Volvo Car AB Class B · OMXSTO:VOLCAR_B
Volvo Car AB Class B — Debt Investor Presentation (November 2020)
43 slides from Volvo Car AB Class B's debt investor presentation, November 2020
Slide 1: Volvo Car Group Green Financing Framework Presentation
Volvo Car Group Freedom to move in a personal, sustainable and safe way Green Financing Framework Presentation
Slide 2: Disclaimer
Disclaimer By accessing this document, the person to whom it is provided (the “Recipient”) agrees to be bound by the following obligations and limitations. This document has been prepared and issued by Volvo Car AB (publ) (together with its subsidiaries, “Volvo Cars”). The information contained in t
Slide 3: Introduction to Volvo Cars
1 2 3 4 5 Introduction to Sustainability It’s time to Green Business Volvo Cars is key change Financing update Framework Volvo Car Group: Green Financing Framework Presentation 3
Slide 4: Volvo Cars in brief 2019
Volvo Cars in brief 2019 Well positioned to take advantage of industry change VOLVO CARS Fast growing premium OEM 705,000 SEK 274 BN SEK 14 BN SEK 69 BN 42,000 Cars sold Revenue EBIT Liquidity Employees STRATEGIC AFFILIATES +57% +118% >8x SEK 12BN +93% (50%) since 2011 since 2011 more than 2011 Free
Slide 5: Flexible, global production footprint supports continued growth
Flexible, global production footprint supports continued growth Global sales development 80000 US 15% of Europe sales 48% of China 60000 sales 22% of sales 2019 40000 2020 Production Other 14% of R&D 20000 sales Assembly / CKD 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Covid-19 effect on
Slide 6: Freedom to move - personal, sustainable and safe
Freedom to move - personal, sustainable and safe PERSONAL SUSTAINABLE SAFE CONNECTIVITY MAKING CARS SAFER KEY ENABLER – SINCE 1927 FOR FUTURE MOBILITY ELECTRIFICATION THE FUTURE IS NOW AUTONOMOUS DRIVING SHARED MOBILITY SAFETY IS KEY NEW CONSUMER SEGMENTS Volvo Car Group: Green Financing Framework P
Slide 7: Sustainability is key
1 2 3 4 5 Introduction to Sustainability It’s time to Green Business Volvo Cars is key change Financing update Framework Volvo Car Group: Green Financing Framework Presentation 7
Slide 8: Sustainability is as important to Volvo Cars as safety
Sustainability is as important to Volvo Cars as safety It’s in our DNA 1959 Three-point 1976 World’s first 3-way catalytic Safety Belt converter LambdaSond. Removes 90% of noxious exhaust emissions 1972 Rearward-facing Child Safety Seat 1996 Environmental requirements on suppliers 1991 Side Impact P
Slide 9: Sustainability is key to our future success
Sustainability is key to our future success Why? Our ambitions 1 Climate change 2 Meet growing 3 Meet – we must act regulatory consumer Climate neutral Circular business Leader in ethical & demands expectations company by 2040 by 2040 responsible business 4 Attract employees 5 Increase 2025 ambition
Slide 10: We aim to be a climate neutral company by 2040
We aim to be a climate neutral company by 2040 Ton CO₂e 2025 ambition: Per car 40 -50% 2018 reduction in 50% tailpipe emission 35 2025 30 reduction in 25 25% operational emissions 20 -25% 36 ton 15 reduction in supply 25% chain emissions 10 18 ton 17 ton 13 ton -25% 5 3 ton 2 ton would lead to a 40%
Slide 11: We aim to be a circular business by 2040
We aim to be a circular business by 2040 • Developing sustainable business models Circular Design 2025 ambition: • Recycled/bio-based materials Recycled and bio- 25 % based plastics Component Value Material Value Retention retention • Maximise resource efficiency 40% Recycled aluminium • Remanufactu
Slide 12: We aim to be a recognised leader in ethical and responsible business
We aim to be a recognised leader in ethical and responsible business Industry role model for Put sustainability on a par Sustainability criteria in Tackle corruption global people standards, with quality and cost in debt funding, investments and unethical equality and labour rights procurement and f
Slide 13: Collaboration is key
Collaboration is key Volvo Cars believes in the importance of engaging with other like-minded companies and organisations to drive our own sustainability performance and industry change We are an active Member of: We work with: Volvo Car Group: Green Financing Framework Presentation 13
Slide 14: It's time to change
1 2 3 4 5 Introduction to Sustainability It’s time to Green Business Volvo Cars is key change Financing update Framework Volvo Car Group: Green Financing Framework Presentation 14
Slide 15: Transitioning into a pure EV group
Transitioning into a pure EV group Investments in new technology and car models support our sustainable transformation Next generation platforms and electrification: Fully flexible platforms in-house design and prepared for electrification Strategic ownership in Carve out of traditional Polestar spe
Slide 16: Accelerating the shift, electrifying model line up toward 2025 EV target
Accelerating the shift, electrifying model line up toward 2025 EV target Volvo Cars fleet Strong PHEV Leader in premium Most ambitious EV target in the industry: CO2e decrease sales momentum plug-in sales in H1 50% BEV and 50% HEV Sales by 2025 +80% -16% 157 38 PHEV units 132 14% brand sales Targeti
Slide 17: Constant focus on reducing global operational emissions
Constant focus on reducing global operational emissions Climate neutral manufacturing operations by 2025 Skövde, Sweden • Climate neutral manufacturing Charleston, USA since January 2018 • Opened in 2018 • Uses electricity from • On site solar energy as renewable sources one power source • Heating g
Slide 18: Responsible supply chain and sustainable battery management
Responsible supply chain and sustainable battery management as we accelerate our EV journey Action Within the Supply Chain Responsible Battery Strategy CO2 commitments secured from our battery suppliers and blockchain technology used • Ambition to achieve 100 per cent throughout our cobalt supply ch
Slide 19: Sustainability at Volvo Cars is centrally governed and coordinated
Sustainability at Volvo Cars is centrally governed and coordinated Board of Directors (BoD) Executive Management Team (EMT) People and Sustainability Commercial & Committee Product Creation Board Corporate Board Operations Board Cluster Global Sustainability Global Sustainability Green Financing Man
Slide 20: Green Financing Framework
1 2 3 4 5 Introduction to Sustainability It’s time to Green Business Volvo Cars is key change Financing update Framework Volvo Car Group: Green Financing Framework Presentation 20
Slide 21: Introduction to the Green Financing Framework
Introduction to the Green Financing Framework • The Green Financing Framework aligns our sustainability strategy with financing opportunities that lead to a positive impact on environment and society • The Green Financing Framework is aligned with both the ICMA Green Bond Principles (GBP) and the LM
Slide 22: Use of proceeds: Strategic projects in Clean Transportation
Use of proceeds: Strategic projects in Clean Transportation R&D: Zero emission vehicles New electric powertrain and platform technology Manufacturing: Increased BEV production capacity and battery assembly Investments into polestar to Expected allocation of proceeds spearhead electrification R&D Man
Slide 23: Other elements from Green Financing Framework
Other elements from Green Financing Framework Green Financing Committee (GFC) responsible for the Eligible Green Projects from selection till reporting Process for project evaluation Identification Selection Tracking Transparency and selection potential Green Projects evaluated by GFC business and f
Slide 24: Second Party Opinion by CICERO Shades of Green
Second Party Opinion by CICERO Shades of Green SHADES OF GREEN Green Financing Framework has received Dark Green shading by CICERO Shades of Green GOVERNANCE PROCEDURES CICERO Shades of Green finds the governance procedures in Volvo Cars’ framework to be Excellent GREEN BOND and GREEN LOAN PRINCIPLE
Slide 25: Business update
1 2 3 4 5 Introduction to Sustainability It’s time to Green Business Volvo Cars is key change Financing update Framework Volvo Car Group: Green Financing Framework Presentation 25
Slide 26: 2020 H1 business update – market share gains despite Covid-19 impact
2020 H1 business update – market share gains despite Covid-19 impact • Market share gains in all regions despite Covid-19 impact, positive y-o-y global sales growth since July • Liquidity remained strong and cost efficiencies intensified, which partly offset reductions in revenue and EBIT from volum
Slide 27: Strong historical performance paves the way for continuous growth
Strong historical performance paves the way for continuous growth Retail sales Revenue +4.4% +9.1% -9.9% -6.6% 705 253 274 256 642 635 SUV 535 572 209 Estate 181 273 359 445 254 424 Sedan 170 198 185 161 116 69 Other 42 101 98 99 95 2016 2017 2018 2019 2020 June LTM 2016 2017 2018 2019 2020 June LTM
Slide 28: Building the future through focused and controlled investments
Building the future through focused and controlled investments Annual capital expenditure (bn SEK) Annual research and development expenses (bn SEK) 11.4 11.5 25.7 10.9 12.3% 10.2 10.2 9.5 20.9 21.0 20.1 19.3 8.7 10.8% 13.9 6.2 7.3 9.2 8.7% 8.3% 9.2 5.9% 5.7% 7.7% 7.9% 4.7 4.3% 4.2% 4.5% 3.6% 17.0 1
Slide 29: Robust liquidity position with significant positive net cash
Robust liquidity position with significant positive net cash 2020 maturity profile and split (MSEK) 68,100 24,300 Net cash 500 11,800 32% 32,000 68% 43,300 7,600 7,400 6,650 2,400 450 5,850 4,400 650 2,450 6,200 1,800 5,200 450 5,200 3,000 2,000 200 Liquidity 2020 2021 2022 2023 2024 2025 2026 June
Slide 30: Outlook H2 2020
Outlook H2 2020 Ambition to return to sales volume, profit and cash flow similar to H2 2019 levels. Committed to continue investments in new technologies and products. Volvo Car Group: Green Financing Framework Presentation 30
Slide 31: Fastest growing premium auto mobility group with leading ambitions
Fastest growing premium auto mobility group with leading ambitions Leading ambitions Financial strength Climate action, Circular economy, Ethical & responsible business SEK68bn of liquidity supporting a prudent financial policy Superior growth Fast-transforming Track record of outperformance set to
Slide 32: Investor relations contact
volvocars.investors.com investors@volvocars.com
Slide 33: Appendix 1: Green Financing Framework
Appendix 1: Green Financing Framework Volvo Car Group: Green Financing Framework Presentation 33
Slide 34: Use of Proceeds
Use of Proceeds An amount at least equivalent to the net proceeds from the issuance of the Green Financing Instrument, will be used to finance or refinance, in whole or in part, new or existing, projects, assets or activities that meet the Eligibility Criteria defined below: Eligible Categories EU E
Slide 35: Process for Project Evaluation and Selection
Process for Project Evaluation and Selection A cross-departmental Green Financing Committee (the “GFC”) has been established as an important structure within its overall governance framework. The GFC will be responsible for: • Reviewing and validating the portfolio of Eligible Green Projects • Monit
Slide 36: Management of proceeds
Management of proceeds Efficient tracking of the proceeds • The net proceeds from Green Financing Instruments will be deposited in Volvo Cars general account and an amount equivalent to the net proceeds will be earmarked for allocation to the Eligible Green Projects portfolio, in accordance with Vol
Slide 37: Reporting & Verification
Reporting & Verification Focused on Transparency & Impact Volvo Cars is committed to transparent reporting and will publish a Green Financing Instrument report within one year from the date of issuance of each Green Financing Instrument and annually thereafter until full allocation of the proceeds.
Slide 38: Appendix 2
Appendix 2: Volvo Car Group: Green Financing Framework Presentation 38
Slide 39: The Volvo Car Group – a set-up for the future
The Volvo Car Group – a set-up for the future VOLVO CARS STRATEGIC AFFILIATES Fast growing premium OEM (50%) (30%) New youthful brand Spearheading going global to electrification with address 65 M DIRECT CONSUMER BUSINESSES pure progressive mass market performance cars Direct online Care by Volvo sa
Slide 40: Strong portfolio and a leader in premium plug-in
Strong portfolio and a leader in premium plug-in 2020 H1 sales by market, carline and powertrain +80% 38 S90 21 S60 PHEV sales (k units) 6% 14% 14% XC60 V60 H1 2019 H1 2020 17% CAGR 69% +4.7% V90 705 642 635 Europe 535 572 504 XC40 China XC US V XC90 Other S 2015 2016 2017 2018 2019 LTM Volvo Car Gr
Slide 41: Commitment to energy efficiency in all aspects of product development
Commitment to energy efficiency in all aspects of product development ...2019 2020... Fully flexible platforms One powertrain family – improved fuel Next generation platforms and electrification Aerodynamic top hats and prepared for electrification economy of up to 35%, same lines in-house design &
Slide 42: First carmaker to introduce Blockchain for global traceability
First carmaker to introduce Blockchain for global traceability Volvo Cars has been the first carmaker to Supply chain implement global traceability of cobalt used in its batteries by applying blockchain technology. Blockchain technology, which establishes a transparent and reliable shared data netwo
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