Volvo 2009 Annual Report Download - page 55

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In spite of the downturn, VFS has made
strides in accordance with its long-term strat-
egies, including growth through geographical
expansion. In 2009, nancing operations com-
menced in Japan and Australia.
Financial performance
Total new nancing volume in 2009 amounted
to SEK 28.7 billion (44.5). Adjusted for
changes in exchange rates, new business vol-
ume decreased by 41% compared to 2008 as
a result of lower sales volumes of Group prod-
ucts. In total, 25,782 new Volvo vehicles and
machines (47,986) were nanced during the
year. In the markets where nancing is offered,
the average penetration rate was 25% (25).
On December 31, 2009, total assets in cus-
tomer nance amounted to SEK 98.8 billion
(117.6). During 2009 the credit portfolio
decreased by 15.6% (11.8), adjusted for
exchange-rate movements.
The operating loss for the year amounted to
SEK 680 M compared to an operating income
of SEK 1,397 M in the previous year. Return on
shareholders’ equity was a negative 6.2%
(Positive: 12.6). The equity ratio at the end of
the year was 8.7% (8.2). The loss was mainly
caused by higher credit provisions. During the
Outcome 2009
Renement of underwriting, portfolio management and •
remarketing processes.
Full liquidity & interest matching maintained. •
Developed integrated offers with the other business •
areas to reduce inventory levels and optimize cash flow.
Commenced customer nancing activities in Japan •
and Australia.
Developed and implemented global framework to •
secure key competencies.
Ambitions 2010
Support customer and dealer downturn activities •
while mitigating the frequency and severity of credit
losses.
Adapt commercial strategy to lessons learned from •
the downturn to achieve sustainable protability.
Operational improvement & efciency.•
Secure diversication of funding channels in •
cooperation with Volvo Treasury.
Ambitions 2009
Ensure sustained protability in the global recession. •
Secure efcient funding and execute on capital •
management strategies.
Continue optimizing growth by more tailored customer •
solutions.
Secure key competencies and global mobility.•
year, credit provision expenses amounted to
SEK 2,327 M (483) while write-offs of SEK
2,223 M (521) were recorded. This resulted in
an increase in credit reserves from 1.37% on
December 31, 2008, to 1.67% of the credit
portfolio on December 31, 2009. The write-off
ratio was 2.09% (0.54).
51