Volvo Group - six months ended June 30, 2010

Volvo Group - six months ended June 30, 2010

During the second quarter, the Volvo Group's sales continued to increase
as a result of the gradual recovery in demand in most of the Group's
markets. At the same time, profitability continued to improve thanks to
the sales increase, strict control over our costs and a good
productivity development in our industrial system. Adjusted for
exchange-rate fluctuations, the Group's sales rose 31% compared with the
second quarter of 2009. Operating income reached SEK 4.8 billion in the
second quarter with an operating margin of 6.9%. Operating cash flow in
the Industrial Operations was strong and amounted to SEK 8.5 billion.

  · In the second quarter net sales increased by 27% to SEK 68.8 billion
(54.0). Adjusted for currency movements, sales increased by 31%
  · The second quarter operating income amounted to SEK 4,770 M
including a write-down of assets in Volvo Aero Services amounting to SEK
223 M (Loss SEK 6,883 M). Operating margin in the second quarter was
6.9% (Negative 12.8%)
  · In the second quarter basic and diluted earnings per share amounted
to SEK 1.55 (Negative SEK 2.75)
  · In the second quarter, operating cash flow in the Industrial
Operations was positive in an amount of SEK 8.5 billion (Negative SEK
2.9 billion)
  · During the second quarter, net debt in the Industrial Operations was
reduced by SEK 5.1 billion to SEK 39.9 billion, corresponding to 63.4%
of equity (53.3% excluding provisions for post-employment benefits)
  · Decision to start production of the Group's new medium duty engine
range in India

“In the near term, we will focus on ensuring that planned production
increases in most of our manufacturing facilities run as efficiently as
possible, with minimum capital being tied up. The pace in the recovery
in demand has been rather moderate, which is positive as it gives us a
good opportunity to continue with the activities that contribute to
further increasing productivity and efficiency. In this area, employees
in all parts of our operations have made significant contributions.”
Leif Johansson, President and CEO.

Contacts Investor Relations:   
Christer Johansson            +46 31 66 13 34
Patrik Stenberg               +46 31 66 13 36
Anders Christensson           +46 31 66 11 91
John Hartwell                 +1 212 418 7432