VOLVO CAR GROUP results presentation second quarter 2018/media/Files/V/... · results presentation second quarter 2018 Hans Oscarsson, Senior vice president finance & CFO Patrik Tolf,

VOLVO CAR GROUP

results presentation

second quarter 2018

Patrik Tolf, Deputy CFO & head of Group Finance Hans Oscarsson, Senior vice president finance & CFO

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 APRIL-JUNE 2018

DISCLAIMER

2

Financial Summary Q2 2018

BNSEK 66.0 (+27%)

Revenue

BNSEK 4.2 (+29%)

ebit

6.4%Ebit margin

3

170k(+15%)

units

mSEK 3,700Operating & investing cash flow


Comparable period: April – June 2017

Europe is defined as EU + EFTA

US +34%27,539 units

China +15%32,712 units

EUROPE +6%85,036 units

Global growth +15%170,232 units

Suv share 55%

retail Sales Q2 2018

4VOLVO CAR GROUP RESULTS PRESENTATION APRIL-JUNE 2018

highlights

US plant inaugurated –global structure completed

New S60 launched – SPA completed

XC40 capacity increase


5

Financials


key financial developmentsNet revenue (MSEK)Retail sales (units)

EBIT (MSEK)

14%

15%

YTD18

317,700

YTD17

277,700

Q218

170,200

Q217

148,500

24%

27%

YTD18

122,900

YTD17

99,400

Q218

66,000

Q217

52,000

3,290

15%

29%

YTD18

7,840

YTD17

6,800

Q218

4,250

Q217

6.3%

EBIT

margin

6.4%

EBIT

margin


Net income (MSEK)

18%

40%

YTD18

5,600

YTD17

4,750

Q218

3,000

Q217

2,140

Investments (MSEK)

7

Free cash flow (MSEK)

900

-800

-3,200

YTD18YTD17Q218

3,700

Q217

9,650

-17%

-23%13,900

YTD18

16,800

Q218 YTD17

7,430

Q217

6.8%

EBIT

margin

6.4%

EBIT

margin

Net revenue Q2 2018

8

MSEK

Other

2,600

Sales Mix and Pricing

3,600

Volume

7,800

Q2 2017

52,000

Q2 2018

66,000

+27%


XC

55%

V29%

S

16%

Other

15%

US 16%

China

19%

Europe50%

Retail sales by carline Q2 2018Retail sales by carline Q2 2017

Retail sales by carline and region q2 2018

Retail sales by region Q2 2018Retail sales by region Q2 2017

Other

13%US

14%

China

19%Europe54%

XC 47%

V

37%

S

16%


ebit improvement q2 2018

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-DECEMBER 2016 10

2016

3,290

2017

4,250

Volume increase

Sales mix positive

Cost & Other

6.3% EBIT

margin

6.4%EBIT

margin

+29%MSEK

* Change in inventories, accounts receivables and accounts payables, **Adjusted for interests and other items, *** Adjusted for exchange on cash

2,800

15,900

47,800

29,100

7,600

2018 Q1 Liquidity

-200

EBITDA

-3,700

Working capital*

6,100

Investments**

13,600

Financing***

38,900

400

52,900

2018 Q2 Liquidity

Undrawn credit facilities CashMarketable securities

11

MSEKFree cash flow MSEK 3,700


Cash Flow movements Q2 2018Net cash position of SEK 14.4bn

(Q1 2018 SEK10.4bn)

R&D Expenses (SEKbn)

0

2

4

6

8

10

12

LTM Q2

2018

9.5

4.1%

2017

10.2

4.9%

2016

10.2

5.7%

2015

8.8

5.4%

2014

7.2

5.2%

R&D expenses% of Revenue

Investments (SEKbn)

32.7

6.0

17.0

9.7

15.7%

2016

25.6

6.1

13.1

6.4

14.3%

2015

18.9

5.5

8.7

4.7

11.5%

2014

18.6

4.8

8.6

5.2

13.6%

5.3

14.7

9.8

LTM Q2

2018

29.8

2017

12.8%

Non capitalised R&DIntangible investments

Tangible investments% of Revenue

12

Investments and R&D


Liquidity & debt – improved net cash position

14,400

28,000

Debt

24,900

22,700

2,200

Liquidity

52,900

38,900

400

13,600

Long-term Debt

Short-term Debt

Cash & Cash Equivalents

Marketable Securities

Undrawn Credit Facilities

MSEK

Net cash position of SEK 14.4bn

(Q1 2018 SEK10.4bn)


Balanced Amortisation schedule

210420420750

420

420

2021

7,600

5,230

2,370

2020

3,540

2019

1,560

20182018

June 30

52,900

20262025

5,650

5,230

202420232022

3,420

3,000

BondsLoansLiquidity

MSEK

14

Loans 43%

Bonds57%

Funding by type


15

Looking ahead


2018 - outlook

16

Continued strong growth and maintained strong profits

Upside from renewed product portfolio

Strong foundation for our longer term ambitions


Questions


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

12.0%

LTM Q2

2018

2017

26.2

8.1

6.5%

16.0

9.8%

2014

9.5

27.9

12.5%

2016

21.5

12.0%

2015

EBITDA margin, %

EBITDA, MSEK

VOLVO CAR GROUP RESULTS PRESENTATION APRIL-JUNE 2018 18

Another year of strong growthNet revenue (SEKbn)


232211

179164138

0

50

100

150

200

25013.9%

LTM Q2

2018

2017201620152014

19

Net Revenue

CAGR

0

10

20

30

40

29.8

9.8

5.3

14.7

LTM Q2

2018

2017

32.7

6.0

17.0

9.7

2016

25.6

6.1

13.1

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

612572534503466

0

200

400

600

8007.1%

LTM Q2

2018

2017201620152014

Retail sales

EBIT (SEKbn)

0

5

10

15

20+44%

LTM Q2

2018

15.1

6.5%

2017

14.1

6.7%

2016

11.0

6.2%

2015

6.64.0%

2014

2.11.5%

EBIT

% margin

CAGR

VOLVO CAR GROUP RESULTS PRESENTATION APRIL-JUNE 2018 20

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VOLVO CAR GROUP results presentation second quarter 2018/media/Files/V/... · results presentation second quarter 2018 Hans Oscarsson, Senior vice president finance & CFO Patrik Tolf,