Volvo to Consider Increased Returns, Sets New Financial Targets
olvo AB’s board of directors may move to increase shareholder return at the company’s next annual general meeting after first considering possible acquisitions, the truck maker said Friday.
The world’s second-largest truck manufacturer also revised its operating margins target to 7% over a business cycle from 5% to 7%, while raising the restricting ratio for net debt to equity to 40% of shareholders equity from 30%, Volvo said in a statement.
The company will maintain its 10% growth target.
On Thursday, the Associated Press reported that Cevian Capital II Master Fund L.P. acquired a 5% voting stake in the world’s second-largest truck manufacturer in an effort to force a management restructuring.
Cevian has already won support from other Volvo investors to join a committee that selects the company’s board members, Bloomberg reported Friday.
In addition, Cevian head Christer Gardell will seek membership on Volvo’s board, Bloomberg said. (Click here for previous coverage.)