Volvo 2014 Annual Report Download - page 2

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A GLOBAL GROUP
CEO comment 2
Improved underlying profi tability 4
OPERATING CONTEXT 6
Long-term challenges 7
Economic growth drives the demand for transport solutions 12
Material issues 13
STRATEGY 14
Vision, Core values, Code of conduct and Wanted position 16
Strategic framework 18
Strategy for the period of 2013-2015 20
Increased scope of the strategic program 24
Financial targets 25
BUSINESS MODEL 26
Creating value in every stage of the value chain 28
Brands 30
Effi cient products and services 32
Renault Trucks T-range 34
Product development 36
Volvo 7900 Electric Hybrid 42
Industrial structure 44
Higher effi ciency in truck manufacturing 46
Effi cient production and responsible sourcing 48
World-class services and distribution 50
Strong momentum for both truck brands in North America 54
A high-performing organization 56
GROUP PERFORMANCE 62
Global strength 64
BOARD OF DIRECTORS’ REPORT
Signifi cant events 66
Trucks 70
Construction Equipment 74
Buses 77
Volvo Penta 79
Volvo Financial Services 81
Risks and uncertainties 83
Financial management 86
The share 87
CORPORATE GOVERNANCE 90
Corporate Governance Report 92
Board of Directors and Secretary 100
Group Management 104
FINANCIAL INFORMATION 108
Financial performance 110
Volvo Group and Other comprehensive income 110
Financial position 114
Consolidated balance sheet 114
Consolidated cash-fl ow statements 117
Changes in consolidated Shareholders’ equity 118
Notes to consolidated fi nancial statements 119
Parent Company AB Volvo 166
Proposed remuneration policy 176
Proposed disposition of unappropriated earnings 177
Audit Report for AB Volvo 178
Eleven-year summary 179
Fold-out Defi nitions
Annual General Meeting
The Volvo Group’s formal fi nancial reports are presented on pages
66–89 and 108–177 in the printed version and has been audited by
thecompany’s auditors.
CONTENT
1
OPERATING CONTEXT
The world evolves at a
rapid pace, making it more
important than ever for the
Volvo Group to have an informed under-
standing of our global operating envi-
ronment. As part of our business and
sustain ability strategies, we continually
analyze megatrends and regional varia-
tions to assess their impact on ourGroup and to seek new
business opportunities.
PAGE 6
2
STRATEGY
The Volvo Group’s strategy
contributes to realizing the
Group’s vision and wanted
position by developing and driving strat-
egies for profi table growth, effi ciency
and transformation towards sustainable
transport solutions.
PAGE 14
5
CORPORATE
GOVERNANCE
The Volvo Group appreci-
ates the value of sound
corporate governance as a fundamental
base in achieving a trusting relation with
shareholders and other key parties. The
Swedish Corporate Governance Code,
which is applied by the Volvo Group,
aims at empowering the shareholders and creating a sound
balance of power between shareholders, the board of directors
and the senior management. Sound corporate governance,
characterized by high standards when it comes to transparency,
reliability and ethical values, has always been a well-established
guiding principle within the Volvo Group’s operations.
PAGE 90
3
BUSINESS MODEL
The Volvo Group’s business
model is focused on
utilizing its strong brands,
technological expertise, effi cient prod-
ucts and world-class services and
distribution to create value for its
customers.
PAGE 26
4
GROUP PERFORMANCE
Since the streamlining
towards commercial vehicles
was initiated more than ten
years ago, the Volvo Group has grown into
the world’s second largest manufacturer
of heavy-duty trucks and one of the larg-
est manufacturers of buses and construc-
tion equipment and is today also a leading
manufacturer of heavy-duty diesel engines and marine and industrial
engines. Year 2014 was characterized by mixed market conditions
and internal measures to increase effi ciency and profi tability.
PAGE 62
6
FINANCIAL INFORMATION
PAGE 108