2009-10-23 Volvo Group - nine months ended September 30, 2009

Although the third quarter remained, as expected, challenging in terms of profitability, there are some positive signs indicating that the decline in demand has bottomed out and that we are now beginning a gradual recovery.

These signs are the most obvious in the Group's second largest region in terms of sales, Asia, where the economic growth is also reflected in demand for the Group's products.

• In the third quarter net sales decreased by 31% to SEK 48.5 billion (69.8). Adjusted for currency effects, net sales decreased by 39%
• The third quarter operating loss was significantly reduced compared to the second quarter as a result of cost cutting measures. The operating loss amounted to SEK 3,286 M compared to an operating loss of SEK 6,883 M in the second quarter of 2009. In the third quarter of 2008 the operating income was SEK 3,177 M
• In the third quarter, basic and diluted earnings per share amounted to a negative SEK 1.44 (Positive SEK 0.98)
• In the third quarter, operating cash flow in the Industrial operations was negative in an amount of SEK 1.4 billion (Negative SEK 6.1 billion). Cash flow was positively impacted by SEK 3.4 billion in reduction of inventories
• During the quarter, net debt in the Industrial operations was reduced by SEK 0.7 billion to SEK 50.4 billion and the liquidity position was maintained with liquid assets of SEK 33.5 billion and unutilized credit facilities of SEK 31 billion, in total SEK 64.5 billion

"Although we see that the markets have stabilized, we are not relying on our profitability being boosted by a substantial recovery in sales of new products. We remain far below the long-term trend line for sales of new trucks and machines, and we will therefore continue to adjust our costs to current demand. We will also continue our work to improve efficiency throughout the Group," says Leif Johansson, President and CEO.