Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — AB Volvo — Q4 2006 Earnings Presentation
26 slides from Volvo Ab Class A's earnings presentation, Feb 2, 2007
Slide 1: Fourth Quarter 2006 Press Conference
Fourth Quarter 2006 Press Conference, February 2, 2007
Slide 2: Highlights
Press Conference Q4 2006 1 Highlights Fourth Quarter In Focus Going Forward z Business environment z Finalize product- and production - European market stronger than expected change-over - North America prebuy/softer market z Capitalize on new products z Medium and heavy truck orders up 79% in Europ
Slide 3: Net sales, operating income, earnings per share
Press Conference Q4 2006 2 Net sales (SEK bn) Europe North 53% (50) America Asia 27% (28) 9% (10) South Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 America Rest of 65,3 60,2 65,5 57,4 65,1 231,2 239,1 243,5 248,4 248,1 5% (6) the world 6% (6) Quarter 12 months rolling Operating income Earnings per share (SEK M) (
Slide 4: Trucks
Press Conference Q4 2006 3 Trucks Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 43,4 40,5 43,5 38,7 43,7 2742 3539 4029 3303 3498 155,4 159,9 162,3 166,0 166,3 6,3% 8,7% 9,3% 8,5% 8,0% 11717 12179 12806 13613 14369 Quarter 12 m
Slide 5: Heavy Duty Truck Market Europe
Press Conference Q4 2006 4 Heavy Duty Truck Market Europe (EU members + Switzerland and Norway) Units, Thousands (heavy trucks) 350 Forecast Modification of definition In 1991 (East Germany) and 2007: ~300 000 in 2000 (new member states) 295 300 250 256 230 200 188 171 179 150 122 100 116 50 0 85 86
Slide 6: Heavy Duty Truck Market North America
Press Conference Q4 2006 5 Heavy Duty Truck Market North America Units, Thousands (heavy trucks) 349 350 308 300 225 250 Forecast 2007: ? 200 174 150 171 100 122 50 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 AB Volvo 2007-02-02
Slide 7: Volvo Trucks
Press Conference Q4 2006 6 Volvo Trucks Investing in strategic Volvo Truck Centres in Eastern Europe Helsinki Nizhniy Novgorod St Petersburg Moscow Berlin Minsk Kiev Warsaw Lvov Wienna Odessa Belgrad Bucharest Constanta Sarajevo Varna Sofia Volvo Truck Centres Skopje 2004: 6 Istanbul 2006: 11 2010:
Slide 8: Renault Trucks
Press Conference Q4 2006 7 Renault Trucks Renault Maxity – broadening the light truck segment in Renault Trucks AB Volvo 2007-02-02
Slide 9: Volvo Buses
Press Conference Q4 2006 8 Volvo Buses Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 134 131 179 132 191 5,3 4,2 4,5 3,7 4,5 2,5% 3,1% 4,0% 3,6% 4,3% 16,6 17,6 17,9 17,6 16,9 470 569 588 576 633 Quarter 12 months rolling Quarte
Slide 10: Volvo Buses product launches 2006
Press Conference Q4 2006 9 Volvo Buses Product launches 2006 Europe N & S America International Complete Buses New 9900 coach New Nova articulated city bus New city bus, India New 8500 intercity bus New Nova hybrid city bus New Silverbus coach, China Face-lift 9700 coach New articulated city bus, Me
Slide 11: Volvo Construction Equipment
Press Conference Q4 2006 10 Volvo Construction Equipment Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 10,3 9,4 11,0 9,5 10,8 736 829 1239 828 992 34,8 37,0 38,4 40,1 40,6 7,1% 8,9% 11,3% 8,7% 9,2% 2752 3023 3325 3632 3888 Quar
Slide 12: Volvo Construction Equipment: The new L350F
Press Conference Q4 2006 11 Volvo Construction Equipment The new L350F AB Volvo 2007-02-02
Slide 13: Volvo Penta
Press Conference Q4 2006 12 Volvo Penta Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 2,4 2,7 2,8 2,4 2,5 205 222 347 233 200 9,8 10,1 10,3 10,4 10,5 8,4% 8,2% 12,2% 9,8% 7,9% 943 959 1004 1007 1002 Quarter 12 months rolling Qu
Slide 14: Volvo Penta 100th anniversary
Press Conference Q4 2006 13 Volvo Penta Volvo Penta 100th anniversary AB Volvo 2007-02-02
Slide 15: Olof Persson, President Volvo Aero
Press Conference Q4 2006 14 Olof Persson President Volvo Aero AB Volvo 2007-02-02
Slide 16: Strong order intake of large commercial aircraft
Press Conference Q4 2006 15 Strong order intake of large commercial aircraft • The order backlog reached a new record high of 4,988 aircraft in December 2006. • Deliveries increased by 25% in 2006 versus 2005 • Passenger air travel reached all time high, month by month, during 2006 Backlog develomen
Slide 17: Volvo Aero has a strong market position
Press Conference Q4 2006 16 Volvo Aero has a strong market position • Independent role; Cooperation with all major players • Strong partner; Focus on light weight design and production technology • Strong and well balanced product portfolio • No 2 in the world within our specialization, with up to 7
Slide 18: Our position and the market development enable us to expand
Press Conference Q4 2006 17 Our position and the market development enable us to expand our business • More than 20 start ups during 2006, GEnx - the engine for versus 4-5 a normal year Boeing 787 (”The • Strong sales volume for the GEnx engine Dreamliner”) and for in 2006 Boeing 747-8 p -s um C nx
Slide 19: Volvo Aero - After market re-position
Press Conference Q4 2006 18 Volvo Aero - After market re-position Volvo Aero After Market Business Engine Services and Inventory sales Overhaul Parts Distribution and Leasing Redistribution Asset management Logistics Focus 2007: • Exit large engine overhaul – Strategic decision to close
Slide 20: Volvo Aero in the Volvo Group
Press Conference Q4 2006 19 Volvo Aero in the Volvo Group Areas of synergies Competence Financing transfer Process- /product technology Quality Distribution development solutions Light weight technology Volvo IS/IT Brand AB Volvo 2007-02-02
Slide 21: Volvo Aero
Press Conference Q4 2006 20 Volvo Aero Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06* 2,1 2,2 1,9 1,9 2,1 219 206 150 139 108 7,5 8,1 8,2 8,1 8,0 10,4% 9,5% 7,9% 7,3% 5,2% 836 832 814 714 603 Quarter 12 months rolling Quarter M
Slide 22: Volvo Financial Services
Press Conference Q4 2006 21 Volvo Financial Services Fourth Quarter New retail financing Operating income and return on equity (SEK bn) (SEK M) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 9,3 7,8 9,6 7,8 10,1 479 571 626 580 524 33,0 33,8 34,6 34,5 35,3 15,3% 14,1% 15,6% 15,5% 15,5%
Slide 23: Volvo Financial Services Fourth Quarter - isolated
Press Conference Q4 2006 22 Volvo Financial Services Fourth Quarter - isolated New financing Penetration on new financing 3% 6% 54% 23% Volvo Renault Volvo Volvo CE Mack Trucks Trucks Buses 13% 32% 27% 15% 13% 9% 1% AB Volvo 2007-02-02
Slide 24: Proposed dividend
Press Conference Q4 2006 23 Proposed dividend Per share • Ordinary dividend SEK 25 • Share split 6:1 - 5 ordinary shares - 1 redemption share SEK 25 • Redemption share listed and traded on Stockholm Stock Exchange • Total SEK 50 AB Volvo 2007-02-02
Slide 25: Summary
Press Conference Q4 2006 24 Volvo Group Summary z 2006 – Difficult but the strongest year ever - Sales growth: 7% - Operating income 22.1 billion - Operating margin: 8.9% - Cash flow: 12.6 billion - ROE: 19.6% z Finalize product renewal in North America z Expansion in Eastern Europe and Asia AB Volv
Slide 26: Press Conference Q4 2006
Press Conference Q4 2006 25 AB Volvo 2007-02-02