Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Debt Investor Presentation (March 2003)
27 slides from Volvo AB Class A's debt investor presentation, Mar 12, 2003
Slide 1: Christer Johansson, Investor Relations
Christer Johansson Investor Relations Lisbon March 12, 2003
Slide 2: Volvo Group's Positions
Lisbon March 12, 2003 Volvo Group’s Positions Relative size 2001 Heavy duty trucks, > 16 ton Heavy duty buses, > 12 ton Construction equipment DCX Mercedes + Setra Caterpillar Truck Operation Volvo Group Volvo Bus Komatsu FAW IRIS Bus Case & New Holland Paccar MAN Volvo CE Dongfeng Scania Deere Mari
Slide 3: Heavy Duty Truck Market - Western Europe
Lisbon March 12, 2003 Heavy Duty Truck Market Western Europe Units, Thousands (heavy trucks) 250 225 200 175 150 125 100 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 AB Volvo 2003-03-12, Slide 2
Slide 4: Heavy Duty Truck Market - North America
Lisbon March 12, 2003 Heavy Duty Truck Market North America Units, Thousands (heavy trucks) 300 250 200 150 100 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 AB Volvo 2003-03-12, Slide 3
Slide 5: Legislative Demands: Emission Standards
Lisbon March 12, 2003 Legislative Demands Emission Standards Euro 2 0.14 0.12 Particulates 0.1 US’02: Euro 3 EGR 0.08 0.06 US 07-11 0.04 Euro 5 Euro 4 0.02 After treatments* 0 g/kW,h 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 NOx AB Volvo 2003-03-12, Slide 4
Slide 6: "Global" Market Position
Lisbon March 12, 2003 “Global” Market Position 1,000 units Heavy Duty Engines - 2001 * VOLVO 122 DCX 114 CAT 85 Cummins 76 Scania 62 MAN 49 DAF 26 * Heavy Duty 9 - 18 litre Source: Power Systems Research December 2001 update (excluding licenses / JV’s) Iveco 21 0 20 40 60 80 100 120 140 AB Volvo 200
Slide 7: MD/HD Engine Consolidation
Lisbon March 12, 2003 MD/ HD Engine Consolidation 18 platforms 2 platforms Displ. Current New Range Litre Volvo RVI/ Mack Vendor Volvo Powertrain D16 E9 16 MD16 ISX 14 N14 MD13 12 D12 TD12 ETec 0 h dCi1 ISM MD11 1 10 F3-10 D10 MD9 ISL 8 D7 1013- MD7 6 6.10 TD70 F2 - 6 2012- ISB 6 MD6 D6 6 6L 1013- M
Slide 8: Shared Vehicle Architecture
Lisbon March 12, 2003 Shared Vehicle Architecture Standardized Chassis & Components AB Volvo 2003-03-12, Slide 7
Slide 9: Two Years of Truck Integration
Lisbon March 12, 2003 Two Years of Truck Integration – Consolidation of diesel engine program – Sharing of vehicle architecture – Brand strategy in place – Purchasing gains – Expansion of Customer Finance – Industrial restructuring – Dealer optimization in North America AB Volvo 2003-03-12, Slide 8
Slide 10: Construction Equipment: Towards a Full Liner
Lisbon March 12, 2003 Volvo Construction Equipment Towards a Full Liner Articulated Hauler Wheel Loader Excavator Motor Grader Compact Wheel Loader Skidsteer Loader Compaction Telescopic Handler Compact Excavator Backhoe Loader AB Volvo 2003-03-12, Slide 9
Slide 11: Market Construction Equipment by Region
Lisbon March 12, 2003 Market Construction Equipment by Region General Purpose Equipment 1997 - 2003F 45,500 45,500 W-Europe 42,000 42,000 38,500 38,500 35,000 35,000 31,500 31,500 28,000 28,000 N. America 24,500 24,500 21,000 21,000 Int’l Region excl. JP 17,500 17,500 Japan 14,000 14,000 1997 1998 1
Slide 12: Buses: Restructuring Actions
Lisbon March 12, 2003 Volvo Buses Restructuring Actions • Exit City Bus segment in the US - Closed two plants • Production move to Poland • Well positioned in important markets: - J/V’s in China - Mexico AB Volvo 2003-03-12, Slide 11
Slide 13: Aero
Lisbon March 12, 2003 Volvo Aero Manufacturing of After Market Military Segment Engine Component Aerospace Land and Engine Aviation Components Marine Services Services Gas Turbines Percentage 44% 49% 7% of sales 2002 AB Volvo 2003-03-12, Slide 12
Slide 14: Penta
Lisbon March 12, 2003 Volvo Penta Safety Service Alarm KAD300 Sea-Key TAD1032GE AB Volvo 2003-03-12, Slide 13
Slide 15: Financial Services
Lisbon March 12, 2003 Volvo Financial Services z Continued growth in Mack, Renault Trucks, Construction Equipment and Buses z US Truck portfolio continues to stabilize z Q4 2002: Sixth quarter in a row with improving operating income In InFocus: Focus:Controlled Controlledportfolio portfolioand andp
Slide 16: Cash Flow Development
Lisbon March 12, 2003 Cash Flow Development Fourth Quarter 2002 6 5.0 5 Operating cash flow* 4 3 2 b SEK 1 0 -1 -2 -3 -4 Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- 2000 2000 2000 2000 2001 2001 2001 2001 2002 2002 2002 2002 * Cash-flow after net investments excluding: Investments in shares, acq
Slide 17: Summary
Lisbon March 12, 2003 Summary Fourth Quarter and Full Year In Focus Going Forward z Strengthening the N. American Truck business z Business Cycle Management z Successful Volvo VN launch – 8000 orders z Cash flow z Provisions in Volvo CE for dealer restructuring z Continued truck integration in North
Slide 18: Lars I Persson, Corporate Finance
Lars I Persson Corporate Finance Lisbon March 12, 2003
Slide 19: Financial Management
Lisbon March 12, 2003 Volvo Group Financial Management Background: - Established 1995 when Volvo re-focused to automotive Objective: - Financial stability and flexibility throughout the business cycle Steering Principles: - Key Financial Ratios - Cash/Sales - Committed LT Facilities / Sales - L-t de
Slide 20: Industrial & Commercial: Maturity structure
de c- 0 5 000 10 000 15 000 20 000 25 000 30 000 0 ap 2 MSEK AB Volvo r-0 au 3 g- 0 de 3 2003-03-12, Slide 19 c- 0 ap 3 r-0 au 4 g- 0 de 4 Lisbon March 12, 2003 c- 0 ap 4 r-0 au 5 g- 0 de 5 c- 0 ap 5 r-0 au 6 g- 0 de 6 c- 0 ap 6 r-0 au 7 g- 0 de 7 c- 0 ap 7 r-0 au 8 g- 0 Maturity structure de 8 c- 0
Slide 21: Customer Finance: Maturity structure
Lisbon March 12, 2003 Customer Finance Maturity structure MSEK 50 000 45 000 40 000 35 000 Actual 02Q4: 30 000 • Liquidity Matching 99% 25 000 • IR Matching 99% 20 000 • Currency Matching 100% 15 000 10 000 5 000 0 -01 -04 -07 -10 -01 -04 -07 -10 -01 -04 -07 -10 -01 -04 -07 -10 -01 2003 2003 2003 20
Slide 22: Funding Sources
Lisbon March 12, 2003 Volvo Group Funding Sources "Max" Nom Amount Used M Dec-02 MSEK MSEK Commercial Paper 36 030 8 951 Medium Term Notes 44 689 26 904 Bonds 20 238 18 049 Term Loans 11 103 11 055 Uncommitted Facilities (ST Loans) 3 572 927 115 632 65 886 Non VT Funding 7 538 7 538 TOTAL 123 170 73
Slide 23: Committed Facilities
Lisbon March 12, 2003 Volvo Group Committed Facilities Maturity Structure MSEK 18 000 16 000 14 000 12 000 Syndicated Loan Facilities • 1 000 MUSD 5y renegotiated 2001 10 000 • 850 MUSD 5y renegotiated June 8 000 2002 6 000 • No financial covenants or rating triggers in the documentation 4 000 • Str
Slide 24: Credit Ratings March-2003
Lisbon March 12, 2003 Volvo Group Credit Ratings March-2003 Long Term Short Term - MOODY’S Unsolicited A3 (Negative outlook) P-2 (Stable) - S&P A2 (Stable) - FITCH Unsolicited F2 - DBRS A (low) Negative outlook R-1 (low) (Stable) - R&I A (Not published!) Commercial Paper Programs ~ 36 bln SEK (SEK,
Slide 25: Cash Conversion Cycle
Lisbon March 12, 2003 Volvo Group (excl. Customer Finance) Cash Conversion Cycle MSEK Days 40 000 90 80 80 73 35 000 80 70 67 57 70 30 000 53 51 60 25 000 ~40 50 20 000 40 15 000 30 10 000 20 5 000 10 0 0 01q1 01q2 01q3 01q4 02q1 02q2 02q3 02q4 Target 04Q2 Net capital tied up CCC, days AB Volvo 2003
Slide 26: Lisbon March 12, 2003
Lisbon March 12, 2003 AB Volvo 2003-03-12, Slide 25
Slide 27: Lisbon March 12, 2003
Lisbon March 12, 2003 AB Volvo 2003-03-12, Slide 26