Volvo 2012 Annual Report Download - page 60

BOARD OF DIRECTORS’ REPORT 2012 GROUP PERFORMANCE
SIGNIFICANT EVENTS
During 2012
The divestment of Volvo Aero, increased ownership in Deutz
and the launch of the new Volvo FH truck series were some of
the important events in 2012.
Annual General Meeting of AB Volvo
The Annual General Meeting of AB Volvo held on
April 4, 2012 approved the Board of Directors’
motion that a dividend of SEK 3.00 per share be
paid to the company’s shareholders.
Peter Bijur, Jean-Baptiste Duzan, Hanne de
Mora, Anders Nyrén, Olof Persson, Ravi Venkatesan,
Lars Westerberg and Ying Yeh were reelected as
members of the AB Volvo Board. In addition,
Carl-Henric Svanberg was elected member of the
Board and Board Chairman, replacing Louis
Schweitzer who had declined reelection.
Carl-Olof By, representing AB Industrivärden,
Jean-Baptiste Duzan, representing Renault s.a.s,
Lars Förberg, representing Violet Partners LP,
Håkan Sandberg, representing Svenska Handels-
banken, SHB Pension Fund, SHB Employee
Fund, SHB Pensionskassa and Oktogonen and
the Chairman of the Board were elected members
of the Election Committee.
AB Volvo signs memorandum
of understanding with Deutz
On April 5 it was announced that AB Volvo had
signed a non-binding memorandum of under-
standing with Deutz AG with the intention to
explore the potential to extend the long-term
cooperation with a joint development of the next
generation of medium-duty engines for off-road
applications.
The memorandum of understanding also aims
at analyzing the conditions for establishing a
Deutz majority-owned joint-venture company in
China for the production of medium-duty engines
for off-road applications. The production com-
pany is intended to provide support for the Volvo
Group’s anticipated growth in off-road applica-
tions in Asia. Any implementation requires both
companies to agree on the final terms and con-
ditions in a binding contract.
Unfavorable court ruling in the U.S.
pertaining to Volvo Penta engines
Volvo Powertrain Corporation and the U.S. Envi-
ronmental Protection Agency are in a dispute per-
taining to emission compliance of 8,354 model
year 2005 Volvo Penta engines under a 1999
Consent Decree entered between the parties. On
April 13, 2012, the U.S. District Court for the Dis-
trict of Columbia issued an order directing Volvo
to pay a total of USD 72 M in penalties and inter-
est. The decision has been appealed.
AB Volvo acquires shares in Deutz AG
On June 13 AB Volvo announced that it had
signed an agreement under which the company
was offered the opportunity to increase its share-
holding in Deutz AG from 6.7% to just over 25%
by acquiring a total of 22,117,693 shares from
Same Deutz-Fahr Group at a price of EUR 5.88
per share, EUR 130 M in total. The transaction
was completed in September and made AB
Volvo the largest shareholder in Deutz AG, which
since many years is a strategic partner within
medium- duty engines.
AB Volvo divests Volvo Aero to British
GKN for SEK 6.9 billion
On July 5 it was announced that AB Volvo divests
the Group’s subsidiary Volvo Aero to the British
engineering company GKN for an enterprise
value of SEK 6.9 billion. The transaction was com-
pleted on October 1, 2012. The transaction gener-
ated a positive effect on the Group’s operating
income of SEK 568 M of which SEK 254 M in
the fourth quarter. The divestment reduced the
Group’s financial net debt by SEK 5.5 billion.
New Volvo engine for Euro 6
On July 5 Volvo Trucks presented an engine tai-
lored for the Euro 6 environmental standards.
Nitrogen oxide emissions will drop by 77% and
particulate emissions will be halved from already
low levels. First off the mark is Volvo’s D13 460
horsepower engine, which powers more than
one-third of all Volvo trucks.
Renault Trucks Defense acquires French
manufacturer Panhard
On July 26 it was announced that Renault Trucks
Defense, which is included in the Volvo Group’s
Governmental Sales business area, acquires the
French company Panhard, which specializes in
manufacturing light transport vehicles adapted for
defense operations. In 2011, Panhard reported
sales of EUR 81 M and operating profit amounted
to EUR 9.4 M. The transaction was finalized in
October 2012.
New Volvo FH launched
On September 5, Volvo introduced its new Volvo
FH series. The new Volvo FH is pushing the
envelope for what a premium truck can offer. The
Volvo FH is a truck built with the driver in mind and
with the focus on improving the haulage firm’s
profitability.
Volvo Group invests in Russia
On September 13, the Volvo Group announced
that it will invest SEK 783 M in a new facility for
the production of cabs at the plant in Kaluga,
Russia. The facility, which is expected to become
operational in 2014, will manufacture cabs for the
Volvo and Renault Trucks brands with a total
annual capacity of 15,000 cabs.
Volvo Group announced new truck strat-
egy to achieve profitability improvement
The new strategy, which is an important step for
the Group towards achieving the objective to
improve the operating margin by 3 percentage
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