#1VOLVO Fixed Income Investor Presentation 2019 560#2DISCLAIMER By accepting this document, the person to whom it is provided (the "Recipient”) agrees to be bound by the following obligations and limitations. This document has been prepared and issued by Volvo Car AB (together with its subsidiaries, "Volvo Cars"). The information contained in this document is derived from sources that have not been independently verified. Except in the case of fraudulent misrepresentation, no responsibility or liability is accepted by Volvo Cars or by any of its respective officers, employees, affiliates or agents in relation to the accuracy, completeness or sufficiency of any information contained herein or any other written or oral information made available by Volvo Cars in connection therewith or any data which any such information generates, or for any loss whatsoever arising from or in connection with the use of or reliance on this document and any such liability is expressly disclaimed. 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Nor does this document constitute a recommendation with respect to any securities. | VOLVO CARS - DEBT INVESTOR PRESENTATION | 2#3AGENDA Volvo Cars at a Glance Key Credit Highlights Financials • Appendix XC 90 VOLVO O#4OUR STRATEGIC JOURNEY Strengthened brand Completely new vehicle range Truly global presence Standalone governance COMPANY TRANSFORMATION 2018 Personal and direct relationship with consumers Sustainable products and business Safe mobility with leading AD technology Purpose driven organization GAME CHANGING BUSINESS TRANSFORMATION | VOLVO CARS - DEBT INVESTOR PRESENTATION | 4#5SUCCESSFUL BUSINESS TRANSFORMATION... 2015 XC90 2016 2017 2018 S90 XC60 S60 SPA V90/V90CC SPA XC40 V60/V60CC S90L Portfolio age (years) Modular Architecture SPA 3.0 Scalable Product Architecture (SPA) CMA SPA 2.5 2.4 Modular Powertrain Consolidation of separate engine architectures into one Models: 60/90 Series Scale: Volvo 550' units Compact Modular Architecture (CMA) Models: 40 Series Outputs from 122 to >400bhp (in combination with an electric motor) while reducing number of cylinders • Modular design allows high component commonality Reducing complexity in development and maintenance as well as increasing efficiencies in production Scale: Volvo 250' units 2019-2021 New Launches XC40 BEV XC90 BEV DRIVE-E Collaboration with Geely also facilities engine sales within the wider Geely Group PHEV T8 Petrol 3-4 cvl Diesel 4 cvl twin engine Non-complex and Fully Invested Base Modular Architecture Driving Cost Efficiencies and Rapid Product Renewals | VOLVO CARS - DEBT INVESTOR PRESENTATION | 5#6...YIELDING STRONG PERFORMANCE Strong Revenue Development... ...With Solid Earnings Growth... SEKbn SEKbn EBITDA EBITDA margin, % % 40 16% 11.9% 12.5% CAGR: 16% 11.3% 253 30 9.8% 12% 209 6.9% 29 181 20 26 8% 164 22 138 10 16 4% 9 0 0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 ...And Strong Cash Flow Generation... Operating cash flow (SEKbn) 27 23 28 25 25 ...Driven By Successful Product Launches Ste XC90 XC60 9 auto 2014 2015 2016 2017 2018 QQQQ WINNER WORLD CAR AWARDS 2018 WORLD CAR OF THE YEAR Note: 1) Operating cash flow: EBITDA + net cash interests + tax paid + movements in working capital XC40 European car of the year 2018 CAR YEAR 2018 | VOLVO CARS - DEBT INVESTOR PRESENTATION | 6#7VOLVO CARS AT A GLANCE Overview . Fastest growing premium OEM • Standalone business with an own corporate • governance, under ownership of Zheijang Geely Holding Group since 2010 Global footprint with activities in EMEA, Asia-Pacific and the Americas • ~43,000 employees¹ • ~2,300 dealers selling in ~100 countries ● Headquartered in Gothenburg, Sweden FY18 Financial Highlights. SEK, % 253bn Premium Products PRICE New Price and New Premium Positioning Revenue 14.2bn Operating Income (EBIT) High Previous Price and Premium Positioning XC60 XC90 +21.1% Revenue increase +12.4% Retail Sales XC90 Classic XC40 V90 i XC60 Classic 642.3K Units 4.7bn Operating & Investing CF 18bn Net Cash position I V70 Low Low NEW PREMIUM High Number of Cars Sold Units '000 Note: CAGR: 8% 642 466 503 534 572 2015 2016 2017 2018 2014 1) Average 2018 employees Sales by Model - 2018 Diversified by model and increasing in SUVS The Volvo Car Group and Affiliates 642k units 15% VOLVO Care by Volvo 56% 29% SUV Estate Sedan M Polestar 2 LINK&C9 ZENUITY | VOLVO CARS - DEBT INVESTOR PRESENTATION | 7#8A STRUCTURE FOR THE FUTURE HUMAN- CENTRIC SYNERGIES The Volvo Car Group VOLVO Care by Volvo M Strong brand within the premium segment Robotaxi Subscription services My car always EMBRACING DISRUPTION TRULY GLOBAL Solutions & services for smarter mobility Polestar (Volvo Cars 50% ownership) Spearheading electrification Strategic Affiliates L\NK&CO (Volvo Cars 30% ownership) Capturing new mass market consumer group PIONEERING PARTNERSHIPS Z ZENUITY Make it real. (Volvo Cars 50% ownership) A market leading AD/ADAS software developer My car sometimes Non-consolidated entities | VOLVO CARS - DEBT INVESTOR PRESENTATION | 8#9POSITIVE RATING TRAJECTORY 06 May 2016 S&P assigns BB rating with positive outlook; Positive outlook based on possibility of raising rating by one notch to BB+ if Volvo Cars continues to be successful in launching new car models, while maintaining stronger profitability and low levels of adjusted debt 10 May 2017 S&P raises rating to BB+ with stable outlook citing good progress in strengthening competitive position and business profile by demonstrating successful model launches and improving profitability; Stable outlook reflects expectation that Volvo Cars will continue successful rollout of new car models while maintaining profitability and zero or low levels of adjusted debt 20 November 2018 S&P affirms BB+ rating and revises outlook to positive; the outlook reflects Volvo Cars' good position to improve its credit metrics over 2019-2021, including meaningful improvement in free operating cash flow to debt. Positive outlook reflects good progress in strengthening competitive position and successful model launches establishing itself as a premium car manufacturer S&P Global Ratings Jan-16 MOODY'S 19 March 2019 Volvo Car's parent company Zhejiang Geely Holding Group rated Investment Grade BBB- with stable outlook by S&P Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Jan-19 09 May 2016 Moody's assigns first-time Ba3 rating with positive outlook; Positive outlook reflects commencement of major product renewal programme 12 Oct 2016 21 Dec 2016 Moody's comment: SEK 5bn Preference Shares Issue Is Credit Positive 30 Jun 2017 Moody's comment: Volvo Car's declared SEK 2.2bn dividend is credit negative but has no impact on Ba2 rating Moody's upgrades rating to Ba2 with stable outlook; Upgrade reflects strong operating performance based on the successful introduction of new XC90 and several expected new product launches 17 Oct 2017 Moody's affirms Ba2 rating with stable outlook. Stable outlook based on expectation that renewal programme and subsequent sales and earnings growth will lead to a further improvement in credit metrics 2 May 2018 Moody's upgrades rating to Ba1 with stable outlook; Upgrade reflects continued improvements in operating performance and credit metrics, with expectations that the trend will continue founded by further successful new model launches | VOLVO CARS - DEBT INVESTOR PRESENTATION | 9#10LONGER TERM AMBITIONS >5 million direct consumer relationships 50% recurring subscription based revenues 50% pure electric cars 30% autonomous cars Naturally hedged global production Superior growth Premium OEM profitability | VOLVO CARS - DEBT INVESTOR PRESENTATION | 10#11AGENDA Volvo Cars at a Glance Key Credit Highlights Financials Appendix VOLVO#12KEY CREDIT HIGHLIGHTS 6 1 HUMAN-CENTRIC BRAND IDENTITY WITH SUSTAINABILITY BEING AN INTEGRATED PART OF COMPANY CULTURE AND STRATEGY ROBUST GROWTH TRAJECTORY 2 TRACK RECORD OF INDUSTRY OUTPERFORMANCE TRULY GLOBAL 3 LO 4 WITH UNIQUE CHINA POSITIONING SYNERGIES 360 STRATEGIC AFFILIATES DRIVING SYNERGIES AND EARNINGS EMBRACING DISRUPTION AND PIONEERING PARTNERSHIPS OPEN APPROACH TO TECHNOLOGY AND MARKET CHANGE SOLID FINANCIAL PERFORMANCE TRANSFORMATION FULLY SELF FINANCED DH HAY 360 | VOLVO CARS - DEBT INVESTOR PRESENTATION | 12#131. HUMAN-CENTRIC BRAND IDENTITY WITH SUSTAINABILITY BEING AN INTEGRATED PART OF COMPANY CULTURE AND STRATEGY Purpose, Culture and Customer Promise FREEDOM TO MOVE - IN A PERSONAL, SUSTAINABLE AND SAFE WAY Sustainability Visions WE ARE CURIOUS, WE CREATE TOGETHER, WE MAKE THE DIFFERENCE We Understand You We Protect What Is Important to You We Make People Feel Special Full transparency of our 3TG and cobalt supply chain by 2020 50% of sales to be fully electric by 2025 Climate neutral operations by 2025 25% of plastic in our cars made from recycled material by 2025 No one should be seriously injured or killed in a new Volvo car by 2020 NO 1 POVERTY 2 ZERO HUNGER SSS SUSTAINABLE GOALS DEVELOPMENT 3 GOOD HEALTH AND WELL-BEING QUALITY EDUCATION 5 GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH DETRYINATION AND INFRASTRUCTURE 10 REDUCED INEQUALITIES 11 SUSTAINABLE CITIES AND COMMUNITIES 12 RESPONSIBLE CONSUMPTION AND PRODUCTION 13 CLIMATE ACTION Brand Value in Line With Societal Development PEACE, JUSTICE 17 PARTNERSHIPS FOR THE GOALS 14 BELOW WATER 15 ONLAND 16 AND STRONG INSTITUTIONS | VOLVO CARS - DEBT INVESTOR PRESENTATION | 13#142. ROBUST GROWTH TRAJECTORY TRACK RECORD OF INDUSTRY OUTPERFORMANCE Strong Track Record of Outgrowing Market¹ Unit Sales CAGR 2014-18A 1.3% 5.6% 8.4% 3 2 Non-premium Cars Premium Cars Volvo Cars Note: 1) Based on the LMC Automotive Q1-2019 edition of its Global Automotive Sales Forecast 2) Premium Cars based on LMC Automotive's Premium and Super-Premium segmentation. 3) Non-premium Cars based on LMC Automotive's segmentation excluding the Premium and Super-Premium segments. Key Growth Levers Well-known brand with momentum Full range now being rolled out including strong SUVs All cars to be fully electric or plug-in hybrids Impact and growth from strategic affiliates Global market share opportunities In particular US & China New business segments | VOLVO CARS - DEBT INVESTOR PRESENTATION | 14#153. TRULY GLOBAL HIGHLY FLEXIBLE MANUFACTURING NETWORK WITH UNIQUE CHINA POSITION Global Presence Why Volvo Car Group Is Uniquely Positioned in China Only fully integrated global car group in China Enabled VCG to move fast (3 plants in 4 years) Unique JV setup Production R&D Units Sold By Region Global Employee Base FY 2018 FY 2018 2% 15% Europe Europe¹ 15% China 19% 50% US Other China US 75% Other 20% 43k FTEs 642k units Note: 1) Whereof Sweden represents 57% of total FTEs Parent with track record of creating strong brands in China Sales still outgrowing the premium car market Well Diversified Manufacturing Footprint • 2019 installed global capacity provides flexibility and all regions SPA platform compatible: Charleston 75k Gothenburg 300k Ghent 225k Chengdu 150k - Daqing 75k - Luqiao 45k | VOLVO CARS - DEBT INVESTOR PRESENTATION | 15#164. SYNERGIES STRATEGIC AFFILIATES DRIVING SYNERGIES AND EARNINGS N ZENUITY + Polestar with Geely Joint Venture Joint Venture Powertrain Pure electric • Hybrids with Veoneer VOLVO GV Auto Tech Joint Venture with Geely for common sourcing L\N&CĐ Architecture Production CMA Cars SPA Engines R&D / Procurement Distribution/ Service utilization of commercial system • Faster to market Lower cost • Increased • . Profitability Earnings increase Economies of scale | VOLVO CARS - DEBT INVESTOR PRESENTATION | 16#175. EMBRACING DISRUPTION AND PIONEERING PARTNERSHIPS OPEN APPROACH TO TECHNOLOGY AND MARKET CHANGE CONSUMER EXPERIENCE FOCUS Electric Cars Connected Premium Cars Autonomous Cars Direct Consumer Business/ Subscription FLEXIBLE AND FAST MOVING Well-positioned on EU CO2 target having flexibility to launch BEV at right time Sharing costs with broader Volvo-Geely ecosystem Phasing out diesel from all new models; no diesel residual value exposure NO LIMITING LEGACY ✓ Target all new models to be electrified; effectively transitioning to 100% electrification All new cars produced are internet connectivity enabled Focus on consumer experience to drive price premium and consumer loyalty Transition to direct consumer relationships ✓ Long term ambition of >5m direct customer relationships ✓ Aim to be first to commercialise L4 AD on wide scale Safety branding recognition among consumers and legislators Provider of total solutions to Robotaxi operators Long term ambition of L4 AD cars representing 30% of car volume Traditional and new consumer go to market model in place in parallel Offers range of mobility solutions including subscription (Care by Volvo), Mobility per mile (Volvo Car Mobility) and Robotaxi Long term ambition of 50% cars under subscirption¹ ++ CATL Polestar L LG Chem android amazon Alibaba Group E2A 阿里巴巴集团 UBER veoneer LUMINAR Care by Volvo LUXE M Note: 1) Percentage of car volume produced and delivered through subscription services | VOLVO CARS - DEBT INVESTOR PRESENTATION | 17#186. SOLID FINANCIAL PERFORMANCE TRANSFORMATION FULLY SELF FINANCED Cash Flow From Operating and Investing Activities Net Cash (Net Debt) Position Development SEKbn SEKbn (4.8) 2014 SEK 9.9bn Free cash flow 2014-2018 7.2 6.5 4.7 2015 2016 (3.8) SEK 18bn Net cash position 2018 18.9 18.1 0.9x 0.5x 12.5 0.6x 0.5x 7.7 (0.1x) (0.9) 2014 2015 Net Cash 2016 2017 2018 Net Cash/ EBITDA 2017 2018 Longer Term Objective to Have a Capital Structure that Enables an Investment Grade Rating | VOLVO CARS - DEBT INVESTOR PRESENTATION | 18#19AGENDA Volvo Cars at a Glance Key Credit Highlights Financials •Appendix. VOLVO#20PREMIUM PRODUCT PORTFOLIO DRIVES GROWTH Retail Units '000 Revenue SUV Estate Sedan SEKbn Other CAGR: 8% CAGR: 16% +12% 98 101 68 69 71 185 209 64 68 198 170 181 168 359 173 164 254 273 138 203 155 2014 2015 2016 2017 2018 Average Revenue per Unit. SEK '000 CAGR: 7% +8% 393 365 326 338 296 2014 2015 2016 2017 2018 +21% 253 2014 2015 2016 2017 2018 ✓ Volvo Cars consistently delivered on volume targets Established track-record of successful execution of product launches ✓ High exposure to fast growing SUV segment | VOLVO CARS - DEBT INVESTOR PRESENTATION | 20#21PROFITABILITY TRAJECTORY EBIT SEKbn 6.6 4,0% 2.1 2014 1,5% 2015 11.0 14.2 14.1 EBITDA SEKbn 16.0 28.6 26.2 21.5 6,7% 6,1% 5,6% 11,9% 12,5% 9.5 11,3% 9,8% 6,9% 2016 2017 2018 % margin EBIT 2014 2015 2016 2017 2018 % margin EBITDA Benefiting from increased pricing and stronger sales mix ✓ Expects considerable benefits from operational leverage in the future | VOLVO CARS - DEBT INVESTOR PRESENTATION | 21#22CASH FLOW TRAJECTORY R&D Expenses SEKbn Capex SEKbn 12.8% 12.1 10.2 10.1% 8.7% 10.1 10.8% 9.7 9.5 8.5% 8.5 6.4 7.2 5.9% 5.2 4.7 5.2% 5.7% 17.0 4.9% 4.8% 13.1 13.6 8.6 9.2 2014 2015 % of Revenue 2016 2017 2018 2014 2015 2016 2017 2018 R&D expenses Intangible and tangible investments % of Revenue Net Working Capital¹ SEKbn Note: 6.8 2014 2.8 5.2 3.0 Intangible investments Operating Cash Flow2 SEKbn 9 Tangible investments 27 28 25 23 (0.6) 2015 2016 2017 2018 2014 2015 2016 1) Net working capital = inventory + accounts receivable accounts payable 2) Operating cash flow: EBITDA + net cash interests + tax paid + movements in working capital 2017 2018 | VOLVO CARS - DEBT INVESTOR PRESENTATION | 22#23LIQUIDITY AND NET CASH POSITION AS PER FY 2018 Liquidity and Debt Position SEKM 55,100 | 13,300 1,600 (31,400 18,100 23,700 --2,200- 40,200 21,500 Net Cash Position SEKbn SEK 18bn Net cash position 2018 18.9 18.1 0.9x 0.5x 12.5 0.6x 0.5x 7.7 (0.1x) (0.9) Liquidity Debt r 2014 2015 2016 2017 2018 ☐☐ Undrawn Credit Facilities Marketable Securities Net Cash -Net Cash/ EBITDA Cash & Cash Equivalents Long-term Debt Short-term Debt | VOLVO CARS - DEBT INVESTOR PRESENTATION | 23#24DIVERSIFIED FUNDING STRUCTURE AS PER FY 2018 Funding by Type Loan and Bond Amortization Schedule of SEK 23.7bn % Bank loans 44% 56% MSEK 7,490 2,360 3,850 3,420 2,240 420 5,130 3,000 Prior to issuances during 2019 5,550 420 5,130 420 530 210 Bonds 2019 2020 2021 2022 2023 2024 2025 2026 Loans Bonds | VOLVO CARS - DEBT INVESTOR PRESENTATION | 24#25KEY CREDIT HIGHLIGHTS 6 1 HUMAN-CENTRIC BRAND IDENTITY WITH SUSTAINABILITY BEING AN INTEGRATED PART OF COMPANY CULTURE AND STRATEGY ROBUST GROWTH TRAJECTORY 2 TRACK RECORD OF INDUSTRY OUTPERFORMANCE TRULY GLOBAL 3 LO 4 WITH UNIQUE CHINA POSITIONING SYNERGIES 360 STRATEGIC AFFILIATES DRIVING SYNERGIES AND EARNINGS EMBRACING DISRUPTION AND PIONEERING PARTNERSHIPS OPEN APPROACH TO TECHNOLOGY AND MARKET CHANGE SOLID FINANCIAL PERFORMANCE TRANSFORMATION FULLY SELF FINANCED DH HAY 360 | VOLVO CARS - DEBT INVESTOR PRESENTATION | 25#26AGENDA Volvo Cars at a Glance Key Credit Highlights Financials Appendix VOLVO CZD 991 VOLVO D#27VOLVO CAR GROUP OWNERSHIP STRUCTURE Zhejiang Geely Holding Group Co., Ltd. 100% Geely Sweden Holdings AB Volvo Car Group 99% Other Investors 1% Volvo Car AB 100% Volvo Car Corporation Issuer Guarantor of the Notes Volvo Cars (China) Investment Co. Ltd. Volvo Cars consolidated subsidiaries Non-consolidated entities with Volvo Cars ownership | VOLVO CARS - DEBT INVESTOR PRESENTATION | 27