Slide 1: Second Quarter 2007 Press Conference
Second Quarter 2007 Press Conference, July 25, 2007
Slide 2: Group Highlights
Page 1 Group Highlights Second Quarter z Business environment - Europe and International strong - North America and Japan softer/prebuy z First quarter with Nissan Diesel and IR Road Development – 12,000 new employees z Investing in increased manufacturing capacity for heavy diesel engines and gear
Slide 3: Net sales
Page 2 Net sales Net sales SEK bn z Net sales up 5% - Nissan Diesel SEK 4.6 bn - IR Road Development SEK 1.1 bn z Adjusted for FX and acquired and divested units, net sales down 1% z Trucks North America down 54% z Strong development outside North America - Europe up 10% Q2 06 Q3 06 Q4 06 Q1 07 Q2 0
Slide 4: Operating income
Page 3 Operating income + Product and market mix Operating income SEK M - Strong Europe and International + Price realization + Aftermarket and retail business + Divested companies (SEK 516 M) - US truck operations - Nissan Diesel - R&D (SEK 370 M) Q2 06 Q3 06* Q4 06 Q1 07 Q2 07 - Lower capitalizati
Slide 5: Trucks
Page 4 Trucks Net sales – SEK bn Operating income – SEK M Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 * Quarter 4,126 3,470 3,575 3,711 3,831 Quarter 45.0 39.7 45.0 39.2 46.3 12 Mth. rol. 13,021 13,995 14,828 14,882 14,587 12 Mth. rol. 164.9 169.7 171.3 168.9 170.3 Margin 9.2% 8.7% 7
Slide 6: Volvo Trucks
Page 5 Volvo Trucks z Strong order intake z Deliveries Europe +13% Asia +18% North America -79% z Good reception of US’07 trucks z Continued expansion of European dealer network AB Volvo 2007-07-25 Second Quarter 2007
Slide 7: Renault Trucks
Page 6 Renault Trucks z Strong order intake for heavy and medium duty trucks z Light truck orders down due to model change over z Deliveries of the new EU4 version of Renault Mascott have started z Much improved industrial productivity z Improving profitability AB Volvo 2007-07-25 Second Quarter 200
Slide 8: Mack Trucks
Page 7 Mack Trucks z Deliveries down 62% z Positive customer reception from road show, introducing US’07 engine family z Improved order intake for vocational trucks z Continued good performance in the dealer network AB Volvo 2007-07-25 Second Quarter 2007
Slide 9: Nissan Diesel
Page 8 Nissan Diesel z Early introduction of new emission technology – ahead of competition z Deliveries in the second quarter was 10,011, down 36% - Temporary gap in product availability to Nissan Motors - Weak Japanese market compensated by export growth z Operating income at SEK 94 M, excluding a
Slide 10: Heavy-Duty Truck Market - Europe
Page 9 Heavy-Duty Truck Market - Europe (EU members + Switzerland and Norway) Units, Thousands (heavy trucks) Forecast 2007 ~330,000 350 Modification of definition In 1991 (East Germany) and in 2000 (new member states) 300 In 2006 (new member states) 256 300 250 200 178 229 150 100 116 50 0 90 91 92
Slide 11: Heavy-Duty Truck Market – North America
Page 10 Heavy-Duty Truck Market – North America Units, Thousands (heavy trucks) Forecast 2007: 200-220,000 400 349 350 308 300 250 225 200 194 150 171 100 122 50 0 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 AB Volvo 2007-07-25 Second Quarter 2007
Slide 12: Volvo Construction Equipment
Page Volvo Construction Equipment 11 Net sales Operating income SEK bn SEK M Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Quarter 1,276 872 1,047 946 1,398 Quarter 11.4 9.8 11.2 11.0 14.1 12 Mth. rol. 3,410 3,761 4,072 4,141 4,263 12 Mth. rol. 39.2 41.3 42.1 43.4 46.1 Margin 11.2% 8.9
Slide 13: Construction Equipment: IR Road Development integration
Page Volvo Construction Equipment 12 Rapid integration of IR Road Development product portfolio Adding annual volumes of 4-5,000 Volvo engines (> 4 Litre) AB Volvo 2007-07-25 Second Quarter 2007
Slide 14: Volvo Buses
Page Volvo Buses 13 Net sales Operating income SEK bn SEK M Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Quarter 201 162 211 90 122 Quarter 4.6 3.8 4.6 3.7 4.1 12 Mth. rol. 650 668 745 664 585 12 Mth. rol. 18.1 17.9 17.3 16.7 16.2 Margin 4.3% 4.3% 4.6% 2.4% 3.0% Highlights In Focus z
Slide 15: Buses: Hybrid technology
Page Volvo Buses 14 Hybrid technology will bring progress ¾ 116 million SEK from Swedish Energy Agency ¾ 35% reduced fuel consumption ¾ Unique parallel hybrid concept ¾ Field test in London 2008, 6 double deckers AB Volvo 2007-07-25 Second Quarter 2007
Slide 16: Volvo Penta
Page Volvo Penta 15 Net sales Operating income SEK bn SEK M Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Quarter 375 257 226 293 444 Quarter 2.9 2.4 2.6 2.9 3.2 12 Mth. rol. 1,057 1,084 1,105 1,151 1,220 12 Mth. rol. 10.5 10.6 10.8 10.9 11.2 Margin 12.8% 10.5% 8.7% 10.0% 13.8% Highlig
Slide 17: New products from Volvo Penta
Page Volvo Penta 16 New products from Volvo Penta IPS750/ IPS850 GPS Anchor AB Volvo 2007-07-25 Second Quarter 2007
Slide 18: Volvo Aero
Page Volvo Aero 17 Net sales Operating income SEK bn SEK M Q2 06 Q3 06 Q4 06* Q1 07 Q2 07 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Quarter 153 143 111 92 93 Quarter 2.0 2.0 2.1 2.0 1.8 12 Mth. rol. 821 725 617 499 439 12 Mth. rol. 8.3 8.2 8.2 8.0 7.9 Margin 7.8% 7.3% 5.2% 4.7% 5.0% Highlights In Focus • Strong
Slide 19: Volvo Aero GEnx components Fan Blade Out test
Page Volvo Aero 18 Volvo Aero’s GEnx components passed the Fan Blade Out test AB Volvo 2007-07-25 Second Quarter 2007
Slide 20: Volvo Financial Services
Page Volvo Financial Services 19 New retail financing Operating income and return on equity SEK bn SEK M Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Operating 484 426 372 395 421 Quarter 9.6 7.8 10.1 8.7 10.7 Income 12 Mth. rol. 34.6 34.5 35.3 36.2 37.3 ROE 14,0% 13,5% 13,2% 13,1% 12
Slide 21: Volvo Financial Services: Managed Assets
Page Volvo Financial Services 20 Managed Assets - BSEK Penetration on new financing (Second Quarter isolated) Europe North America International Volvo Volvo Renault Volvo CE Mack Q206 39 32 14 Trucks Buses Trucks Q207 41 30 18 Q206 29% 23% 18% 15% 11% Q207 37% 30% 15% 15% 21% AB Volvo 2007-07-25 Sec
Slide 22: Group Summary
Page 21 Group Summary Earning per share SEK z Good financial performance - Operating income SEK 6.1 bn - Earnings per share SEK 1.98 - Return on equity 17.9% - Operating cash flow SEK 6.1 bn - SEK 20 bn distributed to shareholders Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Quarter 2,31 1,94 1,83 1,85 1,98 12 Mth