Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — Q1 2000 Earnings Presentation
20 slides from Volvo AB Class A's earnings presentation, Apr 26, 2000
Slide 1: First Quarter Results, 2000
Volvo Group First Quarter Results, 2000 April 26, 2000 AB Volvo Telekonf-Q1/000426
Slide 2: Strength in Diversity
Volvo Group Strength in Diversity 1 First Quarter Results Key Events/Outlook ! Industrial diversity paying off ! EU Commission stops Volvo’s ! Globally driven volume growth acquisition of Scania ! Volvo CE led the quarter ! Volvo acquiring RVI and MACK in exchange for 15% of Volvo’s shares ! Marin &
Slide 3: Sales by Market Area
Volvo Group Sales by Market Area 2 First quarter 2000 Percent of First quarter, bln Change Volvo´s sales 2000 1999 % Western Europe 54 16.6 15.5 +7 Eastern Europe 3 0.8 0.6 +40 North America 32 9.7 8.3 +17 South America 3 1.1 1.0 +6 Asia 6 1.7 1.1 +54 Others 2 0.6 0.5 +20 Total 100 30.5 27.1 +13 • N
Slide 4: Sales by Business Area
Volvo Group Sales by Business Area 3 First quarter 2000 Total First quarter Change SEK M % 2000 1999 % Trucks 51 15,129 14,215 +6 Buses 13 3,838 2,688 +43 Construction Equipm. 16 4,649 4,040 +15 Marine & Ind. Power Syst. 5 1,585 1,230 +29 Aero 8 2,286 2,167 +5 Finance 7 2,206 2,098 +5 Other & Elimin
Slide 5: Operating Income by Business Area
Volvo Group Operating Income by Business Area 4 First quarter 2000 Total First quarter Change SEK M % 2000 1999 % Trucks 40 645 830 (22) Buses 2 33 (64) nm Construction Equipm. 19 311 182 +71 Marine & Ind. Power Syst. 6 103 45 +129 Aero 7 110 139 (21) Finance 25 398 167 138 Other & Eliminations (175
Slide 6: First quarter 2000 - Consolidated Results
Volvo Group First quarter 2000 - Consolidated Results 5 First quarter Adjustments Normalized Change SEK M 2000 1999 1999 1998 2000 1999 % Sales 30,546 27,072 30,546 27,072 +13 Operating income 1,425 27,953 (26,695) 1 1,425 1,258 +13 Inc. ass. comp. & oth. inv. 375 20 375 20 Interest net 111 (101) 11
Slide 7: Volvo Construction Equipment
Volvo Group Volvo Construction Equipment 6 First Quarter 2000 First quarter SEK M 2000 1999 Change Sales 4,649 4,040 + 15% Operating income 311 182 + 70% Operating margin 6.7% 4.5% + 2.2 ROC, 12 M 20% 15% + 5.4 Major factors First quarter constraints In Focus • Best Q1 ever in terms of sales • Decli
Slide 8: Volvo Penta
Volvo Group Volvo Penta 7 First Quarter 2000 First quarter SEK M 2000 1999 Change Sales 1,585 1,230 +29% Operating income 103 45 +129% Operating margin 6.5% 3.7% +2.8 ROC, 12M 32% 8% +24.0 Major Factors First quarter constraints In Focus • Growth in all regions and segments • Still low demand in Bra
Slide 9: Volvo Buses
Volvo Group Volvo Buses 8 First Quarter 2000 First quarter SEK M 2000 1999 Change Volume (units) 2,626 1,822 44% Sales 3,838 2,688 43% Operating income 33 (64) nm Operating margin 0.9% (2.4%) 3.3 ROC, 12M 5.4% 4.8% 0.6 Major Factors First quarter constraints In Focus • Strong deliveries in • High in
Slide 10: Volvo Aero
Volvo Group Volvo Aero 9 First Quarter 2000 First quarter SEK M 2000 1999 Change Sales 2,286 2,167 5% Operating income 110 139 -21% Operating margin 4.8% 6.4% (1.6) ROC, 12M* 20% 24% (4.5) * excl. Aviation Support Services Major Factors First quarter constraints In focus • Continued revenue growth •
Slide 11: Volvo Trucks
Volvo Group Volvo Trucks 10 First Quarter 2000 First quarter SEK M 2000 1999 Change Volume (units) 20 226 19 799 2% Sales 15,129 14,215 6% Operating income 645 830 -22% Operating margin 4.3% 5.8% ROC, 12M 27% 28% Major Factors First quarter constraints In focus • Strong markets in W. • Lower deliver
Slide 12: Volvo to join forces with RVI and Mack
Volvo Group 11 Volvo to join forces with RVI and Mack • Consolidated strength in Markets and Products • Strong industrial logic • Positive financial terms for Volvo shareholders AB Volvo Telekonf-Q1/000426
Slide 13: Merger Logic
Volvo Group Merger Logic 12 Global Position - Volvo and Renault VI trucks/Mack N o.1 in Heavy Trucks in Europe N o.2 in Heavy Trucks in North America N o.2 in Heavy Trucks in the World N o.3 in Heavy Diesel Engine in the World AB Volvo Telekonf-Q1/000426
Slide 14: World Heavy Truck Production 1999
Volvo Group World Heavy Truck Production 1999 13 Mercedes 194 Volvo 81 Mack +39 RVI +31 151 Paccar 95 Navistar 53 Scania 46 MAN 37 Iveco 35 Hino 8 Nissan 6 Mitsubishi 9 Isuzu 5 AB Volvo Telekonf-Q1/000426
Slide 15: World Heavy Diesel Engine Production 1999
Volvo Group World Heavy Diesel Engine Production 1999 14 Cummins 154 Cat/Perkins 149 Volvo 59 RVI +20 Mack +45 124 DDC 99 Scania 54 Mercedes 54 Iveco 31 MAN 27 Daf 20 Isuzu 36 Mitsubishi 21 Nissan 16 Hino 11 AB Volvo Telekonf-Q1/000426
Slide 16: Merger Logic: Markets and Products
Volvo Group Merger Logic 15 M arkets and Products Mack in North America Renault VI trucks in Europe • Strong position in the vocational segments • Strong position in southern Europe • Strong brand image • Strong brand image • Strong dealer network • Strong dealer network • Integrated engines - uniqu
Slide 17: Key Figures 1999
Volvo Group Key Figures 1999 16 RVI trucks/ Volvo Volvo Group Mack Trucks incl. RVI/Mack Sales (euro M) 6,000 7,900 20,200 (SEK M) 53,000 69,500 178,000 Op. Income* (euro M) 217 443 902 (SEK M) 1,900 3,900 8,000 Op. Margin (%) 3.6 5.6 4.5 No. of Employees 23,000 24,100 76,500 Sales units heavy truck
Slide 18: Pro forma Key Financials
Volvo Group Pro forma Key Financials 17 Volvo and RVI Adjust- Volvo Group Jan-Dec 19991, SEK bln Volvo RVI ment incl. RVI Sales 125,0 53,0 178,0 Operating income 6,6 1,9 (0,5) 8,0 Operating margin (%) 5,2 3,6 4,5 Net income 2 5,5 1,2 (0,92) 5,8 EPS 12:40 - 13:10 EBITDA per share 3 22:20 - 29:60 Dec,
Slide 19: Cost savings
Volvo Group Cost savings 18 Synergy drivers: Common Global organisation Synergies After 2 years • Purchasing Purchasing 50% • Powertrain Powertrain 25% • R&D Assembly • Finance Distribution 25% Support Total approx. SEK 3,500 M (Euro 420 M) Additional savings long term: Approx. + SEK 3,000 M (Euro 3
Slide 20: Summary
Volvo Group Summary 19 Q 1 results -D iversity paying off • Global expansion in all businesses • Industrial diversity - stable operating income • Financial Services increasing growth and profits • Strong increase in EPS Volvo acquiring R VIand M A C K • EPS increase from start and substantial future