Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — AB Volvo — Investor Day (November 2010)
20 slides from Volvo Ab Class A's investor day presentation, Nov 2, 2010
Slide 1: Volvo Construction Equipment
Volvo Construction Equipment Olof Persson President Volvo Construction Equipment AB Volvo NY Investor Day 1
Slide 2: Agenda
Agenda BUSINESS UPDATE BRIC FOCUS NORTH AMERICA IN FOCUS AB Volvo NY Investor Day 2
Slide 3: World markets are continuing to recover
World markets are continuing to recover 350,000 350,000 2010 Market Developments (estimate) North America + 5-10% N. America 300,000 Europe + 10% 300,000 Asia + 50% International + 50% Europe 250,000 N America 250,000 200,000 200,000 Europe China 150,000 150,000 Asia excl. CN Asia excl. CN 100,000 I
Slide 4: Q3 results for Volvo CE
Q3 results for Volvo CE Net sales Operating income SEK bn SEK M Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Quarter -787 -564 1,006 2,086 1,330 Quarter 8.2 10.2 11.1 15.3 12.7 12 Mth. rol. -4,697 -4,005 -1,604 1,741 3,858 12 Mth. rol. 36.7 35.7 38.6 44.8 49.3 Margin, % -9.6% -5.6% 9.
Slide 5: Restructuring implemented during the crisis
Restructuring implemented during the crisis Action Outcome Q3, 2010 • Maintain market share 9 Market shares held or increasing • Maintain prices 9 Positive price realization • Optimize inventory situation 9 Inventory aligned with demand • Implement new organization 9 Structure savings of 1 BSEK • Pr
Slide 6: Managing the Break-Even point to maximize profitability
Managing the Break-Even point to maximize profitability Volvo CE Breakeven analysis Leverage Productivity and ~ 40% efficiency improvements Operating margin Cost Reductions 0% Volvo CE Historical Operating Margin Volvo CE Operating Margin (YTD, 2010) Representative Graph Units sold per year (without
Slide 7: Consistent investment in new product development
Consistent investment in new product development • 55 New products or strategic updates in the pipeline – In addition, the SDLG product offering is expanding • Tier IV development is on track – More than 100,000 hours of testing – Production is ready to begin AB Volvo NY Investor Day 7
Slide 8: BRIC Focus
BRIC Focus
Slide 9: More than 100 million USD investments to become #1, 2 or 3 in BRIC markets
More than 100 million USD investments to become # 1, 2 or 3 in BRIC markets AB Volvo NY Investor Day 9
Slide 10: Strong investments to support capacity and product offering in China
Strong investments to support capacity and product offering in China • 37 MUSD invested in Volvo’s world class Shanghai facility since 2003 • Jinan Volvo technology center Volvo Facility in Shanghai – 30 MUSD investment • 50 MUSD in Linyi excavator production facility – 4 models of SDLG excavators J
Slide 11: Tremendous excavator growth in China
Tremendous excavator growth in China YTD Sep. 2010: Volvo sales up 135% vs. 2009, Market up 83% 140,000 120,000 100,000 80,000 60,000 40,000 YTD Sep Volume growth 2010 vs 2009 (Excavator) 20,000 Volvo 135% Sany 119% Above Market Growth Rate 0 Kobelco 103% Hyundai 99% 83% 2005 2006 2007 2008 2009 201
Slide 12: Volvo and Lingong combined is the 4th largest player in the Chinese market
Volvo and Lingong combined is the 4th largest player in the Chinese market (units) Other Import Suppliers; Other Local • Volume wise Chinese 1,1% Suppliers; are main players 8,7% Changlin; 2,4% Liugong; 11,2% • Global players are Lovol; 3,4% Longgong; strong in terms of SANY; 3,4% 10,3% revenue & pr
Slide 13: SDLG Excavators to be launched at Bauma China
SDLG Excavators to be launched at Bauma China • 3 models in production • First machines have been shipped to customers • Aggressive ramp-up plan to capture the large and growing market opportunity in China • Chinese Excavator already more than 125,000 units in 2010 • Additional investments are being
Slide 14: Building on an established presence in India
Building on an established presence in India • 20 MUSD investment in Bangalore factory to produce excavators • First manufacturer to introduce telematics in the Indian market (CareTrack) • Strong dealer development in India (service locations, personnel and points of sale) Bangalore Factory AB Volvo
Slide 15: Strengthening position in Russia & Brazil
Strengthening position in Russia & Brazil • Russian distribution agreement – Partner to invest up to 100 MUSD by 2015 to develop the Russian distribution network • Brazil – strong market growth across whole of South America • World class production facilities in Brazil • SDLG Wheel Loader sales in P
Slide 16: North America in Focus
VOLVO North America in Focus
Slide 17: Optimizing the North American Operations
Optimizing the North American Operations Goderich, Canada - Closing • Consolidating/optimizing the Shippensburg, US North American industrial ± 570 empl. footprint • Substantial investment (30 MUSD) in the Shippensburg facility to also produce motor Asheville, NC Closed graders – State of the art fa
Slide 18: A strong dealer network that has weathered the financial crisis
A strong dealer network that has weathered the financial crisis • 49 Dealers with 252 locations throughout the US and Canada • Continual focus on overall distribution development throughout the crisis to strengthen dealer network – Mark of Excellence – Mergers and Acquisitions AB Volvo NY Investor D
Slide 19: Conclusions
Conclusions • Market has been improving during 2010 – Volvo CE is in a good position to capitalize on these improving market conditions • North America is a home market and is a strategic focus area • Continue to invest and develop our distribution network to support BRIC growth • Actively manage th
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