Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Q2 2010 Earnings Presentation
25 slides from Volvo AB Class A's earnings presentation, Jul 22, 2010
Slide 1: Second Quarter 2010 Press Conference
Second Quarter 2010 Press Conference, July 22, 2010
Slide 2: Group Highlights
Group Highlights Second quarter – Operating income SEK 5.0 bn* – Cash flow SEK 8.5 bn – Decision to start engine production in India Business environment – Europe; gradually improving demand – Asia & South America; strong markets – North America; increased market activity * Excluding write down of a
Slide 3: Volvo Group
Volvo Group Net sales Second quarter (SEK bn) 5% Eastern Europe North America 17% 11% South America 26% Asia 49% Western 34% Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Europe Quarter 54 48,5 59,8 58,6 68,8 12 Mth. rol. 257,9 236,6 218,4 220,9 235,7 7% Other markets Operating income (SEK M) Operating income + Inc
Slide 4: Strong sales growth in Brazil, India and China
Volvo Group Strong sales growth in Brazil, India and China Q2, net sales Other Asia Japan India North America China Eastern Europe South America Western Europe 2007 2008 2009 2010 2007 2008 2009 2010 Still low levels in US, Europe High sales levels in Brazil, and Japan India and China AB Volvo Secon
Slide 5: Volvo Group – Cash Flow
Volvo Group – Cash Flow Industrial Operations 12-months, SEK bn 20 15 10 5 0 -5 -10 -15 -20 -25 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 08 09 09 09 09 10 10 2005 2006 2007 2008 2009 2010 Cash Flow 11 8,2 10 1 1,9 4,9 5,2 13 10 10
Slide 6: Volvo Group – Net Financial Debt
Volvo Group – Net Financial Debt Industrial Operations Net debt, Group liquidity position SEK 74 bn SEK bn - Limited maturities in 2010-2011 60 85.8% of equity 50 40 63.4% (53.3%) 30 20 Changes in Net financial debt - Cash Flow + 8.5 bn 10 - Currency - 3.3 bn 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 -
Slide 7: Debt update
Debt update Funding Rating Short-term Long-term Completed key transactions 2010 • Club loan of EUR 775 M prolonged f Moody’s (global) P-2 Baa2 stable 2 year. 12 banks participating f S&P (global) A-3 BBB- neg • JPY ¨bridge¨ of JPY 50 bn f DBRS (Canada) R-2 (high) BBB (high) stable prolonged 1 year w
Slide 8: Upturn management
Upturn management f Hold on to implemented cost reductions f Increased focus on efficiency f Build flexibility in cost structure f Supply chain management f Increase working capital turn-over f Price management AB Volvo Second Quarter 2010 8
Slide 9: Trucks
Trucks Net sales Operating income SEK bn SEK M Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Quarter 33,5 30,4 37,7 36,5 41,6 Quarter -4 778 -2 329 -1 316 1 444 2 478 12 Mth. rol. 171,2 155,4 138,9 138 146,1 12 Mth. rol. -4 250 -9 232 -10 805 -6 979 277 Margin -14,3% -7,7% -3,5% 4,0% 6
Slide 10: New products into production
New products into production Volvo EPA 2010 trucks Renault Master UD Quon UD Condor Trucks launched in 2010 Mack EPA 2010 trucks Eicher VE series Volvo FMX Volvo FM Distribution AB Volvo Second Quarter 2010 10
Slide 11: Heavy-duty truck market - Europe
Heavy-duty truck market - Europe (EU members + Switzerland and Norway) Units, Thousands (heavy trucks) 350 Modification of definition 329 In 1991 (East Germany) and in 2000 (new member states) 319 In 2006 (new member states) 300 256 250 2010: 200 178 229 up ~ 10% 150 164 100 116 50 0 90 91 92 93 94
Slide 12: Heavy-duty truck market – North America
Heavy-duty truck market – North America Units, Thousands (heavy trucks) 400 349 350 308 300 250 225 208 2010: 200 up 20-30% 185 194 150 171 100 122 115 50 0 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 AB Volvo Second Quarter 2010 12
Slide 13: Net order intake
Net order intake Trucks Net order Q2-09 Q1-10 Q2-10 Change Change 60 000 intake Q2->Q2 Q1->Q2 50 000 Europe 8,980 16,361 19,054 112% 16% 40 000 North America 3,257 3,410 6,675 105% 96% 30 000 South America 2,998 4,548 4,986 66% 10% 20 000 Asia 7,884 15,442 13,367 70% -13% 10 000 Other markets 3,505
Slide 14: Construction Equipment
Construction Equipment Net sales Operating income SEK bn SEK M Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Quarter -1 259 -787 -564 1 006 2 086 Quarter 9,2 8,2 10,2 11,1 15,3 12 Mth. rol. -3 776 -4 697 -4 005 -1 604 1 741 12 Mth. rol. 42 37 36 39 45 Margin, % -13,8 -9,6% -5,6% 9,0% 1
Slide 15: New series of compact equipment
New series of compact equipment The C-series of excavators (EC15C-EC20C) and F-series of wheel loaders (L20F & L25F) Production Planning AB Volvo Second Quarter 2010 15
Slide 16: Buses
Buses Net sales Operating income SEK bn SEK M Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Quarter -118 -91 -46 145 259 Quarter 4,7 4,0 5,8 5,1 5,3 12 Mth. rol. -214 -233 -351 -111 267 12 Mth. rol. 18,1 18,3 18,5 19,5 20,1 Margin -2,5% -2,3% -0,8% 2,9% 4,9% Highlights In Focus z Slow
Slide 17: Buses: Hybrid serial production
Buses Hybrid serial production AB Volvo Second Quarter 2010 17
Slide 18: Volvo Penta
Volvo Penta Net sales Operating income SEK bn SEK M Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Quarter -165 25 7 121 312 Quarter 2,3 1,9 1,9 2,0 2,6 12 Mth. rol. -110 -283 -230 -12 465 12 Mth. rol. 9,3 8,6 8,2 8,1 8,5 Margin -7,3% 1,3% 0,4% 6,1% 11,9% Highlights In Focus z Slow Mari
Slide 19: Volvo Penta product news
Volvo Penta product news Swedish Coast Guard selects Volvo Penta's IPS system AB Volvo Second Quarter 2010 19
Slide 20: Volvo Aero
Volvo Aero Net sales Operating income SEK bn SEK M 241 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Quarter 28 108 -169 152 -372 Quarter 2,0 1,8 2,0 1,9 2,1 12 Mth. rol. 330 360 50 119 -281 12 Mth. rol. 8,1 8,2 7,8 7,7 7,8 Margin 1,4% 6,1% -8,5% 8,0% -17,4 Highlights In Focus z Air tr
Slide 21: Volvo Aero: Rolls-Royce Trent XWB
Volvo Aero Rolls-Royce Trent XWB: First engine for Airbus A350 XWB to test AB Volvo Second Quarter 2010 21
Slide 22: Financial Services
Financial Services New retail financing Operating income and return on equity SEK bn SEK M Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Quarter 7,9 6,3 7,0 6,8 8,9 Quarter -296 -3 15 14 7 12 Mth. rol. 38,2 33,6 28,7 28,0 29,0 ROE -0,5% -3,4% -6,2% -2,8% -0,3% Highlights In Focus z Dep
Slide 23: Financial Services
Financial Services Total managed assets Penetration on new financing (SEK bn) W Volvo Volvo Renault Mack UD Americas E Europe Asia Buses Europe CE Trucks Trucks Trucks Trucks Q2 09 49 45 13 8 Q2 09 36% 34% 15% 19% 16% N/A Q2 10 37 46 8 8 Q2 10 37% 27% 13% 16% 16% 9% AB Volvo Third Quarter 2009 23
Slide 24: Group Summary
Group Summary Earnings per share Second quarter SEK • Sales 27% higher, +31% fx-adjusted • High sales levels in Brazil, India & China • Low sales levels in US, Europe & Japan • Operating income SEK 5.0 bn*, operating margin 7.3%* Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 • Cost reductions executed Quarter -2,75
Slide 25: Second Quarter 2010
VOLVO Second Quarter 2010