Volvo 2005 Annual Report Download - page 17

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Shareholder value
Volvo’s financial strength and cash flow
have enabled the Group to pay its share-
holders a competitive return on their
investment.
Dividend policy
Volvo’s objective is that the effective
return to the shareholders (dividend com-
bined with the change in the share price)
will exceed the industry average.
Higher earnings
and increased
dividend
During 2005, earnings per share rose to
SEK 32:21 (23:58). The Board of Directors
proposed that the dividend for 2005 be
increased to SEK 16.75 (12.50) per share.
Although the Volvo Group is active in a
cyclical industry, the ordinary cash dividend
has increased continuously since 1995.
Competitive total
return
The total return on the Volvo share (share
price development including re-invested
dividends) has averaged 25% annually
since 2001.
During the same period, the total return
on the Stockholm Stock Exchange as a
whole was 4% annually, according to the
SIX Return Index.
Shareholder value
95 96 97 98 99 00 01 02 03 04 05
Dividend per share, SEK
n
4.00 4.30 5.00 6.00 7.00 8.00 8.00 8.00 8.00 12.50 16.75
Direct return, % 2.9 2.9 2.3 3.2 3.2 5.1 4.5 5.6 10.5 4.7 4.5
1 Including dividend from Ainax.
Ainax:
SEK 15
1
Historically stable dividend
More information about the
Volvo share is presented on
pages 28 and 150.
B Share (incl. re-invested dividends) SIX Return Index Source: SIX
01 02 03 04 05
0
50
100
150
250
300
200
Total return, Volvo B
Index 100 = Volvo B share price January 1, 2001.
Volvo Group 2005 13