Volvo 1998 Annual Report Download - page 19

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17
and MASA resulted in a negative cash flow of SEK 1.3 billion. Divestments of,
and investments in, shares and participations during the year yielded SEK 5.5
billion (10.7) in net liquid funds. The sale of Volvo’s remaining shareholding in
Pharmacia & Upjohn yielded SEK 6.5 billion, while the acquisition of shares in
the Henlys Group and the Deutz company reduced liquid funds by SEK 1.0
billion.
Financing and dividend
During the year Volvo Group Finance raised long-term loans totaling
SEK 5.2 billion, of which bond loans amounting to SEK 3.2 billion with matur-
ities ranging from 2 to 10 years, and other loans amounting to SEK 2.0 billion
with maturities of 2 to 15 years. Amortizations in 1999, which are being reported
as short-term loans, reduced long-term borrowing by SEK 2.7 billion. In other
respects, loans of the Volvo Group increased mainly through short-term
borrowing related to sales-financing operations. A dividend amounting to
SEK 2.2 billion was paid to AB Volvo’s shareholders during the year.
Change in liquid funds
The Group’s liquid funds, which decreased by SEK 0.4 billion in 1998,
amounted at year-end to SEK 20.2 billion (20.6), equal to 9% (11) of consoli-
dated sales.
Consolidated cash flow analysis, Volvo Group
SEK billion excluding sales financing Sales financing Total Volvo Group
1996 1997 1998 1996 1997 1998 1996 1997 1998
Profit for the year 12.5 10.5 8.3 0.0 (0.1) 0.3 12.5 10.4 8.6
Depreciation and other non cash-related items 4.2 5.2 6.6 0.9 2.0 3.2 5.1 7.2 9.8
Gain on sales of shares and subsidiaries (8.2) (4.1) (4.8) ———(8.2) (4.1) (4.8)
Increase (decrease) of operating capital
and deferred taxes (2.9) 5.0 0.2 (3.0) (7.0) (1.8) (5.9) (2.0) (1.6)
Cash flow from operations 5.6 16.6 10.3 (2.1) (5.1) 1.7 3.5 11.5 12.0
Capital expenditures (8.1) (9.8) (10.4) (0.1) (0.1) (0.1) (8.2) (9.9) (10.5)
Investments in leasing assets (0.8) (0.5) (0.9) (3.1) (9.3) (11.8) (3.9) (9.8) (12.7)
Disposals 1.8 1.0 1.5 0.2 0.9 1.3 2.0 1.9 2.8
Shares and participations, net 14.1 10.7 5.5 ——0.0 14.1 10.7 5.5
Long-term receivables, net (0.8) 1.2 (0.5) (2.0) (7.2) (9.4) (2.8) (6.0) (9.9)
Acquisitions and sales of companies (0.9) (1.3) (5.0) ——(0.6) (0.9) (1.3) (5.6)
Remaining after net investments 10.9 17.9 0.5 (7.1) (20.8) (18.9) 3.8 (2.9) (18.4)
Increase in loans 3.3 4.4 19.9
Dividend paid to AB Volvo shareholders (1.9) (2.0) (2.2)
Other (1.5) (5.8) —
Increase (decrease) in liquid funds
excluding translation differences 3.7 (6.3) (0.7)
Translation differences on liquid funds (0.3) 0.3 0.3
Increase (decrease) in liquid funds 3.4 (6.0) (0.4)
Capital expenditures approved but not yet implemented
at December 31, 1998, SEK billion
Cars 11.1
Trucks 4.7
Buses 0.6
Construction Equipment 0.7
Marine and Industrial Engines 0.0
Aero 0.6
Other companies and undistributed investments 0.3
Total 18.0
Self-financing ratio
100
50
200
150
0
%
96 97
Volvo Group excluding sales financing
98
Definition in note 1 on page 57.