Volvo 2013 Annual Report Download - page 27

Financial targets
INDUSTRIAL OPERATIONS
12.5
12
12.1
13
(6.2)
09
(10)
0
0.4
10
7.3
11
15
10
5
(5)
Target: 12−15%
Return on shareholders’ equity, %
CUSTOMER FINANCE OPERATIONS
Target and outcome
The target for Customer Finance is a return on
shareholders’ equity of 12–15% and an equity
ratio above 8%. The return on shareholders’
equity for 2013 amounted to 12.1%. At year
end 2013 the equity ratio was 8.1%.
CONSTRUCTION EQUIPMENT AND VOLVO PENTA
Target Comparison group Preliminary outcome*
The annual organic sales growth for the
construction equipment operations and
Volvo Penta, shall be equal to or exceed a
weighted-average for comparable competitors.
Each year, the operating margin for the
construction equipment operations and Volvo
Penta, shall be ranked among the top two
companies when benchmarked against relevant
competitors.
Brunswick, Caterpillar, CNH, Cummins, Deere,
Hitachi, Komatsu and Terex.*
* Deere’s and Terex’s fi gures are based on rolling four quarters
as of the third quarter of 2013.
The organic sales decreased by 9.9% for the
Volvo Group’s construction equipment opera-
tions and Volvo Penta and was below the
weighted average of a decline of 8.3% for the
competitors.
The operating margin of 3.8% for the
VolvoGroup’s construction equipment opera-
tions and Volvo Penta was ranked number
seven in comparison with the competitors.
Target Comparison group Preliminary outcome*
The annual organic sales growth for the truck
and bus operations shall be equal to or exceed
a weighted-average for comparable competitors.
Each year, the operating margin for the truck
and bus operations shall be ranked among the
top two companies when benchmarked against
relevant competitors.
Daimler, Iveco, MAN, Navistar, Paccar, Scania
and Sinotruk.*
* Navistar’s and MAN’s fi gures are based on rolling four quar-
ters as of the third quarter of 2013 and Sinotruk’s fi gures are
based on rolling four quarters as of the second quarter of 2013.
The organic sales decreased by 1.2% for the
Volvo Group’s truck and bus operations and was
below the weighted average of 0.1% for the
competitors.
The operating margin of 1.6% for the Volvo
Group’s truck and bus operations was ranked
number six in comparison with the competitors.
TRUCKS AND BUSES
29.3
12
29.0
13
70.9
09
0
(20)
37.4
10
25.2
11
40
20
80
60
Net cash Net debt
Target below:
35%
40%
Net fi nancial debt as a percentage
of shareholders’ equity, %
Target and outcome
The Industrial Operations’ net fi nancial
debt, excluding pension obligations, shall be
below 35% of shareholders’ equity under
normal conditions. At the end of 2013, the
fi nancial net debt amounted to 29.0% of
shareholders’ equity.
INDUSTRIAL OPERATIONS
As of January 1, 2013, new accounting rules for
employee benefi ts came into effect. As a consequence,
AB Volvo’s Board of Directors decided to exclude
pension obligations from the target. The new target
corresponds to the previous fi nancial target of 40%
in which pension obligations were included.
Starting in 2012 new fi nancial targets for the Volvo Group were implemented in
which growth and profi tability of the Group’s various operations are measured
and benchmarked annually against competitors. This creates a clear picture of
how the operations are developing compared to the industry. Information on
how the comparison with competitors is made is available under the heading
Investors on www.volvogroup.com.
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