Volvo Cars signs EUR 1.3 billion sustainability-linked revolving credit facility
Volvo Cars has signed a EUR 1.3 billion sustainability-linked revolving credit facility, renewing an undrawn EUR 1.3 billion credit facility signed in 2017. The successful transaction underlines the growing confidence in the company’s financial and operational transformation.
The renewed facility has a clear link to Volvo Cars’ sustainability plans: as a sign of its ambition to become a climate neutral company by 2040, interest rate margins for the facility are linked to Volvo Cars’ progress in reducing its carbon emissions.
The facility is backed by a group of leading global and regional banks, underlining the financial community’s support for Volvo’s climate plan.
“This new credit facility underlines the financial industry’s pivotal role in stimulating and supporting sustainable development,” said Carla de Geyseleer, chief financial officer. “It also reinforces Volvo Cars’ commitment to sustainable financing, following the recent successful issuance of our first EUR 500 million Green Bond.”
The three-year facility has two one-year extension options and will serve as a back-up facility for general corporate purposes.
Citi, HSBC, Nordea and SEB acted as coordinators for the agreement and the facility encompasses 21 participating banks. The banks within the group are well diversified and will form the core relationship bank group for Volvo Cars globally.
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Volvo Car Group in 2019
For the 2019 financial year, Volvo Car Group recorded an operating profit of 14.3 BSEK (14.2 BSEK in 2018). Revenue over the period amounted to 274.1 BSEK (252.7 BSEK). For the full year 2019, global sales reached a record 705,452 (642,253) cars, an increase of 9.8 per cent versus 2018. The results underline the comprehensive transformation of Volvo Cars’ finances and operations in recent years, positioning the company for its next growth phase.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected car brands in the world with sales of 705,452 cars in 2019 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding since 2010.
In 2019, Volvo Cars employed on average approximately 41,500 (41,500) full-time employees. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for APAC is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected into a number of business ambitions: for example, by the middle of this decade it aims for half of its global sales to be fully electric cars and to establish five million direct consumer relationships. Volvo Cars is also committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.