VOLVO CAR GROUP results presentation January – March 2018 Patrik Tolf, Deputy CFO & head of Group Finance Nils Mösko, vice president & Head of investor relations
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Financial Summary q1 2018 BNSEK 3.6 147 k ebit 6.4% units Ebit margin mSEK -2,800 BNSEK 56.8 Operating & investing cash flow Revenue VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 3
Volvo Car Group Sales Global growth +14.1% EUROPE +5.7% US +49.0% China +23.3% Comparable period: Jan – Mar 2017 Europe is defined as EU + EFTA VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 4
Q1 2018 highlights Complete SUV line up XC40 sales start a success – 6,200 cars sold and 24,000 orders XC60 named World Car of the Year 2018 New V60 – launched in February Lynk & Co cars – to be produced in Ghent Named one of the World’s Most Ethical Companies – for the second time First climate neutral manufacturing plant – renewable heating in Skövde 5 VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Financials 6
key financial developments Q1 2018 Retail sales (units) Net revenue (MSEK) Investments (MSEK) 14% -10% 19% 147,400 56,820 7,040 6,340 129,150 47,800 Q117 Q118 Q117 Q118 Q117 Q118 EBIT (MSEK) Free cash flow (MSEK) Net income (MSEK) 3% 3,620 3,500 -2% 2,600 2,560 7.3% 6.4% EBIT margin EBIT margin -2,300 -2,900 Q117 Q118 Q117 Q118 Q117 Q118 VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 7
Income Statement Net revenue MSEK 19% 4,150 56,820 -530 5,400 47,800 Q1 2017 Volume Sales Mix and Pricing Other Q1 2018 VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 8
Retail sales by carline and region Retail sales by carline Q1 2018 Retail sales by carline Q1 2017 S S 18% 15% XC XC 47% 47% 38% V 35% V Retail sales by region Q1 2018 Retail sales by region Q1 2017 Other Other 12% 13% US US 14% 11% 54% 58% Europe Europe 18% China 20% China VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 9
Income Statement ebit improvement MSEK 3% 1,340 370 3,620 3,500 -1,590 7.3% 6.4% EBIT EBIT margin margin Q1 2017 Volume Sales Mix and Pricing Cost, FX and Other Q1 2018 VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 10
Cash Flow Statement Cash Flow movements Free cash flow MSEK -2,900 MSEK 54,600 47,900 15,200 15,900 6,900 4,000 -3,700 -6,100 -3,400 2,900 35,400 29,100 2017 FY Liquidity EBITDA Working capital* Investments** Financing*** 2018 Q1 Liquidity Undrawn credit facilities Marketable securities Cash * Change in inventories, accounts receivables and accounts payables, **Adjusted for interests and other items, *** Adjusted for exchange on cash VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 11
Investments and R&D R&D Expenses (SEKbn) Investments (SEKbn) 15.3% 14.4% 12 32.3 31.7 13.9% 13.6% 10.2 10.2 9.6 10 8.8 11.5% 9.7 25.2 10.0 8 7.2 6.4 18.9 18.6 5.6% 5.4% 5.2% 6 4.7 4.8% 5.2 4.4% 16.6 16.3 12.7 4 8.7 8.6 2 6.1 6.0 5.5 5.4 4.8 0 2014 2015 2016 2017 LTM 2014 2015 2016 2017 LTM Q1 2018 2018 Q1 % of Revenue R&D expenses % of Revenue Tangible investments Intangible investments Non capitalised R&D VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 12
Liquidity & debt – comfortable net cash position 47,900 MSEK Net cash position of SEK 10.4bn (2017 SEK12.5bn) 15,900 26,300 2,900 10,400 21,600 Undrawn Credit Facilities 13,200 29,100 Marketable Securities Cash & Cash Equivalents Bonds 1,700 Short-term Debt 6,700 Long-term Debt Liquidity Debt VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 13
Balanced Amortisation schedule MSEK Funding by type 47,900 Loans 36% 6,900 64% 1,800 5,100 Bonds 3,000 3,000 5,100 1,500 1,100 2017 2018 2019 2020 2021 2022 2025 Dec 31 Liquidity Loans Bonds VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 14
Looking ahead VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 15
Outlook 2018 Further sales progress - complete SUV line up New disruptive business opportunities Complete product portfolio renewal Truly global manufacturing footprint Continued strong growth and improved profits VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 16
Questions VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 17
Volvo Cars’ Transformation NEW ERA AS AN INDEPENDENT, STANDALONE COMPANY UNDER GEELY OWNERSHIP 2010 – 2015 2016-2020E PHASE I “STRATEGIC TRANSFORMATION” PHASE II “PROFITABLE GROWTH” 2010 2014 2017 2016 Volvo Cars unveils the all-new XC90 , First OEM to commit to fully Zhejiang Geely Holding Group Volvo Cars another record year of sales acquires Volvo Cars the first product on the SPA platform electrified fleet 534k and earnings SEK 11bn Launch new XC60 and XC40 (new segment entry) 2011 Enters into the debt capital markets 2015 30% stake in Lynk & Co Initiation of strategic repositioning Volvo Cars achieves new record unit sales of 503k and improved profitability New ways to consumers: 26.7 Commencement of the largest 26.2 Care By Volvo subscription investment programme in the based ownership Company’s history 21.5 Launch Polestar – pure progressive performance 2013 16.0 Further footprint optimisation , Introduces new new plant in US generation powertrains 12.4% 12.1% 11.9% 9.5 9.0 8.1 9.8% EBITDA margin, % 7.4% 6.9% 6.5% EBITDA, MSEK 2012 2013 2014 2015 2016 2017 LTM Q1 2018 VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 18
Another year of strong growth Retail sales (Thousand) Net revenue (SEKbn) 5.3% 12.4% 250 572 572 220 211 600 534 503 466 181 200 164 138 400 150 100 200 Retail sales Net Revenue 50 CAGR CAGR 0 0 2014 2015 2016 2017 LTM Q1 2014 2015 2016 2017 LTM Q1 2018 EBIT (SEKbn) 2018 Investments (SEKbn) +44% 14.1 14.2 40 15 32.3 31.7 11.0 30 25.2 9.7 10.0 10 18.9 18.6 6.4 6.6 Intangible investments 6.7% 6.5% 20 6.1% % margin 4.7 5.2 4.0% 16.6 16.3 5 Tangible investments 12.7 EBIT 2.1 10 8.7 8.6 Non capitalised R&D CAGR 1.5% 6.1 6.0 4.8 5.5 5.4 0 0 2014 2015 2016 2017 LTM Q1 2014 2015 2016 2017 LTM 2018 VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 2018 Q1 19
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2017 20
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