VOLVO CAR GROUP results presentation January December Håkan Samuelsson, president & CEO Hans oscarsson, senior vice president & CFO
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performance 11 BN 534,000 ebit 180 BN Net revenue 6.1% Ebit margin 3rd consecutive year of record sales 6,5 BN Operating and investing cash flow +3,000 Employees CURRENCY: SEK
Retail sales US +18.1% Turnaround ConfirmeD Global growth 6.2% EUROPE +2.7% Profitable Growth China +11.5% Regained momentum 4
Operations 90 Series completed Torslanda Ramp up S90 daqing CMA Luqiao Charleston plant
Capital markets Private Placement Sek 5 bn two bonds Sek 8 bn Two ratings
Finance
Overview of key financial developments Retail sales (units) Net revenue (SEKbn) +6% 503,127 534,332 164,043 +10% 180,672 EBIT (SEKbn) Net income (SEKbn) +66% 11,014 +67% 7,460 6,620 4.0% EBIT margin 6.1% EBIT margin 4,476 7
Financial statements Income statement Income statement msek Net Revenue 180,672 164,043 Cost of Sales -143,282-128,238 Gross Income 35,805 38,805 EBIT 11,014 6,620 Net Income 7,460 4,476 Cash flow statement msek Operating activities 26,861 22,576 Investing activities -20,346-15,342 Cash flow from operating and investing activities 6,515 7,234 Financing activities 5,792 1,445 Total cash flow 12,307 8,679 msek Balance sheet Intangible assets, Property, plant & equipment etc. Inventories, Accounts receivable, Cash & cash equivalents etc. 82,075 68,317 79,338 64,000 Total assets 161,413 132,317 Equity 43,310 34,635 Long term liabilities to credit institutions and provisions for pensions etc. Short term liabilities to credit institutions, Accounts payable and short term provisions etc. 41,979 30,473 76,124 67,209 Total Equity & Liabilities 161,413 132,317 9
Income Statement Net revenue strong growth MSEK +10% 11,810-3,451 180,672 8,270 164,043 Volume Sales Mix Exchange & Other 10
Income Statement Revenue by Carline and Market Revenue by carline 23% V Revenue by market Western Europe 36% XC 64% 13% S Other markets 17% 13% Sweden 17% US 18% China 11
Income Statement ebit significant improvement MSEK +66% 2,255 5,240-3,101 11,014 6,620 4.0% EBIT margin 6.1% EBIT margin Volume Sales Mix Exchange, Cost & Other 12
Financial statements Cash flow Statement Income statement msek Net Revenue 180,672 164,043 Cost of Sales -143,282-128,238 Gross Income 35,805 38,805 EBIT 11,014 6,620 Net Income 7,460 4,476 Cash flow statement msek Operating activities 26,861 22,576 Investing activities -20,346-15,342 Cash flow from operating and investing activities 6,515 7,234 Financing activities 5,792 1,445 Total cash flow 12,307 8,679 msek Balance sheet Intangible assets, Property, plant & equipment etc. Inventories, Accounts receivable, Cash & cash equivalents etc. 82,075 68,317 79,338 64,000 Total assets 161,413 132,317 Equity 43,310 34,635 Long term liabilities to credit institutions and provisions for pensions etc. Short term liabilities to credit institutions, Accounts payable and short term provisions etc. 41,979 30,473 76,124 67,209 Total Equity & Liabilities 161,413 132,317 13
Cash Flow Statement Cash Flow MSEK Free cash flow 6,500 MSEK 4.500 3.500 2.700 49.300 35.100 21.500 20.300 5.800 700 6.000 4.700 6.000 3.500 RCF 38.600 Mkt sct Cash 25.600 Liquidity EBITDA Working capital Provisions Other items* Investments Financing Exchange on cash Liquidity *Adjusted for interests and other items 14
Cash Flow Statement Working Capital and CCC days Change in Working capital (MSEK) 4,500 YTD CCC* days 3-4 4,000-2 -3-230 Inventory 730 Receivables Payables WC Inventory -6 Receivables Payables *CCC = Cash Conversion Cycle 15
Financial statements balance sheet Income statement msek Net Revenue 180,672 164,043 Cost of Sales -143,282-128,238 Gross Income 35,805 38,805 EBIT 11,014 6,620 Net Income 7,460 4,476 Cash flow statement msek Operating activities 26,861 22,576 Investing activities -20,346-15,342 Cash flow from operating and investing activities 6,515 7,234 Financing activities 5,792 1,445 Total cash flow 12,307 8,679 msek Balance sheet Intangible assets, Property, plant & equipment etc. Inventories, Accounts receivable, Cash & cash equivalents etc. 82,075 68,317 79,338 64,000 Total assets 161,413 132,317 Equity 43,310 34,635 Long term liabilities to credit institutions and provisions for pensions etc. Short term liabilities to credit institutions, Accounts payable and short term provisions etc. 41,979 30,473 76,124 67,209 Total Equity & Liabilities 161,413 132,317 16
Balance Sheet Investments Investments (BNSEK) 13,5% 13,4% 11,4% 19 19 5 5 5 5 9 9 24 6 5 13 % Revenue Intangible investments Non capitalised R&D Tangible investments 2014 17
Balance Sheet Liquidity & debt structure as of December 31, MSEK 49,728 6,355 4,738 25,306 18,951 Net cash position of SEK19bn 10.5% of net revenue 24,422 38,635 Liquidity 7,699 2,813 13,910 Debt Undrawn Revolving Credit Facility (RCF) Marketable Securities Cash & Cash Equivalents Bonds Short-term Debt Long-term Debt 18
Balance Sheet Amortisation schedule MSEK 43,373 Liquidity Loans Bonds 6,737 2,813 3,266 3,609 4,766 1,961 4,777 3,000 2017 2018 2019 2020 2021 2022 19
Transformation continues Roll out of new cars and continued growth Commercialisation of new technologies 20
Autonomous Driving Software Zenuity Hardware Uber People Drive me 21
electrification All models in Twin engine variant Pure electric car 2019 1 M electrified cars by 2025 22
Digital Experience & Connectivity Service Mobility solutions Per Mile new business unit Per month Care BY Volvo New Chief digital Officer Atif Rafiq Development Centre Mountain view, California 23
Outlook 2017 New volume and revenue record foreseen Continued industrial transformation New XC60 New XC40 Maintained strong profit level 90 years anniversary 24
Q&A 25
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Appendix 1: Retail sales 27
Appendix 2: Key figures extended version Key figures Q4 Q4 Full year Full year Full year vs Full year Retail sales (units) 155,003 156,981 534,332 503,127 6.2% Net revenue (MSEK) 55,940 52,646 180,672 164,043 10.1% Research and development expenses (MSEK) -2,038-2,484-9,374-8,803 6.5% Operating income, EBIT (MSEK) 3,355 3,684 11,014 6,620 4,394 MSEK Net income (MSEK) 2,349 2,938 7,460 4,476 3,018 MSEK EBITDA (MSEK) 6,035 6,201 21,541 16,019 5,522 MSEK Cash flow from operating and investing activities (MSEK) 8,769 9,476 6,515 7,234-719 MSEK EBIT margin (%) 6.0 7.0 6.1 4.0 2.1bps EBITDA margin (%) 10.8 11.8 11.9 9.8 2.1bps Capex & R&D spend (MSEK) 17,665 14,490 22.3% Capex & R&D spend against net revenue (%) 9.8 8.8 0.9bps Equity ratio (%) 26.8 26.2 0.6bps Net debt/net cash (net cash if negative) (MSEK) -18,873-7,721-11,152 28
Appendix 3: Definitions of performance measures Performance measures disclosed in the presentation are those that are deemed to give the most true and fair, as well as relevant view of Volvo Car Group s financial performance for a reader of the presentation. 29
Appendix 4: Reconciliation tables of performance measures 30
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