Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Q4 2011 Earnings Presentation
22 slides from Volvo AB Class A's earnings presentation, February 2012
Slide 1: Volvo Group Fourth Quarter 2011
VOLVO GROUP FOURTH QUARTER 2011 VOLVO
Slide 2: Group overview – record quarter
Group overview – record quarter OPERATING NET SALES MARGIN INCOME VOLVO GROUP 87 bn 6,955 M 8.0% TRUCKS 57 bn 4,906 M 8.6% VOLVO CE 17 bn 1,649 M 9.8% BUSES 6.7 bn 295 M 4.4% VOLVO PENTA 1.9 bn 94 M 4.8% VOLVO AERO 1.9 bn 151 M 8.1% FINANCIAL SERVICES 12.6 bn New financing 262 M AB Volvo Fourth quar
Slide 3: Strong growth in N America and E Europe
Strong growth in N America and E Europe MARKET DEVELOPMENT* VOLVO GROUP* SALES Q4 SEK bn % South America 18% growth, 20% excl currency 85 North America 6% 15% 11 19% 21 Asia 72 40% 47% 6% 23 31 7 7 Eastern Europe Western Europe Other markets * Industrial operations AB Volvo Fourth quarter 2011 3
Slide 4: Group sales and operating income at all-time-high
Group sales and operating income at all-time-high SALES TREND Full year 310 bn OPERATING INCOME Full year 27 bn SEK bn (+46 bn) SEK bn (+9 bn) 87 7.0 73 5.5 60 -2.3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2009 2010 2011 AB Volvo Fourth quarter 2011 4
Slide 5: High capital efficiency
High capital efficiency OPERATING CASH ROC CASH FLOW CONVERSION CYCLE % SEK bn Full year Days 14.1 bn 29% 15.1 20% 10.7 8.6 55 21 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 10 10 10 10 11 11 11 11 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Inventories CCC-days -16% 2009 2010 2011 Target
Slide 6: Strengthened financial position & proposed dividend
Strengthened financial Proposed dividend 2011 SEK 6 bn distributed to the shareholders position & proposed dividend SEK 12 bn re-invested in the Group NET DEBT ORDINARY DIVIDEND & YIELD PER SHARE SEK SEK & % 6 5:50 Direct return** 5 3.3% 76% of Equity 4 3:00* 3 2:50 25% 2 1 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 7: Trucks – Strong sales through market growth and improved market shares
Trucks – Strong sales through market growth and improved market shares SALES TREND SALES BRIDGE SEK bn SEK bn Full year 201 bn 19% growth, 21% excluding currency (+33 bn) 57 21% 4% 19% 46% 57 11% 48 48 38 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 AB Volvo Fourth quarter 2011 7
Slide 8: Trucks – Operating income continues to improve
Trucks – Operating income continues to improve Operating leverage 15%, 17% excluding currency effects OPERATING INCOME OPERATING MARGIN SEK bn % Currency -294 M Full year 18 bn 4.9 8.6% 7.3% 3.5 -3.5% -1.3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2009 2010 2011 AB Volvo F
Slide 9: Volvo CE – Growth in North America and improved market shares in China
Volvo CE – Growth in North America and improved market shares in China SALES TREND SALES BRIDGE SEK bn SEK bn Full year 14% growth, 15% excluding currency 65 bn (+11 bn) 11% 33% 17 17 38% 12% 15 15 -8% 10 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 AB Volvo Fourth quarter 2011 9
Slide 10: Volvo CE – Strong growth with stable margins, excl fx
Volvo CE – Strong growth with stable margins, excl fx Operating leverage -5%, 9% excluding currency OPERATING INCOME OPERATING MARGIN SEK bn % Currency -320 M Full year SEK 6.7 bn 1.8 1.6 12.0% 9.8% -5.6% -0.5 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2009 2010 2011 AB Vol
Slide 11: Trucks - Order intake slowing moderately
Trucks - Order intake slowing moderately ORDERS ORDERS AND DELIVERIES Book to bill: 0.84 Q3-11 Q4-10 Q4-11 YoY Europe 22,257 26,014 19,738 -24% 69 North America 11,898 10,414 12,690 +22% 58 South America 8,063 7,369 6,011 -18% Asia 13,772 14,617 14,221 -3% Other markets 3,985 3,637 5,044 +39% Total
Slide 12: Unchanged outlook for heavy-duty trucks
Unchanged outlook for heavy-duty trucks Units, thousands 400 Total market 2011 Act 2012 F Europe 29 242,000 220,000 (-9%) 350 North America 216,000 250,000 (+16%) Brazil 112,000 105,000 (-6%) Japan 25,000 30,000 (+20%) 300 2012 Forecast North America 250’ 250 Europe 220’ 200 150 100 Brazil 105’ 50 J
Slide 13: Market development – Construction Equipment
Market development – Construction Equipment Units, thousands 450 Market forecasts 2011 Act 2012 F 2012 Forecast 400 Europe + 33% + 10-20% China +/- 0% North America + 39% + 15-25% (+0-10%) South America + 20% + 0-10% 350 Asia, excl China + 27% + 10-20% China + 9% flat 300 250 Asia, excl China 200 +1
Slide 14: Reorganization – status after 120 days
Reorganization – status after 120 days - New structure operational Processes and - 25 new senior management structures teams in place - 109 new managers appointed - New governance principles & structures in place -- Brand segmentation initiated Customer Process - Asian ownership and product focus go
Slide 15: Strong full year
Strong full year • Net sales SEK 310 bn (+17%) • Operating income SEK 27 bn (+49%) • Operating margin 8.7% (6.8%) • Diluted EPS SEK 8.75 (5.36) • Net debt ratio 25.2% (37.4%) • Proposed dividend SEK 3.00 (2.50) AB Volvo Fourth quarter 2011 15
Slide 16: Investor Day – March 28, Pithampur, India
INVESTOR DAY – March 28, Pithampur, India PLANT TOUR - New Engine plant - Truck assembly - New paint shop PRESENTATIONS - Eicher Motors Ltd - Volvo Group Trucks in Asia AB Volvo Fourth quarter 2011 16
Slide 17: Volvo
VOLVO
Slide 18: Appendix
APPENDIX AB Volvo VOLVO
Slide 19: Guidance
Guidance Market forecast Capex PPE 2012 Heavy-duty trucks 2012 - Europe 29 220,000 Ind. Operations ~10 bn - North America 250,000 - Brazil 105,000 Tax rate 2012 ~30% - Japan 30,000 CE 2012 - Europe + 10-20% - North America + 15-25% - South America + 0-10% - Asia, ex China + 10-20% - China +/- 0% AB
Slide 20: Currency effects – On operating income
Currency effects – On operating income SEK M Q4-11 vs Q4-10 Trucks -294 Volvo CE -320 Buses -22 Volvo Penta -64 Volvo Aero -91 Other +366 Volvo Group -425 AB Volvo Fourth quarter 2011 20
Slide 21: Upcoming events
Upcoming events INVESTOR DAY March 28 Pithampur AGM April 4 Göteborg Q1 REPORT April 26 Stockholm Q2 REPORT July 24 Göteborg CAPITAL MARKET DAY Sept 25 Göteborg www.volvogroup.com/IR AB Volvo Fourth quarter 2011 21
Slide 22: Volvo
VOLVO