ce presentation

Construction Equipment Corporate Presentation2004: 

Construction Equipment Corporate Presentation 2004

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The Volvo Group Mission By creating value for our customers we create value for our shareholders. We use our expertise to create transport-related hard and soft products of superior quality, safety and environmental care for demanding customers in selected segments. We work with energy, passion and respect for the individual.

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To be valued as the world´s leading provider of commercial transport solutions. Position aspired to by 2005 In each of our businesses: Number 1 in image and customer satisfaction Sustainable profitability above average Number 1 or 2 in size or superior growth rate The Volvo Group Vision

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Volvo Group Corporate Values

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5 The Volvo Way The Volvo Way is a guide for our behavior as leaders and team members. It shows what we stand for and want to achieve. We shall work towards profitable growth with energy, passion and respect for the individual.

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Business Areas Mack Trucks Volvo Aero Volvo Penta Volvo Buses Volvo Trucks Renault Trucks Trucks Volvo Financial Services Volvo Construction Equipment

The Volvo Group Organisation: 

The Volvo Group Organisation Mack Trucks Renault Trucks Volvo Trucks Volvo Aero Financial Services Trucks AB Volvo Volvo Buses Volvo CE Volvo Penta Logistics

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Global Business Number of Employees: 75,700

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Trucks 67% Volvo Penta 4% Volvo Aero 5% Other 4% Trucks Buses Volvo CE Volvo Penta Financial Services Other 1040 Operating Income 6,5 Billion SEK = 0.8 Billion USD Volvo Aero Sales 175 Billion SEK = 22 Billion USD Volvo Group: Relative sales of Business Areas 2003 14% Volvo CE 13 % Volvo Bus 7 %

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Volvo Construction Equipment

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CEO Tony Helsham Product Technology & Industry Anders P. Larsson Corp. Communication: K.Magnusson HRM: K. Jonsson Legal: E. Carleson Processes & Systems: E. Wedekind . Sales & Marketing Scott Hall CFO Pat Olney Business Line - Compact Equipment Didier Teirlinck Business Line - Motor Graders Anders P. Larsson (until replacement is appointed) Business Line – Excavators Eric Nielsen Business Line - Articulated Haulers Stefan Nordström Business Line - Wheel Loaders Yngve Rosén Region Int’l L. Haglund Region Europe C. Rees Region N. America D.Slagle Rents B. Natwick Cabs F. Axelsson Industrial Systems & Global Sourcing K.Tipping Product Portfolio Management & AE L. Terreno Customer Support G. Reinl Components B-G Ulfberg Business Dev.: F. Ahmad Marketing Comm.: G. Rowley Marketing Projects: C-G Göransson Channel Comp. Dev.: G. Lilly Key Accounts: L. Rohwer

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Industrial System Changwon, Shanghai, China ±1300 empl. Hallsberg, Sweden ± 500 empl. Eskilstuna, Sweden ±900 empl. Eskilstuna, Sweden Arvika, Sweden ± 1100 empl. Pederneiras, Brazil ± 250 empl. Asheville, North America ± 250 empl Goderich, Ontario, Canada ± 700 empl. Belley, France Konz-Könen, Germany Wroclaw, Poland ± 950 empl. Braås, Sweden; ± 600 empl.

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Volvo Construction Equipment Customer Segments Based on 2003 estimates

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Sales & Marketing Region North America ± 150 empl. (HQ in Asheville, US, North America & Mexico) Region Europe ±1000 empl., incl. dealerships (HQ in Duxford, Great Britain, Western & Central Europe) Region International ± 550 empl., incl. dealerships (HQ in Eskilstuna, Sweden, Eastern Europe, Oceania, Latin America, Asia, Africa, Middle East) Customer Support Business Area ± 350 empl. (HQ in Eskilstuna, Sweden, & Global Responsibility) Worldwide Distribution in more than 200 Countries Rental Business Area ± 40 empl. (HQ in Brussels, Belgium, & Global Responsibility)

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Business Lines General Purpose and Production Equipment Compact Equipment Lighter duty applications in construction, industrial and maintenance work Construction, including road building and maintenance, extraction and industrial applications Compact Wheel Loaders Compact Excavators Backhoe Loaders Skid Steer Loaders Telescopic Handlers Wheel Loaders Excavators Articulated Haulers Motor Graders

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Volvo Construction Equipment vs Industry Products Industry Other 2003 data Total: 43 BUSD Volvo CE Other

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Volvo Construction Equipment vs Industry Geography Industry Total: 43 BUSD Volvo CE Total: 2.9 BUSD Western Europe 27% Latin America 2% Japan 10% Asia excl. Japan/China 5% ROW 12% North America 26% Western Europe 49% North America 26% ROW 9% Asia excl. Japan/China 11% Japan 0.5% Latin America 4% China 18% China 1%

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Estimated market shares 2003 Construction Equipment Industry 48.7 BUSD Few global players Several international specialist companies Smaller companies – often single product, regionally focused

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Volvo Construction Equipment Key Data 2003 Sales, SEK bln Operating Income, SEK bln 23* 0.9* * 2866 MUSD * 118 MUSD Volumes all time high: 24.354 units

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R & D Expenses and Capital Expenditures in MUSD

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Europe 23% Sweden 42% Korea 14% North America 12% 9,282 employees in 2003 Employees (7,610 in 1995) ROW 9%