Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — Q3 2022 Earnings Presentation
26 slides from Volvo Ab Class A's earnings presentation, Oct 20, 2022
Slide 1: Third Quarter 2022
votLvoao THIRD QUARTER 2022 Martin Lundstedt, President and CEO Volvo Group Third Quarter 2022 2022-10-20
Slide 2: Quarter highlights
votuLuvoao Volvo Group Quarter highlights + Net sales increased to SEK 114.9 bn, an increase NET SALES ADJUSTED OPERATING INCOME of 21% adjusted for FX SEK bn SEK bn (margin)* == 12 months SEK 442 bn == 12 months 11.0% + Adjusted operating income reached SEK 11.9 bn (9.4), corresponding to a margin
Slide 3: Volume development
Volvo Group Volume development Volvo Group Third Quarter 2022 votLvoao TRUCK DELIVERIES == 12 months 230 k units 421% d 53.3 44.0 33.9 Q3 Q4 Qi Q2 G8 Q4 Qt Q2 G3 2020 2021 2022 Deliveries restated for UD Trucks divestment MACHINE DELIVERIES. == 12 months 80 k units -7% a Q3 G4 Qi Q2 G3 G4 At Q2 Q3 2
Slide 4: Electrification progress
Volvo Group Electrification progress Volvo Group Third Quarter 2022 votLvoao ORDER INTAKE, FULLY ELECTRIC VEHICLES == 12 months 4,015 units 25, 434 Q3 Q4 QI Q2 @3 G4 at Q2 a3 2020 2021 2022 DELIVERIES, FULLY ELECTRIC VEHICLES == 12 months 1,537 units Alil G3 a4 al 2020 Q@2 03 44 a 2021 517 Q2 3 2022
Slide 5: Service sales development
Volvo Group Service sales development SERVICE SALES (incl. Financial Services) SEK bn ==" 12 months SEK 103.7 bn 424% 410% excl. FX 22.5 20.6 Q3 G4 Qt Q2 Q3 4 @1 Q2 Q3 2020 2021 2022 Service sales restated for UD Trucks divestment Volvo Group Third Quarter 2022 votLvoao YoY GROWTH % 1% 3% TRUCKS CON
Slide 6: Trucks: Electric
votLvoao Trucks ; = ‘BS ELECTRIC Significant electrification steps taken in the quarter: + Volvo Trucks starts series production of electric heavy-duty trucks + Volvo Trucks will supply 20 electric heavy-duty trucks to Amazon + Renault Trucks electric heavy-duty trucks available for pre-order + Volv
Slide 7: Market environment
votL.voao Market environment NORTH AMERICA HD EUROPE HD 400 300 se 200 2021: 270° 2021: 277' i Forecast 2022: 300° = Forecast 2022: 300° 0 Forecast 2023: 300° 0 Forecast 2023: 300’ 03 (05 «(07 «#(09«11:«13:«15 «17:19 2128 03 05 OF 08 11 13 15 17 19 21 23 BRAZIL HD INDIA HD+mD CHINA HD+MD 150 450 7e0
Slide 8: Trucks: Restrictive order slotting to manage order book quality and cost inflation
votLuvoao Trucks: Restrictive order slotting to manage order book quality and cost inflation Quarterly Orders +27% and Deliveries +21% NORTH AMERICA EUROPE Orders Deliveries = Orders_seme Dellveries Q3 Q4 ai a2 Q@3 a a @ @ Q3 Q4 QI G2 @3 G4 @ a2 a3 2020 2001 en 2020 2021 2022 ; Orders -14% Orders +7
Slide 9: Heavy-duty truck market shares
Trucks Heavy-duty truck market shares NORTH AMERICA YTD Aug 10.3 8.4 75 5.9 Volvo Mack BRAZIL YTD Sept 25.0 21.6 Volvo Volvo Group Third Quarter 2022 EUROPE (EU29) YTD Aug 18.9 15.4 8.4 Volvo Renault Total market share SOUTH AFRICA YTD Aug 21.6 99.4 Volvo votLvoao 42.9 0.9 Volvo Renault Battery elec
Slide 10: Construction Equipment
votLuvoao Construction Equipment * Continued global roll-out of electric machines in China and South Korea * Order intake for electric machines increased 98% and deliveries increased 147% Volvo Group Third Quarter 2022 2022-10-20 10
Slide 11: Construction Equipment: Market environment
votL.voao Construction Equipment Market environment Forecast 2022: -40% to -30% Forecast 2023: -15% to-5% 11315 «17 «19 «24 23 NORTH AMERICA EUROPE 250 250 200 150 =} 100 Forecast 2022: 0% to +10% 50 Forecast 2022: -5% to +5% 50 +59 Y Forecast 2023: -5% to +5% Forecast 2023: -5% to +5% 0 0 01 03 05
Slide 12: Construction Equipment: Restrictive order slotting
votLuvoao Construction Equipment: Restrictive order slotting to manage order book quality and cost inflation Quarterly Orders -32% and Deliveries -7% NORTH AMERIC, EUROPE mm Orders em Deliveries wr Orders «=mDeliveries Q3 Q@4 Qi @2 @ G4 Qa Q2 Q3 Q3 Q4 Qi G2 G Q4 A Q2 Q3 2020 2021 2022 2020 2021 2022
Slide 13: Buses
Buses * Orders increased by 3% * Deliveries increased by 19% * The new Volvo 9800 Euro 6 coach is well received in Mexico Volvo Group Third Quarter 2022 votLvoao 2022-10-20 13
Slide 14: Volvo Penta
Volvo Penta + Orders on par with last year * Deliveries increased by 14% * New range of variable speed generator sets for marine applications launched Volvo Group Third Quarter 2022 votLuvoao 2022-10-20 14
Slide 15: Financial Services
votuLuvoao Financial Services Record new business volume for a third quarter Stable finance penetration levels Good portfolio performance VFS finances 112 electric Volvo buses with largest operator in Sweden Volvo Group Third Quarter 2022 NEW RETAIL FINANCING & PENETRATION RATE SEK bn == Penetration
Slide 16: Third Quarter 2022 - CFO
votLvoao THIRD QUARTER 2022 Tina Hultkvist, Executive Vice President Group Finance and CFO Volvo Group Third Quarter 2022 2022-10-20
Slide 17: Net sales per market
votLuvoao Volvo Group Net sales per market NET SALES SEK bn Currency SEK +12.2 bn 114.9 Q3 2021 Europe North South Asia Africa and Q3 2022 America America Oceania Volvo Group Third Quarter 2022 2022-10-20 7
Slide 18: Adjusted operating income contributors
votLuvoao Volvo Group Adjusted operating income contributors ADJUSTED OPERATING INCOME Volvo Group Third Quarter 2022 SEK bn Currency SEK +2.4 bn 6.2 . 48 Se 11.9 14 04 oa Q3 2021 Gross Cash NetR&D Selling Admin Other Q3 Income R&D Cap./Amo. 2022 + \ + Price realization + Vehicle and service volumes
Slide 19: Cash flow and financial position in Industrial Operations
Volvo Group VotL Cash flow and financial position in Industrial Operations OPERATING CASH FLOW SEM DE = 12 months SEK 40.0 bn -_ 14.6 “5.7 Q@3 @4 a Q@2 Q@3 O44 Qi Q2 Qs 2020 2021 2022 Volvo Group: Third Quarter 2022 OPERATING CASH FLOW SEK bn Working capital: 5.9 bn vo WC & Depr. A/R Invent. A/P Oth
Slide 20: Trucks: Net sales and adjusted operating income
Trucks votuLuvoao Net sales and adjusted operating income NETSALES = — 49 months SEK 290.4 bn SEK bn +41% (excl, FX +26%) ! ; | 75A 53.4 42.4 @ at oat @2 @ @ a a2 a3 2020 2021 2022 Net sales restated for UD Trucks divestment Volvo Group Third Quarter 2022 ADJUSTED OPERATING INCOME SEK bn 7.3 58 al +
Slide 21: Construction Equipment: Net sales and adjusted operating income
votuLuvoao Construction Equipment Net sales and adjusted operating income NET SALES ADJUSTED OPERATING INCOME SEKbn “= 12 months SEK 94.4 bn SEK bn +23% (excl. FX +9%) [ 3.8 SSSSESS= once 2 al + Price realization 19.6 26 + Mix 17.6 - Material costs - Freight costs a3 G4 Qi a2 G8 a4 ai a2 a3 a3 a3 20
Slide 22: Buses: Net sales and adjusted operating income
votuLuvoao Buses Net sales and adjusted operating income NET SALES ADJUSTED OPERATING INCOME SEKbn == 12 months SEK 16.1 bn SEKM +46% (excl. FX +31%) -—— a 124 + Service volume + Price realization - Material costs - Selling expenses - R&D expenses 3.1 3.3 as as Q3 a4 Qi a2 G3 a4 aI a2 a3 2021 2022 2
Slide 23: Volvo Penta: Net sales and adjusted operating income
Volvo Penta votuLuvoao Net sales and adjusted operating income NET SALES SEKbn = 12 months SEK 16.9 bn +30% (excl. FX +20%) f 1 3.4 3.1 Q3 Q4 Q@1 G2 G3 @4 QI @2 @3 2020 2021 2022 Volvo Group Third Quarter 2022 ADJUSTED OPERATING INCOME SEKM 593 501 + Engine volumes + Price realization - Material cos
Slide 24: Financial Services: Credit portfolio and profitability
Financial Services Credit portfolio and profitability CREDIT PORTFOLIO & ROE* SEKbn + ROE 12 months 16.4% 21 157 Q3 Q4 Qi G2 @3 G4 Qi a2 Q3 2020 2021 2022 Volvo Group Third Quarter 2022 votuLuvoao ADJUSTED OPERATING INCOME SEKM 879 826 “yl + Portfolio growth - Selling expenses RIF - Spreads * ROE ex
Slide 25: Q&A: Third quarter 2022
Q&A Third quarter 2022 Net sales SEK 114.9 bn Adjusted operating margin 10.3% ROCE 27.4% (Industrial Operations) EPS increased by 22% to SEK 4.24 (3.47) Series production of heavy-duty, 44-tonnes electric trucks started Volvo Group Third Quarter 2022 2022-10-20 25
Slide 26: voL.vo
voL.vo