance sheet, ABD has successfully raised £5.4m gross in a placing and expects to raise another £1m from an offer. We were not surprised to learn that the placing was over 3.5x oversubscribed. How many listed UK companies are positioned to take advantage of the digital revolution in the automotive industry? The additional investment in new people, facilities, products & services should be dilutive to FY2017-18 EPS but this is small price to pay to establish the leading supplier of integrated test, measurement and simulation solutions to the autonomous vehicle industry. Our forecasts assume that growth will accelerate from FY2019. We raise our target price to 575p based on 15x FY2019 EPS, equivalent to Ricardo, the only other UK stock which has embraced the optionalities offered by the technological changes in the automotive industry.
07 Dec 16
Severfield’s (SFR’s) H117 results were well ahead of the previous year; margin performance and order book development cause us to raise our FY17 profit expectations. This combination has also proved to be a catalyst for share price outperformance following the results. Revenue growth and further margin development towards management’s stated aim of doubling FY16 PBT by 2020 can sustain further progress.
Exceptional trading continues
08 Nov 16
Keywords has announced that the strong trading in localisation and audio services has continued into H216. In particular, the Synthesis business acquired in April continues to benefit from exceptionally strong trading. Full-year results are now expected to be materially ahead of consensus and we upgrade our FY16e EPS by 13%. Erring on the side of caution, we have not changed our FY17 estimates significantly. Nevertheless, we believe the company does have a platform to sustain double-digit earnings growth, and hence medium-/long-term prospects for further share appreciation remain good.
N+1 Singer - Waterman Group - Encouraging AGM statement in line with expectations
09 Dec 16
This morning’s AGM Statement confirms that trading in the first four months of the year to 31st October was in line with expectations. Revenue was slightly above the prior year period and cash collection has remained strong. The Group has reiterated its commitment to maintaining a progressive dividend policy. The statement is encouraging and we therefore leave our forecasts unchanged. We note the attractions of a 5% dividend yield and consider the shares inexpensive at 4.5x FY’17 EV/EBITDA.