Volvo Group is the world's #2 heavy-truck maker (Volvo, Renault, Mack), plus buses, Volvo CE and Penta, with a captive Financial Services arm. On Industrial Operations (the right operating lens, excluding the captive lending book) FY2025 was a cyclical down-year — industrial revenue ~SEK 458bn (-4% FX-adjusted) — yet industrial adjusted operating margin held and industrial ROIC was ~33% with economic profit +SEK ~27bn. The service/aftermarket base (~26% of group) cushions the cycle.
Balance sheet is a fortress (industrial net cash ~SEK 63bn). The valuation is fair, not cheap: ~19x trailing P/E and a ~4% dividend yield (incl. an extra) in a trough-ish year. Two honest caveats: statutory tax flatters NOPAT vs the ~27% effective rate, and capitalized R&D modestly flatters EBIT. Quality cyclical, priced about right.
At ~19x trailing P/E in a cyclical down-year with industrial ROIC ~33% and net cash, Volvo is fairly valued; the dividend (incl. extra) is the near-term return.
Base SEK 340 (fair for the quality + balance sheet); bull SEK 400 on a truck-cycle upturn + margin expansion; bear SEK 250 on a deeper freight/industrial downturn.
The market pays today’s enterprise value for roughly 5.1% NOPAT growth over 5 years. The business earns 33% on capital against a 9% cost of capital (spread +23.8 pp); the no-growth value is SEK 276/share (85% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 400 | +12% | +24% | 30% | Truck-cycle upturn + margin expansion |
| Base | SEK 340 | +7% | +5% | 45% | Fair for quality + fortress balance sheet |
| Bear | SEK 250 | -3% | -23% | 25% | Deeper freight/industrial downturn |
| Prob-weighted | SEK 336 | — | +4% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 7.50% | 348 | 385 | 413 | 457 | 490 | 580 |
| 8.25% | 307 | 339 | 362 | 399 | 426 | 500 |
| 9.00% (base) | 276 | 303 | 323 | 354 | 377 | 440 |
| 9.75% | 252 | 275 | 292 | 319 | 338 | 392 |
| 10.50% | 232 | 252 | 266 | 290 | 307 | 353 |
Green = fair value above the current price of SEK 323.60. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
A recovery in heavy-truck demand lifts volumes + margins off a trough.
~26% of group; stabilizes margin through the cycle.
Industrial net cash ~SEK 63bn funds dividends + extras.
BEV trucks + connected services + uptime offerings.
Volvo is a high-quality, fortress-balance-sheet global truck maker with industrial ROIC ~33% and EP +SEK ~27bn even in a down-year, fairly valued at ~19x P/E / ~4% yield. HOLD (constructive); base SEK 340.
Own it for through-cycle quality + capital returns; add into cyclical weakness.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Industrial Operations net sales (FY2025) | 457,509 | Consolidated income statement - full year, Industrial Operations column | Industrial Operations net sales FY2025 = 457,509 (FY2024 504,975). Group net sales 479,183; Financial Services 26,469; eliminations -4,795. Used as the operating revenue base. |
| Industrial Operations operating income (reported EBIT, FY2025) | 44,379 | Consolidated income statement - full year, Industrial Operations column | Industrial Operations reported operating income FY2025 = 44,379 (FY2024 62,198), operating margin 9.7%. Group reported operating income 48,506; Financial Services 3,869. |
| Industrial Operations adjusted operating income (FY2025) | 47,043 | Adjusted operating income table (Note 6 reference) | Industrial Operations adjusted operating income FY2025 = 47,043 (FY2024 61,305), adjusted margin 10.3%. Group adjusted operating income 51,218; adjustments -2,712 bridge to group reported 48,506. Industrial adjustment = 47,043 - 44,379 = 2,664 (accepted as one-off). |
| Group income before tax / income taxes / net income (FY2025) | 34,707 | Consolidated income statement - full year, Volvo Group column | Group income after financial items 47,391; income taxes -12,685 (effective 26.8%); income for the period 34,707; attributable to owners of AB Volvo 34,456; NCI 251. Industrial-segment taxes -11,669 on Industrial pre-tax 43,522 (26.8%). |
| Industrial Operations total assets (Dec 31 2025) | 401,461 | Consolidated balance sheet - assets, Industrial Operations column | Industrial Operations total assets 401,461 (FY2024 451,684). Top of the capital-employed reconciliation (total assets - non-IB liabilities 228,777 = capital employed 172,684). |
| Industrial Operations total equity / equity to owners (Dec 31 2025) | 151,013 | Consolidated balance sheet - equity and liabilities, Industrial Operations column | Industrial total equity 151,013 (equity attributable to owners 150,931 + NCI 83). Group total equity 178,477; equity to owners 178,395 (book value 87.7 SEK/share). Equity ratio Industrial 37.6%. |
| Industrial PP&E / inventories / trade payables (Dec 31 2025) | 83,758 | Consolidated balance sheet, Industrial Operations columns | Industrial PP&E 83,758; assets under operating leases 36,072; inventories 65,104; accounts receivable 29,333; trade payables 67,265; goodwill 23,659; other intangibles 22,769 (incl. capitalised R&D). The operating-capital building blocks. |
| Industrial Operations cash and marketable securities (Dec 31 2025) | 68,017 | Consolidated balance sheet - assets, Industrial Operations column | Industrial cash and cash equivalents 67,875 + marketable securities 142 = 68,017 liquidity. Operating buffer ~2% of sales (9,150) retained; excess 58,867 stripped from IC. |
| Industrial interest-bearing financial liabilities (excl. pension/lease, Dec 31 2025) | 13,800 | Net financial position excl. post-employment benefits and lease liabilities, Industrial Operations | Industrial total interest-bearing financial liabilities excl. pension/lease = 13.8bn; total interest-bearing financial assets = 76.9bn; net financial position = +63.0bn NET CASH. Drives net_debt = -63,000. |
| Industrial net financial position excl. pension/lease (net cash, Dec 31 2025) | -63,000 | Net financial position table, Industrial Operations | Industrial net financial position excl. pension and lease = +SEK 63.0bn net cash (FY2024 85.9bn). Including pension (-6.8bn) and lease (-7.9bn) it is +48.4bn. Used directly as net_debt (negative = net cash). |
| Industrial Operations D&A and EBITDA (FY2025) | 18,573 | EBITDA and EBITDA margin, Industrial Operations | Industrial D&A FY2025 = 18,573 (amortisation product/software dev 3,591 + other intangibles 392 + depreciation tangible 14,589); EBITDA 62,951 (margin 13.8%). Net R&D capitalisation +4,026 (gross 7,553 less amortisation 3,527). |
| Industrial Operations ROCE and operating cash flow (FY2025) | 0.253 | Key ratios / Return on capital employed, Industrial Operations (12m rolling) | Company-reported Industrial ROCE 25.3% (12m rolling; 25.7% on year-end capital employed); return on operating capital 44.5%. Industrial operating cash flow FY2025 = 21,837 (FY2024 45,295). Used to reconcile capital employed and as the FCF proxy. |
| Shares outstanding (A + B, total) | 2,033 | Quarterly figures - shares; share-structure announcement (31 Mar 2026) | Total 2,033,452,084 shares (441,543,462 Series A + 1,591,908,622 Series B), zero own/treasury shares. Weighted-average 2,033m used for EPS 16.94. Total group shares used for market cap per the prompt. |
| Live share price VOLV-B.ST | 324 | VOLV-B.ST Nasdaq Stockholm close 2026-06-08 | VOLV-B close 323.60 SEK on 2026-06-08 (market cap ~654-658bn). 52-week range 244.90-354.00. Applied to 2,033.452084m shares for market cap 658,025. |
How the mttssn view has evolved — each prior dated note is preserved.