VOLVO CAR GROUP

results presentation

January – June 2016

Håkan Samuelsson, president & CEO Hans oscarsson, senior vice president & CFO

disclaimer

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 2

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agenda

Key Operational Highlights

• First Half Year 2016 – Strong Progress

• Global Growth First Six Months 10.5%

• 90-series Launched

Financials

• Key Figures

• Net Revenue Improved

• Significant EBIT Improvement

• Cash Flow

• Capex & R&D Spend

• Liquidity & Debt Structure

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 3

Outlook 2016

Q&A

Appendix

Key operational highlights

• EBIT of MSEK 5,592 (1,660), EBIT margin of

6.7% (2.2%)

• Improved financial result absorbing the production

change over effects

• Retail sales up 10.5%

• Growth in all three regions, US turnaround

confirmed

• XC90 strong sales, S90 & V90 well received

• First corporate bond issued (MEUR 500)

Håkan Samuelsson, president & CEO

5VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016

US +24.8%

36,654*china +6.3%

40,688*

Other markets +4.1%

40,370*

Sweden +12.3%

36,455*

Western europe

+9.6%

102,396*

*Retail sales first six months 2016

GLOBAL growth FIRST SIX MONTHS 10.5%

S90 XC90 V90

5 THOUSAND

ORDERS

85 THOUSAND

DELIVERED

6,5 THOUSAND

ORDERS

90-series launched

Financials

Hans oscarsson, senior vice president & CFO

Key figures

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 8

Key figures H1 2016 H1 2015

H1 2016

vs H1 2015

Retail sales (units) 256,563 232,284 10.5%

Net revenue (MSEK) 83,647 75,215 11.2%

Operating income, EBIT (MSEK) 5,592 1,660 3,932 MSEK

EBITDA (MSEK) 10,739 6,085 4,654 MSEK

Cash flow from operating and investing activities (MSEK) -3,175 -1,044 -2,131 MSEK

EBIT margin (%) 6.7% 2.2% 4.5pts

EBITDA margin (%) 12.8% 8.1% 4.7pts

Capex & R&D spend (MSEK) 10,698 9,304 15.0%

Capex & R&D spend of net revenue (%) 12.8% 12.4% 0.4pts

Net revenue improved

MSEK

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 9

86,000

88,000

84,000

0

82,000

76,000

80,000

78,000

H1 2016

83,647

Sales Mix

-3,398

Exchange & Other

75,215

H1 2015 Volume

7,710

4,120

+11.2%

Significant ebit improvement

MSEK

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 10

0

4,000

7,000

3,000

5,000

6,000

2,000

Exchange, Cost & Other H1 2016

-603

5,592

H1 2015 Volume

3,050

1,485

Sales Mix

1,660

2.2%

6.7%

CASH FloW

MSEK

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 11

230818

222

28,000

31,000

30,000

34,000

32,000

27,000

29,000

33,000

26,000

0

Cash & Cash

Equivalents +

Marketable

Securities H1 2016

Investing

-7,788

Financing Change in

Marketable

Securities

Exchange on Cash

27,230

Operating

4,613

Cash & Cash

Equivalents +

Marketable

Securities FY 2015

29,135

Capex & R&D spend

4,5 5,0

4,75,6

12,3%12,6%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

0

2

4

6

8

10

12

14

H1 2015 H1 2016

Investments in PP&E R&D Spend Capex & R&D Spend against Net Revenue

SEKbn

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 12

Liquidity & debt structure as of June 30, 2016

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

14,470

Total Balance Sheet Debt

4,692

3,446

22,608

Liquidity as of June 30, 2016

33,452

22,900

4,330

6,222

Long-term Debt

Cash & Cash Equivalents

Marketable Securities

Undrawn Revolving Credit Facility (RCF)

Bond Loans

Short-term Borrowings

MSEK

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 13

Outlook 2016

Håkan Samuelsson, president & CEO

• Strong start of the year – new full year record sales

• Higher profit and profitability compared to full year 2015

• Positive operating and investing cash flow

Q&A

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 17

Appendix 1:

Retail sales

Appendix 2:

Key figures – extended version

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 18

Key figures Q2 2016 Q2 2015 H1 2016 H1 2015

Full year

2015

H1 2016

vs H1 2015

Retail sales (units) 135,972 124,563 256,563 232,284 503,127 10.5%

Net revenue (MSEK) 41,890 41,564 83,647 75,215 164,043 11.2%

Research and development expenses (MSEK) -2,344 -2,256 -4,757 -4,231 -8,803 12.4%

Operating income, EBIT (MSEK) 2,447 1,671 5,592 1,660 6,620 3,932 MSEK

Net income (MSEK) 1,715 1,118 3,784 877 4,476 2,907 MSEK

EBITDA (MSEK) 5,151 3,848 10,739 6,085 16,019 4,654 MSEK

Cash flow from operating and investing activities (MSEK) -2,852 -56 -3,175 -1,044 7,234 -2,131 MSEK

EBIT margin (%) 5.8% 4.0% 6.7% 2.2% 4.0% 4.5bps

EBITDA margin (%) 12.3% 9.3% 12.8% 8.1% 9.8% 4.7bps

Capex & R&D spend (MSEK) 10,698 9,304 18,687 15.0%

Capex & R&D spend against net revenue (%) 12.8% 12.4% 11.4% 0.4bps

Equity ratio (%) 26.4% 28.7% 26.2% -2.3bps

Net debt/net cash (net cash if negative) (MSEK) -4,622 453 -7,721

Appendix 3:

Definitions of performance measures

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 20

Performance measures disclosed in the presentation are those that are deemed to give the most true and fair, as well as relevant view of Volvo Car Group’s financial performance for

a reader of the presentation.

VOLVO CAR GROUP RESULTS PRESENTATION JANUARY-JUNE 2016 21

Appendix 4:

Reconciliation tables of performance measures