Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — AB Volvo — Q4 2005 Earnings Presentation
39 slides from Volvo AB Class A's earnings presentation, Feb 3, 2006
Slide 1: Fourth Quarter 2005 Press Conference
Fourth Quarter 2005 Press Conference, February 3, 2006
Slide 2: Highlights
Press Conference Q4 2005 1 Highlights Fourth Quarter and Full Year In Focus Going Forward z Business environment z Manage product- and production - Continued strong demand in North America change-over - European market – stronger than expected z Capitalize on new products z Best year ever - Growth 1
Slide 3: Press Conference Q4 2005
Press Conference Q4 2005 2 * Excluding effects from the holding in Scania AB AB Volvo 2006-02-03
Slide 4: Trucks
Press Conference Q4 2005 3 Trucks Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 39,5 35,9 41,1 34,9 43,4 3312 3077 3402 2496 2742 136,9 141,6 147,8 151,5 155,4 8,4% 8,6% 8,3% 7,1% 6,3% 8992 10532 11598 12287 11717 Quarter 12 mo
Slide 5: Transition to world class
Press Conference Q4 2005 4 Transition to world class Merger mode Transition period Vision mode “Create synergies” “New architecture and shared technologies. Develop unique brand versions” AB Volvo 2006-02-03
Slide 6: Transition to new generation of trucks
Press Conference Q4 2005 5 Transition to new generation of trucks Renault Magnum Renault Premium Route Mack Granite Mack Pinnacle AB Volvo 2006-02-03
Slide 7: Transition to new generation of engines
Press Conference Q4 2005 6 Transition to new generation of engines Renault Mack MP7, US04, 11 litre Trucks Volvo Penta, TAD 1640, 16 litre DXI11 Optidriver II Buses, G9 Euro 4 / Incentive 5 Volvo CE D12D Tier 3, 12 litre Volvo Trucks, D13 Euro 3/4/5 13 litre AB Volvo 2006-02-03
Slide 8: Volvo Trucks
Press Conference Q4 2005 7 Volvo Trucks New Volvo FH16 • Stronger powertrain - Improved 16 L engine - Increased power - 610 hp 660 hp - I-shift for 60t and over - New engine brake • Euro 4 emission std • Up to 4% reduced fuel consumption AB Volvo 2006-02-03
Slide 9: Heavy Duty Truck Market - Europe
Press Conference Q4 2005 8 Heavy Duty Truck Market Europe (EU members + Switzerland and Norway) Units, Thousands (heavy trucks) 2006 forecast 300 ~270,000 Modification of definition 277 In 1991 (East Germany) and in 2000 (new member states) 250 256 256 230 200 188 171 179 150 122 100 116 50 Europe F
Slide 10: Heavy Duty Truck Market - North America
Press Conference Q4 2005 9 Heavy Duty Truck Market North America Units, Thousands (heavy trucks) 2006 forecast 350 329 330-340,000 309 300 250 255 236 200 174 199 179 150 170 134 100 122 50 Forecast 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06E AB Volvo 2006-02-03
Slide 11: Volvo Buses
Press Conference Q4 2005 10 Volvo Buses Fourth Quarter Net sales Operating income* (SEK bn) (SEK M) Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 189 32 160 144 134 3,6 3,2 4,2 3,9 5,3 5,2% 1,0% 3,8% 3,7% 2,5% 12,7 13,4 14 15 16,6 253 316 371 525 470 Quarter 12 months rolling Quarter M
Slide 12: Volvo Buses
Press Conference Q4 2005 11 Volvo Buses 2,000 city buses sold to Shanghai, China Volvo B6R AB Volvo 2006-02-03
Slide 13: Volvo Construction Equipment
Press Conference Q4 2005 12 Volvo Construction Equipment Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 7,9 7,2 9,6 7,8 10,3 425 558 937 521 736 29,4 30 31,2 32,4 34,8 5,4% 7,8% 9,8% 6,7% 7,1% 1898 2104 2290 2441 2752 Quarter 12
Slide 14: Volvo Construction Equipment
Press Conference Q4 2005 13 Volvo Construction Equipment New range of Motor Graders – 7 models AB Volvo 2006-02-03
Slide 15: Press Conference Q4 2005
Press Conference Q4 2005 14 AB Volvo 2006-02-03
Slide 16: Volvo Penta Business
Press Conference Q4 2005 15 Volvo Penta Business 25% 75% AB Volvo 2006-02-03
Slide 17: Press Conference Q4 2005
Press Conference Q4 2005 16 AB Volvo 2006-02-03
Slide 18: Press Conference Q4 2005
Press Conference Q4 2005 17 AB Volvo 2006-02-03
Slide 19: Industrial Power Systems
Press Conference Q4 2005 18 Industrial Power Systems AB Volvo 2006-02-03
Slide 20: Industrial Power Systems
Press Conference Q4 2005 19 Industrial Power Systems AB Volvo 2006-02-03
Slide 21: Industrial Power Systems
Press Conference Q4 2005 20 Industrial Power Systems AB Volvo 2006-02-03
Slide 22: Industrial Power Systems - Versatile engines
Press Conference Q4 2005 21 Industrial Power Systems Versatile engines AB Volvo 2006-02-03
Slide 23: Industrial Power Systems
Press Conference Q4 2005 22 Industrial Power Systems AB Volvo 2006-02-03
Slide 24: Volvo Penta Marine Power Systems
Press Conference Q4 2005 23 Volvo Penta Marine Power Systems Stern drive Shaft 75% 25% AB Volvo 2006-02-03
Slide 25: Volvo Penta Innovations
Press Conference Q4 2005 24 Volvo Penta Innovations New segment created by Volvo Penta AB Volvo 2006-02-03
Slide 26: Volvo Penta Innovations
Press Conference Q4 2005 25 Volvo Penta Innovations AB Volvo 2006-02-03
Slide 27: Volvo Penta IPS
Press Conference Q4 2005 26 Volvo Penta IPS Marine Leisure trendsetters Azimut Yachts, Italy Tiara Yachts, US AB Volvo 2006-02-03
Slide 28: Volvo Penta Innovations - Joystick
Press Conference Q4 2005 27 Volvo Penta Innovations Joystick AB Volvo 2006-02-03
Slide 29: New Boating Experience
Press Conference Q4 2005 28 New Boating Experience AB Volvo 2006-02-03
Slide 30: Marine Business
Press Conference Q4 2005 29 Marine Business • New segments - new technology • Demography - wealth - age - health - leisure time • Larger boats • Strong future growth AB Volvo 2006-02-03
Slide 31: Volvo Penta
Press Conference Q4 2005 30 Volvo Penta Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 2,2 2,4 2,6 2,3 2,4 238 206 302 230 205 9,1 9,3 9,3 9,5 9,8 10,9% 8,6% 11,5% 9,9% 8,4% 940 958 953 976 943 Quarter 12 months rolling Quarter
Slide 32: Volvo Aero
Press Conference Q4 2005 31 Volvo Aero Fourth Quarter Net sales Operating income (SEK bn) (SEK M) Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 1,8 1,6 1,8 2 2,1 13 210 168 239 219 6,9 7 6,9 7,2 7,5 0,7% 12,8% 9,4% 12,0% 10,4% 403 504 491 630 836 Quarter 12 months rolling Quarter Margi
Slide 33: Volvo Aero
Press Conference Q4 2005 32 Volvo Aero Increased share in the GEnx engine AB Volvo 2006-02-03
Slide 34: Volvo Financial Services
Press Conference Q4 2005 33 Volvo Financial Services Fourth Quarter New retail financing Operating income and return on equity (SEK bn) (SEK M) Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 7,7 7 8,8 7,9 9,3 434 587 483 484 479 29,3 30,3 30,9 31,4 33 11,1% 13,9% 14,3% 15,4% 15,3% Quart
Slide 35: Volvo Financial Services
Press Conference Q4 2005 34 Volvo Financial Services Fourth Quarter - isolated AB Volvo 2006-02-03
Slide 36: Stable Dividend History over the Cycle
Press Conference Q4 2005 35 Stable Dividend History over the Cycle 10.5% SEK SEK: 16.75 kr* 18 4.5%* Share buybacks = SEK 13 b Trucks 16 600,000 14 550,000 4.7% 12 Ainax: 15 kr 500,000 10 450,000 5.1% 4.5% 5.6% 3.6% 8 3.2% 400,000 3.2% 6 2.3% 350,000 2.9% 2.9% 4 2.4% 300,000 2 250,000 0 200,000 1994
Slide 37: Volvo Group Summary
Press Conference Q4 2005 36 Volvo Group Summary z 2005 - Strongest year ever - Sales growth: 14% - Operating margin: 7.9% - Cash flow: 6.8 billion - ROE: 17.8% - Proposed dividend: 16.75 SEK per share z 2006 - In focus: - Transition into a more efficient industrial and product structure - Capitalize
Slide 38: Press Conference Q4 2005
Press Conference Q4 2005 37 AB Volvo 2006-02-03
Slide 39: Safe Harbor Statement
Press Conference Q4 2005 38 Safe Harbor Statement AB Volvo 2006-02-03