Volvo 2014 Annual Report Download - page 85

VFS fi nancial solutions are offered with the sales of
Volvo Group vehicles and equipment, and are avail-
able with other service and aftermarket products
such as service contracts, repair and maintenance
contracts, insurance, etc. through seamless inte-
gration at the point-of-sale with Volvo Group dealers. This app-
roach delivers a convenient one stop-shopping experience for the
customer.
Record volume
Improved commercial activities globally, enhanced by strong mar-
ket conditions in North America resulted in the highest recorded
volume, penetration and managed asset levels in VFS’ history. This
growth along with good portfolio performance, pricing control and
productivity gains yielded good profi tability for VFS in 2014.
Operational effi ciencies and process standardization were key
activities for VFS in 2014. Scalable business platforms and higher
service levels resulted in signifi cant operating leverage by ena-
bling growth without requiring commensurate cost increases.
Capital market activities such as syndications and asset-backed
securitizations also played an important role in increasing profi ta-
bility and return on equity by enhancing VFS’ funding structure,
reducing Volvo Group risk exposure and supporting additional
Volvo Group sales.
Good growth and portfolio performance
VFS benefi ted from Volvo Group delivery levels being maintained
in the truck business, a stronger economic environment in North
America, and a steady recovery in most served markets. VFS’
portfolio growth and performance in 2014 was highlighted by
high origination volumes and improving portfolio performance
metrics including lower customer delinquencies, repossessions,
inventory, and write-off levels.
VOLVO FINANCIAL SERVICES
In the Americas, record managed assets and retail volumes
were achieved and the portfolio performed very well in terms of
delinquencies and write-offs.
EMEA (Europe, Middle East and Africa) achieved increased
volume for the year and record market shares overall. In addition,
the portfolio performance improved signifi cantly with low levels of
delinquency and inventory in most served markets.
In APAC (Asia Pacifi c), asset levels remained stable despite
the slower demand in China, particularly for construction equip-
ment in the mining sector. Good cost control and strong pricing
discipline resulted in good profi tability, despite delinquencies in
China continuing to be on elevated levels.
In all VFS markets, and particularly in developing markets,
downturn preparedness is a key objective regardless of the cur-
rent business cycle.
Facts VFS conducts customer fi nancing in 42 countries in the
world.
Position on world market Volvo Financial Services operates
exclusively to support the sales of vehicles and equipment which
are produced by the Volvo Group. In doing so, VFS enhances the
competitiveness of Volvo Group products and helps secure loyalty
to the Volvo Group brands.
Number of regular employees 1,339 (1,355)
Share of Group net sales, %
3 (3)
BOARD OF DIRECTORS’ REPORT 2014
GROUP PERFORMANCE
Volvo Financial Services (“VFS”) offers competitive
fi nancial solutions which strengthen long-term rela-
tionships with Volvo Group customers and dealers.
As the number one provider of fi nancial solutions for
Volvo Group product sales, VFS consistently adds
value for its customers and builds loyalty to the
Volvo Group brands.
GOOD
PROFITABILITY,
growth and portfolio performance
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