Volvo 2000 Annual Report Download - page 17

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15
Volvo’s dividend policy is that the effective return (the dividend combined with the change
in share price over the long term) should exceed the average for the industry. If the future
capital level in the Group is determined to be too high and not necessary for the growth of
operations, the annual dividend could also be supplemented by measures such
as the repurchase of company shares.
Repurchase of shares of AB Volvo
During 2000, the Board of Directors of AB Volvo voted to repurchase a max-
imum of 10% of the total number of the Company’s shares through an offer to the share-
holders, which included a premium of approximately 30%. The repurchase offer expired on
June 30, 2000 and a total of 43,285,237 shares were tendered, corresponding to 9.8% of the
total number of Volvo shares. The payment of SEK 11.6 billion was transferred to Volvo’s
shareholders on July 18, 2000. The remaining 0.2% of the shares was repurchased on the OM
Stockholm Exchange during the autumn of 2000. In total SEK 11.8 billion was transferred to
Volvo’s shareholders.
The repurchased shares were transferred to Renault on January 2, 2001 as partial payment
for the shares in Mack and Renault V.I. On February 1, 2001, the Board of Directors of AB
Volvo decided to acquire a maximum of 10% of the Company’s shares on the OM Stockholm
Exchange, corresponding to 44,152,088 shares. Of the repurchased shares, 5% shall be trans-
ferred to Renault S.A. as final payment. Any repurchases in addition to the 5% to be delivered
to Renault S.A. will be made in order to optimize the capital structure of the Volvo Group.
High or low risk
The beta value is a measurement of implied risk or volatility that shows a share price change
relative to all the other share price changes on a stock exchange. A low beta value (<1) indi-
cates a low-risk share compared to the other shares on the exchange, and a high beta value
(>1) implies a higher risk. The average beta value for the period from 1997 to 2000 for Volvo
Series B shares was 0.53, which means that the Volvo share price changed 47% less than all
the shares on the OM Stockholm Exchange.
96 97 98 99 00
■ Net income, SEK per share
■ Dividend, SEK per share
26.9 23.2 19.1 73.0 11.2
4.3 5.0 6.0 7.0 8.0
96 97 98 99 00
Effective return, %
30 46 (10) 22 (23)
96 97 98 99 00
Direct return, %
2.9 2.3 3.2 3.2 5.1
96 97 98 99 00
■ Return on equity, %
■ Shareholders’ equity
per share, SEK
125 140 157 221 222
23.7 17.2 13.0 34.9 5.0
The repurchase offer included
a premium of approximately 30%
Price trend, Volvo Series B shares SEK
Turnover, Volvo Series B shares Millions
Highest and lowest price per month
on the OM Stockholm Exchange
96 97 98 99
500
450
400
350
300
250
200
150
100
50
0
00
General Index
Number of Volvo Series B shares
traded on the OM Stockholm Exchange 90
80
70
60
50
40
30
20
10
0
96 97 98 99 00
Source: OM Stockholm Exchange
For more information related to the
Volvo share, see page 101.
Source: OM Stockholm Exchange