Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — AB Volvo — Investor Day (December 2008)
25 slides from Volvo Ab Class A's investor day presentation, Dec 2, 2008
Slide 1: Welcome to Investor Day
Welcome to Investor Day AB Volvo Investor Day in New York 2008 - Leif Johansson 1 2008-12-02
Slide 2: Volvo Group
Volvo Group Leif Johansson President and CEO Volvo Group AB Volvo Investor Day in New York 2008 - Leif Johansson 2 2008-12-02
Slide 3: Agenda
Agenda TRANSFORMING THE VOLVO GROUP BUSINESS UPDATE DOWNTURN MANAGEMENT DIESEL-ELECTRIC HYBRIDS SUMMARY AB Volvo Investor Day in New York 2008 - Leif Johansson 3 2008-12-02
Slide 4: Exit Cars to build strong Commercial Product business
Exit Cars to build strong Commercial Product business SEK ~300 bn l gr nua SEK 200 bn th les an ow sa 3% Cars Commercial ~1 Products 50% 100% Commercial Products 50% 1998 2008 -Q3 12-months AB Volvo Investor Day in New York 2008 - Leif Johansson 4 2008-12-02
Slide 5: Strong growth in developing economies
Strong growth in developing economies Heavy duty truck market 2007 CHINA EUROPE RUSSIA 495,000 329,000 129,000 NORTH AMERICA 220,000 255,000 +190% 44,000 208,000 +1,170% 2000 2007 1998 2007 39,000 INDIA 193,000 1998 2007 1998 2007 JAPAN SOUTH AMERICA +290% 43,000 50,000 32,000 102,000 42,000 1998 20
Slide 6: Capturing growth in developing economies improves geographical balance
Capturing growth in developing economies improves geographical balance Q3 2008 North America Eastern Europe 1998 16 11% % 16% 9% South 5% 8% America 31% 3% 31% 3% Western 18% 45% 6% 6% 46% 52% 5% 5% 17% Europe 19% Asia 52% 3% 3% 39% 6% 7% SEK 100 bn Other Markets Soft products SEK ~310 bn Soft produ
Slide 7: Business Update
BUSINESS UPDATE f Volvo Group f Trucks f Volvo CE f Buses f Volvo Penta f Volvo Aero AB Volvo Investor Day in New York 2008 - Leif Johansson 7 2008-12-02
Slide 8: Volvo Group
BUSINESS UPDATE Volvo Group Net sales (SEK bn) Difficult quarter • Sales down 13% compared to Q2 • Operating income down 37% • Competitive new products Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Decrease in operating income Quarter 68 85 77 80 70 12 Mth. rol. 269 285 301 310 311 + Good performance in Europe and
Slide 9: Trucks
BUSINESS UPDATE Trucks Volvo Trucks Renault Trucks z Market shares gained in Europe z Improving market shares in Europe z Production adjustments in Europe z Adjustment of production - temporary z Order book normalized workers staffing z New products launched in Europe z Product innovation - Good rec
Slide 10: Volvo CE
BUSINESS UPDATE Volvo CE • Manage consolidation of Road Machinery in North America – Goderich plant close-down • Integrating acquired operations – Road Machinery – Lingong • Steel prices • Adjusting to rapidly weakening demand – stop weeks/months • Introduction of hybrids AB Volvo Investor Day in Ne
Slide 11: Buses
BUSINESS UPDATE Buses • Europe – Consolidation and improved city bus performance – Closure of Tampere and divestiture of Turku factory Oct 1, 2008 – Synergies with Trucks • North & South America – Export from Mexico – New coach range in Brazil – Bus Rapid Transit in focus • International – Export fr
Slide 12: Volvo Penta
BUSINESS UPDATE Volvo Penta • Continue to build on the strong momentum for Volvo Penta IPS – Inboard Performance System • Leverage sales of industrial engines based on the new Volvo Group engine offer • Broadening customer offering and sales of soft products like: – Joystick – GPS based anchor • Adj
Slide 13: Volvo Aero
BUSINESS UPDATE Volvo Aero • Product cost reduction – Raw material inflation – Weak USD • Air traffic growth flattening out • Component business still growing, with good margin • Manage supply chain ramp-up for 2009-2010 • Capitalize on composite knowledge • Continue aftermarket profitability improv
Slide 14: Downturn Management
DOWNTURN MANAGEMENT AB Volvo Investor Day in New York 2008 - Leif Johansson 14 2008-12-02
Slide 15: Challenging times!
Challenging times! • North America, Europe and Japan in recession • Emerging markets slowing down rapidly: China, India, Russia… AB Volvo Investor Day in New York 2008 - Leif Johansson 15 2008-12-02
Slide 16: Volvo Group
Volvo Group Sales growth year over year (%) Asia 18% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Sales growth -3% 5% 13% 25% 26% 13% 2% AB Volvo Investor Day in New York 2008 - Leif Johansson 16 2008-12-02
Slide 17: Braking sharply
Braking sharply Truck deliveries in Europe: 3-months rolling 45 000 40 000 Cost level 35 000 • Speed ! 30 000 • Depth ? 25 000 20 000 15 000 10 000 5 000 0 05 8 8 5 6 5 06 07 8 5 5 05 6 6 06 06 7 7 07 07 08 07 08 -0 -0 l-0 -0 l- 0 -0 l- 0 -0 l- 0 0 0 -0 v- - - p- p- v- p- v- p- n- n- n- n- aj aj aj
Slide 18: Long term actions
Long term actions Drive intra-Group synergies and aftermarket business • Take advantage of converging emission regulations within Purchasing, R&D and production • Further improve efficiency in Business Units • Leverage the Group’s Asian presence • Drive sales in retail, service and spare parts (soft
Slide 19: Diesel-Electric Hybrids and Automated Manual Transmissions
DIESEL-ELECTRIC HYBRIDS and AUTOMATED MANUAL TRANSMISSIONS AB Volvo Investor Day in New York 2008 - Leif Johansson 19 2008-12-02
Slide 20: Potential to reduce fuel consumption
Potential to reduce fuel consumption Potential reduction (%) -5 0 Co EU04 Base nv scenario en tio 5 na l po we 10 rtr ain Vehicl s Modular system 15 eAero optdynamics imizat ion 20 25 Hybrid s 30 2008 2020 AB Volvo Investor Day in New York 2008 - Leif Johansson 20 2008-12-02
Slide 21: Volvo hybrid system the superior choice
Volvo hybrid system the superior choice • The parallel hybrid will fit a wide range of the Volvo Group vehicles • Excellent performance Electric Motor/Generator • Lower cost compared to all Engine available hybrid systems Powertrain Control • Double electrical power Transmission and torque capacity
Slide 22: One Group-wide technology generates economy of scale
One Group-wide technology generates economy of scale Battery Control system management unit • Commonality Motors • Short development Electric architecture, times voltage levels Energy • Volumes of storage key components Cables and connectors Inverter DC/DC converter AB Volvo Investor Day in New York
Slide 23: Automated manual transmission
Automated manual transmission Now also in North America and for Hybrids Success factors Penetration of AMT • Automated manual transmission, 60% advantages: 50% – low weight 40% – low friction – few moving parts 30% Volvo FH • Widened offer – now construction 20% and up to 80 tons 10% • Low fuel cons
Slide 24: Summary
Summary 1998-2007 • Downturn management • Drive intra-Group synergies and aftermarket business • Integration in Asia and Volvo CE • Diesel-Electric Hybrids • Competitive products AB Volvo Investor Day in New York 2008 - Leif Johansson 24 2008-12-02
Slide 25: Best Products Best Network Best People
Best Products Best Network Best People AB Volvo Investor Day in New York 2008 - Leif Johansson Please note that according to an agreement with the other heavy truck manufacturers participating in this survey we are not allowed to use the results in our external 25 2008-12-02 communication. All infor