VOLVO CAR GROUP results presentation January/media/Files/V/... · VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 9. Net revenue strong growth 10 MSEK 2015 8,270 +10% 2016

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%


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


Capital markets


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


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


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


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


Financial statements – Cash flow Statement


msek FY

2016

FY

2015

Net Revenue 180,672 164,043

Cost of Sales -143,282 -128,238


EBIT 11,014 6,620


msek FY

2016

FY

2015


82,075 68,317


79,338 64,000

Total assets 161,413 132,317

Equity 43,310 34,635




76,124 67,209


msek FY

2016

FY

2015








14

*Adjusted for interests and other items


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


Working Capital and CCC daysCash Flow Statement

Financial statements – balance sheet


msek FY

2016

FY

2015

Net Revenue 180,672 164,043

Cost of Sales -143,282 -128,238


EBIT 11,014 6,620


msek FY

2016

FY

2015


82,075 68,317


79,338 64,000

Total assets 161,413 132,317

Equity 43,310 34,635




76,124 67,209


msek FY

2016

FY

2015








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


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


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


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


Autonomous Driving

1 M electrified cars by 2025

Pure electric car 2019

All models in Twin engine variant


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


Outlook 2017


New volume and revenue record foreseen

Continued industrial transformation

New XC60

Maintained strong profit level

90 years anniversary

24

New XC40

25

Q&A



Appendix 1:

Retail sales


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


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.


Appendix 4:

Reconciliation tables of performance measures



Documents

VOLVO CAR GROUP results presentation January/media/Files/V/... · VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 9. Net revenue strong growth 10 MSEK 2015 8,270 +10% 2016