Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — Q4 2022 Earnings Presentation
27 slides from Volvo Ab Class A's earnings presentation, Jan 26, 2023
Slide 1: Fourth Quarter and Full Year 2022
FOURTH QUARTER AND FULL YEAR 2022 Martin Lundstedt, President and CEO
Slide 2: Full Year 2022 Highlights
votLuvao Volvo Group FULL YEAR 2022 HIGHLIGHTS * Sales growth of SEK 101 bn to SEK 473 bn * Adj. operating income growth of SEK 9.5 bn to SEK 50.5 bn * Operating cash flow Industrial Operations SEK 35 bn * Net cash position of SEK 74 bn * ROCE 27.4% (25.3) * A year of major challenges: — Supply chai
Slide 3: Fourth quarter highlights
Volvo Group Fourth quarter highlights * Net sales increased to SEK 134.3 bn, an increase of 17% adjusted for FX * Adjusted operating income reached SEK 12.2 bn (10.1), corresponding to a margin of 9.1% (9.8) Volvo Group Fourth quarter and full year 2022 votLuvao NET SALES SEK bn == 12 months SEK 473
Slide 4: Volume development
Volvo Group Volume development Volvo Group Fourth quarter and full year 2022 votLuvao TRUCK DELIVERIES == 12 months 233 k units Q4 Qi Q@2 Q3 4 Qi Q2 @3 a4 2020 2021 2022 Deliveries restated for UD Trucks divestment MACHINE DELIVERIES == 12 months 81k units +4% A Q4 Qi Q@2 G3 @4 Qt @2 Q3 a4 2020 2021
Slide 5: Electrification progress
Volvo Group Electrification progress* including Designwerk and Nova Bus Volvo Group Fourth quarter and full year 2022 votLuvao ORDER INTAKE, FULLY ELECTRIC VEHICLES === 12 months 4,892 units 1481 604 95 Q4 Qt Q2 Q8 G4 at Q2 Q8 a4 2020 2021 2022 DELIVERIES, FULLY ELECTRIC VEHICLES == 12 months 2,194
Slide 6: Service sales development
Volvo Group Service sales development SERVICE SALES (incl. Financial Services) SEKbn == 12 months SEK 109.8 bn +25% +11% excl. FX 23.9 21.6 Q4 QI Q2 G3 Q4 QI Q2 Q3 a4 2020 2021 2022 Service sales restated for UD Trucks divestment Volvo Group Fourth quarter and full year 2022 votLuvao YoY GROWTH % 7
Slide 7: Trucks
votLuvao Trucks * 1,000 battery-electric trucks produced in the Blainville plant in France * XPO Logistics accelerates its transition to a sustainable fleet — investing in 100 fully-electric Renault trucks * Volvo Group and Pilot Company to create partnership for charging network in North America *
Slide 8: Truck market charts
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Slide 9: Trucks: Restrictive order slotting to manage order book quality and cost inflation
Trucks Restrictive order slotting to manage order book quality and cost inflation Quarterly orders -21% and deliveries +4% NORTH AMERICA s==Orders s=mDeliveries Q4 Qi Q@2 Q3 Q4 Ql Q2 Q3 a4 2020 2021 2022 Orders -32% votLuvao EUROPE Orders ==mDeliveries Q4 Qi Q2 G3 G4 Qi @2 Q3 4 2020 2021 2022 1 1 Or
Slide 10: Market data (IHS Markit)
Includes content supplied by IHS Markit . Copyright © IHS Markit (2022). All rights reserved.
Slide 11: Construction Equipment
Construction Equipment Volvo CE launched its Collision Mitigation System for Volvo wheel loaders * Electric machine orders +90% and deliveries +221% Volvo Group Fourth quarter and full year 2022 votLuvao 2023-01-26 1"
Slide 12: Construction equipment market charts
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Slide 13: Construction Equipment: Restrictive order slotting
votLuvao Co n stru ctio n Eq u i pment Restrictive order slotting to manage order book quality and cost inflation Quarterly orders -23% and deliveries +4% NORTH AMERICA men Orders ame Deliveries EUROPE Orders <===Deliveries Q4 Qi @2 Q3 a4 ai Q2 @ a4 2020 2021 2022 Orders -83% Deliveries +63% Q4 Ql Q
Slide 14: Buses
votLuvao Buses F447: * Orders increased by 70% az. * Deliveries increased by 64% v * Volvo Buses along with the City of Gothenburg, Sweden, recognized for its innovations within geofencing Volvo Group Fourth quarter and full year 2022 ad. Fy | 2023-01-26 4
Slide 15: Volvo Penta
votLuvao Volvo Penta * Orders decreased by 18% * Deliveries increased by 11% * Continued work towards net zero solutions leveraging the Group cube battery technology Volvo Group Fourth quarter and full year 2022 2023-01-26 6
Slide 16: Financial Services
votLuvao Financial Services * Record quarterly and annual new business volume * Good portfolio performance * Finance penetration levels slightly declined Volvo Group Fourth quarter and full year 2022 NEW RETAIL FINANCING & PENETRATION RATE SEK bn == Penetration rate 12 months 28.5 % 30.6 25.8 21.5 Q
Slide 17: Fourth Quarter 2022
voLuvoe FOURTH QUARTER 2022 Tina Hultkvist, Executive Vice President Group Finance and CFO Volve Group Fourth quarter and full year 2022 2023-01-26
Slide 18: Net sales per market
Volvo Group Net sales per market Volvo Group Fourth quarter and full year 2022 votLuvao NET SALES SEK bn Currency SEK +14.6 bn 5.6 24 134.3 6.4 a — 9.3 _ 8.5 | 102.4 Q4 2021 Europe North South Asia Africa and Q4 2022 America America Oceania 2023-01-26 18
Slide 19: Adjusted operating income contributors
votLuvao Volvo Group Adjusted operating income contributors ADJUSTED OPERATING INCOME SEK bn Currency SEK +1,.8 bn Al 2.0 -O1 EH ~ + Price realization _. 7 12.2 + Vehicle volumes 23-03 0.3 - Material costs ny - Selling expenses - R&D expenses - Freight costs Q4 2021 Gross Cash NetR&D Selling Admin O
Slide 20: Cash flow, financial position and ROCE in Industrial Operations
Volvo Group votLuvao Cash flow, financial position and ROCE in Industrial Operations OPERATING CASH FLOW SEK bn == 12 months SEK 35.3 bn a4 al a2 a3 a4 at a2 a3 a4 2020 2021 2022 Volvo Group Fourth quarter and full year 2022 ROCE FINANCIAL POSITION % 12 months (Excl. pensions and lease liabilities)
Slide 21: Trucks: Net sales and adjusted operating income
Trucks votLuvao Net sales and adjusted operating income NET SALES == 12 months SEK 310.5 bn SEK bn 430% (excl. FX +16%) j — 87.3 67.2 55.4 a4 ai @2 G8) a4 at a2 ast 2020 2021 2022 Net sales restated for UD Trucks divestment Volvo Group Fourth quarter and full year 2022 ADJUSTED OPERATING INCOME SEK
Slide 22: Construction Equipment: Net sales and adjusted operating income
votLuvao Construction Equipment Net sales and adjusted operating income NET SALES == 12 months SEK 100.2 bn SEK bn +27% (excl. FX +13%) f } 27.6 21.8 20.8 Q4 Ql Q2 @8 G4 QI Q2 O38 a4 2020 2021 2022 Volvo Group Fourth quarter and full year 2022 ADJUSTED OPERATING INCOME SEK bn 3.1 vt + Price realizat
Slide 23: Buses: Net sales and adjusted operating income
Buses votLuvao Net sales and adjusted operating income NET SALES == 12 months SEK 18.6 bn SEK bn +60% (excl. FX +43%) 6.7 54 4.2 Q4 Qi Q2 Q@3 Q4 Qi Q2 G3 a4 2020 2021 2022 All numbers restated to exclude Nova Bus which is now included in segment ‘Group Functions and other’ Volvo Group Fourth quarter
Slide 24: Volvo Penta: Net sales and adjusted operating income
Volvo Penta votLuvao Net sales and adjusted operating income NETSALES == 12 months SEK 18.1 bn SEK bn +33% (excl. FX +22%) 48 3.6 3.0 Q4 Qi Q2 Q3 @4 Qi Q2 Q3 a4 2020 2021 2022 Volvo Group Fourth quarter and full year 2022 ADJUSTED OPERATING INCOME SEKM 468 330 + Price realization + Volumes - Materia
Slide 25: Financial Services: Credit portfolio and profitability
votLuvao Financial Services Credit portfolio and profitability CREDIT PORTFOLIO & ROE* SEK bn = === * ROE 12 months 15.1% 216 152 Q4 Qi @2 Q3 G4 Qi Q2 Q3 a4 2020 2021 2022 * ROE excludes provisioning related to Russian assets in Q1 2022 Volvo Group Fourth quarter and full year 2022 ADJUSTED OPERATIN
Slide 26: Full Year 2022 Highlights
votLuvao Volvo Group FULL YEAR 2022 HIGHLIGHTS PERFORM TRANSFORM * Sales growth of SEK 101 bn to SEK 473 bn * Close to 5,000 fully-electric orders in 2022 — Truck sales >300 bn (all time high) * Series production started of battery-electric — Volvo CE sales >100 bn (all time high) heavy-duty trucks
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