Volvo AB Class A · OMXSTO:VOLV_A
Volvo AB Class A — Q2 2015 Earnings Presentation
24 slides from Volvo AB Class A's earnings presentation, 2015
Slide 1: Volvo Group Second Quarter 2015
Volvo Group SECOND QUARTER 2015 JAN GURANDER Volvo Group Headquarters Second quarter 2015 1
Slide 2: Second quarter summary
VOLVO GROUP Second quarter summary IMPROVED PROFITABILITY ON FLAT VOLUMES UNDERLYING OPERATING MARGIN 7.1% SOLID CASH FLOW OF 8.6 BN * Excluding restructuring charges, EU anti-trust provision, Volvo Group Headquarters gain on sale of real estate, provision related to Volvo Rents Second quarter
Slide 3: Trucks: Orders and deliveries stable on a global level
TRUCKS Orders and deliveries stable on a global level – regional differences Orders decreased by 6% Deliveries increased by 4% Book-to-bill 89% Volvo Group Headquarters Second quarter 2015 3
Slide 4: Trucks Europe: Gradually improving market
TRUCKS EUROPE Gradually improving market Total market up 17% through May – growth in most markets Total market outlook for 2015 revised upwards from 240,000 to 250,000 units Net order intake improved by 13% in Q2 - Renault Trucks +17% - Volvo +9% Market shares through May - Volvo 17.1% (-0.6
Slide 5: Trucks North America: Slowing momentum from high levels
TRUCKS NORTH AMERICA Slowing momentum from high levels Total market increased by 20% through May Total market forecast remains at 310,000 trucks for 2015 Net order intake decreased by 19% in Q2 - Volvo -1% - Mack -50% Mack order book double in size Good aftermarket momentum US Market sha
Slide 6: Trucks South America: Continued weak economic development
TRUCKS SOUTH AMERICA Continued weak economic development Total heavy-duty truck market in Brazil declined by 53% in Q2 2015 Total Brazilian market forecast for 2015 revised downwards to 40,000 units Net order intake declined by 54% in Q2 Volvo’s market share in Brazil declined to 20.1% (-1.3
Slide 7: Trucks Asia Pacific: Mixed market development
TRUCKS ASIA PACIFIC Mixed market development Japanese demand remains healthy Recovering demand in India, but weak in South East Asia Construction segment in China continues to decline Engine agreement in place with DFCV UD Trucks’ HD market share in Japan reached 18.8% (-0.1) YTD Volvo Gro
Slide 8: Construction Equipment: Continued market headwind
VOLVO CONSTRUCTION EQUIPMENT Continued market headwind 49% further market decline in China through May Deliveries down by 24% mainly due to low demand in China, Russia and Brazil Orders down by 27% Sales activities to improve market and product mix – higher market shares on heavy machines Vo
Slide 9: Buses and Volvo Penta
BUSES VOLVO PENTA Deliveries stable, orders down by 37% Strong order intake, +18% Continued good demand in North America, recovering market in Europe and still low Sales momentum continues across all demand in Brazil segments First Volvo electric buses in commercial Competitive products
Slide 10: Financial Review
Volvo Group SECOND QUARTER 2015 FINANCIAL REVIEW Volvo Group Headquarters Second quarter 2015 10
Slide 11: Good sales growth in North America and Europe partly offset by decline in South America
VOLVO GROUP Good sales growth in North America and Europe partly offset by decline in South America Volvo Group Headquarters Second quarter 2015 11
Slide 12: Earnings improvements in all Business Areas
VOLVO GROUP Earnings improvements in all Business Areas + Trucks + Volvo CE + Volvo Penta + Customer Finance + Buses Volvo Group Headquarters Second quarter 2015 12
Slide 13: Improved earnings
VOLVO GROUP Improved earnings + Increased gross margins in Europe and North America on both new products and aftermarket + Lower cash R&D spending - Lower gross margins in Brazil (Trucks) and China (Volvo CE) - Administrative and Selling expenses Volvo Group Headquarters Second quarter 2015 13
Slide 14: Trucks: Improved profitability
TRUCKS Improved profitability Volvo Group Headquarters * Excluding restructuring charges, EU anti-trust provision and gain on sale of real estate Second quarter 2015 in 2014 and capital gain on the sale of shares in Eicher Motors Limited in 2015 14
Slide 15: Trucks: Improved profitability in North America and Europe
TRUCKS Improved profitability in North America and Europe Volvo Group Headquarters * Excluding restructuring charges and gain on sale of real estate in 2014 Second quarter 2015 and capital gain on the sale of shares in Eicher Motors Limited in 2015 15
Slide 16: CE: Improved profitability despite continued drop in volumes
VOLVO CE Improved profitability despite continued drop in volumes Volvo Group Headquarters * Excluding restructuring charges and credit provisions in China Second quarter 2015 in Q4 2014 16
Slide 17: CE: Improved results in Europe and North America
VOLVO CE Improved results in Europe and North America Volvo Group Headquarters * Excluding restructuring charges Second quarter 2015 17
Slide 18: Buses and Volvo Penta
BUSES VOLVO PENTA Volvo Group Headquarters * Excluding restructuring charges Second quarter 2015 18
Slide 19: Customer Finance: Strong results, profitable portfolio growth
CUSTOMER FINANCE Strong results – profitable portfolio growth Volvo Group Headquarters * Excluding restructuring charges Second quarter 2015 19
Slide 20: Positive cash flow trend
VOLVO GROUP Positive cash flow trend Volvo Group Headquarters * Industrial Operations Second quarter 2015 20
Slide 21: Structural cost reductions offset by currency effect
VOLVO GROUP Structural cost reductions offset by currency effect REALIZED COST REDUCTIONS ADJUSTED FOR CURRENCY EFFECTS Q215 vs. Q214 Q215 vs. Q214 Q215 vs. Q214 Total cost reduction* - 296* M + 186* M - 399* M Σ - 509* M Volvo Group Headquarters * Excluding currency effects Second quarter 2015 21
Slide 22: Structural cost to be reduced by SEK 10 bn
VOLVO GROUP Structural cost to be reduced by SEK 10 bn – facing currency-headwind SEK bn Targeted reduction 2016 vs 2012 2013 2014 Q2 2015* 2012 Structural cost reduction in Gross Income - -1.0 -1.7 Cash R&D 16.9 15.9 15.2 14.7 Selling expenses 27.9 28.5 27.4 27.9 Administrative expenses 5.6 5.9 5.4
Slide 23: Second quarter summary
VOLVO GROUP Second quarter summary IMPROVED PROFITABILITY ON FLAT VOLUMES STRONG CASH FLOW EFFICIENCY ACTIVITIES IN FOCUS FOR 2015: GROUP TRUCKS SALES IT OPERATIONS GROUP TRUCKS OPERATIONS VOLVO CE * Excluding restructuring charges, EU anti-trust Volvo Group Headquarters provision, gain on s
Slide 24: Volvo Group
Volvo Group Second quarter 2015 Volvo Group Headquarters Second quarter 2015 24