Slide 1: First Quarter 2010 Press Conference
First Quarter 2010 Press Conference, April 23, 2010
Slide 2: Group Highlights
Group Highlights First quarter – Operating income SEK 2.8 bn – Cash flow – negative SEK 2.7 bn – Strong recovery in Volvo CE Business environment – Europe; market improving – Asia & South America; strong recovery – North America; early signs of increased market activity AB Volvo First Quarter 2010 2
Slide 3: Volvo Group
Volvo Group Net sales First quarter (SEK bn) 4% Eastern Europe North America 19% 10% South America 25% Asia 46% Western 35% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Europe Quarter 56 54 49 60 59 12 Mth. rol. 284 258 237 218 221 7% Other markets Operating income (SEK M) Operating income + Cost reductions effect
Slide 4: Volvo Group – Cash Flow
Volvo Group – Cash Flow Industrial Operations SEK bn 10 5 0 -5 -10 -15 -20 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Cash Flow 1,8 -15,7 -2,9 -1,4 8,6 -2,7 AB Volvo First Quarter 2010 4
Slide 5: Volvo Group – Net Financial Debt
Volvo Group – Net Financial Debt Industrial Operations Net debt, Liquidity position SEK 66 bn SEK bn - Limited maturities in 2010-2011 60 50 76.2% 40 66.0% 30 Changes in Net financial debt 20 - Cash Flow 2.7 bn - Currency 0.1 bn 10 - Other 0.7 bn 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Total 3.5 bn Pensions
Slide 6: Maintained focus on cost & cash flow
Maintained focus on cost & cash flow 2009 9 21 bn cost reduction in place 9 Working capital reduced - Inventories - Turnover Historical development – Working capital First quarters, SEK bn 2010 2009 2008 2007 2006 2005 Total change in working capital -4,5 -11,4 -8,7 -6,3 -3,2 -4,6 Change in accounts
Slide 7: Trucks
Trucks Net sales Operating income SEK bn SEK M Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Quarter 37,4 33,5 30,4 37,7 36,5 Quarter -2 382 -4 778 -2 329 -1 316 1 444 12 Mth. rol. 190 171 155 139 138 12 Mth. rol. 5 353 -4 250 -9 232 -10 805 -6 979 Margin -6,4% -14,3% -7,7% -3,5% 4,0%
Slide 8: Quon
Quon New heavy-duty range from UD Trucks AB Volvo First Quarter 2010 8
Slide 9: Condor
Condor New Condor model equipped with the all-new medium-duty Group engine AB Volvo First Quarter 2010 9
Slide 10: VE Series
VE Series New series of heavy-duty Eicher trucks in India AB Volvo First Quarter 2010 10
Slide 11: Volvo FMX
Volvo FMX Strenghtened product offering for the construction segment AB Volvo First Quarter 2010 11
Slide 12: Volvo FM
Volvo FM Dedicated to regional distribution AB Volvo First Quarter 2010 12
Slide 13: 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 14: Heavy-duty truck market – North America
Heavy-duty truck market – North America Units, Thousands (heavy trucks) 400 349 350 308 300 250 225 208 200 2010: 185 194 up 20-30% 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 First Quarter 2010 14
Slide 15: Net order intake – positive trend
Net order intake – positive trend Trucks Net order Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Change Change 60 000 intake Q1->Q1 Q4->Q1 50 000 Europe 7,494 8,980 8,189 14,546 16,361 118% 12% 40 000 North America 2,869 3,257 5,093 4,661 3,410 19% -27% 30 000 South America 1,731 2,998 5,284 5,576 4,548 163% -18% 2
Slide 16: Construction Equipment
Construction Equipment Net sales Operating income SEK bn SEK M Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Quarter -1 395 -1 259 -787 -564 1 006 Quarter 8,2 9,2 8,2 10,2 11,1 12 Mth. rol. -888 -3 776 -4 697 -4 005 -1 604 12 Mth. rol. 49 42 37 36 39 Margin, % -17,1 -13,8 -9,6% -5,6% 9
Slide 17: One of the best first quarters ever
One of the best first quarters ever 81% leverage year over year Ranking Sales (MSEK) Operating Margin Cash Flow 1 Q1 2008 (15,140) Q1 2010 (9.0%) Q1 2004 2 Q1 2010 (11,148) Q1 2006 (8.9% ) Q1 2010 3 Q1 2007 (11,002) Q1 2007 (8.6%) Q1 2005 4 Q1 2006 (9,362) Q1 2008 (8.6%) Q1 2002 5 Q1 2009 (8,172) Q1
Slide 18: World markets recovering from very low levels
World markets recovering from very low levels 260 000 260 000 China 240 000 240 000 220 000 N. America 220 000 200 000 200 000 180 000 Europe 180 000 160 000 160 000 140 000 140 000 120 000 120 000 100 000 Asia excl. CN International 100 000 80 000 80 000 2010 Market Development (Est.) 60 000 Europe
Slide 19: Regional shift towards BRIC countries
Regional shift towards BRIC countries China by far the largest market New machine revenues 2009-Q1 2010-Q1 Europe Europe 28% Russia 18% Russia North America 3% China North America 2% China 19% 25% 7% 39% India India 3% 3% Brazil 5% Brazil 7% Other Asia 9% Other Asia 11% Other International 8% Other
Slide 20: Actions taken in 2009
Actions taken to in 2009 Action (Defined end 2008) Outcome • Maintain market share 9 Market shares held or increasing • Maintain prices 9 Positive price realization • Positive Cash flow 9 Strong seasonal cash flow • Optimize inventory situation 9 Inventory aligned with demand • Implement new organiz
Slide 21: Well Positioned to Capitalize on Improving Market Conditions
Well Positioned to Capitalize on Improving Market Conditions 9Execute 2010-2012 strategy – more than 700 activities already ongoing 9Continue to capitalize on Lingong and Road Machinery investments 9BRIC market focus and development 9Continue to develop distribution 9Maintain high flexibility in pro
Slide 22: Construction Equipment
Construction Equipment New OptiShift – increasing fuel efficiency by up to 15% AB Volvo First Quarter 2010 22
Slide 23: Buses
Buses Net sales Operating income SEK bn SEK M Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Quarter -95 -118 -91 -46 145 Quarter 4,0 4,7 4,0 5,8 5,1 12 Mth. rol. -50 -214 -233 -351 -111 12 Mth. rol. 17,7 18,1 18,3 18,5 19,5 Margin -2,4% -2,5% -2,3% -0,8% 2,9% Highlights In Focus z Slow
Slide 24: Buses
Buses 1,500 buses from Volvo to World Expo in Shanghai AB Volvo First Quarter 2010 24
Slide 25: Volvo Penta
Volvo Penta Net sales Operating income SEK bn SEK M Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Quarter -97 -165 25 7 121 Quarter 2,0 2,3 1,9 1,9 2,0 12 Mth. rol. 513 -110 -283 -230 -12 12 Mth. rol. 10,4 9,3 8,6 8,2 8,1 Margin -4,8% -7,3% 1,3% 0,4% 6,1% Highlights In Focus z Improved
Slide 26: Volvo Penta Product News
Volvo Penta Product News Dynamic Positioning System Volvo Technology Award 2010 AB Volvo First Quarter 2010 26
Slide 27: Volvo Aero
Volvo Aero Net sales Operating income SEK bn SEK M Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Quarter 83 28 108 -169 152 Quarter 2,0 2,0 1,8 2,0 1,9 12 Mth. rol. 306 330 360 50 119 12 Mth. rol. 7,8 8,1 8,2 7,8 7,7 Margin 4,1% 1,4% 6,1% -8,5% 8,0% Highlights In Focus z Air traffic re
Slide 28: Volvo Aero
Volvo Aero Maiden flight for Boeing 747-8 with GEnx engines AB Volvo First Quarter 2010 28
Slide 29: Financial Services
Financial Services New retail financing Operating income and return on equity SEK bn SEK M Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q309 Q4 09 Q1 10 Quarter 7,5 7,9 6,3 7,0 6,8 Quarter -396 -296 -3 15 14 12 Mth. rol. 42 38 34 29 28 ROE 5,0% -0,5% -3,4% -6,2% -2,8% Highlights In Focus z Improvements
Slide 30: 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 Q1 09 51 47 14 2 Q1 09 33% 31% 13% 25% 14% N/A Q1 10 39 43 9 7 Q1 10 29% 29% 11% 18% 11% 8% AB Volvo Third Quarter 2009 30
Slide 31: Group Summary
Group Summary Earnings per share First quarter SEK • Sales 4% higher, +12% fx-adjusted • Operating income SEK 2.8 bn, operating margin 4.8% • Cost reductions executed • Operating cash flow – normal seasonality Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 • Introduction of new trucks in Japan, Quarter -2,09 -2,75 -
Slide 32: First Quarter 2010
VOLVO First Quarter 2010