Volvo Car AB Class B · OMXSTO:VOLCAR_B
Volvo Car AB Class B — Debt Investor Presentation (May 2022)
40 slides from Volvo Car AB Class B's debt investor presentation, May 2022
Slide 1: Green Bond Investor Presentation
Volvo Car Group Green Bond Investor Presentation Per Ansgar, Deputy CFO Alexander Petrofski, Head of Investor Relations Anders Kärrberg, Head of Global Sustainability Daniel Aspenberg, Head of Treasury
Slide 2: Disclaimer
Disclaimer By accessing 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 (publ) (together with its subsidiaries, “Volvo Cars”). The information contained in t
Slide 3: Introduction to Volvo Cars
1 2 3 4 5 Introduction to Full Sustainability Green Funding Volvo Cars Electrification is key Financing Framework
Slide 4: Who we are
Who we are Purpose & values FREEDOM TO MOVE IN A PERSONAL, SUSTAINABLE AND SAFE WAY PERSONAL S U S TA I N A B L E SAFE We commit to developing and building the We commit to the highest standard of We commit to pioneering the safest, most most personal solutions in mobility: to sustainability in mobi
Slide 5: Global Presence
Global Presence 1.2 MN CARS1 Focused and well-invested HQ/R&D/Design IN CAPACITY Production +100 SALES IN COUNTRIES 2,300 RETAIL PARTNERS 42,000 EMPLOYEES GEOGRAPHICAL REVENUE SPLIT AMERICAS EMEA APAC 4% 3% ~2,000 employees ~31,000 employees ~9,000 employees 7% China USA Sweden China US 8% 35% • Mah
Slide 6: Current portfolio supporting our electrification strategy
Current portfolio supporting our electrification strategy SUV / XC WAGON / V SEDAN / S CROSSOVER /C All models available as XC90 V90 S90 PHEVs/BEVs 90 XC60 V60 S60 All models 60 electrified since 2020 XC40 C40 40 Newest addition the fully electric C40 in 2021 71% 14% 15% 0% OF SALES* OF SALES* OF SA
Slide 7: Mid-decade business ambitions
Mid-decade business ambitions Fast-growing premium brand 50% FULLY ELECTRIC SALES 1.2M 8-10% 40% CO2 REDUCTION UNITS SOLD EBIT MARGIN PER CAR 50% ONLINE SALES 7 7
Slide 8: Our strategy
Our strategy Looking at the next decade 1 2 3 4 5 + FAST GROWING FASTEST STRATEGIC FULL ELECTRIFICATION A LEADER IN NEW DIRECT CONSUMER PREMIUM BRAND TRANSFORMER – WAY AFFILIATES TECHNOLOGY RELATIONS OF WORKING 88
Slide 9: Strong track record
Strong track record Retail sales (K UNITS) +5.7% SUV +11.0% 705 661 699 Estate 642 572 445 Sedan 273 359 469 525 198 185 161 Coupe 94 77 101 98 99 98 96 1 2017 2018 2019 2020 2021 Revenue (BN SEK) +7.2% +14.5% 253 274 263 282 209 2017 2018 2019 2020 2021 EBITDA (BN SEK) 35 30 26 27 23 12,5% 10,8% 10
Slide 10: Continued investments
Capital expenditure (BN SEK) 10 Intangible Investments Tangible Investments % of Revenue Continued investments 12 7 9 9 13% 8% 8% 8% 7% 17 14 12 10 11 2017 2018 2019 2020 2021 Research & Development (BN SEK) % of Revenue 13,1 10,9 11,4 11,4 10,2 4,9% 4,3% 4,3% 4,7% 4,2% 2017 2018 2019 2020 2021 Oper
Slide 11: Developments Q1 2022
Developments Q1 2022 Retail sales Revenue EBIT / margin BEV & PHEV CO2 reduction per car (k UNITS) (bn SEK) (bn SEK/ %) (k UNITS/ % Share of total retail sales) (tonne/car) +8% BEV PHEV 55 54 -20% 74 60 20% 52 69 50 -1,1% 48 186 8.4 50 10% -6,2% -9,5% -13,4% 148 40 0% 6.0 5.9 5.5 30 38 -10% - 40% 43
Slide 12: Electrification is key
1 2 3 4 5 Introduction to Full Sustainability Green Funding Volvo Cars Electrification is key Financing Framework
Slide 13: Volvo Cars' full electrification strategy
Volvo Cars’ full electrification strategy Leverage strong Reduce ICE legacy Control value-chain of electrified track record exposure to fully focus sustainable battery and product plan with on electrification technology and secure full electric focus supply Dedicated EV-only Aurobay architecture Vol
Slide 14: 100% pure electric by 2030
100% pure electric by 2030 On a transitional journey 100% 75 FULLY ELECTRIC 34% 34% SALES 25% 26% 50 24% 22% 15% 13% 17% 50% FULLY 8% ELECTRIC 25 6% SALES 3% 4% 2% 2% FY 2021 3.7% FY 2020 FULLY ELECTRIC 0.7% SALES FULLY ELECTRIC SALES 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Mid-decade 2030 2020 2020 2020 2020
Slide 15: Continued investments in electrification as the enablers
Continued investments in electrification as the enablers More than half share of investment today already dedicated to BEV Q1 2022 EV industrial infrastructure BEV Capacity • We have started to convert our production BEV NON-BEV COMMON system towards large scale BEV production. 57% 9% 34% • Dedicate
Slide 16: Preparing for 100% pure electric
Preparing for 100% pure electric Industrial infrastructure: examples of recent investments Gothenburg Torslanda Ghent Investing SEK 30BN, through Investing SEK 10BN in Torslanda Quadruple electric car debt/equity, in a new battery plant in preparation for the manufacturing in Ghent, Belgium manufact
Slide 17: Committed to sustainable battery production
Committed to sustainable battery production SOURCING STRATEGY AND ROADMAP RESPONSIBLE BATTERY STRATEGY • Global agreements in place ensuring flexibility & supply • Blockchain technology used for battery mineral supply chain • CO2 commitments secured from battery suppliers • Through Northvolt JV, bat
Slide 18: Sustainability
1 2 3 4 5 Introduction to Full Sustainability Green Funding Volvo Cars Electrification is key Financing Framework
Slide 19: Sustainability is key to our future success
Why? 1 Climate change – we must act Sustainability is key to our future success, 2 and we concentrate on three areas Meet growing regulatory demands 3 Meet consumer expectations 4 Climate Action Climate neutral company Circular Economy Circular business Responsible Business Leader in ethical & Attra
Slide 20: Climate action
Climate action CO2 EMISSION AMBITIONS TONNES (CO2/CAR) We aim to reduce overall emissions by 40% per car by mid-decade (base year 2018) through: 50 % Reduction in tailpipe emission 25 % Reduction in operational emissions 25 % Reduction in supply chain emissions Tailpipe Emissions Supply Chain Emissi
Slide 21: Circular economy
Circular economy We aim to be a circular business by 2040 – decoupling resource consumption from growth Circular • Developing sustainable business models Mid-decade ambition: design 25 % Recycled and bio-based plastics • Recycled/bio-based materials Component value Material value 40 % Recycled alumi
Slide 22: Responsible business
Responsible business We aim to be a recognised leader in ethical and responsible business Industry role model for global Put sustainability on a par with Sustainability criteria in debt Tackle corruption and people standards, equality quality and cost in procurement funding, investments and unethica
Slide 23: Developments in 2021
Developments in 2021 FAMILY BOND 24 80% weeks Pay 23
Slide 24: ESG ratings and key partnerships
ESG ratings and key partnerships Volvo Cars engage actively with several ESG rating agencies, since it Volvo Cars believes in the importance of engaging with other like- enables us to improve our performance. We are pleased that our minded companies and organisations to drive our own ratings have im
Slide 25: Sustainability governance and coordination
Sustainability at Volvo Cars is centrally governed and coordinated Board of Directors (BOD) Executive Management Team (EMT) Product Creation Board Commercial & Industrial Board Strategic Design Review Functional Global Sustainability Team Green Financing Management (GST) Committee (GFC) Teams Strate
Slide 26: Green Funding Framework
1 2 3 4 5 Introduction to Full Sustainability Green Funding Volvo Cars Electrification is key Financing Framework
Slide 27: Introduction to the Green Financing Framework
Introduction to the Green Financing Framework GREEN FINANCING FRAMEWORK SECOND PARTY OPINION • The Green Financing Framework aligns our sustainability strategy with • Green Financing Framework has received Dark Green shading by financing opportunities that lead to a positive impact on environment an
Slide 28: Use of proceeds
Use of proceeds Targeted allocation for the next bond R&D 30% Manufacturing 30% Refinancing (1 year look-back period) of which 100% R&D STRATEGIC PROJECTS 70% IN CLEAN TRANSPORTATION 70% Financing R&D Zero emission vehicles electric powertrain and platform technology Allocation of proceeds of the 20
Slide 29: Impact report of the 2020 Green Bond
Impact report of the 2020 Green Bond • Volvo Cars publishes its Green financing report as part of its Annual Report since 2020, providing information relating to the allocation and the impact associated with its green bond issuance. We will continue to do so also for the new Green bond. • The enviro
Slide 30: Financing
1 2 3 4 5 Introduction to Full Sustainability Green Funding Volvo Cars Electrification is key Financing Framework
Slide 31: Strong net cash and prudent maturity profile
Strong net cash and prudent maturity profile Maturity profile and split (BN SEK) 72.2 13.5 Net cash 33.1 7.3 25.6 6.9 20% 0.7 5.9 28% 5.3 Loans 0.7 0.1 51.4 4.5 Bonds 2.6 6.2 Green bond 0.6 5.2 5.2 2.0 0.5 52% Liquidity 2022 2023 2024 2025 2026 2027 March 2022 Undrawn credit facilities Cash & cash e
Slide 32: Ratings
Ratings BB+ Outlook Positive Ba1 Outlook Positive “Rating Action Overview “Credit Strengths 25th November 2021 10th December 2021 B » With its electric vehicle (EV) transformation plan, Sweden-based global carmaker Volvo Car » Strong brand identity with Volvo vehicles recognised for their safety AB
Slide 33: The offering
The offering ISSUER VOLVO CAR AB (PUBL) Guarantor Volvo Car Corporation Issuer Ratings BB+ Positive Outlook (S&P), Ba1 Positive Outlook (Moody’s) Issue Rating BB+ (S&P), Ba1 (Moody’s) Format Senior unsecured, RegS Bearer, New Global Notes Size EUR500m WNG Tenor [●] Coupon Type Fixed, Annual, ACT/ACT
Slide 34: Appendix
APPENDIX 34
Slide 35: Volvo Cars at a glance Q1 2022
Volvo Cars at a glance Q1 2022 148,295 SEK 74 BN 8% SEK 6BN SEK 33 BN -13.5% CO2 REDUCTION CARS SOLD REVENUE BEV SHARE EBIT NET CASH PER CAR (Baseline 2018) 35
Slide 36: Solid liquidity level
Solid liquidity level LIQUIDITY Q1 (BN SEK) 84 13 10 72 8 13 -9 -6 7 1 BN SEK -8 62 -14 51 Liquidity EBITDA Net working Other Investments Financing*** Liquidity December capital* working March 2021 capital** 2022 Undrawn credit facilities Marketable securities Cash * Change in inventories, accounts
Slide 37: Key Figures
Key Figures Full Year 2015 Full Year 2016 Full Year B 2017 Full year 2018 Full year 2019 Full year 2020 Full year 2021 Q1 2021 Q1 2022 Retail sales, units 503,127 534,332 571,577 642,253 705,452 661,713 698,693 185,698 148,295 Revenue, MSEK 160,515 178,586 208,646 252,653 274,117 262,833 282,045 68,
Slide 38: Assets (SEK m)
Assets (SEK m) Full Year 2015 Full Year 2016 Full Year 2017 Full year 2018 Full year 2019 Full year 2020 Full year 2021 Q1 2022 Non-current assets Intangible assets 22,834 25,368 29,157 29,626 32,786 37,168 43,840 47,351 Tangible assets3) 37,428 45,468 55,245 61,208 69,738 61,943 70,903 72,542 Asset
Slide 39: Equity & Liabilities (SEK m)
Equity & Liabilities (SEK m) Full Year 2015 Full Year 2016 Full Year 2017 Full year 2018 Full year 2019 Full year 2020 Full year 2021 Q1 2022 Equity Equity attributable to owners of the parent company 32,550 39,536 48,729 52,873 53,883 59,412 90,418 96,518 Non-controlling interests 2,085 3,774 5,931
Slide 40: Volvo Car Group
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