Volvo 2013 Annual Report Download - page 119

The cash fl ow within Industrial Operations was
positively affected by the operating income and
negatively affected by the increased working
capital. Accounts receivables increased with SEK
4.8billion, inventories increased SEK3.2billion
and the trade payables increased SEK7.9 billion.
Financial items and paid income taxes had a
SEK 4.9 billion negative effect on cash fl ow
within Industrial Operations, mainly through
payments of interests and income tax.
Operating cash fl ow within Customer Finance
was a negative SEK 7.6 billion (neg: SEK
14.8 billion), mainly due to increased customer
fi nancing-receivables.
Investments
The industrial operations’ investments in fi xed
assets and capitalized R&D during 2013 amount-
ed to SEK 12.2 billion (14.6).
Capital expenditures in Trucks amounted to
SEK 8.4 billion (10.7). Capital expenditures
within Trucks have also this year to a large
extent been driven by investments relating to
the extensive product renewal with the com-
pletely new Renault Trucks range, new Volvo
trucks, new heavy-duty trucks for growth mar-
kets, UD Quester, and a new Volvo VM in Brazil.
Also Euro 6 emission regulations, and product
related investments in production have had a
large impact. There are also larger investments
in the Kaluga-plant in Russia. During 2013 the
Volvo Group continued to invest in the dealer
network and workshops, mainly in Europe and
Asia (mainly Japan), but also in Latin America.
Capital expenditures, Industrial Operations
12111009
Capital expenditures,
% of net sales
13
4.0
7.1
5.0
7.7
4.1
8.5
4.9
9.5
4.6
8.5
Property, plant and
equipment, SEK bn
Capitalized development
costs, SEK bn
3.2
2.6 4.1 5.1 3.7
Self-fi nancing ratio,
Industrial Operations %
Cash-flow from operating activities
divided by net investments in fixed
assets and leasing assets.
12111009
72
13
112210294(16)
Operating cash fl ow,
Industrial Operations, SEK bn
20132012
Q4
10.3
Q3
(5.3)
Q2
4.1
Q1
(7.6)
Q4
4.7
Q3
(7.2)
Q2
2.5
Q1
(4.9)
Capital expenditures for Construction Equip-
ment amounted to SEK 2.3 billion (1.7). The
major investments during 2013 related to the
new excavator plant in Kaluga, Russia; continu-
ation of the investment program in the North
American hub in Shippensburg, where the new
sales offi ce has been inaugurated as well as
start-up of wheel loader production. The Jinan
Technology center in China has been fi nalized
during the year. The product related invest-
ments during the year refer mainly to the latest
emission regulations in Europe and North
America.
The investments in Buses were SEK 0.4
billion (0.3), and in Penta SEK 0.3 billion (0.2).
Investments in Volvo Rents were considera-
bly lower during 2013 than previous year. Dur-
ing 2012 the rental fl eet was renewed and
expanded, affecting both investments in leas-
ing assets and other assets. Total investments
in leasing assets for Industrial operations
during 2013 amounted to SEK 1.5 billion (3.6).
During 2014, investments in property, plant
and equipment are expected to be on the same
level as in 2013. The investments will mainly
cover optimization of the industrial footprint,
dealer investments and product related tooling;
with a large share related to the Volvo Group
strategic objectives.
Acquisitions and divestments
In September 2012 AB Volvo increased its share-
holding in Deutz AG to just over 25% which had a
negative impact on cash fl ow of SEK 1.1 billion.
Acquired and divested operations 2013 had
a positive impact on cash fl ow of SEK 0.9 billion
(positive 3.4).
Financing and dividend
Net borrowings increased cash and cash equiv-
alents by SEK 13.0 billion during 2013 (14.1).
During the year dividend of SEK 6.1 billion,
corresponding to SEK 3.00 per share, was paid
to the shareholders of AB Volvo.
Change in cash and cash equivalents
The Volvo Group’s cash and cash equivalents
increased by SEK 1.8 billion during the year
and amounted to SEK 27.0 billion at Decem-
ber 31, 2013.
Refer to Note 29 for principles for preparing
the cash fl ow analysis.
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