Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — Q2 2021 Earnings Presentation
29 slides from Volvo Ab Class A's earnings presentation, Jul 20, 2021
Slide 1: Volvo Group Second Quarter 2021
VOLVO VOLVO GROUP SECOND QUARTER 2021 Martin Lundstedt, President and CEO
Slide 2: Second Quarter Highlights
Volvo Group SECOND QUARTER HIGHLIGHTS - Net sales adjusted for UD Trucks divestment increased by 33% (+43% excl. FX) - Adjusted operating income SEK 9.7 bn (3.3) corresponding to a margin of 10.7% (4.5) - Operating cash flow in the Industrial Operations SEK 5.9 bn (-5.7) - ROCE 23.4% (15.3%) + Suppl
Slide 3: Volume Development in the Second Quarter
Volvo Group VOLUME DEVELOPMENT IN THE SECOND QUARTER me TRUCK DELIVERIES MACHINE DELIVERIES kunits HD/MD a, 12 months 161 k units k units = 12 months 106 k units +85% +5% 54.9 ——— 30.7 26.9 29.41 Q@2 Q@3 @Q4 Qi @2 Q@3 @4 Qi @Q2 Q2 @3 Q4 Qi @2 @3 G4 QI Q2 Figures restated for UD Trucks divestment Vol
Slide 4: Electrification Progress
Volvo Group ELECTRIFICATION PROGRESS Order Intake, fully electric vehicles, Q2 2021 units HD/MD/LD Trucks 194 Volvo CE (2}e) Volvo Buses 50 Volvo Penta 8 Volvo Group, Total 351 Volvo Group ‘Second Quarter 2021 4 2021-07-20 Deliveries, fully electric vehicles, Q2 2021 units HD/MD/LD Fully electric ve
Slide 5: Service Sales Development
Volvo Group SERVICE SALES DEVELOPMENT Figures restated for UD Trucks divestment SERVICE SALES (incl. Financial Services) SEK bn «=» 12 months SEK 85.5 bn +13% +23% excl, FX 22.9 19.4 Q@2 @3 @Q4 Qi @2 @3 @Q4 Qi a2
Slide 6: Group GHG targets validated by Science Based Targets initiative
Volvo Group GHG targets validated by Science Based Targets initiative - Target to reach net-zero value chain emissions by 2040 at the latest, ten years earlier than the SBTi commitment - GHG reduction interim-goals by 2030: (Baseline 2019) — Trucks and Buses: -40% per vehicle km — Volvo CE:-30% in a
Slide 7: Trucks
Trucks
Slide 8: Trucks
Trucks - Renault Trucks T, T high, C & K evolution launched with more comfortable, reliable and productive trucks - Volvo Group, Daimler Truck and the Traton Group plan to pioneer a European high- performance charging network for heavy- duty trucks
Slide 9: Trucks Market Environment
Trucks MARKET ENVIRONMENT NORTH AMERICA up 400 300 - 200 - ae 100 2020: 235' Forecast 2021: 290" ) 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 192021 N BRAZIL HD 2020: 67" ™_ Forecast 2021: 95° 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 192021 Volvo Group Second Quarter
Slide 10: HD/MD: Quarterly Orders +140% and Deliveries +85%
Trucks HD/MD: QUARTERLY ORDERS +140% AND DELIVERIES +85% NORTH AMERICA Q2 Q3 Q4 Qi Q2 Q3 a4 at a2 Orders +8 5% Deliveries +150% EUROPE ee ie Orders =D eliveries Q2 Q3 Q4 Qi Q2 Q3 Q4 a1 a2 Orders, +1009 Deliveries +70% SOUTH AMERICA Orders _«=mDeliveries Q2 Q3 Q4 Qi Q2 Q@3 Q4 Qi a2 Orders —Dalveries
Slide 11: Market Shares
Trucks MARKET SHARES NORTH AMERICA EUROPE (ev29) YTD May YTD June ‘Total Fully electric YTD May 43.5 16.5 35.0 a ee mT 88 84 21.3 0 Mots sini Volvo Renault Volvo Renault BRAZIL F SOUTH AFRICA YTD June Qe YTD May AUSTRALE casa 17.3 17.6 188 12.4 TT 5.4 Volvo Volvo Volvo Mack HD% | 2020 [i 2021 Volvo
Slide 12: Construction Equipment
Construction Equipment »«
Slide 13: Construction Equipment
Construction Equipment - Introducing a new 50-tonne excavator machine class aimed at heavy-duty digging and large site preparation. - First dedicated Fuel Cell Test Lab in Volvo Group opened in Eskilstuna, Sweden If Hell Hell rele BLE aa! hy #, Volvo Group ‘Second Quarter 2021 13 2021-07-20
Slide 14: Construction Equipment Market Environment
Construction Equipment MARKET ENVIRONMENT NORTH AMERICA EUROPE 200 250 150 Ra? 200 100 fu-\--s 150 50 100 Forecast 2021: +10% to +20% 50 0 10% 9 (01 02.03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 2021 of Forspast 2026107002207 (01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 192021 SOUT
Slide 15: Quarterly Orders +35% and Deliveries +5%
Construction Equipment QUARTERLY ORDERS +35% AND DELIVERIES +5% NORTH AMERICA Orders _e===Deliveties Q2 Q3 Q4 QI Q2 Q3 Q4 ai a2 Orders +1950% Deliveries +36% EUROPE mL aes > Orders Deliveries Q2 Q3 Q4 Qi Q2 Q3 Q4 ai a2 Orders +191% Deliveries +49% SOUTH AMERICA te OO Orders s=™Deliveries AFRICA AND
Slide 16: Buses
Buses - Orders increased by 5% - Deliveries increased by 45% Volvo Group ‘Second Quarter 2021 16 2021-07-20
Slide 17: Penta
Volvo Penta - Orders increased by 102% oa eos = - Deliveries increased by 68% at 74 bl : - Acquisition of a majority stake in ZEM, a Norwegian marine battery and electric driveline solutions provider Norwegian vessel powered by. ari second Quai 2021 electric driveline {7 2021-07-20 Volvo Group
Slide 18: Financial Services
Financial Services - Record new business volume for a Q2 - Continued penetration improvement - Stable portfolio performance + Developing new services and business models Volvo Group ‘Second Quarter 2021 18 2021-07-20 PENETRATION RATE, % 12 months moving 29 27 39 35 30 20 28 30 Trucks Volvo CE Buses
Slide 19: Volvo Group Second Quarter 2021, CFO
VOLVO VOLVO GROUP SECOND QUARTER 2021 Jan Ytterberg, CFO
Slide 20: Net Sales per Market
Volvo Group NET SALES PER MARKET NET SALES > Currency SEK-6.7 bn SEK bn 3.3 14 7.8 _ eee | 1.6 67.9 Q2 2020 Europe North South Asia Africaand @2 2021 America America Oceania Figures restated for UD Trucks divestment Volvo Group ‘Second Quarter 2021 20 2021-07-20
Slide 21: Adjusted Operating Income Contributors
Volvo Group ADJUSTED OPERATING INCOME CONTRIBUTORS ADJUSTED OPERATING INCOME* > currency SEK -1.5 bn SEKM 7,087 as 371 230 320 9,730 1,261 -289 3,272 a2 Gross Cash NetR&D Selling Admin Other Q2 2021 2020 Income R&D Cap./Amo. * For information on adjustments, see note 7 in the quarterly report Volvo
Slide 22: Cash Flow and Financial Position
Volvo Group — Industrial Operations CASH FLOW AND FINANCIAL POSITION OPERATING CASH FLOW OPERATING CASH FLOW FINANCIAL POSITION SEK bn == 12 months SEK 40.0 bn SEK bn (Excl. pensions and lease liabilities) Working capital (-2.7 bn) SEK bn 67.3 r 0.8 3.5 10. 7 = = | 50.6 0.7 Le __ a. “23 419) -3.5 “O
Slide 23: Trucks: Net Sales and Adjusted Operating Income
Trucks NET SALES AND ADJUSTED OPERATING INCOME NET SALES = 12 months SEK 202.7 bn SEK bn +47% (excl. FX 458%) 69. 51.9 35.3) ADJUSTED OPERATING INCOME* SEK bn + Price + Used trucks -R&D - JV earnings 0.7 + Vehicle volumes tT + Industrial capacity utilization 5.4 ADJUSTED OPERATING INCOME me SEK bn (
Slide 24: Construction Equipment: Net Sales and Adjusted Operating Income
Construction Equipment NET SALES AND ADJUSTED OPERATING INCOME NET SALES ADJUSTED OPERATING INCOME* ADJUSTED OPERATING INCOME SEK bn = 12 months SEK 89.0 bn SEK bn SEK bn (margin)* = 12 months 12.9% Currency SEK -0.6 bn +13% 3 (excl. FX +21%) 3.4 (15.5%) SS Bl + Mix a. —~_-—= 26.8 8 + Machine and se
Slide 25: Buses: Net Sales and Adjusted Operating Income
Buses NET SALES AND ADJUSTED OPERATING INCOME NET SALES SEK bn = 12months SEK 20.1 bn (excl. FX+68%) 8.9 51 3.2 Q2 Q3 Q4 Q1 G2 Q3 Q4 Qi Q2 Volvo Group ‘Second Quarter 2021 25 2021-07-20 ADJUSTED OPERATING INCOME* ADJUSTED OPERATING INCOME * For information on adjustments, see note 7 in the quarterly
Slide 26: Penta: Net Sales and Adjusted Operating Income
Volvo Penta NET SALES AND ADJUSTED OPERATING INCOME NET SALES ADJUSTED OPERATING INCOME* ADJUSTED OPERATING INCOME SEK bn = 12 months SEK134 bn SEKM SEK M (margin)* = 12 months 13.8% Currency SEK -172 M +58% 617 (excl. FX +69%) -——_ + Engine and service volumes 4,0 3.7 345 - S&A Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 27: Credit Portfolio and Profitability
Financial Services CREDIT PORTFOLIO AND PROFITABILITY NEW RETAIL FINANCING ADJUSTED OPERATING INCOME* SEK bn SEKM = 12 months SEK 78.6 bn =12 months SEK 2,539 M Currency SEK -86 M 913 20.9 686 17.3 57 Q2 Q3 Q4 Q1 Q2 Q3 Q4 QI a2 Q2 Q3 Q4 Q1 G2 Q3 Q4 Qi G2 * For information on adjustments, see note 7
Slide 28: Second Quarter Highlights
Volvo Group SECOND QUARTER HIGHLIGHTS - Net sales adjusted for UD Trucks divestment increased by 33% (+43% excl. FX) - Adjusted operating income SEK 9.7 bn (3.3) corresponding to a margin of 10.7% (4.5) - Operating cash flow in the Industrial Operations SEK 5.9 bn (-5.7) - ROCE 23.4% (15.3%) + Suppl
Slide 29: Q&A
Q&A