Volvo Ab Class A · OMXSTO:VOLV_A
Volvo Ab Class A — AB Volvo — Investor Day (June 2007)
11 slides from Volvo Ab Class A's investor day presentation, Jun 19, 2007
Slide 1: Capital Market Day, Washington, June 19, 2007
Capital Market Day Washington June 19, 2007 DC January 12, 2007 Pär Östberg LeifPresident Senior Vice Johansson and CFO President and CEO
Slide 2: Agenda
1 Capital Market Day 2007 Agenda • Cash flow • Cash deployment • Funding AB Volvo 20070619 Pär Östberg
Slide 3: Continued strong cash flow
2 Capital Market Day 2007 Continued strong cash flow Cash Flow from operating activities – Industrial Operations (before investments) 25 14% 12% 20 10% EBITDA margin SEK bn 15 8% 10 6% 4% 5 2% 0 0% 2002 2003 2004 2005 2006 Q1 2006-Q1 2007 Op Cash Flow EBITDA margin • Strong sales growth > 10% target
Slide 4: Clear strategy for cash deployment
3 Capital Market Day 2007 Clear strategy for cash deployment 1) Investments 2) Value accretive acquisitions Samsung, Renault Trucks, Mack Trucks, Nissan Diesel, Lingong and Ingersoll Rand Road Development 3) Strong and stable ordinary dividend 10 year CAGR 19% 4) Excess cash returned to shareholders
Slide 5: Recent liquidity events
4 Capital Market Day 2007 Recent liquidity events Q1 • Nissan Diesel: SEK 7.4 bn • Customer Finance: SEK 0.8 bn Q2 • Dividend and redemption: SEK 20.2 bn • Ingersoll Rand road division: SEK 8.8 bn Onwards • Investments in capacity and technology • Customer Finance expansion AB Volvo 20070619 Pär Öst
Slide 6: New funding strategy in place
5 Capital Market Day 2007 New funding strategy in place • Borrowing requirements Q1-07 • Industrial Operations: ~SEK 23 bn • Customer Finance: ~SEK 70 bn • Average maturities • Industrial Operations 6 years • Customer Finance 1.4 years • Diversification • Strong and stable credit rating AB Volvo 200
Slide 7: Funding sources secured
6 Capital Market Day 2007 Funding sources secured • Cash in Q1-07: SEK 39 bn • Public debt programmes: SEK 115 bn • EMTN • MTN: SEK and AUD • CP: USD, EUR, SEK, CAD and AUD • Loan facilities and agreements: SEK 35 bn • Undrawn long term committed credit facilities: ~SEK 25 bn • EUR1.45bn maturing 20
Slide 8: Key transactions 2007
7 Capital Market Day 2007 Key transactions 2007 • 1.0 bn EUR 10 yr Bond • 5.1 bn SEK 7yr Bond • 2.1 bn SEK 10 yr Bond • 100 bn JPY Bridge facility AB Volvo 20070619 Pär Östberg
Slide 9: Efficient capital structure
8 Capital Market Day 2007 Efficient capital structure • Increased leverage Industrial operation (SEK bn) 2006 Q1- 2007 Financial assets 43.2 38.9 • Debt / equity <40% Pensions and others -8.7 -10.3 Interest-bearing debt -11.5 -23.1 • Customer Finance equity ratio 8% Financial debt -20.1 -33.4 • Cash
Slide 10: The new financial strategy
9 Capital Market Day 2007 The new financial strategy Shareholders Debt providers Strong credit rating Long-term attractive and Financial strength stable total return Financial key ratios to balance these objectives and flexibility Financial Targets Financial Restriction Sales growth >10% Net debt /
Slide 11: Summary
10 Capital Market Day 2007 Summary • Cash flow in focus • Clear strategy for cash deployment • Efficient capital structure and strong credit metrics AB Volvo 20070619 Pär Östberg