Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — AB Volvo — Investor Day (November 2009)
25 slides from Volvo Ab Class A's investor day presentation, Nov 4, 2009
Slide 1: Investor Day
Investor Day Leif Johansson President and CEO Volvo Group AB Volvo New York - Leif Johansson 1 2009-11-04
Slide 2: Agenda
Agenda STRATEGIC DIRECTION BUSINESS UPDATE PRIORITIES AB Volvo New York - Leif Johansson 2 2009-11-04
Slide 3: Strategic Direction
STRATEGIC DIRECTION BUSINESS UPDATE PRIORITIES AB Volvo New York - Leif Johansson 3 2009-11-04
Slide 4: Exit Cars to build strong Commercial Product business
Exit Cars to build strong Commercial Product business SEK 304 bn 2008 AB Volvo New York - Leif Johansson 4 2009-11-04
Slide 5: Required scale in all business areas achieved
Required scale in all business areas achieved Second largest in trucks globally Third largest in construction equipment globally Heavy duty truck production in 2008 Sales in 2008 1,000 units BUSD Daimler 281 Caterpillar 31,8 Volvo 190 Komatsu 19,0 Paccar 113 Volvo 8,7 CNHTC 111 Hitachi 8,0 FAW 107 D
Slide 6: Strengthened presence in Growth Economies
Strengthened presence in Growth Economies 4% Eastern Europe North America 9% South America 18% 44% 24% Asia Western Europe 38% 7% Other markets AB Volvo New York - Leif Johansson 6 2009-11-04
Slide 7: Strong position in Asia in CE
Strong position in Asia in CE Revenues on par with Europe Linyi, China • Volvo CE and SDLG are the third largest construction equipment supplier in China Changwon, South Korea • Local sourcing in China, India and South Korea Shanghai, China • Export opportunities of SDLG Brand Bangalore, India AB Vo
Slide 8: Volvo CE's units sold in Q3
Volvo CE’s units sold in Q3 2008 2009 23% 18% 12% 4% 61% 32% 34% 17% AB Volvo New York - Leif Johansson 8 2009-11-04
Slide 9: Strategic Direction for 2010-2012
Strategic Direction for 2010-2012 Changing focus Product Cycle 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 Requi
Slide 10: Changing focus
Changing focus Product Cycle 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 AB Volvo New York - Leif Johansson 10 2
Slide 11: Emission Legislation
Emission Legislation Challenges and opportunities Particulates 0.14 Euro 2, 1996 0.12 US US02, 02,2002 2002 0.10 Euro 3, 2002 0.08 0.06 0.04 Japan, 2007 0.02 Euro Euro5,5,2009 2009 Euro 4, 2006 US 2007 US 07, 07, 2007 Euro 4, 2006 0.00 0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Tier 4B, 2014 NOx US 10, 2010 Euro
Slide 12: Emission regulations and technology convergence
Emission regulations and technology convergence EGR+SCR+DPF for the global engine • To meet upcoming emission regulations US’10 PNLT with competitive solutions Euro 6 Tier 4i • Capitalize on converging technologies across products and markets to drive: ~2014 - R&D efficiency - Competitive product co
Slide 13: Hybrid technology
Hybrid technology > 35% 20-30% 10% (50%) AB Volvo New York - Leif Johansson 13 2009-11-04
Slide 14: Changing focus
Changing focus Product Cycle 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 AB Volvo New York - Leif Johansson 14 2
Slide 15: Unprecedented drop - both speed and depth
Unprecedented drop - both speed and depth – Combined market in Europe & North America Units, Thousands (heavy trucks) 700 600 500 - 26% 400 - 60% 300 200 100 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 AB Volvo New York - Leif Johansson 15 2009-11-04
Slide 16: Progress in cost cutting
Progress in cost cutting Q2 Q3 • Under absorption in Manufacturing -3.0 bn -2.5 bn vacation quarter (SEK) • R&D -3% -17% FX-adjusted • Selling expenses -15% -16% FX-adjusted • Admin. expenses -22% -34% FX-adjusted AB Volvo New York - Leif Johansson 16 2009-11-04
Slide 17: Integration ongoing
Integration ongoing AB Volvo New York - Leif Johansson 17 2009-11-04
Slide 18: Business Update
STRATEGIC DIRECTION BUSINESS UPDATE PRIORITIES AB Volvo New York - Leif Johansson 18 2009-11-04
Slide 19: Business update: Business environment
Business update Business environment – Europe; bottoming out and some signs of improvement – Asia; recovery under way – North America; no clear signs of recovery AB Volvo New York - Leif Johansson 19 2009-11-04
Slide 20: Heavy-duty truck markets
Heavy-duty truck markets 350 Europe 329 319 300 256 250 200 178 229 150 ? 2009: 100 116 down >50% 50 0 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 400 North America 349 350 308 300 250 225 208 200 185 194 171 150 ? 100 122 2009: down 50 30-40% 0 90 91 92 93 94 95 96 97
Slide 21: Net order intake – positive trend
Net order intake – positive trend Trucks Net order intake Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Change 60000 Q3-Q2 Europe 115 -1,549 7,494 8,980 8,189 -9% 50000 North America 7,578 4,037 2,869 3,257 5,093 56% 40000 South America 5,096 1,087 1,731 2,998 5,284 76% 30000 Asia 14,607 7,868 5,712 7,884 10,079 28
Slide 22: Dramatic decline in all markets, except China
Dramatic decline in all markets, except China General Purpose Equipment 65 000 65 000 60 000 N. America 60 000 55 000 Asia excl. CN 55 000 50 000 50 000 45 000 45 000 Europe 40 000 40 000 35 000 35 000 China 30 000 30 000 25 000 25 000 20 000 20 000 15 000 International 15 000 10 000 10 000 5 000 5
Slide 23: Group Summary
Group Summary Earnings per share Third quarter SEK • Sales 31% lower than Q3-08, -39% adjusted for currency • Operating loss reduced • Successful reduction of inventories: SEK 3.4 bn Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 • Operating cash flow – positive trend Quarter 0,98 -0,67 -2,09 -2,75 -1,44 • Net debt
Slide 24: Priorities
STRATEGIC DIRECTION BUSINESS UPDATE PRIORITIES AB Volvo New York - Leif Johansson 24 2009-11-04
Slide 25: Priorities: cash flow, cost structure, competitive products
f Cash flow f Cost structure f Competitive products f Profitability among industry leaders AB Volvo New York - Leif Johansson 25 2009-11-04