Volvo 2014 Annual Report Download - page 28
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A GLOBAL GROUP 2014
STRATEGY
24
Strategic Program 2013–2015
The activities within the Strategic Program
2013–2015 are being implemented as
planned. Among the activities are:
• Reduction of 4,400 white-collar employ-
ees and consultants
• Reduction in research and development
• Optimization of the European sales and
service channel for trucks
• Optimization of the European industrial
footprint for trucks
• Right-sizing of the truck sales organiza-
tion in Japan
• Industrial restructuring in Japan
• Consolidation and optimization of the
spare parts distribution worldwide.
ENTER 2016 UTILIZING THE FULL POTENTIAL
OF THE VOLVO GROUP
NEW SCOPE OF STRATEGIC PROGRAM
2013–2015
SEK10 billion
Structural cost to be reduced by SEK 10 billion
– implemented by end 2015 with full-year effect
in 2016 when compared with 2012.
New
initiatives
SEK6.5 billion
SEK 3.5
billion
STRATEGIC PROGRAM
2013–2015
Ongoing structural cost reduction initiatives.
New initiatives 2014
However, in the autumn of 2014 additional
opportunities to reduce the Group’s struc-
tural cost level were identifi ed and therefore
the scope of the Strategic Program was
increased with the following new activities:
• Reorganize Group Trucks Sales in order
to increase effi ciency and reduce costs
• Implement further cost-reduction activi-
ties in Volvo CE
• Review what is core and non-core in the
Group’s IT operations.
Increased scope of the
strategic program
Full-year savings of SEK 10 billion
In the ongoing activities in the Strategic Pro-
gram 2013-2015, the structural cost reduc-
tions were targeted at SEK 6.5 billion. The
new activities are targeted to generate an
additional SEK 3.5 billion of structural cost
reductions. By having implemented all activi-
ties before the end of 2015 the cost reduc-
tions are expected to result in full-year sav-
ings of SEK 10 billion in 2016 compared to
the full year 2012. Total restructuring costs
for the activities are expected to be SEK
6.0 billion to SEK 7.0 billion
In 2014 the total cost-reduction con-
nected to the program amounted to SEK
3.3 billion when compared with 2012.
Restructuring charges amounted to SEK
2.6 billion in 2014. At the end of the year
SEK 2.1 billion to SEK 3.1 billion in expected
restructuring charges remained.
The Volvo Group increases the scope of the cost savings in the Strategic Program 2013–2015.