Slide 1: First Quarter 2001 Telephone conference
Volvo Group First Quarter 2001 Telephone conference May 2, 2001 AB Volvo Telekonf-Q1/010502/
Slide 2: Highlights
Volvo Group Highlights 1 First Quarter In Focus Going Forward l Continued downturn in North America l Continuous adaptation to changing - Cyclical adjustments / Personnel reduction market conditions - Beginning to affect Europe l Renault and Mack integration l Renault V.I. and Mack acquisition - Res
Slide 3: Sales by Market Area
Volvo Group Sales by Market Area 2 2001 Percent of Total First Quarter SEK M 2001 2000 Europe 57 24,896 15,828 North America 31 13,441 9,131 South America 3 1,379 964 Asia 4 1,941 1,748 Others 5 2,093 603 Total 100 43,750 28,274 • Increased size of the Volvo Group • Sales in North America decreased
Slide 4: Sales by Business Area
Volvo Group Sales by Business Area 3 2001 Percent of Total First Quarter Change SEK M 2001 2000 % Global Trucks 68 29,962 15,129¹ 98 Buses 8 3,715 3,838 (3) Construction Equipm. 11 4,688 4,649 1 Marine & Ind. Power Sys. 4 1,736 1,585 10 Aero 6 2,607 2,286 14 Other&Elimination 3 1,042 787 Volvo Group
Slide 5: Operating Income by Business Area
Volvo Group Operating Income by Business Area 4 2001 First Quarter SEK M 2001 2000 Global Trucks 150 645¹ Buses (83) 33 Construction Equipment 81 311 Marine & Ind. Power Systems 167 103 Aero 160 110 Financial Services 113 450 Other & Eliminations² (86) 148 Operating Income excl. Restruc. Costs³ 502
Slide 6: Renault V.I. and Mack Integration
Volvo Group Renault V.I. and Mack Integration 5 Restructuring Costs and Goodwill SEK Bln Q1-2001 2001-2003 2003- Adaptation to market 0.5 Structural changes 0.8 3.0 Synergies 3.5 /year 1.3 Goodwill 7.3 Yearly amortisation 0.36 AB Volvo Telekonf-Q1/010502/
Slide 7: Operating Income
Volvo Group Operating Income 6 Adjustments First Quarter Adjustments Normalised SEK M 2001 2000 2001 2000 2001 2000 Sales 43,750 28,274º 43,750 28,274 Operating Income (817) 1,800 829¹ (551)² 12 1,249 Income after fin. items (1,251) 1,888 (422) 1,337 Net Income (801) 1,267 (221)³ 779³ 0) Financial S
Slide 8: First Quarter 2001 Consolidated Results
Volvo Group 7 First Quarter 2001 Consolidated Results First Quarter SEK M 2001 2000 Sales 43,750 28,274 Operating Income excl. items affecting comparability¹ 502² 1,800 Operating Income¹ (817) 1,800 Interest Net (273) 111 Other Financial Items (161) (23) Income after Financial Items (1,251) 1,888 Ta
Slide 9: Volvo Global Trucks
Volvo Group Volvo Global Trucks 8 First Quarter 2001 First Quarter SEK M 2001 2000¹ Change 2000³ Volume (units) 42,139 47,189 (11%) 20,226 Sales 29,962 30,015 (0%) 15,129 Operating income 150² 1,326 (89%) 645 Operating margin 0.5% 4.4% (3.9) 4.3% Highlights In Focus • Increased deliveries in almost
Slide 10: Volvo Global Trucks Deliveries
Volvo Group 9 Volvo Global Trucks Deliveries January-March Change Units 2001 2000¹ % Total Europe 27 655 27 394 1 of which: Western Europe 26 021 25 915 0 Eastern Europe 1 634 1 479 10 North America 10 150 16 381 (38) South America 1 283 954 34 Asia 994 1 147 (13) Rest of the world 2 057 1 313 57 To
Slide 11: Monthly Order Intake vs. Build Rate
Volvo Group Monthly Order Intake vs. Build Rate 10 Heavy Trucks in North America Units 40000 Industry Build Net Order Intake 35000 • Industry build rate in balance 30000 with demand in Q1 25000 • Excess industry inventory until fourth quarter or later 20000 • Continued price deterioration 15000 • To
Slide 12: Global Trucks Profit Improvement Program
Volvo Group Volvo Global Trucks 11 Profit Improvement Program • Price management implementation • Decisive line rate reduction and workforce reduction program • Distribution efficiency program • Sales & Administration cost reduction • Product cost reduction AB Volvo Telekonf-Q1/010502/
Slide 13: Activity List First 100 Days
Volvo Group Activity List First 100 Days 12 Integration Mack / Renault V.I. / Volvo Trucks Secure Start-up • Financial, legal and operational control Implement Global Organization and Processes • Global organization of 3P and Powertrain • Brand organization of Volvo, Renault and Mack trucks Establis
Slide 14: Volvo Global Trucks Summary
Volvo Group 13 Volvo Global Trucks Summary •• 100 100days daysintegration integrationwork workconcluded concludedaccording accordingto toplan plan •• Focus Focuson onNorth NorthAmerica, America,the thebusiness businessclimate climateworse worsethan than expected expected •• Downturn DownturnininNort
Slide 15: Volvo Construction Equipment
Volvo Group Volvo Construction Equipment 14 First Quarter 2001 First Quarter SEK M 2001 2000 Change Sales 4,688 4,649 1% Operating income 81¹ 311 (74%) Operating margin 1.7% 6.7% (5.0) ROC, 12M 11.3% 19.8% (8.5) Highlights In Focus l World market down 4% • Temporary shutdowns / l Balance weaker dema
Slide 16: Volvo Buses
Volvo Group Volvo Buses 15 First Quarter 2001 First Quarter SEK M 2001 2000 Change Volume (units) 2,117 2,626 (19%) Sales 3,715 3,838 (3%) Operating income (83)¹ 33 Operating margin (2,2)% 0.9% (3.1) ROC, 12M 4.5% 6.3% (1.8) Highlights In Focus • Market situation in Europe • Reduced volume mainly in
Slide 17: Volvo Penta
Volvo Group Volvo Penta 16 First Quarter 2001 First Quarter SEK M 2001 2000 Change Sales 1,736 1,585 10% Operating income 167¹ 103 62% Operating margin 9.6% 6.5% 3.1 ROC, 12M 48.0% 32.2% 15.8 Highlights In Focus • Continued strong sales • Production and supplier • Continue to increase sales and deve
Slide 18: Volvo Aero
Volvo Group Volvo Aero 17 First Quarter 2001 First Quarter SEK M 2001 2000 Change Sales 2,607 2,286 14% Operating income 160¹ 110 45% Operating margin 6.1% 4.8% 1.3 ROC, 12M, excl. AGES 25.1% 19.7% 5.4 Highlights In Focus • Strong performance in • Industry aftermarket still soft • Improving profitab
Slide 19: Volvo Financial Services
Volvo Group Volvo Financial Services 18 First Quarter 2001 First Quarter SEK M 2001 2000 Change Operating income 113 450* (75%) Op. Income (excl. non-rec.) 113 240 (53%) ROE 5.3% 18.4% (13.1) Assets, MSEK 71,588 56,938 26% Equity ratio 12.0% 12.3% (0.3) Highlights In Focus • Asset Growth 14% year-on
Slide 20: Summary
Volvo Group Summary 19 l Continued downturn in North America across the whole group - Cyclical adjustments - Avoid inventory build-up - Starting to affect Europe l Renault V.I. and Mack acquisition completed - Integration proceeding positively - Restructuring activities • Medium Duty Truck program t