Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — Q4 2001 Earnings Presentation
26 slides from Volvo AB Class A's earnings presentation, Feb 8, 2002
Slide 1: Fourth Quarter and Full Year 2001 Press Conference
Volvo Group Fourth Quarter and Full Year 2001 Press Conference February 8, 2002 AB Volvo Pressconfq401/020208/
Slide 2: Highlights
Volvo Group Highlights 1 Fourth Quarter In Focus Going Forward l Business conditions Short Term - Recession in North America continues - Downturn in Europe l Production start of FH/ FM - Slow recovery in air traffic - deliveries from end of Q1 l Cyclical adjustments and structural changes l Adapting
Slide 3: Sales by Market Area
Volvo Group Sales by Market Area 2 Fourth Quarter and Full Year 2001 Percent of Fourth Quarter Change Full Year Change SEK M Total 2001 2000 % 2001 % Western Europe 53 25,702 17,927 43 93,147 50 Eastern Europe 5 2,429 1,321 84 6,383 74 North America 26 12,454 9,091 37 54,630 44 South America 3 1,473
Slide 4: Sales by Business Area
Volvo Group Sales by Business Area 3 Fourth Quarter and Full Year 2001 Percent of Total Fourth Quarter Change Full Year Change SEK M % 2001 2000 % 2001 % Global Trucks 69 33,696 17,651 91 120,140 93 Buses 8 4,044 4,910 (18) 16,675 (3) Construction Equipm. 10 4,992 5,102 (2) 21,135 6 Penta 4 1,894 1,
Slide 5: Operating Income by Business Area
Volvo Group 4 Operating Income by Business Area Fourth Quarter Change Full Year Change SEK M 2001 2000 % 2001 % Global Trucks 591 685 (14) 1040 (26) Buses (231) 162 na (524) na Construction Equipm. 136 261 (48) 891 (44) Penta 128 63 103 658 36 Aero 89 161 (45) 653 5 Financial Services 80 151 (47) 32
Slide 6: Restructuring Costs Q4 - 2001
Volvo Group Restructuring Costs Q4 - 2001 5 Building a competitive position and adapting to market conditions Global Trucks • Early retirements in Renault Trucks SEK 507M • Peru Plant closure • Dealer restructuring (US) Buses • Roswell closure or divestment SEK 350M Construction Equipment • Redundan
Slide 7: Global Trucks
Volvo Group Volvo Global Trucks 6 Fourth Quarter and Full Year 2001 Fourth Quarter Full year 2001 SEK M 2001 2000 Change 2001 Change 1) Volume (units) 42,085 52,511 (20%) 155,311 (17%) Sales 33,696 17,651 91% 120,140 93% Operating income 591 685 (14%) 1,040 (26%) Operating margin 1.8% 3.9% (2.1) 0.9
Slide 8: Volvo, Renault and Mack Trucks Deliveries
Volvo Group Volvo, Renault and Mack Trucks 7 Deliveries Jan - Dec Change 2001 2000 % Units Total Europe 98 041 108 143 (9) of which: Western Europe 90 460 101 098 (11) Eastern Europe 7 581 7 045 8 North America 34 645 57 933 (40) South America 5 789 5 104 13 Asia 6 603 6 732 (2) Net orders : -12% Re
Slide 9: Market Development - Heavy Trucks
Volvo Group Market Development - Heavy Trucks 8 Western Europe Units Thousands 246 250 237 Registrations 236 200 208 150 100 98 99 '00 '01 '02 AB Volvo Pressconfq401/020208/
Slide 10: Market Development - Class 8
Volvo Group Market Development - Class 8 9 NAFTA Units Thousands 309 300 Retail sales 257 250 255 200 170 150 100 98 99 '00 '01 '02 AB Volvo Pressconfq401/020208/
Slide 11: Integration Volvo Trucks / Renault V.I. / Mack
Volvo Group Integration Volvo Trucks / Renault V.I. / Mack 10 First Year • Key decisions: - Vehicle / Engine Plans - Industrial restructuring in North America • First years synergies - on track and contributing positively • New organization structure for trucks - Based on distinct and powerful brand
Slide 12: The Volvo Group Organisation
Volvo Group 11 The Volvo Group Organisation AB Volvo Business Areas Mack/ Marine & Renault Volvo Construction Industrial Financial North Buses Equipment Power Aero VI Trucks Services America Systems Trucks Business Powertrain Logistics Units Mobility Systems 3P Technological Development Technology T
Slide 13: Product Launches 2001
Volvo Group Product Launches 2001 12 Volvo Renault V.I. Mack FH/FM Magnum Granite The new Volvo FH The new Magnum The new construction truck with with: with: • New exterior & interior design • New standard cab • Conventional chassis • Cab exterior and interior layouts • Front axle forward - Bumper w
Slide 14: Construction Equipment
Volvo Group Volvo Construction Equipment 13 Fourth Quarter and Full Year 2001 Fourth Quarter Full Year SEK M 2001 2000 Change, % 2001 Change, % Sales 4,992 5,102 (2) 21,135 6 Operating income 136 261 (48) 891 (44) Operating margin 2,7% 5,1% (2.4) 4,2% (3.8) ROC, 12M 8.6% 16.2% (7.6) 8,6% (7.6) Highl
Slide 15: Our Strategy for Growth
Volvo Group Our Strategy for Growth Product 14 expansion Channels § Existing products to market Superior execution with § Compact focus on quality Equipment (BHL, SSL, RTLT) § Strategic Alliances Solutions provider Customer satisfaction Brand Customer Geographic management segment expansion expansio
Slide 16: Volvo CE and Komatsu in talks
Volvo Group 15 Volvo CE and Komatsu in talks: • Determination on future cooperation in development and production of major components • How to strengthen cost competitiveness • Tangible outcome expected by mid-year 2002 Discussions will not include: • Sales • Service • Distribution • Equity particip
Slide 17: The Volvo Backhoe Loader
Volvo Group The Volvo Backhoe Loader 16 (Grävlastare) • Volvo CE created its own completely new Backhoe loader (BHL) • Result of close cooperation between team of engineers, marketing specialists and many customers from various countries and backgrounds • Shown for the first time at ConExpo, Las Veg
Slide 18: The Volvo Backhoe Loader
Volvo Group 17 The Volvo Backhoe Loader AB Volvo Pressconfq401/020208/
Slide 19: Scat Trak Acquisition: The Skidsteer Loader
Volvo Group 18 Scat Trak Acquisition: The Skidsteer Loader Opportunity: Assets: • Skidsteer (SSL) range of 8 models • Design rights to product. Ø Asset purchase without Ø Drawings, documentation, technology manufacturing facility • Limited plant assets • Key product line for Volvo CE Ø Tooling, asse
Slide 20: UpRight Acquisition: The Telehandler
Volvo Group UpRight Acquisition: The Telehandler 19 (Teleskopisk materialhanterare) Opportunity: Assets: • Telehandler range of 6 models • Design rights to product Ø Asset purchase without Ø Drawings, documentation, technology manufacturing facility • Limited plant assets • Key product line for Volv
Slide 21: Volvo Compact Line-Up
Volvo Group 20 Volvo Compact Line-Up AB Volvo Pressconfq401/020208/
Slide 22: Buses
Volvo Group Volvo Buses 21 Fourth Quarter and Full Year 2001 Fourth Quarter Full Year SEK M 2001 2000 Change, % 2001 Change, % Volume (units) 2,791 2,975 (6) 9,953 (10) Sales 4,044 4,910 (18) 16,675 (3) Operating income (231) 162 na (524) na Operating margin (5.7)% 3.3% (9.0) (3.1)% (5.7) ROC, 12M (
Slide 23: Penta
Volvo Group Volvo Penta 22 Fourth Quarter and Full Year 2001 Fourth Quarter Full Year SEK M 2001 2000 Change, % 2001 Change, % Sales 1,894 1,679 13 7,380 12 Operating income 128 63 103 658 36 Operating margin 6.8% 3.8% 3.0 8.9% 1.6 ROC, 12M 57.9% 43.3% 14.6 57.9% 14.6 Highlights In Focus • Increased
Slide 24: Aero
Volvo Group Volvo Aero 23 Fourth Quarter and Full Year 2001 Fourth Quarter Full Year SEK M 2001 2000 Change, % 2001 Change, % Sales 3,123 2,882 8 11,784 10 Operating income 89 161 (45) 653 5 Operating margin 2,8% 5,6% (2.8) 5.5% (0.3) ROC, 12M excl. Aero Serv. 20,5% 25,2% (4.7) 20,5% (4.7) Highlight
Slide 25: Financial Services
Volvo Group Volvo Financial Services 24 Fourth Quarter and Full Year 2001 Fourth Quarter Full Year SEK M 2001 2000 Change, % 2001 Change,% Operating income 80 151 (47) 325 (78) ROE 4.2% 14.1% (9.9) 4.2% (9.9) Assets, MSEK 73,528 66,522 11 73,528 11 Equity ratio 10.3 11.5 (1.2) 10.3% (1.2) Highlights
Slide 26: Summary
Volvo Group Summary 25 • Business conditions - Continued recession in North America - Downturn in Europe • Adaptation to the business cycle - Employees reduced by 5,700 - Temporaries and consultants reduced by 1,400 • Positive effect from synergies • Strong cash flow in Q4 • Extensive product renewa