Volvo 2007 Annual Report Download - page 73
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Please find page 73 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Further develop the technology offering, •
to ensure a role in future engine programs.
Fulfi ll commitment in the development •
and manufacture of the new GEnx
engine.
Expand component business. •
Increased volumes and improve profi t-•
ability in the aftermarket.
Further development has proceeded •
according to plan. Volvo Aero has
received the task of redesigning one of
the components in the GP7000 engine
to reduce its weight.
GEnx assignment completed, despite a •
tight timetable.
The component business grew. •
Operations in Bromma were phased •
out. Overall positive development of vol-
ume and profi tability, but profi tability in
the aftermarket will need to be
improved further.
Develop composite offerings for cold •
structures within the framework of the
acquisition of ACAB.
Meet increased volumes through •
improved productivity and lower prod-
uct costs.
Continued improvements in volumes •
and profi tability within the aftermarket
business.
Volvo Aero’s new design will result in a more
than 10% weight reduction.
To be able to further develop its lightweight
technology, Volvo Aero acquired Applied
Composites AB (ACAB) in December, a
Swedish company with 70 employees. The
goal is to develop and manufacture composite
aircraft engine components with the help of
ACAB’s technology, which is signifi cantly
lighter than corresponding metal parts. In
conjunction with the acquisition, Volvo Aero
will be investing approximately SEK 50 M in
research and development within the com-
posites area over the next 18 months.
Market
World airline passenger traffi c increased by
4.6% in 2007. Order bookings for large com-
mercial jets continued to increase and the
backlog at the end of the year grew to 6,848
aircraft. At current production rates, the back-
log represents about seven years production.
Continuing demand for new commercial jet
aircraft is also pushing up engine require-
Ambitions 2007 Outcome 2007 Ambitions 2008
Net sales by market
SEK M 2006 2007
Europe 3,798 3,462
North America 3,815 3,723
South America 173 127
Asia 356 234
Other markets 91 100
Total 8,233 7,646
Earnings
Volvo Aero’s net sales decreased by 7% in
2007 to SEK 7,646 M (8,233). The trend within
manufacturing of engine components remained
very strong, with increased manufacturing and
higher sales volumes of new spare parts in the
commercial sector. Adjusted for exchange rate
differences and the phase-out of Bromma
operations in 2007, sales rose 8%.
Operating income amounted to SEK 529 M
(359). Despite higher material costs, the com-
ponents business continued to report favorable
profi tability. In addition, profi tability improved
within the aftermarket business. The operating
margin increased to 6.9% (4.4).
ments. The engine order book increased to
14,404 large engines at the end of December,
an increase of 35%. Deliveries of large com-
mercial aircraft increased 7%, to 894 aircraft
in 2007.
The success for Volvo Aero’s largest com-
mercial engine project (GEnx) continued, as a
result of the sales success of Boeing 787 and
747-8. The GEnx engine program has now
accumulated 1,112 engines on the 787 and
747-8, which corresponds to an increase in
the order book by more than 40% compared
to a year ago. In January 2008, Boeing con-
fi rmed that fi rst fl ight of the 787 has been
delayed to around the end of the second
quarter 2008. Deliveries are expected to
begin early 2009.
For Volvo Aero, order bookings remain
strong and the value of the order book in the
component business at December 31 was
19% higher than at the same date in the pre-
ceding year.
Business areas 2007 69