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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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

Financials

6

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

15

Looking ahead

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

Questions

17VOLVO 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

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2017 20