Volvo 2001 Annual Report Download - page 18

14
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 of Renault V.I. in exchange for
15% of the shares in AB Volvo. In connection
with the acquisition of Mack and Renault
V.I., Renault V.I. Finance was acquired for
approximately FRF 154 M.
Volvo’s repurchase of Company shares
During 2001, Volvo effected a repurchase of
Company shares amounting to 10% of the
total number of Volvo shares, whereof 5%
were purchased to finance the final payment
to Renault for the shares in Renault V.I. and
Mack Trucks, and 5% were purchased in
order to optimize the capital structure of the
Group. As a result a total of SEK 8.3 billion
was transferred to Volvo’s shareholders.
Divestment of the insurance operations
in Volvia
On February 8, 2001, Volvia reached an
agreement covering the divestment of its
insurance operations to the If insurance
company. The divestment resulted in a capi-
tal gain of SEK 562 M.
AB Volvo and Renault SA
Volvo and Renault have entered into arbitra-
tion regarding the final value of acquired
assets and liabilities in Renault V.I. and
Mack. This process could result in an adjust-
ment in the value of the transfer. Any such
adjustment will affect the amount of
acquired liquid funds and Volvo’s reported
goodwill amount.
The outcome of this arbitration cannot be
determined with certainty. However, Volvo
believes that the outcome will not lead to an
increase in goodwill.
Volvo Aero enters Rolls-Royce’s Trent
engine program
In May 2001, an agreement was signed
through which Volvo Aero becomes a risk-
and-revenue sharing partner in two Rolls-
Royce engine programs, the Trent 500 for
the Airbus A340-500/-600 and the Trent
900 for the new Airbus A380.
Divestment of shares in Volvofinans
On June 28, 2001, Volvo reached an agree-
ment to divest its entire 50% holding in AB
Volvofinans to Ford Credit International,
Inc., for a total purchase price of SEK 871 M.
The divestment had a marginally positive
effect on Volvo’s earnings.
Divestment of shares in Mitsubishi Motors
Corporation (“MMC”)
On June 29, 2001, Volvo sold its 3.3% hold-
ing in, and all rights and obligations relating
to, MMC to DaimlerChrysler. The divest-
ment resulted in a net capital gain of SEK
574 M.
Volvo divests its Low Cab-Over-Engine
(LCOE) business
On July 27, 2001, Volvo Trucks North
America agreed to sell its Xpeditor®LCOE
truck product line to Grand Vehicle Works
Holdings, LLC. By divesting its LCOE oper-
ations, Volvo met the condition imposed by
the US Department of Justice for approval
of its acquisition of Mack and Renault V.I.
Volvo Trucks launches the new Volvo FH
and FM trucks
In November, Volvo Trucks introduced the
new Volvo FH and FM models. The three
new models – the Volvo FH12, Volvo FM12
and Volvo FM9 – have features such as new
engines with improved fuel economy, and
the fully-automatic Volvo I-Shift gear-chang-
ing system.
The year 2001
The Volvo Group in euro
2000 2001
Net sales, EUR M 14,249 19,540
Operating income, EUR M 789 (73)
Income after
financial items, EUR M 739 (202)
Net income, EUR M 557 (159)
Income per share, EUR 1.33 (0.38)
Dividend per share, EUR 0.95 0.87
In 2001, EUR 1.00 = 9.2434 SEK, annual average
In 2000, EUR 1.00 = 8.4494 SEK, annual average
EU countries
Member of EMU
Non-EMU members
Volvo and the euro
Volvo’s gradual conversion to the euro,
for operations within the EMU was
completed in 2001. The cost of Volvo’s
changeover to the euro within the
EMU is estimated to be less than 0.1%
of sales. The dominant portion of
these costs is related to information
technology.
After having established the euro as
the internal currency within the EMU,
administrative cost savings has been
realized within distribution, inventory
control and marketing. Substantial
savings have also been made within
treasury operations at the same time
as risks have been reduced due to a
lower foreign currency exposure.
Currency hedges for EMU currencies
have been denominated in euro since
the start of the EMU, in 1999.
BOAR D OF DIRECTOR’SREPORT