Volvo 2003 Annual Report Download - page 43

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Note 4Segment reporting
2001 2002 2003
Number of of which Number of of which Number of of which
Average number of employees employees women, % employees women, % employees women, %
Shanghai Sunwin Bus Corp. 621 13 622 13 617 13
Xian Silver Bus Corp. 220 13 210 13 267 13
Jinan Hua Wo Truck Corp. ––––520
Prévost Holding BV 278 19 978 11 842 15
Total number of employees 1,119 14 1,810 12 1,731 14
Reporting by business segment
The Volvo Group’s operations are organized in eight business areas:
Volvo Trucks, Renault Trucks, Mack Trucks, Buses, Construction
Equipment, Volvo Penta, Volvo Aero and Financial Services. In addi-
tion to the eight business areas, there are other operations con-
sisting mainly of business units that are designed to support the
business areas’ operations. The business units include Powertrain,
3P, Volvo IT, Logistics and Parts. Each business area, except for
Financial Services, has total responsibility for its operating income,
operating capital and operating cash flow. The Financial Services
business area has responsibility for its net income and total balance
sheet within certain restrictions and principles that are established
centrally. The supervision and coordination of treasury and tax matt-
ters is organized centrally to obtain the benefits of a Group-wide
approach. The legal structure of the Volvo Group is based on optimal
handling of treasury, tax and administrative matters and, accordingly,
differs from the operating structure.
The business units are designated to support the business areas
and are therefore not reportable business segments. In Volvo’s exter-
nal financial reporting, the financial results within the business units
Powertrain and Parts are distributed to the respective business seg-
ments. As the three truck brands share product development,
production and other activities in business units such as 3P and
Powertrain and also share certain infrastructure in distribution such
as dealers, the truck brands are reported as one business segment.
Net sales 2001 2002 2003
Trucks 116,568 118,752 116,969
Buses 16,675 14,035 11,978
Construction Equipment 21,135 21,012 23,154
Volvo Penta 7,380 7,669 7,596
Volvo Aero 11,784 8,837 8,030
Other and eliminations 7,073 6,775 7,041
Volvo Group excl Financial Services 180,615 177,080 174,768
Financial Services 9,495 9,925 9,153
Eliminations (830) (807) (630)
Volvo Group total 189,280 186,198 183,291
The above sales figures include internal sales with the following amounts: Trucks 719 (400; 279), Buses 166 (0; 151), Construction Equipment
313 (318; 201), Volvo Penta 31 (27;19), Volvo Aero 87 (74; 259) and Financial Services 630 (807; 830). Other and eliminations include inter-
nal sales of 8,014 (7,638; 7,441) and eliminations amounting to 9,330 (8,457; 8,350).
Internal sales between business areas are generally made at standard cost of sales, including calculated interest and product improvement
expenses. Internal sales from service companies are generally at market prices.
Operating income (loss) 2001 2002 2003
Trucks (2,066) 1,189 3,951
Buses (916) (94) (790)
Construction Equipment 527 406 908
Volvo Penta 658 647 695
Volvo Aero 653 5 (44)
Financial Services 325 490 926
Other 143 194 (3,142)
Volvo Group total (676) 2,837 2,504
Operating income in 2003 included write-down of shares in Scania AB and Henlys Group Plc amounting to 4,030, of which 429 was reported
in Buses (Henlys Group) and 3,601 was reported in Other (Scania AB).
Operating income in 2001 included restructuring costs of 3,862, of which 3,106 in Trucks, (mainly related to the integration of Mack and
Renault), 392 in Buses and 364 in Construction Equipment.