Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — Investor Day (June 2003)
19 slides from Volvo Ab Class A's investor day presentation, Jun 3, 2003
Slide 1: Volvo Financial Services - Capital Market Days
Capital Market Days June 4-5, 2003 Sal Mauro President Volvo Financial Services Volvo Financial Services 1 2003-06-03, Slide 1
Slide 2: A Global Services Organization
Capital Market Days June 4-5, 2003 A Global Services Organization FC FC TC FC FC FCFC FC FC FC FC HQ FC FC FC FC FC TC FC FC TC FC FC TC Volvo Financial Services consist of FC 21 Finance companies (FC) 4 Treasury Centers (TC) 1 Real Estate Group (Danafjord) 2# Volvo Financial Services 2 2003-06-03,
Slide 3: A Global Services Organization
Capital Market Days June 4-5, 2003 A Global Services Organization Customer Finance Insurance Real Estate Treasury Customer Finance: •Operational leasing •Liability •Ownership •Foreign Exchange •Financial leasing •Physical damage •Maintenance •Loans and Deposits •Instalment credits •GAP •Lease Agreem
Slide 4: VFS Financial Services
Capital Market Days June 4-5, 2003 VFS Financial Services Financial Services • Volvo Trucks • Renault Trucks • Mack Trucks • Volvo Buses • Volvo Construction Equipment • Volvo Aero • Volvo Penta Volvo Financial Services 4 2003-06-03, Slide 4
Slide 5: Building Blocks for Global Strategy
Capital Market Days June 4-5, 2003 Building Blocks for Global Strategy BEST IN CLASS: Products, Diversification & Customer Support Develop Product Offering & Customer Retention Emerging Markets Financing Employer of Choice Customer Satisfaction Operational Efficiency Upfront Letter of Global Risk Lo
Slide 6: Principles on Running VFS
Capital Market Days June 4-5, 2003 Principles on Running VFS Operational Excellence Strategy Stability and Control Operational Excellence Customer Operational Satisfaction Efficiency 6# Volvo Financial Services 6 2003-06-03, Slide 6
Slide 7: Principles on Running VFS: Global Risk Management
Capital Market Days June 4-5, 2003 Principles on Running VFS Global Risk Management Portfolio Control Collections Contract End of Pricing Term Lifecycle Underwriting Loss to Liquidation Pro forma Pricing 7# Volvo Financial Services 7 2003-06-03, Slide 7
Slide 8: Balance Sheet Reserves
Capital Market Days June 4-5, 2003 Monthly Upfront Provisioning Income Statement Impact Quarterly Monthly Balance Sheet Reserve Adequacy Write-off Reserves Assessment Balance Sheet Impact (General & Specific) Potential Income Statement Impact Monthly Reserve Reclassification (between general & speci
Slide 9: Principles on Running VFS: Customer Satisfaction
Capital Market Days June 4-5, 2003 Principles on Running VFS Customer Satisfaction Dealers Business End Areas Users Volvo Financial Services VFS “Touches” The Customer Many Times During The Contract Lifecycle. Positive Experiences For The Customer At Each Of These Touch Points Builds Loyalty And Enh
Slide 10: Strategic alternatives, new markets
Capital Market Days June 4-5, 2003 Strategic alternatives, new markets Various stages of development requires different solutions Cross border financing Vendor program • Initial step • Risk for adverse credit • Low cost solution selection • Difficult to control • No profits, large portion import pro
Slide 11: Financial Targets & Long-term Objectives
Capital Market Days June 4-5, 2003 Financial Targets & Long-term Objectives • Profitability ATROE • Earnings Operating income • Growth % of Volvo unit Sales • Productivity Operating expense ratio improvement • Credit control Write-off and overdue >30 days • Stability Positive and stable development
Slide 12: VFS Financial Update Key Figures
Capital Market Days June 4-5, 2003 VFS Financial Update Key Figures (MSEK) 2002 2001 Q1 2003 Q1 2002 VFS Operating Income 490 325 212 115 ATROE 4.7% 4.4% 7.1% 4.7% Operating Expense 1,405 1,337 330 370 Employees 1,056 1,077 1,040 1,065 Equity Ratio 10.8% 10.3% 11.2% 10.3% Assets 69,364 73,528 66,926
Slide 13: VFS Financial Update Key Figures: Customer Finance
Capital Market Days June 4-5, 2003 VFS Financial Update Key Figures (MSEK) 2002 2001 Q1 2003 Q1 2002 Customer Finance Retail Volume (New & Used) 26,345 22,377 5,898 5,787 Gross Credit Portfolio 62,829 65,927 61,763 64,328 Reserve ratio 2.55% 2.85% 2.2% 2.6% Write-Offs 893 823 367 212 Delinquency 0.6
Slide 14: VFS Financial Update: Stability and Control
Capital Market Days June 4-5, 2003 VFS Financial Update: Stability and Control Effective Risk Management = Stability and Control Overdue > 30 Ratio Overdue > 90 Ratio 0.70% 0.70% 0.60% 0.60% 0.50% 0.50% 0.40% 0.40% 0.30% 0.30% 0.20% 0.20% 0.10% 0.10% 0.00% 0.00% Nov-02 Oct-02 Jul-02 Dec-02 Jan-03 Ju
Slide 15: Portfolio Review: Net Credit Portfolio 1994-2003 Q1
Capital Market Days June 4-5, 2003 Portfolio Review: Net Credit Portfolio: 1994 – 2003 Q1 Diversified portfolio growth since 2001 80,000 70,000 * 60,000 50,000 MSEK 40,000 30,000 20,000 10,000 0 94Q4 95Q4 96Q4 97Q4 98Q4 99Q4 00Q4 01Q4 02Q4 03Q1 Volvo Truck Renault Truck Mack Truck VCE Bus Other *Lin
Slide 16: Portfolio Review: Gross Credit Portfolio Structure
Capital Market Days June 4-5, 2003 Portfolio Review: Gross Credit Portfolio Structure March 2003 Regional distribution and product mix 35,000 30,000 25,000 20,000 MSEK 15,000 10,000 5,000 Western Europe North America Developing world Volvo Trucks Buses Constr Equipment Renault Mack Other Volvo Finan
Slide 17: Volume and Penetration: First Quarter 2003
Capital Market Days June 4-5, 2003 VFS Financial Update Volume and Penetration: First Quarter 2003 New financing Penetration on new financing 16% 7% 52% 17% Volvo Renault Volvo Mack Volvo CE Trucks Trucks Buses 7% 29% 13% 11% 31% 21% 1% 17# Volvo Financial Services 17 2003-06-03, Slide 17
Slide 18: Key objectives
Capital Market Days June 4-5, 2003 Key objectives 1 Stability in earnings over a business cycle 2 Profitability in all business segments 3 Controlled and profitable asset growth 4 Sound portfolio structure / asset diversification 5 Support Business Areas & maximize customer satisfaction 18# Volvo Fi
Slide 19: Capital Market Days June 4-5, 2003
Capital Market Days June 4-5, 2003 19# Volvo Financial Services 19 2003-06-03, Slide 19