Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — Investor Day (June 2022)
60 slides from Volvo Ab Class A's investor day presentation, Jun 22, 2022
Slide 1: Volvo Group Capital Markets Day 2022: Geared for growth
VOLVO GROUP CAPITAL MARKETS DAY 2022 Geared for growth Capital Markets Day 2022
Slide 2: Disclaimer
voLuvoao Disclaimer This presentation has been prepared by AB Volvo (pub) (the "Company” and together with its subsidiaries, the "Volvo Group") for information and background purposes only. This presentation is not, and should not be construed as, a prospectus or offering document, and has not been
Slide 3: Slide 3
Slide 4: Our strategic framework
= lig Our strategic framework Transform the Volvo Group to. th able product and service portfolio with the right quality, | provider inthe word Aspirations Have leading Be the most Grow in Asia and the US: In Asia through JVs, alliances and by strengthening the Volvo Group footprint in China, custom
Slide 5: Delivering on our financial ambitions and strategic direction
votLuvoaoe Delivering on our financial ambitions and strategic direction Volvo Group Capital Markets Day 2022 2022-06-22 5
Slide 6: Delivering on our financial ambitions and strategic direction
votLuvoaoe Delivering on our financial ambitions and strategic direction Gradual and Reduced volatility Transformation consistent earnings in earnings and accelerating improvement cash flow growth ©) ) Volvo Group Capital Markets Day 2022 2022-06-22
Slide 7: Developing our business portfolio
Volvo Group Capital Markets Day 2022 Operating income votLuvoaoe Developing our business portfolio Illustrative A @ Develop e @ High frequency follow-ups e Exit e r) e °° ee ° . e Coe e@°@ e e e e e e e e @ e@ > Revenue 2022-06-22
Slide 8: Improving through-cycle earnings resilience
Improving through-cycle earnings resilience + Decentralized P&L accountability + Price management + Service growth priority * — Regionalized value chains * R&D and industrial efficiency through modular product architecture + Production volume flexibility Consistent earnings improvement while investi
Slide 9: Strong financial position and shareholder returns
votLuvoaoe Strong financial position and shareholder returns Cash position, Industrial Operations Shareholder return of SEK 105 bn with {excl. pensions and lease liabilities) strong yield over the last five years SEK bn 25 90 @ 20 70 60 15 50 40 10 ~ 20 5 i fo} ie) 2017 2018 2019 2020 2021 2022, Q1
Slide 10: Including Financial Services
SEK bn Including Financial Services
Slide 11: Long term ambition
votutuwvo Long term ambition 0/ Safe . 0 Fossil free. More productive Capital Markets Day 2022
Slide 12: Recap of CMD 2020: Opportunity of a century!
Volvo Group Capital Markets Day 2022 votLuvao RECAP OF CMD 2020 Opportunity of a century! Step change in market share Higher life cycle revenue per unit >1.5x for electric vehicles > 5x for autonomous solutions >35% electric vehicle sales by 2030 Underlying transport demand LEADING THE WAY TO A FOSS
Slide 13: Companies taking action towards science-based targets
! Companies taking action towards | science-based targets I | / 3,170 voLuvoe 116 2015 2022 YTD 2025 Capital Markets Day 2022 2022-06-22 13
Slide 14: Low investment to decarbonize logistics
votLuvoaoe Low investment to decarbonize logistics Example: Automotive OEM, CO, scope 1-3 Cost or saving to remove CO, First abatement wave ...which fund the next enables savings... abatement wave Cost > 100% CO, Saving Source: IEA, BNEF, IRENA, BCG Volvo Group Capital Markets Day 2022 2022-06-22 4
Slide 15: When all three parameters come together customers switch to electric
votLuveaod When all three parameters come together — customers switch to electric Revenue and TCO impact co, Ease and confidence of savings implementation Volvo Group Capital Markets Day 2022 2022-06-22 15
Slide 16: We have the assets for the most competitive solution for the customer
votLuveaod We have the assets for the most competitive solution for the customer O) VEHICLE a BATTERY AND CHARGING SYSTEMS REPAIR & MAINTENANCE £— | | FINANCING & INSURANCE NN ) Y EQUIPMENT-as-a-SERVICE < Uptime lJ Safe ¥}\ CO,-free ¥1Cost / km |\¥| Productive “| Peace of mind Battery electric vehic
Slide 17: Case: France — urban distribution
votuLuvoao Case: France — urban distribution COST OF OPERATIONS INCREASES BY 5.5%-POINTS ICE Unaffected costs Depreciation 0.3% 75.4% / Fuel 7.4% Leasing 11.4% Services 2.4% Insurance 3.1% Volvo Group Capital Markets Day 2022 —_—> BEV Depreciation 0.6% Wj Leasing 19.4% QQ Services 1.6% Insurance 4.8
Slide 18: France - Urban distribution
France - Urban distribution ICE votLuvoaoe ICE - BEV CO, reduction TCO as a share of the total cost Volvo Group Capital Markets Day 2022 = ICE Change in TCO BEV Change in total cost ICE [ 45.5% BEV The cost per extra km is 57% lower for BEV Annual reduction of ~1,300 tonnes of CO, The cost of reduci
Slide 19: votLuvoaoe
votLuvoaoe Volvo Group Capital Markets Day 2022 2022-06-22 19
Slide 20: End customer choice will be simple
Diesel carried milk Electric carried milk 1.00 EUR 1.01 EUR Transport CO2 -100% End customer choice will be simple
Slide 21: End customer choice will be simple
Diesel carried milk Electric carried milk 1.00 EUR 1.01 EUR 1.005 EUR Transport CO2 -100% End customer choice will be simple
Slide 22: Case: Sweden — regional haul
votLuveaod Case: Sweden — regional haul COST OF OPERATIONS INCREASES BY 3.7%-POINTS ICE Unaffected costs 60.0% Fuel 17.8% Leasing15.4% Services 5.4% Insurance 1.4% Volvo Group Capital Markets Day 2022 _ BEV \'\ Services 3.6% Insurance 2.1% Unaffected costs 57.9% Electricity 9.6% Leasing 26.8% 2022-0
Slide 23: Sweden — regional haul
Sweden — regional haul ICE votLuveaod ICE - BEV CO, reduction TCO as a share of the total cost Volvo Group Capital Markets Day 2022 ICE Change in TCO +9.3% —_— = BEV Change in total cost ICE +3,7% BEV The cost per extra km is 40% lower for BEV Annual reduction of ~1,300 tonnes of CO, The cost of red
Slide 24: Price for CO2 emissions increasing
votLuvoaoe Price for co, emissions increasing European carbon permits Price (Euros / tonnes) Volvo Group Capital Markets Day 2022 Source: tradingeconomics.com 2022-06-22 24
Slide 25: Leaders in decarbonization also enjoy higher growth
Green alternatives Conventional products Market Size (2019) Volvo Group Capital Markets Day 2022 votLuvoaoe Leaders in decarbonization also enjoys higher growth % CAGR conventional products vs green alternatives 2016-2019 26 22 14 6 6 1 3 1 1 LI 98 80M Oil Chemicals Food Automotive FMCG Source: EU a
Slide 26: Electrification will happen segment by segment and region by region
votLuvoaoe Electrification will happen segment by segment and region by region EV market =Total Distribution Waste Regional ——=LongHaul © ——=Construction Volvo Group Capital Markets Day 2022 2022-06-22 26
Slide 27: Closer, broader and deeper customer engagement drives growth
votLuvoaoe Closer, broader and deeper customer engagement drives growth Productivity services vival drivers Operational pita) services ecosystem Service contracts Service planning Site optimization Fleet Management Charging & power solutions Financing program Tires & superstructure Insurance package
Slide 28: Volvo Group
Volvo Group =~ Capital Markets Day 2022
Slide 29: Global electric line up
votLuvao Global electric line up Volvo Group Capital Markets Day 2022 2022-06-22 29
Slide 30: Volvo Trucks' market share
Volvo Group Capital Markets Day 2022 voLuvo Volvo Trucks’ market share NORTH AMERICA EUROPE 50% 35% 19% 12% Diesel Electric Diesel Electric* *YTD May 2022 registration data, except for North America Electric 2021 FY. Includes content supplied by IHS Markit. Copyright © IHS Markit (2022). All rights
Slide 31: Electric trucks 2020 to June 2022
n 2020 ~ June 2022 f | & Volvo Group Capital Markets Day 2022 2022-06-22 31
Slide 32: Charging infrastructure & Repair
rging —. = structure & Repair N
Slide 33: Great opportunity to increase revenues
votLuvoaoe Great opportunity to increase revenues Digital Services Truck Cia Batteries & optimization iy) f= Route Tires & superstructure services Insurance ep . i simulations Charging Service services contracts Financing Volvo Group Capital Markets Day 2022 Service contract Average length - +100% ~
Slide 34: CO2 targets: -50% by 2030, -100% by 2040, net zero 2050
Slide 35: Driving customer journey towards decarbonisation
DRIVING CUSTOMER JOURNEY TOWARDS DECARBONISATION TECHNOLOGY BUSINESS CO2 TARGET OPTIONS ECOSYSTEM AWARENESS & SMART UNDERSTANDING CHARGING ROUTE PLANNER FLEET & ROUTES TRAINING ANALYSIS & COACHING IMPLEMENTATION FLEET & OPERATION CUSTOMER DIAGNOSTIC SITE MONITORING ANALYSIS UPGRADE & LIFE EXTENSION
Slide 36: Accelerating the race towards electrification
ACCELERATING THE RACE TOWARDS ELECTRIFICATION 21% 10% Diesel Electric LEADING THE INDUSTRIAL RACE > 1 000 ORDERS & LOI YTD May 2022 registration data. Includes content supplied by IHS Markit . Copyright © IHS Markit (2022). All rights reserved
Slide 37: Ramping up charging and infrastructure solutions
VOoOLvao Ramping up charging and infrastructure solutions Home-depot Public charging Sweden Intended JV cooperation with 43 kW AC OKQ@8 Daimler Truck and Traton Volvo Group Capital Markets Day 2022 2022-06-22 37
Slide 38: Volvo Energy accelerating electrification and circularity
VOoOLvao += o Volvo Energy accelerating electrification and circularity 6. Grow partnerships 4. Monitor and across ecosystems optimize batteries + First life: support Volvo Group brands with sales and service of electrified vehicles and machines. (=? scital 2. Secure charging SBIR ix , infrastructur
Slide 39: Capturing opportunities in a rapidly growing battery energy storage market
VOoOLvao Capturing opportunities in a rapidly growing battery energy storage market Market projection for battery energy storage systems Annual installations in GWh (BCG, 2022) 367 CAGR: +34% 2021 2025 2030 * Accelerate electrification across society * Grow Volvo Group services and resilience * Driv
Slide 40: 50% of the global strategic accounts committed to science-based targets
votLuvao 50% of the global strategic accounts 20 committed to science-based targets 2015 2016 2017 2018 2019 2020 2021 2022 Volvo Group Capital Markets Day 2022 Ka VEOUA SV EIFFAGE iclr}a}mjo} Stena ORR eR noord OLOXAM ena HEIDELBERGCEMENT 2022-06-22 40
Slide 41: votLuvao
votLuvao Volvo Group Capital Markets Day 2022 2022-06-22 a
Slide 42: Closer, deeper and broader customer engagement through productivity services
voLuvo Closer, deeper and broader customer engagement through productivity services Value Volvo site solutions Site optimization Machine Volvo Group Capital Markets Day 2022 Fleet Site(s) 2022-06-22 42
Slide 43: Our three strategic segments
votLuvao Our three strategic segments Confin re First mile Middle mi Hub-to-Hub Mining and Quarry Ports and Logistics Volvo Group Capital Markets Day 2022 2022-06-22 43
Slide 44: Addressing a huge revenue pool
Volvo Group Capital Markets Day 2022 votLuvoaoe Addressing a huge revenue pool Truck freight industry V.A.S. total addressable market Truck market Volvo share 2022-06-22 444
Slide 45: Platform strategy to maximize value creation for Volvo Group
Volvo Group Capital Markets Day 2022 Virtual drivers i>] Aurora avin Truck brands votLuvao Platform strategy to maximize value creation for Volvo Group Autonomy enabled truck + virtual driver interface SS Use cases Geographies g @ ASIA Business models Cyn) Autonomous Vehicle as a Transport Service S
Slide 46: Volvo Autonomous Solutions unlocks customer value beyond today
votLuvao Volvo Autonomous Solutions unlocks customer value beyond today Addressing the driver shortage Reducing transportation time C) Increasing efficiency ofl co, Reducing Green House Gas Improving fuel efficiency vi S Anew source of freight capacity Removing drivers from © unsafe environments e|5
Slide 47: Addressing a huge revenue pool beyond today's addressable market
votLuvao Addressing a huge revenue pool Beyond today’s addressable market Truck freight industry V.A.S. total addressable market Revenue Volvo share 2020 2025 2030 Volvo Group Capital Markets Day 2022
Slide 48: Reservations Hub-to-Hub
Slide 49: 100% fossil free Volvo Group vehicles from 2040
votLuvao 100% fossil free Volvo Group vehicles from 2040 Carbon fuel | Carbon neutral BATTERY ELECTRIC Carbon neutral electricity -_ Share tl of FC share Zz new trucks FUEL CELL ELECTRIC Q Carbon neutral hydrogen 4 COMBUSTION ENGINE 2 ICE share? BioLNG Bio fuels, hydrogen 0% 2020 2030 2040 2050 Volv
Slide 50: Common Architecture and Shared Technology
Volvo Group Capital Markets Day 2022 votLuvao Common Architecture and Shared Technology CONSTRUCTION EQUIPMENT VOLVO PENTA 2022-06-22 50
Slide 51: votLuvoaoe
votLuvoaoe Volvo Group Capital Markets Day 2022 2022-06-22 51
Slide 52: Mixed model assembly
votLvao MIXED MODEL ASSEMBLY
Slide 53: Existing industrial footprint and competence a great asset!
EXISTING INDUSTRIAL FOOTPRINT AND COMPETENCE A GREAT ASSET! 2022-06-22 53
Slide 54: Increasing depth of engagement in the battery value chain
voLuvoaoe Increasing depth of engagement in the battery value chain CELL MODULE PACK ESS Volvo Group Capital Markets Day 2022 2022-06-22 54
Slide 55: Delivering on our financial ambitions and strategic direction
votLuvoaoe Delivering on our financial ambitions and strategic direction Gradual and Reduced volatility Transformation consistent earnings in earnings and accelerating improvement cash flow growth ) ) Volvo Group Capital Markets Day 2022 2022-06-22 55
Slide 56: Volvo Group has the assets to create the most competitive solution
votLuveaod Volvo Group has the assets to create the most competitive solution for the customer + tet te MM VEHICLE REPAIR & MAINTENANCE ¥ Application excellence Y Service network density 24/7 ¥ Tailor-made for productivity and uptime Y Service and uptime contracts ¥ Modular product system - CAST Y C
Slide 57: Attractive case for customers, talents, partners and investors
votLuvoaoe Attractive case for customers, talents, partners and investors The Current The Transformation Y _Best-in-class profitability and yield ¥ _ Decarbonization leadership Y Strong financial position ¥ —_ Step-change in markets shares and service content Y High customer retention ¥ — Solution-a
Slide 58: Geared for growth
Volvo Group Capital Markets Day 2022 2021 votLuvoaoe Geared for growth Transformation accelerating growth Productivity services 2030 5x for autonomous solutions Energy services Digital services > 1.5x for electric vehicles Step change in: > Market shares > Service and finance contract penetration an
Slide 59: Geared for growth
votLuvoaoe Geared for growth Clear opportunity: * Capturing industry growth * Investing to win * Delivering on financial targets Volvo Group Capital Markets Day 2022 Sales } CAGR % ~3% last ten years Yesterday To Today ILLUSTRATIVE >10% EBIT- margin 2022-06-22 59
Slide 60: Shaping the world we want to live in
SHAPING THE WORLD WE WANT 10 LIVE IN