Ladies and gentlemen, my name is Claes Eliasson. I wish to welcome you all to this conference call covering the fourth quarter and full year 2020. We will be listening to a presentation by the Volvo Group President and CEO, Martin Lundstedt, followed by a presentation by Chief Financial Officer, Jan Ytterberg. When done, we will open the line for a Q&A session. Without further ado, Martin, please take it away. Thank you, Claes, and also from my side, hello, everyone, of course, and most welcome to the quarter four and full year 2020 presentation today. When summarizing 2020 to start with, we can, of course, conclude that this has really been an extraordinary year. When we discussed this also upfront with the preparation, it feels much longer than only one year, given all the different events that have happened and that we have been through together. Of course, keeping health and safety has been the main priority for us during the course of the year, but COVID-19 has, in addition to that, been also a resilience test, both for society at large, but of course also for the Volvo Group. I have to say that I'm really proud of that despite all challenges, how the colleagues and all our partners in upstream and downstream value chain have really kept their eyes on the ball here and sticking to our tactical agenda, obviously, but also our strategic roadmap and driving our performance and transformation activities. We are proud that we have actually demonstrated also strong resilience through volume and cost flexibility throughout the different parts of the organization, delivered good profitability, enabled increased shareholder returns, but also while further accelerating our transformation into sustainable transport and infrastructure. If we look at the fourth quarter highlights, we had a strong currency headwind on sales, meaning a decrease of sales with 8% to little bit lower than SEK 100 billion. If you exclude FX on par with the previous year, so it's a good recovery that has continued sequentially. The adjusted operating margin increased with 2.5 percentage points to 11.3% on the back of continuous good OpEx reduction and thereby volume flexibility. Group Trucks, worthwhile mentioning, performed strongly with best ever quarterly margins. We have had a continuous focus on cash also enable the positive cash flow of SEK 17 billion. Jan will come back to that. The organization has, at the same time, revealed also new and exciting news in the field of, for example, electrification together with further serial deliveries of fully electric product and solutions to our customers, more on that later as well. In summary, a very strong quarter. At the same time, we had a strong quarter, we are also still in the midst of the pandemic, with different phases and situations around the globe. We are a truly global company present in 190 countries. Our priorities are still to protect our employees and partners and to protect the good maneuverability for the g roup moving forward as well. The focus on the four Cs has been really a key pillar for our year of 2020, and it remains obviously, where health and safety is always the number one priority, as I've already mentioned. While at the same time continuing to serve our customers in the best possible way in the market as such through our service business, but also when it comes to the demand that we are seeing. We have to continue to do that during continuous difficult and challenging conditions, obviously, not at least related to the pandemic. After the initial lockdown, our commercial and later industrial systems have been ramped up back to levels in line with 2019. I have to say, in some cases, actually beyond that also when we look at the utilization among our customers. We have done that also with a leaner cost base. The work in the group we have started way before the pandemic to have a better volume flexibility has been very important to us. Even if we could not anticipate that volatility that has been even more drastic and dramatic, we were prepared, and more importantly, I think the colleagues have executed well here. We have seen it both during the lockdown, of course, but also the following periods now of strong demand and supply acceleration, not at least during quarter three and quarter four. We have indeed had a steep increase during the fall, not at least in order intake, as you can see in the figures. We are therefore now continuously managing a challenging supply chain situation to meet increased demands. We have seen that in transportation and in parts of the steel supply. We see that now also when it comes to the semiconductor situation. There are several areas of supply that are strained, and we'll decide what level of ramp-up that is possible for the time being to meet the increased order backlog that we've had thanks to the strong order intake. On that note, we are working, of course, 24/7 to minimize the number of vehicles affected in quarter one at least, and also to recover as soon as possible during the course of the year. I think it's very important here to remember that we have shown, not at least in 2020, good volume flexibility, and we'll continue to focus our efforts on that also now in 2021 here. Deliveries of trucks are down 2% year-over-year, but sequentially, of course, strong development of +49% in relation to Q3. It was very well done by the organization and suppliers to manage these volume swings during the year. Everyone, I have to say, has not gone only the extra mile, but several extra miles in order to achieve this. Also, the volumes for VCE were up 21%, mainly driven by China, where Volvo Construction Equipment, including SDLG, is growing the business faster than the fast-growing market, with a slight market share gain, both for excavators and wheel loaders combined. For excavators alone, the increased market share was 1.1%. The majority of that was SDLG, Volvo also showed good development. The underlying service sales increased 2%, adjusted for currency, which is showing, as I previously said, that customer activity levels are back to or above pre-corona levels. We see that the utilization in the installed truck fleet is now somewhat above, for example, in Europe and in North America. Also the construction equipment fleet utilization, three months rolling, sees higher levels for 2020 than 2019, both in December and in November. That is also following this gradual and rather steep ramp-up, actually, of activity levels. The bus coach business continues to be severely hit by the pandemic restrictions on primarily on travels and tourism, but also that we have seen some restrictions on the road fleet in public transport systems. That is also, of course, affecting the service need instantly. The 12 months rolling run rate of services sales is approximately SEK 80 billion, which is, of course, supporting our resilience in all times, but not at least in uncertain times. As far as market forecasts are concerned, there is, of course, still a high level of uncertainty here. When we look at the forecast, and it is based on our current assessment of the visibility, both on demand and on supply or in the supply field. In Europe, we still see a continuous recovery of orders, among others, I have to say, linked to the e-commerce trend, but also a lack of general transport capacity, growing utilization, and low inventories of used and new vehicles. That is on very low, and I should say not over healthy levels when it comes to the low inventory. The market forecast is revised upwards to 290,000 units for the full year here. For North America, also revising upwards, we see similar patterns as for Europe, 290,000. Our estimate of a normal replacement market is 275,000, so we are a little bit higher. What we see now is mainly driven by the highway and sleeper segments. Brazil, also a record harvest in 2020, also better prices on raw materials, commodities. That will drive the need of increased transport, and we are also there lifting up the forecast to 95,000. Japan unchanged at 45,000. Also for China, we have an unchanged forecast of 1.3 million units. China, as you know, had a very, very strong year. Last year of 1.8 million trucks, amongst others, driven by the replacement subsidies for vehicles for CN3 or China III emission levels or lower. India has seen also a gradual improvement from very low levels, and the market forecast is somewhat revised down, I should say, to 265,000, given that we only had 143,000. Even if it's a recovery, we are revising a little bit downward. Truck deliveries, very positive book to bill on the back of the continuous recovery. Orders up 61%, while deliveries, as we have already stated, were almost in line then with the same quarter 2019. North America, very strong order development based on better activity levels, but also lower order levels in 2019. We had anticipated a correction on that. Sorry. There we are. Yeah, North America had a very strong order development based on both better activity levels, as I said, but also that we had lower order intake in 2019, and that was also related to a pre-pandemic anticipation of a correction in the market. Europe, strong recovery, 42% in orders. We do see similar patterns across the globe with a growing order pipeline as a result. As I said, we are of course now focusing a lot on keeping reasonable lead times, but the strained supply chain or of course, what we are working a lot with, as I've already stated. We will then work with that throughout the year in a good and professional way. On the market share side. Also here, Europe positive, gain of 0.7% for Volvo, up to 16.2%, and a stable development for Renault. A rather stable situation in North America, and also high continuous level in Brazil, historically high levels of about 22%. I have also to mention Japan here. As you remember, we started slowly following the announcement of the divestment of UD Trucks in quarter one, but gradually, the organization and the colleagues in Japan have done a great job here to recover that and actually to beat the 2019 market share with 0.4 percentage points. That is also a very good achievement. We have had also the opportunity to, during the year, but also quarter four, to push our leading position in battery electric vehicles in different regions. What is very positive is that the interest among customers and also their customers, the interest is very high. Both Volvo and Renault are into serial production, as you know, since start of 2020 for urban applications, distribution, waste collection, urban construction, et cetera. We have actually a high level of interest there and a lot of tender activities. The next step now, it's on its way with the sales start for Volvo, more heavy application as from 2021, and that is another very important step. In North America, start of sales in Q4 for Volvo for the regional applications and for Mack when it comes to waste collection. Overall, we will continue to develop new regions, applications to drive the shift into fossil-free transport step by step. Complementing, of course, the current battery electric offering with the progress we are doing also in the formation of the joint venture with Daimler on the hydrogen piece of heavy haulage and long haulage with the fuel cell cooperation. It will be very exciting to continue to work with that during the course of the year, and we see how big both investment into the sector and also interest in really creating the right ecosystem. I will come back to that, but that is of course also why we are now forming a specific business area around different parts of the transformation here. We have seen that in our journey the last five, six years, the importance of carving out entities with full P&L responsibility in areas where we want to have turnarounds or acceleration, focus, and dedicated and professional teams. We are doing that also with Volvo Energy now on the battery piece, obviously, to optimize into our business areas that are still selling the solution up front to our customers, the right offering when it comes to the first usage of batteries. Also knowing the fact that the second usage of the batteries after have been used in a vehicle is still very interesting, since a big part of the energy is left when it cannot be used in a vehicle anymore and will, of course, be used then in energy storage and other type of applications, where Volvo Energy then will take the lead in the Group to really face customers and commercialize this, and then also take full responsibility for the recycling. In addition to that, we are also more and more in request of mastering the infrastructure piece, both when it comes to depot charging, semi-public, but also when it comes to permissions, grid capacity, grid installations, et cetera, both for the electrification, as I talked about, but also when it comes to the fuel cell development. Really looking forward to this development here. We are forming it from 1st of February. Joachim Rosenberg will be the president of this business area. Long-lasting experience within the group and also a successful turnaround with UD Trucks as the chairman over the last five years here. Moving in now to construction equipment. As for trucks, the market forecast, of course, are based on the current visibility on both demand and supply. It is, as a matter of fact, unchanged in relation to what we revealed in relation to the Q3 2020 reporting in October. This means slight improvements in relation to 2020 for Europe, North America, and Asia, excluding China, and somewhat higher increase for South America. China, that is, of course, extremely important here, is estimated to have a good spring season supported by the stimulus packages provided in 2020. We estimate and somewhat, I should say, hope also that market will cool off during the second semester of 2021, because it would be healthy in our view to avoid the bubble that we have seen in the past here. It is important also that the Chinese recovery is sustainable over time. When it comes to deliveries and orders, book to bill was also in this area positive, less pronounced obviously because we had an increase of deliveries up with 21%, but orders were still higher with 31%. Maybe I have to comment on one thing here, and that is the decrease in order intake in North America shall be seen in the light of, first and foremost, volatility between quarters and a very strong order intake in quarter four 2019. We have anyhow now, if you look at instantly, a stronger order book entering into 2021 than one year ago, and believe that the market will grow slightly, as we have also said in our estimate. For the remaining regions, such as Europe, the order intake was strong and deliveries are picking up, supporting the market forecast that we have. On the news side for Volvo Construction Equipment, also a number of very important steps here, launching a new range dedicated for China, the 20-tonner and the 48-tonner. We are moving it into our Chinese industrial footprint, good level of localization, and thereby also being able to support with short lead times and with the right sort of specification level really opted for the Chinese customers that are maturing very rapidly. Exciting news, and we are introducing that right now as we speak in the beginning of February here. We have also continued to pioneer the electro-hydraulic solutions in this specific area now with a technology partner, where we have a very good exclusivity agreement, and this technology enables a step change in fuel economy and energy efficiency. I will not reveal the exact numbers, but I can tell you it's a step change. It's a huge step, and that is important to continue to drive innovation when it comes to energy efficiency for all different regions. Also following earlier announcements, now we are into deliveries of our electric compact wheel loaders and excavators that have reached final customers, and we are very excited about the utilization in real applications around Europe here. Buses continues to be, as I said, severely impacted by the COVID-19, both on utilization and consequently in the service business as well. Activity level was also lower in the city and transit bus market, as I said. We expect therefore 2021 to be another very tough year for Volvo Buses, and we continue to take measures to mitigate the situation, and that is, of course, the highest priority. At the same time, the transformation is ongoing. We did deliver 145 city buses, among others, a big chunk of articulated fully electric buses to city of Gothenburg, the biggest order and the biggest fleet in Nordics. In addition, Anna Westerberg has been appointed President of Volvo Buses, and she is replacing Håkan Agnevall, who has been appointed President and CEO of Wärtsilä. Very glad for Anna and of course, wishing her all the best in that position. On the Volvo Penta side, we see also a normalization, a recovery, order intake up 22% year-over-year, following first and foremost the recovery in the marine leisure, also followed by gensets and also gradually by the industrial off-road segments. Commercial marine a little bit slower. We see that vessels for wind farms are actually picking up. That is natural also with the transformation. We have seen also, not at least in the marine leisure, enjoyed strong service growth during the summer and continued into quarter three and quarter four. We also took, and Jan will come back to that, one- off, depending on the discontinuation of Seven Marine on the outboard segment. That is related to the strategy that we are really focusing now on the transformation in our sectors where we are really the leading actors. As you can see also, we are continuing to drive innovation in our segments. We took two examples here, both when it comes to the easy boating concept continuation. We have now a fully integrated Assisted Docking system that I can recommend to everyone, and presented at a Consumer Electronics Show that we are actually one of the finalists. That is, of course, showing the strong push for innovation. We have also announced a collaboration with Danfoss when it comes to further doing hybridization of the Volvo Penta Inboard Performance System, the so-called IPS, that is leading solution in yacht and industry. On a final note from my side on financial services, continue to work very closely with customers following the initial lockdowns, a standstill that, as you remember, that we have said also resulted in a steep increase of modification requests from customers. That is natural, both that they don't have any visibility, et cetera. During quarter four, we have achieved a continued reduced number of requests reflecting the better activity level. In addition, we also did see a stable payment performance. The penetration continued to improve in all segments, and therefore for the group, of course, in total. That is also an achievement that we have been focusing upon because we know that when we have good penetration, we also have a good retention and contact over the life cycle with our customers. We are also continuing to push for innovation here to build up the complete solutions that are necessary for all type of application, but not at least now when we are taking the journey more and more towards equipment as a service with a connected insurance offering. We are starting in North America, both for Volvo Trucks and Mack, and much more specific offering for each customers where we can follow it together. Very exciting news there as well. With that, Jan, I leave it to you for the financial part of the presentation. Okay. Thank you, Martin. The combination of recovery of volumes and good cost execution continued to yield good leverage also here in the fourth quarter. We were back to similar levels of vehicle deliveries and service volume as the fourth quarter costs and costs employed, which was clearly seen in the results and margins despite the headwind from currency. COVID-19 as such, in combination with supply constraints, calls for a continued cost and cash cautiousness. If we move over to the numbers and start with the net sales, they decreased by 8% for the group. If we take out currency, net sales for the fourth quarter was at the same level as last year. The Swedish krona has appreciated against all major currencies, but the weaker dollar and the Brazilian real affect most substantially, giving a combined negative FX effect for us of some SEK 9 billion on net sales. As regard regions, it's mainly Asia that deviates from the trend of similar volumes as last year, that's mainly related to increased machine deliveries and partly then to an improved truck volume, China was the main contributor behind this. If we move over to the results, we see that the enforced focus on cost and cash all through 2020 was clearly seen here in this fourth quarter. The good cost control was the main reason behind the improvement of adjusted operating income of some SEK 1.7 billion to SEK 10.9 billion, giving then a margin of 11.3%. Improved cost efficiency can be seen across functions and businesses, which creates comfort for the coming quarters. In the fourth quarter, it was mainly achieved by continuous improvements, by continue to eliminating and postponing activities, and by structure measures related to layoffs. The challenge is now for us to accelerate in certain areas like R&D while maintaining the cost discipline and get the full effect on the structure measures we implemented during the second half of 2020. It's difficult to find negative sides in this report. We had actually a negative effect coming from market and product mix in the quarter, in the business areas outside trucks. In the quarter, there was a positive effect of some SEK 600 million from a correction of actuarial calculations for pensions and a negative effect related to the restructuring Martin was mentioning in Volvo Penta of some SEK 175 million. You should remember that Q4 last year included a capital gain of real estate of some SEK 500 million. The negative FX effect of close to SEK 1.8 billion reflected the strong Swedish krona in general, and once again, US dollar and Brazilian real impacted more substantially. The FX transaction effect for 2021 is expected to be some SEK -1 billion. We do not provide forecast for the full FX effect on operating income. If we move over to the cash generation, there we are. Fourth quarter is, as you surely know, a seasonally very strong cash flow quarter, and that was the case also this year. Operating cash flow in industrial operation was close to SEK 17 billion. During the fourth quarter, we have gradually increased production, which gave a positive effect on trade payables, naturally. The enforced focus on cash and capital efficiency was reflected in a continued decrease of inventories, despite then the gradual increase in volumes during the quarter. We are at historically low inventory levels on new, but especially on used vehicles. As a consequence of the cash inflow, in the quarter, net cash position for industrial operation was close to SEK 75 billion. Moving over to the segments, let's start with trucks. Who would have believed that Group Trucks would be at peak-adjusted operating margins of 13% just two quarters after entering into the devastating second quarter. It happened, as demand recovered quickly and the cost execution was strong. All in all, an improvement of SEK 1.8 billion up to SEK 8 billion for the fourth quarter, despite a headwind from currency with around SEK 1 billion. We have, as you see, the same explanation of the improved adjusted operating income as for the group, also here for our main segment trucks, excluding the comment of negative mix. Group Trucks was positively impacted by some SEK 320 million from the correction of actuarial pension calculations. For construction equipment, the service volume improved in the fourth quarter, and machine deliveries increased with 21%. Increases were particularly strong in China and for our SDLG brand and then limiting the increase of FX-adjusted net sales to 15%. Besides the positive effects on earnings from the improved volumes, the cost execution both on the indirect side, but also in the industrial system where we had continued good volume flexibility, impacted positively. Here we have a negative market mix effect with lower deliveries in Europe and North America, and FX had a negative impact of SEK 0.6 billion. All in all, adjusted operating income increased to some SEK 2.3 billion, and we had a margin of 11.2% in the quarter. Buses continued to be hampered, as Martin was saying too, by reduced personal mobility around the globe and also that we have fleets and buses standing idle. Also here in the fourth quarter, restrictions continue, and of course, that affects our service revenues and also partly the deliveries of new buses, where we see a very subdued coach and tourist segment. The lower services sales and then the low capacity utilization, as well as a negative product and market mix impacted negatively for buses, which were partly offset by a strong cost execution on selling, administration, and R&D. The adjusted operating income was just below breakeven, and despite them also fighting a negative FX effect of some SEK 80 million. Very strong work in buses. These are, of course, indeed unprecedented time in bus business and for our bus organization, and they are really doing a fantastic job. High uncertainty and future challenges prevail also for the coming quarters for buses. For Penta, volumes continued to recover in the quarter and were actually higher than the fourth quarter last year, mainly related to the industrial segment. Service volume improved, particularly in North America. The improved volumes, together with the good cost execution also here in selling and R&D, contributed positively, but were offset by negative product mix with less of heavier marine engines compared to fourth quarter last year. Furthermore, the decision to decommission the outboard segment gave rise to provision of SEK 177 million in the quarter. All in all, an adjusted operating income of SEK 25 million in the quarter, a decrease of close to SEK 150 million compared to last year, FX impacting negatively with SEK 85 million. Ending the walkthrough of the segment with financial services and adjusting for currency, the new retail financing volume and the credit portfolio were higher than last year, as market share on customer finance improved. The provisioning for future potential credit losses increased, reflecting the still uncertain business environment. The write-off levels, though, have increased slightly from the fourth quarter last year, but are still limited to what we can call mid-cycle levels. Compared to the fourth quarter last year, credit provisioning was some SEK 150 million higher than last year, which together with the negative FX effect of around SEK 100 million, then partly offset by lower expenses, were the main reasons behind the lower adjusted operating income. By that, Martin, I give it to you to sum up an unprecedented 2020. Thank you, Jan. In summary, the group has demonstrated a strong execution and resilience in a very difficult year. I think that is a starting point. We have fought the COVID-19 situation by focusing on health and safety for colleagues and partners around the globe, and at the same time executed on volume and cost flexibility, resulting in a margin of 8.4%, despite the sales decline of 22%, but also remember the huge volatility between quarters here. During the year, we have also accelerated the commercialization of electric vehicles and equipment, and we have also announced new business areas, important business areas to drive this transformation, Volvo Autonomous Solutions, Volvo Energy, and also the announcement of the Daimler- Volvo fuel cell joint venture, and also the continuous work with the strategic alliance with Isuzu. That all in all is to further strengthen our joint journey towards sustainable and safe solutions. As we also said, obviously in the short term, there will be production interruptions as supply chains are extremely strained after the steep recovery during the fall and winter, but also related to the fact that we are still in the midst of the pandemic with continuous risk for local and regional disruptions. That is across industries as we speak now. Of course, we will continue to fight hard to minimize that impact, and to find way also of recovering any short-term fallbacks here. I think it's also important to remember that the recovery lately shows that the increased demand of transport and infrastructure solutions for the coming period is here, resulting also in our increased market forecast in many regions. Also, that the transformation is happening with a lot of interesting opportunities as we speak. Rest assured about that we have a fantastic drive among our colleagues to always fight and to always make things better, in the short run and in the long run. I think 2020 has shown that we are on our way in that regard. As a result, also, the board is now proposing to the annual general meeting, an ordinary dividend of SEK 6 and an extra dividend of SEK 9, reflecting also the financial achievements so far and the current financial positions right now, reflecting continuous strong financial position for the group and also a good return to our shareholders. By that, I think we end the presentation, Claes, and we move into the Q&A session. Yes. Thank you very much. We will now seamlessly transition into the Q&A session. Operator, will you please let the first caller through? Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad now. Our first question comes from the line of Hampus Engellau from Handelsbanken. Please go ahead. Thank you very much. Two questions from me. Starting off on your market outlook, if I look at the trucking market, both in Europe and North America, it's 10% bigger active fleet in the last 10 years. If we look at the average age, it's slightly below six years in both markets. At the same time, this market has been around 300,000 units for some time. My thinking here is that going forward, given your outlook for 2021 in both markets, we are expanding the active fleet, and we're also making it even younger. I would be interested to hear your view on the cycle. How should we think of the cycle? Should we think of a slowdown then into 2022, or are these new fundamentals coming into play? That's my first question. Second question is on new truck pricing. We've seen this fantastic increase in order intake during the quarter. We're coming off a quite big fleet season in Q4. Always challenging when you have these breaks in demand is to manage price. Any comments from you guys on how prices have been developed would be helpful. Thank you. Thank you, Hampus. Didn't have time to look at your report today, but just saw a flash that it seems that it was improvement as well. Coming back to your questions, when it comes to the active fleet and expansion, I think we have been discussing that a number of times in the past. To your point, if you should look at the normal trend line and where we should be in normalized market, it's maybe more like 270,000, 280,000. We have said a number of times also that we see a number of dynamics coming into play now, not at least e-commerce, the different patterns of transportation, that is actually giving us reason to believe that there is an expansion from that trend line that can be somewhat higher. Since we are talking on relative low numbers in percentage, I think that is reasonable to believe. At the same time, what we see with the recovery is also, yeah, it is a little bit young, but at the same time also when it comes to the inventory levels of both new and the aging structure of that and also used, we think that we are entering into this cycle now in a healthy state of Volvo, and also as we can read it in the industry. Let's see. We will not give a forecast for 2020, but I think we are pointing at the direction here of 290,000. As we also stated that during the year here, given the steep recovery and the good order intake, of course a lot of focus be to maximize the output and to realize the order book. There is, so to speak, also this balance, how big the market will be balanced both on the demand side and the supply side during the course of the year, step by step. It's stemming from a positive situation. It's stemming from, if I may put it a little bit bluntly, a wide problem, and that we need to now mitigate in good way and not least have a very good discussion and cooperation with our customers in order to plan that as good as possible. When it comes to pricing, I don't know if you would like to start to comment on that, Jan. I can do that, Martin. We talked about it during the quarters here in 2020 that, of course, in case of new vehicles and something being ordered from the production, then it has been a stable price level, but it has been more on dealer inventory and reducing stocks where we have seen some kind of price pressure. That went away during the fourth quarter for obvious reasons related to the demand. We can say we have stable prices on the truck side when we talk about the fourth quarter. What we have to, of course, mitigate is that there is cost pressure in certain areas in the supply chain for raw materials that we have to, of course, increase prices for when we come into the 2021 year and the deliveries there. What you can say in addition to that, what is obviously now, when we have had a very good order intake and increased order backlog, obviously, we will not fight for the last fleet deal either, so to speak, give to the biggest proportion of it and have a good mix. To Jan's point also, the fact that we have a very healthy level on both new and used inventory is, so to speak, a price realization in the mix as such. We continue to monitor that, both as regards material, but also the opportunities in the market. Thank you. Can I ask just one follow-up on lead times in North America and that market? They have a history of double ordering and dealers becoming worried about not getting slots. Where are you in terms of lead times? Is that something that you worry about when you have orders growing 160% during the quarter? What's your view on that? Yeah, of course, it's always like that when you have an increased order backlog. The dream scenario is to be able to follow that order intake with, so to speak, your supply capabilities. Given the very high figures now, the order book has expanded. I think during not only the pandemic, but during a number of courses we have here, we have learned a lot to work really close with the customers and dealers, I should say, not at least the dealers, to really follow up the quality of the pipeline. We have now an increased order book, and thereby long lead times. That is the matter of the fact. I think also we have to reflect on what happened in 2019, second half of the year, when everything more or less stopped in wait for the potential downturn in the beginning of 2020. We are comparing with strange quarters, and we are comparing it for the end of this year. As we mentioned in the presentation, yeah. Okay. Next question, please. Our next question comes from the line of Klas Bergelind from Citi. Please go ahead. Hi, Martin and Jan, it's Klas at Citi. First, on the dividend, it's obviously great to see that you are rewarding the shareholder through an extra dividend. I just want to ask on the dividend policy. You are a cyclical company, but there are others in the truck industry with a healthy payout ratio, and you have really proven yourself during 2020. I think it's difficult to argue that Volvo isn't a much better business. You also said, Martin, during the Capital Markets Day, that you feel very confident that we won't see any major investment in the shift to non-ICE. Here's my question, really. Could you tell us a little bit about the reasoning, how that went in the board, and why there is no medium-term plan for the dividend? Maybe there is, but maybe not spelled out. I'll start here. Thank you. Thank you, Klas. As I said also, first and foremost, I think it's important to remember that the board has decided to put forward that proposal that we have now on the table to the AGM based on the financial achievements and financial events fulfilled up to now, and thereby the current financial position. The board has deemed that to be a good balance now, the financial position for the group. Going forward, with what has been fulfilled up to now and also a good return to shareholders, showing that we have a continuous focus of having good returns. We don't have any explicit dividend policy to your point, but I think also history is telling you something about how we are thinking about it. Be responsible when it comes to a strong financial position, flexibility, maneuverability, and also good returns to shareholders, including the events that have happened up to now. Just to follow up on that, Martin. With investors listening to you now, they shouldn't be concerned that your view of investment levels have changed in any way. We can still look at investment going from obviously the conventional powertrain being shifted over to the new powertrain. There won't be any step change going forward. Just to confirm that. I think you put it correctly. You listened in on many of your colleagues in this call listening to the Capital Markets Day. I can only reiterate what we said. I think we have a good roadmap for the future, both when it comes to the needed investments in our performing part of the journey, also in our transformation part of the journey. We have not changed our view on that. Again, I think up to now with the financial achievements, current financial position, and events that have happened up to now, good balance. It's still showing confidence in our way of thinking about it, that we will be an attractive investment for shareholders believing in our policy or our way of working in this. I think that is the best way of showing confidence that we are, so to speak, steady in our view on the right balancing. Yep. No, that's good to hear. My second one is on market shares, and it's obviously good to see that you're improving on the Volvo side in North America. I guess that this is because you're targeting a little bit more fleet, you're a bit more broad-based. The question here is on the gross margin. Is there any implication from this when we start to deliver on these trucks as orders on the fleet side, the typical lower margin? On Europe, it feels like you're taking a share here on the new Volvo range at the end of the year. If you could comment on that as well. No, to your point, I think maybe we should rewind it a little bit further and say that we have gradually been losing out a little bit of market share also, if we look into it. I should not say that it has been deliberate strategy, but it has been very important to continue to focus on the right type of mix of customers, the right type of segment spread, the right type of also, as we said, pipeline management. We don't have that high volatility also between ourselves and dealers, and we need to discount things not only because there is fleet mix, but also that you have unhealthy stocks, et cetera. You have a double whammy on that, et cetera. I think it has been good now that we have seen a break in that curve, but also that the organization and the colleagues in North America for Volvo Trucks have been working really good to find a good mix of customer base. I think historically, maybe we have been a little bit over-reliant on the fleet sales, and I think we have a mix here. Obviously when sleeper and highway is coming back, you also see the bigger fleets coming into place. That is for sure, too, but I think we have a stronger platform to build upon, yeah. Just a quick final one on regional battery electric on the heavy-duty side. We're hearing of very high interest in this range in Europe, given all the carbon pledges out there. I guess we will be maybe in the hundreds looking to the market, and then in the thousands maybe next year. If you could comment a bit on the scope and then maybe a little bit on sales by truck. How big is the difference looking at price mix roughly when these orders are coming through? No, as we have said, and just referring back to the Capital Markets Day also, you are right. It will be this type of S-shaped curve for different countries, regions, applications, depending on the right balance between, you have to start incentives or other types of pushes. We also see to your point also a bigger interest, because when not at least customers would really embark on that journey to fulfill their targets and promises when it comes to the CO2 targets, for example, and science-based targets, et cetera. We see an increased interest. You're right that it will come in the hundreds, and it will come in the thousands. Again, as we said, and that goes with your CapEx and investment question also, it will transform in S-curves connected to different segments of ADO step by step. I think that's a good way of doing it also, both from an industrial standpoint and a commercial standpoint. Thank you. Thank you. Our next question- Yes, please. Our next question is from Björn Enarson from Danske Bank. Please go ahead. Thank you. First question is on R&D spending, those have been coming in below expectation or quite low at least. You talked about slightly increasing R&D as you're changing focus towards electrical powertrains. Is still this the case or of a gradual increase, or you're taking a more of a big leap now as spending has come down a lot during the last year? Thank you, Björn, for that question. First and foremost, I think everyone can agree upon that the absolute majority of the effects of the pandemic has been bad. One, so to speak, opportunity related to that has been, of course, to take down the activity level and look up on how to restart activities when it comes to ways of working, ways of prioritizing, et cetera. That our technology organization across the group has done in a very professional way. Now when we are refilling the pipeline step by step, we can do that also not only with activity levels but also ways of working. I think that is an important element. Also having been able to really look through the prioritization. Of course, when we are seeing, so to speak, the general activity level in economy and thereby transports increasing, we will also put effort into the R&D. I think also for investors should, as we have said, not been overly worried about that it will be that step change on R&D in relation to sales that we have seen in other sectors. At the same note, I think you should not be overly worried if you have fluctuations when it comes to R&D of percentage point to 1.5 for one or two years, depending on where we are in the cycle of sales, given the fact that the EBIT expansion of the group has improved a lot. Thereby it should be unwise to have a too short-term view on that and to adapt it too much in relation to the bets that we have in leading the transformation. My simple answer is refilling responsibly, but not being opportunistic when it comes to not fulfilling our targets when it comes to innovation, because you don't have to worry of big step change in that. It will be a little bit of fluctuation. I think the EBIT expansion has given the room to be offensive in a smart way here without having a big hit on the total journey, so to speak. Thank you. My last question is on the production issues that you highlight in the presentation in the report. If you can shed some more light on that and of the magnitude, and what we should look at for the coming quarter or quarters. No, as we have said, first and foremost, we have to start on the positive note, a very good order intake and order books. Priority of course, will be to realize that order book as good and as quick as possible, not at least for our customers that are actually having also a good activity level. That is the starting point. Maximum focus of really getting out what is possible. We have seen, as I said, with a rather steep recovery across industries, it's not only related to commercial vehicles, industrial goods or automotive, but because industries that are utilizing same type of components, some global bottlenecks. That we have to live with for a while will cause some disturbances, but we will gradually recover and work with that. As I said, also, I think it's important for all of you to remember that we have shown good volume flexibility, and that focus is not going away now because we have this, that will continue to be important to us to follow, so to speak, that development also on the cost and volume flexibility side. Good order book, try to realize as much as possible, but during some periods of time here, it will be decided also by the supply situation. That is how it looks like. Perfect. Okay. Thank you. Our next question comes from the line of Akshat Kacker from JP Morgan. Please go ahead. Thank you. Akshat from JP Morgan, a couple from my side. The first one again on the semi shortages and production bottlenecks. What is the best way for you to quantify the impact on build rates and production sequentially into Q1, if there is the best available information to you right now? What are the chances that the situation normalizes in Q2? That's the first one. The second one is on construction equipment. Can you talk about North America? Generally, the market environment and activity levels. Order intake in the region is somewhat lagging, versus the rest of the world. Interested in hearing your comments around that. Thank you. Yeah. On the first question, I think I will try to reiterate what I said. If we look sequentially, quarter three to quarter four, of course, we had a big improvement, 49% up. Given the order intake that we have in quarter four, obviously we have a big order book to work with. We are not giving any guidance on future forecast, the only thing that we can say about that, good order book, good order backlog, and of course the main priority now, 24/7, is to realize that as much as possible. Of course, it will be a situation that we will follow closely. We have stated now that it will be at least quarter one, and that's the reason, because there are a lot of activities in those value chains now, and the visibility is what it is now, and we have to continue to work. I have to say that on a positive note here, we have very good relations with our Tier 1, Tier 2, and Tier 3 partners. This is not a game about banging people in the head. It's about coming up with constructive ideas in order to find solutions moving forward and to realize the order book. That will be, of course, the focus during the time when it's necessary, and it's, by the way, always the focus given our design of the value chains. To be followed, so to speak, but again, a very strong order book there. As I said about North America, I can understand the question, because given the order intake in comparison with Q4 2019, it looks like it's lagging behind. Reality is that it has been very volatile when it comes to order intakes, a little bit depending on the inventory situations during different quarters, both for 2019 and 2020, et cetera. I think you should think about that the order book that we are entering 2021 is actually better than when we were entering 2020, and therefore, we are guiding also for a slight increase in the total market of 0% to +10%. It's more about a little bit that quality. Thank you. Next question comes from the line of Daniela Costa from Goldman Sachs. Hi, good morning. I have three questions. Maybe I'll ask them one at a time, but I wanted to start by going back to your true cycle margin target, the 10%. You've just, I guess, closed with 8.4% for what is a trough year, really, really depressed volumes, even still in Q4, 11.3% margin ahead of what you had in 2019. Can you walk us through why you still think the 10% is the adequate true cycle target, given what we've seen this year? Also, how should we think about the next peak? As a start with, you're absolutely right. Well said. That is 10% of the cycle, and both ourselves in management and among our colleagues in the organization, but also with the board, et cetera, we said that is super important for us to really work towards. To show that this is a target that is not just a target, that is something that we are able to achieve. I think during a highly volatile year, to your point, that 2020 was, and delivering 8.4%, it's a good sign that we are actually a better company. Not at least when it comes to resilience, volume flexibility, cost reductions, but also the service business as we have been into. Now we, I think, step by step are showing that we are taking this very seriously, since it is always, so to speak, something that investors are interested in to see that companies that are quality companies are able to demonstrate good resilience capabilities. 2020 was important in that regard. Then we are coming back when we think it's time to do something else than the financial targets that we have right now. Then the bean counter can add that it's actually only one year when we have passed the operating income, which is the target, not adjusted, and that was last year. It's a little early to actually change the target, but Martin is perfectly right. Of course, the question mark is what we can actually do in a trough, and that we are sure that we are good at, and let's see that we are good at, and continue to be good at delivering in good times as well. Thank you. Then I wanted to ask about Penta and buses. Those were a bit weaker on the margins in Q4. What's the path going forward to recovery? Do you think they can go back in 2021 to the profitabilities we had seen before? What has to be done there for them to do as well as trucks has done? Thank you. We start with Penta, I think you should think about Q4 is normally weak quarter. That is how it looks like when it comes to activity level, not at least when it comes to the marine segment and the service business there. This case, of course, you have to put back the SEK 175 million that we took now in order to discontinue our outboard segment of Seven Marine and annual report, basically on what we have seen before. Our way of looking at Penta is that it's a high-quality company, they have all the opportunities also with the growing participation in the industrial off-road, to mention one thing. When it comes to b uses, obviously, as we have said that Volvo Buses is a better company today. Even in an extremely difficult year that we've been seeing 2020, where restrictions are not only putting, so to speak, the business under pressure, but in many cases actually are stopping the business, not only for our customers in tourism and travels, but also in public transport as we have been into. I think actually that the resilience test that they have proven is showing that when markets are coming back, we can also foresee that the performance transformation program and the further, so to speak, clarification and carving out of the different divisions of buses will pay off. This is a matter now of how restrictions in their main segments will actually develop. That does not mean that we will not continue to mitigate this activity, but Volvo Buses is a better company than we have seen historically. When market is coming back, that will also show off. Thank you. I just had a final question regarding, I guess you've made the EV launches, both in North America and in Europe. You're ramping up production, but you probably have an order book. Can you give us maybe a little bit more color about how that order book is developing? How big, how it's growing over the last couple of months? Just any kind of numbers that you can give us to have a feel on how the trajectory is being there and how quickly that can be significant. Thank you for that question. I can tell you if I take it in percentage points increase, you will be super impressed. Of course, since we're starting serial production for trucks, and that was in Europe then for quarter one for city applications, as I said, we are gradually now ramping up that. I think the more important is that we see a very big interest, and we are also now preparing our main production lines for hosting these type of volumes that we see. I think at one point in time, you are absolutely correct. We will start also to disclose that so you can follow that journey, because we are pretty proud of what is happening in the company, but not at least in relation to our customers. I said that in a media interview earlier this morning. It's impressive to see how proud our customers and their customers are about the deliveries and how they are participating in this transformation. I think you have a good point, and let us come back to that. I think we have reasons to hear from each other in maybe one quarter or so. Perfect. Thank you very much. Next question, please. Our next question comes from the line of Erik Golrang from SEB. Please go ahead. Thank you. A few questions following up on the EV side here. Assuming we get a scenario where demand for fully electric trucks happens or comes through much faster than what you currently expect, would you be able to capture that? To what extent will you or could you be limited by capacity constraints there? How fast could you ramp on that side? The second question on your comment there that you saw increasing demand there from your customers to also handle the infrastructure for charging and hydrogen. Do you see that also for trucks, or is that mainly on the bus side? If so, could you give an example of that on trucks? What kind of application that could be? Thirdly, also follow up on the dividend and the cash situation. Post this payout, you would be at SEK 45 billion. Would it be helpful to have a revised gearing target from being debt-free to being firmly net cash? Okay. Thank you, Erik. First and foremost, I think your first question is, of course, something that we are looking very much into. We have the flexibility because, regardless of plans, the only thing you know about plans for the future is that they will be exactly wrong. You need to have redundancy planning in the event it will happen faster or slower. I think if any probability it will happen faster, at least in certain segments to your point. That's the reason why both is important for us to get into the main lines of our production when it comes to the building of these type of trucks, and by utilizing then pre-assembly lines into the main lines, because then we can much easier have the right mix in our own facilities and also then have, so to speak, the same type of conversation with the supply chain upstream. If I take, for example, the batteries, that's the reason also why we have a battery commitment and a battery alliance together with Samsung, for example, that is one of the biggest suppliers to have that flexibility of the ramp-up where we are, of course, both interested to cope with that demand and capture, I should say, the opportunities. That goes also for other type of components, given the constitution of the truck that we are planning with that. We have not only a planning scenario for the short term, but also different scenarios for the long run, segment by segment and region by region. I feel that we can capture those opportunities, and as always, when you have different ramp-ups, you need to be very close to what is happening with the development there. What was the second question? On the infrastructure, you said there were more- Yeah, [crosstalk] absolutely. On the infrastructure side. It relates to all the different applications actually, where we will have electrification. We see that customers are very keen on that. On trucks, just to give an example right now, we have a lot of urban construction. We have a lot of city distribution, waste collections where trucks are returning to their depots. They want really to have the right optimized, depending what size of the fleet, how should it look like? How can they bring the right arbitrage when it comes to overnight charging, given that electricity prices are lower? How can they actually even out the grid capacity in a smart way? There also our second use of batteries with energy storage is really come in handy as one example. That goes also for mining or quarries for our construction equipment side. That's the reason why we have Volvo Energy as a backbone business area supporting our other business areas, and also fronting commercial applications for the second use among others. Full focus and not hide behind the other hardware, but be a solution provider is the target here. Absolutely across the group here. Then it goes on dividend, and Martin explained a little about how we view the dividend or how the board is viewing the dividend and what we think about that. Of course, from my side, it's very important to be prudent with our financial situation, not at least for the rating, but also in times of uncertainty. In times of uncertainty, you would expect us to have somewhat more on our balance sheet than being closer to zero and closer to the financial target of net debt free in industrial operation. As you are well aware of, we are also into buying into the joint venture with Daimler on fuel cells, and that will also mean that we have a payout to take care of when everything is settled around that. As I said, uncertainty, of course, there will be somewhat more on the balance sheet, but as we have said before, we are not the bank. No, just to reiterate what you said, we have decided now the board has decided these proposals for the AGM based on the financial achievements and financial events, financial position up to now. Then, of course, that is what has been decided, and it's a good balance given the situation. We feel it's a great balance. Thank you. Okay, this concludes this call for the fourth quarter 2020. We are looking forward to meet you in three months time. Best regards. Bye for now. Thank you very much. Bye-bye. Thank you. Bye.