Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Q1 2012 Earnings Presentation
21 slides from Volvo AB Class A's earnings presentation, 2012
Slide 1: AB Volvo
AB Volvo 1
Slide 2: Group overview – good sales momentum
VOLVO GROUP Group overview – good sales momentum OPERATING NET SALES MARGIN INCOME VOLVO GROUP 79 bn 6,239 M 7.9% TRUCKS 49 bn 3,521 M 7.2% VOLVO CE 18 bn 2,131 M 11.8% BUSES 5.2 bn 62 M 1.2% VOLVO PENTA 1.9 bn 112 M 5.8% VOLVO AERO 1.7 bn 235 M 14.0% FINANCIAL SERVICES 10.4 bn New financing 333 M A
Slide 3: Record sales volume but leverage impacted by market mix
VOLVO GROUP Record sales volume but leverage impacted by market mix SALES TREND 12-months 318 bn OPERATING INCOME 12 months 27 bn SEK bn SEK bn 79 6.5 6.2 72 59 2.8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2010 2011 2012 AB Volvo First quarter 2012 3
Slide 4: Good geographical balance
VOLVO GROUP Good geographical balance MARKET DEVELOPMENT* VOLVO GROUP* SALES Q1 SEK bn % South America 10% growth, 7% excl currency North America 20% 77 45% 4% 6% 9 70 24 Asia 5% - 4% 25 29 6 7 Eastern Europe Western Europe Other markets * Industrial operations AB Volvo First quarter 2012 4
Slide 5: High capital efficiency
VOLVO GROUP High capital efficiency CCC at a record low 19 days OPERATING CASH ROC* CASH FLOW* CONVERSION CYCLE* % SEK bn 12 months Days 13.2 bn 28% 24% 41 19 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 - 2.7 - 4.0 - 4.9 10 10 10 10 11 11 11 11 12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 -9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 6: North America drives sales growth
TRUCKS North America drives sales growth SALES TREND SALES BRIDGE SEK bn SEK bn 12 months 203 bn 8% growth, 6% excluding currency 35% 49 42% 9% 49 45 - 10% 45 - 4% 36 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 AB Volvo First quarter 2012 6
Slide 7: Effects from changed market mix
TRUCKS Effects from changed market mix Operating leverage -13%*, -20%* excluding currency effects OPERATING INCOME OPERATING MARGIN SEK bn % Currency + 52 M 12 months 17 bn 9.5% 7.2% 4.3 3.5 4.0% 1.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2010 2011 2012 * Excluding non-
Slide 8: Global demand stable – regional differences
TRUCKS Global demand stable – regional differences Improved book-to-bill ratio in Europe triggers moderate increase in production ORDERS ORDERS AND DELIVERIES Book to bill: 108% Q1-12 YoY QoQ BtB Europe 23,416 -2% +19% 117% 61 North America 13,766 +17% +8% 107% South America 5,603 -25% -7% 109% 56 A
Slide 9: Slightly improved outlook for HD trucks in Europe
TRUCKS Slightly improved outlook for HD trucks in Europe Units, thousands 400 Total market 2011 Act 2012 F Europe 29 242,000 230,000 350 North America 216,000 250,000 Brazil 112,000 105,000 Japan 25,000 30,000 2012 Forecast 300 North America 250’ (unchanged) 250 Europe 230’ (220’) 200 150 100 Brazil
Slide 10: Maintained volumes in China and growth in North America
VOLVO CE Maintained volumes in China and growth in North America SALES TREND SALES BRIDGE SEK bn SEK bn 12 months 66 bn 17% growth, 11% excluding currency 18 7% 5% 18 111% 10% 15 4% 15 11 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 AB Volvo First quarter 2012 10
Slide 11: Good leverage due to price management
VOLVO CE Good leverage due to price management Operating leverage 15%, 12% excluding currency OPERATING INCOME OPERATING MARGIN SEK bn % Currency +161 M 12 months 7.2 bn 2.1 1.8 11.4% 11.8% 9.0% 1.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2010 2011 2012 AB Volvo First qu
Slide 12: Declining total market in China
VOLVO CE Declining total market in China Units, thousands 450 Market forecasts 2011 Act 2012 F 2012 Forecast 400 Europe + 33% + 10 to 20% North America + 39% + 15 to 25% South America + 20% + 0 to 10% 350 Asia, excl China + 27% + 0 to 10% China + 9% - 15 to -25% China -15 to -25% 300 (+/- 0%) 250 As
Slide 13: Reorganization – status after 180 days
VOLVO GROUP Reorganization – status after 180 days Processes and - New structure operational - 25 new senior management structures teams in place - 439 new managers appointed - Substantially reduced number Customer of decision bodies - Process ownership and offering governance defined - New Financia
Slide 14: Reorganization – status after 180 days
VOLVO GROUP Reorganization – status after 180 days Processes and structures Customer - Brand segmentation project offering well under way – finished in Q4 - New Asian product plan in place and under implementation for: - trucks Utilizing the full - buses potential - construction equipment Q4 2011 Q1
Slide 15: Reorganization – status after 180 days
VOLVO GROUP Reorganization – status after 180 days Processes and structures Customer offering - Detailed mapping of cost Utilizing the full efficiency opportunities potential - Activity plan finalized in Q3 Q4 2011 Q1 2012 Q2 2012 Q3 2012 1. Design and prepare 2. Implement 3. Adjust and follow- 4. F
Slide 16: VOLVO
VOLVO
Slide 17: APPENDIX
APPENDIX AB Volvo First quarter 2012 17
Slide 18: Guidance
Guidance Market forecast Capex PPE 2012 Heavy-duty trucks 2012 - Europe 29 230,000 Ind. Operations ~10 bn - North America 250,000 - Brazil 105,000 Tax rate 2012 ~30% - Japan 30,000 CE 2012 - Europe + 10 to 20% - North America + 15 to 25% - South America + 0 to 10% - Asia, ex China + 0 to 10% - China
Slide 19: Currency effects – On operating income
Currency effects – On operating income SEK M Q1-12 vs Q1-11 Trucks + 52 Volvo CE + 161 Buses + 101 Volvo Penta + 24 Volvo Aero + 14 Other + 51 Volvo Group + 403 AB Volvo First quarter 2012 19
Slide 20: Upcoming events
Upcoming events Q2 REPORT July 24 Stockholm CAPITAL MARKET DAY Sept 25 Göteborg Q3 REPORT Oct 24 Stockholm www.volvogroup.com/IR AB Volvo First quarter 2012 20
Slide 21: VOLVO
VOLVO