Volvo 2006 Annual Report Download - page 34

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The share
Trading in Volvo A shares on the Stockholm
Stock Exchange increased by 43% compared
with 2005 and the share price rose by 33%. At
year-end, the share price for the A share was
SEK 486.00. The highest price paid was SEK
493.00 on November 15, 2006, which is the
highest price paid for Volvo A shares up until
the end of 2006.
Trading in Volvo B shares on the Stockholm
Stock Exchange increased by 19% compared
with 2005. The share price rose by 25% and
was SEK 471.50 per share at year-end. The
highest price paid was SEK 478.50 on
November 15, 2006, which is the highest price
paid for Volvo B shares up until the end of
2006.
On NASDAQ, the volume of trading in the
Volvo share fell by 28%, while the share price
rose by 40%. At year-end, the share price was
USD 68.75 (SEK 472.50).
In 2006, a total of 673 (558) million Volvo
shares were traded on the Stockholm Stock
Exchange, corresponding to a daily average
of 2.7 (2.2) million shares traded. At year-end
2006, Volvo’s market capitalization totaled
SEK 193 billion (150).
The Volvo Group’s strategy has resulted in structurally higher
profi tability, a lower risk level and a stronger cash fl ow. Combined,
these have resulted in increased shareholder value.
Additional information concerning the Volvo
share is presented in the 11-year summary on
page 158.
Dividend
The objective of Volvo’s dividend policy is that
the long-term total return to shareholders
should exceed the average for the industry.
Historically, dividends on Volvo shares have
risen steadily. The Volvo share’s total return, that
is, the share’s value development plus reinvested
dividends, has amounted to an average of 49%
per year since 2002. This can be compared
with the average total return for the Stockholm
Stock Exchange in its entirety, which during the
same period, was 16%, according to SIX.
For fiscal year 2006, the Board of Directors
proposes that the shareholders at the Annual
General Meeting approve an ordinary dividend
of SEK 25 per share and an extraordinary pay-
ment through a 6:1 share split in which the
sixth share will be redeemed by AB Volvo for an
amount of SEK 25 per share. The share split
reduces the value of each trading block and
should make trading easier for shareholders
with smaller holdings.
Total return, Volvo B
Earnings1 per share
Dividend per share
05
32.2
06
40.2
03
0.7
02
3.3
04
23.6
16.75 25.08.08.0 12.5
Extraordinary payment
25.0
1 Years 2004, 2005 and
2006 are reported in accord-
ance with IFRS and 2002
and 2003 in accordance
with prevailing Swedish
GAAP. See Note 1 and 3.
Earnings and cash dividend per share
B Share
(incl. re-invested dividends)
SIX Return index
Index 100 = Share price Volvo
B Share, January 1, 2002.
Source: Findata Direkt
02 03 04 05 06
50
100
150
200
250
300
350
>>> The Volvo share is listed on the Stockholm
Stock Exchange in Sweden and on the
NASDAQ exchange in the US. Volvo A and
Volvo B shares are traded on the Stockholm
Stock Exchange and a trading block consists of
100 shares each. One Volvo A share entitles
the holder
to one vote
at Annual
General Meetings and one Volvo B share enti-
tles the holder to one tenth of a vote. Dividends
are the same for both classes of shares. Since
1985, a program for American Depositary
Receipts (ADRs) has existed in the United
States. Each ADR represents one Volvo B
share.
The Volvo Share is included in a large num-
ber of indexes that are compiled by Dow
Jones, FTSE, S&P, the OMX Nordic Exchange
and Affärsvärlden, among others.
Positive trend for the share
In general, the trend on the world’s leading
stock exchanges was positive in 2006. On the
Stockholm Stock Exchange, OMXS index rose
by 23.6%.
30 A global group 2006