Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Q3 2004 Earnings Presentation
26 slides from Volvo AB Class A's earnings presentation, Oct 22, 2004
Slide 1: Third Quarter 2004 Press Conference
Third Quarter 2004 Press Conference, October 22, 2004
Slide 2: Highlights
Press Conference Q3 2004 1 Highlights Third Quarter In Focus Going Forward z Strong sales growth 16% z Manage high levels of production and supply chain - High capacity utilization - Good order intake z Price management z Product renewal z Henlys resolution: - Acquisition of Prevost/Nova z Cash flow
Slide 3: Net sales, Operating income, Earnings per share
Press Conference Q3 2004 2 Net sales (SEK bn) Europe North 53% America Asia 28% 10% Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 South America Rest of 40.5 48.7 45.5 53.0 45.9 171.9 174.8 179.3 187.8 193.1 4% the world 5% Quarter 12 months rolling Operating income* Earnings per share (SEK M) (SEK) 7.0% Q3 03 Q4 03
Slide 4: Trucks
Press Conference Q3 2004 3 Trucks Third Quarter Net sales Operating income (SEK bn) (SEK M) 6.9% Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 26.9 33.2 31.2 34.9 31.3 944 1457 1476 2287 1768 114.9 117.0 120.8 126.3 130.6 3.5% 4.4% 4.7% 6.6% 5.7% 3001 3951 4900 6164 6988 Quarter 12 mon
Slide 5: Heavy Duty Truck Market Europe
Press Conference Q3 2004 4 Heavy Duty Truck Market Europe (EU members + Switzerland and Norway) 300 Units, Thousands Forecasts: (heavy trucks) 2004 2005 256 254 +5% 250 230 246 200 188 214 171 150 170 122 100 116 50 Western Europe Europe Forecast 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '0
Slide 6: Heavy Duty Truck Market North America
Press Conference Q3 2004 5 Heavy Duty Truck Market North America Units, Thousands (heavy trucks) 309 Forecasts: 300 2005 +15-20% 2004 250 240 236 200 174 199 179 150 170 134 122 100 50 Forecast 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04E '05E AB Volvo 04-10-22
Slide 7: Volvo Trucks
Press Conference Q3 2004 6 Volvo Trucks Strong performance AB Volvo 04-10-22
Slide 8: Volvo Buses
Press Conference Q3 2004 7 Volvo Buses Third Quarter Net sales Operating income* (SEK bn) (SEK M) Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 -93 -96 -47 91 -26 2.8 3.1 2.5 3.6 2.9 -3.3% -3.1% -1.8% 2.5% -0.9% 12.7 12.0 11.6 12.1 12.2 -232 -361 -325 -145 -78 Quarter 12 months rolling
Slide 9: Volvo Buses: Facelift Volvo 9700 Europe
Press Conference Q3 2004 8 Volvo Buses Facelift Volvo 9700 Europe • Strong customer offer: - Financing - Repair & Maintenance - Dynafleet online • Product improvements: - New interior - New drivers workplace - New safety features AB Volvo 04-10-22
Slide 10: Volvo Construction Equipment
Press Conference Q3 2004 9 Volvo Construction Equipment Third Quarter Net sales Operating income (SEK bn) (SEK M) Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 5.6 6.5 6.1 8.1 6.4 210 133 309 648 349 21.9 23.2 24.5 26.4 27.1 3.7% 2.0% 5.0% 8.0% 5.5% 728 908 1077 1300 1439 Quarter 12 mo
Slide 11: New range of short swing radius compact excavators
Press Conference Q3 2004 10 Volvo Construction Equipment New range of short swing radius compact excavators ECR 28 ECR 38 ECR 58 ECR 88 AB Volvo 04-10-22
Slide 12: Volvo Penta
Press Conference Q3 2004 11 Volvo Penta Third Quarter Net sales Operating income (SEK bn) (SEK M) Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 153 171 188 307 207 1.8 1.9 2.2 2.6 2.1 8.5% 9.2% 8.6% 11.9% 9.7% 7.5 7.6 7.9 8.4 8.7 683 695 724 819 873 Quarter 12 months rolling Quarter Ma
Slide 13: Volvo Penta: New marine engine range
Press Conference Q3 2004 12 Volvo Penta New marine engine range AB Volvo 04-10-22
Slide 14: Volvo Aero
Press Conference Q3 2004 13 Volvo Aero Third Quarter Net sales Operating income (SEK bn) (SEK M) Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 1.8 2.1 1.6 1.9 1.7 -2 -47 101 173 96 8.0 8.0 7.3 7.4 7.2 -0.1% -2.2% 6.5% 9.2% 5.8% -38 -44 63 225 323 Quarter 12 months rolling Quarter Margi
Slide 15: Strategic acquisition of Aero-Craft
Press Conference Q3 2004 14 Volvo Aero Strategic acquisition of Aero-Craft Volvo Aero growth by entering Fan Case market AB Volvo 04-10-22
Slide 16: Volvo Financial Services
Volvo Financial Services Sal Mauro President Volvo Financial Services
Slide 17: A global service organization
Press Conference Q3 2004 16 Volvo Financial Services A global service organization AB Volvo 04-10-22
Slide 18: Volvo Financial Services: Third Quarter
Press Conference Q3 2004 17 Volvo Financial Services Third Quarter New retail financing Operating income and return on equity (SEK bn) (SEK M) Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 6.9 8.0 6.0 8.2 7.4 242 251 281 307 343 26.1 26.9 27.0 29.1 29.6 9.0% 9.8% 10.2% 10.4% 9.7% Quart
Slide 19: Third Quarter - isolated
Press Conference Q3 2004 18 Volvo Financial Services Third Quarter - isolated New financing Penetration on new financing 16% 7% 51% 21% Volvo Renault Volvo Mack Volvo CE Trucks Trucks Buses 1% 4% 30% 20% 13% 37% 14% AB Volvo 04-10-22
Slide 20: Operating income and ROE
Press Conference Q3 2004 19 Volvo Financial Services Operating income and ROE SEK M 400 12.0% 350 10.0% 300 8.0% 250 200 6.0% 150 4.0% 100 2.0% 50 0 0.0% 01Q1 01Q2 01Q3 01Q4 02Q1 02Q2 02Q3 02Q4 03Q1 03Q2 03Q3 03Q4 04Q1 04Q2 04Q3 Operating Income* ROE** *Isolated Quarters **12-month Rolling Average A
Slide 21: Gross credit portfolio
Press Conference Q3 2004 20 Volvo Financial Services Gross credit portfolio SEK M 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 01 01 01 01 02 02 02 02 03 03 03 03 04 04 04 Volvo Truck Renault Truck Mack Truck VCE Bus Other AB Volvo 04
Slide 22: Effective Risk Management = Stability and Control
Press Conference Q3 2004 21 Volvo Financial Services Effective Risk Management = Stability and Control Overdue > 30 Ratio Overdue > 90 Ratio 0.8% 0.8% 0.7% 0.7% 0.6% 0.6% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.2% 0.2% 0.1% 0.1% 0.0% 0.0% May-04 Jul-04 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Jun-04 Sep-04
Slide 23: Customer finance reserve ratios
Press Conference Q3 2004 22 Volvo Financial Services Customer finance reserve ratios 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 01Q1 01Q2 01Q3 01Q4 02Q1 02Q2 02Q3 02Q4 03Q1 03Q2 03Q3 03Q4 04Q1 04Q2 04Q3 Credit Provision Ratio Reserve Ratio Write-off Ratio AB Volvo 04-10-22
Slide 24: The Customer finance business cycle
Press Conference Q3 2004 23 Volvo Financial Services The “Customer finance business cycle” Fierce Competition Margin Compression Irrational Lending Over Supply of Credit VFS: • Continue to Offer Competition Enters Prudent Liquidity Increased Liquidity • Price Maximization • Optimization for Next Upt
Slide 25: Key objectives
Press Conference Q3 2004 24 Volvo Financial Services Key objectives 1 Stability in earnings over a business cycle 2 Profitability in all business segments 3 Controlled and profitable asset growth 4 Sound portfolio structure / asset diversification 5 Support Business Areas & maximize customer satisfa
Slide 26: Volvo Group Summary
Press Conference Q3 2004 25 Volvo Group Summary z Strong sales development z Finalizing merger phase in Trucks z Henlys resolution z Significant profitability improvement AB Volvo 04-10-22