Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — Q2 2022 Earnings Presentation
25 slides from Volvo Ab Class A's earnings presentation, Jul 19, 2022
Slide 1: Second Quarter 2022
votuLuvoao SECOND QUARTER 2022 Martin Lundstedt, President and CEO Volvo Group Second Quarter 2022 2022-07-19
Slide 2: Quarter highlights
Volvo Group Quarter highlights * Net sales increased to SEK 118.9 bn, an increase of 20% adjusted for FX + Adjusted operating income reached SEK 13.7 bn (9.7), corresponding to a margin of 11.6% (10.7) * Operating cash flow in the Industrial Operation amounted to SEK 7.2 bn (5.9) + ROCE 26.8% (23.4)
Slide 3: Volume development
Volvo Group Volume development Volvo Group Second Quarter 2022, votLuLuvoao TRUCK DELIVERIES k units == 12 months 221k units 438% 24.8 Q2 Q3 G4 Qi G2 Q3 @4 a 2020 2021 Deliveries restated for UD Trucks divestment 60.8 Q2 2022 MACHINE DELIVERIES. k units == 12 months 81k units 30.7 294 22.4 Q2 Q3 Q4
Slide 4: Electrification progress
Volvo Group Electrification progress Volvo Group Second Quarter 2022, votLuLuvoao ORDER INTAKE, FULLY ELECTRIC VEHICLES Units == 12 months 3,224 units 1457 35 Q2 Q3 G4 GI @2 @8 4 A Q2 2020 2021 2022 DELIVERIES, FULLY ELECTRIC VEHICLES Units “= 12 months 1,207 units 434 357 Q2 @3 @4 Qi Q2 G8 Q@4 Ql Q
Slide 5: Service sales development
Volvo Group Service sales development SERVICE SALES (incl. Financial Services) SEK bn =" 12 months SEK 98.4 bn +22% +11% excl. FX 26.7 21.9 19.4 Q2 Q3 Q4 Qt @2 Q3 Q4 at Q2 2020 2021 2022 Service sales restated for UD Trucks divestment Volvo Group Second Quarter 2022, YoY GROWTH % 10% 5% 24% 5% 12% T
Slide 6: Trucks
votuLuvoao Trucks + Volvo Trucks showcased a new zero-emission fuel-cell truck powered by hydrogen + Volvo Trucks will introduce frame-rails made of fossil-free steel in its battery electric heavy-duty trucks * First assembly plant for battery packs opened in Ghent, Belgium. Volvo Group Second Quart
Slide 7: Trucks: Market environment
Volvo Group Second Quarter 2022, Trucks Market environment votuLuvoao NORTH AMERICA HD EUROPE HD 400 400 300 f\_.+ 300 = —— Ne aeeas ? SS ° 200 an 200 2021: 270° 400 2021: 277" i Forecast 2022: 300° Forecast 2022: 300° i) i) (0001 020304 0506 07 08091011 12131415 1617 18192021 22 0001 020304050607 0
Slide 8: Trucks: Restrictive order slotting to manage order book quality and cost inflation
votuLuvoao Trucks: Restrictive order slotting to manage order book quality and cost inflation Quarterly Orders -8% and Deliveries +33% NORTH AMERICA mr Orders mmDeliveries Q2 Q3 Q@4 Qi Q2 Q3 @4 Qi Q2 2020 2021 2022 Orders +26% SOUTH AMERICA Deliveries +53% "Orders “Deliveries Q2 Q3 Q@4 QI @2 G3 4 Ql
Slide 9: Heavy-duty truck market shares
votLuLuvoao Trucks Heavy-duty truck market shares 43.5 NORTH AMERICA EUROPE (EU29) 36.9 YTD May YTD May a7 10.5 19.3 7 15.1 5.8 34 26 Volvo Mack Volvo Renault Volvo Renault Total market share Battery electric market share BRAZIL SOUTH AFRICA AUSTRALIA YTD June YTD June YTD June 25.8 20.9 304 17.0 lm
Slide 10: Construction Equipment
votuLuvoao Construction Equipment * Customer delivery of the world’s first construction machine using fossil-free steel + Volvo Construction Equipment investment in Dutch firm, Limach, to broaden the electric product range Volvo Group Second Quarter 2022, 2022-07-19 10
Slide 11: Construction Equipment: Market environment
Construction Equipment Market environment NORTH AMERICA Forecast 2022: +5% to +15% 01 02.03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 192021 22 SOUTH AMERICA votuLuvoao EUROPE 250 200 o f= 150 =e=eo-- 100 50 Fi Forecast 2022: 0% to +10% 01 02.03 04 05 08 07 08 09 10 11 12 13 14 15 16 17 18 19 20.
Slide 12: Construction Equipment: Restrictive order slotting to manage order book quality and cost inflation
votuLuvoao Construction Equipment: Restrictive order slotting to manage order book quality and cost inflation Quarterly Orders -42% and Deliveries -27% NORTH AMERICA mm Orders «mm Deliveries Q2 Q@3 G4 at @2 G8 24 at Qe 2020 2021 2022 Orders -57% Deliveries +8% SOUTH AMERICA = Orders em Deliveries Q2
Slide 13: Buses
Buses * Orders in Q2 increased by 44% * Deliveries in Q2 increased by 22% + Volvo Buses launched a new powerful and fuel-efficient coach platform with up to 500hp and 9% fuel savings Volvo Group Second Quarter 2022, votLuLuvoao 2022-07-19 13
Slide 14: Volvo Penta
Volvo Penta * Orders decreased by 25% * Deliveries decreased by 1% + Volvo Penta’s electric driveline now powering city firetrucks in North America Volvo Group Second Quarter 2022, votuLuvoao 2022-07-19 14
Slide 15: Financial Services
Financial Services Record quarterly new business volume Stable finance penetration levels Strong portfolio performance Customer financing operations started in Portugal Volvo Group Second Quarter 2022, votLuLuvoao NEW RETAIL FINANCING & PENETRATION RATE SEK bn == Penetration rate 12 months 30.0 % 26
Slide 16: Second Quarter 2022 - CFO
votuLuvoao SECOND QUARTER 2022 Tina Hultkvist, Executive Vice President Group Finance and CFO Volvo Group Second Quarter 2022 2022-07-19
Slide 17: Net sales per market
votuLuvoao Volvo Group Net sales per market iat ee Currency SEK +10.2 bn 63 21 118.9 8.3 | Q2 2021 Europe North South Asia Africa and Q2 2022 America America Oceania Volvo Group Second Quarter 2022, 2022-07-19 7
Slide 18: Adjusted operating income contributors
votuLuvoao Volvo Group Adjusted operating income contributors ADJUSTED OPERATING INCOME 7.0 SEK bn Currency SEK +2.8 bn Q2 Gross Cash Net R&DSelling Admin Other 2021 Income R&DCap./Amo. Volvo Group Second Quarter 2022, Q2 2022 + \ + Price realization + Vehicle and service volumes - Material costs -
Slide 19: Cash flow and financial position in Industrial Operations
Volvo Group votLuLuvoao Cash flow and financial position in Industrial Operations OPERATING CASH FLOW SEK BH = 12 months SEK 19.6 bn -5.7 a2 G3 G4 G@ @2 a8 @ a a2 2020 2021 Volvo Group Second Quarter 2022, OPERATING CASH FLOW SEK bn FINANCIAL POSITION (Excl. pensions and lease liabilities) Working c
Slide 20: Trucks: Net sales and adjusted operating income
votLuLuvoao Trucks Net sales and adjusted operating income NETSALES =. 49 months SEK 268,7bn_ | ADJUSTED OPERATING INCOME SEK bn +51% SEK bn (excl. FX+39%) i . 78.6 + + Price realization 96 519 + Vehicle & service volumes Poe ox = Material costs |S - JV earnings - Selling expenses - R&D expenses @2
Slide 21: Construction Equipment: Net sales and adjusted operating income
votLuLuvoao Construction Equipment Net sales and adjusted operating income NET SALES ADJUSTED OPERATING INCOME ADJUSTED sdiealluina INCOME SEKbn “= 12 months SEK 89.9 bn SEK bn SEK bn (margin) —= 12 months 12,7% 0% Currency SEK +1.3 bn : ‘excl. FX -9%) 7 3.6 3.6 2 } = + Mik 34 34 (13.8%) + Price rea
Slide 22: Buses: Net sales and adjusted operating income
votLuLuvoao Buses Net sales and adjusted operating income NET SALES ADJUSTED OPERATING INCOME SEKbn “= 12 months SEK 14.6 bn SEKM +7% (excl. FX -2%) ' 41! + Service & vehicle vol. 8 + Price realization 7 2.5 i - Mix Ee ar - Material costs - Selling & R&D expenses Q2 Q@3 G4 Qi Q@2 Q@38 Q4 Qi a2 ee ae
Slide 23: Volvo Penta: Net sales and adjusted operating income
votLuLuvoao Volvo Penta Net sales and adjusted operating income NET SALES ADJUSTED OPERATING INCOME SEKbn “= 12 months SEK 15.9 bn SEKM +16% (excl. FX +9% ( 6) 617 4.6 4,0 tT + Price realization 699 2.5 : - Material costs sll - Selling & R&D expenses - Freight costs a2 a3 @4 at a2 a8 a4 at a2 Q2 Q2
Slide 24: Financial Services: Credit portfolio and profitability
votLuLuvoao Financial Services Credit portfolio and profitability CREDIT PORTFOLIO & ROE* ADJUSTED OPERATING INCOME ADJUSTED OPERATING INCOME ** SEKbn = * ROE 12 months 17.5% foe nai Seg ionins se hie soe Mi Currency SEK +128 M 913 913 als | + Portfolio growth gee 163 8 - Accounting change in 2071 (
Slide 25: Q&A
votuLuvoao Q&A Second quarter 2022 + Net sales SEK 118.9 bn * Adjusted operating margin 11.6% * ROCE 26.8% (Industrial Operations) Volvo Group Second Quarter 2022, 2022-07-19 25