DOUGLAS A. BOLDUC

The Volvo numbers that stood out

Douglas A. Bolduc is managing editor at Automotive News Europe.
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Volvo's latest financial results were full of positive numbers but a couple really stood out.

"Cash flow is maybe the most important slide in the presentation today," Chief Financial Officer Hans Oscarsson said during the company's results conference today. "We started off 2016 with 35 billion [Swedish crowns] including a working capital facility of 6 billion and now we are up to 49.3 billion ($5.55 billion) in liquidity. This shows that we continue to be able to cover our investments -- and more."

When Oscarsson switched to the slide with Volvo's liquidity and debt structure it showed the automaker finished last year with a net cash position of 18.95 billion crowns ($2.13 billion).

Volvo never expected to be this far, this early in its transformation process since being purchased by Zhejiang Geely Holding from Ford in 2010.

When asked about the numbers in a phone interview today, Volvo CEO Hakan Samuelsson told me the company "generated a lot more cash than anticipated."

He said Volvo performed better than expected because of two factors: 1) the strength of the overall European, U.S. and Chinese markets last year and 2) the overwhelmingly positive reception the company has had for new models such as its XC90 flagship SUV.

"We were aware of the gap between us and our premium competitors," Samuelsson said, "but we have closed the gap much faster than expected."

You can reach Douglas A. Bolduc at dbolduc@crain.com.

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