VOLVO CAR GROUP

results presentation

January – June 2017

Hans Oscarsson, Senior vice president & CFOHåkan Samuelsson, president & CEO

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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-JUNE 2017 2

DISCLAIMER

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

Strong Growth in h1

BNSEK 99.1 +18% revenue

BNSEK 6.8 ebit 278,000

units6.8%Ebit margin

BNSEK -3.1Operating and investing cash flow

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 *Comparable period: Jan – June 2016

Americas -4.9%Delivery constraints Asia pacific +22.6%

Strong growth

emea +6.6%Good momentum

Global growth +8.2%

sales

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

New XC60 rolled out

24,500 orders 6,000 built

Ramp up completed Q4

Committed to Electrification

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

P – Pure T – twin engine B – Brake recovery

Five fully electric cars 2019-2021

All other new models launched

from 2019 will be hybrids

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

Pure Progressive Performance

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

ZENUITY

Joint venture with Autoliv

NVIDIA partnership

400 employees

Connectivity

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

Component and technology sharing

Electrification partnership

Synergies from Common sourcing

Volvo minority ownership in lynK & co

Sharing architectures

Financials

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 11

key financialS

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017

12

Revenue (MSEK)

Net income (MSEK)

Sales (units)

+8%

2017 H1

277,650

2016 H1

256,55084,200

99,100

2017 H12016 H1

+18%

EBIT (MSEK)

5,600

2016 H1

+21%

6,800

2017 H1 2017 H1

+25%

3,8004,750

2016 H1

Net revenue growth

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 13

MSEK

8,300

2016 H1

84,200

Other

4,350

Sales mix and pricing

2,200

Volume

+18%

2017 H1

99,050

Income statement

Ebit improvement

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 14

MSEK

-400

Volume

2,200

2016 H1

5,600

+21%

2017 H1

6,800

Fixed cost and other

-600

Sales mix and pricing

Income statement

Cash Flow movements

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 15

*Adjusted for interests and other items, ** Adjusted for exchange on cash

Cash Flow Statement

MSEK Free cash flow MSEK -3,200

2017 H1 Liquidity

36,250

33,800

2,450

Financing**

-1,700

Investments*

-12,800

Working capital

-3,100

EBITDA

12,700

2016 FY Liquidity

43,450

38,700

4,750

Mkt sct

Cash

Liquidity & debt structure as of JUNE 30, 2017

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 16

25,150

Debt

23,000

12,300

3,000

7,700

Liquidity

48,150

33,800

2,450

11,900

13,250

Short-term Debt

Bonds

Long-term Debt

Cash & Cash Equivalents

Marketable Securities

Undrawn Revolving Credit Facility (RCF)

MSEK

Balance Sheet

Net cash position of SEK13bn

Investments as of Dec 31, 2016

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 17

2015

18,700

8,700

5,300

4,700

2016

5,200

13.5% 24,200

12,700

5,100

6,400

13.4%

11.4%

2014

18,500

8,600

4,700

Tangible investments

Non capitalised R&D

Intangible investments

% Revenue

Investments (MSEK)

Balance Sheet

Amortisation schedule as of Dec 31, 2016

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 18

2022

3,000

2021

2,813

2016

4,766

2019

1,961

2020

43,373

6,737

4,777

3,609

2018

3,266

2017

Liquidity

Loans

Bonds

Balance Sheet

MSEK

Outlook 2017

Increased production capacity

Maintained strong profitability

Launch of the XC40 – 3rd SUV

Continued growth

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 19

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 20

QUESTIONS

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 21

XC 55%

V29%

S

16%

EMEA

28%Asia Pacific

18%

Americas

54%

Revenue by carline Revenue by region

Appendix 1:

Revenue by carline and region

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 22

2017

H1 WC

-3,085

Payables

6,401

Receivables

-2,136

Inventory

-7,3502

10

2017 H1Payables

-2

Receivables

-3

Inventory

-4

2016 H1

*CCC = Cash Conversion Cycle

Change in Working capital (MSEK) 12 months rolling CCC* days

Appendix 2:

Working Capital and CCC DAys

Appendix 3:

Retail sales

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 23

Appendix 4:

Key figures – extended version

Key figures H1 2017 H1 2016

H12017

vs H1 2016

Retail sales (units) 277,641 256,563 8.2%

Wholesale (units) 288,074 258,046 11.6%

Net revenue (MSEK) 99,060 84,202 17.6%

Research and development expenses (MSEK) -5,602 -4,757 17.8%

Operating income, EBIT (MSEK) 6,776 5,592 21.2%

Net income (MSEK) 4,749 3,784 25.5%

EBITDA (MSEK) 12,724 10,739 18.5%

Cash flow from operating and investing activities (MSEK) -3,146 -3,175 29MSEK

EBIT margin (%) 6.8 6.6 0.2bps

EBITDA margin (%) 12.8 12.8 -

Equity ratio (%) 27.6 26.8 0.8bps

Net cash (MSEK) 13,122 18,873 -5,751

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 24

Appendix 5:

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-JUNE 2017 25

Appendix 6:

Reconciliation tables of performance measures

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017 26

27VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2017