AB Volvo

Good morning and welcome to the Volvo Group first quarter press conference. Today we'll listen to the presentation from Martin and Mats about the first quarter result and then we'll follow up with the Q&A session later on in the session. So with that short introduction, I hand over to Martin.

Thank you for that, Johan. And also from my side, good morning to this quarter one, 2026 press conference. Great to have you here. First and foremost, the group and all colleagues and business partners delivered a solid result in the quarter with an adjusted operating income of 12.2 billion second, a margin of 11%. and continue to demonstrate strong earnings resilience despite that market volumes moderated compared to last year and despite many moving parameters as you're all aware of such as geopolitical turmoil and tariffs. Performance was good across all business areas with a high customer confidence in our products and services reflected in good order intake and low cancellations throughout the quarter. We also launched several new business offerings as well as portfolio moves to further improve our competitive set and enable continued profitable growth. To mention a few examples in the intro here, from the first quarter, we have further reinforced the regional hall and conventional business offerings in North America for Volvo and Mack. Super excited about that. We are continuing to roll out these new offerings. And as you did see also here in the intro movie, Volvo has launched their next generation of battery electric offerings, including also the new FH Aero electric long range with up to 700 kilometer range. which is of course a significant and benchmark step. As regards our company portfolio, we continue to optimize our structure and capital allocation with a number of important moves in the quarter. First, the intention of Toyota to step into self-centric being an equal shareholder together with us and Daimler Truck, paving the way then for the hydrogen journey. The intention and execution, I should say, we are waiting for a merger clearance there on the Flexis divestment, our 45% share to Renault Group, still then having a considerable, so to speak, lineup of LCV, including the Flexis vehicles, so that will further clarify that part of the business for Renault Trucks. The Swecon integration strengthening the retail sales presence for VCE started during the quarter and also the announcement of discontinuing the Rockback brand when it comes to our whole business within Volvo construction equipment that has been subscaled and low profitability, not at least then with our decision in 22 to leave Russia amongst others. Here and now, and despite uncertainties, order intake also developed positively, as you have seen with, for example, an increase year-over-year of 14% for group trucks, as one example. And when it comes to the market forecast for the full year, we offer trucks then a slightly revising upward for Europe and Latin America, while reiterating the forecast for North America on the back of stronger order momentum. I guess it would be certain questions about, I mean, how that is playing out, obviously, but we will come back to that more in detail, why we are reiterating that and see a gradual now coming back in the North American market. And operationally, I think that is also important. We are utilizing our flexibility toolbox, both for upwards and downward correction, to maintain balance between demand and supply and to keep inventory levels on the right level, so to speak. And that has been well done during these more stormy waters, and we will continue to do so. Focus is also on effective cost control, generally speaking, but also further optimizations of our structures across the group that we have done during the quarter, primarily in the truck segments. Commercial discipline continues, of course, to be very important. We have a very strong total offer, and we should utilize that. What is very, very positive is of course also the service business growing with 6% organically, showing that our customers around the world continue to utilize their equipment. But also that we have an increased share of wallet, and that is of course driving loyalty and customer centricity, but for the group of course also resilience. So while the recent geopolitical tensions and the Middle East conflict have so far not caused any major disruptions in our operations, we are of course keeping watchful eyes whether and when they might affect primarily, if they will, the general economy more broadly and thereby our demand. But with our flexible business model, with an increased service business together with strong market positions, And disciplined cost control, we are well positioned to navigate potential short-term swings in demand. And you have heard me saying that before, in times like this, we focus on what we can affect and what we can impact. And staying close to our customers and business partners to continue to drive resilience and growth. Moving forward, there will be an increased structural need in the world of efficient and effective transport solutions, infrastructure, and energy solutions, and the group is well positioned moving forward. If we go into the figures on the first quarter, net sales amounted to 111 billion with an organic sales growth of 2%. And we have, and you will hear that from Mats and myself, we have introduced the term organic sales growth to illustrate the underlying sales development pace, and thereby neutralizing also the M&A effects. For example, if you take Visida and the Svekon and SDLG effects in the quarter, and of course also FX. More granular information about this is disclosed as part of the key ratios section in the quarterly report. And we continue to focus on earnings resilience, as I've said, adjusted operating income amounted to 12.2 billion, with the margin expanding to 11%. For trucks, our European business performance compensated the under-absorption cost from the U.S. truck manufacturing operations that were standing still approximately 25% to 30% of the available time in the quarter. That was a conscious, tough decision, and eventually, as we see it, the right decision to have these stop weeks as we now have available production capacity to meet the increased demand we have seen recently. As from May, we are in balance in North America. Operating cash flow had a normal seasonal effect and amounted to 400 million SEK. Net financial position, end of quarter one, 56.8 billion. Return on capital employed, 24.5% and earnings per share, 4.09 krona per share. So we can then conclude another strong and resilient quarter here. Group news, as I said, quite a lot of things happened. We're very busy quarter, I have to say. First and foremost, as you can see here, the Toyota Motor Corporation aiming to join the Volvo Group and Diamond Truck as equal shareholder in the fuel cell joint venture Cellcentric. The combination of the parties' complementary experience and know-how will support and accelerate the joint objective to develop, produce, and most importantly then commercialize fuel cell systems for heavy-duty vehicles, but also for other heavy-duty applications, such as energy solutions, for example. And this is a very, very good industrial move and industrial fit, as these three significant OEMs join forces to drive decarbonization. as super happy obviously to have to go to on board with their long-lasting story when it comes to this journey of hydrogen and the hydrogen economy. This will further strengthen an already well-functioning joint venture actually. Also as I alluded to, Volvo Group, Renault Group and CMA-CGM has been in agreement now on a strategic change for the current joint venture Flexis that contains the next generation electric light commercial vehicles. And the move is that Renault will buy Volvo's 45% ownership and CMA, CGM's 10% in flexes. But Volvo Group, through then Renault Trucks, that is the counterpart, will remain a partner and investor in the vehicle project and will commercialize and distribute flexes developed products from 2027, adding to the lineup that we already have together with Renault Group. Also a very successful setup, by the way. AGM of AB Volvo, annual general meeting of AB Volvo was held at World of Volvo in Gothenburg. Very proud of that, I can say. I mean, that is a manifest also of both the history and the future for Volvo. And as always, of course, it is a special moment to meet with our shareholders. The AGM decided also, along with the board's different proposals and amongst those, of course, also to, not of course, but to shift 26.4 billion to the shareholders or 13 krona per share. On volume side, truck deliveries decreased by 3% to 47,500 vehicles with lower volumes than in North America and somewhat also in South America, but partly then compensated in Europe. And Volvo Construction Equipment's Volvo branded volume, that is the relevant these days now, I mean, since we have completed the divestment of SDLG, did grow with 12% in the quarter, driven primarily by the European market. Electrification, first and foremost, with different uncertainties related to the electrification still in our key markets, demand continues to be slow. Orders of electrical vehicles decreased 22% adjusted for SDLG, mainly on the back of a broadening offering from competition. That is natural. I mean, we have been rather alone with some players, but we see more and more players coming in, and I think that is a good sign. But also the general uncertainties in the market. The reality is that the base of calculating market share is very low, so you will see rather big swings here moving forward as well. But deliveries of electric vehicles and machines did grow with 15% adjusted for STLG. And this growth was mainly supported in this quarter by a strong growth of light commercial vehicles in electric business. When it comes to the total vehicle and equipment sales, that was flat in quarter one. Trucks organic sales decreased 3% on the minus three truck volume showing. Generally, then, continuous price discipline in the market. Construction equipment grew 16% driven by Volvo branded machines in Europe. Organic sales growth for buses, 14% driven by Prevost, mainly in North America. And since we are doing complete buses for Prevost, of course, the sales value per vehicle is rather high here. And Volvo Penta grows sales by 14% with solid growth both in Europe and North America. One example, as I alluded to last time, is also the growth in data centric segments continuous showing a continuous high activity levels. I think it's 14, 15% now with the portfolio and growing for Penta, so it's very interesting. Underlying service sales growth also amounted to impressive, I should say, 6% in the quarter with positive service developments across business areas, while it was flat for VFS, and that was of course related to volumes in the other business areas. They were keeping penetration as you will see. VC and trucks did grow with 7% and Penta 10% organically. And the 12-month rolling service sales amounted to $123 billion and represented over 26% of the group's revenues. And it was actually 28% for the quarter. And again, coming back to the importance of that, that we have diligently worked with them in the service penetration and the rolling fleet and getting a high penetration per unit here. Loyalty and closeness, of course, but also resilience. On the truck side, busy quarter as well. Came with a lot of product news and launches. Here you see the Mackie Granite. It's the iconic Mack Granite. That is now fully updated, still with its typical Mack. Look, and we reveal that it connects both together with a brand new Mac keystone that is also for demanding heavy haulage application amongst others. And of course, a very, very important launch for Mac since these two models are also part of the true core segments of Mac moving forward and also as we speak. Also in North America, Volvo Trucks and Mack Trucks have started production of their new regional haul trucks, the Volvo VNR and Mack Anthem. So as I said, we are more and more now completing the rollout and are getting ready for having a well-greased system in North America and up to a level that we have seen in Europe before. Volvo has begun also on-road testing. Maybe some of you did see it in the introduction movie here also of heavy trucks powered by hydrogen combustion engines. And we are continuing this three-pronged approach, obviously, with battery electric combustion engines driven on renewables and also fuel cells. And the commercial launch is planned before or around 2030. On the electric side, as I said, Volvo revealed a number of new executions now in April. For the versatile and the vocational, you can say also FH, FM and FMX electric models are now available with up to 470 kilometer range on one charge, which means that the absolute, I should say, I mean, the absolute, absolute majority of missions in those segments will be handled with overnight charging. And that is, of course, a change in the game for our customers. You remember, it was a time when But you could live a complete day with one charge also on the phone. You know, that completely changed the way of thinking about that. Volvo has also, as you did see, showcased a new long-range FH aeroelectric with a range up to 700 kilometers. And that is a true benchmark, obviously. Same there. Then you can do missions, even really the most advanced long-haulage operations. And also coming with megacharging, as you did see. A market forecast for North America will repeat our market outlook for 2026 at the 265,000 in retail sales. Order levels have been elevated, as we have seen in recent months, while retail sales, that is how we measure the market or retail deliveries, pace is lower because that is related to the order intake at the end of 25. But it's expected now to regain momentum in the second half of the year. And any EPA 27 pre-buy is included in that view. So we don't expect any material pre-buy, which I think is a good thing for the market dynamic, generally speaking. European registration pace continues to gradually increase. We have lifted our market forecast with 5,000 units to 310,000 units for 26 and similar, even if we have a falling trend still in Brazil. Market contracted through 25, as you know, and we see that continuing. But still, we are lifting the forecast from 75 to 80,000 heavy-duty trucks in 26, so plus 5,000. Indian market is driven also by a healthy replacement demand, infrastructure investments, and a general increased freight demand. And here we lift with 20,000 units for medium and heavy duty trucks up to 400,000 vehicles. And on a side note, I have to say that I'm very proud of also our joint venture in India, Volvo Aichi Commercial Vehicles, that actually Sold for the first time because they have their fiscal year ending at the end of March, as companies normally have in Asia. And sold over 100,000 vehicles for the full year, which ended now in March 31st. And what is interesting is obviously this is a 15% growth, and historically we have been thinking about Volvo commercial vehicles as light and medium duty, but the reality is that it's more than 25,000 heavy-duty trucks, what we are also calling heavy-duty trucks. So that is starting to give real leverage and also carry back opportunities for us when it comes to technology. You know that we are already doing the 5.8 liter engines in India with very, very good results. And the industrial system is gearing up here. So I think that is a great achievement by the team and a great asset moving forward. And for China, we reiterate our 2026 total market forecast for over 760,000 medium and heavy-duty trucks for the China market. Book-to-bill, positive, obviously, as we have seen. 135% for medium and heavy duty in the quarter and 99% rolling. 12-month rolling. North America, we had a book-to-bill of 192% on the back. On one side, on the back of strong order intake, mainly from fleets, but also retails coming in. But also that we still had planned stop weeks. So you had that, so to speak, effects on the two sides between 25 and 30 percent of the total availability. So that was quite extensive. But we said, keep the balance, but keep ready. We had still also some stop days during April, but from May we will use the installed capacity. So we feel that the right decision to utilize that flexibility tool for quarter one here, even if that came with under absorption cost, and you will hear Mats talking a little bit about that later on here. Europe, 150%. South America, 134%. And the industrial systems may need to be tuned upwards given the gradual increased customer demand. We have been in balance here already as we speak. And now when we see, so to speak, support from order intake, we will have the flexibility tools necessary here. And you can see primarily Asia, Africa, Oceania in good balance. market share side in Europe then continued to deliver strong market share for the quarter with the Volvo at 19.3% the Renault Trucks at 9.4% giving a total share of almost 29% on the battery electric side as we said as more OEMs are now delivering Volvo and Renault Trucks delivered 23% combined market share for the quarter And we will still see these swings now moving forward as the market still is rather low. Now we are coming in with new executions and that will come back, etc. I think it will be this type of stepwise approach. But more importantly, we proceed with our efforts. We proceed with our three-pronged approach, as I said, approach with combustion technology, electric and hydrogen to drive decarbonization. And in North America, we had a combined share of 17.2, so starting to go in the right direction. Super important, the Mack Trucks self-help is giving result. We are now at 8.7%, and we see a good momentum here, that we are not hampered by our own industrial system and other deficits. And one example is the cab over engine, some in the waste collection units where Maccas always had a leading position. When we had, so to speak, the problems here, one, one and a half year ago, we were down to 30% market share in that specific segment. Now we're back to plus 50%. So that shows also how important it is that we have the capacity in the different type of segments here. And also Volvo trucks are back on the right track, absolutely not on the level where they should be, but back on the right track and regains their position. And of course it will be further support when over the road is expected to become better here. Brazil strong, 23.7%, and also good starter should say 22.5% combined for Volvo and Mack in Australia. Construction equipment, closing of the exposition of Sveakonden in this quarter. So Monday has passed. We always talk about Friday and Monday, but Monday has passed. Very good sentiment when it comes to the integration. We are super happy to welcome all new retail and service colleagues into the group in this core markets. You know, it's Germany, Sweden, it's Baltics. and all our great colleagues here will further strengthen the volvo ci service and market position in core markets and that is of course one of the key factors also for continuous success and such an important part of the tco for for our customers so a great opportunity to further strengthen customer centricity competitive set through total offer and resilience by the way one of the areas that we will further discuss at the cmd It is also with regret that the decision has been made, as I alluded to in the introduction, to later in the year discontinue the sub-scale and loss-making rock-back articulated hauler business. We have tried hard together, to be frank. But given also the fragmented footprint here, we have decided that the Scottish Motherwell site will be focused into a center of excellence for large, rigid mining business carrying the Volvo brand. And the one-time cost related is then under the adjusted section, and you have seen that. When it comes to the market forecast, I can be rather swift. We are not changing anything in relation to the last report, the full year report for 2025. So plus 5% Europe and China are flat for the other regions. Book to Bill, I should say also, positive sign in that sense. 110% in the quarter, driven primarily by North America, but also somewhat by Europe. North American demand is broad-based. As stated last report, similar pattern. Data center energy sector on shoring and manufacturing as well as the possibility for customers to write off quicker. And the European demand is still encouraging, but we also hear increased uncertainty among customers due to the conflicts in the Middle East. Buses, important launch actually. You know that Mexico is super important for us when it comes to buses. The new 9800 was launched for the coach market in Mexico, marking another milestone in the Mexican passenger transport industry. The Volvo 9800 has a new aerodynamics and a comprehensive design, fuel consumption improvement of 4%. And coach is a very important tool for passenger transport. So 4% with the mileage produced is very, very important. Book-to-bill, 130%. It was mainly driven by somewhat lower delivery volumes. However, with higher sales value per buses, I said, because it was a lot of privo into those figures. But we have a solid fill rate for the full-year Volvo buses. Volvo Penta, great to see on the marine side to start with, recognized for its leadership in marine innovation, sustainable marine innovation, with its hybrid electric IPS propulsion that was named the Technical Development of the Year. at the Motorboat Awards in Düsseldorf. Maybe you have visited the Düsseldorf Boat Show. I always find it interesting, by the way, that it is in Düsseldorf. It's not a lot of lakes or seas out there, but it's a great show anyhow, and a very important one. And also strong market interest, what you can see on the slide here, that is the Volvo Penta G17, the 17-liter gasified power generation offering for mission-critical applications such as data centers. And that I said also, that is growing, obviously, not at least for standby and backup power and good order borders. Book-to-bill reached 95% and 92% at Wellmark Rolling. But generally speaking, a good activity level, what we have seen basically during quarter one is if you take the four main segments, marine commercial, marine leisure, and industrial all speed, all stable levels when it comes to all activities and deliveries, it is really in the power generation, Europe, Middle East slowing down temporarily. And that is related to the conflict because you have an instant effect of that. But obviously, that depends on the length of the conflict here. Yeah, I can also mention, sorry for that. No, I think we're ready with that. And VFS finally, continue to grow the portfolio on a currency adjusted basis through solid new retail financing penetration, as I said, sustained at 30%. And portfolio performance continue to be good. Although delinquencies and write-offs remain at the higher levels that we have seen during previous quarters, but it's still well within the bandwidth, depending on where we are in the cycles. So no signs of worries in that regard. And we also continue to focus on enhancing the portfolio when it comes to utilizing, so to speak, the VFS capabilities. Insurance offering is now on the rise, for example. So that was the business update. So I will leave the word to you, Mats, for the financials.

Great.