2019 Results Presentation Carla De Geyseleer Volvo Car Group Results - PowerPoint PPT Presentation

Volvo Cars 2019 Results Presentation Carla De Geyseleer Volvo Car Group Results Presentation January – December 2019

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4. 2. 1. 3. Outlook Financial 2019 Sustainable review Highlights actions Volvo Car Group Results Presentation January – December 2019 3

A YEAR OF STRONG PERFORMANCE AND TRANSFORMATION Strong growth and market Financial targets Milestone in electrification share gains achieved and connectivity 700,000 cars sold, 6 th Continued growth in sales Two BEV´s launched • • • consecutive all time high and revenue Battery capacity secured • Market share gains in US, Improvements from cost • • World´s first integrated • EU and China efficiency measures Android infotainment system Production start of XC40 Improved profit and EBIT • • margins in 2 nd half and S60 in China Strong cash flow • Volvo Car Group Results Presentation January – December 2019 4

3. 4. 2. 1. Sustainable Outlook Financial 2019 actions review Highlights Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary Volvo Car Group Results Presentation January – December 2019 5

STRONG REVENUE GROWTH AND IMPROVED FINANCIAL PERFORMANCE 2019 HIGHLIGHTS 9.8% 8.5% +0.8% 146.0% 705 274,100 14,300 11,573 252,700 14,200 642 5.6% 5.2% 4,705 2018 2019 2018 2019 2018 2019 2018 2019 Cash flow Retail sales Revenue EBIT / margin from operating and investing activities (k units) (MSEK) (MSEK/%) (MSEK) Volvo Car Group Results Presentation January – December 2019 6

GROWTH AMBITIONS DELIVERED 2019 SALES GROWTH BY MARKET, CARLINE AND POWERTRAIN Model range distribution CAGR +9.8% % change YoY 14% +8.6% XC +24% 705 V -13% 64 Sweden 642 S +2% 23% 572 56 UK 535 63% 341 504 Germany 466 318 53 BeLux* 299 24 Italy 291 22 282 Powertrain distribution 254 155 7% % change YoY 131 114 91 PHEV +23% 31% 82 82 108 98 Petrol +18% 82 83 70 56 Diesel -5% 101 95 77 74 70 70 62% 2014 2015 2016 2017 2018 2019 Europe China US Other * BeLux: Belgium & Luxembourg Volvo Car Group Results Presentation January – December 2019 7

FINANCIAL PERFORMANCE IN LINE WITH GUIDANCE 2019 FINANCIAL HIGHLIGHTS 2019 2018 Change (%) (MSEK) Revenue 274,100 252,700 8.5 Cost of goods sold -222,000 -203,300 9.2 Gross income 52,070 49,331 5.6 Gross margin 19.0% 19.5% Operating income (EBIT) 14,303 14,185 0.8 EBIT margin 5.2% 5.6% Net income 9,600 9,800 -2.0 Volvo Car Group Results Presentation January – December 2019 8

SOLIDLY OUTGROWING THE OVERALL MARKET ACROSS ALL REGIONS 2019 REVENUE GROWTH COMPOSITION (MSEK) GLOBALLY BALANCED REVENUE DISTRIBUTION MSEK 21,464 +8.5% 3,155 274,117 8,533 16% 10,670 -894 252,653 48% 22% 15% Revenue Volume, Sales of Foreign Other Revenue Europe US China Other 2018 sales mix licenses exchange 2019 and pricing rates Volvo Car Group Results Presentation January – December 2019 9

ONGOING COST EFFICIENCY MEASURES TARGETING A LOWER FIXED COST BASE RUN RATE COST REDUCTION (BNSEK) Key objectives 1.8 Increase profitability by focusing on margins,  variable and fixed costs Ongoing review of resource allocation  2019 activities Cost efficiency measures are targeting to lower fixed cost run rate in H1 2020 by SEK 2bn through Reduction white collar employees and consultants  Reduction bought services  Achieved by December 31 2019 Other Employees Volvo Car Group Results Presentation January – December 2019 10

IMPROVED HEAD COUNT EFFICIENCY 2019 FTE* END OF PERIOD FULL TIME EMPLOYEES DISTRIBUTION BY REGION -1,181 Other 46,414 33,882 2% 45,233 China 19% 25,202 24,869 26,800 Sweden US 4% 45,233 21,212 20,364 Belgium 5,109 75% Rest of Europe December December 1,973 Europe Blue collar White collar 2018 2019 Average FTE* 45,871 +0.2% 45,965 for the year Produced 669k +5.5% 707k cars *FTE includes both employees and agency personnel Volvo Car Group Results Presentation January – December 2019 11

3. 4. 2. 1. Sustainable Outlook Financial 2019 actions review Highlights Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary Volvo Car Group Results Presentation January – December 2019 12

ROBUST EBIT DRIVEN BY VOLUME AND PRODUCT MIX 2019 EBIT GROWTH (MSEK) MSEK 118 0.8% 865 1,308 14,303 14,185 -425 5.2% 5.6% 5.2% -1,505 -125 EBIT 2018 Volume, sales Sale of licenses Government grants Foreign exchange rates Other EBIT 2019 mix and pricing Volvo Car Group Results Presentation January – December 2019 13

3. 4. 2. 1. Sustainable Outlook Financial 2019 actions review Highlights Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary Volvo Car Group Results Presentation January – December 2019 14

STRONG CONSOLIDATED BALANCE SHEET EQUITY AND LIABILITIES ASSETS DECEMBER DECEMBER DECEMBER DECEMBER 2019 2018 2019 2018 (MSEK) (MSEK) Intangible assets 32,790 29,630 Total equity 63,650 61,250 PPE 69,740 61,210 Operating leases 3,240 2,520 Provisions for post-employment benefits 12,580 8,430 Investments 7,410 7,000 Bonds and Liabilities to credit institutions 26,130 21,470 Deferred taxes and other non-current assets 10,870 9,810 Other interest bearing liabilities 5,080 - Total non-current assets Other non-current liabilities and provisions 18,390 16,670 124,050 110,170 Total non-current liabilities 62,180 46,570 Inventories 38,910 35,160 Accounts receivable 13,240 13,700 Accounts payable 44,880 43,630 Current tax assets and other current Liabilities to credit institutions 4,110 2,180 assets 9,830 10,450 Other interest bearing liabilities 1,070 - Marketable securities and Cash and Other current liabilities and provisions 65,670 57,600 cash equivalents 55,530 41,750 Total current liabilities Total current assets 115,730 103,410 117,510 101,060 TOTAL ASSETS TOTAL EQUITY & LIABILITIES 241,560 211,230 241,560 211,230 Volvo Car Group Results Presentation January – December 2019 15

3. 4. 2. 1. Sustainable Outlook Financial 2019 actions review Highlights Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary Volvo Car Group Results Presentation January – December 2019 16

IMPROVED EBITDA AND WORKING CAPITAL DRIVE STRONG CASH FLOW GENERATION IN 2019 2019 CONDENSED CASH FLOW 2019 2018 (MSEK) EBITDA 29,851 27,398 Cash flow from other operating activities -4,978 -4,745 Adjustments -2,415 68 Net working capital * -403 -1,961 Other working capital 10,319 6,005 Cash flow from operating activities 32,374 26,765 Investments in tangible assets -11,807 -13,574 Investments in intangible assets -9,176 -7,283 Cash flow from other investing activities 182 -1,203 Total operating and investing cash flow 11,573 4,705 Net cash flow from interest bearing liabilities and bonds 4,673 -4,267 Investments in marketable securities -1,985 2,558 Dividends -2,897 -67 Other -622 1,033 Cash flow from financing activities -831 -743 Total cash flow for the period 10,742 3,962 * Change in inventories, accounts receivable and accounts payable Volvo Car Group Results Presentation January – December 2019 17