Carla De Geyseleer, Per Ansgar, Therese Jandér 2020-07-21
Volvo Cars 2020 First Half Year Update Carla De Geyseleer, Per - - PowerPoint PPT Presentation
Volvo Cars 2020 First Half Year Update Carla De Geyseleer, Per - - PowerPoint PPT Presentation
Volvo Cars 2020 First Half Year Update Carla De Geyseleer, Per Ansgar, Therese Jandr 2020-07-21 Disclaimer By accepting this document, the person to whom it is from or in connection with the use of or reliance on this provided (the
Disclaimer
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
- ther written or oral information made available by Volvo
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- pinions expressed. This document speaks as of the date
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- r any security, credit, currency, rate or other market or
economic measure. Nor does this document constitute a recommendation with respect to any securities.
2020-07-21 Volvo Cars 2020 First Half Year Update 2
2020-07-21 Volvo Cars 2020 First Half Year Update 3
1
First Half Year 2020
3
Outlook
2
Financial Review
Market share gains despite Covid-19 impact
- Proactive and pragmatic
actions
- China returning to growth in
April and US in June
- Sales in Europe show clear
signs of recovery
- Market share gains in all
regions Accelerated transformation
- Share of PHEV sales doubled
- XC40 Recharge production
starts in H2
- Polestar 2 reaching markets
- Online sales initiatives
- Waymo collaboration
Financial performance
- Revenue and EBIT reduction
from volume decline
- Continued strong mix
- Cost efficiencies intensified
- Liquidity remained strong
2020-07-21 Volvo Cars 2020 First Half Year Update 4
2020-07-21 Volvo Cars 2020 First Half Year Update 5
1
First Half Year 2020
Half Year 2020 Financial Performance
EBIT Balance Sheet Cash flow Financial Summary
3
Outlook
2
Financial Review
2020 H1 KEY FIGURES
COVID-19 IMPACTED FINANCIAL PERFORMANCE
Revenue
(MSEK)
Retail sales
(K UNITS)
EBIT / margin
(MSEK/%) 341 270 2019 H1 2020 H1
- 20.8%
130,095 111,759 2020 H1 2019 H1
- 14.1%
5,519
- 989
2019 H1 2020 H1
- 117.9%
Cash flow
from operating and investing activities (MSEK)
- 2,759
- 12,803
2019 H1 2020 H1
- 364.0%
4.2%
- 0.9%
2020-07-21 Volvo Cars 2020 First Half Year Update 6
GROWTH TRAJECTORY AFFECTED ELECTRIFICATION ACCELERATED
2020 H1 SALES BY MARKET, CARLINE AND POWERTRAIN
70 70 77 95 101 91 70 83 82 98 108 101 82 91 114 131 155 153 282 291 299 318 341 290 2019 LTM 2018 2015 2016 2017 504 535 572 642 705 635 CAGR +4.7%
- 9.9%
XC V S US Europe China Other
18 19 44 47 57 Sweden Italy UK Germany BeLux*
Model range distribution H1 PHEV sales (k units)
* BeLux: Belgium & Luxembourg
H1 2019 H1 2020 21 38 +79.8% Other US Europe China 69% 14% 17%
2020-07-21 Volvo Cars 2020 First Half Year Update 7
FINANCIAL PERFORMANCE
2020-07-21 8 Volvo Cars 2020 First Half Year Update
2020 H1 FINANCIAL HIGHLIGHTS
(MSEK)
2020 H1 2019 H1 Change (%) Revenue 111,759 130,095
- 14
Cost of sales
- 94,480
- 105,450
- 10
Gross income 17,279 24,645
- 31
Gross margin 15.5% 18.9% Operating income (EBIT)
- 989
5,519
- 118
EBIT margin
- 0.9%
4.2% Net income
- 1,171
3,398
- 134
REVENUE DECLINE LESS THAN VOLUME
2020 H1 REVENUE COMPOSITION (MSEK) REVENUE DISTRIBUTION BY MAIN MARKETS
1,070 111,759 Revenue 2019 H1 Used cars, P&A* and
- thers
- 16,860
Volume, sales mix and pricing Foreign exchange rates
- 2,546
Revenue 2020 H1 130,095 MSEK -18,336
- 14.1%
49% 22% 15% 14% Other Europe US China
* P&A: parts & accessories
2020-07-21 Volvo Cars 2020 First Half Year Update 9
➢
Existing initiatives in fixed and variable cost reduction intensified
➢
Notice of 1,300 employees in Sweden
3.2 Structural Efficiencies
COST EFFICIENCY MEASURES AND STRUCTURAL TRANSFORMATION COVID-19 MITIGATION MEASURES
➢
Governmental support for “technical unemployment” in Q2
➢
Plants balanced their manning costs to meet 20% reduced production in Q2
➢
Strengthened liquidity with SEK 14.7bn credit facilities (of which SEK 13.2 bn incremental)
Cost reduction H1 2020 vs H1 2019 (BNSEK)
MITIGATING MEASURES AND DISCIPLINED COST EFFICIENCIES
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IMPROVED HEAD COUNT EFFICIENCY
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2020 H1 FTE* END OF PERIOD DISTRIBUTION BY REGION
Jun-19 Jun-20 Dec-18
- 455
- 736
Dec-19 45,233
- 726
46,414 45,959 44,497
- 1,917
21% 72% Europe China 4% US 3% Other
*FTE: number of full time equivalents, includes both employees and agency personnel No impact of technical unemployment included
44,497
2020-07-21 Volvo Cars 2020 First Half Year Update 12
1
First Half Year 2020
Half Year 2020 Financial Performance
EBIT
Balance Sheet Cash flow Financial Summary
3
Outlook
2
Financial Review
EBIT MAINLY AFFECTED BY VOLUME DECREASE
2020 H1 EBIT (MSEK)
- 989
- 1,320
- 1,679
5,519 Volume, sales mix and pricing* EBIT 2019 H1
- 6,020
Foreign exchange rates Efficiencies and other EBIT 2020 H1 Governmental support 1,074 1,437 Non-recurring** MSEK -6,508
- 117.9%
*New car sales ** Including recall and restructuring
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2020-07-21 Volvo Cars 2020 First Half Year Update 14
1
First Half Year 2020
Half Year 2020 Financial Performance EBIT
Balance Sheet
Cash flow Financial Summary
3
Outlook
2
Financial Review
BALANCE SHEET REMAINS STRONG
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ASSETS
(MSEK)
JUNE 2020 DECEMBER 2019 Intangible assets 33,960 32,790 PPE 67,700 69,740 Operating leases 3,720 3,240 Investments in JVs and associates 6,500 7,410 Deferred taxes and other non-current assets 12,780 10,870 Total non-current assets 124,660 124,050 Inventories 42,130 38,910 Accounts receivable 14,300 13,240 Current tax assets and other current assets 10,700 9,830 Marketable securities, Cash and cash equivalents 43,810 55,530 Total current assets 110,940 117,510 TOTAL ASSETS 235,600 241,560 EQUITY AND LIABILITIES
(MSEK)
JUNE 2020 DECEMBER 2019 Total equity 62,880 63,650 Provisions for post-employment benefits 13,820 12,580 Bonds and Liabilities to credit institutions 23,920 26,130 Other interest bearing liabilities 4,960 5,080 Other non-current liabilities and provisions 18,830 18,390 Total non-current liabilities 61,530 62,180 Accounts payable 37,970 44,880 Bonds and liabilities to credit institutions 8,040 4,110 Other interest bearing liabilities 1,160 1,070 Other current liabilities and provisions 64,020 65,670 Total current liabilities 111,190 115,730 TOTAL EQUITY & LIABILITIES 235,600 241,560
2020-07-21 Volvo Cars 2020 First Half Year Update 16
1
First Half Year 2020
Half Year 2020 Financial Performance EBIT Balance Sheet
Cash flow
Financial Summary
3
Outlook
2
Financial Review
COVID-19 AMPLIFIED CASH FLOW SEASONALITY
2020-07-21 Volvo Cars 2020 First Half Year Update 17 * Change in inventories, accounts receivable and accounts payable
(MSEK)
2020 H1 2019 H1 EBITDA 6,819 13,300 Cash flow from other operating activities
- 2,420
- 3,133
Adjustments 3,243
- 1,608
Net working capital *
- 11,252
- 7,455
Other working capital 137 6,259 Cash flow from operating activities
- 3,473
7,363 Investments in tangible assets
- 5,108
- 5,998
Investments in intangible assets
- 4,218
- 4,239
Cash flow from other investing activities
- 4
115 Total operating and investing cash flow
- 12,803
- 2,759
Net cash flow from interest bearing liabilities and bonds 971 6,909 Investments in marketable securities 3,065
- 2,705
Dividends
- 2894
Other 151 255 Cash flow from financing activities 4,187 1,565 Total cash flow for the period
- 8,616
- 1,194
BUILDING THE FUTURE THROUGH FOCUSED AND CONTROLLED INVESTMENTS
ANNUAL CAPITAL EXPENDITURE (BNSEK) ANNUAL RESEARCH AND DEVELOPMENT EXPENSES (BNSEK)
9.2 13.1 17.0 13.6 11.8 10.9 4.7 6.2 8.7 7.3 9.2 9.2
7.9% 10.8% 8.7%
2019 2016 2015
12.3%
2017
8.3%
2018
7.7%
25.7 2020 June LTM 13.9 19.3 20.9 21.0 20.1 % of Revenue Tangible investments Intangible investments 9.5 10.2 10.2 10.9 11.4 11.5 2 4 6 8 10 12 14 2 4 6 8 10 12 2015 2017
5.9% 5.7%
2018 2019 2016
3.6% 4.3% 4.2% 4.5%
2020 June LTM R&D expenses % of Revenue
2020-07-21 Volvo Cars 2020 First Half Year Update 18
LIQUIDITY REMAINS STRONG AT 68 BNSEK
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2020 H1 LIQUIDITY (MSEK) CHANGE IN NET WORKING CAPITAL (MSEK)
3,740
- 4,385
- 1,961
- 403
- 4,200
2018
- 2.1% -0.8%
2.1%
- 0.2%
2016 2017 2019
- 1.6%
LTM 2020 June 6,819 867 4,187 524 13,593 2020 June Liquidity 3,518 51,997 2019 December Liquidity Investments 68,094 Financing Other** 24,282 43,288 Net working capital* EBITDA
- 11,252
69,108
- 9,330
Cash Undrawn credit facilities Marketable securities % of Revenue Net working capital
* Change in inventories, accounts receivable and accounts payable ** Interest, tax and changes in other items
MSEK
- 12,896
STRONG NET CASH POSITION
2020-07-21 Volvo Cars 2020 First Half Year Update 20
2020 MATURITY PROFILE AND SPLIT (MSEK)
1,800
5,200 3,000 2,000 6,200 5,200
200
2,400 4,400 450
43,300 500 24,300
Liquidity June 30 2020 2020 2021
7,400
2022 2023
450
2024
2,450
650
2025 2026
68,100 7,600 6,650 5,850 Bonds Undrawn credit facilities Marketable securities Loans Cash & cash equivalents
32,000 32% 68% Loans Bonds Net cash 11,800
2020-07-21 Volvo Cars 2020 First Half Year Update 21
1
First Half Year 2020
Half Year 2020 Financial Performance EBIT Balance Sheet Cash flow
Financial Summary
3
Outlook
2
Financial Review
FINANCIAL SUMMARY
Covid-19 impact
volume, revenue and EBIT decline
Market share gains
in all regions with strong sales mix
PHEV sales increase
with a doubling share of sales reaching CO2-targets
Disciplined cost efficiencies
and structural transformation showing effect
Strong liquidity
maintained on 2019 level with a net cash position of 12bn
2020-07-21 Volvo Cars 2020 First Half Year Update 22
2020-07-21 Volvo Cars 2020 First Half Year Update 23
1
First Half Year 2020
3
Outlook
2
Financial Review
OUTLOOK H2 2020
Ambition to return to sales volume, profit and cash flow similar to H2 2019. Committed to continue investments in new technologies and products
2020-07-21 Volvo Cars 2020 First Half Year Update 24
Thank You.
2020-07-21 Volvo Cars 2020 First Half Year Update 25
Appendix
2020-07-21 Volvo Cars 2020 First Half Year Update 26
FINANCIAL DEVELOPMENT
2020-07-21 Volvo Cars 2020 First Half Year Update 27
101 98 99 198 185 161 116 170 273 359 445 424 254 LTM 69 642 2017 42 2019 2016 2018 572 95 535 705 635 +4.4%
- 9.9%
SUV Sedan Estate Other 181 209 253 274 256 2019 2016 2017 2018 LTM +9.1%
- 6.6%
26.2 27.4 29.9 23.4 5 10 15 10 20 30 12.5% 2018 10.8% 12.1% 2016 2017 10.9% 2019 9.1% LTM 21.5 EBITDA margin, % EBITDA 27 25 27 32 22 2017 2016 2018 2019 LTM
RETAIL SALES REVENUE OPERATING CASH FLOW EBITDA
BUSINESS RECOVERY
2020-07-21 28
2020 MONTHLY SALES* BY MARKET AND PRODUCTION RESTART (K UNITS) EUROPE CHINA US
23 23 24 9 15 28 Apr Jan Mar Feb Jun May 10 1 10 15 15 15 Jun Jan Mar Feb May Apr 6 8 6 4 10 10 Jun May Feb Jan Apr Mar
* Sales: Volvo Cars retail sales
Volvo Cars 2020 First Half Year Update