Volvo Car AB Class B · OMXSTO:VOLCAR_B
Volvo Car AB Class B — Q2 2019 Earnings Presentation
21 slides from Volvo Car AB Class B's earnings presentation, July 2019
Slide 1: Volvo Car Group Results Presentation Second Quarter 2019
VOLVO CAR GROUP RESULTS PRESENTATION SECOND QUARTER 2019 HANS OSCARSSON PER ANSGAR THERESE JANDÉR CHIEF FINACIAL OFFICER VP GROUP REPORTING HEAD OF INVESTOR RELATIONS
Slide 2: Disclaimer
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 doc
Slide 3: Operational Highlights Q2 2019
OPERATIONAL HIGHLIGHTS Q2 2019 XC40 in Luqiao • Capacity increase and benefit from local production • High demand has exceeded our expectations • Three car models on a single production line (CMA) Battery deal with Asian suppliers • Battery supply for future cars secured with CATL and LG Chem • Majo
Slide 4: Financial Highlights Q2 2019
FINANCIAL HIGHLIGHTS Q2 2019 Strong growth and market share gains Sales volume +5.4% Continued price pressure and additional tariffs Revenue +1.7% Operating income SEK 2.6bn Free cash flow MSEK 1,600 Cost actions taken Volvo Car Group Results Presentation January- June 2019 4
Slide 5: Global Sales Development Q2 2019
GLOBAL SALES DEVELOPMENT Q2 2019 GLOBAL +5.4% 179,506 Units EUROPE US CHINA +3.5% +1.9% 88,029 Units +15.7% 28,062 Units 37,855 Units OTHER +2.5% 25,560Units 5 Comparable period: Apr – Jun 2018 Volvo Car Group Results Presentation January- June 2019 Europe is defined as EU28 + EFTA
Slide 6: Q2 2019 Sales Distribution
Q2 2019 SALES DISTRIBUTION Retail sales by carline Retail sales by market +5% +5% 179,506 179,506 170,232 170,232 13% 14% 16% 15% 16% 26% 16% 29% 21% 19% 61% 55% 49% 50% Q2 2018 Q2 2019 Q2 2018 Q2 2019 S V XC Other US China Europe Volvo Car Group Results Presentation January- June 2019 6
Slide 7: Financials
FINANCIALS Volvo Car Group Results Presentation January- June 2019 7
Slide 8: Key Financial Developments Q2 and H1 2019
KEY FINANCIAL DEVELOPMENTS Q2 AND H1 2019 Retail sales (units) Net revenue (MSEK) Capex (MSEK) +7% +6% -1% +5% 317,600 340,800 +2% 122,900 130,100 -4% 11,200 11,100 170,200 179,500 66,000 67,200 5,700 5,500 Q218 Q219 H118 H119 Q218 Q219 H118 H119 Q218 Q219 H118 H119 EBIT (MSEK) Net income (MSEK) Fre
Slide 9: Net Revenue and EBIT Walk Q2 2019
NET REVENUE AND EBIT WALK Q2 2019 Net revenue (MSEK) 1,500 67,200 66,000 1,700 600 • Revenue increase mainly driven -2,600 by China, UK and Germany • Positive volume mainly driven Q2 2018 Volume, sales Sales of Foreign Other Q2 2019 mix and pricing licenses exchange rates by XC40 EBIT (MSEK) • Incre
Slide 10: Net Revenue and EBIT Walk H1 2019
NET REVENUE AND EBIT WALK H1 2019 Net revenue (MSEK) 4,000 2,000 130,100 122,900 300 900 • Revenue increase mainly driven by China, UK and Germany • Positive volume and sales mix mainly driven by XC40 H1 2018 Volume, sales Sales of Foreign Other H1 2019 mix and pricing licences exchange rates • Incr
Slide 11: Cash Flow Movements Q2 2019
CASH FLOW MOVEMENTS Q2 2019 • Seasonal working capital MSEK changes, including: 58,200 Free cash flow MSEK 1,600 • Higher inventory due to 51,300 13,700 sales growth and 13,500 6,500 3,500 expanding business 3,600 4,200 • Higher receivables on the 2,700 -2,900 -5,500 back of sold licenses 40,300 • I
Slide 12: Cash Flow Movements H1 2019
CASH FLOW MOVEMENTS H1 2019 • Seasonal working capital MSEK Free cash flow MSEK -2,800 changes, including: 58,200 • Higher inventory due to 55,100 13,300 sales growth, expanding 13,300 2,500 13,700 business and change in -7,500 2,900 4,200 logistics flow 1,600 • Higher receivables on the -11,100 bac
Slide 13: Capex and R&D
CAPEX AND R&D Capex (SEKbn) R&D Expenses (SEKbn) 12.8% 13.5 26.7 8.5% 12.1 10.8% 8.7% 10.1% 22.1 22.1 10.2 10.2 9.7 9.5 8.5% 19.5 8.5 9.4 7.2 6.4 13.8 13.9 5.9% 5.7% 5.2% 4.9% 4.8% 5.2% 5.2 4.7 17.0 13.1 13.6 12.7 8.6 9.2 2014 2015 2016 2017 2018 LTM H1 2014 2015 2016 2017 2018 LTM H1 2019 2019 % of
Slide 14: Liquidity & Debt
LIQUIDITY & DEBT MSEK 58,200 Net cash position of SEK 12.5bn 13,700 (Q1 2019 SEK 11.9bn) 26,200 4,200 12,500 32,000 2,600 Undrawn Credit Facilities 40,300 Marketable Securities 29,400 Cash & Cash Equivalents Short-term Debt Long-term Debt Liquidity Debt Volvo Car Group Results Presentation January-
Slide 15: Amortization Schedule
AMORTIZATION SCHEDULE MSEK Funding by type 58,200 Loans 32% 7,800 7,500 1,100 2,500 5,700 400 68% 4,000 Bonds 3,400 400 2,400 6,400 5,300 400 5,300 1,200 3,000 2,000 200 2019 2019 2020 2021 2022 2023 2024 2025 2026 June 30 Liquidity Loans Bonds Volvo Car Group Results Presentation January- June 2019
Slide 16: Cost Reductions
COST REDUCTIONS Staff reduced by 750 people Cost reduction in bought services Planned actions to lower cost run rate by SEK 2bn Further actions will reduce costs into 2020 H1 2019 H2 2019 H1 2020 SEK 1bn SEK 1bn Volvo Car Group Results Presentation January- June 2019 16
Slide 17: 2019 H2 - Outlook
2019 H2 - OUTLOOK Continued growth in sales Continued pressure on margins Additional cost reductions of 1 + 1 billion SEK Strengthened profit vs H2 2018 Volvo Car Group Results Presentation January- June 2019 17
Slide 18: Q&A
Q&A Volvo Car Group Results Presentation January- June 2019 18
Slide 19: Longer Term Ambitions
Longer Term Ambitions Direct consumer relationships >5 million Subscription with recurring revenue 50% Pure electric cars 50% Autonomous cars 30% Naturally hedged global production Superior growth Premium OEM profitability Volvo Car Group Results Presentation January- June 2019 19
Slide 20: A New Structure for the Future
A NEW STRUCTURE FOR THE FUTURE The Volvo Car Group Strategic affiliates Care by VOLVO Wholesale business Direct consumer business Direct consumer business (50%) (30%) (50%) Strong brand with the Subscription services Solutions and services Spearheading Capturing new mass A market leading premium seg
Slide 21: Volvo Car Group Results Presentation January- June 2019
Volvo Car Group Results Presentation January- June 2019 21