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Annual Report 2001

Table of contents

  • Page 1
    Annual Report 2001

  • Page 2
    ... heavy commercial vehicles and diesel engines. The Group is organized in eight business areas: Volvo, Renault and Mack Trucks, Buses, Construction Equipment, Volvo Penta, Volvo Aero and Financial Services. Board of Director's report 14 The year 2001 The acquisition of Renault Trucks and Mack Trucks...

  • Page 3
    .... Financial Services. In 2001, Volvo Financial Services started up as a new business area. It reorganized its operations and introduced new programs aimed at bolstering its customer finance portfolio. It also rolled out a variety of soft offers to Renault and Mack dealers and customers. Treasury...

  • Page 4
    ... applications. Renault introduced the new Magnum and Midlum trucks. In the autumn, Volvo launched its totally new Volvo FH and Volvo FM with a new 500-hp engine. Construction Equipment. During 2001, Volvo CE introduced the new series of articulated haulers, the A25D and A30D, a new wheel loader...

  • Page 5
    ... costs, SEK M Gain on divestment of Volvo Cars, SEK M Operating income, SEK M Income after financial items, SEK M Net income, SEK M Operating margin, % Income (loss) per share, SEK Return on shareholders' equity, % Dividend per share, SEK Number of employees at year-end 1 Proposed by the Board...

  • Page 6
    ...heavy commercial vehicles and diesel engines. Volvo also offers a comprehensive range of customized solutions in financing, leasing, insurance and service, as well as complete transport systems for urban traffic. As of 2002, the Volvo Group is organized in eight business areas: Volvo Trucks, Renault...

  • Page 7
    ... provides construction equipment - excavators, wheel loaders, motor graders, articulated haulers and compact equipment - to customers all over the world. Production takes place on four continents and service is offered worldwide, including the global supply of spare parts. Volvo CE works in close...

  • Page 8
    ... applications. Aero entered Rolls Royce's Trent-engine program for the new Airbus generation and signed a number of service contracts on engines. Net sales*, SEK bn 97 98 99 00 01 change, a milestone in the development of the Group. It has given our business areas the volumes, the structure...

  • Page 9
    ... all major markets. Construction Equipment and Financial Services reported lower, but still stable operational results. Volvo Penta continued to generate good profits, in fact the best ever on a full-year basis. Volvo Aero reported reasonable strong earnings despite the downturn in air traffic. The...

  • Page 10
    ... competitive environment, many companies are searching for economies of scale as the pace of technical development with respect to new materials, fuels, more efficient engines, electronic systems and information technology is increasing. The ongoing consolidation in the commercial vehicle industry...

  • Page 11
    ... the Volvo Group has set its mission: By creating value for our customers, we create value for our shareholders. We use our expertise to create transport-related products and services of superior quality, safety and environmental care for demanding customers in selected segments. We work with energy...

  • Page 12
    ... be used both in concept vehicles and commercial applications. By offering transport equipment with a low environmental impact, Volvo is enabling proactive customers to compete for contracts subject to strict environmental conditions. Wanted position in 2005 In order to reach the vision to be valued...

  • Page 13
    ... based on its own specific attributes and value offerings. By adding new, recognized brands, such as the Mack and Renault truck brands, the Volvo Group gains both in economies of scale and capability to achieve larger market shares. Moreover, Volvo gains a generally more powerful and competitive...

  • Page 14
    ... offered, mostly truck related, but also for buses and construction equipment. The services offered include financial and operating leasing, insurance, installment contracts and dealer financing. Other offers within the Group are maintenance contracts and up-time warranties. Business partners Volvo...

  • Page 15
    ...targets cover growth, operating margin, return on equity and capital structure. The financial targets are set over a business cycle. Growth In order to achieve the strategy for growth as well as the wanted position in 2005, Volvo's ambition is that net sales should increase by more than 10% per year...

  • Page 16
    ... the spring of 2001. Of the repurchased shares, 5% were transferred to Renault SA as final payment for the shares in Mack and Renault V.I. The remaining 5% is held by AB Volvo. The stock market in 2001 The year 2001 was initially characterized by declining share prices on stock markets worldwide...

  • Page 17
    ...59%), equities funds (16%) and private persons (25%). Of Volvo's 214,000 shareholders, the 50 largest accounted for approximately 70% of the voting rights and 60% of the share capital, excluding shares held by Volvo. Turnover, Volvo Series B shares Millions Number of Volvo Series B shares traded on...

  • Page 18
    ...'S REPORT The year 2001 The Volvo Group in euro 2000 2001 Significant events Volvo acquires Mack and Renault V.I. On January 2, 2001, AB Volvo's acquisition of Renault's truck operations, Mack and Renault V.I., became effective. Under the terms of the acquisition AB Volvo acquired all the shares...

  • Page 19

  • Page 20
    ... Trucks. Excluding acquired companies, Group net sales in Western Europe increased by 2%. The decline in demand in North America had an adverse effect on net sales. Excluding acquired companies Group net sales in Global Trucks 1 Buses Construction Equipment Volvo Penta Volvo Aero Financial Services...

  • Page 21
    ... selling and administrative expenses Acquired and divested operations Changes in currency exchange rates Capitalization of development costs Credit losses in US truck financing portfolio Gain on divestment of shares in Mitsubishi Motors Deficit in Swedish pension foundation Alecta surplus funds 2000...

  • Page 22
    ... Aero Services LP (14%, previously the AGES Group) and Volvo Aero Norge AS (22%). Net income/loss Net loss amounted to SEK 1,467 M (net income of 4,709) and the return on shareholders' equity was negative of 1.7% (positive 5.0%). Net sales Cost of sales Research and development expenses Selling...

  • Page 23
    ...December 31, 2000 Cash flow from operating activities Net investments in fixed assets and leasing assets Customer finance receivables, net Operating cash flow, excluding Financial Services Investments in shares, net Acquired and divested operations 1 Dividend to AB Volvo's shareholders Repurchase of...

  • Page 24
    ... in fixed assets and leasing assets Customer finance receivables, net Operating cash flow, Volvo Group, excluding Financial Services 1.3 (1.4) 3.4 1 1999: excluding gain on sale of Volvo Cars, SEK 26.7 bn. Future capital expenditures, approved SEK bn Global Trucks Buses Construction Equipment...

  • Page 25
    ... of fixed assets and leasing vehicles Customer Finance receivables, net Investments in shares, net Acquired and divested operations Cash flow after net investments excl Financial Services Cash flow after net investments, Financial Services Cash flow after net investments, Volvo Group total Financing...

  • Page 26
    ... friendly technologies opment of the company, but some are more highlighted daily. Our customers' business is our business. Our employees embody the competence of the Volvo Group. Our shareholders provide financial opportunities for our operations. Our "broadest" stakeholder, the society, sets the...

  • Page 27
    16:42 Faro, Portugal - Pedro and his friends are going to be professional football players 23

  • Page 28
    ... construction equipment is used by companies involved in such operations as the extraction of minerals, loading, construction, forestry, transport and road works. The customers who purchase our diesel engines manufacture products such as leisure craft, commercial vessels, power-generating equipment...

  • Page 29
    ...KAD300 diesel engine. During the year Volvo Penta also launched the new D2-55 diesel engine for sailboats. Efforts to strengthen Volvo Penta's industrial product range included the introduction of a new 12-liter diesel engine and 5- to 7liter engines for mobile applications. In the marine commercial...

  • Page 30
    ... company. The competence of our employees is the competence of Volvo. The Operational Development Program (OD) is a method for change and improvement work within Volvo. OD has provided first-class improvements in areas such as customer satisfaction, product quality, cost savings and process control...

  • Page 31
    ...the individual and the company. Volvo works actively with health and the work environment. A health action plan will be developed by each company within the Volvo Group. Each manager has responsibility for their employees' workrelated health. When it comes to the working environment at the different...

  • Page 32
    ... for the new products are increased safety, decreased emissions and the increased fuel efficiency that directly relates to our customers' business. The new FH and FM series from Volvo Trucks, the Renault Magnum truck, the new buses and coaches on the TX platform and the new construction equipment...

  • Page 33
    ... need for open and reliable information on the performance of our products. In September 2001, Volvo Trucks introduced a web-based Environmental Product Declaration, where customers and transport buyers can find information on the complete life-cycle impact of the heavy-duty trucks. A calculation of...

  • Page 34
    ... policy is to provide open and factual information internally and to our stakeholders. The information in the annual report is supplemented on the Internet, where detailed Environmental audits The acquisition of Mack and Renault V.I. means that 9 new plants are being integrated in the Volvo Group...

  • Page 35
    ... on used commercial vehicles. During 2001, Volvo has increased its provisions for residual value risks as a consequence of declining used truck prices, primarily in the US. Interest-rate and liquidity risk in customer financing Changes in interest rates during the period covered by a contract can...

  • Page 36
    ... Net sales*, SEK bn Global Trucks The Volvo Group's purchase of Mack Trucks and Renault V.I. in January 2001 created Europe's largest - and the world's secondlargest - producer of heavy trucks. The three 97 98 99 00 01 product components in North America, with a market share of 14.3% in the Class...

  • Page 37
    07:40 Early morning light over Gamla Stan in Stockholm There is an increasing demand for efficient, silent and environmentally friendly city transports. 33

  • Page 38
    ... dealers and service centers throughout the world, of which 1,350 are located in Europe. These facilities offer a broad program of competitive products and services. Number of vehicles invoiced 2000 1 Trucks 2001 Western Europe Eastern Europe North America South America Asia Other markets Total...

  • Page 39
    ...789. Volvo Global Trucks gained market share in North America in 2001. At the end of 2000, Volvo's share of the heavy truck market was 10.6% and Mack's was 12.7%. By the end of 2001, Mack's market share had risen to 14.3%, while Volvo's fell slightly to 10%. Financial performance Net sales amounted...

  • Page 40
    ... costs. In terms of competitors, Iveco agreed to acquire the shares owned by Renault in Irisbus during 2001. MAN acquired adapted forms such as mobile homes. Volvo Buses has renewed its entire product range in less than four years. Most of the new models are based on TX, the company's product...

  • Page 41
    13:26 Visiting Göteborg, Sweden for the first time Highly efficient systems for public transport are an integral part of modern infrastructure. 37

  • Page 42
    ...2001 Mexico USA 1 China with Hong Kong 1 Great Britain Iran 1,620 1,520 450 1,230 560 1,660 1,110 930 890 600 16.0 n/a n/a 48.6 n/a 16.1 n/a n/a 38.7 n/a 1 Deliveries from factory. Net sales per market SEK M 1999 2000 Buses 2001 Western Europe Eastern Europe North America South America Asia...

  • Page 43
    .... In addition, Volvo CE manufactures compact wheel loaders and compact excavators. Volvo CE also offers solutions for financing and leasing, renting and sales of used machines. Total market The total combined world market for heavy construction equipment and compact equipment declined by 7% during...

  • Page 44
    ...a program called "Partners for Profit." Western Europe Eastern Europe North America South America Asia Other markets Total 9,901 193 5,725 498 1,903 662 10,029 255 5,823 776 2,484 626 CE was able to strengthen its share of the market in several important geographical and product areas mainly due...

  • Page 45
    11:40 Lunch-break at Continental Cement, Fort Lauderdale Reliable products with high productivity are essential tools in the construction industry. 41

  • Page 46
    ... Volvo Penta's industrial product range included the introduction of a new 12-liter diesel engine and 5- to 7liter engines for mobile applications. In the marine commercial segment, Volvo Penta has extended its customer offering up to 2000 horsepower output, which has generated new business...

  • Page 47
    14:30 Ron and Marion leaving Miami for an afternoon cruise Marine power systems with high reliability are a matter of safety at sea. 43

  • Page 48
    ... in the marine leisure industry. Market development During the year Volvo Penta reported increased market shares in all business segments. Volvo Penta strengthened its already very strong positions among boat builders in Europe and in North America. Sales of Volvo Penta's industrial engines rose...

  • Page 49
    ... and engines as well as service and maintenance companies, whose market diminished drastically as air travel declined and many aircraft were grounded. In total, it is estimated that more than 200,000 employees within the airline industry were given notice of dismissal during 2001. Volvo Aero in...

  • Page 50
    ... right to sell the surplus of American Airlines' spare parts. Volvo Aero Services already held the exclusive right to sell the spare parts surplus for all of Boeing's Net sales per market SEK M 1999 2000 Aero 2001 Western Europe Eastern Europe North America South America Asia Other markets Total...

  • Page 51
    14:00 Preparing for take-off, heading for Stockholm More than 80 percent of all commercial aircraft engines contain components from Volvo Aero. 47

  • Page 52
    ... development during the year throughout both North and South America. The North American insurance operations offer transport-related insurance solutions to solutions. To that end, in early 2001 Volvo formed Volvo Financial Services (VFS) as a separate business area by uniting the Group's customer...

  • Page 53
    .... Together with Volvo Action Services, an integrated claim process is offered in the US, which minimizes customers' downtime in case of accidents. Danafjord, VFS's real estate company, saw a further expansion in 2001. The operation mainly covers the leasing and development of commercial real estate...

  • Page 54
    ..., Renault S.A. 1999-2000. Prior to that a long career at Ford Motor Company. Member of Group Executive Committee since January 2002. With Volvo since 2001. Holdings: none. 5 Michel Gigou Born 1946. Bachelor of Engineering and Master of Business Administration. President of Volvo Trucks North America...

  • Page 55
    ...Accounting. President of Volvo Financial Services since 2001. Member of Group Executive Committee since 2001. President of Volvo Car Finance Europe 1999-2001. With Volvo since 1985. Holdings: 1003 American Depositary Receipts (ADRs) of AB Volvo. 11 Lars-Göran Moberg Born 1943, Master of Engineering...

  • Page 56
    ... of Renault V.I. 1998-2001. With Renault since 1979. Board chairman: Renault F1. Board member: VINCI. Member of Volvo Board since 2001. Holdings: 2,000 Volvo Series B shares. 4 Tom Hedelius Born 1939, Master of Business Administration, Hon. Dr. of Economics. Board Chairman: Bergman & Beving AB. Vice...

  • Page 57
    .... Employee representative. With Volvo since 1975. Deputy member of Volvo Board since 1999. Deputy member of Volvo Wheel Loaders and Board member of Volvo Construction Equipment Customer Support AB. Holdings: 100 Volvo Series B shares. 12 Report on Board activities during 2001 In 2001, Volvo's Board...

  • Page 58
    ... 3 2000 2001 Net sales Cost of sales Gross income Research and development expenses Selling expenses Administrative expenses Other operating income and expenses Income from investments in associated companies Income from other investments Income from divestment of Volvo Cars Restructuring costs...

  • Page 59
    ... leases Financial fixed assets Shares and participations Long-term customer-financing receivables Other long-term receivables Total non-current assets Current assets Inventories Short-term receivables Customer-financing receivables Other receivables Marketable securities Cash and bank accounts...

  • Page 60
    ... assets Customer-financing receivables, net Shares and participations, net Acquired and divested subsidiaries and other business units, net Cash flow after net investments Financing activities Increase in bond loans and other loans Loans to external parties, net Dividend to AB Volvo shareholders...

  • Page 61
    ... systems, and a key partner to the foremost companies in the aircraft and aerospace industries. Operating structure The Volvo Group's operations during 2001 were organized in six business areas: Global Trucks, Buses, Construction Equipment, Volvo Penta, Volvo Aero and Financial Services. In addition...

  • Page 62
    ... in 2000, the Volvo Group's net financial assets have been calculated excluding the Financial Services business area since financial income and expense in Financial Services is reported in consolidated operating income. As of January 1, 2000, as a result of the new definition, Volvo's net financial...

  • Page 63
    ... its estimated useful life. The amortization period is 5 to 20 years. The goodwill pertaining to Renault V.I., Mack Trucks, Volvo Construction Equipment, Champion Road Machinery, Volvo Aero Services, Prévost, Nova BUS, Volvo Bus de Mexico, Volvo Construction Equipment Korea and Volvo Aero Norge are...

  • Page 64
    ...financial benefits for the company. The acquisition value for such intangible assets shall be amortized over the estimated useful life of the assets. Volvo's application of the new rules means that very high demands are established in order for these development expenditures to be reported as assets...

  • Page 65
    ... engineering company that develops production processes for buses and produce frames for the new TX platform, from TWR Sweden AB. Thereafter, Volvo Buses owns 100% of Acrivia AB. Low Cab-Over-Engine (LCOE) On July 27, 2001 Volvo Trucks North America agreed to sell its LCOE business to Grand Vehicle...

  • Page 66
    ... in Renault V.I.'s annual report for the year 2000. No adjustment has been made for purchase accounting or for differences in accounting principles between the Volvo Group and Renault V.I. The proforma calculation has not been audited by AB Volvo's auditors. 1999 2000 2001 Net sales Operating...

  • Page 67
    ... no longer reported in accordance with the equity method. 3 From 2001 a subsidiary of AB Volvo Note 8 Income from other investments 1999 2000 2001 Dividends received Scania AB 1 Henlys Group Plc Holdings of Volvo Technology Transfer 2 Other Subtotal Gain (loss) on sales of securities Mitsubishi...

  • Page 68
    ... to SEK 26.7 billion. On November 25, 1999, Sweden's Supreme Administrative Court confirmed the preliminary decision of the Tax Board that AB Volvo's sale of Volvo Cars did not result in a taxable capital gain. Deferred taxes relate to estimated tax on the change in tax-loss carryforwards and...

  • Page 69
    ...in shareholders' equity consisted mainly of the Henlys Group's participation in Prévost Holding BV (49%) and the minority interests in Volvo Aero Norge AS (22%) and in Volvo Note Intangible and tangible assets Value in balance sheet 1999 Value in balance sheet 2000 Subsidaries Sales/ acquired and...

  • Page 70
    ...Dec 31,2000 Book value SEK M 2 Dec 31,2001 Book value SEK M 2 Group holdings of shares and participations in non-Group companies Shares in associated companies, equity method of accounting Bilia AB, Göteborg, Sweden Shanghai Sunwin Bus Corp, China Petro Stopping Centers Holdings, LP, USA Blue Chip...

  • Page 71
    ... Centers in the U.S. This expanded service to Volvo's truck customers along the interstate network in the U.S., offering preventative maintenance, spare parts sales, emergency road service and minor repairs. Scania AB Bilia AB Deutz AG Henlys Group Total holdings in listed companies Holdings...

  • Page 72
    ... customer-financing receivables 1999 2000 2001 Installment credits Financial leasing Retailer financing Other receivables Total 4,099 4,595 6,890 912 16,496 6,143 5,195 6,816 728 18,882 8,450 5,913 7,296 1,050 22,709 The increase in 2000 was mainly attributable to the North American operations...

  • Page 73
    ...Note 20 21 Cash and bank accounts 1999 2000 2001 Cash in banks Time deposits in banks Total 4,324 3,989 8,313 5,802 598 6,400 4,941 8,928 13,869 Note Shareholders' equity beginning of 2001, Volvo repurchased an additional 10% of the total number of shares outstanding in AB Volvo. As a result...

  • Page 74
    ... to the pension foundation while in 2000 a net of 105 was received. The accumulated benefit of Volvo Group pension obligations secured by this foundation at year-end 2001 amounted to 3,918. Assets in Volvo's Swedish pension foundation, which are invested in Swedish and foreign shares and funds, as...

  • Page 75
    ... spring of 2000 and a refund of 683 was recognized in Volvo's accounts during 2000. At year-end 2001, a refund of 412 had yet not been settled with cash. As a result of the acquisition on January 2, 2001 of Mack Trucks Inc. and Renault V.I., the Volvo Group received provisions for post-employment...

  • Page 76
    ... Secured bank loans at year-end 2001 amounted to 472 (473; 415). The corresponding amount for other current liabilities was 1,732 (1,506; 1,860). Note 26 Assets pledged 1999 2000 2001 Property, plant and equipment - mortgages Chattel mortgages Receivables Inventories Cash, marketable securities...

  • Page 77
    ... other business units, net in 2001 amounted to SEK 13.0 billion mainly pertained to the final payment of SEK 12.1 billion from the sale of Volvo Cars, divestment of the insurance operation in Volvia and acquired liquid funds within Mack and Renault V.I. During 2001 and 2000 net investments in loans...

  • Page 78
    ...) Book value of assets subject to finance lease: 2000 2001 At December 31, 2001, future rental payments (minimum leasing fees) related to noncancellable leases amounted to 5,192 (4,385; 5,328). Future rental payments are distributed as follows: Financial leases Operating leases Acquisition costs...

  • Page 79
    ...-sharing payments to employees for 2001, 2000 and 1999 amounted to -, - and 185. 2000 Number of employees of whom, women, % Number of employees 2001 of whom, women, % Average number of employees AB Volvo Sweden Subsidiaries Sweden Western Europe Eastern Europe North America South America Asia...

  • Page 80
    ... (commercial exposure), to payment flows related to loans and investments (financial exposure), and to the translation of assets and liabilities in foreign subsidiaries (equity exposure). The objective of the Volvo Group Currency Policy is to minimize the short-term impact of adverse exchange rate...

  • Page 81
    ...- - - 24,100 3 Average exchange rate during the financial year. 4 Outstanding currency contracts, regarding commercial exposure due in 2002, percentage of net flow 2001. Financial exposure Group companies operate in local currencies. Through loans and investments being mainly in the local currency...

  • Page 82
    ... been calculated. Credit risks in financial instruments Credit risk in financial investments The liquidity in the Group is invested mainly in local cash pools or directly with Volvo Treasury. This concentrates the credit risk within the Group's in-house bank. Volvo Treasury invests the liquid funds...

  • Page 83
    ...-term loans - the book value has been assumed to closely approximate market value. Official exchange rates and prices quoted in the open market have been used initially for purposes of valuation. In their absence, the valuation has been made by discounting future cash flows at the market interest...

  • Page 84
    ... are valued at market rates. The profits and losses that thereby arise are included when calculating income. Unrealized net losses for 2001 pertaining to forwards and options contracts are estimated at 944 (1,286; 632). Volvo uses derivative instruments to hedge the value of the Groups' financial...

  • Page 85
    ... value of other intangible assets. Net income Shareholders' equity 2001 1999 2000 2001 Goodwill Goodwill in accordance with Swedish GAAP, December 31 Items affecting reporting of goodwill: Acquisition of Renault V.I. and Mack Trucks Inc. Acquisition of Volvo Construction Equipment Corporation Net...

  • Page 86
    ... of pension benefits, usually related to the employee's final salary. In these cases the annual pension cost is calculated based on the current value of future pension payments. In Volvo's consolidated accounts, provisions for pensions and pension costs for the year in the individual companies are...

  • Page 87
    ... not yet paid at beginning of year - Acquisitions/divestments, net - Actual return on plan assets (39) Employer contributions 0 Foreign-exchange translation - Benefits paid (95) Fair value of plan assets at end of year 3,537 1 Assets in pension funds, estimated at fair value. 2001 3,537 - - (157...

  • Page 88
    ... post-retirement benefit obligation as of December 31, 1999, 2000 and 2001 were 7.5%, 7.5% and 7.0- 7.25%, respectively. I. Alecta surplus funds. In the mid-1990s and later years surpluses arose in the Alecta insurance company (previously SPP) since the return on the management of ITP pension plan...

  • Page 89
    ...cash equivalents" comprise only funds with a maturity of three months or less from the date of purchase. Some of Volvo's liquid funds (see Notes 19 and 20) do not meet this requirement. Consequently, in accordance with SFAS 95, changes in this portion of liquid funds should be reported as investing...

  • Page 90
    .... Financial net assets/debt amounted to 12,207 (-5,178; 15,503). AB Volvo's risk capital (shareholders' equity plus untaxed reserves) amounted to 73,682 corresponding to 82% of total assets. The comparable figure at year-end 2000 was 76%. Income statements SEK M 1999 2000 2001 Net sales Cost of...

  • Page 91
    ... financial fixed assets Total non-current assets Current assets Short-term receivables from Group companies Other short-term receivables Short-term investments in Group companies Cash and bank accounts Total current assets Total assets Shareholders' equity and liabilities Shareholders' equity Share...

  • Page 92
    ... in Group companies, net Shares and participations in non-Group companies, net Cash flow after net investments Financing activities Increase (+)/ decrease (-) in loans Long-term receivables, net Dividend to AB Volvo shareholders Repurchase of own shares Change in liquid funds Liquid funds at...

  • Page 93
    ... payments to employees in the amount of 0 (0; 1). Note Income from investments in Group companies to DaimlerChrysler, thus resulting in a capital gain of 172 in AB Volvo. Income in 2000 included an additional capital gain of 382, pertaining to the sale of shares in Volvo Personvagnar Holding AB...

  • Page 94
    ..., costs for confirmed credit facilities and costs of having Volvo shares registered on various stock exchanges as well as additional financial expenses attributable to a tax audit previously carried out. Exchange differences on borrowings and lendings, including forward contracts related to loans...

  • Page 95
    ... by AB Volvo and were booked to an amount of 10,700. The shares were then sold group internal to Volvo Holding France SA. The shares in Mack Trucks Inc were acquired from Renault V.I. for 3,225 and newly issued shares were subscribed for in the amount of 1,490. At the end of the year the holdings...

  • Page 96
    ...then accounted for as shares in non-Group companies. Shareholder contributions that increased the book values were made to VFHS Finans AB, 3,460, Volvo Bus Corporation, 1,054, Volvo Holding Sverige AB, 767, Volvo Aero Corporation, 302, Volvo Technology Transfer AB, 50, Volvo Business Services AB, 23...

  • Page 97
    ... 2001. The reserve for doubtful receivables amounted to 5 (5; 5) at the end of the year. Note 14 15 Short-term investments in Group companies Short-term investments in Group companies comprise deposits of 17,873 (0; 6,280) in Volvo Treasury. Note Shareholders' equity Restricted equity Share...

  • Page 98
    ... benefit obligation of all AB Volvo's pension obligations at year-end 2001 amounted to 702, which has been secured in part through provisions for pensions and in part through funds in pension foundations. Net asset value in the Pension Foundation, marked to market, accruing to AB Volvo was 10 lower...

  • Page 99
    ...Motors Corporation, Japan Deutz AG, Germany 2 Bilia AB, Sweden 2 Henlys Group Plc, Great Britain2 Blue Chip Jet HB, Sweden Eddo Restauranger AB, Sweden Other investments Total book value, non-Group companies Registration number Percentage holding 1 Dec 31, 2000 Dec 31, 2001 Book value, Book value...

  • Page 100
    ... Services AB (Volvo Group Credit Sweden AB), Sweden Sotrof AB, Sweden Volvo Technology Transfer AB, Sweden Celero Support AB, Sweden Volvo Holding Sverige AB, Sweden Volvo Holding France SA, France Renault V.I., France VFHS Finans AB, Sweden Mack Trucks Inc, United States Volvo Group Finance Europe...

  • Page 101
    ... in the consolidated balance sheet at December 31, 2001, unrestricted equity amounted to SEK 70,239 M (71,885). Of this amount, SEK 13 M is estimated to be appropriated to restricted equity. AB Volvo Retained earnings Net income 2001 Total SEK M 51,150 11,114 62,264 The Board of Directors and the...

  • Page 102
    ...AB VOLVO Auditors' report for AB Volvo We have audited the annual accounts and the consolidated accounts on pages 14-97 and the accounting records and the administration of the Board of Directors and the President of AB Volvo for the year 2001. These accounts and the administration of the Company...

  • Page 103
    ... pertaining to Volvo Construction Equipment. Consolidated income statements with Financial Services reported in accordance with the equity method SEK M 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Net sales Cost of sales Gross income Research and development expenses Selling expenses...

  • Page 104
    ... 2000 2001 Intangible assets Property, plant and equipment Assets under operating leases Shares and participations Inventories Customer financing receivables Interest bearing receivables Other receivables Liquid funds Assets Shareholders' equity Minority interests Provision for post-employment...

  • Page 105
    ... of fixed assets and leasing assets Customer financing receivables, net Shares and participations, net Acquired and divested subsidiaries and other business units, net Cash flow after net investments Increase (decrease) in loans Repurchase of own shares Dividend to AB Volvo shareholders Other...

  • Page 106
    ... of net sales 1, 2 Selling expenses as percent of net sales 1, 2 Administration expenses as percentage of net sales 1, 2 Operating margin, % Return on shareholders' equity, % Interest coverage, times Self-financing ratio, % 3 Self-financing ratio excluding Financial Services, % 3 Net financial...

  • Page 107
    ... at year-end. 8 Plus one share of Swedish Match per Volvo share, price of SEK 21.74 (weighted average first ten trading days following listing). 9 Proposed by the Board of Directors. 10 Source NASDAQ - Citibank. The largest shareholders in AB Volvo, December 31, 2001 1 Number of shares % of Share...

  • Page 108
    ...Volvo Aero Western Europe Eastern Europe North America South America Asia Other markets Total Other and eliminations 9,953 10,713 11,784 Net sales excl Financial Services Financial Services Western Europe Eastern Europe North America South America Asia Other markets Total Eliminations Volvo Group...

  • Page 109
    ... Trucks, which was estimated to arise in connection with exchange of shares with Renault. 9 Refers to Volvo Trucks for 1991-2000. Operating margin % 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Global Trucks Buses Construction Equipment 1 Volvo Penta Volvo Aero Volvo Group...

  • Page 110
    ... adjusted to conform with the new Annual Accounts Act. Number of employees at year-end Number 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Global Trucks Buses Construction Equipment Volvo Penta Volvo Aero Financial Services Other Volvo Group, excluding divested operations Cars...

  • Page 111
    .... 2 Until 1996 including company vehicles. M AR KET AR EA STATI STI CS Net sales excluding Financial Services SEK M 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Western Europe Eastern Europe Europe total North America South America Asia Other markets Volvo Group excl divested...

  • Page 112
    E LEVE N-YEAR S U M MARY Employees Number 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Sweden Europe, excluding Sweden North America South America Asia Other markets Volvo Group total 42,960 11,630 5,320 1,730 1,460 480 63,580 39,130 12,040 5,540 1,520 1,380 510 60,120 43,...

  • Page 113
    Volvo Production sites â- Mack Trucks â- Volvo Trucks â- Volvo Buses North America Macungie Hagerstown Winnsboro North America New River Valley North America St Claire St Eustache Schenectady Roswell* Mexico City â- Volvo Construction Equipment â- Volvo Penta North America Lexington ...

  • Page 114
    ... is used only for Volvo's business areas, not for the Group as a whole. Return on shareholders' equity Net income divided by average shareholders' equity. Self-financing ratio Cash flow from operating activities (see Cash flow statement) divided by net investments in fixed assets and leasing assets...

  • Page 115
    ... Pension Insurance Fund, Fourth Fund Managing board Chairman of the Board of AB Volvo Representative for shareholders with smaller holdings Renault SA Alecta The Nomination Committee is responsible for submitting to the Annual General Meeting the names of candidates to serve as members of the Board...

  • Page 116
    AB Volvo (publ) SE-405 08 Göteborg, Sweden Telephone +46-31 66 00 00 AB Volvo, Investor Relations, 635-2604