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VOLVO CAR GROUP
results presentation
January – December 2016
Håkan Samuelsson, president & CEO Hans oscarsson, senior vice president & CFO
By accepting this document, the person to whom it is provided (the “Recipient”) agrees to be bound by the following obligations and limitations.
This document has been prepared and issued by Volvo Car AB (together with its subsidiaries, “Volvo Cars”).
The information contained in this document is derived from sources that have not been independently verified. Except in the case of fraudulent misrepresentation, no responsibility or liability is accepted by Volvo Cars or by any of its respective officers, employees, affiliates or agents in relation to the accuracy, completeness or sufficiency of any information contained herein or any other written or oral information made available by Volvo Cars in connection therewith or any data which any such information generates, or for any loss whatsoever arising from or in connection with the use of or reliance on this document and any such liability is expressly disclaimed. Analyses and opinions contained herein may be based on assumptions that, if altered, can change the analyses or opinions expressed. This document speaks as of the date hereof and in providing this document, Volvo Cars gives no undertaking and is under no obligation to provide the Recipient with access to any additional information or to update this document or to correct any inaccuracies in it which may become apparent. Volvo Cars’ past performance is not necessarily indicative of future results and nothing contained herein shall constitute any representation or warranty as to future performance of Volvo Cars or any security, credit, currency, rate or other market or economic measure. Nor does this document constitute a recommendation with respect to any securities.
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 2
DISCLAIMER
performance
180 BNNet revenue
11 BNebit
534,0003rd consecutive year of
record sales
6,5 BNOperating and investing cash flow +3,000
Employees
6.1%Ebit margin
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 CURRENCY: SEK
US +18.1%Turnaround
ConfirmeD
China +11.5%Regained
momentum
EUROPE +2.7%Profitable
Growth
Global growth
6.2%
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 4
Retail sales
Charleston plant
Torslanda Ramp up
90 Series completed
S90 daqing
CMA Luqiao
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Operations
Private PlacementSek 5 bn
two bondsSek 8 bn
Two ratings
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Capital markets
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Finance
Overview of key financial developments
7
Net revenue (SEKbn)
Net income (SEKbn)
Retail sales (units)
+6%
2016
534,332
2015
503,127 164,043180,672
20162015
+10%
EBIT (SEKbn)
6,620
2015
+66%11,014
2016 2016
+67%
4,476
7,460
2015
4.0%EBIT margin
6.1% EBIT margin
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Financial statements – Income statement
msek FY
2016
FY
2015
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
msek FY
2016
FY
2015
Intangible assets, Property, plant & equipment etc.
82,075 68,317
Inventories, Accounts receivable, Cash & cash equivalents etc.
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.41,979 30,473
Short term liabilities to credit institutions, Accounts payable and short term provisions etc.
76,124 67,209
Total Equity & Liabilities 161,413 132,317
msek FY
2016
FY
2015
Operating activities 26,861 22,576
Investing activities -20,346 -15,342
Cash flow from operating and
investing activities6,515 7,234
Financing activities 5,792 1,445
Total cash flow 12,307 8,679
Income statement Balance sheetCash flow statement
9VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Net revenue strong growth
10
MSEK
2015
8,270
+10%
2016
180,672
Exchange & Other
-3,451
Sales Mix
11,810
Volume
164,043
Income Statement
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Revenue by Carline and Market
11
XC64% S
13%
V
23%
Other markets
US
18% China
36%
Western Europe
17%Sweden
13%
17%
Revenue by carline Revenue by market
Income Statement
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
ebit significant improvement
12
MSEK
11,014
Exchange,
Cost & Other
-3,101
Sales MixVolume
2,255
2015
5,240
6,620
+66%
2016
4.0% EBIT margin
6.1% EBIT margin
Income Statement
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Financial statements – Cash flow Statement
13VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
msek FY
2016
FY
2015
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
msek FY
2016
FY
2015
Intangible assets, Property, plant & equipment etc.
82,075 68,317
Inventories, Accounts receivable, Cash & cash equivalents etc.
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.41,979 30,473
Short term liabilities to credit institutions, Accounts payable and short term provisions etc.
76,124 67,209
Total Equity & Liabilities 161,413 132,317
msek FY
2016
FY
2015
Operating activities 26,861 22,576
Investing activities -20,346 -15,342
Cash flow from operating and
investing activities6,515 7,234
Financing activities 5,792 1,445
Total cash flow 12,307 8,679
Income statement Balance sheetCash flow statement
14
*Adjusted for interests and other items
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Cash FlowCash Flow Statement
2016 FY
Liquidity
49.300
38.600
4.700
6.000
Exchange
on cash
700
35.100
3.500
6.000
Financing
5.800
Investments
20.300
Other items*
2.700
Provisions
3.500
Working
capital
EBITDA
21.500
2015 FY
Liquidity
4.500
25.600
Free cash flow 6,500 MSEK
Cash
Mkt sct
RCF
MSEK
15
-230
2016 WC
4,500
Payables
4,000
Receivables
730
Inventory
-2
-3
-6
3
Inventory PayablesReceivables 2016
-4
2015
*CCC = Cash Conversion Cycle
Change in Working capital (MSEK) 2016 YTD CCC* days
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Working Capital and CCC daysCash Flow Statement
Financial statements – balance sheet
16VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
msek FY
2016
FY
2015
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
msek FY
2016
FY
2015
Intangible assets, Property, plant & equipment etc.
82,075 68,317
Inventories, Accounts receivable, Cash & cash equivalents etc.
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.41,979 30,473
Short term liabilities to credit institutions, Accounts payable and short term provisions etc.
76,124 67,209
Total Equity & Liabilities 161,413 132,317
msek FY
2016
FY
2015
Operating activities 26,861 22,576
Investing activities -20,346 -15,342
Cash flow from operating and
investing activities6,515 7,234
Financing activities 5,792 1,445
Total cash flow 12,307 8,679
Income statement Balance sheetCash flow statement
Investments
17
9 913
5 5
55 5
6
2016
24
13,4%
2015
19
11,4%
2014
19
13,5%
Tangible investments
% Revenue
Intangible investments
Non capitalised R&D
Investments (BNSEK)
Balance Sheet
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Liquidity & debt structure as of December 31, 2016
18
25,306
Debt
24,422
13,910
2,813
7,699
Liquidity
49,728
38,635
4,738
6,355
18,951
Short-term Debt
Bonds
Long-term Debt
Cash & Cash Equivalents
Marketable Securities
Undrawn Revolving Credit Facility (RCF)
MSEK
Balance Sheet
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Net cash position of SEK19bn10.5% of net revenue
Amortisation schedule
19
2022
3,000
2021
4,766
2019
3,609
2018
3,266
2017
2,813
2016
43,373
6,737
4,777
1,961
2020
Bonds
Loans
Liquidity
MSEK
Balance Sheet
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
20
Roll out of new cars and
continued growth
Commercialisation of
new technologiesVOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Transformation continues
Software – Zenuity
Hardware – Uber
People – Drive me
21VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Autonomous Driving
1 M electrified cars by 2025
Pure electric car 2019
All models in Twin engine variant
22VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
eLECTRIFICATION
23
Mobility solutionsPer Mile – new business unit
Per month – Care BY Volvo
Digital Experience &
Connectivity Service
Development Centre
Mountain view, California
New Chief digital Officer
Atif Rafiq
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Outlook 2017
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
New volume and revenue record foreseen
Continued industrial transformation
New XC60
Maintained strong profit level
90 years anniversary
24
New XC40
25
Q&A
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
26VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016
Appendix 1:
Retail sales
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 27
Appendix 2:
Key figures – extended version
Key figures Q4 2016 Q4 2015
Full year
2016
Full year
2015
Full year
2016
vs Full year
2015
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
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 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.
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 29
Appendix 4:
Reconciliation tables of performance measures
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 30
31VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016