Volvo report on operations 2006

Transcription

1 AB Vlv Press infrmatin February 2, 2007 Vlv reprt n peratins 2006 Net sales fr the full year increased by 7% t SEK 248,135 M (231,191) Net sales in the furth quarter amunted t SEK 65,065 M (65,287) Fr 2006, incme fr the perid rse 24% t SEK 16,318 M (13,108) In the furth quarter, incme fr the perid increased by 24% t SEK 3,701 M (2,995) Basic earnings per share rse t SEK (32.22) fr the full year Basic earnings per share fr the furth quarter rse t SEK 9.13 (7.37) Operating incme rse t SEK 22,111 1) M fr the full year (18,153) In the furth quarter, perating incme increased t SEK 5,170 M (4,262) The Brazilian Supreme Curt decided in AB Vlv s favr in an exprt credits dispute, which had a psitive effect f SEK 357 M n perating incme in the furth quarter. This was ffset by csts fr capacity reductins in Nrth America and reserves fr the clsure f Vlv Aer s peratins in Brmma, Sweden, ttaling SEK 358 M Operating cash flw, excluding Financial Services, amunted t SEK 12.6 billin fr the full year (6.8) including transfers t pensin fundatins f SEK 3.3 billin (4.4) The Bard f Directrs prpses an rdinary dividend f SEK 25 per share and an extrardinary dividend thrugh a share split 6:1 where the sixth share will be redeemed by AB Vlv fr an amunt f SEK 25 per share Furth quarter Year Net sales, SEK M 65,065 65, , ,191 Operating incme, SEK M 1) 5,170 4,262 22,111 18,153 Gdwill adjustment - - (1,712) - Operating incme, SEK M 5,170 4,262 20,399 18,153 Incme after financial items, SEK M 5,226 4,144 20,299 18,016 Incme fr the perid, SEK M 2) 3,701 2,995 16,318 13,108 Basic earnings per share, SEK Return n sharehlders' equity during mst recent 12-mnth perid, % ) Excluding adjustment f gdwill f SEK -1,712 M in the subsidiary Mack Trucks in ) Including net effect f adjustment f gdwill and reversal f valuatin reserve fr deferred tax receivable in Mack Trucks f SEK 336 M in As f January 1, 2005 AB Vlv cmplies with Internatinal Financial Reprting Standards (IFRS), previusly knwn as IAS, as adpted by the Eurpean Unin. In the cmments n earnings n pages 1-22 hwever, Vlv Financial Services is reprted in accrdance with the equity methd. Financial infrmatin with Vlv Financial Services reprted in accrdance with the purchase methd as it is stipulated by IFRS begins n page 23. Aktieblaget Vlv (publ) Cntacts Investr Relatins, VHQ Investr Relatins: Christer Jhanssn SE Götebrg, Sweden Jakim Wahlström Tel Fax Jhn Hartwell Nah Weiss

2 CEO cmment recrd sales and increased prfitability The year 2006 was eventful, with extensive prduct launches and majr changes in the industrial system, particularly tward the end f the year. Despite this, we psted the best year in histry, in terms f sales and earnings. During 2006, the Vlv Grup increased sales by 7% t nearly SEK 250 billin, perating incme by 22% t mre than SEK 22 billin excluding an adjustment f gdwill (SEK 1,712 M) and reached an perating margin f almst 9%. Earnings per share rse by 25% t SEK and return n equity was nearly 20%. It is als pleasing that we generated a strng perating cash flw, which fr the full year amunted t SEK 12.6 billin. I am prud f all the effrt cntributed by ur emplyees thrughut the Grup t achieve this. The result f the gd achievements is that ur emplyees will receive a maximum distributin frm the Grup s prfit sharing prgram, ttalling apprximately SEK 450 M. Imprved margins during an intensive quarter During the furth quarter, majr changes were implemented in the industrial systems in Eurpe, particularly regarding Renault Trucks, with extensive changevers t new trucks and engines. At the same time, we tk the final step in the wrk t frm a mre cst-efficient industrial structure in Renault Trucks, where the fcus nw is n imprving prductivity. In Nrth America, we cmmenced changever t the new generatin f engines at the end f the year, which will be implemented during the first quarter in We are als adapting prductin capacity t meet the significantly lwer demand in the Nrth American truck market. Naturally, the extensive prduct launches and prductin changevers impact ur prfitability in the shrt term, but I am cnfident that they will strengthen ur future cmpetitiveness. Our new trucks with the new generatin f engines were received psitively in the market and cmbined with strng demand resulted in an increase f 79% in rder bkings fr heavy and medium-heavy trucks in Eurpe in the furth quarter. The truck peratins imprved prfitability with a margin f 8.0%. Cnstructin Equipment cntinued t perfrm strngly, with psitive grwth as well as increased prfitability. In Nvember, Vlv Aer tk a strategic decisin t clse dwn the peratins in Brmma, Sweden, which had an impact n perating incme in the furth quarter. In ttal, Grup perating margin increased t 7.9% during the quarter, cmpared with 6.5% the previus year. New prducts strengthen cmpetitiveness The mst rapidly grwing business area in 2006 was Cnstructin Equipment, which, thrugh its renewed prduct prgram increased sales by 17% and had a gd prfitability develpment. Despite declining sales, Buses imprved its prfitability, which hwever is still unsatisfactry. Buses new prduct generatin has als been well received, primarily in terms f cmpetitive fuel cnsumptin. Demand fr Vlv Penta s new drive system fr leisure bats, IPS, cntinues t increase, and the result fr 2006 remained at a satisfactry level. Vlv Aer is in a difficult phase in terms f investments in new aircraft engine cmpnents and declined smewhat, while Financial Services maintained its stable earnings capacity and prduced a return n sharehlders equity f 15.5%. Advanced psitins in Eastern Eurpe and Asia Our gegraphic expansin eastwards gained mmentum in In Eastern Eurpe, we recrded smething f a breakthrugh with mre than 40% increase in sales. During the furth quarter, rder bkings fr trucks mre than dubled in the regin. Due t early and lng-term investments in the market, we are nw able t benefit frm the rapid ecnmic grwth in these cuntries. We plan t increase investments in Eastern Eurpe. Thanks t the agreement regarding Lingng, we are the first freign manufacturer f cnstructin equipment in China with a natinwide dealer netwrk. With regard t trucks, tgether with Japanese Nissan Diesel, we have prepared the guidelines fr ur strategic alliance and in China discussins deepened with Dngfeng Mtrs n future cllabratin in the truck and bus area. 2

3 New prduct generatin and expansin eastwards Indicatins pint t cntinued strng glbal ecnmy in 2007, hwever, with the exceptin f a weakening in Nrth America. At present, we estimate that the truck market in Eurpe will increase smewhat in 2007 and reach a level f apprximately 300,000 heavy trucks, cmpared with the previus assessment f 290,000 trucks. Demand in Nrth America will decline sharply during the first six mnths f the year, while the secnd six mnths is still difficult t assess. We are nw seeing increasingly distinct advantages f the Grup being well structured, with effectively crdinated units in which we gain frm the cmbined vlumes within purchasing, manufacturing and business supprt functins. The year 2007 will be exciting, particularly since we will rll ut the entire new prduct generatin n the markets and take new steps in the expansin eastward. Leif Jhanssn President and CEO 3

4 Higher sales and imprved earnings Net sales by market area Furth quarter Year SEK M Change Change Western Eurpe 29,682 29,172 2% 113, ,479 7% Eastern Eurpe 5,174 3,711 39% 16,044 11,401 41% Nrth America 17,354 18,245 (5%) 73,657 67,233 10% Suth America 3,289 3,989 (18%) 12,533 11,901 5% Asia 5,675 6,418 (12%) 19,610 22,598 (13%) Other markets 3,891 3,752 4% 12,722 11,579 10% Ttal 65,065 65,287 (0%) 248, ,191 7% The Vlv Grup s net sales amunted t SEK 65,065 M in the furth quarter f 2006, which was mre r less unchanged cmpared with SEK 65,287 M in the furth quarter f Adjusted fr currency effects and fr the effects f acquired and divested units, net sales increased by 6%. Trucks net sales rse 1% and amunted t SEK 43,711 M (43,441). Cnstructin Equipment s net sales rse by 4% t SEK 10,753 M (10,301) and Vlv Penta s were up 4% t SEK 2,536 M (2,428). On the ther hand, Vlv Aer s net sales declined by 2% t SEK 2,076 M (2,110) and Buses decreased by 15% t SEK 4,476 M (5,260). Fr the full year, the Vlv Grup s net sales increased by 7% t SEK 248,135 M (231,191). Imprved perating incme In the furth quarter f 2006, perating incme rse by 21% t SEK 5,170 M (4,262). The imprvement is the result f imprved prduct and market mix and higher prices n new prducts with increased custmer value. The perating incme includes a psitive effect f SEK 357 M as a cnsequence f the Brazilian Supreme Curt s decisin t rule in AB Vlv s favr in an exprt credits dispute, f which SEK 310 M is included in the perating incme f Trucks and SEK 47 M in the perating incme f Buses. In additin, csts f SEK 258 M relating t the decisin in principle n clsure f Vlv Aer s peratins in Brmma, Sweden, SEK 100 M frm capacity adjustments in Nrth America and apprximately SEK 500 M related t csts fr the changever in the industrial systems and prductin starts f new engines and trucks primarily in Renault Trucks. The perating incme fr 2005 included csts f apprximately SEK 500 fr prduct launches and prductin starts, a write-dwn f the hlding in the American bus manufacturer Blue Bird amunting t apprximately SEK 550 M and a capital gain frm the sale f Celer Supprt amunting t apprximately SEK 430 M. The ttal impact f exchange rate fluctuatins affected perating incme negatively by apprximately SEK 800 M in the furth quarter f 2006 cmpared with the crrespnding perid in Incme frm investments in assciated cmpanies includes SEK 39 M (-) frm Nissan Diesel, which is reprted in the Trucks segment. Detailed cmments are prvided in the business area sectins beginning n page 11. Fr the full year, perating incme rse by 22% t SEK 22,111 M (18,153), including an adjustment f gdwill during the third quarter 2006, which had a negative impact f SEK 1,712 M. Hwever, this adjustment resulted in a psitive effect n incme taxes by SEK 2,048 M, giving a net psitive effect n incme fr the year in an amunt f SEK 336 M. As an effect f the Grup s gd prfitability in 2006, SEK 450 M f the year s prfits was reserved fr the Grup s emplyee prfit-sharing prgram. Financial net Net interest incme in the furth quarter was SEK 62 M, cmpared with an expense f SEK 141 M in the yearearlier perid. The imprvement is mainly attributable t higher shrt-term interest rates in Sweden and lwer csts fr pensin bligatins, thanks t earlier year s transfers t pensin fundatins. During the quarter Other financial incme and expenses includes a psitive effect f SEK 19 M frm the market valuatin f derivatives in accrdance with IAS 39 (psitive SEK 110 M). 4

5 Incme taxes Tax expenses relating t bth current and deferred tax amunted t SEK 1,525 M (1,149) during the furth quarter f The tax rate fr the quarter was 29% (28). Incme fr the perid and earnings per share increased Incme fr the perid increased t SEK 3,701 M (2,995) in the furth quarter. Basic earnings per share amunted t SEK 9.13 (7.37). Cnditinal upn all utstanding ptins being exercised, earnings per share after full dilutin amunted t SEK 9.13 (7.36). Incme fr the year amunted t SEK 16,138 M (13,108). Basic earnings per share amunted t SEK (32.22). Cnditinal upn all utstanding ptins being exercised, earnings per share after full dilutin amunted t SEK (32.16). Number f emplyees On December 31, 2006, the Vlv Grup had 83,187 emplyees, cmpared with 81,856 at year-end Vlv Grup Incme Statements Furth quarter Year SEK M Net sales 65,065 65, , ,191 Cst f sales (50,821) (51,677) (192,242) (180,823) Grss incme 14,244 13,610 55,893 50,368 Research and develpment expenses (2,380) (1,972) (8,354) (7,557) Selling expenses (5,170) (5,687) (19,999) (19,616) Administrative expenses (1,727) (1,614) (6,352) (6,147) Other perating incme and expenses 1) (361) (29) (3,292) (397) Incme frm Financial Services 2) ,301 2,033 Incme frm investments in assciated cmpanies 27 (517) 61 (568) Incme frm ther investments 13 (8) Operating incme 5,170 4,262 20,399 18,153 Interest incme and similar credits Interest expenses and similar charges (192) (296) (816) (1,134) Other financial incme and expenses (6) 23 (181) 181 Incme after financial items 5,226 4,144 20,299 18,016 Incme taxes (1,525) (1,149) (3,981) (4,908) Incme fr the perid* 3,701 2,995 16,318 13,108 * Attributable t: Equity hlders f the parent cmpany 3,697 2,981 16,268 13,054 Minrity interests ,701 2,995 16,318 13,108 Basic earnings per share, SEK Diluted earnings per share, SEK Number f shares utstanding, millin Average number f shares during perid, millin Average diluted number f shares during perid Number f cmpany shares, held by AB Vlv Average number f cmpany shares, held by AB Vlv ) 2006 includes adjustment f gdwill in the subsidiary Mack Trucks f SEK -1,712 M. 2) Financial Services reprted in accrdance with the equity methd. 5

6 Key perating ratis, Vlv Grup Furth quarter Year % Grss margin Research and develpment expenses in % f net sales Selling expenses in % f net sales Administrative expenses in % f net sales Operating margin 1) Operating margin ) Excluding adjustment f gdwill in the subsidiary Mack Trucks in Cndensed incme statement - Financial Services Furth quarter Year SEK M Net sales 2,138 1,956 8,969 7,549 Incme after financial items ,301 2,033 Incme taxes (187) (150) (756) (609) Incme fr the perid ,545 1,424 Key ratis - Financial Services Dec 31 Dec mnth rlling figures unless therwise stated Return n sharehlders' equity, % Equity rati at end f perid, % Asset grwth, % (2.0) 20.0 The Vlv Grup s financial psitin Ttal assets in the Vlv Grup amunted t SEK billin at December 31, 2006 up SEK 1.2 billin cmpared with year-end Assets increased mainly as a result f investments in shares and participatins, which cmprises the investments in Nissan Diesel and Deutz carried ut during the year and increased wrking capital as a result f higher sales. Currency mvements reduced ttal assets in an amunt f SEK 14.5 billin. As f December 31, 2006 assets and liabilities in Vlv Aer Engine Services (VAES) are classified as nn-current assets held fr sale, fr further infrmatin see Significant events n page 19. Sharehlders equity at December 31, 2006, amunted t SEK 87.2 billin, which crrespnds t 43.5% f ttal assets, excluding Financial Services. Changes in sharehlders equity during the perid are specified n page 8. The Grup s net financial assets at the same date, excluding Financial Services, amunted t SEK 24.7 billin, crrespnding t 28.3% f sharehlders equity. Changes in net financial psitin are specified n page 9. Sales t assciated cmpanies amunted t SEK 156 M and purchases frm assciated cmpanies amunted t SEK 288 M during At December 31, 2006 receivables frm assciated cmpanies amunted t SEK 40 M and liabilities t assciated cmpanies ttaled SEK 39 M. Sales t Renault SA amunted t SEK 336 M and purchases frm Renault SA amunted t SEK 4,031 M. At December 31, 2006 receivables frm Renault SA amunted t SEK 97 M and liabilities t Renault SA were SEK 1,176 M. Ttal cntingent liabilities at December 31, 2006 amunted t SEK 7.7 billin (7.9). 6

7 Vlv Grup Balance Sheets Vlv Grup excl. Financial Services 1) Financial Services Vlv Grup ttal Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 SEK M Assets Intangible assets 19,054 20, ,117 20,421 Prperty, plant and equipment 30,493 31,330 3,886 3,738 34,379 35,068 Assets under perating leases 11,822 10, ,501 20,839 Shares and participatins 16,565 10, , Lng-term custmer finance receivables ,276 39,083 32,089 31,184 Lng-term interest-bearing receivables 3,463 1, ,150 1,433 Other lng-term receivables 7,723 7, ,913 7,026 Inventries 33,893 33, ,211 33,937 Shrt-term custmer finance receivables ,979 38,907 32,653 33,282 Shrt-term interest bearing receivables 9,751 6, Other shrt-term receivables 35,612 36,750 1,564 1,607 34,654 35,855 Nn-current assets held fr sale, nn interestbearing Nn-current assets held fr sale, interestbearing Marketable securities 20,324 28, ,342 28,834 Cash and cash equivalents 9,583 7,385 1, ,757 8,113 Ttal assets 200, ,985 84,102 85, , ,207 Sharehlders' equity and liabilities Sharehlders' equity 2) 87,188 78,760 9,703 9,634 87,188 78,760 Prvisins fr pst-emplyment benefits 8,661 11, ,692 11,986 Other prvisins 19,385 17,164 1,321 1,264 20,970 18,556 Lans 9,779 13,097 67,991 69,993 66,957 74,885 Liabilities assciated with assets held fr sale, nn interest-bearing Liabilities assciated with assets held fr sale, interest -bearings Other liabilities 74,988 73,998 5,056 4,938 74,340 73,020 Sharehlders' equity and liabilities 200, ,985 84,102 85, , ,207 1) Financial Services reprted in accrdance with the equity methd. 2) Of which minrity interests SEK 284 M (260). 7

8 Changes in net financial psitin, excl. Financial Services SEK bn Furth quarter Year Beginning f perid Cash flw frm perating activities excl. Financial Services Investments in fixed assets, net (2.6) (9.3) Operating cash-flw, excluding Financial Services Investments and divestments f shares, net 0.0 (5.8) Acquired and divested peratins, net Change in prvisin fr pst-emplyment benefits Dividend paid t AB Vlv sharehlders 0.0 (6.8) Currency effect Other Ttal change Net financial psitin at end f perid Changes in sharehlders' equity Year SEK bn Ttal equity at beginning f perid Sharehlders' equity attributable t equity hlders f the parent cmpany at beginning f perid Impact frm new accunting principles Translatin differences (2.7) 3.5 Translatin differences n hedge instruments f net investments in freign peratins 0.1 (0.2) Available-fr-sale investments Cash flw hedges 1.0 (1.4) Net incme recgnized directly in equity (1.2) 2.0 Incme fr the perid Ttal recgnized incme and expense fr the perid Dividend t Vlv's sharehlders (6.8) (5.1) Repurchase wn shares - (1.8) Share-based payments Other changes in Nissan Diesel's equity (0.1) - Other changes Sharehlders' equity attributable t equity hlders f the parent cmpany at end f perid Minrity interests at beginning f perid Translatin differences Net incme recgnized directly in equity Incme fr the perid Ttal recgnized incme and expense fr the perid Cash dividend Other changes Minrity interests at end f perid Ttal equity at end f perid

9 Key ratis Dec 31 Dec mnth rlling figures unless therwise stated Basic earnings per share, SEK Sharehlders' equity, excluding minrity interests, per share, at end f perid, SEK Return n perating capital excluding Financial Services, % Return n sharehlders' equity, % Net financial psitin at end f perid, SEK billin Net financial psitin at end f perid as percentage f sharehlders' equity Sharehlders' equity at end f perid as percentage f ttal assets Sharehlders' equity as percentage f ttal assets, excluding Financial Services

10 Strng perating cash flw In the furth quarter f 2006, perating cash flw, excluding Financial Services, amunted t SEK 7.4 billin (5.8). Wrking capital decreased by SEK 3.8 billin in the furth quarter, this was in line with the decrease during the furth quarter the previus year. The decrease was mainly an effect f lwer inventries. The furth quarter 2006 includes transfers t pensin plans amunting t SEK 1.5 billin. In the furth quarter f 2005, the transfers t pensin plans amunted t SEK 0.8 billin. During the full year 2006 the transfers t pensin plans amunted t SEK 3.3 billin (4.4). Cash-flw statement Furth quarter Year SEK bn Operating activities Operating incme 1) Depreciatin and amrtizatin Other nn-cash items Change in wrking capital (3.1) (5.6) Financial items and incme taxes paid (1.0) (0.9) (3.7) (1.9) Cash flw frm perating activities Investing activities Investments in fixed assets (2.8) (3.4) (9.7) (9.9) Investment in leasing vehicles (0.1) (0.1) (0.5) (0.3) Dispsals f fixed assets and leasing vehicles Operating cash flw excl. Financial Services Operating cash flw, Financial Services (1.3) (3.0) (1.8) (4.4) Operating cash flw, Eliminatins (0.4) 0.1 (0.7) (0.6) Operating cash flw, Vlv Grup ttal Investments and divestments f shares, net (5.8) 0.3 Acquired and divested peratins, net Interest-bearing receivables incl. marketable securities, net (2.0) (4.9) 7.7 (1.3) Cash flw after net investments 3.8 (1.5) Financing activities Change in lans, net (2.0) 0.7 (2.6) 3.6 Dividend t AB Vlv sharehlders (6.8) (5.1) Repurchase f wn shares (1.8) Other Change in cash and cash equivalents excl. translatin differences 1.8 (0.8) 3.1 (1.8) Translatin difference n cash and cash equivalents (0.2) 0.1 (0.5) 1.1 Change in cash and cash equivalents 1.6 (0.7) 2.6 (0.7) 1) Excluding Financial Services. 10

11 Financial review by business area Net sales Furth quarter Year SEK M Change Trucks 43,711 43, , ,396 7% Buses 4,476 5,260 16,856 16,589 2% Cnstructin Equipment 10,753 10,301 40,564 34,816 17% Vlv Penta 2,536 2,428 10,485 9,776 7% Vlv Aer 2,076 2,110 8,048 7,538 7% Other units and eliminatins 1,513 1,747 5,876 7,076 (17%) Net sales 65,065 65, , ,191 7% Operating incme Furth quarter Year SEK M Change Trucks 1) 3,498 2,742 14,369 11,717 23% Buses % Cnstructin Equipment ,888 2,752 41% Vlv Penta , % Vlv Aer (150) (59%) Financial Services ,301 2,033 13% Other units and eliminatins (85) (253) (427) (598) - Operating incme 1) 5,170 4,262 22,111 18,153 22% Gdwill adjustment - - (1,712) - - Operating incme 5,170 4,262 20,399 18,153 12% 1) Excluding adjustment f gdwill in the subsidiary Mack Trucks in Trucks' perating incme amunts t SEK 12,657 M including the adjustment. Operating margin Furth quarter Year % Trucks 1) Buses Cnstructin Equipment Vlv Penta Vlv Aer (7.2) Operating margin incl. Financial Services 1) Operating margin incl. Financial Services ) Excluding adjustment f gdwill in the subsidiary Mack Trucks in

12 Trucks cntinued earnings imprvement Strng Eurpean market rder bkings up 58% Prductin changes in Renault Trucks Mre detailed discussins with Nissan Mtr and Dngfeng Grup n cperatin Net sales by market area Furth quarter Year SEK M Change Change Eurpe 23,621 22,579 5% 88,323 79,706 11% Nrth America 12,097 12,583 (4%) 50,605 46,129 10% Suth America 2,535 2,156 18% 9,213 7,657 20% Asia 2,830 3,483 (19%) 8,975 13,551 (34%) Other markets 2,628 2,640 (0%) 9,190 8,353 10% Ttal 43,711 43,441 1% 166, ,396 7% Strng market fr heavy trucks in Eurpe Fr the full year 2006, the ttal number f new registratins in Eurpe 27 increased by 7% t 294,997 heavy trucks (276,822). The markets in Western Eurpe cntinued t grw as a result f increased transprt needs. Fr the full year 2006, new registratins increased by 12% in Germany, 2% in Spain, 2% in Italy and 43% in the Netherlands. On the ther hand, new registratins declined by 3% in the UK and 4% in France. The markets in Eastern Eurpe cntinue t shw very strng grwth. Registratin increased by 45% in Pland, 14% in the Czech Republic, 35% in Slvakia and 15% in Hungary. Sales f heavy trucks (Class 8) rse by 13% in Nrth America fr the full-year 2006 t 348,866 trucks, cmpared with 307,973 in The increase was a result f custmers electing t pre-buy trucks befre new emissin regulatins tk effect n January 1, 2007 and due t substantial transprt needs. In Brazil, the market declined by 9% t 39,873 heavy trucks (43,777). The Japanese market grew by 6% t 50,742 trucks (47,761). The Chinese market fr trucks ver 14 tns grew by 27% t 277,534 trucks (218,670) thrugh Nvember. In all f Eurpe, there is a strngly increasing need fr transprt, particularly between east and west, resulting in increased demand fr heavy trucks. A significant factr is the strng ecnmic trend in Eurpe. The strngest grwth is seen in Eastern Eurpe, where the new EU member states are majr cntributrs. Eastern Eurpean cuntries utside the EU als shwed a very psitive trend and are expected t shw cntinued strng demand fr transprts and thus heavy trucks during The ttal Eurpean market is expected t cmprise abut 300,000 new trucks during 2007, cmpared with previus frecasts f a level f 290,000 new trucks. Demand in the Nrth American market is expected t decline sharply during the first half f 2007 as a cnsequence f pre-buying during Demand in the secnd half f the year remains difficult t assess. Strng grwth in Eurpe underlies increased rder bkings Order bkings per market Furth quarter Year Number f trucks Change Change Eurpe 44,888 28,343 58% 141, ,850 35% Nrth America 7,517 18,843 (60%) 45,587 72,919 (37%) Suth America 3,174 3,871 (18%) 11,829 11,921 (1%) Asia 3,491 3,690 (5%) 14,140 24,278 (42%) Other markets 2,929 2,561 14% 11,716 9,783 20% Ttal 61,999 57,308 8% 224, ,751 0% During the furth quarter, rder bkings fr Trucks increased by 8% t 61,999 trucks (57,308). Abve all, Eurpe shwed a psitive trend with an increase f 58%. Order bkings fr heavy and medium-heavy trucks rse by 79%, while light trucks declined by nearly 30% due t the new versin f the Renault Masctt with the Eur 4 engine nt being available fr sale during the quarter. The new mdel was shwn t custmers in late January 2007, and deliveries will begin in the middle f Bth Vlv Trucks and Renault Trucks new prduct prgrams had a very substantial impact n the market. 12

13 The decline was as expected substantial in Nrth America, since custmers t a great extent did nt rder trucks that meet the new emissin requirements that tk effect n January 1, Order bkings are expected t remain at a relatively lw level ver the cming mnths as an effect f the early rders during 2006 and hesitatin amng custmers with respect t trucks with the new-generatin engines. High delivery rate Deliveries per market Furth quarter Year Number f trucks Change Change Eurpe 30,358 29,823 2% 114, ,622 10% Nrth America 17,672 16,709 6% 70,499 64,974 9% Suth America 2,863 2,883 (1%) 11,646 11,248 4% Asia 4,590 6,627 (31%) 12,817 25,706 (50%) Other markets 3,306 2,511 32% 10,552 8,829 20% Ttal 58,789 58,553 0% 219, ,379 3% The rate f truck deliveries was high during the furth quarter, and capacity utilizatin in the prductin plants was at a high r very high level acrss the bard. In ttal, 58,789 trucks were delivered during the quarter, cmpared with 58,533 trucks during the crrespnding perid a year earlier. Deliveries increased in all markets except Suth America and Asia. The decline in Asia was attributable t sharply lwer deliveries t the Middle East. Imprved prfitability Net sales in Trucks peratins amunted t SEK 43,711 M fr the furth quarter, which was an increase f 1% ver sales f SEK 43,441 M in the same quarter f Adjusted fr currency mvements, net sales increased by 7%, primarily as a result f a favrable prduct and market mix. Operating incme increased by 28% t SEK 3,498 M (2,742) in the furth quarter. Operating incme included a psitive effect f SEK 310 M deriving frm settlement f a dispute relating t exprt credits in Brazil. The perating margin rse t 8.0% (6.3). The favrable prduct and market mix and higher prices fr new prducts with increased custmer value als had a psitive impact n prfitability. In additin, prfits cntinued t increase in the dealer rganizatin, which was ffset by increased csts f abut SEK 500 M in cnjunctin with prductin changes, primarily within Renault Trucks, and by sme SEK 100 M relating t capacity reductins in Nrth America. Net sales fr the full year increased by 7% t SEK 166,306 M (155,396). Operating incme excluding adjustments f gdwill amunted t SEK 14,369 M (11,717), while the perating margin was 8.6% (7.5). High activity during the first quarter T meet the very high demand in Eurpe, Vlv Trucks increases capacity as f February in its Eurpean manufacturing system, by abut 5%, cmpared with year-end Vlv Trucks plans t increase capacity by a further 10% tward the end f the secnd quarter. T retain its leading psitin and t take advantage f the very strng ecnmic trend in Eastern Eurpe, Vlv Trucks will increase investments in new Vlv Truck Centers in strategic lcatins in the regin. Renault Trucks deliveries and prductivity were affected negatively by extensive prductin changes in the industrial system in cnjunctin with the intrductin f new truck mdels and engines. During the furth quarter, phasing ut f the Renault Kerax plant in Villaverde was cmpleted. Assembly f Renault Trucks heavy truck prgram was thus cncentrated t the plant in Burg-en-Bresse. The current fcus is n imprving prductivity and ensuring delivery capacity t meet the strng demand. In January, Renault Trucks signed an agreement with Nissan Mtr regarding distributin f the light truck Renault Maxity, which will be manufactured by Nissan Mtr. Renault Maxity supplements Renaults ther light truck prgrams. In Nrth America, phase-ut f the lder generatin engines has begun fr bth Vlv and Mack. In parallel with this changever, adaptatin f prductin t lwer vlumes during 2007 was initiated. In bth f the Grup s truck prductin plants in Nrth America, the changever t new engines and capacity reductins will take place during the first quarter. In January, Mack Trucks launched a new truck fr the refuse and cnstructin segment called TerraPr Cabver with the new MP engine family. A lw-entry versin f TerraPr Cabver will be intrduced later in the year. 13

14 Buses increased prfitability in spite f lwer sales Imprved prfits Higher rder intake in Eurpe, the US and Canada, lwer in ther regins Fewer deliveries Net sales by market area Furth quarter Year SEK M Change Change Eurpe 2,229 1,819 23% 7,509 7,142 5% Nrth America 1,339 1,246 7% 4,910 4,247 16% Suth America 279 1,396 (80%) 1,537 2,641 (42%) Asia (29%) 2,003 1,612 24% Other markets (4%) (5%) Ttal 4,476 5,260 (15%) 16,856 16,589 2% Market trends vary The glbal bus market is stable but varies between the varius markets. Registratins in Eurpe increased by 7% up until September. The highest grwth was in Central Eurpe due t registratin f vehicles with Eur 3 engines. In Nrth America, the cach bus market increased by 20% during 2006, driven primarily by pre-buying effects in anticipatin f new envirnmental regulatin in Intercity traffic was at the same level as in In Mexic, the cach bus market was at the same level as in Lwer rder bkings During the furth quarter, rder bkings ttaled 3,258 buses, cmpared with 3,764 buses in the same perid in the preceding year, a decline f 13%. Order bkings were lwer in China, Suth America and Mexic, while they increased in Eurpe, the US and Canada. During the furth quarter, 2,464 buses were delivered, cmpared with 3,344 in the same perid in 2005, a decline f 26%. Deliveries were higher in Eurpe than in the preceding year, and it was primarily Suth America where deliveries were lwer than last year, which was due t the large delivery f 1,779 buses t Santiag, Chile in Earnings increase in furth quarter Net sales fr the furth quarter amunted t SEK 4,476 M, dwn 15%, cmpared with SEK 5,260 M in the preceding year. Adjusted fr exchange rate mvements, net sales declined by 9%. This primary reasn was lwer vlumes due t reduced deliveries in Suth America. Operating incme increased t SEK 191 M, cmpared with SEK 134 M in the preceding year. The result was psitively impacted by the gd develpment in the US and Canada, while it was negatively impacted by lwer prfitability in Mexic and Suth America. Operating incme included a psitive effect f SEK 47 M fllwing settlement f a dispute regarding exprt credits in Brazil. The perating margin amunted t 4.3% (2.5). Fr the full-year 2006, net sales increased 2% t SEK 16,856 M (16,589). Operating incme imprved 35% t SEK 633 M (470), and the perating margin rse t 3.8% (2.8). Efficiency wrk cntinues Vlv Buses cntinues t fcus n increasing efficiency glbally in bth the cmmercial and the industrial system. The intrductin and sales f the new prducts with the new engine generatin that was launched during the autumn cntinues t have high pririty. During the furth quarter, Vlv Buses received a number f significant rders. Vlv Buses subsidiary Nva Bus will deliver 322 articulated buses t Quebec between 2009 and Nva Bus will als deliver 126 city buses t Vancuver during The intrductin f the Eur 4 engine was very psitive. Gd rder intake f Eur 4 was recrded in the UK, including 110 B7R schl buses t be delivered t Nrthern Ireland. 14

15 Cnstructin Equipment cntinued imprved prfitability Operating incme increased 35% 2006 all-time high in vlumes, sales and earnings L350F launched VCE s largest wheel lader ever Net sales by market area Furth quarter Year SEK M Change Change Eurpe 5,268 4,537 16% 18,759 15,524 21% Nrth America 2,202 2,731 (19%) 11,280 10,337 9% Suth America % 1,358 1,238 10% Asia 1,996 1,905 5% 6,903 5,717 21% Other markets % 2,264 2,000 13% Ttal 10,753 10,301 4% 40,564 34,816 17% Ttal wrld market up 5% in the furth quarter The ttal wrld market fr heavy and cmpact equipment, in the prduct areas were Vlv CE participate, increased 5% in the last quarter 2006 cmpared t the same perid the year befre. Nrth America, strngly driven by a dwn-turn in the cmpact segment, was dwn 20%. The Eurpean ttal market increased 7 %, Asia, strngly driven by China, was up 15% and Other markets grew by 30%. Fr the full year 2006 the ttal wrld market fr heavy and cmpact was up 9%. Ttal market develpment in the furth quarter, unit sales in % Eurpe Nrth America Asia Other markets Ttal Heavy equipment +15 (3) Cmpact equipment +2 (28) (3) Ttal +7 (20) Fr 2007 the Eurpean market is expected t cntinue t grw in the range f 0-5%. The Asian market is prjected t grw by clse t 10%, with China as the driving frce, and Other markets are expected t grw by 10-15%. The develpment in these parts f the wrld is expected t cmpensate a dwn-turn in Nrth America, where the market is expected t decline by 5-10%. The decline is mainly an effect f lwer demand fr cmpact equipment, which is a cnsequence f lwer husing related activities. Strng rder bkings Order bkings remain strng and the ttal value f the rder bk n December 31 was 60% higher cmpared with the same date in the preceding year. Ttal sales vlume in 2006 increased by 11% and reached and all-timehigh f ver units. Sharp increase in sales and perating incme Net sales fr Cnstructin Equipment increased during the quarter by 4% t SEK 10,753 (10,301). Adjusted fr currency mvements, net sales rse 12%. Operating incme during the perid was up by 35% t SEK 992 (736) and the perating margin increased t 9.2% (7.1). The imprved perfrmance is mainly due t higher vlumes, a favrable prduct mix and high capacity utilizatin. Fr the full year 2006, financial perfrmance was all-time-high. Sales increased 17% t SEK 40,564 (34,816), perating incme was up 41% t SEK 3,888 (2,752) and the perating margin rse t 9.6% (7,9). Investment in Lingng in China apprved and new wheel lader launched During the furth quarter Vlv CE launched its largest wheel Lader ever, the new L 350 F replacing the 330 E mdel. The 350 F is equipped with Vlvs 16 liter engine and with its imprved perfrmance it is a very gd bundle with the biggest haulers A35 and A40. During the first quarter f 2007 all necessary apprvals fr the earlier annunced investment f 70% in Shandng Lingng has been received, and the peratin will be cnslidated in Vlv CE financial reprting as frm 1 January Fr further infrmatin, see Significant events n page

16 Vlv Penta cntinued favrable prfitability Sales exceeded SEK 10 billin fr the full-year 2006 Operating incme exceeded SEK 1 billin n an annual basis fr the first time Cntinued strng grwth in Eurpe Net sales by market area Furth quarter Year SEK M Change Change Eurpe 1,411 1,309 8% 5,822 5,102 14% Nrth America (6%) 2,815 2,832 (1%) Suth America % % Asia (0%) 1,359 1,427 (5%) Other markets % % Ttal 2,536 2,428 4% 10,485 9,776 7% Cntinued strng market in Eurpe, weakening in the US The Eurpean market fr diesel engines remained strng during the furth quarter fr bth leisure bats and industrial applicatins, primarily diesel-pwered gensets. In the US, the market fr marine engines was smewhat weaker, cmpared with the preceding quarter. Demand fr industrial engines was strng in many parts f the wrld, such as Turkey and Suth Africa, as was demand fr engines fr cmmercial shipping. Strengthened market shares Vlv Penta strengthened its market shares in Eurpe, due particularly t the IPS system, which created a new market in the inbard segment. A strng trend fr Vlv Penta IPS was als nted in the US, where the new system in cmbinatin with the jystick has als begun t be used in the imprtant sprt-fishing bat segment. Vlv Penta s psitins in industrial engines were strengthened, in part fr mbile applicatins, such as cranes and terminal frklifts. As f December 31, 2006, the vlume in the ttal rder stck was 5% higher than at the same date in the preceding year. Retained earnings level Vlv Penta s sales increased by 4% during the furth quarter frm SEK 2,428 M t SEK 2,536 M. Adjusted fr currency mvements, sales increased by 15%. Operating incme fr the furth quarter amunted t SEK 200 M, cmpared with SEK 205 M fr the crrespnding perid in the preceding year. The perating margin amunted t 7.9% (8.4). Prfits were negatively affected by an unfavrable prduct mix, primarily in the industrial engine segment. Fr the full-year 2006, net sales increased by 7% t SEK 10,485 M (9,776), while perating incme increased by 6% t SEK 1,002 M (943). The perating margin was stable at 9.6%. New industrial engines During the furth quarter, Vlv Penta launched a series f new 16-liter diesel engines designed fr dieselpwered gensets. The new industrial engines are Vlv Penta s strngest t date fr electricity prductin in a market segment in which Vlv Penta is currently the wrld leader. The new frward-facing prpellers, Vlv Penta IPS, are reaching an increasing number f custmers. In the US, a fur-engine installatin f the IPS system was launched in a new 75-ft express cruiser. With this type f multiple-engine installatin, Vlv Penta is entering a market fr high pwer classes and thus significantly larger bats. 16

17 Vlv Aer discntinuatin csts and new investments affected earnings Wrld air travel cntinues t grw Decisin in principle t clse dwn Brmma plant Recrd high number f prductin start ups f new cmpnents Net sales by market area Furth quarter Year SEK M Change Change Eurpe % 3,613 3,406 6% Nrth America 1,037 1,037 0% 3,815 3,612 6% Suth America (37%) % Asia (28%) % Other markets % % Ttal 2,076 2,110 (2%) 8,048 7,538 7% Air traffic cntinues t increase Airline passenger traffic increased by 4.4% in Nvember and by 4.3% fr the first eleven mnths f Passenger traffic imprved during Octber and Nvember and is nw back at the lng-term trend level. The cabin factr, meaning the number f available seats sld, cntinued t imprve in Nvember and amunted t 75.2%. The year 2006 was anther strng year with respect t cmmercial aircraft rders. Airbus and Being received rders fr 1,882 new aircraft during 2006, which was 12% less than the recrd year f The rder backlg at year-end had reached a new recrd level f 4,988 aircraft. During 2006, Airbus and Being delivered 832 aircraft, an increase f 25%, cmpared with The aircraft manufacturers expect a further increase by apprximately 10% during Overall, this means that the market remains strng. A challenge fr bth aircraft and aircraft engine manufacturers, hwever, is t handle the increased prductin rate, while cntinuing develpment f new aircraft and aircraft engine prgrams. Many new prductin starts reduced prfits During the furth quarter, Vlv Aer s net sales amunted t SEK 2,076, which was 2% lwer than in the furth quarter f 2005 (2,110), Adjusted fr currency mvements, sales increased by 5%. An perating lss f SEK 150 M was reprted, cmpared with an incme f SEK 219 M in the preceding year. In Nvember, Vlv Aer tk a strategic decisin t phase ut maintenance peratins in Brmma, which had reprted lsses fr many years. Earnings were negatively affected in an amunt f SEK 258 M fr discntinuatin csts. Prfitability in aftermarket sales remained unsatisfactry. During the quarter, prfitability declined in cmpnent sales as a result f investments in new aircraft engines and many prductins starts, which resulted in increased csts. At the same time, capacity in prductin plants culd nt be utilized ptimally. Increased raw material csts als affected prfitability. Fr the full year, net sales increased by 7% t SEK 8,048 M (7,538), while perating incme declined by 59% t SEK 345 M (836). The perating margin fell t 4.3% (11.1). Vlv Aer invests in Nrth America Vlv Aer s subsidiary Aer-Craft in Newingtn utside Hartfrd, Cnnecticut in the US is expanding. In Nvember, grund was brken fr an additin that will entail expanding the current plant by 70%. Pratt & Whitney Rcketdyne has selected Vlv t participate in the early develpment f the nzzles fr the J-2X engine. This engine will be used in NASA s manned spacecraft ARES I, which will replace the space shuttle. 17

18 Financial Services strng furth quarter Strng perfrmance in all businesses Delinquencies and risk parameters n lw level Gd grwth in Eastern Eurpe New financing and penetratin by business area New financing, SEK M Penetratin, % Furth quarter Furth quarter Vlv Trucks 5,410 4, Renault Trucks 1,356 1, Mack Trucks Buses Cnstructin Equipment 2,334 1, Other Ttal 10,074 9, Recrd vlume in the furth quarter Ttal new financing vlume in the furth quarter f 2006 amunted t SEK 10.1 billin (9.3). In ttal, 12,264 units (10,946) were financed during the quarter, resulting in an average financing per cntract f SEK 0.82 M (0.85). In the markets where financing is ffered, the average penetratin rate in the furth quarter was 22% (21). Steady grwth Ttal assets at December 31, 2006 amunted t SEK 84 billin (86). Of the ttal assets, SEK 77 billin was attributable t the credit prtfli (79). Adjusted fr exchange-rate mvements, the credit prtfli grew by 5.3% (9.6). Vlv Trucks accunts fr 48% f the credit prtfli, Cnstructin Equipment fr 22%, Renault Trucks fr 15%, Mack Trucks fr 9% and Buses fr 5%. The remaining 1% is mainly attributable t Vlv Aer and Vlv Penta. Gd perating incme and cntinued lw risk level Operating incme in the furth quarter amunted t SEK 524 M (479). Return n sharehlders equity fr the rlling 12 mnths was 15.5% (15.3). The equity rati at the end f the furth quarter was 11.5% (11.2). Write-ffs in the furth quarter amunted t SEK 74 M (91). The annualized write-ff rati thrugh December 31, 2006, was 0.33% (0.40). On December 31, 2006, the ttal credit reserves were 2.01% f the credit prtfli (2.17). Credit prvisins in the quarter were n the same level as the furth quarter f Cmpared with previus quarters in 2006, credit prvisining increased during the furth quarter, but were still at histrically lw levels. Write-ffs, delinquencies, repssessins and inventry f equipment remain stable at lw levels. Business activities During the furth quarter Financial Services cmpleted ur annual surveys f custmers which shwed that custmer satisfactin has remained strng fr the 2006 survey perid. Ntably, gd prgress has been made in the areas f: Initial Sales and Credit Prcess, Ownership Experience and Custmer Service Experience. In China Financial Services cmmenced dealer financing activities t cmplement the retail financing started earlier in the year. Elsewhere VFS decided t establish finance cmpanies in Slvakia and Hungary. 18

19 Significant events Strategic decisin n clsure f Vlv Aer s peratins in Brmma In Nvember, it was annunced that Vlv Aer had initiated cdeterminatin negtiatins with the trade unins relating t the clsure f Vlv Aer Engine Services (VAES) in Brmma, which cnducts verhaul f large aircraft engines. In recent years, the vlumes f the engines verhauled in Brmma, the JT8D and JT9D, have declined sharply. Amng ther actins, VAES has tried t ffset the declining vlumes thrugh cmplementing peratins with a third engine type, the PW4000, but vlumes have nt reached the levels required. The cmpany has investigated ther pssibilities, but all attempts have failed. VAES in Brmma emplys 456 persns, 145 salaried emplyees and 311 skilled wrkers. In accrdance with the strategic decisin, the peratins will be gradually phased ut during Csts fr a clsure are estimated t SEK 258 M. SEK 1.8 bn expected in annual synergy gains thrugh cperatin with Nissan Diesel Within five years, the crdinatin gains between the Vlv Grup and the Japanese truck manufacturer Nissan Diesel will ttal abut SEK 1.8 billin, accrding t a jint study f the synergies just carried ut by Vlv and Nissan Diesel. Mre than half f the ttal crdinatin benefits will ccur within Nissan Diesel and the remainder within the Vlv Grup. Vlv Cnstructin Equipment finalizes the acquisitin f 70% f the shares in Lingng In January 2007, it was annunced that Vlv Cnstructin Equipment (Vlv CE) had received all necessary regulatry apprvals fr the earlier annunced equity investment f 70% in Shandng Lingng Cnstructin Machinery C, Ltd (Lingng), a majr cnstructin machinery manufacturer in China and the deal is nw clsed. Vlv CE has invested RMB 328 millin, crrespnding t just ver SEK 300 M, in exchange fr 70% f the equity in Lingng. In 2005 Lingng s perating incme was RMB 10 millin n revenue f RMB 2 billin. The deal has n material impact n Vlv s financial psitin. Dngfeng Mtr Grup, Nissan Mtr and AB Vlv deepen discussins n pssible future cperatin In January 2007, it was annunced that Dngfeng Mtr Grup Cmpany Limited (DFG), Nissan Mtr and AB Vlv is deepening discussins n a pssible AB Vlv investment in the heavy and medium-duty cmmercial vehicle business currently included in Dngfeng Mtr C, Ltd (DFL) the Chinese jint venture between DFG and Nissan Mtr. Nissan Mtr will fcus n passenger cars and light cmmercial vehicles and has divested its hlding in Nissan Diesel t AB Vlv. Subsequently, DFG, Nissan Mtr and AB Vlv initiated discussins at the end f 2006 with the Chinese authrities n the future pssible cperatin f the parties. DFG intends t establish mre cmpetitive alliances with Nissan and AB Vlv respectively, in rder fr all parties t achieve the best develpment in their specialized field. T mve frward n this issue, DFG, Nissan Mtr, DFL and AB Vlv als have signed a nn-binding framewrk agreement with the intentin f AB Vlv t invest in the heavy and medium-duty cmmercial vehicle business and future engine business, while Nissan Mtr remains cmmitted t the lng-term cperatin with DFG regarding passenger vehicles and the light cmmercial business. Any future definitive agreement regarding such a transactin will be subject t apprval by Chinese authrities. Renault Trucks launches new versin f lightweight truck In January 2007, AB Vlv s subsidiary Renault Trucks annunced the launch f a new versin f Renault Masctt. The new Renault Masctt is equipped with a new gearbx, new driveshaft and new engine. Tw engine alternatives are available, 130 hp r 150 hp, which meet the Eurpean Eur 4 emissins standard. In additin, the Renault Masctt features a new, effective brake system that prvides the shrtest braking distance in the lightweight truck segment. The Renault Masctt is ne f Renault Trucks best sellers in its segment, with nearly 15,000 vehicles sld during Deliveries f the newest versin are expected t start at mid-year

20 Renault Trucks in distributin agreement with Nissan Mtr regarding light truck AB Vlv s subsidiary Renault Trucks, annunced in January 2007 that it had signed a distributin agreement cvering the Renault Maxity light duty vehicle with the manufacturer Nissan Mtr. An agreement in principle regarding the distributin agreement was signed in February Renault Maxity is a cab-ver-engine light duty vehicle develped and prduced fr Renault Trucks by Nissan Mtr. Sales by Renault Trucks dealers will begin in March Renault Maxity cmplements Renault Trucks existing range f light trucks, cmprising Renault Master and Renault Masctt, and is prduced in a range f weight classes frm 2.8 t 4.5 tns, with three engine alternatives. Mack Trucks launches new truck in cnstructin segment AB Vlv s subsidiary Mack Trucks, Inc is launching a new truck mdel in the cnstructin segment, the TerraPr Cabver. Mack hlds a leading psitin in the US as a supplier f trucks in this segment. The mdel is a further develpment f Mack s ppular MR series and is adapted specially fr handling cncrete pumping. The new mdel ffers custmers a new driver envirnment including an ergnmic seat, spacius driver cab, effective climate-cntrl system, easily accessible instrument and cntrl panel and substantial strage space. Majr emphasis was placed n reducing nise levels and the vibratins that arise during wrk peratins. TerraPr Cabver is equipped with an 11-liter MP7, available in the 325 t 405 hp classes, r the 13-liter MP8 engine, available in the 415 t 485 hp classes. Bth engines are apprved in accrdance with EPA 07 Significant events earlier in the year Vlv became majr sharehlder in Nissan Diesel Renault Trucks signed agreement in principle with Nissan Mtrs cncerning new light truck Vlv Grup premiered hybrid technlgy fr heavy vehicles Vlv Trucks launched new mdels fr the Nrth American market Annual General Meeting f AB Vlv Vlv Trucks bradens its business with new, cleaner trucks fr distributin Launch f new versins f Renault Midlum and Renault Premium Distributin Wrld premiere fr new Vlv 7700 city bus Frame agreement between Renault Trucks and the GAZ Grup Vlv Bard decided n new financial targets AB Vlv increased its hlding in Nissan Diesel Vlv plans bus bdy cperatin in India Vlv Cnstructin Equipment invests in China Reversal f reserve fr tax receivables yields psitive earnings effect Fr further infrmatin regarding previusly reprted significant events, please refer t Vlv Grup s reprts n the first three mnths, the first six mnths f 2006 and the first nine mnths f Infrmatin is als available at 20