Volvo 2003 Annual Report Download - page 3

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1
The year 2003
Volvo Trucks begins production
in Russia
Volvo Trucks became the first Western truck
manufacturer to start production under its
own name in Russia. The new assembly facil-
ity for heavy trucks was inaugurated on
March 20 in Zelenograd, just north of
Moscow.
Volvo CE starts production in China
The first Volvo Excavator, built in Volvo CE’s
new plant located in the Pudong area out-
side Shanghai in China, left the production
line at the beginning of April.
Volvo CE acquires US dealer L.B. Smith
On May 2, Volvo Construction Equipment
purchased the assets associated with the
Volvo distribution business of L.B. Smith,
Inc., its largest dealer in the US. The intention
is to spin off the acquired operations.
Volvo starts assembly of trucks in China
On June 9, Volvo Trucks signed a joint-ven-
ture agreement with China National Heavy
Truck Corporation for production of trucks.
Production is planned to commence during
the first quarter of 2004.
Volvo Trucks introduces new models
Volvo Trucks launched the new Volvo NH in
Brazil. This model was developed for the
South American market and is built in Brazil.
The launch was accompanied by the intro-
duction of the new Volvo FH and Volvo FM in
South America. The new medium-heavy truck
in the 17-23 ton segment, Volvo VM, was
also introduced during 2003. This marks the
total renewal of the entire Volvo truck range
in South America.
On June 5, Volvo Trucks presented the
new Volvo FH16. The Volvo FH16 was devel-
oped to meet the trend for heavier and
longer truck combinations. The new Volvo
FH16 is equipped with an all-new 16-liter
engine, with a power output of up to 610 hp,
making it the most powerful truck in the
European market.
Volvo Penta introduces new products
Volvo Penta is launching a new generation of
medium-heavy diesel engines for leisure
boats. The new electronic diesel engines, the
D4 at 210 hp and the D6 at 310 hp, are
manufactured at Volvo Penta’s engine plant
in Vara, Sweden.
Volvo Penta is also launching the new
130- or 160-hp D3 diesel engine and the
new D2 75-hp engine for sailing yachts.
Renault Trucks launches the new
Renault Master
The Renault Master features new exterior,
interior, engines and improved performance.
Furthermore, the user of the Renault Master
benefits from a network of specialists in utili-
ty vehicles, consisting of 1,350 sales and
service points in Europe.
Volvo acquires Bilia’s truck and
construction equipment operations
The truck and construction equipment oper-
ations of Bilia was acquired in the third quar-
ter through the exchange of the predominant
part of Volvo's holding in Bilia for 98% of the
shares in the acquired operations, Kommers-
iella Fordon Europa AB (KFAB). KFAB is a
leading service supplier and reseller of Volvo
trucks and construction equipment in
Europe.
Volvo Aero is partner in General
Electric’s new LMS100 gas turbine
Volvo Aero will deliver a number of key com-
ponents to the new environmentally friendly
gas turbine, the LMS100, which is expected
to play a significant role in the power-gener-
ation industry. This is an important agree-
ment for Volvo Aero and a broadening of its
product range. The total value of the con-
tracts is estimated to USD 800 M over a 20-
year period.
Volvo and ArvinMeritor plan
strategic alliance on axles
Volvo plans to enter into a strategic alliance
on axles with ArvinMeritor. A Memorandum
of Understanding has been signed between
the two companies. Final agreements are
planned to be concluded during the first
quarter of 2004.
Subsequent events
Volvo’s holding of Scania B shares was
divested to Deutsche Bank on March 4,
2004 for an amount of about SEK 15 billion.
The transaction was carried out as part of
our commitment to the European Commis-
sion to divest the Scania shares not later
than April 23, 2004. After the sale, Volvo
owns 27.3 million A shares in Scania AB,
corresponding to 24.8% of the votes and
13.7% of the capital.
The Volvo Group in EUR
2002 2003
Net sales, EUR M 19,333 19,151
Operating income, EUR M1310 716
Operating income, EUR M 310 274
Income after financial items, EUR M 220 182
Net income, EUR M 152 33
Income per share, EUR10.36 1.13
Income per share, EUR 0.36 0.08
Dividend per share, EUR 0.87 0.88 2
1 Excluding write-down of shares in Scania AB and Henlys
Group Plc.
2 As proposed by the Board of Directors. In addition, the Board
proposed a dividend of 2 shares in the wholly owned subsidiary
Ainax AB for each 31 shares in AB Volvo. Based on the clos-
ing price of Scania A shares on March 12, 2004, this was cor-
responding to a value of EUR 1.58 per share.
2002: EUR 1.00 = SEK 9.1596, annual average
2003: EUR 1.00 = SEK 9.1258, annual average
Board of Directors’ Report