Volvo Cars 2019 Results Presentation
Carla De Geyseleer
Volvo Car Group Results Presentation January – December 2019
2019 Results Presentation Carla De Geyseleer Volvo Car Group Results - - PowerPoint PPT Presentation
Volvo Cars 2019 Results Presentation Carla De Geyseleer Volvo Car Group Results Presentation January December 2019 DISCLAIMER By accepting this document, the person to whom it is provided (the Recipient) agrees to be bound by the
Carla De Geyseleer
Volvo Car Group Results Presentation January – December 2019
DISCLAIMER
Volvo Car Group Results Presentation January – December 2019
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
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.
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Sustainable actions
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Volvo Car Group Results Presentation January – December 2019
A YEAR OF STRONG PERFORMANCE AND TRANSFORMATION
Strong growth and market share gains
consecutive all time high
EU and China
and S60 in China Financial targets achieved
and revenue
efficiency measures
margins in 2nd half
Milestone in electrification and connectivity
Android infotainment system
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary
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Sustainable actions
Volvo Car Group Results Presentation January – December 2019
STRONG REVENUE GROWTH AND IMPROVED FINANCIAL PERFORMANCE
Revenue
(MSEK)
Retail sales
(k units)
EBIT / margin
(MSEK/%)
642 705 2018 2019
9.8%
2018 2019 252,700 274,100
8.5%
14,200 2019 2018 14,300
+0.8%
Cash flow
from operating and investing activities (MSEK)
2018 2019 11,573 4,705
146.0%
5.6% 5.2%
2019 HIGHLIGHTS
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Volvo Car Group Results Presentation January – December 2019
14% 63% 23% 7% 62% 31% 74 70 70 77 95 101 56 70 83 82 98 108 82 82 91 114 131 155 254 282 291 299 318 341 2019 2014 2015 504 2017 2016 572 2018 642 466 535 705 CAGR +8.6% +9.8% PHEV +23% Diesel -5% Petrol +18% XC +24% V -13% S +2% Europe China Other US
22 24 53 56 64 Sweden BeLux* Italy UK Germany
% change YoY % change YoY
GROWTH AMBITIONS DELIVERED
2019 SALES GROWTH BY MARKET, CARLINE AND POWERTRAIN
Model range distribution Powertrain distribution
* BeLux: Belgium & Luxembourg
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(MSEK)
2019 2018 Change (%)
Revenue 274,100 252,700 8.5 Cost of goods sold
9.2 Gross income 52,070 49,331 5.6 Gross margin 19.0% 19.5% Operating income (EBIT) 14,303 14,185 0.8 EBIT margin 5.2% 5.6% Net income 9,600 9,800
Volvo Car Group Results Presentation January – December 2019
FINANCIAL PERFORMANCE IN LINE WITH GUIDANCE
2019 FINANCIAL HIGHLIGHTS
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Volvo Car Group Results Presentation January – December 2019
Other Revenue 2018 10,670 Volume, sales mix and pricing 252,653
Sales of licenses 8,533 Foreign exchange rates 3,155 Revenue 2019 274,117 MSEK 21,464 +8.5% 15% 48% 22% 16%
SOLIDLY OUTGROWING THE OVERALL MARKET ACROSS ALL REGIONS
2019 REVENUE GROWTH COMPOSITION (MSEK)
US Europe China Other
GLOBALLY BALANCED REVENUE DISTRIBUTION
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Key objectives
variable and fixed costs
2019 activities Cost efficiency measures are targeting to lower fixed cost run rate in H1 2020 by SEK 2bn through
Volvo Car Group Results Presentation January – December 2019
Achieved by December 31 2019 1.8 Other Employees
ONGOING COST EFFICIENCY MEASURES
TARGETING A LOWER FIXED COST BASE RUN RATE COST REDUCTION (BNSEK)
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Volvo Car Group Results Presentation January – December 2019
21,212 24,869 25,202 20,364 46,414 45,233
4% US Europe 75% 19% China 2% Other
IMPROVED HEAD COUNT EFFICIENCY
2019 FTE* END OF PERIOD FULL TIME EMPLOYEES DISTRIBUTION BY REGION
Rest of Europe Sweden 26,800 5,109 1,973 33,882 Belgium
Blue collar White collar
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*FTE includes both employees and agency personnel
45,233
December 2018 December 2019 Average FTE* for the year 45,871 +0.2% 45,965 Produced cars 669k +5.5% 707k
Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary
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Sustainable actions
Volvo Car Group Results Presentation January – December 2019
865 14,303 1,308 EBIT 2018
Volume, sales mix and pricing
Sale of licenses Foreign exchange rates Other EBIT 2019 Government grants
14,185
MSEK 118 0.8%
5.6% 5.2%
ROBUST EBIT DRIVEN BY VOLUME AND PRODUCT MIX
2019 EBIT GROWTH (MSEK)
5.2%
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary
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Sustainable actions
Volvo Car Group Results Presentation January – December 2019
ASSETS
(MSEK)
DECEMBER 2019 DECEMBER 2018
Intangible assets 32,790 29,630 PPE 69,740 61,210 Operating leases 3,240 2,520 Investments 7,410 7,000 Deferred taxes and other non-current assets 10,870 9,810
Total non-current assets
124,050 110,170 Inventories 38,910 35,160 Accounts receivable 13,240 13,700 Current tax assets and other current assets 9,830 10,450 Marketable securities and Cash and cash equivalents 55,530 41,750
Total current assets
117,510 101,060
TOTAL ASSETS
241,560 211,230
EQUITY AND LIABILITIES
(MSEK)
DECEMBER 2019 DECEMBER 2018 Total equity
63,650 61,250 Provisions for post-employment benefits 12,580 8,430 Bonds and Liabilities to credit institutions 26,130 21,470 Other interest bearing liabilities 5,080
18,390 16,670
Total non-current liabilities
62,180 46,570 Accounts payable 44,880 43,630 Liabilities to credit institutions 4,110 2,180 Other interest bearing liabilities 1,070
65,670 57,600
Total current liabilities
115,730 103,410
TOTAL EQUITY & LIABILITIES
241,560 211,230
STRONG CONSOLIDATED BALANCE SHEET
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary
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Sustainable actions
Volvo Car Group Results Presentation January – December 2019
IMPROVED EBITDA AND WORKING CAPITAL DRIVE STRONG CASH FLOW GENERATION IN 2019
2019 CONDENSED CASH FLOW
* Change in inventories, accounts receivable and accounts payable
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(MSEK)
2019 2018
EBITDA 29,851 27,398 Cash flow from other operating activities
Adjustments
68 Net working capital *
Other working capital 10,319 6,005 Cash flow from operating activities 32,374 26,765 Investments in tangible assets
Investments in intangible assets
Cash flow from other investing activities 182
Total operating and investing cash flow 11,573 4,705 Net cash flow from interest bearing liabilities and bonds 4,673
Investments in marketable securities
2,558 Dividends
Other
1,033 Cash flow from financing activities
Total cash flow for the period 10,742 3,962
2 4 6 8 10 12 14
1,000 2,000 3,000 4,000 2018
2.1% 2.3%
2015 3,608 2016
2017
2019
3,740
254 69,108 13,330 1,580 13,593 40,170 51,997 2019 December Liquidity 2018 December Liquidity Financing Other** Investments EBITDA 55,080
3,518 Net working capital*
29,851 2,926 Undrawn credit facilities Marketable securities Cash
Volvo Car Group Results Presentation January – December 2019
* Change in inventories, accounts receivable and accounts payable ** Interest, tax and changes in other items
% of Revenue Net working capital
FREE CASH FLOW AMOUNTING TO 11.6 BN SEK
2019 LIQUIDITY (MSEK) CHANGE IN NET WORKING CAPITAL (MSEK)
MSEK 11,573
18
10.0% 8.3%
2017 2014 2015
8.7%
2016
10.8% 12.3%
11.8 17.0 2018
7.7%
2019 13.8 4.7 13.9 19.3 25.7 20.9 21.0 13.1 8.6 5.2 9.2 6.2 8.7 13.6 7.3 9.2 Intangible investments % of Revenue Tangible investments
Volvo Car Group Results Presentation January – December 2019
2 4 6 8 10 12 14 1 2 3 4 5 6 7 8 9 10 11 12
3.6%
2014 2019
5.3%
2017
5.9%
2015
5.7%
2016
4.3%
2018
4.2%
7.2 9.5 10.2 10.2 10.9 11.4 % of Revenue R&D expenses
BUILDING THE FUTURE THROUGH FOCUSED AND CONTROLLED INVESTMENTS
2019 ANNUAL CAPITAL EXPENDITURE (BN SEK) 2019 RESEARCH AND DEVELOPMENT EXPENSES (BN SEK)
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4,100
5,200 3,000 2,000 6,200 5,200
200 3,500
2,400
2023 52,000 13,600 6,650 3,450 Liquidity December 31 2019
450
2020 2021
450
2022 5,850 2,450
450
2024
650
2025 2026 69,100 7,600
Volvo Car Group Results Presentation January – December 2019
Undrawn credit facilities Bonds Cash & cash equivalents Marketable securities Loans 30,300
STRONG NET CASH POSITION OF SEK 25.2BN SUFFICIENTLY COVERING UPCOMING MATURITIES
2019 MATURITY PROFILE AND SPLIT (MSEK)
28% 72% Loans Bonds Net cash 25,200
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary
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Sustainable actions
(MSEK)
Q4 2019 Q4 2018 Change (%) Revenue 79,200 73,000 8.4 Cost of sales
8.5 Gross income 15,100 14,000 8.1 Gross margin 19.1 19.2 Operating income (EBIT) 5,300 4,500 17.5 EBIT margin 6.7 6.2 Net income 3,800 3,100 24.0
Volvo Car Group Results Presentation January – December 2019
STRONG REVENUE GROWTH AND EBIT RECOVERY RESULTING FROM BETTER MIX AND IMPROVED EFFICIENCIES IN QUARTER 4 2019
QUARTER 4 2019 FINANCIAL HIGHLIGHTS
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Volvo Car Group Results Presentation January – December 2019
3,545 2,690 2,125 Volume, sales mix and pricing Revenue Q4 2019 Revenue Q4 2018
Sales of licenses Foreign exchange rates Other 73,025 79,195 MSEK 6,170 8.4% 15% 15% 49% 21% Europe US Other China
STRONG REVENUE GROWTH DRIVEN BY VOLUME AND MIX IN QUARTER 4 2019
QUARTER 4 REVENUE GROWTH COMPOSITION (MSEK)
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GLOBALLY BALANCED REVENUE DISTRIBUTION
Volvo Car Group Results Presentation January – December 2019
510 150 Other Government grants 1,267 EBIT Q4 2019
Sale of licenses
Volume, sales mix and pricing Foreign exchange rates 4,505 5,292 EBIT Q4 2018
MSEK 787 17.5%
6.2% 6.7%
EBIT RECOVERY DRIVEN BY VOLUME & PRODUCT MIX ALONG WITH COST & OPERATIONAL EFFICIENCIES
QUARTER 4 2019 EBIT GROWTH (MSEK)
6.7%
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Volvo Car Group Results Presentation January – December 2019
IMPROVED EBITDA AND WORKING CAPITAL DRIVE STRONG CASH FLOW GENERATION IN QUARTER 4 2019
QUARTER 4 2019 CONDENSED CASH FLOW
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* Change in inventories, accounts receivable and accounts payable
(MSEK)
Q4 2019 Q4 2018
EBITDA 9,338 7,860 Cash flow from other operating activities
Adjustments
2,386 Net working capital * 9,275 4,189 Other working capital 2,125 2,764 Cash flow from operating activities 18,075 16,076 Investments in tangible assets
Investments in intangible assets
Cash flow from other investing activities 164
Total operating and investing cash flow 12,356 10,486 Net cash flow from interest bearing liabilities and bonds
Investments in marketable securities
Dividends
Cash flow from financing activities
Total cash flow for the period 7,859 8,557
3,518 2019 Q4 Liquidity 13,905
51,997 Financing Other**
9,275 45,060 2019 Q3 Liquidity 63,165 69,108 EBITDA Working capital*
Investments 4,200 9,338 13,593 Undrawn credit facilities Marketable securities Cash
Volvo Car Group Results Presentation January – December 2019
* Change in inventories, accounts receivable and accounts payable ** Interest, tax and changes in other items
FREE CASH FLOW REACHING HISTORICAL LEVEL IN QUARTER 4
QUARTER 4 2019 LIQUIDITY (MSEK)
MSEK 12,356
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
Full year 2019 global sales & financial performance EBIT Balance sheet Cash flow Quarter 4 2019 Financial summary
27
Sustainable actions
Volvo Car Group Results Presentation January – December 2019
Revenue growth
driven by volume growth and mix
Record EBIT
product mix, combined with cost and operational efficiencies
Cost optimisation measures
successfully implemented achieving 1.8bn lower cost run rate
Increased profit and margin improvement
in the 2nd half of the year,
Historically strong cash flow
cash position of 25.2bn
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Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
29
Sustainable actions
YYYY.MM.DD Presentation title, Full name, Security Class: Proprietary 30 30
Supply chain Operations Car 40 % reduction of carbon footprint Every model has plug-in version – 20% of sales Recharge– chargeable electric cars XC40-first all electric car We plan to meet new EU CO2 emission target
SUSTAINABLE ACTIONS
Volvo Car Group Results Presentation January – December 2019
Financial review
Outlook
2019 Highlights
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Sustainable actions
Volvo Car Group Results Presentation January – December 2019
OUTLOOK 2020
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Sales and revenue growth Increased profit Similar level
Continued strong cash flow
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Volvo Car Group Results Presentation January – December 2019
A YEAR OF STRONG PERFORMANCE AND TRANSFORMATION
Strong growth and market share gains Financial targets achieved Milestone in electrification and connectivity
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Volvo Car Group Results Presentation January – December 2019
APPENDIX
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Volvo Car Group Results Presentation January – December 2019
SEK DEPRECIATION DURING 2019 VS 2018
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GBP 6,3% EUR USD CNY 2,0% PLN JPY NOK CHF KRW RUB 9,5% 2,7% 3,9% 4,1% 8,1% 0,4% 2,1% 5,3% Change %
FINANCIAL DEVELOPMENT
Volvo Car Group Results Presentation January – December 2019
68 101 98 99 64 69 198 185 161 168 170 273 359 445 203 254 2019 642 42 2015 2016 705 2017 2018 503 535 572 +8.8% +9.8% Other SUV Estate Sedan
RETAIL SALES
164 181 209 253 274 2018 2017 2015 2016 2019 +13.7% +8.3%
REVENUE
2 4 6 8 10 12 14 5 10 15 20 25 30 2019 27.4 2015 26.2 2016 2017 16.0 2018 21.5 29.8 EBITDA EBITDA margin, %
EBITDA
23 27 25 27 32 2016 2015 2017 2018 2019
OPERATING CASH FLOW
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