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VOLVO CAR GROUP
results presentation
January – March 2018
Patrik Tolf, Deputy CFO & head of Group Finance Nils Mösko, vice president & Head of investor relations
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-MARCH 2018
DISCLAIMER
2
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Financial Summary q1 2018
BNSEK 56.8 Revenue
BNSEK 3.6ebit 147k
units
6.4%Ebit margin
3
mSEK -2,800 Operating & investing cash flow
Comparable period: Jan – Mar 2017
Europe is defined as EU + EFTA
US +49.0% China +23.3%
EUROPE +5.7%
Global growth +14.1%
Volvo Car Group Sales
4VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
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
5VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
key financial developments Q1 2018
Net revenue (MSEK)Retail sales (units)
EBIT (MSEK)
Q118
14%
129,150
Q117
147,400
Q118
56,82047,800
Q117
19%
3,500
Q117
3,620
Q118
3%
7.3%EBIT margin
6.4% EBIT margin
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Net income (MSEK)
Q117
2,600 2,560
-2%
Q118
Investments (MSEK)
7
Free cash flow (MSEK)
-2,900
-2,300
Q117 Q118
Q118
7,040
-10%
Q117
6,340
Net revenue
8
MSEK
19%
Q1 2018
-530
Sales Mix and Pricing
4,150
Volume
5,400
Q1 2017
47,800
Other
56,820
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Income Statement
XC
47%
V
35%
S
18%
Other
12%
US14%
China
20%
Europe54%
Retail sales by carline Q1 2018 Retail sales by carline Q1 2017
Retail sales by carline and region
Retail sales by region Q1 2018 Retail sales by region Q1 2017
Other
13%US
11%
China18% Europe
58%
XC 47%
V
38%
S
15%
9VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
10
MSEK
370
3%
3,620
Cost, FX and Other
-1,590
Sales Mix and PricingVolume
1,340
Q1 2017
3,500
Q1 2018
7.3% EBIT
margin
6.4%EBIT
margin
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
ebit improvement
Income Statement
* Change in inventories, accounts receivables and accounts payables, **Adjusted for interests and other items, *** Adjusted for exchange on cash
Investments**
-6,100
Working capital*
-3,700
47,900
29,100
2,900
15,900
Financing***
-3,400
EBITDA
6,900
2017 FY Liquidity
54,600
35,400
4,000
15,200
2018 Q1 Liquidity
CashMarketable securitiesUndrawn credit facilities
11
MSEKFree cash flow MSEK -2,900
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Cash Flow movements
Cash Flow Statement
R&D Expenses (SEKbn)
0
2
4
6
8
10
12
10.2
4.8%
2016 LTM Q1
2018
9.6
2017
4.4%
10.2
5.6%
2015
8.8
5.4%
2014
7.2
5.2%
R&D expenses% of Revenue
Investments (SEKbn)
31.7
5.4
LTM
2018 Q1
16.3
10.0
2017
14.4%
6.1
25.2
2016
15.3%
9.7
16.6
6.0
32.3
4.7
11.5%
2014
18.9
5.5
8.712.7
6.4
13.9%
2015
18.6
4.8
8.6
5.2
13.6%
Intangible investments
Tangible investments
Non capitalised R&D
% of Revenue
12
Investments and R&D
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Liquidity & debt – comfortable net cash position
26,300
Debt
21,600
6,700
1,700
13,200
Liquidity
47,900
29,100
2,900
15,900
10,400
Short-term Debt
Bonds
Long-term Debt
Cash & Cash Equivalents
Marketable Securities
Undrawn Credit Facilities
MSEK
Net cash position of SEK 10.4bn
(2017 SEK12.5bn)
13VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Balanced Amortisation schedule
6,900
5,100
1,800
2020
3,000
2019
1,500
2018 2025
5,100
2022
3,000
2021
1,100
2017
Dec 31
47,900
BondsLoansLiquidity
MSEK
14
64%
Loans36%
Bonds
Funding by type
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
Outlook 2018
16
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
NEW ERA AS AN INDEPENDENT, STANDALONE COMPANY UNDER GEELY OWNERSHIP
Zhejiang Geely Holding Group acquires Volvo Cars
2010
2013
Volvo Cars unveils the all-new XC90, the first product on the SPA platform
2014
Volvo Cars achieves new record unit sales of 503k and improved profitability
2015
Further footprint optimisation, new plant in US
Initiation of strategic repositioning
Commencement of the largest investment programme in the Company’s history
2011
2010 – 2015PHASE I “STRATEGIC TRANSFORMATION”
2016-2020EPHASE II “PROFITABLE GROWTH”
Introduces new generation powertrains
2016
Volvo Cars another record year of sales 534k and earnings SEK 11bn
Enters into the debt capital markets
Launch Polestar – pure progressive performance
Launch new XC60 and XC40 (new segment entry)
2017
First OEM to commit to fully electrified fleet
New ways to consumers:Care By Volvo subscription based ownership
30% stake in Lynk & Co
Volvo Cars’ Transformation
6.9%
2013
9.0
7.4%
2012
12.1%
LTM Q1
2018
2017
26.2
8.1
6.5%
16.0
9.8%
2014
9.5
26.7
12.4%
2016
21.5
11.9%
2015
EBITDA margin, %
EBITDA, MSEK
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018 18
Another year of strong growthNet revenue (SEKbn)
VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-MARCH 2018
220211181
164138
0
50
100
150
200
25012.4%
LTM Q1
2018
2017201620152014
19
Net Revenue
CAGR
0
10
20
30
4031.7
10.0
5.4
16.3
LTM
2018 Q1
2017
32.3
6.0
16.6
9.7
2016
25.2
6.1
12.7
6.4
2015
18.9
5.5
8.7
4.7
2014
18.6
4.8
8.6
5.2
Non capitalised R&D
Tangible investments
Intangible investments
Investments (SEKbn)
Retail sales (Thousand)
CAGR
572572534503466
0
200
400
600
5.3%
LTM Q1
2018
2017201620152014
Retail sales
EBIT (SEKbn)
0
5
10
15
+44%
LTM Q1
2018
14.2
6.5%
2017
14.1
6.7%
2016
11.0
6.1%
2015
6.6
4.0%
2014
2.11.5%
EBIT
% margin
CAGR
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