Hello, and welcome to this presentation of Volvo Cars Financial Results for The third quarter. My name is Christina Sander, and with me here today to walk you through the numbers, I have Håkan Samuelsson, our Chief Executive, and Björn Annwall, our CFO. After their presentation, it will be an opportunity to ask questions, and you can do that either by calling in or by typing in your question in the online chat. If you would like to ask your question over the phone, please remember to press star one. Now I will leave the floor to Håkan. Thank you, Christina, and good morning to all of you listening to our quarter three report. If we then start by looking into the highlights, what really happened during the third quarter, then, of course, is we did the IPO, which is also the reason why we are a bit late with our quarter three report. We had a good introduction, and if you look at the share price development after the IPO, I think we can conclude and say we had a successful IPO. If you look then into the operational performance third quarter, I think call it a challenging quarter. We had volume drop of 17% due to the constraints in semiconductor supply, basically. If we look at the bottom line, it was still a very good quarter, and especially if you look into the first nine months, we have a strong profitability of 8.2%, and we also have a growth compared with 2020 same period. That means if we look into the next year, we can really confirm our outlook that we have stated since really the beginning of the year. This will be a year with continued growth, both in sales volume and revenues, and we will reach profitability more or less on the level we had before the pandemic. We can confirm that outlook. If you look then into a bit more mid-term, we have a transformation going on. Volvo wants to be the fastest transformer to electrification. We have defined some mid-term ambitions. We will continue growing. Mid-decade, we should be a company of 1.2 million cars. Half of those cars should be pure BEV cars, and the other half will be then hybrid cars. Of the total volume also, half of the cars will be sold and available online, also of course available through our retailers, but will be with transparent pricing available online. There we will use the BEV cars as really the forerunner in this transformation. Profit-wise, we should have a profitability in line with other premium manufacturers. We have said 8% to 10% mid-decade. Last but not least, we will also integrate our work to improve our sustainability, and we have a very clear target. A car built 2025 should have a footprint, a carbon footprint 40% lower than a car made a year ago. Those are the ambitions. If you look at the transformation, it's on track. We recently launched our second fully electric car, the C40. It's a car only available as a full electric. The volume of fully electric cars is now 4%. Rather low number because we have concentrated our electrification on the plug-in hybrids, where we have 22%, a very high number in the business. This is a car which also now come with a new version with increased range. A very good solution for bringing our customers into an electric future. The next step is now to build up the capacity for fully electric car. Right now, we have constraints in capacity, but after summer next year, we will have a capacity of 150,000 in Ghent and Luqiao for the two models, the XC40 and the C40. We also have to drive the transformation. We defined an internal target. Reducing the embedded CO2 into our cars requires development, and we have therefore defined a price that the value of the decrease of embedded carbon is worth around 1,000 per ton saved. That will be used as a help to our developers to choose the right solutions looking forward. Another very important transformation activity is also the online sales and, how we will reach our customers in the future, where our Care by Volvo subscription service is a very attractive offer, hassle-free, convenient for our consumers, and, that volume is continuously increasing, month by month. Transformation on track and. Let's look into the financials a bit closer. I will give the word to you, Björn. Thank you, Håkan. Those of you who look forward to a truly exciting financial update, I must disappoint you. The numbers we're gonna look at now are exactly the numbers that we showed in the prospectus, in the run-up to the IPO. No more, no less. What you looked at then was a situation where we looked at the last 12 months, where we could then see that both in terms of retail sales and revenue, we are at the growth pace compared with 2020, but also compared with 2019. The growth pace we have here is clearly lower than what we had in the four or five years prior to 2019, where we were growing with around 10%. Also it's lower than the growth pace that we are planning for in order to get to 1.2 million cars by mid-decade. Clearly, we are constrained by the semiconductor supply. On EBIT, the last 12 months, we are at SEK 22 billion or 7.5%. We need to deliver strong numbers every quarter. As Håkan alluded to, we are also driving a transformation, the fastest transformation strategy that we have, and then we need to deliver on that every quarter, and that's why we try to create transparency on where we are every quarter. When it comes to our Recharge sales, Recharge cars, it continues to grow. It's now about a quarter of our total sales. The strategy has been, over the last two, three years, to really grow with plug-in hybrid, which is a stepping stone into the future that is fully electric. Now, the growth that we're focusing on is shifting over towards fully electric cars, and that's why it's so important what Håkan just mentioned, that our annual capacity, which today is around 15,000 cars annually, will grow to 150,000 cars after summer. We will be able to meet the strong demand we see for these cars from our customers. That's the key growth focus going forward, grow with fully electric cars, which by the way, is the fastest-growing segment of the automotive sector. Typically, if you wanna be successful, focus on growing in the growing part of the market. Our plug-in hybrids are now at a very strong level. There we also made improvements, so the driving range of those fully plug-in hybrids will almost double in real driving range when you wanna go pure, which is very important. Today, the Volvo consumers are using around 40% of the energy in the plug-in hybrids from charged electricity, and with a longer range, that can increase. That's a key focus. Another thing that's important with this new propulsion system we put into the plug-in hybrids is also that it's more cost-effective, so we're gonna get the better economics out of those cars. Another key part is the CO2 reduction. We wanna be a climate-neutral company by 2040, and we should reduce with 40% already by 2025. We need to see progress now quarter- by- quarter. Right now, we are here today with an 8% reduction versus the starting point. Again, we need to get to -40% by 2025. This now needs to show every quarter a strong progression, and that's exactly our plan. When it comes to online sales, clearly, our strategy is to meet consumers expectations with direct online sales. Direct online sales for Volvo Cars, it means that you can interact with Volvo Cars online and get as much support from our great retail partners as you want. Some want a lot, some want somewhat less, but in the end, the car is a physical product and our retail partner will really be an integrated part of our go-to-market model going forward that starts online. Our number of subscription, Care by Volvo, where you get the fixed, transparent price on the car, on the service, the financing, insurance, that is growing, continue to grow very steadily. The total online sales will also include the BEVs that we sell online is also growing. In the European markets, the first five European markets, it's now almost 10% of our total sales. You should remember that right now we have a B2C solution, and the B2B solution to do this effectively, we're rolling out in the coming months. The addressable market for this becomes bigger, and this will continue to grow. Then back to quarter three. It was a challenging quarter, a quarter of extremes. On the one hand, very strong consumer demands. On the other hand, lower production, 50,000 lower this quarter compared with quarter three last year. That was driven by actually two factors. One is the underlying shortage of semiconductors that we've had now in the world for quite some time. On top of that, COVID-related lockdowns in Southeast Asia, Malaysia not the least. There's a lot of important suppliers in that region who were forced to lock down and couldn't assemble their components. It had less to do with the actual semiconductor shortage and more a classic lockdown problem. That lockdown problem is now resolved, and we're back to only, quote-unquote, "having the normal semiconductor shortage." In this period, we lost 50,000 in production, but we only lost about 30,000 in retail deliveries 'cause the inventory continued to shrink. The revenue decrease was lower than the delivery decrease, partly due to selling a rich mix of cars, electrified cars, with a good price realization. The EBIT margin for the quarter was 5.5%. If you break that down, if you compare it with quarter three last year, you can see that the big negative factor was the reduced volume, but we more than compensated for that with the stronger mix and pricing. We had some foreign exchange rate going the right way, some non-recurring. Last year, quarter three, we had a bit of a dividend as we finalized the Zenuity divorce. We have a negative other, and in that, you have, among other things, raw material that was negative more than the foreign exchange was positive. That's, in essence, the work. Very weak volumes, but strong price realization is the main message. What's really the bottleneck for us right now is the production capacity. Given that we are in the 30th of November, and two days from now, we typically send out the sales report for November, we give you a little bit of a trading update on where we are right here and now. There, we can see that in October and November, the continued strong demand is there. There's a really strong demand for Volvo's product. We have a record order book, and the order book is continuing to grow. We still have a supply constraint. It's improving month by month. In October, the production was down 16,000 cars versus the October last year. November is down 7,000. Production is getting better but still constrained. The retail deliveries were also down, given that the production were down. Now we are at the level where the inventories are so low, so we're actually shipping fewer than we're producing as there is some in-transit inventory. That's in a nutshell. The production situation is improving, but going into next year, we're also clear that we don't see the semiconductor shortage disappearing anytime soon, and the forecast ability is still weak. You already said it, Håkan, but in the end, where will we end up for 2021? There we are just reiterating what we've done during the year, that we will deliver growth for the full year, and we will be back at pre-pandemic profitability levels. Easy to say, but we're not going into any more details on the outlook for 2021. When it comes to an outlook for 2022, we come back on more details on that, when we summarize 2021. That's what we had planned to share today. With that, I guess I hand over to you. Yes. Thank you, Björn. With that, we open up for questions. If you would like to call in and ask a question, please remember to press star one. You're also welcome to type in your question in the online chat, and we will raise it here for you. We actually have a few questions already, and I would like to start with a question to you, Håkan. We talk about the challenging third quarter due to lack of components. What would you say about the situation in Q4 and looking into 2022? The figures Björn just showed, I think, shows a really clear improvement. Where we lost, say, 50,000 in quarter three, I think right now we are on our way, maybe landing on something a bit more than half of that lost in production. I think that's, of course, driving everything. That's where it starts. Deliveries to customers, of course, will be much more challenging quarter four to try to sell something out of stock that we need. Basically, this will go through. It's improving on the production side and supply side. Now, of course, very difficult to make any forecast for 2024. I really, if nothing new comes up with any type of new variants of the virus or new waves, I think this, the improvement will continue. Far from we can say that it will be a normal year. I understand. Mm. Björn, you showed here that our fully electric car sales are at 4%. We have a clear target of reaching 50% in at the mid-decade. You mentioned capacity increases, but how are we going to go from 4% today to 50% in just a few years? I mean, in essence, you need customers who want fully electric cars, and there we are very confident. The Volvo consumers want fully electric cars. We've looked at the massive amount of consumers who are buying plug-in hybrids today. When you ask them what type of car they want next, they want fully electric cars. The Volvo consumers are there. The second thing you need is great cars. We have the C40 and the XC40. They are great cars. As we talked about before, we're focusing all our future development into fully electric cars. We're gonna launch them year by year now as we can. Lastly, you need production capacity. There we have secured now much stronger capacity for the XC40 BEV and the C40. Clearly, the new cars that we are launching, we're gonna reveal the replacement of the XC90 next year. A smaller SUV, fully electric, comes, and a replacement for the XC60 comes. With that, we're basically shifting a major part of our volume into a fully electric future. Through that, reaching 50% is clearly achievable. We've received a couple of questions here online, over the chat. The first one is, what is the next step with the range of electric cars? What is the goal when it comes to total range in miles? And are you looking into solid-state batteries? Don't know who feels. Yeah. We look, of course, into improving our batteries to get to more energy-efficient batteries. That means range together, of course, with other measures. If that's going to be solid-state or not, I think solid-state is probably, our estimation is probably after 2030. There will be other improvements, lowering cost and increasing range. Together with better aerodynamics, better efficiency, better batteries, I think we will see a considerable increase of the range of electric cars in the coming towards mid-decade. You would reach levels of range, which is what's needed. Yeah, nobody wants to have a very, very long range, but they should be more or less where the range is for a petrol car today. That's where we're going to be. That's in simplistic terms. That's what our development plan is geared towards. By mid-decade, make sure we have a fully electric car that is cost parity with ICE cars today and have a range that is on parity with what you get on a fuel tank of a petrol car. Mm-hmm. That's in a nutshell what we're trying to achieve. It's really the last small drawback with an electric car is that people are a bit suspicious about where do you charge this car and the range is short. This is something that will be improved also on the XC40s and C40s, also through upgrades over there. There will be improvements coming on those cars. Thank you. We're getting questions on a lot of varied topics here. Now we have a question on currency, and I think perhaps that's for you, Björn. How has Volvo Cars been impacted by the weak Swedish currency? To be honest, that has not really been a major factor in how we've been driving the company over the last few quarters, so not a major factor. We also have a question over the phone. It's from Valdemar Lönnroth, reporter at our local publication, Göteborgs-Posten. Mm-hmm. Valdemar, please go ahead. Yes. Hello, Håkan. Valdemar Lönnroth here. We broke a story today about Geely's plant in Belarus, which is sanctioned by the EU due to its ties with the Lukashenko regime. The cars produced use Volvo technology and the company BelGee use Volvo in its marketing. It's two questions. What's your view on that this company and the deal is very sanctioned? And what is your view, that this company, that is BelGee, use Volvo in its marketing? I can't really comment. First, I haven't read your article. You are referring to a Geely factory, and there they are producing- Yes Geely cars. It has nothing to do with Volvo, and they are not using Volvo-developed platforms in that factory. I think we'll be very surprised if they state that they use Volvo technology. That's nothing I know anything about. I would say they are building- Yeah Geely cars, for further, more details, you have to talk with Geely about that. It's nothing where Volvo is involved at all. Yes, but they use your technology in their marketing also. To be clear, it's the CMA platform and it's also Volvo engine architecture in the Geely cars that are produced here in the factory. The CMA platform is developed by Geely together with support from us basically financially. It's a platform that is part of Geely's IP. Volvo is not contributing to any technology in a factory in Belarus. I would be very surprised to hear that, but we need to look into that. We have to read your article and come back. It's a Geely factory, so you should talk with Geely about that, and it's Geely products. Volvo is not involved at all. Okay, great. Mm-hmm. Okay. Thank you, Valdemar. We're getting a lot of questions here, so if you have more questions, we could get back in line and press star one, and we will address a couple of other questions that have come in as well over the chat. We have a question from Dagens Industri here, from Karin Olander. She's wondering, what are your expectations on the new Swedish government that has been announced today? Of course, that they see the chance to make Sweden a forerunner when it comes to sustainable technology. I mean, we have now a very clear target and a mission here to electrify our company and half of the cars will be all electric. Really to make that an attractive concept for consumers here in Europe, but also an attractive concept for others to copy, to really do something about the global climate. I think it's important that we really have an electricity supply that is supplying CO2-free electricity and do it in a very efficient and smart way. We need more electricity, say, for all electric cars, but we need a smart grid. I think, let's together make a concept both with primary energy and cars, and I think that would be something that I expect from the government to really support and contribute to. I would add, I do believe Sweden has the same opportunity as Volvo has. I mean, the whole climate change and the need for clean tech is a huge opportunity, but it requires a lot of change. I think in that change, it's actually an advantage to be relatively small and relatively good at collaborating cross-sectorial, and I think that's where Sweden has a potential. I know a lot of people in the government is trying to use that to use clean tech as a competitive advantage for Sweden going forward. I think that's an exciting development. Mm-hmm. We get, as I said, questions on a lot of varied topics here. Now we are receiving a product question here from Autocar. SUVs now make up 75% of Volvo sales. Will the V and S lines be replaced? Yes. All lines will be replaced with something even more attractive for the consumers. The SUVs, that is a car with a rather high seating position, that remains a very attractive car type. They will, though, be more aerodynamic, but then we also need lower cars, both with, say, a more conventional body size with the luggage in the rear, but also where there is an extended luggage a bit more square in the rear, which was earlier called wagon. I think you will see those low cars also in addition to our high position SUVs. Mm-hmm. We just have to keep the people waiting here till we can reveal that. Stay tuned. Stay tuned, yes. More to come. We have another caller over the phone. It's Jan Almgren from Svenska Dagbladet. Jan, please go ahead. Thank you. Hello, Håkan. Just one question or two. What do you say about the new Omicron? Is that the name? Are you worried? Will that mean more problems for Volvo when it come to lockdowns and restrictions? I think if you look at our company and our production, and here our office as we have, I mean, in production, we have been building cars all the time. Yes, I will say we are very well prepared for producing also in a safe way for our people, even if there is a new variant. Same is in the offices. We have, of course, a lot of precaution made here. We are offering a safe working environment also here. I'm not too worried about that. You can never rule out, of course, is this very aggressive virus which will spread, then there is a risk we will have more what Björn talked about, lockdown in our supply chain, which would, of course, then mean that we cannot produce any cars. Very difficult to have any opinion about this variant. It's of course worrying that it pops up new variants and there are new waves in this pandemic. I hoped it was slowly coming to an end, and then this popped up. That makes us a bit concerned, of course. We are ready here in our company. Mm-hmm. Okay. You have been at the stock market now for a month. What is your most important message from you today to all the new shareholders in the company after the IPO? I'm very glad to have you on board. I think it's very good for the company to get 200,000 new owners who have expectations on to have invested in the company that will be leading in the electrification. I think that's what everybody have invested in. Right now it is, our full focus to deliver on all of your expectations, and, we will give you feedback quarter by quarter in the future how we progress. Thank you, Jan. If you have more questions, please press star one and get back in line, so to say. We will open the floor for a few other questions that we've received over the chat. We have a question from Kosei Fukao from Nikkei, and he actually has two questions. The first question is you will increase annual production capacity for fully electric cars at Ghent and Taizhou from 15,000 cars today to 150,000 cars after summer. Could you tell us more details? For example, breakdown for each plant and investment. And secondly, regarding next generation XC90 and XC60, will you have PHEV and HEV versions as well? The first question, we're not giving you exact details on how much we produce in each plant, but the combined capacity for XC40, BEVs, and C40s will be 150,000 cars, and we have, you know, flexibility to shift around a bit there. The XC40, as I remember, maybe two-thirds and one-third, C, C40, but we are flexible depending on customer requirements and demand. Upcoming cars. Upcoming cars. The core idea here is that we focus on a fully electric core compute architecture. Therefore, we replace the XC90 with a new car that's gonna be named something else in the similar size class that is fully electric core compute. That will not have a plug-in hybrid propulsion system. What we can do as we go with that route is that we can extend the life of the fantastic XC90 and XC60 that we have, give them some interior upgrades and, you know, continue to develop the great plug-in hybrid platform and keep that running as long as there is need for it. Mm-hmm. That's the strategy. Okay. I would like to remind everyone, if there are any more questions you would like to ask over the phone, please, press star one, and you can continue to send in your questions over the chat. We have received a couple of more. We have a question here from Fredrik Thambert at Dagens Nyheter, and he is asking, what is the status of the new Northvolt factory that you announced earlier this year? Status is that we are. It's really two joint venture. First, we have the R&D joint venture, and we are planning to come back to that, I think, before Christmas to say where it will be. That's where we are going to develop exactly this new generation of batteries we just got a question about. Then the factory, we also now have come to a place, a point where we have a shortlist of very few alternatives, and we are going into the final selections here. Probably we will need some more time, so realistic maybe January. After New Year, we will come back with where we are going to build the factory. It is a huge factory which will supply our next generation of vehicles, mainly for Europe, with those more efficient batteries, and then we will need similar solution for Asia. It's fully on track, a very exciting development, very important for our strategy. Batteries will be core competence for Volvo. You mentioned early next year. Previously, we said before the end of the year that we would be able to give an update. Oh, we have so many candidates- Will there be- for the site. We can give a bit of an update on where we are in the process more concretely, I think, before Christmas, but the final selection won't be. Mm-hmm. Exciting. Stay tuned there as well. Mm-hmm. Yeah. We have a question also from Autocar. Could a shortage of dealer stock accelerate Volvo's shift to an online sales model? I believe that's not really the bottleneck. The bottleneck is to build fantastic digital systems and work with kind of the inventory system in a more direct model. That's what we're working on. Of course, having stocks helps serving customers quicker, and we intend to keep that ability in the future. Rather than having stocks at every retailers, we will have stocks in some central compounds that enables deliveries within a week or something throughout Europe. Much lower total level of inventory and a more efficient system. That's exactly what we're working with our retailers to get in place as we speak. Mm-hmm. It's often talked about direct sales as if we're going to bypass our partners. I mean, that is wrong. You can, of course, walk into a retailer and also in the future order your car, even though it's available online. I think we should focus on the three really fundamental advantages with online, that there will be price transparency. You will know the price of the car. We will have standardized configuration, as Björn said, much more easier to understand what exactly is included in the price. Third, also, we will deliver faster. The online direct sales will, and that's why we introduce it, will be more attractive to the consumer. That's why we are doing it. We have a question here from an anonymous reporter. The question is, will Volvo Gent be the first all-electric factory to build Volvo cars, and how many different models will be built there? I think we have to come back to the. No specifics on that. I don't have that. They are definitely the number one factory right now for all-electric cars, as they are building the XC40 and the C40. They are first in line to have a possibility to be all electric. I think we have to come back exactly when they can only build electric cars. Eventually they will. They will. Be all electric. Ask the company. Mm-hmm. We have another question here from also an anonymous person. The full-size SUV to be launched in 2022, when will it be launched? Is it in first quarter or the last quarter? And when will it be produced for client deliveries? Well. Stay tuned. I think we will present it end of next year. Okay. I think we have said that. The production will follow after that. Mm-hmm. Great. One of the last questions we've received here is, what is Volvo doing for the countries that are still struggling with the virus or are in lockdown? Well, we will do similar things as we have done during the pandemic, and I've been quite impressed with how we managed through our retailers to keep selling cars when the whole society was in lockdown. We managed to keep the factories working in a hygienic way during that period as well. I think it's back to what we learned over the last one and a half years if we come into a new intensive wave. Mm-hmm. We're prepared. Great. Autocar has sent in another question. Has a strong demand for the C40 prompted you to consider coupe style derivatives of all future SUVs? Yes and no. I mean, if you're coupe style, I think the cars, as I said, will maybe be a little less boxy in the future when we have to have a lower air resistance. You could call that a bit coupe-ish maybe. The roof, I mean, if you look a bit how you reduce air resistance, I think, of course, all cars will go in that direction going forward. First now we talk a lot about range with electric cars. I think we very soon will start looking into how many kilowatts per 100 kilometers do you need. It's more the energy efficiency. Then, of course, air resistance will be very central, efficiency of engines as well. It will be an exciting time for people who love car designs because it's been quite standardized for the last five, 10 years. Mm-hmm. with fixed body styles. You're gonna have much more experimentation and much more, I think, innovation and diversification between different players. It's gonna be an exciting time. The customers are king, so let's see how the C40 will sell. It's not entirely up to us. No. As a final question then, Håkan, earlier this month, you joined industry leaders and government representatives at COP26. What are your reflections from that meeting? I'm cautiously optimistic. I mean, we have seen all these climate summits many, many times since 1992. Unfortunately, it's been focused on a lot of discussion about targets, which unfortunately people have gone home and more or less forgot because CO2 have just increased all the time. In Glasgow, for the very first time, I think there was more focus on what should we really do. I like the discussion about the end of coal because that's the root of everything, of course. If we don't stop burning coal, we can talk all day. For our industry, I would say very positive outcome because we had a clear signal, which of course we also contribute. I think that is what authorities should do. Give us a clear signal, and then competition and market economy is great in realizing it very quickly. That was a major step forward, I think. It's also- Hearing what talking- To electrify, of course. That is really going to trigger everybody because exactly as seat belts, they were not introduced because there were some tax breaks or incentives. They were just introduced because suddenly it was mandatory. We welcome that, and there was a signing of that, I think it was 2035. No big problem for us as we plan to be all electric already 2030. Cautiously optimistic for the next COP, which will be somewhere in the Middle East, as I remember. That's maybe a good place to start discussing stop burning fuel. Thank you very much. Thank you. Thanks for joining us. Thank you, Björn. Thank you everyone who's been watching us online.