Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Q4 2010 Earnings Presentation
27 slides from Volvo AB Class A's earnings presentation, Feb 4, 2011
Slide 1: Fourth Quarter 2010
Fourth Quarter 2010 Press Conference, February 4, 2011
Slide 2: Group Highlights
Group Highlights Fourth quarter – Operating income SEK 5.5 bn – Operating margin 7.5% – Cash flow SEK 15.1 bn – Dividend SEK 2.50* (0) Business environment – Europe: improving market conditions – Asia: strong outside Japan – South America: strong market – North America: significant improvement in de
Slide 3: Volvo Group
Volvo Group Net sales Fourth quarter (SEK bn) 6% Eastern Europe North America 17% 11% South America 24% Asia 48% Western 35% Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Europe Quarter 60 59 69 64 73 12 Mth. rol. 218 221 236 251 265 7% Other markets Operating income (SEK M) Sales + Increased sales of new products
Slide 4: Volvo Group – Net Financial Debt
Volvo Group – Net Financial Debt Industrial Operations Net debt, Changes in Net financial debt SEK bn - Cash Flow + 15.1 bn 60 85.8% of equity - Currency - 0.9 bn 50 - Other - 0.5 bn 40 Total 13.7 bn 30 20 37.4% (28.5%) 10 0 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Pensions 9,5 6,0 6,1 6,4 5,7 5,8 Financ
Slide 5: Trucks
Trucks Net sales Operating income SEK bn SEK M Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Quarter 38 37 42 41 48 Quarter -1 316 1 444 2 478 2 700 3 490 12 Mth. rol. 139 138 146 157 167 12 Mth. rol. -10 805 -6 979 277 5 306 10 112 Margin -3,5% 4,0% 6,0% 6,6% 7,3% Highlights In Focus
Slide 6: Net order intake
Net order intake Trucks Net order Q4-09 Q3-10 Q4-10 Change Change 70 000 intake Q4->Q4 Q3->Q4 60 000 Europe 14,546 19,434 26,014 79% 34% 50 000 North America 4,661 9,350 10,414 123% 11% 40 000 South America 5,576 6,085 7,369 32% 21% 30 000 Asia 10,227 13,047 14,617 43% 12% 20 000 Other markets 3,156
Slide 7: Heavy-duty truck market - Europe
Heavy-duty truck market - Europe (EU members + Switzerland and Norway) Units, Thousands (heavy trucks) 350 Modification of definition In 1991 (East Germany) and in 2000 (new member states) In 2006 (new member states) 300 2011F: 250 220’ 200 2010A: 179’ 150 100 50 0 90 91 92 93 94 95 96 97 98 99 '00
Slide 8: North American Trucks
North American Trucks Dennis Slagle President North American Trucks AB Volvo Fourth Quarter 2010 8
Slide 9: Heavy-duty truck market – North America
Heavy-duty truck market – North America • Up 20% in 2010 (142,096 trucks) • Overall demand rising – construction still lagging • Freight volumes and rates rising, capacity tight • Aging fleet (oldest since deregulation) • Strength in aftermarket sales and used trucks AB Volvo Fourth Quarter 2010 9
Slide 10: Heavy-duty truck market – North America
Heavy-duty truck market – North America Units, Thousands (heavy trucks) 400 350 300 2011F: 220’ 250 200 150 2010A: 142’ 100 50 0 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 AB Volvo Fourth Quarter 2010 10
Slide 11: 2010 market share
2010 market share Volvo • U.S. and Canada up 2 percentage points • Volvo power penetration 75% • Volvo I-Shift penetration 26% Mack • U.S. and Canada steady despite construction • Maintained core segment leadership • mDRIVE sold out 2010 AB Volvo Fourth Quarter 2010 11
Slide 12: Well positioned in North America
Well positioned in North America • Leaner, more agile organization • Strong acceptance of EPA’10 solution • Vertical integration • Strong product portfolio • Showcase facilities • Improving price environment • Much improved used truck market • Market tailwinds AB Volvo Fourth Quarter 2010 12
Slide 13: Brand strategy – Mack
Brand strategy – Mack “Built Like a Mack Truck” Durability, Reliability, Application Excellence • Brand strength • Expand highway business – mDRIVE • EPA 2010 performance • Protect vocational leadership AB Volvo Fourth Quarter 2010 13
Slide 14: Brand strategy – Volvo
Brand strategy – Volvo “Driving Success” Driver Productivity, Safety, Fuel Efficiency • EPA 2010 performance • Distribution development • Showcase New River Valley • Shift toward Volvo values • Volvo power and I-Shift • Targeted marketing and price realization AB Volvo Fourth Quarter 2010 14
Slide 15: Retail market share U.S. and Canada 2010
Retail market share U.S. and Canada 2010 Rolling three month average 40% 37% 34% Daimler 31% 28% Paccar 25% 22% Volvo and Mack 19% International 16% 13% 10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AB Volvo Fourth Quarter 2010 15
Slide 16: Construction Equipment
Construction Equipment Net sales Operating income SEK bn SEK M Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Quarter -564 1 006 2 086 1 330 1 758 Quarter 10,2 11,1 15,3 12,7 14,7 12 Mth. rol. -4 005 -1 604 1 741 3 858 6 180 12 Mth. rol. 35,7 38,6 44,8 49,3 53,8 Margin, % -5,6% 9,0% 13,
Slide 17: Volvo Articulated Haulers
Volvo Articulated Haulers Clearing snow – in all conditions Production Planning AB Volvo Fourth Quarter 2010 17
Slide 18: Buses
Buses Net sales Operating income SEK bn SEK M Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Quarter -46 145 259 155 221 Quarter 5,8 5,1 5,3 4,6 5,6 12 Mth. rol. -351 -111 267 513 780 12 Mth. rol. 18,5 19,5 20,1 20,7 20,5 Margin -0,8% 2,9% 4,9% 3,4% 3,9% Highlights In Focus z Continued
Slide 19: Buses – New Coaches to India
Buses – New Coaches to India 9400XL AB Volvo Fourth Quarter 2010 19
Slide 20: Volvo Penta
Volvo Penta Net sales Operating income SEK bn SEK M Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Quarter 7 121 312 72 73 Quarter 1,9 2,0 2,6 2,1 2,0 12 Mth. rol. -230 -12 465 512 578 12 Mth. rol. 8,2 8,1 8,5 8,6 8,7 Margin 0,4% 6,1% 11,9% 3,5% 3,6% Highlights In Focus z Strong world m
Slide 21: Volvo Penta and Yamaha agreement
Volvo Penta and Yamaha agreement AB Volvo Fourth Quarter 2010 21
Slide 22: Volvo Aero
Volvo Aero Net sales Operating income SEK bn SEK M 241 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Quarter -169 152 -372 224 282 Quarter 2,0 1,9 2,1 1,8 1,9 12 Mth. rol. 50 119 -281 -165 286 12 Mth. rol. 7,8 7,7 7,8 7,8 7,7 Margin -8,5% 8,0% -17,4 12,3% 15,2% Highlights In Focus z De
Slide 23: Volvo Aero
Volvo Aero Unique contract guarantees Swedish Airforce full availability AB Volvo Fourth Quarter 2010 23
Slide 24: Financial Services
Financial Services New retail financing Operating income and return on equity SEK bn SEK M Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Quarter 7,0 6,8 8,9 8,8 10,7 Quarter 15 14 7 48 98 12 Mth. rol. 28,7 28,0 29,0 31,5 35,1 ROE -6,2% -2,8% -0,3% 0,0% 0,4% Highlights In Focus z Growth
Slide 25: Financial Services
Financial Services Total managed assets Penetration on new financing (SEK bn) W Volvo Volvo Renault Mack UD Americas E Europe Asia Buses Europe CE Trucks Trucks Trucks Trucks Q4 09 43 43 10 7 Q4 09 34% 28% 10% 16% 11% 6% Q4 10 36 44 5 9 Q4 10 35% 30% 7% 16% 20% 16% AB Volvo Third Quarter 2010 25
Slide 26: Group Summary
Group Summary Earnings per share Fourth quarter SEK • Sales 23% higher, +29% fx-adjusted • Operating income SEK 5.5 bn, operating margin 7.5% • Cost reductions maintained • Operating Cash flow SEK 15.1 bn Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 • Net debt 37% of equity Quarter 12 Mth. roll. -0,99 -7,26 0,83 -
Slide 27: Fourth Quarter 2010
VOLVO Fourth Quarter 2010