Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — AB Volvo — Investor Day (November 2010)
42 slides from Volvo Ab Class A's investor day presentation, November 2010
Slide 1: Investor Day 2010
Investor Day 2010 Leif Johansson President and CEO Volvo Group AB Volvo Investor Day NY - November 2010 1
Slide 2: Well positioned for the future
Well positioned for the future Market update Third quarter Conclusions AB Volvo Investor Day NY - November 2010 2
Slide 3: Focus
Focus Product Portfolio Profitable Growth Operational Excellence Management Required scale in all Capitalize on scale Reduce operating cost to business areas achieved to optimize R&D based on improve profitability shared technology and common architecture Good progress Good progress AB Volvo Investo
Slide 4: Successful inroads into new markets
Successful inroads into new markets 1998 2010, Q3 5% Eastern Europe 31% North 3% America 18% 11% South America 6% 17% 26% Asia 50% 5% Western 52% 32% 3% Europe 8% Other markets Organic growth Acquisitions and JVs • Strong brand and distribution • Lingong, China in Eastern Europe • UD Trucks • Produc
Slide 5: Extensive product renewal in the downturn
Extensive product renewal in the downturn R&D Volvo ECH305 CL Volvo L45F & L50F New range of Volvo L20/L25F Eicher VE series UD Quon compact excavators Volvo Volvo Hybrid Mack EPA 2010 Renault Master UD Condor 7700 Hybrid Double Decker trucks Product launches in 2009 and 2010 Volvo FMX Articulated F
Slide 6: Strong Retail Network – Service business less volatile
Strong Retail Network – Service business less volatile • Key to total transport solution • Growing truck population • Consistent expansion • Driver for profitability • Excellent relations AB Volvo Investor Day NY - November 2010 6
Slide 7: Market update - Mature markets
Well positioned for the future Market update - Mature markets Third quarter Conclusions AB Volvo Investor Day NY - November 2010 7
Slide 8: Western Europe
Regional overview Western Europe Group sales 2010 32% Focus HD Trucks #1 • Introduction of products for EU VI and Tier4 MD Trucks #4 • New Volvo FMX Construction Equipment # 1-2 • Rollout of hybrid city buses Buses #4 • New range of light trucks Volvo Penta • Cost control in upturn Marine #1 Industr
Slide 9: Eastern Europe
Regional overview Eastern Europe Group sales 2010 5% Sales development SEK bn Focus • Leverage on strong brand position 40 • Expand distribution network 30 20 10 Profitable expansion 0 2001 2003 2005 2007 2009 2010* *2010Q3: 12 month moving AB Volvo Investor Day NY - November 2010 9
Slide 10: North America
Regional overview North America Group sales 2010 18% Focus • Industrial footprint restructured Shippensburg Greensboro • Very competitive EPA’10 engine solution • Production ramp-up • Goderich, Canada Æ Shippensburg, US 2009 • Asheville, NC Æ Shippensburg, US 2010 • Allentown Æ Greensboro, US 2010 I
Slide 11: Japan
Regional overview Japan Group sales 2010 8% Focus • Ramp-up production of Volvo Group engines 11L & 13L as well as a new 7L • Launch new ranges of UD Quon and UD Condor • Up and running customer financing Consolidate strong market positions and drive operational efficiency UD Trucks owned, ~90% of t
Slide 12: Market update - Growth markets
Well positioned for the future Market update - Growth markets Third quarter Conclusions AB Volvo Investor Day NY - November 2010 12
Slide 13: South America
Regional overview South America Group sales 2010 11% 21 countries 21 million km2 570 million inhabitants GDP 4,775 USD billions Sales development SEK bn 30 25 20 15 10 5 0 2001 2003 2005 2007 2009 2010* *2010Q3: 12 month moving Source: Global Insight, forecast 2010 AB Volvo Investor Day NY -
Slide 14: Infrastructure – South America
Regional overview – South America Infrastructure More than 500 projects in Latin America on energy, transports and telecom 883 BUSD in Brazil between 2011 to 2014 and further on 2014 World Cup and 2016 Olympic Games to stimulate new investments AB Volvo Investor Day NY - November 2010 14
Slide 15: Construction – South America
Regional overview – South America Dealer network Higher density density Trucks, Buses and Construction Equipment and Buses 144 outlets Trucks More than 4.000 employees More than 100 thousand hours of training Construction 79 outlets Equipment More than 2.000 employees More than 60 thousand hours of
Slide 16: Total market – Trucks
Regional overview – South America Total market – Trucks Latin America, >15t Latin America Brazil 140 120 100 thousand units 80,902 80 60 45,554 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2009 2010 Jan-Sep Jan- Sep AB Volvo Investor Day NY - November 2010 16
Slide 17: India
Regional overview India Group sales 2010 2% Eicher Market Shares Focus 2009 2010 MD Trucks: 7-12T 35.7% 37% • Industrial investments in VECV HD Trucks: >16T 1.1% 1.8% – Engine plant LD Buses: 5-12T 11.2% 12.2% – Paint shop Group sales – Cab plant SEK bn 6 – Assembly lines 5 • Grow market shares in H
Slide 18: Eicher product portfolio
Regional overview - India Eicher product portfolio AB Volvo Investor Day NY - November 2010 18
Slide 19: Heavy-duty truck market
Regional overview - India Heavy-duty truck market AB Volvo Investor Day NY - November 2010 19
Slide 20: 7-12 ton market trend & market share
Regional overview - India 7-12 ton market trend & market share AB Volvo Investor Day NY - November 2010 20
Slide 21: Eicher manufacturing
Regional overview - India Eicher manufacturing • 85 acres with an annual capacity of 48,000 units • Strategic ancillaries located around Indore • Integrated testing facilities • Lean and scalable manufacturing setup • Cabin upgrade for new generation of trucks AB Volvo Investor Day NY - November 201
Slide 22: Medium Duty Engine - leveraging synergies
Regional overview - India Medium Duty Engine - leveraging synergies • Global medium-duty engine platform • New production facilities in Pithampur • Investment of SEK 480 M (INR 2,880 M) Engines • Two main variants – 4 cylinder 5 L engine and 6 cylinder 8 L engine • Engine platform capable of meeting
Slide 23: Volume base and industrial base in Asia
Regional overview - India Volume base and industrial base in Asia 30 000 European engines, final assembly Lyon 25 000 Japanese engines, machining and final assembly Lo Ageo ng blo ck s Pithampur Sourcing, Machining, Assembly 85 000 long blocks 55 000 Asian engines, final assembly VECV plant in Pitha
Slide 24: Japan, Europe and India – combining the best of three
Regional overview - India Japan, Europe and India – combining the best of three • Utilize engine project from UD Trucks acquisition • Combine Japanese quality standard and European technology edge with Indian low cost production • Leverage the VECV supplier base in India - 311 Tier-1 suppliers • Ext
Slide 25: Regional overview - Russia
Regional overview - Russia AB Volvo Investor Day NY - November 2010 25
Slide 26: Volvo plant in Kaluga
Regional overview - Russia Volvo plant in Kaluga – new perspectives for the Russian market AB Volvo Investor Day NY - November 2010 26
Slide 27: Domestic manufacturer of heavy trucks
Regional overview - Russia Domestic manufacturer of heavy trucks AB Volvo Investor Day NY - November 2010 27
Slide 28: Volvo Trucks' position in Russia
Regional overview - Russia Volvo Trucks’ position in Russia • 1st foreign truck registered in Russia: 1973 • 1st in coverage of sales offices and service stations in Russia • 1st for 11 consecutive years in quantity of imported trucks to Russia • 1st in population among foreign truck brands in Russi
Slide 29: Strong position in a growing market Russia
Regional overview - Russia Strong position in a growing market Russia 150’ • Volvo trucks strong brand image and customer satisfaction • High demand for trucks • Industrial supply capacity – need for increased local content 45’ • Continued expansion of service network 2000 2015 Source: Russian Minis
Slide 30: China
Regional overview China Group sales 2010 8% Sales development SEK bn Focus • Leverage on excellent Volvo CE 18 business position 16 • Building Group infrastructure 14 through Business Units and 12 customer finance 10 • Automotive policy slowing down Volvo 8 Group growth in trucks and buses 6 4 2 Pro
Slide 31: China – successful entry within construction equipment
Regional overview China – successful entry within construction equipment Focus • Lingong excavator entry (4 new SDLG models) • Develop aftermarket support and capability in SDLG distribution 35000 29303 30000 25000 20000 Profitable expansion 15000 12841 10000 5000 0 Volvo units 2001 2002 2003 2004 2
Slide 32: Third quarter
Well positioned for the future Market update Third quarter Conclusions AB Volvo Investor Day NY - November 2010 32
Slide 33: Group Highlights
Group Highlights Third quarter – Operating income SEK 4.9 bn – Operating margin 7.7% – Cash flow negative SEK 1.9 bn Business environment – Europe: improving market conditions – Asia & South America: strong markets – North America: improving demand AB Volvo Investor Day NY - November 2010 33
Slide 34: Volvo Group
Volvo Group Net sales Third quarter (SEK bn) 5% Eastern Europe North America 18% 11% South America 26% Asia 50% Western 32% Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Europe Quarter 49 60 59 69 64 12 Mth. rol. 237 218 221 236 251 8% Other markets Operating income (SEK M) Operating income + Increased volumes + Im
Slide 35: Trucks
Trucks Net sales Operating income SEK bn SEK M Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Quarter 30,4 37,7 36,5 41,6 41,2 Quarter -2 329 -1 316 1 444 2 478 2 700 12 Mth. rol. 155,4 138,9 138 146,1 156,9 12 Mth. rol. -9 232 -10 805 -6 979 277 5 306 Margin -7,7% -3,5% 4,0% 6,0% 6,6%
Slide 36: Net order intake
Net order intake Trucks Net order Q3-09 Q2-10 Q3-10 Change Change 60 000 intake Q3->Q3 Q2->Q3 50 000 Europe 8,189 19,054 19,434 137% 2% 40 000 North America 5,093 6,675 9,350 84% 40% 30 000 South America 5,284 4,986 6,085 15% 22% 20 000 Asia 10,079 13,367 13,047 29% -2% 10 000 Other markets 3,353 4,
Slide 37: Buses
BUSINESS UPDATE Buses Third quarter • Still tough bus market 2010 • Profitable third quarter • Launch of two new products - 8900 Intercity and 9500 Coach Focus going forward • Cost adaptation to market situation • High tender activity • Secure product introductions AB Volvo Investor Day NY - Novembe
Slide 38: Volvo Penta
BUSINESS UPDATE Volvo Penta Third quarter • Flat world market for marine engines • Strong industrial engine order intake and good development for the IPS system Focus going forward • Continue to build on the Volvo Penta IPS – Inboard Performance System • Leverage sales of industrial engines • Soft p
Slide 39: Volvo Aero
BUSINESS UPDATE Volvo Aero Third quarter • Increasing demand for air transport • Divestiture of Volvo Aero Services completed Focus going forward • Cost control and product cost management • Execution on new contracts - product development - serial production • Push out of delivery plans for Boeing
Slide 40: Conclusions
Well positioned for the future Market update Third quarter Conclusions AB Volvo Investor Day NY - November 2010 40
Slide 41: Focus
Focus Product Portfolio Profitable Growth Operational Excellence Management Required scale in all Capitalize on scale Reduce operating cost to business areas achieved to optimize R&D based on improve profitability shared technology and common architecture Good progress Good progress AB Volvo Investo
Slide 42: AB Volvo Investor Day NY - November 2010
AB Volvo Investor Day NY - November 2010 42