AB Volvo Annual Report 2022

Geared for Growth
Volvo Group
Annual Report 2022
Driving prosperity
Content through transport and
infrastructure solutions
OVERVIEW The Volvo Group drives prosperity through transport and infrastructure
A global Group . . . . . . . . . . . . . . . . . . . . . . . . . . 2 solutions, offering trucks, buses, construction equipment, power
Volvo Group in 2022 . . . . . . . . . . . . . . . . . . . . 4
CEO comments . . . . . . . . . . . . . . . . . . . . . . . . . 6 solutions for marine and industrial applications, financing and services
STRATEGY that increase our customers’ uptime and productivity.
Driving prosperity . . . . . . . . . . . . . . . . . . . . . . 10 Founded in 1927, the Volvo Group is committed to shaping the
Strategic priorities . . . . . . . . . . . . . . . . . . . . . 11
Towards a decarbonized future . . . . . . . . . . 12 future landscape of sustainable transport and infrastructure solutions.
Opportunity of a lifetime . . . . . . . . . . . . . . . . 13 The Volvo Group is headquartered in Gothenburg, Sweden, employs
The Volvo Group’s journey continues . . . . . 14
Existing industrial footprint 102,000 people and serves customers in almost 190 markets. In 2022,
and competence are great assets . . . . . . . . 18 net sales amounted to SEK 473 billion (EUR 44.5 billion). Volvo
Financial targets . . . . . . . . . . . . . . . . . . . . . . 20
Climate targets . . . . . . . . . . . . . . . . . . . . . . . . 21
shares are listed on Nasdaq Stockholm.
OUR BUSINESS
Creating shared value . . . . . . . . . . . . . . . . . . 22 Shaping the world we want to live in
We are the Volvo Group . . . . . . . . . . . . . . . . 24
Driving prosperity for Every day the Volvo Group’s products deliver food and medicine,
many stakeholders . . . . . . . . . . . . . . . . . . . . 26 take children to schools, power irrigation systems and construct
Partnerships to create leadership . . . . . . . 28
Shaping the future of transportation
roads and buildings. The majority of the Volvo Group’s customers
and infrastructure . . . . . . . . . . . . . . . . . . . . . 30 are companies within the transportation or infrastructure industries.
BOARD OF DIRECTORS’ REPORT 2022 The reliability and productivity of our products and services are a
Financial performance . . . . . . . . . . . . . . . . . 43
Financial position . . . . . . . . . . . . . . . . . . . . . 46
key factor in their success and profitability.
Cash flow statement . . . . . . . . . . . . . . . . . . 50 Climate change, population growth and increasing urbanization
Changes in consolidated equity . . . . . . . . . 52
are shifting the landscape and expectations on transport and infra-
Financial management . . . . . . . . . . . . . . . . . 53
Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 structure. In all our actions, we must consider how to reduce climate
The share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 impact, use the world’s resources more efficiently, and conduct
Risks and uncertainties . . . . . . . . . . . . . . . . 68
NOTES TO THE FINANCIAL STATEMENTS . 74
business more responsibly.
PARENT COMPANY . . . . . . . . . . . . . . . . . . . . 135 Together with our customers and supply chain partners, govern-
SUSTAINABILITY NOTES . . . . . . . . . . . . . . . . 147 ments, societies and other stakeholders, we are moving quickly to
Climate and environment . . . . . . . . . . . . . . 150 develop and introduce transport and infrastructure solutions that
Employees and development . . . . . . . . . . 163
Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 aim to reach our sustainability targets.
Human rights . . . . . . . . . . . . . . . . . . . . . . . . . 170 Driving prosperity socially, environmentally and financially means
Supply partners . . . . . . . . . . . . . . . . . . . . . . . 176
Business ethics and compliance . . . . . . . . 178
that we strive towards our vision of transport and infrastructure
Complementary general disclosures . . . . 180 solutions that are 100% fossil-free, 100% safe and 100% more
GRI Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
productive.
CORPORATE GOVERNANCE REPORT
Corporate Governance . . . . . . . . . . . . . . . . 186 In this annual report, we will take a closer look at how we are
Board of Directors . . . . . . . . . . . . . . . . . . . . 194 working towards achieving this.
Group Executive Board . . . . . . . . . . . . . . . 200
OTHER INFORMATION
Proposed policy for remuneration
to senior executives . . . . . . . . . . . . . . . . . . 204
Proposed disposition of
unappropriated earnings . . . . . . . . . . . . . . 206
Audit report for AB Volvo (publ) . . . . . . . . 207
Key Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Eleven-year summary . . . . . . . . . . . . . . . . . . 215
Annual General Meeting . . . . . . . . . . . . . . 223
Preliminary financial calendar . . . . . . . . . . 223
he Volvo Group’s formal financial reports are presented on pages 42–146, 204–206 and 212–214 and have been audited by
T
the company’s auditors.
S ustainability information is integrated in the sections Strategy and Our Business on pages 6–19 and 21–30, and in Sustainability
Notes on pages 147–185, and has been subject to limited assurance by the Group’s auditors. For information on which pages
constitute the Volvo Group’s Statutory S ustainability Report, please see page 42.
VOLVO GROUP 2022 1 OVERVIEW
100% 100% 100%
fossil-free safe more productive

A global Volvo Group is one of the world’s leading

manufacturers of trucks, buses, construction
Group ... equipment as well as marine and industrial

engines. The Group also provides complete
solutions for financing and service.
People – our most important asset companies. We have a strategic alliance with Isuzu Motors. We
The Volvo Group’s 102,000 employees are our most important have partnered with Samsung SDI on batteries. We have estab-
asset. In the words of CEO Martin Lundstedt: “This company has lished cellcentric together with Daimler Truck to commercialize
an incredible strength thanks to all the fantastic colleagues who fuel cell systems for heavy-duty vehicles and other use cases.
work here. People who are prepared to take responsibility for their We work together with Aurora on autonomous vehicles. And we
link in the chain but also for the big picture.” are pioneering a European high-performance charging network
for heavy-duty trucks and coaches called Milence together with
Strong brands Daimler Truck and Traton Group.
The Volvo Group sells its products under the Volvo, Volvo Penta,
Rokbak, Renault Trucks, Prevost, Nova Bus, Mack and Arquus World-class services
brands. We also partner in alliances and joint ventures in SDLG, In addition to vehicles and machines, our offering includes various
Milence, Eicher, Dongfeng and cellcentric. By offering products types of services such as financing, insurance, rentals, spare parts,
and services under different brands, we address many different repairs, preventive maintenance, service agreements and assis-
customer and market segments around the world. tance services. The range and flexibility of the offering means that
solutions can be tailor-made for each customer to secure uptime
Competitive products and leading technology and productivity. The service business contributes to balancing
The Volvo Group’s products have been developed to contribute to the fluctuations in the sales of new products and improving profit-
efficient transport and infrastructure solutions and to provide our ability over the business cycle. Growing the service business is an
customers with reliable uptime. We drive the development of elec- area of priority.
trified vehicles and machines as well as automated solutions for
the benefit of customers, society and the environment. Sales of Strong positions globally
vehicles and machines build a population of products that requires Thanks to competitive product programs, strong dealers with
spare parts and services. extensive service networks and increasingly more complete offer-
ings, the Volvo Group has established leading positions globally.
Partnerships and collaborations with leading companies These positions provide for economies of scale in product develop
New technologies are developing at a faster pace than ever before. ment, production, purchasing and financial services.
Staying at the forefront is vital to be successful, and that is why
we work in collaborations and partnerships with other leading
NET SALES BY R EVENUE TYPE NET SALES BY MARKET
Vehicles 76% Europe 40%

Services 20% North America 29%
Financial S
ervices 4% South America 11%
Asia 14%
Africa and Oceania 6%
... with strong positions
The Volvo Group’s total market shares in heavy-duty trucks
Europe Europe
North America
Total Electric
16.2% 27.8% 55.8%
Brazil
24.6% South Africa
18.6% Australia
22.0%
Volvo Group in 2022

• Strong growth in both vehicle and • Earnings per share of SEK 16.09 (16.12).
service sales – net sales increased • Good operating cash flow in the
by 29% to SEK 473.5 billion. Industrial Operations of SEK 35.3
• Continued good profitability despite billion (29.4).
supply chain challenges – adjusted • Return on capital employed in the
operating income increased to SEK Industrial Operations of 27.4% (25.3).
50,467 M (41,015), excluding a negative
impact from provisioning of assets related • High pace in the transformation
to Russia in an amount of SEK 4,125 M with a rapid expansion of the offer
and SEK 630 M relating to costs for claims of electric vehicles and machines.
arising from the European Commission’s • Series-production of heavy-duty,
2016 antitrust settlement decision. 44-tonne electric trucks started.
For more information, please see Legal
• The Board of Directors proposes
Proceedings in Note 24.
an ordinary dividend of SEK 7.00
• Reported operating income amounted per share and an extra dividend of
to SEK 45,712 M (43,074). SEK 7.00 per share.
KEY RATIOS 2022 2021
Net sales, SEK M 473,479 372,216

Net sales excluding UD Trucks1, SEK M 473,479 366,778
Adjusted operating income2, SEK M 50,467 41,015
Adjusted operating margin, % 10.7 11.0
Operating income, SEK M 45,712 43,074
Operating margin, % 9.7 11.6
Income after financial items, SEK M 45,077 43,190
Income for the period, SEK M 32,969 33,243
Earnings per share, SEK 16.09 16.12
Dividend, SEK per share 14.003 13.00
Operating cash flow, Industrial O
perations, SEK M 35,327 29,440
Net financial position excl. provisions for post-employment benefits and lease liabilities, Industrial Operations, SEK bn 73.9 66.2
Return on capital employed, Industrial Operations, % 27.4 25.3
Return on equity, Financial Services, % –0.3 18.0
Return on equity excluding impacts related to Russia, Financial Services, % 15.1 18.0
Return on shareholders’ equity, Volvo Group, % 20.7 23.4
Total number of employees 102,155 95,850
Share of women, % 22 21
Share of women, presidents and other senior executives, % 28 27
Energy use per net sales, Industrial Operations, MWh/SEK M 5.1 6.8
Total CO₂ emissions per net sales, Industrial Operations, tons/SEK M (scope 1 & 2) 0.7 1.0
Share of direct material purchasing spend from suppliers having made a CSR self-assessment, % 89 97
1 UD Trucks was divested on April 1, 2021.

2 For more information on adjusted operating income, please see Key Ratios on page 212.
3 Proposed by the Board of Directors to the Annual General Meeting 2023. SEK 7.00 per share in ordinary dividend and SEK 7.00 per share in extra dividend.
4 Paid out in July 2021.
Unless otherwise stated, all comparisons refer to the same period or the same date of the preceding year.
Volvo Group
Net sales, SEK bn Adjusted operating Return on capital Operating cash flow Net financial position
income 1 and Adjusted employed Industrial Industrial Operations, excl. post-employment
operating margin Operations, % SEK bn benefits and lease
Operating income, liabilities Industrial
SEK bn Operations, SEK bn
Operating margin, %
10.7
473.5
73.9
27.4
35.3
50.5
18 19 20 21 22 18 19 20 21 22 18 19 20 21 22 18 19 20 21 22 18 19 20 21 22 Year
Segments Net sales,

Share of
Group
Adjusted
operating income,
Adjusted
operating
SEK M net sales, % SEK M margin, %
TRUCKS
Volvo Trucks, Renault Trucks, Mack
Trucks, Volvo Autonomous Solutions,
Volvo Energy, VE Commercial 310,536 66 33,821 10.9
Vehicles (45.6% ownership), Dong-
feng Commercial Vehicles (45%), cell-
centric (50%) and Milence (33%).
CONSTRUCTION E QUIPMENT
Volvo Construction Equipment 100,261 21 13,244 13.2
and Lingong (70%).
BUSES
Volvo Buses and Prevost. 18,583 4 353 1.9
VOLVO PENTA
Engines and power systems for 18,102 4 2,530 14.0
marine and industrial applications.
FINANCIAL S ERVICES
Provides financial services to 4
17,355 3,416 N/A
customers and dealers.
GROUP FUNCTIONS & OTHER

12
Nova Bus, Arquus and common 16,376 –2,911 N/A
business support functions.
More information on the Volvo Group’s segments and how they are reported can be found in Note 6 to the Financial Statements.
1 For more information on adjusted operating income, please see Key Ratios on page 212.
2 Including Group eliminations.
Strong
performance
and ...
I
n 2022, the Volvo Group delivered strong growth as well as maintained a good adjusted operating margin of 10.9% (11.1).
good profitability and cash flow. We increased our net sales Thanks to our strong product and service offer and our ability to
by over SEK 100 billion to SEK 473.5 billion and our deliver trucks, we continued to gain market shares in most regions.
adjusted operating income rose to SEK 50.5 billion (41.0), Construction activity was high in Volvo Construction Equip-
with an adjusted operating margin of 10.7% (11.0). Several ment’s (Volvo CE) key markets in Europe and North America,
transformation milestones to decarbonize the transport system while demand in China continued to be weak. Towards the end of
were also passed. This transition is not only vital for a sustainable the year, interest rate increases made customers in some markets
future, it also delivers on our customers’ commitments to reduce more cautious about the near-term future. In the longer term,
their CO2 emissions and it drives growth for the Volvo Group. there is a need to renew and expand an aging infrastructure in
many countries across the world, and the investments needed to
Transport and infrastructure vital for sustainable growth drive the green transformation in society is also a big opportunity.
The transport and infrastructure industries are vital parts in driving Volvo CE increased net sales by 9% to SEK 100.3 billion, for the
sustainable growth. Our customers use our products and services first time above SEK 100 billion, and maintained a good adjusted
to move goods and materials, help people get to work or school operating margin of 13.2% (13.3). We continued the rollout of
and build and maintain the infrastructure we all rely on every day. electric machines and moved up to the 20-ton class with the
We drive prosperity, in advanced economies and developing coun- EC230 Electric excavator. In the latest step on the path towards
tries, across the globe and around the clock. net-zero, Volvo CE became the first manufacturer to deliver a con-
With a growing world population, an ongoing urbanization and struction machine – an A30G articulated hauler – built using fos-
growing e-commerce, demand for transport and infrastructure will sil-free steel to a customer.
continue to increase. We will meet this demand with solutions that Volvo Buses net sales increased by 36% to SEK 18.6 billion,
are considerably more sustainable, productive and safer than today. which was an improvement from low levels as demand for trans-
We have already started on this journey together with a growing port and services began to increase as societies opened up after
number of customers, and the shift to a decarbonized transport covid-19. Profitability improved, but the adjusted operating margin
system is a unique growth opportunity for us as a Group, while of 1.9% (0.4) was still low and continues to be a focus area. On
at the same time enabling us to have a positive impact on our the city bus side of the business, the transition to electric buses
customers’ businesses and society. continued to accelerate.
While the long-term growth trend is clear, short-term demand Volvo Penta’s sales of both engines and services grew, with net
for our products will naturally continue to fluctuate with the busi- sales increasing by 25% to SEK 18.1 billion. The adjusted operat-
ness cycle. Following the economic rebound after the covid-19 ing margin amounted to 14.0% (14.5). Electrification projects for
pandemic, our customers have continued to operate with high both marine and industrial applications are gaining momentum.
activity levels. In 2022, this translated into strong demand for both
products and services. At the same time, the supply of critical
components was a limiting factor.
In this situation, with disruptions, unpredictability and the
almost unthinkable scenario of war in Europe becoming a tragic
reality, it has been fantastic to see how colleagues across the “In 2022, we delivered
Group have taken responsibility, supported each other and worked
together with our supply partners and in dialogue with our cus- solid profitability,
tomers to try to deliver on our promises despite all challenges. Our
organizations, teams and colleagues are empowered to take deci- good return to our
sions, and they have responded by finding new, faster, and more
agile ways of working. I would like to thank all colleagues and busi-
shareholders and
ness partners in the extended Volvo Group family for their hard
work, dedication, and outstanding professionalism. Succeeding in
accelerated our
this industry is all about people, and our people are truly fantastic. transformation in yet
Good growth in all business areas another challenging
Throughout the year, we focused on flexibility to be able to
respond quickly to changes in demand. Costs related to energy, year with geopolitical
materials and supply chain disruptions increased at a high pace
and we worked proactively to compensate for these effects. turmoil, supply chain
Despite the challenges in the supply chain, our truck business
delivered 232,558 vehicles which was an increase of 15% com-
constraints and high
pared with 2021 and an all-time-high. Our brands captured the
good demand for both new and used trucks as well as for spare
inflationary pressure.”
parts and services, resulting in net sales in the truck business of
SEK 310.5 billion, for the first time above SEK 300 billion. Trucks
... accelerated
transformation
In May, Arctic tourism operator Hurtigruten Svalbard started oper- same time invest in the transformation of our industries. The
ations with a vessel powered by a hybrid electric solution from Board of Directors proposes an ordinary dividend of SEK 7.00
Volvo Penta in one of the world’s most extreme maritime environ- per share and an extra dividend of SEK 7.00 per share.
ments.
The high activity level at many of our customers was also Good performance a platform for the transformation
reflected in low credit provisions in our customer-financing busi- Our good performance provides the platform for transformation.
ness, Volvo Financial Services. The adjusted operating income And we transform today to continue to perform tomorrow. In
increased to SEK 3,416 M (3,279) and return on equity was 15.1% 2022, we saw an exponential increase in the number of compa-
(18.0), excluding a negative effect from provisioning of assets nies that have committed to ambitious targets for reduction
related to Russia. of greenhouse gas emissions. As they embark on their journey
In addition to delivering good profitability and a return on capital towards net-zero, many companies find that transports make up
employed in the Industrial Operations that increased to 27.4% a substantial part of their CO2 footprint. This creates a positive
(25.3), we also generated a strong operating cash flow of SEK pressure for change in the value chains and provides us with an
35.3 billion (29.4). We ended the year with a net cash position opportunity to grow. Acting as advisors and solution providers,
of SEK 73.9 billion in the Industrial Operations, pension and lease we work together with our customers – and sometimes with their
liabilities excluded. Our strong finances mean that we can con- customers – to help them decarbonize their transport systems.
tinue to provide a good return to our shareholders and at the The shift is happening now and it is accelerating.
“I would like to thank

all colleagues and
business partners in
the extended Volvo
Group family for their
hard work, dedication,
and outstanding
professionalism.
Succeeding in this
industry is all about
people, and our people
are truly fantastic.”
We were early out in the transformation, starting with electric – our joint venture with Daimler Truck on fuel cells. When it comes
city buses more than 10 years ago. Since then, we have step-by- to charging infrastructure, the partnership with both Daimler Truck
step introduced electric offerings across product segments in all and the Traton Group in the newly formed company Milence
business areas, from compact excavators and wheel loaders to will set an example with the establishment of at least 1,700
electric drivelines for industrial and marine applications, and trucks high-performance charging points for trucks and buses along
for waste collection, city distribution and regional haulage. In public roads in Europe.
2022, we passed yet another important milestone with the start Batteries are crucial for the electrification journey. In 2022,
of series production of heavy-duty electric Volvo trucks in the Tuve we continued to increase our engagement upstream in the value
plant, in Gothenburg. These trucks are designed for city-to-city chain. We are already assembling battery modules into battery
haulage, regional assignments and urban construction. They have packs in-house and we will in the future take further steps in
gross combination weights of up to 44 tonnes, power of up to the value chain with the start of production of battery modules.
490 kW/666 hp, and operating ranges of up to 300 km depend- Furthermore, we have started the process to establish battery
ing on application. We are producing them on the same lines cell production in Mariestad, Sweden.
where we assemble our fuel-efficient conventional trucks. This
enables us to utilize our existing industrial footprint, and to build Ambition to be at the forefront
on the vast experience and knowledge of our colleagues within Our ambition is to be at the forefront, to lead this transformation
operations, also for electric trucks. This year, Renault Trucks will and to run a responsible business. Already today, a large part of
follow, complementing their successful electric light- and medi- our R&D activities are related to low- and zero-emission technol-
um-duty trucks with a heavy-duty electric offering for regional ogy and it will continue to grow. We have set climate targets that
transport and construction. are in line with what the latest climate science deems necessary
to keep global warming at a maximum 1.5⁰ C, and our pathway
A great opportunity for the Group to reach the goals of the Paris Climate Agreement have been vali-
The transformation to electric products goes hand in hand with dated by the Science Based Targets initiative. And we have further
our strategy to offer our customers complete solutions that bring strengthened our work with the principles of the UN Global Com-
both value and peace of mind. It is about truly understanding our pact regarding climate, resources and people.
customers’ business and providing a complete package with In 2022, we delivered solid profitability, good return to our
equipment, financing, service contracts, insurance, uptime and shareholders and accelerated our transformation in yet another
productivity services – and in the case of electric solutions also challenging year with geopolitical turmoil, supply chain constraints
charging capabilities and battery optimization. This is a great and high inflationary pressure. We have a strong foundation in
opportunity for us to deepen our engagement with our customers’ terms of our strong financial position, customer relations, indus-
business and to build true partnerships over time. trial backbone, technology, products and services and – most
The transformation will also lead to increased revenues for the importantly – people. These qualities and capabilities will be
Volvo Group with the main driver being the higher value of the equally important as we move forward, working together with
electric vehicles and machines. Today, electric trucks, buses and our customers and partners – shaping the world we want to live in.
construction machines are part of our core business and I am very
proud that we have earned the trust of companies like Maersk,
DFDS, Carlsberg, Coca-Cola and Amazon. We have leading posi-
tions in electric trucks in Europe and North America, with esti-
mated market shares of over 50% albeit based on small volumes.
The Volvo Group has been instrumental in creating a market for
electric trucks and construction equipment that did not exist only
a few years ago. And to accelerate the rate of change even further,
we are working with partners in a number of key areas, ranging Martin Lundstedt
from our strategic alliance with the Isuzu Motors to cellcentric President and CEO
10
VOLVO GROUP 2022
STRATEGY
Our mission Every company exists for a reason – it has a

purpose. Our purpose and our solutions to global
– driving challenges are driven by our mission to drive

prosperity through transport and infrastructure
prosperity
solutions, and our vision to be the most desired
and successful transport and infrastructure
solution provider in the world.
We continuously develop our products and services to create ustomer success, Trust, Passion, Change and Performance,
C
value for our customers and contribute to sustainable societies serve as a guide to our day-to-day behavior and drive decisions on all
and the well-being and safety of people. By doing so, we also levels of the organization. Our Code of Conduct outlines how we do
provide value for our shareholders. business in the Volvo Group: ethically and in compliance with the law.
The foundation of our strategy is to create value by supporting
Creating customer value and showing the way forward our customers’ profitability. There are many paths to pursue to
We aspire to having leading customer satisfaction for all brands in take on opportunities and challenges and our seven strategic
their segments; to be the most admired employer in the industry priorities focus on areas with large benefits for both customers
and to have industry-leading profitability. The Group’s values, and Volvo Group.
V O LV O
GROUP
M I SS I O N
Driving prosperity through
transport and infrastructure solutions
VISION
Be the most desired and successful transport
and infrastructure solution provider in the world
AS P I R AT I O N S
Have leading customer satisfaction Be the most admired Have industry
for all brands in their segments employer in our industry leading profitability
VA LU E S
Customer success Trust Passion Change Performance
CODE OF CONDUCT
We earn business We safeguard company We respect and care We separate personal interests We communicate
fairly and lawfully information and assets for one another from business activities transparently and responsibly
VOLVO GROUP 2022 11 STR ATEGY
Seven strategic To be successful, the key is to create value for

our customers by improving their bottom-line
priorities profitability. By understanding our customer’s

needs, priorities and challenges, we can provide
products and services that grow customers’
revenues and decrease customers’ cost. This
is the foundation of our strategy.
In addition to the mission, vision, aspirations, values and Code of making and result in action – but should not be seen as a detailed
Conduct we have decided on seven strategic priorities for the action plan. The order in which the priorities are presented does
Volvo Group to capture growth opportunities and improve under- not reflect relative importance.
lying performance. The strategic priorities will guide our decision
Creating value by supporting customer profitability
1 5
ransform the Volvo Group to become a leading end-
T Develop robust profitability throughout the decentral-
to-end integrator and offer easy-to-integrate prod- ized regional value chains by leveraging global scale,
ucts and services through strong brands. An over- digitalization, a purpose-fit footprint and continuous
view of our strong position in the world market can be improvement using the Volvo Production System.
found on page 3. Read more about our business model Read more about how we drive synergies by having the
and how we create value for customers and through the same truck platform and manufacturing the trucks in
entire value chain starting on page 22. the same factory regardless of driveline on page 18.
2 6
Grow the service business and target selected industry Selectively capture, accelerate and scale-up new
verticals offering a portfolio of tailor-made solutions. businesses and develop competencies and capabili-
Service sales including Financial Services rose by 22% ties needed. We have together with Daimler Truck
in 2022 and accounted for 24% of the Group’s sales. a joint venture in fuel cells, cellcentric, (page 34) and
together with Daimler Truck and the Traton Group
we will install and operate a high-performance public
charging network for battery-powered heavy-duty
long-haul trucks and long-distance buses across
3
Secure a desirable and sustainable product and ser- Europe called Milence (page 35).
vice portfolio with the right quality, leveraging new
and well-known technologies, CAST, partnerships,
and digital innovation – accelerating electromobility
solutions. Read more about our modular CAST system
7
on page 18 and about our partnerships on page 28. Reinforce value-based leadership and ways of work-
More information about the roll-out of electric trucks ing where all colleagues are empowered to take
and machines and our journey towards fossil-free transaction and are accountable for the results. Read
port and infrastructure solutions starts on page 30. more about how some of our employees work in differ-
ent parts of the value chain on page 24 and more about
employee development on page 163.
4
Grow in Asia and the US: In Asia through JVs, alliances
and by strengthening the Volvo Group footprint in
China. In the US by significantly improving the Group’s
market position. We have a strategic alliance with Isuzu
Motors (page 28) and own 45% in Chinese Dongfeng
Commercial Vehicles. In the US, we are rolling out electric
trucks and more and more customers are coming on board
for the journey (page 33). Information on the development
in North America is also available starting on page 54.
Moving towards The transport of people and goods are essential for
economic and social development. With a growing
a decarbonized global population, urbanization and e-commerce,

demand for transportation and infrastructure is
future ...
expected to continue to increase. We need to meet
this demand with products and services that are
considerably more sustainable than those of today.
It is our long-term ambition to offer solutions that are 100% safe,

100% fossil-free and 100% more productive. Safe because we
cannot accept a situation where, every year, people are killed and
injured on roads and job sites. Approximately 1.3 million people die
in traffic accidents alone, according to the World Health Organiza-
tion. Fossil-free because climate change is the challenge of our
generation. More productive because that will help us meet the
growing demand for transport while staying within the natural
boundaries of what our planet can sustain.
Rapid shift in the transportation industry

The transportation industry has an important role to play in the
decarbonization of society, and the shift towards electrification and infrastructure solutions are helping transport operators and
is taking place here and now, with the pace of change increasing. customers in the construction sector to significantly reduce emis-
Just as the Volvo Group has set ambitious targets on green- sions and noise.
house gas emission reductions in line with the Paris Agreement Already today, electric trucks and construction machines are
approved by the Science Based Targets initiative (SBTi), many of viable options from a total cost of ownership perspective in certain
our customers and their customers are also committing to their segments in some markets. This transformation will continue to
own sustainability goals. This is driving them to phase out vehicles develop segment by segment and region by region, with demand
and machines running on fossil fuels and replace them with electric for electric trucks and machines expected to increase. This is
products. In 2015, there were 116 companies taking action with exemplified by the illustration below with the expected develop-
the SBTi. By the end of 2022, that number had grown to more ment for trucks.
than 4,200. With improvements in battery and hydrogen fuel cell technology
More and more companies are taking their first steps on this and the fast development of charging networks, the Volvo Group
journey together with the Volvo Group. Our electric vehicles and is convinced that there will be a transformation of the entire trans-
machines, based on well-proven technology within the Volvo port and infrastructure industries in the near future.
Group, are serving in real operations. The electrified transport
TAKING ACTION WITH SCIENCE-BASED TARGETS EXPECTED TRANSFORMATION TO ELECTRIC TRUCKS
Companies taking action Electrification will happen

with SBTi on climate segment by segment and
change mitigation. region by region.
Distribution
Waste
Regional
4,200 Construction
EV market
Total
Long haul
116
2015 2022 2025
... creates the The shift to electric equipment drives system

thinking, where the truck or machine is only one
opportunity part of a total solution encompassing charging

infrastructure, battery optimization, maintenance,
of a lifetime
financing and other value-adding services.
For the Volvo Group, the transition to a fossil-free society brings a Trucks have a strong position in heavy-duty electric trucks with a
deeper, broader, and more long-term engagement in our customers’ combined market share of over 50%, according to our assessment.
business, and a significant opportunity for growth. However, it must be emphasized that the volumes are still small.
The Volvo Group estimates that there is a potential to increase With a continued global roll-out of electric machines across
the revenues by more than 50% over the lifecycle when compar- markets in Europe, North America and Asia in 2022, Volvo Con-
ing an electric vehicle to a conventional version. This is primarily struction Equipment supports the journey towards emission-free
based on the increased sales value of an electric vehicle but also job sites in a growing number of markets.
on increased revenues from autonomous solutions, new digital
services and services connected to energy solutions. Other factors Autonomous solutions tapping into new revenue pools
expected to drive growth are increased service contract penetra- We also believe that autonomous solutions has the potential to
tion and an increase in the duration of the contracts. bring a wide range of benefits to society. The introduction of self-
The Volvo Group started series production of electric trucks up to driving vehicles and machines opens the way to transport systems
27 tons already in 2019 and has established leading market shares that have a significantly reduced impact on the climate, are more
both in Europe and North America. In September 2022, Volvo productive, more energy efficient and safer. Since 2020, the Volvo
Trucks started series production of heavy electric 44-tonne trucks. Group has a business area focused on developing and commercial-
With the addition of electric versions of its most important product izing industrial autonomous transport solutions: Volvo Autono-
range, the Volvo FH, Volvo FM, and Volvo FMX, Volvo Trucks has six mous Solutions.
electric truck models in series production. Although autonomous solutions are in relatively early phases,
Furthermore, in early October we announced that Renault Trucks we believe that they may offer a significant growth opportunity for
would open for pre-orders of heavy electric trucks for regional the Volvo Group as they tap into substantial revenue pools that
transport and urban construction. Production will start at the end have not previously been addressed. Instead of selling a truck or
of 2023. Read more on page 31 and 32. machine, we can provide customers with complete transport sys-
In 2022, Volvo Trucks had a market share of 31.6% in heavy- tems, driving productivity for them and revenues for the Group.
duty electric trucks in Europe and Renault Trucks had a market Read more about autonomous solutions on page 37.
share of 24.2%. Also in North America, Volvo Trucks and Mack
GEARED FOR GROWTH
Clear opportunity
• Capturing industry growth Sales
• Untapped service potential
CAGR %
• Electric vehicles and machines
– higher sales value
– increased market shares Ambition for
– increased service contract tomorrow
penetration and duration
• Autonomous solutions
• Energy services ≈3%
• Digital services last ten years
Yesterday Today
>10% Operating margin

The Volvo The Volvo Group’s strategy is a continuation

of a journey the Group has been on for the
Group’s journey last two decades.
continues
Since the divestment of Volvo Cars in 1999, the Volvo Group is The continuous streamlining of the Group’s business portfolio
focused on commercial vehicles. From 1999 until 2011, the has also involved the divestment of e.g. Volvo Aero (2012), Volvo
Group’s strategy primarily targeted growth, not least through Rents (2014), 75.1% of Wireless Car (2019) and UD Trucks (2021).
acquisitions.
From 2012 to 2015 the Volvo Group underwent a restructuring Improved performance
program aimed at reorganizing the company to take out overlaps, Everyday performance is the foundation for our business, here and
reduce structural costs and increase efficiency and profitability now, as well as in the future. We need to be agile and flexible in
after the period of acquisition-driven growth. During this period, terms of production volumes, use our common architecture and
there was one major acquisition –45% of Dongfeng Commercial shared technology (CAST, see page 18) wherever appropriate, and
Vehicles in China in 2015. in having continuous introductions instead of major launch projects.
The period between 2016 and 2018 was characterized by a Our quality work is crucial in achieving customer satisfaction
reinforcement of the performance culture with a more decentral- and the work of regionalizing our value chain is necessary to
ized organization and a regionalized value chain approach. secure access to key components and give our people the right
In 2019, the Group’s performance had improved significantly prerequisites to support our customers with short lead times.
and the importance of accelerating the transition towards more The performance of the Volvo Group has improved substantially
sustainable products and operations was manifested when Trans- during the last few years. Our focus has been on gradual and con-
form was added. A further strengthening of the customer focus sistent earnings improvement, reduced volatility in earnings and
and continuous performance improvements continue to be import- cash flow, as well as allocating capital in a disciplined way. We
ant parts of Perform and Transform, which are not sequential have great assets in our people, products, and services, as well as
events, but are run in parallel. To stay relevant and profitable, production sites, well-established dealer networks and customer
driving both current business performance and the transformation relations. We have strong finances and are in a good position to be
to meet future demands are our key focus areas. able to invest further in new technologies. Our aim is to excel on
Over the last decade, the Volvo Group has established an indus- the basics as well as building resilience.
try-leading level of profitability and is now taking the next step on Building resilience is key to our long-term profitability. There
its strategic journey. Growth is expected to accelerate with the are close to 3 million trucks, buses, and machines, produced by
main driver being the higher value of electric vehicles and machines. the Volvo Group in the last ten years, operating on or off-road.
1999–2011 2012–2015 2016–2018 2019–
ACQUISITION-DRIVEN GROWTH CLOSING IMPROVED PERFORM AND

Scale, synergies and geographical THE GAP PERFORMANCE TRANSFORM
expansion. Product renewal, Customer focus, Customer- centricity,
restructuring simplicity, speed, continuous perfor-
MAJOR ACQUISITIONS and cost efficiency. continuous mance improvement,
2001 Renault Trucks and Mack Trucks improvement and accelerate solutions
organic growth. and partnerships
2007 Nissan Diesel (UD Trucks)
for sustainability.
2007 70% of Lingong (SDLG)
2007 Ingersoll Rand Road Development
2008 VECV (joint venture with Eicher)

Of those, almost 1.4 million are connected. With this as a base we IMPROVED THROUGH-CYCLE EARNINGS RESILIENCE
can extend our service offer and increase the uptime to the benefit
of our customers. A stronger service relation and growing service Profitability has improved in recent
business also improve our resilience throughout the business cycle. years. In 2022, the adjusted oper-
ating margin amounted to 10.7%
(11.0). In 2018–2022 the average
Transform to provide value adjusted operating margin was
The need for transportation is increasing as are the investments in 10.3%.
18 19 20 21 22 Year
infrastructure, and the drivers of transformation within our indus- 41 48 29 41 50
tries are clear. We transform our business to provide even greater 10 11 8 11 11
value to our customers and respond to the need for transport and
A
djusted operating income, SEK bn
infrastructure solutions that are safe, fossil-free and more productive. A
djusted operating margin, %
Today’s trucks and construction machines are not used to their
full capacity due to e.g. congestion, insufficient route planning and
low fill rates. However, with current infrastructure, a fully-loaded STRONG FINANCIAL POSITION
truck operating on diesel is one of the most energy-efficient ways

The Group’s financial position
of transporting goods on our roads. The same is true for construc- is strong with a net cash position
tion equipment. Our view though is that battery-electric and fuel in the Industrial Operations of
cell-electric vehicles and machines as well as products with inter- SEK 73.9 billion excluding post-
nal combustion engines running on different types of renewable employment benefits and lease
liabilities at year-end 2022.
fuels are the future. These offers will be further developed to meet 18 19 20 21 22 Year
upcoming stringent CO2 regulations and our customers’ increased 43 62 75 66 74
demand for sustainable alternatives.
When it comes to safety aspects, it is a fact that people die in Net financial position
Industrial Operations, SEK bn
traffic and human error is by far the main reason. It is also a fact
that people and goods spend a lot of time in congestion. Our daily
life pattern and non-optimized infrastructure and logistics models GOOD SHAREHOLDER RETURNS
result both in temporary congestions and at other times heavily
unutilized road networks. In the last couple of years we have con- In the calendar years 2018–2022,
AB Volvo distributed SEK 109
tinuously invested in new business models and new technologies
billion to the shareholders with a
to be able to offer safer, more sustainable and more productive dividend yield of 7–11% each year,
solutions to our customers, with Volvo Autonomous Solutions and except the pandemic year of 2020.
Volvo Energy as two examples. The extra dividend in 2021 included
SEK 9.50 relating to the distribu- 18 19 20 21 22 Year
The Volvo Group has a good market position in electric vehicles 5 0 9 16 7
tion of the proceeds from the sale
and machines and the focus is on accelerating the commercializa- of UD Trucks. 2022 is according to 5 0 6 6.5 7
tion of new technologies and business models to get traction and 9 0 8 11 7
the Board’s proposal.
impact. This is when the real change happens. Extra dividend, SEK/share
Ordinary dividend, SEK/share
Dividend yield, %
DELIVERING ON OUR FINANCIAL AMBITIONS AND STRATEGIC DIRECTION
Continuous
Gradual and Reduced Discipline investments in
new business Transformation
consistant volatility in in capital
models by inno- accelerating
earnings earnings and allocation/
vation and new growth
improvement cash flow investments
technol-
ogies
Over the last decade, the Volvo Group has established an industry-leading level of profitability and is now taking the next step on its
s trategic journey. Growth is expected to accelerate with the main driver being the higher value of electric vehicles and machines.
Transforming towards decarbonization In our work we focus on three main technologies:

The Volvo Group has committed to the Science-Based Targets ini- • More efficient combustion technology in combination with lower
tiative (SBTi) call for action campaign Business Ambition for 1.5°C. carbon fuels. This is key to reduce emissions in rolling fleets here
The campaign requires greenhouse gas emissions to be net-zero and now.
across the Group’s value chain by 2050 at the very latest, but our • Rapid introduction of battery electric technology to enable zero
target is to reach this already by 2040 in order to help our customers tailpipe emissions. The bus segment has been at the forefront
to reach net-zero by 2050. The Group’s targets were validated by of this rollout, medium-duty and heavy-duty trucks are in series
the SBTi in June 2021. production and followed by Construction Equipment and Volvo
The expected economic life of the Volvo Group’s products is Penta. The main volumes of fully electric vehicles and its associ-
about ten years. What we offer to the market in 2040 will thus still ated GHG emissions reduction of the rolling fleets are expected
be in use until 2050, and therefore the ambition is that all Volvo to be seen at the second half of this decade.
Group products delivered from 2040 should avoid fossil fuel GHG
• Development of fuel cell technology for heavy transports. This
emissions. We expect the shift into battery-electric vehicles, fuel
will enable zero tailpipe emissions for transport segments where
cell-electric vehicles and vehicles with internal combustion
battery electric solutions are not suitable. The ambition is to
engines running on biofuels to be gradual.
offer fuel cell-electric vehicles in the latter part of this decade.
Our ambition is that by 2030, electric vehicles should account
for at least 35% of our vehicle sales globally. Even when most of The increasing pace in the transformation is already evident in the
the vehicles are electric, we foresee use cases for internal com- Volvo Group’s deliveries and order intake. In 2022, the Group’s deliv-
bustion engines (ICE) running on sustainable biofuels or other eries of electric trucks increased by 226%, albeit from low volumes.
fossil-free fuels in some markets. We base the product plan and At the same time, order intake for electric trucks increased by 242%.
therefore our research and development on these basic prerequi- The share of research and development expenses targeted at
sites. We have the competence and the financial resources low-carbon solutions were 26%.
required to invest in several different techniques. This transition is associated with a range of risks and opportuni-
On the road towards decarbonized transport, there will be legis- ties. Investments in research and development will increase in the
lative milestones when it comes to CO2 across the globe. We transition phase as we accelerate to help customers switch to low
therefore continue to invest in combustion engines and aftertreat- emission. Over time the investments into combustion technology
ment systems to increase fuel efficiency, meet the legislative mile- are expected to decrease. Investments in property, plant and
stones and stay competitive. equipment will increase in connection with the Group building up
On our pathway to net-zero we set strategies to reduce emis- capacity for battery-electric and fuel cell-electric vehicles. How-
sion in all relevant scopes. According to our latest emission inven- ever, thanks to the Group’s modular product architecture (CAST,
tory, the use of our products make up approximately 95% of GHG read more on page 18) both electric trucks and trucks with com-
emissions from the product lifecycle. Hence, this is where we bustion engines can be produced on the same assembly lines, thus
emphasize our work and find most opportunities. Individual targets limiting the investments needed for this transition in the industrial
are set for our operating segments – Trucks, Buses, Construction system. The Group also invests in joint ventures and partners with
Equipment and Volvo Penta. strategic suppliers to accelerate the transition.
Read more about this scenario and climate-related risks and
opportunities on page 150.
At least
Volvo Group
35% Customers’
net-zero value
electric rolling fleets
THE GROUP’S PATH TO DECARBONIZATION chain GHG
vehicles net-zero
emissions
2030
Volvo Group’s ambition is to reach

net-zero GHG emissions by 2040. 100%
This will enable our customers to
Battery
have net-zero rolling fleets by mid- Electric
century as it takes approximately
ten years to renew a rolling fleet.
The Volvo Group has a three- Share
of new
pronged approach to the decarbon- vehicles
ization of the product offer and Internal Fuel cell
customers’ fleets of vehicles and Combustion
machines: Engine
• Battery-electric BioLNG
• Fuel cell-electric
0% HVO, electrofuels, hydrogen etc.
• Internal combustion engines
running on lower carbon fuels. 2020 2030 2040 2050
Fossil-based energy Fossil-free energy

Our commitment to achieving

development without exceeding the
planetary boundaries connects to many
of the 17 the UN’s Sustainable
Development Goals.
2030
One global agenda drives development
The Sustainable Development Goals (SDGs) were set in 2015 by development without exceeding the planetary boundaries spans
the United Nations General Assembly and signed by all member across many of the SDGs. Several topics, such as equality and
states and the SDGs are therefore referred to as one global fighting corruption are universal. Beyond these responsibilities,
agenda for 2030. This global agenda impacts the technological we identify closer connections and impacts from our business
and regulatory development as well as expectations from cus- and operations in a number of goals. Read more about our activi-
tomers, investors, employees and other stakeholders where we ties and the most impactful connections to the SDGs in the
operate. Our commitment to achieving social and economic Sustainability Notes on pages 147–185.
Existing In the shift to electric vehicles and autonomous

transports, the Volvo Group’s modular vehicle
industrial architectures will continue to serve the Group well.

They create flexibility as well as cost and capital
footprint and
efficiencies in research and development and in
the industrial system as we go through the
competence
transformation.
are great
assets
CAST – the Volvo Group’s modular system Trucks with different drivelines on same assembly line
The Volvo Group and its partners can benefit from the Group’s The Volvo Group’s modular vehicle architecture creates advantages
modular platform Common Architecture & Shared Technology in both the development and manufacturing phase. For example,
(CAST). The ambition with CAST is to develop a competitive set the architecture allows us to put either an internal combustion
of modular products and services that are easy to integrate, meet engine or an electric driveline in the same truck chassis. In this way,
future legal, market and society needs, as well as meeting cus- we can reduce time and costs in the development phase and bring
tomer expectations. new offers to the market faster. In addition, we can manufacture
The CAST system is modular, scalable and cost-efficient. We the different variants on the same assembly line in existing plants,
secure an aggregated view on needed common architecture and leveraging our skilled workforce and invested capital, which again
platform solutions, consolidate and support activities on new reduces cost and enables us to scale up volumes quickly when
enabling technology development and strive for continuous devel- required.
opment of standardized interfaces for both hardware and software.
Through well-defined performance steps and continuous reduc- Increased depth of engagement in the battery value chain
tion of complexity, the CAST ecosystem supports our different In May 2022, Volvo Group opened its very first battery pack assem-
brand strategies across disruptive technology trends while captur- bly plant. Located in Ghent, Belgium, the plant supplies ready-to-
ing synergies for the Volvo Group and its joint ventures and alli- install batteries for Volvo Trucks’ full electric heavy-duty trucks.
ance partners. In the new battery plant, cells and modules from Samsung SDI
are assembled into battery packs that are tailor-made for the Volvo
Group’s products.
COMMON ARCHITECTURE & SHARED TECHNOLOGY TRUCKS WITH DIFFERENT DRIVELINES ON SAME LINE
The Volvo Group’s Driving synergies and reducing cost.

modular platform.
Combustion Battery
Trucks engine pack
Electric Fuel cell
driveline pack
CAST
Common
Construction Buses
Architecture
equipment
Shared
Technology
Main assembly line
Combustion Battery Fuel cell

engine electric electric
Volvo Penta Joint ventures
and alliances Pre-assembly stations
Ghent plant to
produce
battery
modules
Each battery pack has a capacity of 90 kWh, and in a truck a cus- heritage and world-class competence in advanced, high-volume
tomer can choose to have up to six battery packs (540 kWh). The manufacturing, while having access to Sweden’s rich supply of
number of batteries depends on each customer’s specific range, fossil-free energy. The Volvo Group plans to gradually increase
load capacity demands and access to charging infrastructure, etc. capacity and reach large-scale series production by 2030. The
When our customers invest in electric trucks, we help them plan battery cells will be designed specifically for commercial vehicle
their routes and operations. Done effectively, this makes for a applications, supporting the global roll-out of electric trucks,
smooth transition to electric trucks and extends the truck’s range. buses, construction equipment and electric drivelines for different
Volvo Group’s batteries are designed so that they can later be applications. Establishment of the production site is subject to
remanufactured, refurbished, and reused. In October, it was approvals from relevant authorities. The battery module manufac-
announced that in 2025, the plant in Ghent will start to produce turing line in Ghent will be able to use battery cells both from part-
battery modules. The investment decision to install battery mod- ners and from the planned battery cell plant in Sweden.
ule manufacturing capacity is an important step for the Volvo
Group to shape its future value chain for battery systems.
Another important step is the initiation of the process to estab-
lish a large-scale production plant for battery cells in Mariestad,
Sweden. The proposed site is close to the Volvo Group’s current
main powertrain plant in Skövde. It will benefit from the region’s
existing industrial and logistics infrastructure and build on a strong
BUILD-UP OF A BATTERY
Volvo Group is gradually increasing its vertical

integration towards cell production.
CELL MODULE PACK ENERGY STORAGE SYSTEM

(BATTERY)
Financial targets The current financial targets were decided

on by the Board of Directors in 2017.
– fulfilling our
ambitions
A clear and straightforward operating margin target supports A debt-free industrial balance sheet, excluding pension and lease
the efforts to drive performance across the Group through the liabilities, enables the Volvo Group to better manage cyclicality in a
business cycle. The target also aligns with the way the Group is capital-intensive industry and to secure competitive cost of funds
challenged and measured internally. for the Financial Services’ operation.
OPERATING MARGIN FOR NET FINANCIAL POSITION INDUSTRIAL RETURN ON EQUITY IN

THE VOLVO GROUP, % OPERATIONS, excl. post-employment FINANCIAL SERVICES, %
benefits and lease liabilities, SEK bn
18.0
15 80 74.7 73.9 18
66.2 15.1 15.0
11.5 11.6 62.6 15 15.1*
60
10 12
9.7 43.9
8.8 40 9
8.1
8.3
5 6
20
3
0 0 0 –0.3
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Target: The Volvo Group’s operating margin Target: The Industrial Operations shall under Target: Financial Services’ target is a return on
shall exceed 10% measured over a business normal conditions have no net financial equity of 12–15% at an equity ratio above 8%.
cycle. indebtedness excluding provisions for post-
employment benefits and lease liabilities. Outcome: In 2022, return on equity amounted
Outcome: In 2022, the operating margin to –0.3% at an equity ratio of 8.0%. In 2018–
amounted to 9.7% (11.6). In 2018–2022 Outcome: At the end of 2022, the Industrial 2022 the average return on equity was 11.2%.
the average operating margin was 9.9%. Operations had a net financial asset position In 2022, return on equity excluding a negative
In 2022, the adjusted operating margin of SEK 73.9 billion. effect from provisioning of assets related to
amounted to 10.7% (11.0). In 2018–2022 Russia amounted to 15.1%. In 2018–2022
the average adjusted operating margin was the average return on equity excluding the
10.3%. For more information on adjusted adjustment related to Russia was 14.3%.
operating margin, please see Key Ratios For more information on adjustments, please
on page 212. see Key Ratios on page 212.
* E xcluding a negative effect from provisioning

of assets related to Russia.
Climate targets The Volvo Group has committed and set targets in
line with the Science-Based Targets initiative (SBTi)
– towards campaign Business Ambition for 1.5°C, and we have

set ambitious milestone targets in our value chain
net-zero
along the way. As the most significant emissions are
in the customers’ use-phase, the Volvo Group sees
significant opportunities in helping to decarbonize
their operations.
The transition towards lower emissions in our industries is at an early For Trucks and Buses the targets are set in emission per vehicle-
stage but is expected to accelerate with increased electric vehicle kilometer. For Construction Equipment, Volvo Penta and our own
sales and also with the support of fuel-efficiency improvements. operations, the targets are set as total absolute reductions. These
The Group’s own operations (Scope 1 and 2) make up less than targets are approved by the SBTi as science-based. Tracking of
1% of total emissions. The use-phase (Scope 3.11) makes up over emissions in remaining scopes, representing approximately 4%
95% of lifecycle emissions and this is our main focus of decarbon- of the total, is under development.
ization. Consequently, we have established targets per segment.
SBTI APPROVED TARGETS, FROM BASELINE 2019
Scope 3 Scope 3 Scope 3 Scope 3 Scope 1–2

use phase use phase use phase use phase
OWN
TRUCKS BUSES CONSTRUCTION VOLVO PENTA OPERATIONS
EQUIPMENT
Target 2030 Target 2030 Target 2030 Target 2034 Target 2030
–40% –40% –30% –37.5% –50%
emissions per emissions per absolute absolute absolute
vehicle km vehicle km emissions emissions emissions
Status 2022 Status 2022 Status 2022 Status 2022 Status 2022
–4% –7% –11% +5% –13%
On an aggregated level, the total calcu- volumes have a significant impact on GREENHOUSE GAS EMISSIONS
lated emissions amounted to 287 million results from one year to the next. The Volvo
tons 2022 compared with 323 million tons Group is operating in cyclical industries, Mton
in 2019. The result in total GHG emissions which are linked to economic activity, and
is a combination of energy efficiency, sales consequently sales volumes and utilization
volumes and product mix. of the rolling fleet of products vary over
The reported emissions for the year in time. See detailed information on GHG
‘scope 3.11’ use phase make up the vast emissions, measurements and targets on
majority of the total emissions footprint page 154–156.
and is calculated by including expected
lifetime emissions from all products sold 19 20 21 22 Year
in the reporting year. As such, annual sales 323 241 286 287
22
VOLVO GROUP 2022
OUR BUSINESS
Creating shared
value across the
value chain
Customers
Our aim is to support our customers by providing offers
that increase their productivity, secure uptime and
increase fuel and GHG efficiency, which improve their
financial performance and reduce their impact on the
environment. As 95% product life-cycle emissions occur
in the use phase, we see great opportunities in helping
Our strategy responds to a range of to reduce these emissions and by doing so reducing our
climate-related impacts and risks.
sustainability-related issues. This means
Sustainability focus areas
considering the impact on the world around
• Traffic and site safety example, page 41.
us as part of how we look at the long-term • Science-based targets, scope 3 use phase, page 155.
• Climate strategy, opportunities, risk and governance,
success of our business. page 150.
This illustration maps some of

our priorities in managing sus-
tainability impacts, risks and Customers
opportunities in our value chain
Climate Resources and key processes, as well as
references to further disclosures
in this report.
Reuse
People
We focus on three key areas where our products, services and

operations are particularly important for sustainable development:
• People – focusing on health, empowerment, business ethics and Reuse
human rights, striving for 100% safe products and operations. We strive to increase material efficiency and reduce
energy use by incorporating more recycled materials,
• Climate – focusing of reducing greenhouse gas emissions from
recovering heat and recycling waste. We also work to
our business and operation, striving for 100% fossil free. optimize and extend product life and by doing so extend
• Resources – using natural resources in the most efficient way customer contracts, which can lead to both resource
<-efficiency as well as business opportunities. One key
and contributing to 100% productivity improvement of our
in this work is to increase service-based business and
customers’ logistics operations. peace of mind for customers. Durable products in combi-
nation with added services can enable good opportuni-
ties to extend product usefulness and sell used or repur-
posed vehicles.
Read more about sustainability focus areas

• Waste and recycling in operations, page 157.
• Supporting the transition to circular economy,
page 158.
VOLVO GROUP 2022 23 OUR BUSINESS
Product development Purchasing

Fulfilling our customers’ needs and improving their safety, Long-term cooperation with suppliers drives efficiency,
profitability and environmental performance forms the quality and responsible behavior throughout the value
basis of our product and service development. Product chain. The Volvo Group places high demands on ourselves
development is also influenced by legislation, changes and our supply chain partners. We have both global and local
in society and new technologies. There are strong trends supply chains to deliver components, parts and complete
such as automation, electromobility and connectivity that services and systems. When developing a robust supplier
we are investing in that need to be balanced with invest- base, we look at a wide range of impacts, opportunities
ments in the development of current technologies. and risks. Our Supply Partner Code of Conduct sets the
foundation for how we work.
• Customer health and safety, page 169. Sustainability focus areas
• R&D related to zero- and low-emission vehicles, page 153. • Supplier social assessments including human rights,
page 176.
• Sustainable minerals program, page 177.
Our supply partners have an important role in helping to

develop the solutions needed for our net-zero ambition as
well as to reduce supply chain emissions. Our latest inven-
tory shows that GHG emissions from the supply chain
make up approximately 4% of the total product life-cycle
emissions. Focus areas for emission reduction have been
identified but targets are not yet consolidated for the full
Product Volvo Group in this category.
development
• Supplier environmental assessments on page 177.
Retail and
Purchasing
service
Production and logistics
Retail and service Production and logistics

Our global network of dealers and service centers staffed Our global industrial and logistics system strives for contin-
by competent and service-oriented personnel are key fac- uous improvement to deliver on customer expectations
tors for customer satisfaction and success. The business and meet internal targets. The industrial system consists
areas within the Volvo Group support customers via effi- of capital-intensive component factories as well as labor-
cient dealer workshops, and through service and mainte- intensive assembly plants. The component factories supply
nance agreements. the Group’s needs on a global basis, whereas assembly plants,
in most cases, are located close to end-markets to cater for
Sustainability focus areas local needs and specifications, and short delivery times.
• Responsible sales, page 175.
• Employee related matters, page 163.
• Health and safety, page 167.
Less that 1% of the GHG emissions footprint is connected to Sustainability focus areas
the Group’s own operations in production, retail and service. • Energy and emissions, page 156.
Yet the direct management control makes this a relevant area
in our net-zero value chain GHG ambition.
Making the As we set out to provide customers with the

right solutions for their business needs and
strategy come individual prerequisites, we make the strategy

come to life. Our people want to be empowered to
to life
take action to drive performance and deliver on the
challenge. Here are examples in their own words
how we work in different parts of our value chain
– taking the lead and accelerating the shift.
Supporting customers with different needs There are different business

models for different customers.
The range goes from selling
a vehicle or machine and get
Provide
paid by unit, to solving the
Help me Keep my Maximize Maximize me with the Optimize
maintain my vehicle the use of the use of right transport my supply
customer’s mission and get paid
vehicle available my vehicle my fleet capacity when chain by result. We will have different
I need it offerings along the entire range
for different customers depend-
ing on preferences, segments
and geographies.
1 Vehicle
parts 2 Vehicle
uptime 3 Vehicle
productivity 4 Fleet
productivity 5 Mobility
services 6 Platform
solutions
services services services services
Customers
FINANCING AND INSURANCE, INCLUDING USAGE-BASED MODELS
CONNECTED PLATFORM
VEHICLES AND EQUIPMENT
Reuse
Belén Neira, Head of Indirect Sales, Volvo Energy
I strongly identify myself with the start-up our lives. With our circularity concepts at Volvo Energy, we are
environment in Volvo Energy, because enabling green energy to be accessible and affordable for many people
there’s an entrepreneurial mindset in as part of our business model. One of the most interesting opportunities
this type of smaller organizations where is within second-life for batteries. We are working with the ambition to
everyone is creating something com- prolong battery life after it has served its purpose in the application,
pletely new together. It’s also in my per- finding a second-life in new products like Battery Energy Storage Sys-
sonality to network and collaborate so tems that can provide a solution to stabilizing energy availability.
working in a cross-functional organiza- Striving for societal development has always engaged me and is
tion makes me feel at home. the reason I want to work at the Volvo Group. It has a clear purpose
At Volvo Energy, I’m in a place where my personal and professional for people and society, sharing the belief that there is no trade-off in
ambitions meet, and that motivates me every day. I believe energy is switching to electric and green energy. On the contrary, we are making
a basic human need and human right, and absolutely necessary to live society better for everyone.
Edouard Rochard, Product Line Electric Vehicles, Wissam Ait Sidi Hammou, Segment Leader,
European Medium Duty Business Unit Electromobility, Group Trucks Purchasing
I have always wanted to be in the forefront of develop- As a Segment Leader

ment, that is why I have chosen to go electric. How to within Electromobility,
make a truck maximize in matching diverse customer I oversee the Electrical
needs intrigues me and currently, I am involved in Distribution and Charging
a project to design an experimental urban logistics segment. This gives me
solution. A brand new, 16-tonne electric truck tailored the opportunity to work
for urban deliveries, with improved safety, increased on the growth of the
driver comfort and elimination of pollution and noise electromobility journey
as its main features. and together with my
In this challenge, we truly work as ‘intrapreneurs’ – connecting people, compe- colleagues have the chance to influence how we drive
tences, customers, and partners in one collaborative ecosystem. In each decision, that growth together with our supply chain partners.
big or small, we keep the customer needs at the center. If a feature doesn’t solve Working in this new technology area and in Purchasing
the customer pain point, we think of something else. We’re not doing anything just is for me the perfect match to fully contribute to the
because it is nice engineering – we are doing it since it will be good for our custom- Volvo Group transformation and sustainability targets.
ers and for society at large. It is truly exciting to be in contact with so many inspiring
The market is full of opportunities and in Volvo Group, we are at the forefront of colleagues every day to enable the switch to electrified
the decarbonization journey. We are not just bystanders – we are really taking the vehicles. Working with our supply chain partners is also
lead on all the changes in society that are necessary for a sustainable future. To be very rewarding. Together, we accelerate the technology
a part of this journey is super rewarding and gives me all the energy I need to push journey while focusing on all the important dimensions
forward towards new solutions. So, let’s team up and do something great! – from securing a resilient value chain, setting decar-
bonization and circularity plans to offering the right
features and services to the end-customer. For me,
it all comes down to people and purpose, and in this
role, I get to work with amazing people and an
inspiring purpose to make a difference.
Product
development
Retail and service Purchasing
Production and logistics
Brett Pope, E-Mobility Commercial Support, Elise Harfelt, Team Leader Module Under Cab (MUC),
Volvo Trucks North America Group Trucks Operations
Drawn to the outdoors and open I am a Team Leader at the truck

water, I began my career at Volvo assembly plant in Tuve, Gothen-
Penta in Chesapeake, Virginia. My burg. My team works with assem-
early days as an Engineer at Volvo bling the MUC – the Module
Penta offered me the confidence Under Cab – that is replacing the
of an amazing team and an estab- diesel engine on the brand new
lished network of colleagues who heavy-duty electric trucks that we
supported my exploration of other now have in serial production in
areas of the business, which is Tuve plant. What I think is most
how I found my way to Volvo Trucks. fun being in my role is seeing the journey. From where we started
Throughout my journey with the Group, I have always had the several years ago with test builds, to where we are today being
opportunity to solve complex challenges, learn new skillsets, first out serial producing these electric trucks for our customers.
work abroad, and grow. But at Volvo Trucks, I am able to blend It is so engaging being a part of this. The transformation is
my personal and our company values by pushing boundaries of course about new sustainable products; contributing to a
and exploring new technologies. With the introduction of greener society and shaping the world we want to live in. But
e-mobility into the marketplace, through initiatives like Volvo the transformation is also so much about people. The products
VNR Electric trucks, Volvo LIGHTS (Low Impact Green Heavy are developing, and so are we as a plant in building them, and
Transport Solutions), along with other sustainability driven proj- we as human beings in making this happen. Another important
ects, we are blazing the trail through collaboration, trust, and thing is everyday communication and helping each other to win
transparency with people and businesses all over the world. not separately – but as a team.
I am proud to say that it is my job to convince you that proj- I am sure this journey would not have been possible without
ects like this matter! The industry is changing, and through our the great teamwork we have. Not only in my team working with
collaborative efforts, we are the leading the way in delivering the MUC, but as a plant and as an entire company. Volvo is driv-
solutions that benefit humankind, long term. ing the transformation – and we are Volvo.
Driving Value co-creation
prosperity • Productivity
for many
• Asset uptime Value for
• Fuel efficiency
customers
• Increased revenue
stakeholders
• Decreased costs
Transport and
• P rofitability growth infrastructure solutions
We believe that the key to being successful

is to create value for our customers by
For customers
contributing to improving their profitability.
For our customers, uptime is everything. Regardless of if it is a cus-
By understanding our c ustomers’ priorities tomer that owns one single truck or a fleet of trucks, if they are a public
and challenges, we are able to provide transport provider or a coach owner, a construction entrepreneur or
a quarry owner; their performance depends on reliable products and
products and services that grow customers’ services that meet the needs of their business.
More than 2 million trucks and close to 100,000 buses, which the
revenues and decrease c ustomers’ cost. Key Group manufactured in the last ten years, perform transport work
areas to create value for our customers are worldwide. Construction equipment operate at sites all around the
world, and we have delivered more than 700,000 machines the last
offers that increase our customers’ produc ten years.
tivity, secure uptime and increase fuel effici
ency. By delivering customer value, we will
also deliver value for ourselves, our owners
and society.
Uptime and
profitability
Insights for additional

value creation
• E xcellent products and services
Value for • Closeness to c ustomers
• Efficient way of operating
Volvo Group
• Increased revenue
• Decreased costs
• P rofitability growth
For employees SEK For society SEK

The Group’s 102,155
employees are our most
important asset. 49.5 bn
Employee engagement and a performance culture based on cus-
Our products and services
make societies function.
Our customers operate bus 27.6 bn
lines so that people can get to work, they transport food and
tomer success, trust and passion are critical for the Group to fulfill industrial goods and they build infrastructure such as roads and
its mission. The Group strives to offer competitive employment hospitals. Furthermore, road transport directly creates millions of
terms and benefits as well as a stimulating, safe and healthy work jobs around the world. We also contribute to the local economy
environment. In 2022 we paid SEK 49,531 M in salaries and by being a major employer in many communities, providing both
remuneration. direct and indirect employment. In 2022 the Group paid SEK
10,682 M in social costs, SEK 5,267 M in pension costs and SEK
11,614 M in income taxes, in total SEK 27,563 M. We also pay
customs duties as well as property and energy taxes.
For suppliers SEK

A solid supplier base
and professional
333.0 bn For creditors SEK
0.9 bn
partnerships are
essential for the Volvo Group. The Group provides both income and A long-term competitive business
employment for a large number of companies and in many societies requires access to capital to be
around the world. Purchased goods and s ervices is the Volvo able to invest. The Volvo Group
Group’s single largest expense and in 2022 we bought goods strives to ensure that the capital is used in the best possible way
and services for SEK 332,982 M. and to assure debt providers with the financial strength to secure
proceeds and repayment. In 2022, the Volvo Group paid its credi-
tors in the Industrial Operations SEK 856 M in interest.
For shareholders SEK

The Volvo Group strives to
28.5 bn For the SEK
33.8 bn
generate value for its
shareholders through a Volvo Group
positive share price development and payout of dividends. From A significant portion of
2017 to 2022 the price for the Volvo B share rose by 77%. Share- generated capital is nor-
holders normally receive a certain portion of the retained earnings mally transferred back into the business. The capital is used for
in the form of a dividend, after consideration has been given to the investments that will strengthen competitiveness and create long-
Group’s need for capital for continued development according to term value for the Group and its stakeholders. In 2022, the Volvo
its strategies. In 2022, shareholders received dividends totaling Group invested SEK 22,526M in R&D and another SEK 11,301 M
SEK 26,435 M. To the Annual General Meeting 2023, the Board in property, plant and equipment, in total SEK 33,827 M.
of Directors proposes an ordinary dividend of SEK 7.00 per share
and an extra dividend of SEK 7.00 per share, in total SEK 28,468 M.
Leadership Technologies develop at a faster pace than ever

before. Combined in new ways they offer new
through and innovative solutions in almost all industries.

Keeping up with the latest development is vital
partnerships
to stay successful and is hard to do on one’s own,
and that is why the Volvo Group works in
collaborations and partnerships.
With the rapid development of electrification, connectivity and Furthermore, we have a strategic alliance with Isuzu Motors.
automation, we see great opportunities to co-create a more The alliance aims to capture opportunities in the ongoing transfor-
sustainable transport system and to make societies prosper. mation of the commercial vehicle industry. Alliance work is focused
Here are some examples of our partnerships. on deriving potential synergies in areas that will encompass i.e.
forming a technology partnership and creating a larger volume
Many alliances and partnerships base to support investments for world-class technology.
We have a strategic alliance with Samsung SDI to develop batteries
for the Volvo Group’s electric products. Working together with Sam- Driving change with public-private partnerships
sung SDI, Volvo Group aims to accelerate the speed of development We are also active in public-private partnerships to drive change.
and strengthen the long-term capabilities within electromobility,
to the benefit of customers in different segments and markets.
One such partnership is First Movers Coalition to drive demand for

Sharing the Green Deal vision of sustainable transport and a carbon low carbon tech. Roughly half of the emission reductions needed
neutral Europe by 2050, the Volvo Group and Daimler Truck have to reach the UN’s 2050 climate goals rely on technologies in early
launched a fuel cell joint venture called cellcentric. The intention is development, demonstration, or prototype phases. Accelerating
to develop, produce and commercialize fuel cell systems for heavy- innovation in this decade is critical to bring these technologies to
duty vehicle applications and other use cases. During the year, Volvo market and make them cost-competitive. To jumpstart this effort,
Trucks showcased a fuel cell-electric truck running on hydrogen. the First Movers Coalition is a platform for companies to make
Read more on page 34. purchasing commitments that create market demand for low-
carbon technologies in seven “hard-to-abate” industrial sectors
that currently account for 30% of global emissions: Aluminum,
Aviation, Chemicals, Concrete, Shipping, Steel, and Trucking. The
coalition’s members commit in advance to purchasing a proportion
of the industrial materials and long-distance transportation they
Together with Daimler Truck and the Traton Group we have founded need from suppliers using near-zero or zero-carbon solutions,
Milence, which plans to install and operate a high-performance despite the premium cost. Volvo Group is a founding member of
public charging network for battery-electric heavy-duty long-haul the coalition.
trucks and coaches across Europe. Read more on page 35.
We collaborate with SSAB on the research and development and

commercialization of the world’s first vehicles made of fossil-free
steel. Read more on page 36. H2Accelerate is a collaboration with the aim to accelerate the
We work together with Aurora to develop autonomous trucks. use of hydrogen as a fuel for heavy-duty road transport in Europe.
Aurora is a US-based company specialized on the development As a growing number of governments and businesses align on
virtual drivers. Volvo Autonomous Solutions has also partnered a common vision of a net-zero emissions energy system, the
with customers DHL Supply Chain and UBER Freight regarding H2Accelerate participants believe that hydrogen is an essential
on-highway autonomous solutions and with Holcim to further fuel for the complete decarbonization of the truck sector. The
develop the use of autonomous electric haulers in a limestone group comprises vehicle OEMs Volvo Group, Daimler Truck and
quarry. Read more on page 37. Iveco and hydrogen suppliers Shell, OMV and TotalEnergies.
Support for disaster relief in Ukraine During the year, Volvo Group worked in collaboration with
with the Red Cross and UNHCR the International Red Cross Committee and UNHCR to
transport aid to Ukraine. The Red Cross early identified
truck capacity and logistics systems as an area where
Volvo Group could support with expertise and assets. The
Volvo Group saw an opportunity to donate a previous exhi-
bition version of a Renault Trucks T and to support with
transport and logistics expertise. The collaboration resulted
in approximately 100 truckloads of life-saving kits being
delivered across the border between Hungary and Ukraine.
“The Volvo Group believes in the force of partnership with

a clear aim – to rapidly introduce and implement best-in-
class low carbon technology throughout industry verticals.
Together we are strong enough to really make a difference
and we are increasing our efforts, both ourselves, but also
with partners to accelerate the shift into a path that aims
to deliver on the goals in the Paris agreement”, says Martin
Lundstedt, President and CEO.
Rollout of more Climate change, congested cities, and

hazardous road and working conditions
sustainable
call for future transportation technology
and systems solutions that are safer,
transport and
cleaner and more efficient. On the
following pages are some examples
infrastructure
of what we worked on in 2022.
solutions 2,194
2022
Volvo Group deliveries of

fully electric vehicles
942
and machines
2021
302
2020
Towards a fully-electric offer

Demanding long-haul Our introduction of electric trucks, buses and
machines has already started. We are drawing on
Heavy construction the experience from the city bus applications, where
we have more than 10 years of experience from
electrification – starting with hybrid-electric solu-
Regional haul
tions and building that into battery-electric buses.
On the truck side, Volvo Trucks, Renault Trucks
Urban transport & and Mack Trucks started series production of
light construction trucks for important segments such as city distri-
bution, waste and recycling in 2020. The Group
continued its step-by-step rollout with regional
Heavy haul Volvo trucks in North America in 2021 and of
trucks for regional haul and heavy construction in
Large Europe in 2022. The Volvo Group intends to have
electric products and solutions for all relevant truck
År segments, eventually also the really heavy-duty
Medium
long haul segment, which will be a combination
of battery-electric (BEV) and fuel cell-electric
Compact vehicles (FCEV).
The first electric compact construction equip-
ment were introduced in select markets in Europe
in 2020. The rollout continued in Europe and
North America in 2021, followed by Asia in 2022.
In 2022, the first medium-duty electric machine,
the 23-ton EC230 Electric excavator, was brought
to selected markets.
2010 2015 2020 2025 2030
Volvo Group’s electric

Electric hybrid Battery electric Energy recuperation Fuel cell electric
vehicles and machines
on the road, off road,
in the city and at sea.
Volvo Trucks In September 2022, Volvo Trucks started America,” said Roger Alm, President of
started series series production of heavy electric, 44- Volvo Trucks.
tonne trucks in the company’s most import- Series production of Volvo’s heaviest
production of
ant product range, its heavy-duty trucks electric trucks started in the Tuve factory
heavy electric
Volvo FH, Volvo FM, and Volvo FMX. With in Gothenburg, Sweden and in 2023 the
trucks
these new additions, Volvo Trucks has six factory in Ghent, Belgium will follow.
electric truck models in series production Volvo produces the electric trucks on the
globally – the broadest electric truck line same line as its conventional trucks, which
up in the industry. The electric line-up cov- gives high production flexibility and effi-
ers a wide range of applications such as city ciency gains. The batteries are supplied
distribution and refuse handling, regional from the Group’s new battery assembly
transport, and construction work. plant in Ghent.
“This is a milestone and proves that we According to Eurostat statistics “Road
are leading the transformation of the indus- Freight Transport by distance” (2018), 45%
try. It’s less than two years ago since we of all goods transported on road in Europe
showcased our heavy electric trucks for the travel less than 300 km. That means that
very first time. Now we are ramping up vol- Volvo Trucks’ electric portfolio could cover
umes and will deliver these great trucks to around 45% of all goods transported in
customers all over Europe, and later on also Europe today.
to customers in Asia, Australia and Latin
20 heavy-duty electric Volvo trucks to Amazon

Amazon is one of Volvo Trucks’ customers committed to decarbon-
izing its fleet. Amazon in Germany ordered 20 Volvo FH Electric,
which are expected to drive more than one million road kilometers
annually, fueled by electricity instead of diesel. Heavy goods vehi-
cles and other commercial vehicles make up around 36% of Ger-
many’s domestic transport emissions, which makes road transport
decarbonization an important issue to address. DHL and Volvo Trucks kick off
zero-emission cooperation
In May, Volvo Trucks and Deutsche Post
DHL Group signed a cooperation agree-
ment to accelerate the shift to zero exhaust
emission vehicles. DHL intends to intensify
its transition to heavy electric trucks by
deploying a total of 44 new electric Volvo
trucks on routes in Europe.
Fully electric rear axle unveiled

In September, Volvo Trucks unveiled a com-
Record order for electric trucks pletely new, fully electric rear axle. Freeing
in Australia up space for more batteries by integrating
In December, Australian express freight com- the electric motors and the transmission
pany, Team Global Express, placed an order into the rear axle, the new e-axle means
for 36 Volvo electric trucks. This was Volvo’s even longer range for Volvo’s battery-electric
largest electric truck order to date in Australia. The trucks will trucks. Serial production of trucks with the
hit the streets of Sydney during Q1 2023. new e-axle will begin in a few years.
Renault Trucks expanded its Renault Trucks is expanding its all-electric range and
range of e
lectric trucks during the year announced the start of sales in the first
quarter of 2023 of two new models of up to 44 tonnes,
namely the Renault Trucks T E-Tech for regional transport
and the Renault Trucks C E-Tech for the construction
industry.
Renault Trucks is pursuing its commitment to support-
ing its customers’ energy transition and its ambition to
provide electric trucks for all uses. Since 2020, Renault
Trucks has been selling a range of all-electric trucks from
3.1 to 26 tonnes.
These new models in Renault Trucks’ heavy-duty range
will be fitted with two or three electric motors providing a
combined power of up to 490 kW. They will be manufac-
tured at the Renault Trucks plant in Bourg-en-Bresse.
With a full electric range that extends from 3.1 to 44
A customer’s tonnes, Renault Trucks is stepping up its strategy and
view on elec- setting its sights higher: the manufacturer intends to
tric trucks.
sell 50% of its vehicles in electric form by 2030.
Barcelona commits to sustainable

transport with 73 Renault Trucks
electric trucks
The city of Barcelona, Spain made a strong choice in
favor of decarbonized urban transport when award-
ing its latest public contract for municipal waste col-
lection and maintenance. This contract was awarded
in batches to several waste management sub-con-
tractors who share the same sustainability goals for
the city. The companies CLD Sorigué, Urbaser, and
Valoriza (Sacyr Group) chose Renault Trucks to pro-
vide 73 fully electric trucks.
Coca-Cola to make local d

eliveries in Belgium
with 30 Renault Trucks electric vehicles
Coca-Cola Europacific Partners will start using 30 electric trucks to make
“last mile” deliveries to local customers in Belgium. The first five vehicles went
out in November 2022 in the Antwerp area. Through a key partnership with
Renault Trucks, the beverage manufacturer is electrifying one-fifth of its truck
fleet and will also reduce its CO2 emissions by 75% compared to diesel trucks.
“Our industry is facing difficulties that require rapid adaptation, but we are
also firmly committed to maintaining a long-term approach. Investing in elec-
tric trucks will allow Coca-Cola Europacific Partners to cut CO2 emissions by
30% across the entire value chain by 2030 and become climate neutral by
2040,” says An Vermeulen, VP & Country Director of Coca-Cola Europacific
Partners for Belgium and Luxembourg.
Volvo Trucks North America launched

an electric truck with longer range
In January 2022, Volvo Trucks in North America launched on par with the total cost of operating diesel trucks. Also
an enhanced version of its heavy-duty Volvo VNR Electric in March, Volvo Trucks received its largest global order of
with up to 85% increased range and faster charging. Sales heavy-duty electric trucks thus far when Performance Team
start of the first generation of Volvo VNR Electric was in – A Maersk Company, ordered a further 110 trucks.
December 2020 and series production began in 2021. It Together with previous orders, this made their total purchase
had an operating range of up to 240 km. The enhanced commitment 126 Volvo VNR Electric. In May, Quality Cus-
version has an operational range of up to 440 km (275 tom Distribution, a Golden State Foods company, increased
miles) and increased energy storage of up to 565 kWh. its commitment to zero-tailpipe emission freight transport
The improved performance is due to, among other things, with an order of 30 Volvo VNR Electric. The trucks will
improved battery design and a new six battery pack option. deliver products to restaurants and coffee shops through-
The new Volvo VNR Electric also reduces the required out Riverside and San Bernardino Counties. Also in May,
charging time, as the 250kW charging capability provides NFI Industries, a leading third-party supply chain solutions
an 80% charge in 90 minutes for the six-battery pack, and provider, ordered 60 Volvo VNR Electric. In September,
60 minutes for the four-battery version. Production of the family-owned 4 Gen Logistics ordered 41 Volvo VNR Elec-
new version started in the second quarter of 2022. tric to haul freight between the Port of Long Beach and
Southern California’s Inland Empire — a national logistics
Customers going further with electric trucks and warehousing hub.
Volvo Trucks has a strong position in electric trucks with Customers in other states are also investing in electric
an increasing number of customers going for zero-tailpipe trucks. In May, Fleetmaster Express, a for-hire logistics car-
emission trucks. Nowhere more so than in California, where rier based in Texas, ordered 10 Volvo VNR Electric to sup-
the adoption of electric trucks is spurred on by incentives. port supply chain sustainability efforts for Ball Corporation,
In March, our customer WattEV ordered 50 Volvo VNR a leading global provider of recyclable aluminum beverage
Electric trucks to launch its Truck-as-a-Service model in packaging. Also in May, PIT T OHIO, a leader in transporta-
California, providing shippers and carriers access to battery- tion, warehouse, and logistics services, announced the
electric trucks at a per-mile rate, including charging, that is addition of two Volvo VNR Electric box trucks to its fleet.
Mack LR Electric – built tough to run clean

Mack Trucks began serial production of the Mack LR Electric refuse
truck in December 2021. By year end 2022, the on-board battery
capacity had been increased by 42%. The rollout of these trucks are in
the early stages, but the 44 orders received in 2022 were nearly five
times as many as the previous year. Mack Trucks was the only OEM to
deliver serial production electric heavy-duty refuse vehicles during the
year, amounting to 100% of the market share in North America.
Volvo Trucks showcased zero-emissions

fuel cell truck
Imagine a truck that only emits water vapor, produces its

own electricity onboard and has a range of up to 1,000
km. It is expected to be possible with fuel cells powered
by hydrogen, and in 2022 Volvo Trucks started to test
vehicles using this new technology.
To decarbonize transport, Volvo Trucks already today
offers battery electric trucks and trucks that run on
renewable fuels, such as biogas. In the second half of this
decade, a third option will be added – fuel cell electric
trucks powered by hydrogen. The fuel cell electric trucks
is planned to have an operational range comparable to FACTS ABOUT FUEL CELLS
many diesel trucks – up to 1,000 km – and a refueling • A fuel cell generates its own electricity from the
time of less than 15 minutes. The two installed fuel cells hydrogen onboard instead of being charged from
have the capacity to generate 300 kW of electricity an external source. The only byproduct emitted is
onboard. Customer pilots will start in a few years from water vapor.
now and commercialization is planned for the latter part
• T he fuel cells will be supplied by cellcentric – the
of this decade.
joint venture between the Volvo Group and Daimler
“Hydrogen-powered fuel cell electric trucks will be
Truck AG. Cellcentric plans to build one of Europe’s
especially suitable for long distances and heavy, energy-
largest series production facilities for fuel-cells,
demanding assignments. They could also be an option in
specially developed for heavy vehicles.
countries where battery charging possibilities are limited,”
says Roger Alm, President of Volvo Trucks.
Fuel cell technology is still in an early phase of develop-
ment. There are many benefits with the new technology,
but also some challenges ahead. One of them is large-scale
supply of green hydrogen produced by using renewable
energy sources, such as wind, water and solar power.
Another is the fact that refueling infrastructure for heavy
vehicles is yet to be developed.
Volvo CE testing the world’s Volvo Construction Equipment (Volvo CE) continues
first prototype hydrogen to act on its commitment to drive change towards a
articulated hauler net-zero future. Besides battery-electric solutions,
where Volvo CE is already offering a large range of
commercial products, the company’s efforts also
include exploring the potential of electrification
through hydrogen fuel cell technology.
In 2022, an important milestone was reached with
the testing of a world-first emission-free hydrogen
fuel cell articulated hauler prototype, the Volvo HX04.
Milence – the European charging

infrastructure joint venture – kicked off
In July, the Volvo Group, Daimler Truck, and Traton Group

completed the final step in forming the announced joint
venture for charging infrastructure in Europe. The new joint
venture, named Milence, is expected to have a significant
role in supporting the European Union’s Green Deal for
carbon-neutral freight transportation by 2050.
Milence plans to install and operate at least 1,700 high-
performance green energy charge points on, and close to,
highways as well as at logistics hubs across Europe. The
Volvo Group, Daimler Truck, and the Traton Group own equal for a rapid expansion of the necessary charging network
shares in Milence but continue to be competitors in all other as well as investing in renewable energy in order to reach
areas. The parties are committing to invest EUR 500 M Europe’s climate targets. As a clear signal to all stakehold-
in total, which is a significant investment in charging infra- ers, the charging network will be open and accessible to all
structure for heavy-duty trucks in Europe. heavy commercial vehicles in Europe, regardless of brand.
Milence intends to take a catalyzing role as a charge
point operator in the value chain by installing and managing
charging stations for heavy-duty trucks and coaches. This
kick-start is a call to action to all other industry players, as
well as governments and policymakers, to work together
Partnership with Pilot Company to create

charging network in North America
In November, the Volvo Group and North American-based Pilot Company signed a
Letter of Intent for the development of a public, high-performing charging infrastruc-
ture for medium- and heavy-duty electric vehicles. Pilot Company intends to install
the charging infrastructure at selected Pilot and Flying J travel centers that will be
open to vehicles of any brand. This initiative will provide customers the necessary
peace of mind to consider adopting electric trucks, eliminating range anxiety and give
the prerequisites for the North American fleet customers to meet their environmental
goals on their decarbonization journeys.
USA
Volvo Trucks constructing California e

lectrified charging c
orridor
CALIFORNIA
In July, Volvo Trucks North America announced that it was joining forces with Volvo
Financial Services, Volvo Technology of America, Shell Recharge Solutions, TEC
Equipment, Affinity Truck Center, and Western Truck Center to develop a publicly Dixon
accessible medium- and heavy-duty electric vehicle charging network that connects
Oakland Stockton
several of California’s largest metropolitan areas. With an award from the California
Fresno
Energy Commission (CEC) of USD 2 M, the Electrified Charging Corridor Project will
address a key barrier to the deployment of electric trucks for long-range transports. Bakersfield
The project got underway in 2022, with all stations anticipated to be online by the
end of 2023. La Mirada Fontana
Volvo Construction Equipment adds

electric power to customer sites
With a range of electric construction machines available on Volvo CE’s electric range incorporates the ECR18 Electric
the market today, Volvo Construction Equipment (Volvo CE) and EC18 Electric compact excavators and the L25 Electric
is showcasing that the journey towards emissions-free and and L20 Electric compact wheel loaders available in Europe
quieter job sites is well under way. and North America, and the ECR25 Electric, available in
Volvo CE believes that electromobility has the power to Europe, North America and Asia, together with the EC55
change the way customers do business – by opening up work Electric excavator, for now only available in China.
in new places, in sensitive environments and even indoors, For medium-sized equipment, Volvo CE in 2022 intro-
thanks to the near silence and zero exhaust emissions that they duced the 23-ton EC230 Electric excavator in selected
bring. No longer is electromobility only a niche option – markets. These solutions are proving their potential for more
change is here, and the company’s technology is already prov- efficient and more sustainable operations with just as much
ing to be a reliable and emission-free solution for customers. power and performance as their diesel counterparts.
Volvo Group has started using weight coming from steel and cast iron – and with the figure
fossil-free steel for Volvo construction machines even higher – replacement
of material in our products with fossil-free and recycled alter-
natives is another important step on the journey to net zero.
Fossil-free steel has been on Volvo Group’s radar for a
while and, thanks to a collaboration with Swedish steel
manufacturer SSAB, it has started to make its way into
our product range. To make fossil-free steel, hydrogen pro-
duced with renewable energy is used instead of the coke
normally used to smelt iron ore. The end result is water
vapor instead of CO2. At least 90% of the CO2 emitted
when producing steel is eliminated with the current production
process.
In October 2021, Volvo Group and SSAB unveiled the
world’s first vehicle created with fossil-free steel: an articu-
lated hauler. And in 2022, Volvo Construction Equipment
became the first manufacturer to deliver a construction
machine made with fossil-free steel to a customer, when
an A30G articulated hauler was handed over to long-term
partner NCC as part of the United Nations’ Stockholm +50
summit.
Volvo Trucks has also started to introduce fossil-free steel
into parts of its range: specifically, the electric versions of
When it comes to the race to net zero, there is a lot of focus the heavy-duty Volvo FH, Volvo FM and Volvo FMX models.
on the exhaust emissions from vehicles and machines. But Steel produced with hydrogen is being introduced into the
it goes much deeper than that – in fact, right down to the frame rails, the backbone of the truck upon which all other
very materials that the products are built from. The creation main components are mounted. As the availability of fossil-
of fossil-free steel is another crucial step on a journey that free steel increases, so will the amount that is used in the
can make things better for our industries. rest of the truck.
The global steel industry accounts for a significant amount
of CO2 emissions worldwide. With around 70% of a truck’s
Transforming the movement of goods through efficient,

sustainable and safe autonomous transport solutions
Volvo Autonomous Solutions (V.A.S.), is the Volvo Group’s

business area dedicated to commercializing autonomous
transport solutions. Contributing to a more sustainable indus-
try and society is a driving force behind V.A.S.’s strategy. The
solutions being developed by V.A.S. will complement today’s
transport system and address some of the biggest chal-
lenges the industry faces – demand for more freight capac-
ity, driver shortage and a desire to reduce emissions while
keeping people out of hazardous environments.
BUILDING
TECHNOLOGY
Focus on industry verticals LEADERSHIP
V.A.S.’s solutions are offered as Transport-as-a-Service Multiple virtual drivers: V.A.S. is taking a two-
and geared towards three industry verticals: hub-to-hub pronged strategy for virtual driver development by
on highway trucking, ports and logistics centers, as well investing in both an in-house developed virtual driver
as mines and quarries. By providing a complete transport for confined areas while also partnering with virtual
solution tailored to each vertical, V.A.S. believes it can driver company Aurora to develop a solution for U.S.
facilitate the introduction and acceptance of technology on highway transportation.
while accessing a larger market.
Platform strategy: V.A.S. is utiliz-
Large market potential for V.A.S. ing Volvo Group’s common archi-
Truck freight tecture and shared technology
industry
(CAST) platform to develop and
V.A.S. total deploy machines and vehicles pur-
addressable
market pose-built for autonomy. Through this approach
Truck
V.A.S. believes it can both ensure the safety and scal-
sales
ability of its autonomous transport offering while also
Volvo bolstering Volvo Group’s leadership position.
share
Autonomous transport solution in real-world

applications
Since 2018, the Volvo Group has been operating autonomous
transport missions in a limestone quarry in Brönnöy, Norway.
In 2022, V.A.S. achieved several milestones including the
granting of a permit by Norwegian authorities allowing the
operation of autonomous trucks without a safety driver while
personnel is working in the area where the trucks operate.
V.A.S. is also working together with Holcim to develop
needs and accelerate commercialization, V.A.S. is forming
the use of autonomous electric haulers in a limestone quarry
long-term strategic partnerships with others who share the
in Switzerland. The technologies being deployed in both
same vision for a safer and more sustainable future. These
projects utilize V.A.S. in-house developed virtual driver.
include technology partner Aurora but also customers like
In the U.S., V.A.S. is developing an Autonomous Trans-
Uber Freight and DHL. In 2022, V.A.S. announced long-term
port Solution intended for shippers, logistics providers, car-
partnerships with both companies to deploy its Autonomous
riers, and freight brokers. To better understand customer
Transport Solution on U.S. highways.
Improvements on trucks with We are not only driving the development of electric vehicles
internal combustion engines and machines, but we are also continuously improving our
products with internal combustion engines in terms of fuel-
efficiency and performance that enhances productivity.
Volvo Trucks cuts fuel use by 18% in test

An independent test done in Germany on Volvo’s fuel-effi-
ciency flagship, the recently updated Volvo FH with I-Save,
showed that it consumes almost 18% less fuel compared
with four years ago. In the test carried out by German maga-
zine Trucker, the 32 tonne Volvo FH 460 with I-Save was
taken on a 343 km long route of public roads, including a
variety of motorways, hilly terrains, and tighter roads. When
compared with the same test in 2018 – before Volvo intro-
duced the I-Save fuel-saving package – the test showed an
impressive 18% combined reduction in diesel and AdBlue
consumption. Even if Volvo Trucks’ goal is that electric
trucks shall account for half of its global truck sales in 2030,
the combustion engine will continue to play an important
role in the transport industry for many years to come. The
Turbo Compound engine is also certified to run on HVO100,
a renewable diesel in the form of hydrogenated vegetable
A customer review
of the Volvo FH
oils, that cuts CO2 emissions dramatically. I-Save was first
with I-Save. launched in 2019. The 13-liter engine with Volvo’s Turbo
Compound technology, D13TC, makes it possible to drive
with low engine revs and high gears for longer periods of
time. The new I-Torque function manages gear selection,
engine torque and braking when I-Cruise is activated. The
function uses I-See to look at the road ahead and evaluate
Up to 10% less fuel and CO2 with how much torque the engine needs to run as energy and fuel
Renault Trucks new heavy-duty models efficiently as possible, based on the truck’s total weight.
Renault Trucks is stepping up the energy efficiency
of its models designed for distribution and light con-
struction, while reducing their environmental foot-
print. Thanks to engine optimization, a new gearbox
and the Fuel Eco+ pack, which includes a roof de
flector, side deflectors, a compressor that can be dis-
engaged and automatic engine shutdown after three
minutes, the Renault Trucks D, D Wide and C 2.3 m
2023 are set to reduce fuel consumption and the
associated CO2 emissions by up to 10% compared
10
with the previous versions.
The day-to-day work of drivers in urban areas can
be very challenging, with deliveries in congested city
%
centers, stress caused by always being watchful of
the safety of other road users and loads, and the
need to maintain productivity. Renault Trucks works
hard to facilitate their task and boost performance
for both drivers and their vehicles. Therefore, improved
safety and on-board comfort are further benefits of
the new range, which was launched in 2022 with
deliveries to begin in 2023.
New platform for premium coaches In June, Volvo Buses launched a powerful
can save up to 9% in fuel costs new fuel-saving platform for its premium
coach range and for chassis customers. With
power ratings up to 500 hp and fuel savings
of up to 9% it is a true cost saver for tour,
charter and line-haul operations. The core
of the new coach platform is a new Euro 6
version of Volvo’s trusted and well-proven
13-liter engine with improved fuel efficiency.
The new platform is the basis for Volvo’s
9000 range of coaches, and it is also offered
as the B13R chassis on all Volvo Buses main
markets. Versions with two-or three axle con-
figurations are available on various markets.
The power ratings span from 380 to 500 hp,
all of which are certified for HVO while the
460 and 500 hp versions are also certified for
biodiesel. To complete the range, there is also
a low-entry configuration, ideal for building
premium double decker coaches.
Volvo Trucks Volvo Trucks North America added to its track record of breakthroughs in powertrain
North America innovation with the Volvo I-Torque. Now available as an option with the latest D13 Turbo
introduces C ompound engine, I-Torque is designed to achieve best-in-class fuel efficiency, without
I-Torque compromising performance, drivability and productivity. The all new Volvo I-Torque is
a unique powertrain solution enabling the truck to operate optimally with up to a 31%
increase in fuel efficient speed range. I-Torque comprises the D13 Turbo Compound (TC)
engine, the I-Shift with overdrive features, adaptive gear shift strategy, a new map-based
version of the predictive cruise control Volvo I-See, and rear axle ratios as exceptionally
low as 2.15.
Data and wireless technology

preventing trucks from breaking down
Almost 1.4 million

connected vehicles
and machines.
Imagine if our customers knew when their trucks would full check of the whole fleet can be completed in just eight
breakdown before it happened? How much would this minutes. And we are constantly improving.
improve their business’ uptime and productivity? With the
help of data, our understanding of how vehicles work is The role of artificial intelligence in reshaping
enhanced even further. And with the help of artificial intelli- the truck industry
gence (AI) and machine learning, it is becoming possible to The more data a system can analyze, the more accurately
predict breakdowns with even greater accuracy and to pre- it can predict outcomes. Initially, connected services and
vent them from occurring. real-time monitoring services were designed to react to
There are almost 1.4 million connected vehicles and certain thresholds or sensor values for individual parame-
machines from the Volvo Group in operation. The vast ters as a means of predicting faults, for example, the engine
amounts of data being collected from for instance trucks exceeding a set temperature. While these sorts of insights
today means its increasingly easier to identify and fix faults are useful, they can be somewhat limited because they do
before they lead to unexpected breakdowns. Traditionally, not take into account the vehicle’s unique circumstances
the main approach to improving uptime has been regular, and driving conditions. While it is important to detect a
scheduled servicing and reactive measures like breakdown potential fault as early as possible, it is also important not
support services. But with the range of sensors and wire- to bring a vehicle into the workshop unnecessarily either.
less technologies found on today’s trucks, we and our cus- Machine learning can be used to analyze greater volumes
tomers can be far more p roactive. of data and to detect patterns impossible to find otherwise.
This results in even more accurate predictions. Different
Vast amounts of data in real time parameters and data points from a wider variety of compo-
The core of connected services and preventative mainte- nents and sensors can be combined, which is then analyzed
nance is that the use of wireless technology and sensors by AI systems to detect patterns indicative of potential
makes it possible to collect vast amounts of data from a problematic behavior that is likely to lead to a breakdown.
vehicle in real time. By analyzing this data and identifying For example, the temperatures of different parts can be
patterns, it is possible to predict and anticipate a fault analyzed in combination with other factors such as vehicle
before it occurs. This gives customers time to schedule a mileage and fault codes. Once a machine learning algorithm
workshop visit at their convenience, and then fix the fault has been trained to identify a pattern or combination of fac-
before it causes an unexpected breakdown. tors that often cause a particular fault, it then becomes pos-
The Volvo Group’s technologies and capabilities in this sible to predict problems for individual vehicles no matter
field are expanding quickly. In 2016, Volvo Trucks’ Monitor- what type of application they are in. You could say that it
ing Centre in Ghent, Belgium remotely monitored just one will be as if the service was created for a specific vehicle
component and it took a full day to complete a full check in and its customer. And as we continue to improve our capac-
a fleet of several hundred trucks. Currently, multiple compo- ity to analyze data, the more accurate these systems will be.
nents in tens of thousands of trucks are monitored, and a
New safety system to protect cyclists

and pedestrians
Volvo Trucks introduced a new safety system to detect

other road users entering the blind spot on both sides of
the truck. The new safety system uses a dual radar on
each side of the truck that detects when other road users
enter the blind-spot area.
When someone is in the blind spot zone, the system,
called Side Collision Avoidance Support, informs the
driver via a red light on the relevant side mirror. If the
driver indicates a lane change via the turn signal, the red
light starts to flash and a warning sound emits from the
side of the potential collision. The driver is alerted and can
brake the truck, allowing for example a cyclist to pass.
The new system was made available globally on the
Volvo FH, Volvo FM and Volvo FMX with diesel, gas and
electric drivelines in September 2022.
Volvo Group Health & Safety Awards
Since 2006, the Volvo Group Health & Safety Awards rec- of the Volvo Group Executive Board present to celebrate the
ognize success and celebrate achievements across all our winning teams.
sites – from plants and offices to retail and warehouses. One of the celebrated best practices were Volvo Con-
The purpose is to give leaders and teams across the Group struction Equipment in Shanghai, who have been working
an opportunity to demonstrate their commitment to raising consistently with infusing a safety culture in operations and
the health and safety standards, promote well-being and customer solutions for over a decade. Health and safety
share their passion for improving our working conditions to committees with employees and management, emergency
inspire others. response training, involvement of local and external stake-
For 2021, over 80 applications were submitted and finally, holders and arranging safety-focused family days are some
five winning achievements were selected. The award cere- of the tools thev have deployed for over a decade to build
mony was held in Gothenburg in April 2022, with members the knowledge, capacity and culture needed to deliver on
their health and safety commitment.
42
VOLVO GROUP 2022
BOARD OF DIRECTORS’ REPORT
Ownership and legal form Statutory sustainability report

AB Volvo (publ) with corporate identity The Volvo Group has prepared a sustain
no 556012-5790 is a limited company ability report in accordance with the
and its shares are listed on Nasdaq Global Reporting Initiative’s guidelines
Stockholm, Sweden. AB Volvo is the (GRI Standards) and the non-financial
parent company of the Volvo Group disclosure requirements in the Swedish
and is headquartered in Gothenburg, Annual Accounts Act. The Volvo Group’s
Sweden. The ultimate parent of the sustainability report consists of the
Group is AB Volvo with registered Sustainability Notes on pages 147–185
office at SE-405 08 Gothenburg, together with all other relevant sustain-
Sweden. ability disclosures in this Annual and Sus-
tainability Report, see:
Business activities • Strategy and business model,
The Volvo Group drives prosperity pages 10–29
through transport and infrastructure • Policies, assessments and results,
pages 147–179
solutions, offering trucks, buses, con-
• Material risks and mitigation, pages
struction equipment, power solutions 68–73 and 148–179
for marine and industrial applications, • Key performance indicators,
financing and services that increase pages 150–181, Taxonomy regula-
our customers’ uptime and productiv- tion disclosures, page 159–162.
ity. Founded in 1927, the Volvo Group
is committed to shaping the future Events after the balance sheet date
landscape of sustainable transport No material events have occurred after
and infrastructure solutions. The Volvo the end of the financial year that are
Group has production in 18 countries expected to have a material effect on
and sell its products in almost 190 the Volvo Group’s financial statements.
markets. A significant part of the
Group’s operations is in Sweden. Other
significant operations are found in the
US, Brazil, India, France and China.
VOLVO GROUP 2022 43 BOARD OF DIRECTORS’ REPORT
Financial performance
Higher sales and operating income

For the Volvo Group, 2022 was a year with a strong increase in net sales and an improved operating income, despite challenges created
by geopolitical turmoil, supply chain constraints and high inflationary pressure. Both vehicle and service volumes grew significantly com-
pared with the preceding year.
INCOME STATEMENTS VOLVO GROUP
Industrial Operations Financial Services Eliminations Volvo Group

SEK M Note 2022 2021 2022 2021 2022 2021 2022 2021
Net sales 6, 7 459,703 361,062 17,355 13,437 –3,579 –2,283 473,479 372,216
Cost of sales –354,682 –277,048 –10,641 –7,700 3,581 2,285 –361,741 –282,463
Gross income 105,021 84,013 6,714 5,738 2 2 111,737 89,753
Research and development expenses –22,526 –18,027 – – – – –22,526 –18,027

Selling expenses –26,066 –21,575 –2,978 –2,384 – – –29,044 –23,959
Administrative expenses –5,867 –4,859 –13 –11 – – –5,880 –4,870
Other operating income and expenses 8 –4,498 300 –2,876 –54 – – –7,374 246
Income/loss from investments in joint
ventures and associated companies 5, 6 –1,333 –54 – – – – –1,333 –54
Income/loss from other investments 132 –15 0 0 – – 132 –15
Operating income 44,862 39,783 848 3,289 2 2 45,712 43,074
Interest income and similar credits 1,315 362 0 – –307 –4 1,008 358
Interest expenses and similar charges –1,512 –1,172 0 0 307 4 –1,205 –1,167
Other financial income and expenses 9 –437 926 0 – – – –437 926
Income after financial items 44,228 39,899 848 3,289 2 2 45,077 43,190
Income taxes 10 –11,207 –9,140 –901 –807 –0 –0 –12,108 –9,947

Income for the period 33,021 30,759 –53 2,482 1 1 32,969 33,243
Attributable to:
Owners of AB Volvo 32,722 32,787
Non-controlling interest 247 456
32,969 33,243
Basic earnings per share, SEK 19 16.09 16.12

Diluted earnings per share, SEK 19 16.09 16.12
OTHER COMPREHENSIVE INCOME

SEK M Note 2022 2021
Income for the period 32,969 33,243

Items that will not be reclassified to income statement:
Remeasurements of defined benefit plans 20 3,817 6,091
Remeasurements of holding of shares at fair value 19 –45 48
Items that may be reclassified subsequently to income statement:
Exchange differences on translation of foreign operations 10,544 5,775
Share of other comprehensive income related to joint ventures and associated companies 1,279 1,349
Accumulated translation difference reversed to income – –324
Other comprehensive income for the period, net of income tax 15,596 12,938
Total comprehensive income for the period 48,565 46,182
Attributable to:
Owners of AB Volvo 48,140 45,354
Non-controlling interest 425 828
48,565 46,182
Net sales European Commission’s 2016 antitrust settlement decision. For

During 2022, net sales increased by 27% to SEK 474 billion (372). more information, please see Legal Proceedings in Note 24.
Adjusted for currency movements and UD Trucks, which was Adjusted operating income in 2021 excluded positive effects
divested on April 1, 2021, the sales increase was 17%, of which of SEK 2.1 billion mainly related to the divestment of UD Trucks.
vehicle sales increased by 19% due to growing transport volumes, For information on adjustments, see Key Ratios on page 212.
improving construction activities and price relaization, and service The adjusted operating margin amounted to 10.7% (11.0).
sales increased by 11%, as high utilization of vehicles and machines Profitability was solid in yet another challenging year with
drove demand for spare parts and services. geopolitical turmoil, supply chain constraints and high inflation
The truck business’ net sales increased by 25% adjusted for pressure. Compared with 2021, the increased adjusted operating
currency movements and UD Trucks, driven by strong demand for income is mainly an effect of price realization, improved volumes,
both new and used trucks as well as services combined with price and positive currency effects. This was partly offset by higher
realization in most markets. For Construction Equipment, net sales material costs, costs related to supply chain disturbances, higher
decreased by 2%, adjusted for currency movements, due to weak selling and administrative expenses and increased R&D expenses
market conditions in China. Overall demand outside of China con- relating to investments in the transformational technologies such
tinued to be good. Buses’ net sales increased by 23% adjusted for as electrification and automation.
currency movements, primarily driven by increased demand for Reported operating income amounted to SEK 45.7 billion (43.1).
long-distance buses. Net sales for Volvo Penta increased by 17%,
adjusted for currency movements, as both the marine and indus-
trial engine market continued their positive development after the Net sales SEK bn Operating income SEK bn
covid-19 pandemic.
The Volvo Group’s sales of defense material, as defined in the
Swedish Military Equipment Ordinance (1992:1303) section A,
amounted in 2022 to 0.72% (0.63) of net sales.
Operating income
In 2022, the Volvo Group’s adjusted operating income amounted
18 19 20 21 22 18 19 20 21 22 Year
to SEK 50.5 billion (41.0), excluding a negative impact from provi- 391 432 338 372 473 34.5 49.5 27.5 43.1 45.7
sioning of assets related to Russia in an amount of SEK 4.1 billion
and SEK 0.6 billion relating to costs for claims arising from the
Net sales by operating segment, Adjusted operating income by

SEK M 2022 2021 % operating segment, SEK M 2022 2021
Trucks 310,536 230,881 35 Trucks 33,821 25,567

Construction Equipment 100,261 92,031 9 Construction Equipment 13,244 12,228
Buses 18,583 13,652 36 Buses 353 59
Volvo Penta 18,102 14,437 25 Volvo Penta 2,530 2,092
Group Functions & Other 16,376 13,459 22 Group Functions & Other –2,911 –2,265
Eliminations –4,155 –3,398 – Eliminations 12 53
Industrial Operations 459,703 361,062 27 Industrial Operations 47,049 37,733
Financial Services 17,355 13,437 29 Financial Services 3,416 3,279

Reclassifications and eliminations –3,579 –2,283 – Reclassifications and eliminations 2 2
Volvo Group1 473,479 372,216 27 Volvo Group adjusted operating income 50,467 41,015
1 Adjusted for changes in currency rates and acquired and divested operations,
Adjustments¹ –4,755 2,059
net sales increased by 17%.
Volvo Group operating income 45,712 43,074
Net sales by geographical region, 1 For more information on adjusted operating income, please see section for Key ratios
SEK M 2022 2021 %
Europe 187,715 154,296 22 Adjusted operating margin, % 2022 2021

North America 131,632 94,356 40
Trucks 10.9 11.1
South America 48,400 28,810 68
Construction Equipment 13.2 13.3
Asia 63,604 62,310 2
Buses 1.9 0.4
Africa and Oceania 28,352 21,291 33
Volvo Penta 14.0 14.5
Total Industrial Operations 459,703 361,062 27
Industrial Operations 10.2 10.5
Of which: Volvo Group adjusted operating margin 10.7 11.0
Vehicles 367,234 282,666 30 Volvo Group operating margin 9.7 11.6
Services 92,469 78,396 18
Change in operating income, Change Key operating ratios, Industrial Operations, % 2022 2021
Volvo Group (excluding Currency
SEK bn currency) impact Total Gross margin 22.8 23.3
Research and development expenses
Operating income 2021 43.1 as % of net sales 4.9 5.0
Change in gross income Selling expenses as % of net sales 5.7 6.0
Industrial Operations 10.2 10.8 21.0
Administrative expenses as % of net sales 1.3 1.3
Change in gross income Financial Services 0.3 0.7 1.0
Operating margin 9.8 11.0
Higher credit losses¹ –3.7 0.0 –3.7
Sale of tangible and intangible assets –0.5 0.0 –0.5
Divestment of group companies² –1.6 0.0 –1.6 Expenses by nature, SEK M 2022 2021
Higher capitalization of development cost 1.7 0.0 1.7
Material cost (freight, distribution, warranty)
Higher research and development and purchased services 301,407 232,774
expenditures –5.6 –0.4 –6.0
Personnel 65,480 56,944
Higher selling and administrative expenses –3.7 –2.4 –6.1
Amortization/depreciation 20,729 18,720
Income from investments in joint ventures
and associated companies –1.2 0.0 –1.2 Other 31,575 20,881
Higher damages and litigation expenses³ –2.0 0.0 –2.0 Total 419,191 329,319
Restructuring costs –0.1 0.0 –0.1
Other 0.5 –0.4 0.1
Operating income 2022 –5.7 8.3 45.7
1 Including provisioning of assets related to Russia.
Research and development expenses, Industrial Operations
2 In 2021 a capital gain of SEK 1.7 bn from the divestment of UD Trucks was included.
3 Includes costs for claims arising from the European Commission’s 2016 antitrust
settlement decision and costs for a civil penalty from the National Highway Traffic
Safety Administration in the US.
Impact of exchange rates on operating income,

Volvo Group, Compared with preceding year, SEK M
Net sales1 44,031

Cost of sales –32,548 18 19 20 21 22 Year
15.9 18.5 16.8 18.0 22.5
Research and development expenses –442
4.2 4.4 5.1 5.0 4.9
Selling and administrative expenses –2,375
Other –387 Research and development expenses, SEK bn
Total effect of changes in exchange rates
in % of net sales
on operating income 8,279
1 The Volvo Group sales are reported at monthly average rates.
Impact of exchange rates on operating income Net financial items

In 2022, changes in exchange rates compared to last year impacted In 2022, interest income increased by SEK 0.7 billion and
the Volvo Group’s operating income positively by SEK 8.3 billion. amounted to SEK 1.0 billion (0.4). Interest expenses was on par
The impact was related to translation of operating income in for- with the previous year and amounted to SEK 1.2 billion (1.2). Other
eign subsidiaries by SEK 4.5 billion, net flows in foreign currency by financial income and expenses amounted to SEK –0.4 billion (0.9).
SEK 4.4 billion and revaluation of receivables and liabilities of SEK The change compared with 2021 was primarily due to revaluation
–0.6 billion. The translation of operating income was mainly effects on financial assets and liabilities mainly related to derivatives
impacted by the appreciation of BRL, USD and EUR. The net flows hedging interest rate exposure in Financial Services.
in foreign currency were positively impacted by an appreciation of
Read more in Note 9 Other financial income and expenses.
USD, AUD and GBP.
ead more in Note 4 Goals and policies in financial risk management

R
Income taxes
regarding Volvo Groups transaction exposure from operating net flows,
graphs 4:4 and 4:6, as well as currency impact on sales and operating The tax expense for the year amounted to SEK 12.1 billion (9.9)
income. corresponding to an effective tax rate of 27% (23).
Income for the period and earnings per share

In 2022, income for the period amounted to SEK 33.0 billion
(33.0). Earnings per share and diluted earnings per share amounted
to SEK 16.09 (16.12).
Financial position
Strengthened financial position

In 2022, the Volvo Group returned SEK 26,4 billion to its shareholders and strengthened
the financial position to continue to invest in transformational technologies.
BALANCE SHEET VOLVO GROUP – ASSETS

Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31
SEK M Note 2022 2021 2022 2021 2022 2021 2022 2021
Assets
Non-current assets
Intangible assets 12 41,471 36,971 73 98 – – 41,544 37,070
Tangible assets 13
Property, plant and equipment 63,058 54,299 50 48 – – 63,108 54,348
Investment property 54 57 – – – – 54 57
Assets under operating leases 34,109 32,150 21,372 19,658 –11,963 –11,838 43,518 39,969
Financial assets
Investments in joint ventures
and a ssociated companies 5 21,583 20,685 – – – – 21,583 20,685
Other shares and participations 5 587 524 18 15 – – 605 539
Non-current customer-financing
receivables 15 1,903 1,669 105,536 83,774 –2,375 –2,057 105,064 83,386
Net pension assets 20 2,722 2,372 5 – – – 2,727 2,372
Non-current interest-bearing
receivables 16 7,227 1,747 1,153 74 –6,578 –70 1,803 1,752
Other non-current receivables 16 10,997 9,211 227 187 –202 –170 11,022 9,227
Deferred tax assets 10 12,219 9,744 1,969 1,203 0 0 14,189 10,947
Total non-current assets 195,931 169,430 130,404 105,058 –21,118 –14,135 305,217 260,352
Current assets
Inventories 17 75,382 63,715 307 202 – – 75,689 63,916
Current receivables
Customer-financing receivables 15 1,128 868 89,145 68,352 –1,409 –1,102 88,864 68,118
Tax assets 16 1,489 1,336 570 373 – – 2,059 1,708
Interest-bearing receivables 16 5,690 1,976 0 0 –27 –26 5,663 1,950
Internal funding1 7,991 16,672 – – –7,991 –16,672 – –
Accounts receivables 16 46,672 39,321 1,548 1,455 – – 48,220 40,776
Other receivables 16 21,390 18,103 3,302 1,840 –5,319 –3,201 19,373 16,742
Marketable securities 18 93 167 – – – – 93 167
Cash and cash equivalents 18 76,005 59,435 9,688 3,913 –1,806 –1,223 83,886 62,126
Total current assets 235,840 201,593 104,560 76,135 –16,553 –22,223 323,847 255,504
Total assets 431,771 371,022 234,964 181,193 –37,671 –36,359 629,064 515,856
1 Internal funding is internal lending from Industrial Operations to Financial Services.
Balance sheet No assets and liabilities held for sale were recognized as of
In 2022, total assets in the Volvo Group increased by SEK 113.2 December 31, 2022 (–).
billion compared to year-end 2021, whereof SEK 45.9 billion is

Read more in Note 3 Acquisitions and divestments of operations,
related to currency movements. The increase was mainly in inven- regarding assets and liabilities held for sale.
tory, accounts receivables, customer financing receivables and
cash and cash equivalents. Investments in joint ventures and associated companies amounted
Read more in Note 15 Customer-financing receivables. to SEK 21.6 billion as of December 31, 2022 an increase of SEK
Read more in Note 16 Receivables. 0.9 billion compared with year-end 2021.
Read more in Note 17 Inventories.
Read more in Note 5 Investments in joint ventures, associated
Read more in Note 18 Cash and cash equivalents. companies and other shares and participations.
BALANCE SHEET VOLVO GROUP – EQUITY AND LIABILITIES

Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31
SEK M Note 2022 2021 2022 2021 2022 2021 2022 2021
Equity and liabilities

Equity attributable to
owners of AB Volvo 19 143,921 126,546 18,796 14,500 – –2 162,717 141,045
Non-controlling interest 11 3,519 3,073 – – – – 3,519 3,073
Total equity 147,439 129,619 18,796 14,500 – –2 166,236 144,118
Non-current provisions
Provisions for post-
employment benefits 20 8,690 12,095 55 82 – – 8,745 12,177
Provisions for deferred taxes 10 3,060 2,774 2,412 2,153 – – 5,472 4,926
Other provisions 21 12,330 10,610 66 49 – 557 12,396 11,216
Total non-current provisions 24,080 25,478 2,533 2,284 – 557 26,613 28,319
Non-current liabilities
Bond loans 22 102,887 79,365 – – – – 102,887 79,365
Other loans 22 25,446 16,488 12,325 10,148 –2,086 –1,823 35,684 24,812
Internal funding1 –110,254 –82,734 98,310 74,223 11,944 8,512 – –
Other liabilities 22 51,351 42,978 1,467 1,557 –7,270 –7,705 45,549 36,831
Total non-current liabilities 69,431 56,096 112,101 85,928 2,587 –1,016 184,119 141,008
Current provisions 21 13,095 11,535 24 36 – 383 13,119 11,954
Current liabilities
Bond loans 22 37,794 21,747 – – – – 37,794 21,747
Other loans 22 24,666 21,230 11,163 7,432 –1,247 –962 34,583 27,700
Internal funding1 –50,804 –36,176 79,677 63,141 –28,873 –26,964 – –
Trade payables 22 89,174 76,079 1,003 666 – – 90,177 76,745
Tax liabilities 22 6,147 3,720 760 567 – – 6,907 4,287
Other liabilities 22 70,749 61,693 8,906 6,639 –10,138 –8,354 69,517 59,978
Total current liabilities 177,726 148,293 101,510 78,445 –40,258 –36,281 238,977 190,457
Total equity and liabilities 431,771 371,022 234,964 181,193 –37,671 –36,359 629,064 515,856
1 Internal funding is internal lending from Industrial Operations to Financial Services.
The net value of assets and liabilities related to pensions and

similar obligations amounted to a liability of SEK 6.0 billion as Return on capital employed, Industrial Operations %
of December 31, 2022, a decrease of SEK 3.8 billion compared
with year-end 2021.
Read more in Note 20 Provisions for post-employment benefits.
On December 31, 2022, total equity for the Volvo Group amounted
to SEK 166.2 billion compared with SEK 144.1 billion at year-end
18 19 20 21 22 Year
2021. The equity ratio was 26.4% (27.9). On the same date the 22.4 28.4 14.7 25.3 27.4
equity ratio in the Industrial Operations amounted to 34.1% (34.9).
Return on capital employed in Industrial Operations amounted to
27.4% (25.3).
Net financial position excl. post-employment benefits and

lease liabilities Industrial Operations Volvo Group
SEK M Dec 31 2022 Dec 31 2021 Dec 31 2022 Dec 31 2021
Non-current interest-bearing assets

Non-current customer-financing receivables – – 105,064 83,386
Non-current interest-bearing receivables 7,227 1,747 1,803 1,752
Current interest-bearing assets
Customer-financing receivables – – 88,864 68,118
Interest-bearing receivables 5,690 1,976 5,663 1,950
Internal funding 7,991 16,672 – –
Marketable securities 93 167 93 167
Cash and cash equivalents 76,005 59,435 83,886 62,126
Total interest-bearing financial assets 97,006 79,998 285,372 217,499
Non-current interest-bearing liabilities
Bond loans –102,887 –79,365 –102,887 –79,365
Other loans –20,611 –11,995 –30,878 –20,343
Current interest-bearing liabilities
Bond loans –37,794 –21,747 –37,794 –21,747
Other loans –22,875 –19,575 –32,806 –26,068
Total interest-bearing financial liabilities excl. post-employment
benefits and lease liabilities –23,109 –13,772 –204,365 –147,523
Net financial position excl. post-employment benefits and
lease liabilities 73,897 66,227 81,008 69,976
Provisions for post-employment benefits and lease liabilities, net Industrial Operations Volvo Group
Non-current lease liabilities –4,835 –4,492 –4,806 –4,469

Current lease liabilities –1,792 –1,655 –1,777 –1,632
Provisions for post-employment benefits, net –5,968 –9,723 –6,018 –9,805
Provisions for post-employment benefits and lease liabilities, net –12,595 –15,870 –12,601 –15,907
Net financial position incl. post-employment benefits and

lease liabilities Industrial Operations Volvo Group
Net financial position excl. post-employment benefits and lease liabilities 73,897 66,227 81,008 69,976
Provisions for post-employment benefits and lease liabilities, net –12,595 –15,870 –12,601 –15,907
Net financial position incl. post-employment benefits and
lease liabilities 61,303 50,356 68,407 54,070
Net financial position

In 2022, net financial assets in Industrial Operations, excluding to SEK 61.3 billion on December 31, 2022. During 2022 provisions
provisions for post-employment benefits and lease liabilities, for post-employment benefits and lease liabilities decreased by
increased by SEK 7.7 billion resulting in a net financial asset posi- SEK 3.3 billion. This was mainly related to remeasurements of
tion of SEK 73.9 billion on December 31, 2022. The change was post-employment benefits of SEK 4.8 billion, partly offset by
mainly explained by a positive operating cash flow of SEK 35.3 negative currency movements of SEK 1.2 billion. The positive
billion offset by the dividend paid to AB Volvo shareholders by remeasurements were primarily an effect of significantly higher
SEK 26.4 billion. Currency movements increased net financial discount rates in all countries, partly offset by adjustments on
assets by SEK 1.6 billion. inflation assumptions in Sweden and the Eurozone as well as
Including provisions for post-employment benefits and lease lower return on assets.
liabilities, the Industrial Operations net financial assets amounted
Read more in Note 20 Provisions for post-employment benefits.
Changes in net financial position, Industrial Operations

SEK bn 2022 2021
Net financial position excl. post-employment benefits and lease liabilities at the end of previous period 66.2 74.7
Operating cash flow 35.3 29.4
Investments and divestments of shares, net –0.9 –7.4
Acquired and divested operations, net1 –0.1 17.9
Capital injections to/from Financial Services –2.1 1.6
Currency effect 1.6 3.0
Dividend to owners of AB Volvo –26.4 –49.8
Dividend to non-controlling interest –0.0 –
Other changes 0.3 –3.2
Net financial position excl. post-employment benefits and lease liabilities at the end of period 73.9 66.2
Provisions for post-employment benefits and lease liabilities at the end of previous period –15.9 –23.7
Pension payments, included in operating cash flow 1.5 1.8
Remeasurements of defined post-employment benefits 4.8 7.7
Service costs and other pension costs –1.6 –2.0
Investments and amortizations of lease contracts 0.0 0.3
Transfer pensions and lease liabilities to UD Trucks – 1.1
Currency effect –1.2 –0.7
Other changes –0.2 –0.4
Provisions for post-employment benefits and lease liabilities at the end of period –12.6 –15.9
Net financial position incl. post-employment benefits and lease liabilities at the end of period 61.3 50.4
1 In 2021 it Includes both the cash flow from the divestment of UD Trucks operations and the inter-company loans that financed the divestment of the customer-financing port-
folio in VFS Japan. This was repaid by UD Trucks at the time of divestment. Read more in Note 3 Acquisitions and divestments of operations.
The Volvo Group’s cash and cash equivalents amounted to SEK

83.9 billion on December 31,2022 compared with SEK 62.1 billion Net financial position, excl. provisions for post-employment
on December 31, 2021. In addition to this granted, but unutilized, benefits and lease liabilities, Industrial O
perations SEK bn
credit facilities amounted to SEK 45.5 billion (42.3) on December
31, 2022. Cash and cash equivalents include 2.3 (2.8) billion that
is not available to use by the Volvo Group and SEK 14.5 (8.7) billion
where other limitations exist, mainly liquid funds in countries
where exchange controls or other legal restrictions apply.
Read more in Note 18 Cash and cash equivalents. 18 19 20 21 22 Year

Read more in Note 22 Liabilities, regarding the maturity structure on 43.9 62.6 74.7 66.2 73.9
credit facilities.
Cash flow statement
Strong operating cash flow

In 2022, operating cash flow in the Industrial Operations amounted Investments and divestments of shares
to SEK 35.3 billion (29.4). The higher operating cash flow compared In 2022, investments and divestments of shares had a negative
with 2021 is primarily an effect of higher operating income. In the impact on cash flow of SEK –0.9 billion (–7.4). The negative impact
working capital, changes in inventories affected the cash flow was mainly due to capital injections of SEK 0.9 billion in the joint ven-
positively compared to 2021. This was offset by a decrease in trade ture cellcentric GmbH & Co. KG.
payables and an increase in accounts receivables compared to prior
Read more in Note 5 Investments in joint ventures, associated companies
year. The total changes in working capital largely remained on par and other shares and participations.
with 2021.
Operating cash flow in Financial Services was negative in an Acquired and divested operations
amount of SEK –22.8 billion (–12.7). The change compared to In 2022, acquired and divested operations had a negative impact
2021 was mainly due to significantly higher increase of new on cash flow of SEK –0.1 billion (22.0). The positive impact in 2021
business volume in the credit portfolio. was mainly due to the divestment of UD Trucks by SEK 22.8 billion.
Read more in Note 3 Acquisitions and divestments of operations.
Investments and disposals
The Industrial Operations’ investments in tangible and intangible Financing and dividend
assets during 2022 amounted to SEK 16.6 billion (12.5). In 2022, net borrowings increased by SEK 34 billion, mainly due
Trucks investments in tangible and intangible assets amounted to significantly higher new business volume in the credit portfolio.
to SEK 13.4 billion (9.8). The major investments were related to During 2022, dividends of in total SEK 26.4 billion (49.8) were paid.
industrial efficiency measures such as replacement and extension These consists of an ordinary dividend of SEK 6.50 per share, and
at the Köping plant in Sweden as well as the ongoing replacement one extra dividend of SEK 6.50 per share.
of casting process equipment in Skövde, Sweden. Capital expendi- Read more in Note 29 Cash flow regarding change in loans.
tures were also related to product upgrades and renewals such as
the development of battery electrical and fuel-cell electrical trucks Change in cash and cash equivalents
with both product development activities and required adaptations In 2022, Cash and cash equivalents increased by SEK 21.8 billion
in the plants. Investments in dealer networks and workshops were and amounted to SEK 83.9 billion on December 31, 2022.
primarily made in Europe, mainly for optimization and replacements.

Read more in Note 18 Cash and cash equivalents regarding
Investments in Construction Equipment amounted to SEK 1.4 the accounting policy.
billion (1.2). The major investments in the plants were mainly
Read more in Note 29 Cash flow regarding principles
related to industrial efficiency measures primarily in Europe and for preparing the cash flow statement.
US. The product related investments during the year were mainly
related to product upgrades and continued electrification with
both product development activities and investments in adapta-
tions in the plants.
The investments in Buses were SEK 0.4 billion (0.4), and in
Volvo Penta SEK 0.8 billion (0.7).
The investment level for tangible assets during 2022 increased
by SEK 2.5 billion compared to 2021. During 2023 investments
in property, plant and equipment are expected to continue upwards.
Optimization of the industrial footprint, product related tooling,
replacements as well as dealer investments will continue to be the
main areas.
CONSOLIDATED CASH FLOW STATEMENT

SEK M Note 2022 2021 2022 2021 2022 2021 2022 2021
Operating activities
Operating income 44,862 39,783 848 3,289 2 2 45,712 43,074
Amortization intangible assets 12 2,918 2,757 53 36 – – 2,971 2,793
Depreciation tangible assets 13 8,601 7,238 25 26 – – 8,626 7,264
Depreciation leasing vehicles 13 4,408 4,301 4,724 4,361 0 0 9,132 8,663
Other non-cash items 29 3,403 –1,444 3,675 453 –114 –7 6,964 –998
Total change in working capital whereof –2,532 –2,270 –26,294 –16,054 152 853 –28,674 –17,471
Change in accounts receivables –5,600 –1,999 –170 –64 – – –5,770 –2,062
Change in customer-financing receivables –169 –623 –26,330 –15,619 148 871 –26,350 –15,370
Change in inventories –5,804 –12,438 –106 151 – – –5,911 –12,287
Change in trade payables 7,749 13,137 282 37 – – 8,031 13,174
Other changes in working capital 1,293 –347 30 –559 4 –19 1,327 –925
Dividends received from joint ventures and
associated companies 70 769 – – – – 70 769
Interest and similar items received 1,055 347 0 0 56 18 1,111 365
Interest and similar items paid –1,147 –854 0 6 290 –6 –856 –854
Other financial items –199 –307 – – – – –199 –307
Income taxes paid –10,019 –8,657 –1,596 –994 – – –11,614 –9,651
Cash flow from operating activities 51,423 41,664 –18,565 –8,877 386 860 33,244 33,647
Investing activities
Investments in intangible assets –5,361 –3,737 –29 15 – – –5,390 –3,722
Investments in tangible assets –11,287 –8,806 –14 –3 – – –11,301 –8,809
Investment in leasing vehicles –1 –37 –9,173 –9,291 19 21 –9,155 –9,308
Disposals of in-/tangible assets and leasing vehicles 553 356 5,026 5,495 –21 –15 5,558 5,837
Operating cash flow 35,327 29,440 –22,756 –12,662 384 866 12,956 17,645
Investments of shares 5 –1,085 –7,384

Divestments of shares 5 157 –
Acquired operations 3 –265 –789
Divested operations 3 153 22,773
Interest-bearing receivables incl marketable securities –158 –87
Cash flow after net investments 11,758 32,158
Financing activities
New borrowings 1 29 177,532 89,141
Repayment of borrowings1 29 –143,551 –96,113
Dividend to owners of AB Volvo –26,435 –49,820
Dividend to non-controlling interest –19 –631
Other –44 –132
Change in cash and cash equivalents
excl. translation differences 19,241 –25,396
Translation difference on cash and cash equivalents 2,520 2,316
Change in cash and cash equivalents 21,761 –23,080
Cash and cash equivalents, beginning of year 18 62,126 85,206
Cash and cash equivalents, end of year 18 83,886 62,126
1 Non-cash items from unrealized currency effects and currency translation are adjusted on new borrowings and repayments of borrowings.
Operating cash flow, I ndustrial Operations SEK bn Investments in property, plant and e
quipment,
Industrial Operations
Property, plant
and equipment,
SEK Bn
Property, plant
and equipment,
% of net sales
18 19 20 21 22 Year 18 19 20 21 22 Year
26.6 38.3 18.5 29.4 35.3 7.0 8.1 5.7 8.8 11.3
1.8 1.9 1.8 2.4 2.5
Changes in consolidated equity
Equity attributable to owners of AB Volvo

Non-
Share Other Translation Retained controlling Total
SEK M Note capital reserves 1 reserve earnings Total interest equity
Balance as of December 31, 2020 2,562 230 –2,778 145,281 145,295 2,847 148,142
Income for the period – – – 32,787 32,787 456 33,243
Other comprehensive income

Remeasurements of defined benefit plans 20 – – – 6,091 6,091 – 6,091
Remeasurements of holding of shares at fair value 5, 19 – 48 – – 48 – 48
Exchange differences on translation
of foreign o
perations – – 5,403 – 5,403 372 5,775
Share of other comprehensive income related
to joint ventures and associated companies – – – 1,349 1,349 – 1,349
Accumulated translation differences
reversed to income – – –324 – –324 – –324
Other comprehensive income for the period – 48 5,079 7,440 12,566 372 12,938
Total comprehensive income for the period – 48 5,079 40,227 45,354 828 46,182
Transactions with shareholders

Dividends to owners of AB Volvo – – – –49,820 –49,820 –631 –50,451
Changes in non-controlling interests – – – – – 26 26
Other changes – –270 – 486 216 4 220
Transactions with shareholders – –270 – –49,334 –49,604 –602 –50,206
Balance as of December 31, 2021 2,562 8 2,301 136,174 141,045 3,073 144,118
Income for the period – – – 32,722 32,722 247 32,969

Remeasurements of defined benefit plans 20 – – – 3,817 3,817 – 3,817
Remeasurements of holding
of shares at fair value 5, 19 – –45 – – –45 – –45
Exchange differences on translation
of foreign o
perations – – 10,366 – 10,366 179 10,544
Share of other comprehensive income related to
joint ventures and associated companies – – – 1,279 1,279 – 1,279
Accumulated translation differences
reversed to income – – – – – – –
Other comprehensive income for the period – –45 10,366 5,096 15,417 179 15,596
Total comprehensive income for the period – –45 10,366 37,818 48,140 425 48,565

Dividends to owners of AB Volvo – – – –26,435 –26,435 –19 –26,454
Changes in non-controlling interests – – – – – 40 40
Other changes – – – –33 –33 – –33
Transactions with shareholders – – – –26,468 –26,468 20 –26,447
Balance as of December 31, 2022 2,562 –37 12,667 147,524 162,717 3,519 166,236
1 Read more in Note 19 Equity and number of shares regarding specification of other reserves.
Financial management
Stable credit rating

The objectives of the financial management in the Volvo Group is
to assure shareholders long-term attractive total return and debt Volvo Group liquidity position, December 31, 2022
providers the financial strength and flexibility to secure proceeds
and repayment. A long-term competitive business requires access SEK bn
140
to capital to be able to invest. Financial management ensures that 129.4
120
the capital is used in the best possible way through well-defined 45.5
100
ratios and objectives for the Industrial Operations as well as for 80
the customer finance operations in Financial Services. 60
The objective on Group operating margin and return on equity for 40 83.9
Financial Services are intended to secure the return requirements 20
from shareholders. The target on no net financial indebtedness 0
Cash and Credit
under normal circumstances in the Industrial Operations and the cash equivalents facilities
equity ratio for Financial S
ervices are there to secure financial stability.
Steering principles to ensure financial flexibility

To ensure financial stability and flexibility throughout the business
cycle the Volvo Group holds a strong liquidity position. Besides Geographically diversified market programs
cash and marketable securities, the liquidity position is built up of
revolving committed credit facilities. Funding and lending in Financial
CAD SEK
Services are in local currency and the portfolio is matched both from
USD EUR JPY
an interest and a liquidity risk perspective, in accordance with the
Volvo Group policy. For further information, please see Note 4 to
the C onsolidated financial statements.
Diversified funding sources AUD
The Volvo Group has centralized the portfolio management of

financial assets and liabilities, funding operations and cash manage
ment through the internal bank, Volvo Treasury. The liability port
folio is separated into two portfolios, one for Industrial Operations
and one for Financial Services, to correspond to the needs of the
different operations. Volvo Treasury works to assure the possibility Credit rating, February 27, 2023
to access capital markets at all times through diversified funding Short-term Long-term
sources. To access capital markets around the world, the Group Moody’s (Corporate Rating) P-1 A2, stable
uses different instruments, such as bilateral bank funding, corpor S&P (Corporate Rating) A-2 A–, positive
ate bonds and certificates, agency funding as well as securitization R&I (Japan) a-1 A+, stable
of assets in Financial Services’ credit portfolio. An increasingly import
ant part of the treasury work is to manage increased funding needs
in new growth markets.
Green Finance Framework A strong and stable credit rating is important

Volvo Group has a Green Finance Framework for the financing Being a large issuer of bonds, it is critical to have a strong and stable
of investments and projects in the area of clean transportation. credit rating. The level of the credit rating is not only important for
The framework enables the Group to issue green bonds and other debt investors but also for a number of other stakeholders when it
green financial instruments and allows it to identify, select, manage comes to creating long-term relationships. A strong credit rating
and report on eligible projects and assets in line with International has a positive effect on the ability to attract and finance customers’
Capital Market Association Green Bond Principles. The funds will purchases of the Group’s products and on the trust from suppliers.
be earmarked to projects in areas such as R&D and manufacturing It also gives access to more funding sources and lower cost of funds.
of electric vehicles, machines and engines with zero tailpipe emis- The Volvo Group has contractual relations with two global Credit
sions. Funds will also be used by Volvo Financial Services to offer Rating Agencies for solicited credit ratings: Moody’s Investors S ervice
green loans to customers who buy the Group’s electric products. (Moody’s) and Standard & Poors’ R ating Services (S&P). During
The Green Finance Framework has been subject to an independent 2022, both Moody’s long-term rating of A2, s table, and S&P’s rating
external assessment by CICERO Shades of Green, which has classi- of A-, positive were unchanged.
fied it as Dark Green – their highest level.
BRANDS
Trucks Volvo Renault Trucks Mack
Increased sales and continued

good profitability
Eicher Dongfeng Trucks
In 2022, net sales in the truck business increased by 35% to SEK Good demand in most markets
310,536 M. The increase was as a consequence of strong demand In 2022, demand for both new and used vehicles continued to be
for both trucks and services in most markets around the world. good in Europe and North America. Customers’ fleets have been
The global supply chain constraints which followed the covid-19 utilized a lot and aged in recent years as an effect of constraints
pandemic limited production in 2022, which meant that deliveries in the production of trucks due to the strained supply chains. This
of trucks could not fully meet customer demand. The adjusted has led to a pent-up need to replace aging trucks and an increased
operating income amounted to SEK 33,821 M (25,567) corre- need for spare parts and services.
sponding to an adjusted operating margin of 10.9% (11.1). In Brazil, the agricultural segment drove demand on the back of a
record harvest, high prices for crops and a pre-buy ahead of the Euro
VI emissions legislation that was implemented on January 1, 2023.
The Chinese truck market continued to decline due to lower
economic activity and lower freight prices and contacted more
than 50% during the year.
Market development, heavy-duty trucks Demand for trucks in India continued to grow, spurred on by
Thousands
increased consumption, pent-up demand and increased govern-
400 ment investments in infrastructure.
300 Orders and deliveries

In 2022, net order intake to the Group’s wholly-owned truck oper-
200 ations decreased by 16% to 217,779 (257,856) trucks, excluding
UD Trucks. Order intake increased in South America and Asia,
100 whereas it decreased in Europe, North America, and Africa and
Oceania. Demand was strong as customers in many markets
0 wanted to both replace old trucks and expand their fleets. How-
18 19 20 21 22 Year
ever, this was not fully reflected in the order intake, as the Group’s
322 321 231 277 298 Europe 30
truck brands were restrictive in slotting orders into production due
311 336 235 270 310 North America
53 75 67 98 98 Brazil to large order books, long delivery times and to manage cost inflation.
306 194 87 154 230 India During the year, a total of 232,558 trucks were delivered from
1,148 1,174 1,619 1,395 672 China the Group’s wholly-owned operations, an increase of 17% com-
pared with 198,464 trucks in 2021, excluding UD Trucks. However,
The truck operation’s product offer Net sales Adjusted operating income1 and
stretches from heavy-duty trucks for adjusted operating margin
long-haulage and construction work to
light-duty trucks for distribution. The Share of Group
offer also includes maintenance and
repair s
ervices, financing and leasing.
66%
Position on the world market
18 19 20 21 22 Year 18 19 20 21 22 Year
Volvo Group is one of the world’s largest
250 277 208 231 311 SEK bn 10.5 11.4 8.3 11.1 10.9 %
manufacturers of heavy-duty trucks. 26.4 31.6 17.3 25.6 33.8 SEK bn
By market, %
Number of regular e
mployees
54,046 (50,974).
44
30
8
Vehicles, 80%
12 Services, 20%
6 1 For information on adjusted operating
income, see Key Ratios on page 212.
STRONG POSITIONS GLOBALLY
Market shares, heavy-duty trucks %

2021 2022
Battery-electric in Europe
42.4
Europe (EU29)1 31.6

24.2
16.5 18.4 19.3
North America
8.8 9.4
9.6 10.0 7.7
6.2
Volvo Renault Volvo Renault China
Volvo Mack Trucks Trucks 12.2 12.4
3.7 3.8
India Heavy Medium
30.5 30.0 Dongfeng2
6.8 7.2
Heavy Medium
Eicher2
Brazil
22.2 24.6 South Africa
16.8 18.6
Australia
17.0
Volvo 12.9
Volvo 4.4 5.0
Volvo Mack
1 The EU, Norway and Switzerland.
2 Volvo Group holds 45.6% in VECV, which produces
Eicher trucks, and 45% in DFCV, which produces
Deliveries by market
Dongfeng trucks.
No. of trucks 2022 2021
Deliveries excluding UD Trucks

Europe 113,245 98,600
North America 56,535 47,613
South America 31,958 28,609
Asia 19,066 14,814
Africa and Oceania 11,754 8,828 Net sales and operating income
Total deliveries excluding UD Trucks 232,558 198,464 SEK M 2022 2021
UD Trucks¹ – 3,994
Net sales excluding UD Trucks
Total deliveries 232,558 202,458
Europe 137,177 107,794
Deliveries excluding UD Trucks North America 92,582 65,281
Heavy duty (>16 tons) 197,249 167,290 South America 38,254 23,527
Medium duty (7–16 tons) 15,475 13,136 Asia 23,988 16,609
Light duty (<7 tons) 19,834 18,038 Africa and Oceania 18,535 12,233
Total deliveries excluding UD Trucks 232,558 198,464 Total net sales excluding UD Trucks 310,536 225,444
UD Trucks¹ – 3,994 Of which
Total deliveries 232,558 202,458 Vehicles 245,681 172,163
Volvo 145,195 122,525 Services 64,855 53,281
UD Trucks¹ – 3,994 UD Trucks1 – 5,348
Renault Trucks 58,967 51,460 Total net sales 310,536 230,881
Mack 26,801 23,631 Adjusted operating income2 33,821 25,567
Other brands 1,595 848 Adjustments2 –1,845 1,781
Total deliveries 232,558 202,458 Operating income 31,976 27,349
Non-consolidated operations Adjusted operating margin, % 10.9 11.1
VE Commercial Vehicles (Eicher) 61,119 51,777 Operating margin, % 10.3 11.8
Dongfeng Commercial Vehicle
1 UD Trucks was divested on April 1, 2021.
Company (Dongfeng Trucks) 86,920 177,430
2 For information on adjusted operating income, please see Key Ratios
1 UD Trucks was divested on April 1, 2021. on page 212.
both the production and the delivery of trucks were hampered by

supply chain disturbances relating to semiconductors and other
components as well as lack of freight capacity.
The Volvo Group is rapidly expanding its offer of fully-electric
light-, medium- and heavy-duty trucks. Total order intake for fully-
electric trucks increased by 242% to 3,633 (1,062) vehicles and
deliveries of fully-electric trucks increased by 226% to 1,211 (371)
vehicles.
Solid performance
In 2022, net sales in the truck operations increased by 35% to
SEK 310,536 M (230,881). Adjusted for currency movements and
UD Trucks, which was divested on April 1, 2021, net sales increased 1,000 electric trucks produced in
by 25%, of which vehicle sales increased by 30% and service sales Blainville-sur-Orne, France
by 10%. The Volvo Group’s plant in Blainville-sur-Orne, France has
Adjusted operating income amounted to SEK 33,821 M (25,567), been serial-producing medium-duty 100% electric trucks
corresponding to an adjusted operating margin of 10.9% (11.1). for Volvo Trucks and Renault Trucks since 2020. Proof of
the success of this carbon-free mobility offer is that the
Adjusted operating income in 2022 excludes a negative effect
plant in October surpassed a production number of 1,000
of SEK 1,215 M primarily from provisioning of assets related to electric trucks of 16, 19 and 26 tonnes used throughout
Russia and SEK 630 M relating to costs for claims arising from Europe. In operation since 1956, the plant in Normandy
the European Commission’s 2016 antitrust settlement decision. specializes in the manufacturing of medium-duty trucks
For more information, please see Legal Proceedings in Note 24. and truck cabs. Ever since the start of series production in
March 2020, demand for electric trucks has been growing.
Adjusted operating income in 2021 excluded positive effects of
Thanks to excellent production flexibility with continuous
SEK 1,781 M. For information on adjustments, see Key Ratios on adaptation of industrial tooling, the production capacity of
page 212. electric trucks has continued to increase to meet growing
The higher earnings were mainly an effect of price realization on demand. The plant is ready to meet the expected volume
ramp-up as more and more customers choose to buy electric
both vehicles and services, which were partly offset by increased
trucks. In 2022, half of the electric trucks sold in Europe
material costs, higher R&D and selling expenses as well as higher were produced in the plant in Blainville.
freight costs. Before the divestment on April 1, 2021, UD Trucks
had a marginally positive impact on adjusted operating income.
Reported operating income amounted to SEK 31,976 M
(27,349). Currency movements had a positive impact of SEK
3,935 M c ompared with 2021. cellcentric, the joint venture between the Volvo Group and Daimler
Truck AG, intends to build one of Europe’s largest series-production
Important events facilities for fuel cells specially developed for heavy vehicles.
In March, Volvo Trucks in North America received an order for 110 In September, as the first global truck manufacturer, Volvo Trucks
Volvo VNR Electric trucks from the global logistics company Maersk. started series production of heavy electric trucks with up to 44
The deal adds to a previous order of 16 trucks of the same model tonnes in gross combination weight when the Volvo FH, Volvo FM,
in 2021 and marks the single largest commercial order to date for and Volvo FMX models were added to the line-up. These three
Volvo’s electric trucks. Read more about the rollout of electric models represent around two thirds of Volvo Trucks’ sales.
trucks starting on page 30. In October, Renault Trucks announced the opening of pre-orders
Also in March, Renault Trucks announced the expansion of its for the heavy electric trucks for regional transport and urban con-
all-electric range and the start of sales in 2023 of two new models struction, extending the current offer. These new 44-tonne electric
of up to 44 tonnes, the Renault Trucks T E-Tech for regional trans- trucks will be produced at the plant in Bourg-en-Bresse, France.
port and the Renault Trucks C E-Tech for the construction industry. In October, Volvo Trucks announced that they would deliver 20
In May, Volvo Group opened its very first assembly plant for fully electric heavy-duty trucks to Amazon in Germany by year
battery packs. Located in Ghent, Belgium, the plant supplies end. XPO Logistics, a long-standing customer of Renault Trucks,
ready-to-install batteries for fully electric heavy-duty trucks and accelerated its transition to a sustainable fleet in France with
other Group products. a landmark investment in 100 electric Renault Trucks vehicles.
As the world’s first truck manufacturer to do so, Volvo Trucks Delivery of the battery-electric trucks began in Q4 2022 and
announced that it would introduce fossil-free steel in frame rails will continue until 2024.
in its battery-electric trucks. The steel is produced by the Swedish In November, the Volvo Group and North America-based Pilot
company SSAB, see page 36. Company signed a Letter of Intent for the development of a public,
In June, Volvo Trucks showcased a new zero-emission fuel- high-performing charging infrastructure for medium- and heavy-
cell truck powered by hydrogen. The fuel cells were supplied by duty electric vehicles.
Volvo As urban skylines grow rap-

idly, so do noise and air pollu-
Fmx
tion. But the robust Volvo
FMX Electric can deliver and
remove heavyweight material
and machines, even in sensi-
tive parts of the city, with as
little disturbances as possible.
ELECTRIC
Fully electric trucks Net order intake Deliveries

2022 2021 2022 2021
Volvo 1,846 440 554 121

Renault Trucks 1,743 613 647 249
Heavy- and medium-duty 804 290 379 64
Light-duty 939 323 268 185
Mack 44 9 10 1
Total 3,633 1,062 1,211 371
BRANDS
Construction Equipment Volvo
Continued good profitability
SDLG Rokbak
2022 was characterized by consistent demand across most regions Global markets at good levels
amid ongoing infrastructure investments. Volvo Construction Equip- Overall demand, outside of China continued to be good in 2022.
ment’s (Volvo CE) net sales in 2022 rose by 9% to SEK 100,261 M. Demand in North America continued to be robust driven by a good
Deliveries however declined by 19% due to the combination of high economic activity and infrastructure projects. The South American
deliveries in 2021, the effects of a slowdown in China and halted market was supported by high activity in the commodity segment.
sales in Russia. Adjusted operating income amounted to SEK In Europe the market grew in the beginning of the year, but demand
13,244 M (12,228) corresponding to an adjusted operating margin flattened in the second half of the year as macro-economic uncer-
of 13.2% (13.3). tainty and higher interest rates made customers more cautious.
The slowdown in China, the largest global market for construction
equipment, was caused by lower economic activity combined with
restrictions and lockdowns related to covid. In other markets in
Asia, government stimulus programs and high commodity prices
provided buoyancy to demand.
Market develop-
320 ment in Volvo Increased sales and maintained profitability
CE's product In 2022, net sales in Construction Equipment increased by 9%
160 ranges, to SEK 100,261 M (92,031). Adjusted for currency movements,
construction
80 net sales decreased by 2%, of which machine sales decreased by
equipment
Thousands 3% and service sales increased by 6%.
40
Adjusted operating income amounted to SEK 13,244 M
20 (12,228), corresponding to an adjusted operating margin of 13.2%
(13.3) excluding adjustments of SEK –338 M (0). For information
18 19 20 21 22* Year
on adjustments, please see Key Ratios on page 212.
167 178 157 202 199 Europe Compared with 2021, the higher adjusted operating income
134 143 127 152 162 N. America
was an effect of price realization and positive mix effects, which
21 25 29 47 51 S. America
219 195 187 219 228 Asia (excl. China) were partially offset by increased material costs, selling expenses,
292 317 411 393 250 China freight costs and R&D expenses.
37 31 31 45 54 Africa & Oceania Reported operating income amounted to SEK 12,907 M
*Rollling 12 months per November (12,228). Currency movements had a positive impact of SEK
3,472 M compared with 2021.
Volvo CE is one of the leaders in the devel- Net sales Adjusted operating income1 and
opment of products and services for the adjusted operating margin
construction, extraction, waste process-
ing and materials handling sectors. Share of Group
Position on the world market

One of the world’s leading manufacturers
21%
of haulers, wheel loaders and excavators. It
18 19 20 21 22 Year
also produces road construction machines 18 19 20 21 22 Year
84 89 81 92 100 SEK bn 13.4 13.4 12.4 13.3 13.2 %
and compact equipment. The offering also
11.3 11.9 10.1 12.2 13.2 SEK Bn
includes services such as customer support
By market, %
agreements, machine control systems,
attachments, financing and leasing.
30
Number of regular e
mployees 22
34
14,797 (13,847). Construction
7 equipment, 85% 1 For information on adjusted operating
7
Services, 15% income, see Key Ratios on page 212.
Net sales and operating income

SEK M 2022 2021
Europe 30,194 29,524

Asia 34,228 36,427
Africa and Oceania 7,054 5,546
Total net sales 100,261 92,031
Of which
Construction Equipment 85,465 79,390
Services 14,796 12,641
Adjusted operating income 1
13,244 12,228
Volvo CE partners on Sweden’s largest
Adjustments1 –338 0
fossil-free worksite
Operating income 12,907 12,228
More than 2,000 tons of CO2 will be saved in a partner-
ship to transform a 100-year-old meat-packing district in
Stockholm, Sweden, setting a new benchmark for almost
1 For information on adjusted operating income, see Key Ratios on page 212.
entirely fossil-free construction sites. Volvo CE is working
with the City of Stockholm, construction company
Skanska, Volvo CE dealer Swecon and other like-minded
partners in the pioneering urban development of Stock-
holm city’s meat packing district. The EC230 Electric,
Deliveries by market
a new 23-ton battery electric excavator from Volvo CE, Number of machines 2022 2021
will play a key role in constructing the neighborhood of
Europe 16,767 20,453
3,000 homes and 14,000 workplaces – helping to build
with the lowest possible greenhouse gas emissions.
Asia 48,153 65,635
Perform to transform
With solid profitability as the base, Volvo CE is continuing to invest Large and medium construction
equipment1 58,110 73,144
in new technologies, such as electrical products, in order to meet
Compact construction equipment2 22,799 26,727
the increasing demand for sustainable solutions from customers.
With the global rollout of Volvo CE’s electric machines along with Of which
services to reduce customers’ carbon impact, Volvo CE is proving Fully electric 598 321
that it is possible to lead the decarbonization transition while Total deliveries 80,909 99,871
maintaining its strong financial performance. Of which

Volvo 39,327 39,903
Important events SDLG 41,339 59,753
Volvo CE became the first manufacturer in the world to deliver a con- Of which in China 34,545 51,819
struction machine built using fossil-free steel to a customer – show- 1 Excavators >10 tons, wheel loaders engine power >120 hp, articulated
ing that the decarbonization journey requires changes in the whole haulers, rigid haulers and road machinery products.
2 Excavators <10 tons, wheel loaders engine power <120 hp, skid steer
value chain, including suppliers, and not only in the use phase of the loaders and backhoe loaders.
products. It also proved that partnership is the key to accelerating the
implementation of low- or zero-carbon innovations across the value
chain. The steel comes from SSAB, see page 36. Following the unveiling of its dedicated fuel cell test lab at the
And with its continued global roll-out of electric machines across R&D Center in Eskilstuna, Sweden in 2021, Volvo CE in 2022
markets in Europe, North America and Asia, Volvo CE is supporting revealed its first fuel cell prototype in the form of a concept hydro-
the journey towards emission free jobsites in a growing number of gen fuel cell articulated hauler – an important milestone in its drive
markets. In 2022, Volvo CE introduced its first fully electric towards a net-zero future where fuel cells, batteries and internal
machine also on the Asian market, the ECR25 Electric excavator. combustion engines powered by biofuels play an important role.
The 23-ton EC230 Electric excavator – the largest electric machine In services, Volvo CE launched a new CO2 Reduction Program,
in the portfolio – was brought to selected markets, making sustain- aimed at helping customers realize their own unique goals towards
able solutions in the mid-size range more accessible to customers. decarbonization, and other pioneering digital solutions such as
In May, Volvo CE invested in Limach, a manufacturer of electric C onnected Map and a Collision Mitigation System, designed to
excavators for the domestic Dutch market. The collaboration will see boost productivity, fuel efficiency and safety.
the development of electric construction machines using Limach’s Volvo CE also announced a SEK 360 M investment in its articu-
proven Li-Ion battery technology applied to conventional Volvo CE lated hauler plant in Braås, Sweden. Over the coming years the plant
products as a base. The internal combustion engine on select exca- will be adapted to be able to produce a larger range of articulated haul-
vators will be replaced by a Limach developed electrification kit. ers with different types of powertrains, including electric drivelines.
BRANDS
Buses Volvo
A recovery in the Prevost
bus market
The year 2022 was characterized by a recovery in travel following tion and road safety and has been designed to be 90% recyclable.
the covid-19 pandemic. Demand for city buses and coaches increased, The chassis offers customers a robust platform with a long service
which contributed to a 36% rise in net sales to SEK 18,583 M. life for efficient, sustainable public transport. As part of our focus
The adjusted operating income amounted to SEK 353 M (59), with on electrified vehicles, Prevost launched a development project
an adjusted operating margin of 1.9% (0.4). with the aim of being able to offer customers an electric coach.
During the year, the implementation of Volvo Buses’ vision Total order intake for fully electric buses rose by 36% to 304
“being the most desired and successful provider of sustainable units (223), while deliveries increased by 14% to 240 units (211).
people transport solutions, driving value creation through innova- As a result of the pandemic and the global situation, the year
tion, partnership and people” and the focus on its strategic priori- was also characterized by problems in the supply chain. The avail-
ties continued, with local adjustments and developments. The ability of components and transport was limited and this led to
strategic priorities consist of five different components: profitable challenges in purchasing, logistics and production. A considerable
growth, accelerated electromobility, grow services and solutions amount of work went into reducing the negative effects and safe-
sales, leverage partnerships and development of people and culture. guarding deliveries to customers.
Increased demand after covid-19 Improved profitability

As the effects of the pandemic began to wane, demand for long- Volvo Buses’ net sales increased by 36% to SEK 18,583 M (13,652).
distance buses and services were the first to recover. The order Adjusted for currency movements, net sales increased by 23%,
intake for long-distance buses improved significantly, primarily with vehicle sales increasing by 23% and service sales increasing
in North and South America, with several large orders from Brazil by 25%.
and Mexico and for Prevost in North America. Demand also grew Adjusted operating income amounted to SEK 353 M (59),
in the city bus segment. which corresponded to an adjusted operating margin of 1.9%
Total order intake rose by 54% to 6,459 units (4,197) and deliv- (0.4). There were no adjustments in 2022 (20). For information
eries increased by 29% to 5,815 units (4,522). The utilization on adjustments, please see Key Ratios on page 212.
level in customers’ bus fleets also rose, which contributed to an The improved earnings were mainly an effect of increased
improvement in service sales of 38% to SEK 4,398 M. vehicle and service volumes. Price adjustments to a large extent
The changeover to electrified buses in cities continued and the counteracted cost increases for material.
global demand for electrified solutions increased. To meet this Reported operating income amounted to SEK 353 M (78).
growing demand, there is a global offering for electric buses, the Currency movements had a positive impact of SEK 310 M
Volvo BZL Electric chassis, which was launched in 2021. The Volvo compared with 2021.
BZL Electric meets the highest standards of driving safety, opera-
Volvo Buses is a leader in the development Net sales Adjusted operating income1 and
of sustainable people transport solutions. adjusted operating margin
The offering includes premium city and
intercity buses, coaches, and chassis as Share of Group
well as services for increased productivity,
uptime and safety. Volvo Buses has sales
in 85 countries and a global service net- 18 19 20 21 22 Year
4 %
work with more than 1,500 dealerships 3.0 4.3 0.4 1.9 %
and workshops. Production facilities are 18 19 20 21 22 Year 765 1,337 59 353 SEK M
26 31 15 14 19 SEK bn
found in Europe, North America and South –3.1
America. –452
By market, %
Position on the world market As of October 1, 2021, the operations of Nova
Volvo Buses is one of the world’s largest Bus were reclassified from the Buses segment
32 into Group Functions and Other. To facilitate
manufacturers of premium buses and 35 2
comparability, financial numbers for 2020 and
coaches. Vehicles, 76% 2021 have been restated.
17
8 Services, 24%
Number of regular e
mployees 1 For information on adjusted operating
5,325 (5,117). income, see Key Ratios on page 212.
Net sales and operating income1

SEK M 2022 2021
Europe 6,034 5,886

South America 3,154 882
Asia 1,372 1,371
Of which
Vehicles 14,185 10,459
Services 4,398 3,192
New operational model for public Adjusted operating income 2
353 59
transport in Chile Adjustments2 0 20
To meet demand for a new operational model for public trans- Operating income 353 78
port in Santiago, Chile, Volvo Buses and Volvo Financial Ser-
vices established a partnership with the operators RedBus
and Metropol. This meant that the two Volvo companies could
jointly solve the wishes for maximum uptime and safety as 1 The operations of Nova Bus were reclassified from the Buses s egment
well as financing. into the segment Group Functions and Other as of October 1, 2021. To
facilitate comparability, financial numbers for 2021 have been restated.
Volvo Buses started delivery of the 564 buses in 2022 and
is responsible for certification of their maintenance through-
out the contract period. Volvo Buses is also responsible for
training drivers and service personnel, providing spare parts
and for digital services for operational management and mon-
itoring of the buses, while Volvo Financial Services owns the
buses run by operators RedBus and Metropol. The business Deliveries by market 1
model is the first on the continent. Number of buses 2022 2021
“We believe that the new operational model with partner-
ships between several different actors can become the stan- Europe 1,424 1,388
dard for other major cities in Latin America as it raises the North America 1,134 1,118
quality of public transport while facilitating financing for oper-
South America 1,957 726
ators and transport authorities”, says Dan Pettersson, Senior
Vice President at Business Unit Chassis. Asia 819 585
Africa and Oceania 481 705
Of which
Fully electric 240 211
Launch of Volvo Connect
Hybrids 127 232
Volvo Connect, including the unique Zone Management solution,
1 The operations of Nova Bus were reclassified from the Buses segment
a portal where customers have access to Volvo Buses’ service into the segment Group Functions and Other as of October 1, 2021. To
offerings and connected services was launched as an important facilitate comparability, financial numbers for 2021 have been restated.
means of increasing sales of services and improving customer service.

The responsibility for digital and connected services was assigned
to a new unit within Volvo Buses, Digital Services & Solutions, in
order to further strengthen and develop the offering to customers A number of larger orders were also received for electric models,
in this area. including 82 Volvo 7900 Electric buses for three different cities in
Finland. Metroline in London, UK placed an important order for 48
Major orders for buses based on new coach platform units of the BZL electric chassis. Volvo Buses now has a total of
During the summer, a new coach platform was launched for pre- more than 5,400 electrified buses in operation.
mium coaches and chassis. With a power output of up to 500 hp Volvo Buses and the city of Gothenburg, Sweden were included
and potential fuel savings of 9%, the new platform offers custom- on TIME’s list of “Best Innovations 2022” for their geofencing part-
ers operating tourist and charter coaches as well as public trans- nership. Geofencing zones can be downloaded to city buses, which
port services the potential to lower costs and reduce emissions. automatically can be slowed down in safety zones. Geofencing can
The new platform is designed for global use but provides signifi- switch to electric drive on hybrid buses in sensitive areas.
cant flexibility for local market adaptations. It is supplied both as
a complete coach and as a chassis. In the autumn, several orders
were placed for buses based on the new platform, including 330
long-distance coaches for Mexico. In Europe, 219 orders were
received for the new platform.
BRAND
Volvo Penta
Increased sales and good
Volvo Penta
profitability
Marine engines Industrial engines
In 2022, Volvo Penta’s net sales increased by 25% to SEK 18,102 The market for industrial off-road engines had a positive devel-
M driven by strong market demand and increased utilization of opment, especially driven by agriculture, mining, construction
Volvo Penta products. Adjusted operating income amounted to and material handling. The industrial power generation market
SEK 2,530 M (2,092), with an adjusted operating margin of increased due to the strained situation in the energy sector. The
14.0% (14.5). strong demand in combination with supply constraints in the
value chain affected lead times in all segments.
Customer success in focus
Volvo Penta operates in two business units: Marine, consisting Continued good performance
of the leisure and commercial subsegments and Industrial, which Volvo Penta’s net sales increased by 25% to SEK 18,102 M (14,437).
includes the off-road and power generation subsegments. Volvo Adjusted for currency movements, net sales increased by 17%, of
Penta’s strategy is to deliver customer success through power which engine sales increased by 20% and service sales by 9%.
solutions and services that increase the customer satisfaction Adjusted operating income amounted to SEK 2,530 M (2,092),
within each segment. Along with the rest of the Group, Volvo corresponding to an adjusted operating margin of 14.0% (14.5)
Penta has set ambitious targets to reach net-zero value chain excluding adjustments of SEK –3 M (0). For information on adjust-
greenhouse gas emissions by 2040. ments, please see Key Ratios on page 212.
Volvo Penta continues the accelerated transformation journey The higher adjusted operating income was primarily an effect of
working with multiple technology paths including combustion price realization and positive mix effects on engines as well as price
engines using renewable fuels, battery electric and fuel cell electric. realization and increased volumes in the service business, which
The development is done by maximum leverage of Volvo Group were partially offset by increased material and freight costs as well
common solutions, in-house product development, and through as higher R&D and selling expenses.
collaborations and partnerships. The transformation also includes Reported operating income amounted to SEK 2,527 M (2,092).
the continued development of services and digital experiences. Currency movements had a positive impact of SEK 757 M com-
pared with 2021.
Continued positive market development
On the marine leisure market, the effects of the stay-at-home Transformation and innovation at a high pace
trends in the wake of the covid-19 pandemic continued during Volvo Penta’s journey towards net zero power solutions for both
2022. In the marine commercial market, projects previously post- industrial and marine customers continued at a high pace. Among
poned due to the pandemic were restarted in the beginning of other milestones, the 600V electric driveline for Rosenbauer’s city
the year. Increased demand for vessels serving the offshore wind fire truck was introduced also to the US market.
industry and patrol vessels contributed to the positive development.
Volvo Penta aims to be the most forward Net sales Adjusted operating income1 and
thinking and customer focused supplier of adjusted operating margin
sustainable power solutions. Volvo Penta
provides engines, power solutions and Share of Group
services for leisure and commercial ves-
sels, as well as for power generation and
industrial off-road applications.
4 %
Position on the world market 18 19 20 21 22 Year 18 19 20 21 22 Year

14 13 12 14 18 SEK bn 17.0 14.1 12.2 14.5 14.0 %
Volvo Penta is one of the world’s largest pro- 2,341 1,876 1,448 2,092 2,530 SEK M
ducer of power systems for leisure boats and
By market, %
a leading provider of power systems for indus- 1 For information on adjusted operating
trial off-road and power generation segments. income, see Key Ratios on page 212.
52
Number of regular e
mployees 20
18
2,022 (1,832). Vehicles, 73%
4
6 Services, 27%
Net sales and operating income

SEK M 2022 2021
Europe 9,417 7,464

South America 635 474
Asia 3,302 2,698
Africa and Oceania 1,054 851
Of which
Engines 13,221 10,282
Services 4,881 4,155
Adjusted operating income 1

2,530 2,092
Adjustments1 –3 0
Operating income 2,527 2,092

Powerful partnerships
Partnerships are a cornerstone of Volvo Penta’s business
Deliveries by segment
strategy. The partnership with CMB.Tech aims to establish Number of units 2022 2021
dual-fuel hydrogen technology as a low-carbon interim solu-
tion before suitable zero-emissions alternatives become via- Marine engines 17,924 17,149
ble. The partnership includes pilot projects and small-scale
Industrial engines 27,360 24,839
industrialization of a hydrogen dual-fuel solution for selected
customers. Total deliveries 45,284 41,988
Of which
Fully electric 24 39
The hybrid solution for Hurtigruten Svalbard’s sightseeing vessel Furthermore, Volvo Penta launched the revolutionary Joystick
Kvitbjørn (Norwegian for polar bear) was put into field testing in Docking system for single diesel Aquamatic sterndrive installa-
the Arctic. Kvitbjørn was nominated as one of the “Significant tions. It integrates steering, bow thruster, gear, and engine speed
Boats of 2022” by WorkBoat, a major American conference and into one control and was nominated for the DAME design award,
expo for commercial vessels. It was the first non-US built vessel following up on last year’s success when the Assisted Docking
ever to be nominated. system won the overall DAME design award. The Assisted Docking
The D13 engine package was extended to meet Tier III emission system was introduced as a retrofit upgrade offer.
regulations for marine high-speed vessels. Also, a new range of Volvo Penta also expanded the power generation offer with a
variable speed generator sets for marine vessels, which is a key new D13 500 kVA genset. The engine is designed to provide full
enabler for electrified marine propulsion, was launched. power output quickly when it starts up – essential when being
As a step towards zero emission solutions, Volvo Penta entered used in emergency/stand-by operations, such as in hospitals,
a partnership with the Belgian clean tech company CMB.Tech. pharmaceutical companies, or data centers.
The partnership is designed to accelerate the development of
dual-fuel hydrogen-powered solutions. The solution can be used
for both industrial and marine applications and has the potential
to reduce CO2 emissions by up to 80%.
Financial Services
Good underlying financial
performance
In 2022, Volvo Financial Services (VFS) continued to deliver strong Return on shareholders’ equity amounted to –0.3% (18.0).
results by focusing on sustainable growth and operational efficiency Excluding the adjustments related to Russia return on sharehold-
while also executing on its transformation agenda. ers’ equity was 15.1%, with a stabilization during the year. The
New business volume increased by 11% and adjusted operating equity ratio at the end of the year was 8.0% (8.0).
income increased to SEK 3,416 M (3,279), while return on equity, Excluding the impacts related to Russia, credit provision
excluding adjustments related to Russia, amounted to 15.1% (18.0). expenses amounted to SEK 302 M (299) while write-offs of
SEK 95 M (413) were recorded. The write-off ratio for 2022 was
Good growth and portfolio performance 0.05% (0.25). At the end of December 2022, credit reserves
During the year, VFS achieved new financing volumes of SEK were 1.64% (1.82) of the credit portfolio excluding the impacts
103.6 billion (85.1), an increase of 22%. Adjusted for currency the related to Russia.
volume increase was 11%. The number of Volvo Group vehicles
and machines financed was 68,658 (69,556) for 2022. Continued transformational investments
Inflation and the resulting interest rate hikes have led to strong With a foundation of solid performance, VFS is continuing invest-
competition from other commercial lenders, impacting penetration ments on four transformation initiatives to advance growth and
growth. Even with these headwinds, VFS maintained good pene- unlock service revenue creation for the Volvo Group. These four
tration of 28% (30). initiatives are the acceleration of Equipment-as-a-Service (EaaS)
VFS net credit portfolio increased by 13% to SEK 216,053 M and electromobility solutions, the expansion of parts & service
(171,784) on a currency-adjusted basis compared to 2021. The financing, growth of insurance-related offerings, and digital
funding of the credit portfolio is matched in terms of maturity, payment solutions.
interest rates and currencies in accordance with Group policy. To achieve its aspirations around these initiatives, VFS relies
For further information, see Note 4. on its Transforming Together strategy and key enablers of people
Adjusted operating income amounted to SEK 3,416 M (3,279), and culture, customer expertise and innovation. These elements,
excluding adjustments of SEK –2,568 M from provisioning of assets together with an embedded focus on integrating ESG (Environ-
related to Russia. In 2021, adjustments amounted to SEK 9 M mental, Social and Governance) factors into its business, provide
related to restructuring charges. For information on adjustments, VFS a roadmap to future revenue growth.
please see Key Ratios on page 212. In 2022, VFS executed on several key elements of its Transform-
Reported operating income amounted to SEK 848 M (3,289). ing Together strategy. Volvo Pay was launched in select European
Currency movements had a positive impact of SEK 372 M com- markets, offering customers a digital payment solution to easily
pared with 2021. approve and securely pay for services using their smartphones.
VFS partners with Volvo Group customers Distribution of credit portfolio % Penetration rate1 %
and dealers to help simplify the purchase
and ownership experience of Group prod-
ucts, as well parts and service financing
during the ownership lifecycle. Through Volvo Trucks, 54 (53)
innovative and flexible financing and Volvo CE, 21 (22)
insurance solutions, and other services Mack Trucks, 11 (12)
Renault Trucks, 10 (10)
tailored to customers’ needs, VFS builds
Buses, 4 (3)
long-term relationships, increasing loy-
alty to the Volvo Group and its brands.
Europe, 40 (42)
Position on the world market North America, 37 (39)
VFS offers customer financing in 48 countries South America, 14 (9) Volvo Renault Mack Volvo Buses
worldwide, with a footprint covering approxi- Trucks Trucks Trucks CE
Asia, 5 (6)
mately 90% of Volvo Group sales. VFS man- Africa and Oceania, 4 (4) 34 32 22 22 23 19 37 31 27 42
ages a credit portfolio of SEK 216 billion with 2021 2022
more than 285,000 vehicles and equipment.
1 Share of unit sales financed by Volvo Financial Services
Number of regular e
mployees in relation to total n
umber of units sold by the Volvo
1,596 (1,546). Group in markets where financial services are offered.
Key ratios, Financial S

ervices 2022 2021
Number of financed units 68,658 69,556

Total penetration rate1, % 28 30
New financing volume, SEK billion 103.6 85.1
Credit portfolio net, SEK billion 216 172
Credit provision expenses, SEK M 3,332 299
Credit provision expenses excluding
impacts related to Russia, SEK M 302 299
Adjusted operating income2 3,416 3,279
Adjustments2 –2,568 9
Operating income, SEK M 848 3,289
Credit reserves, %
Focus on sustainability of credit portfolio 3.00 1.82
Sustainable thinking is rapidly becoming a focal point in and Credit reserves, %
of credit portfolio excluding
across society, as people and businesses consider how their
impacts related to Russia 1.64 1.82
decisions impact our world. Volvo Financial Services (VFS)
is no exception. VFS is developing a sustainability strategy Return on shareholders’ equity, % –0.3 18.0
to help us become the leader in sustainable captive financial Return on shareholders’ equity
services and solutions. excluding impacts related to
Russia, % 15.1 18.0
Aligned with the Volvo Group’s efforts and overall ESG
(Environmental, Social and Governance) considerations, 1 Share of unit sales financed by Volvo Financial Services in relation to
VFS’ sustainability strategy focuses on making a difference the total number of units sold by the Volvo Group in markets where
financial services are offered.
in the areas of climate, resources and people.
2 For information on adjusted operating income, please see Key Ratios on
Our Equipment-as-a-Service and electromobility efforts
page 212.
will have a significant impact on climate, while our parts &
services financing and insurance solutions support circular-
ity by enabling second and third lives for trucks and
machines.
In 2022, VFS and Junior Achievement Worldwide part-
nered together to launch financial literacy programs in nine Income statement Financial
VFS markets around the world. These programs will see VFS Services SEK M 2022 2021
employee volunteers join with JA educators to teach our next
generation the financial skills needed to be successful. Finance and lease income 17,355 13,437
By taking these steps and making a positive impact on Finance and lease expenses –10,641 –7,700
climate, resources and people, VFS and our colleagues around Gross income 6,714 5,738
the globe are helping to shape the world we want to live in.
Selling and administrative
expenses –2,991 –2,395
Credit provision expenses1 –3,355 –266
Other operating income and
expenses 479 213
Related to services revenue growth, VFS increased its focus on Operating income 848 3,289
EaaS, a key priority area for VFS that will help customer adoption
Income taxes –901 –807
of electric vehicles and will also drive higher finance penetration.
Income for the period –53 2,481
By providing a framework to bundle services and solutions, VFS
will enable the Volvo Group’s brands to offer compelling total
offers and peace of mind to customers.
EaaS will reduce complexity for customers, provide differentia-
tion from competition, drive the potential to increase service reve- During the year, VFS also began offering customer financing in
nue, and provide an opportunity to optimize the Group offer. Portugal, giving customers in the market access to our business
VFS is also working with Volvo Trucks and other partners to solutions. With a strong transport sector and upward pressure in
help build a medium- and heavy-duty electric vehicle (MHD EV) the construction segment, Portugal is an excellent growth oppor-
charging network connecting California’s largest metropolitan tunity for VFS.
areas. Scheduled for completion by the end of 2023, the publicly VFS partnered with Volvo Buses in Santiago, Chile to imple-
accessible network will help accelerate the adoption of MHD EVs ment a new operations model to support public transport with
by helping eliminate charging availability as a barrier to their use. a complete Group solution. Under the new model, VFS retains
ownership and management of the assets, while Volvo Buses
Expanded service offer and start in Portugal provides the training, maintenance and certification, helping to
To provide customers increased flexibility based on their usage improve the quality of public transportation.
needs, VFS expanded its service offer with new rental programs
in Brazil, Italy and France. By offering reduced upfront investment
amounts, more customers can access Volvo Group trucks and
machines.
The share
Total shareholder return ahead of index in 2022

Most of the world’s leading stock markets had a negative develop-
ment during 2022. The price of both the Volvo A share and the B
Why invest in the Volvo share?
share declined. However, total return for both shares beat index.
• Competitive products and services
The Volvo share is listed on the stock exchange Nasdaq Stock-
holm, Sweden. One A share carries one vote at General Meetings • Ambition to lead the transformation of our
industry to more sustainable solutions
and one B share carries one tenth of a vote. Dividends are the same
for both classes of shares. The Volvo share is included in many indi- • Strong market positions globally
ces compiled by Dow Jones, FTSE, S&P and Nasdaq Nordic. • Good return on capital employed
• Strong financial position
The Volvo share development • Good cash returns to shareholders
In general, the leading stock exchanges declined during 2022.
On Nasdaq Stockholm the broad OMXSPI index fell by 25% after
having risen by 35% in 2021. The share price for the Volvo A share
declined by 7%, and at year-end the price was SEK 198.10 (212.60).
Earnings and dividend per share, 1 Ordinary dividend of
The lowest closing price was SEK 157.20 on May 9 and the highest dividend yield SEK 6.50, an extra divi-
dend of SEK 6.50 and
was SEK 223.60 on January 13. The share price for the Volvo B SEK 9.50 relating to
share declined by 10% and at year-end the price was SEK 188.48 the proceeds from the
sale of UD Trucks.
(209.65). The lowest closing price was SEK 152.52 on April 14 and
2 Ordinary dividend of
the highest was SEK 222.80 on January 13. Total return, including SEK 7.00 and an extra
reinvested dividends, was 1% for the A share and –3% for the B share dividend of SEK 7.00
18 19 20 21 22 Year proposed by the Board
compared with –20% for the OMX Stockholm Benchmark GI index. 12.24 17.64 9.50 16.12 16.09 of Directors to the AGM
2023.
In 2022, a total of 1.0 billion (1.2) Volvo shares at a value of SEK 10.00 0 15.001 22.502 14.002
229 billion (242) were traded on Nasdaq Stockholm, with a daily 8.7 0 7.7 10.7 7.4
average of 4.0 million shares (4.5). In terms of value, the Volvo Diluted earnings per share, SEK Dividend per share, SEK
shares were the third most traded on Nasdaq Stockholm in 2022. Dividend yield, %
At year-end, Volvo’s market capitalization was SEK 388 billion (428).
Share conversion option maintained through such events as press and telephone conferences
In accordance with a resolution at the Annual General Meeting in conjunction with the publication of interim reports, meetings with
2011, the Articles of Association includes a conversion clause, stip- retail shareholders’ associations, investor meetings and visits, as
ulating that series A shares may be converted into series B shares, well as roadshows in Europe and North America. On volvogroup.
on the request of the shareholder. At the end of 2021, there were com it is possible to access financial reports and search for informa-
444,987,946 A shares outstanding. During 2022, a total of 71 A tion concerning the share and statistics for truck deliveries. It is also
shares were converted to B shares. Further information on the possible to access information concerning the Group’s governance,
conversion procedure is available on volvogroup.com including information about the Annual G eneral Meeting, the Board
of Directors, Group Management and other areas that are regulated
Dividend in the “Swedish Code of Corporate Governance.” The website also
The Board proposes an ordinary dividend of SEK 7.00 per share offers the possibility to subscribe to information from the company.
for the financial year 2022 and an extra dividend of SEK 7.00 per Volvo has decided to present its Corporate Governance Report
share, which would mean that a total of SEK 28,468 M would be as a separate document to the Annual Report in accordance with
transferred to AB Volvo’s shareholders. For the preceding year a Chapter 6 § 8 of the Swedish Annual Accounts Act and it is avail-
dividend of SEK 6.50 per share and an extra dividend of SEK 6.50 able on page 186–203.
per share were distributed, in total SEK 26,435 M. Furthermore,
the proceeds from the sale of UD Trucks, SEK 9.50 per share (SEK Contractual conditions related to takeover bids
19,318 M in total), were distributed to the shareholders in 2021. Provisions stipulating that an agreement can be changed or termi-
nated if the control of the company is changed, so called change
Policy for remuneration to senior executives of control clauses, are included in some of the agreements whereby
See Note 27 on page 125 for the current policy for remuneration to Renault Trucks has been given the right to sell Renault s.a.s. and
senior executives, and page 204 for the Board of Directors’ proposal Nissan Motor Co. Ltd’s light-duty trucks as well as in some of the
to the Annual General Meeting for an updated remuneration policy. Group’s purchasing agreements.
Some of Volvo Group’s long-term loan agreements contain con-
Communication with shareholders ditions stipulating the right for a creditor to request repayment in
Dialogue with the shareholders is important for Volvo. In addition to advance under certain conditions following a change of the control
the Annual General Meeting and a number of larger activities aimed of the company. These clauses are not unusual in loan agreements.
at professional investors, private shareholders and stock market In AB Volvo’s opinion it has been necessary to accept those condi-
analysts, the relationship between Volvo and the stock market is tions in order to receive financing on otherwise acceptable terms.
Price trend, Volvo B share, 2018–2022 SEK The shareholders with the
largest voting rights in AB Volvo,
December 31, 2022
250 Voting Capital,
rights, % %
210 Industrivärden 27.8 8.9

Geely Holding 16.0 8.2
170
AMF Insurance
& Funds 5.4 3.5
Alecta 4.3 3.4
130
AFA Insurance 2.3 0.7
BlackRock 2.2 3.3
90 Vanguard 1.9 3.0
Source:
Investis Digital Swedbank Robur
50 2018 2019 2020 2021 2022
Funds 1.9 4.6
AP4 Fund 1.7 0.7
Volvo B OMX Stockholm PI Index OMX Stockholm Industrial Goods & Services
Norges Bank Invest-
ment Management 1.3 2.3
Share capital, December 31, 2022

Accumulated total return for the Volvo B share
Number of shares 2,033,452,084
% of which,
+6,817% Series A shares1 444,987,875
7,500
of which,
Series B shares2 1,588,464,209
6,000
Share capital, SEK M 2,562
4,500 Quota value, SEK 1.62
Number of shareholders 374,185
3,000 Private persons 356,245
Legal entities 17,940
1,500
For further details on the Volvo share, see Note 19.
1 Series A shares carry one vote each.
0
1987 1990 1995 2000 2005 2010 2015 2022 2 Series B shares carry one tenth of a vote each.
Volvo B Total return (including reinvested dividends)

SIX Return Index (including reinvested dividends) Source: Investis Digital
The graph shows that SEK 1,000 invested in the Volvo B share on January 2,
1987 had grown to SEK 69,170 at the end of 2022, under the condition that
all dividends have been reinvested in Volvo B shares.
Ownership by category 1 Ownership by country 1
Non-Swedish owners 37% M ore details on the Volvo Sweden 63%
Other Swedish institutions 35% shares are provided in USA 22%
Swedish mutual funds 15% Note 19 to the financial United Kingdom 5%
Swedish private shareholders 13% statements and in the Luxembourg 3%
Eleven-year summary. Belgium 1%
Switzerland 1%
Others 5%
Employees’ ownership of shares in Volvo through pension foundations is insignificant. Source: Euroclear
Source: Euroclear 1 Share of capital
1 Share of capital
Risks and uncertainties
Managed risk-taking
Each of the Volvo Group’s Business Areas and Truck Divisions reporting process, which is a systematic and structured framework
monitors and manages risks in its operations. In addition, the Volvo for reporting and reviewing risk assessments and mitigations as
Group utilizes a centralized Enterprise Risk Management (ERM) well as for following up on identified risks.
Volvo Group Enterprise Risk Management Process

For the governance
model of the Volvo
Group, please see
page 187.
The Board of Directors monitors risks and mitigation
Board of Directors
activities annually and the Audit Committee regularly
Audit Committee
goes through the consolidated ERM report.
The Group Executive Board analyzes accuracy of reported risks and mitigation
Group Executive Board
activities as well as ensures alignment to strategic and operational agendas.
The ERM Committee reviews, analyzes and challenges compiled risks and mitiga-
tion activities, ensuring a first alignment with the Group’s operational agenda. The
Enterprise Risk committee consists of the Executive Vice President Group Finance, Executive Vice
Management Committee President Legal & Compliance, Senior Vice President Group Treasury & Corporate
Finance and the Senior Vice President Group Financial Reporting and Business
Control, and Senior Vice President Risk Management and Internal Audit.
Each Business Area and Truck Division reports its largest risks and mitigation
Enterprise Risk
activities to the ERM function, which reviews and combines reported risks into
Management Function
the Group ERM report.
Business review meetings in each Business Area and Truck Division identify,
Business Review Meetings analyze, m
itigate and monitor its largest risks. This forms the basis for the
ERM reporting.
Executive Management Teams in each Business Area and Truck Division are fully
responsible for risk and mitigation m anagement in their respective areas. Risks
Executive Management Teams
are identified, m
itigation activities are established, and monitoring and reporting
of progress is part of daily operations.
Risk categories The following pages present principal risks and uncertainties the
The ERM process classifies Volvo Group risks into five categories: Volvo Group is facing within each risk category. These risks can,
• Macro and market-related risks separately or in combination, have a material adverse effect on
the Group’s business, strategy, financial performance, cash flow,
• Operational risks
shareholder value or reputation.
• Climate and people risks For short-term risks, please also see the segment reporting
• Compliance risks in the Board of Directors report, and Note 2 in the most recent
• Financial risks. quarterly report.
MACRO AND MARKET-RELATED RISKS
Cyclical commercial vehicles industry noise, safety and pollutants from production plants and products are
The Volvo Group’s customers operate all over the world, some within extensive and evolving. These laws and regulations result in an often
a single country and others across borders. A multitude of global and complex, uncertain and changing legal and regulatory environment
regional economic, regulatory, digital, technological, climate and for Volvo Group’s global businesses and operations.
energy resource efficiency factors contribute to a considerable The Volvo Group works actively to ensure compliance with appli-
volatility in demand and risks in different markets. cable laws and regulations and endeavors to collaborate and be
Like many capital goods industries, the commercial vehicle indus- transparent with all governing bodies in certification and compliance
try generally has been cyclical, impacted by e.g. developments of processes, during development and throughout the lifecycle of Group
GDP and corresponding changes in transport demand, the need to products as well as in investments in production plants, but can
replace aging vehicles and machines as well as changing laws and provide no assurance that it will at all times be fully compliant. If the
regulations. Although there is a continued shift in focus in the com- Volvo Group has failed or fails to comply with these laws, regulations
mercial vehicle industry from product to service, the cyclicality in and requirements it could be subject to costs of recalls and other
the industry remains. Fluctuating demand for the Group’s products remediation, significant penalties and other sanctions and liability as
and services makes the financial result of the operations depen- well as reputational damage. A failure to meet applicable laws and
dent on the Group’s ability to react quickly to market changes. regulations in this area could also imply a failure to assure an updated
Inability to adapt to changes in demand could lead to capacity and compliant product and service range in time to meet regulations
constraints or underutilization of resources, which could have a which could have a material adverse effect on the Volvo Group’s
negative effect on earnings, cash flows and financial position. business, operating results, financial position and brand equities.
In addition, safety regulations are becoming increasingly import-
ant with autonomous vehicles in commercial applications.
Competition
If regulations are not set, or not clear enough, there is a risk of
The Volvo Group operates in markets which are highly competitive,
not being able to scale up the autonomous offer, or not complying
and thus faces intense competition from global and local industry
with regulations. A safety incident could have a detrimental effect
peers. The Volvo Group also encounters competition from new
on the images of the Group’s brands and possible earnings. An inci-
market entrants, seeking to offer e.g. sustainable transportation,
dent in the industry could also lead to quickly adjusted or additional
increased logistics efficiency, new technologies and/or new
regulations.
business models. In this market environment, there can be no
assurance that current or new competitors cannot be more
successful than the Group in bringing new products and service Geopolitics and security
solutions to the market, in implementing new technologies or col- The Volvo Group is active in almost 190 countries across the world.
laboration models or in offering more attractively priced products, Political instability, armed conflicts or civil unrest can impact the
services or solutions. This could result in e.g. reduced profit mar- Group’s ability to trade in affected areas. Acts of terrorism, sabo-
gins, loss of market share or a need to accelerate research and tage, and other criminal or malicious activities directed towards the
development investments and/or sales and marketing expenses, Volvo Group’s people, information systems, products, production
which each could adversely affect the Group’s business, results systems, or facilities, or those of its business partners, suppliers or
of operations, market share and financial position. customers, could cause harm to people and severely damage the
Group’s operations and corporate reputation.
The changing geopolitical situation, potential trade sanctions
Regulations
and/or decoupling economies may also give rise to further tariffs
The Volvo Group is subject to environmental, occupational health
and other trade restrictions and barriers being imposed, which
and safety laws and regulations that affect the operations, facilities,
can negatively impact the Group’s production system and ability
products and services in each of the jurisdictions in which the Volvo
to conduct its operations (including in the JVs).
Group operates. In particular, regulations regarding exhaust emissions,
OPERATIONAL RISKS
Transformation and technology The driving factors of the transformation come from different
The ongoing and accelerating transformation of the transport and sources that may not always correlate. Extensive and continuously
vehicle industry towards low-carbon and sustainable transportation evolving regulations and government actions set the legal frame-
and infrastructure solutions entails various transitional risks for the work. Social attitudes and customer preferences relating to climate
Volvo Group. The Volvo Group’s future business success depends change and the transition to a lower carbon economy are additional
on its ability to develop new, attractive, competitive and energy- factors that the Volvo Group is impacted by. In addition, investor
efficient products as well as to successfully position itself in this preferences and sentiment are more and more influenced by envi-
industry shift. Failure to develop products in line with demand and ronmental, social and corporate governance (ESG) considerations.
regulations, especially in view of digitalization, electromobility Changes in these factors, including the pace of change to any of
(battery-electric and fuel cell-electric) and autonomous solutions these factors, as well as the pace of the transition itself, could have
could adversely impact the Group’s operations. an adverse impact on the result of strategic business decisions and,
in the end, on the overall business of the Volvo Group. Changes in demand, it could have a material adverse impact on the Group’s
investor preferences and sentiment could significantly affect the results of operations, financial position and cash flows.
Volvo Group’s business plans and financial performance. An additional level of risk relates to the need to evolve from
Compliance with CO₂, fuel efficiency and emission control a vehicle/product focus towards an ecosystem-driven approach,
requirements might lead to a need to accelerate introduction of where vehicles and infrastructures are to be developed and
significant volumes of electric vehicles as well as implementing implemented simultaneously.
additional new technologies for conventional diesel engines. There
can be no assurance that such new technologies and solutions can
Industrial operations including supply chain
be produced and sold profitably or that customers will purchase
Our ability to deliver in accordance with market demand and
those in the quantities needed to meet the regulatory require-
product quality expectations depends significantly on obtaining
ments. Even if challenges in these areas are resolved and handled,
a timely and adequate supply of materials, components and other
they could have a negative impact on the Group’s reputation, usage
vital s ervices, as well as on our ability to properly utilize the capacity
of resources, cost of production or cost of product recalls, and
in the Group’s different production and service facilities. Our indus-
may result in adverse effects on earnings and financial position.
trial system and supply chain were strained in many areas during
The transformation to electric solutions also depends on exter-
2022 due to e.g. shortages of materials and components, short-
nal factors such as the existence of a functioning charging infra-
ages of transport s ervices, developments of the covid-19 pandemic
structure and access to renewable energy sources to power
and response measures taken as well as the war in Ukraine and
battery-electric and fuel cell-electric products. If the expansion
ensuing sanctions. Further disturbances in the supply chain and
of charging infrastructure or the availability and cost of renewable
industrial system can arise from a variety of factors, including con-
energy sources, alone or in combination, are inadequate, custom-
tinued or additional shortages of material, single sourcing, supplier
ers’ investments into the Volvo Group’s electrified products may
insolvency, shortages of labor and components, strikes, pandem-
happen in a slower pace than anticipated, which could negatively
ics or climate hazards such as extreme weather, which each or in
impact the Group’s operating income, financial position and the
combination could result in stoppages and other interferences in
Group’s sustainability goals. Many of the new products and tech-
production and deliveries, which may impair our ability to meet our
nologies are still in early stages of development which – together
customers’ orders, and thus negatively affect the Volvo Group’s
with the lack of broadly accepted standards – poses significant
business and results from operations.
risks for the Volvo Group as it is required to choose relevant tech-
nologies, quality of products and time their introduction wisely,
while respecting the widespread in readiness level among markets Suppliers and materials
and segments across the globe. If the Volvo Group miscalculates, The ongoing technology shift into electrification and other new
delays recognition of, or fails to adapt its products and services to customer offerings, combined with required investments in tradi-
trends, legal and customer requirements in individual markets or tional technologies, may move the industry and the Volvo Group
other changes in demand, it could have a material adverse impact towards reliance on new suppliers, new materials and on materials
on the Group’s results of operations, financial position and cash flows. being used in new applications and in different quantities com-
Last, if the Volvo Group positions itself unsuccessfully in this tech- pared to traditional technologies. Some of these materials may
nology shift (timing and/or technology selection), earnings capac- pose a risk of supply due to scarcity or geopolitical, conflict or
ity and financial position could be severely affected. human rights concerns. Adherence of new suppliers to the Volvo
Group’s code of conduct may pose a reputational risk. At the same
time the suppliers providing more traditional products might lose
New business models
business and risk closing, which could leave the Volvo Group with
The transport and vehicle industry is facing new technologies,
a shortage of suppliers in a particular area and thereby a need to
business models, competitors and global trends such as digitaliza-
make investments.
tion which combined create a highly disruptive environment. These
factors are shifting the Volvo Group from a heavy commercial vehi-
cle manufacturer to more of a provider of transport and logistics Cost inflation and price increases
solutions. The Volvo Group has, during the last couple of years, During 2022 the Group experienced higher input costs from
continuously invested in new business models and new technologies increased prices on e.g. purchased material, freight and energy as
to be able to offer safer, more sustainable, and more productive well as higher labor costs. These inflationary trends could continue
solutions to its customers. Going forward, a new transport land- with potential further impact from the energy crisis and also occur
scape will continue to emerge and will impact large parts of the for additional commodities and materials which the Group purchases
Volvo Group’s operations and way of working, entailing risks on the world market as well as on salaries and services. The ability
related to the ability to respond to specific customer needs with to pass on such higher costs into price increases for products and
tailored services and the availability of technological innovations services may be limited by competitive pressure or already commit-
that respond to the major trends of the industry (i.e. digitalization, ted prices to customers in order books and other agreements.
electromobility and autonomous solutions). If the Volvo Group If the Group is unable to compensate for the higher input costs
miscalculates, delays recognition of, or fails to adapt its services through increased prices on products and services sold, this could
to trends, legal and customer requirements or other changes in have a negative impact on the Group’s financial performance.
Information security and digital infrastructure expenses and impairments related to goodwill and other intangible
The operation of many of the Volvo Group’s business processes assets, as well as unanticipated difficulties in integration of an
depends on reliable information technology (IT) systems and acquired entity. Divestments could present risks in e.g. the opera-
infrastructure. This applies to e.g. research and development, tional separation or through contractual undertakings or legal lia-
production, logistics and sales, as well as products and services bilities with respect to the business divested.
using connectivity and automation features. Disruptions, cyber JVs and partnerships may fail to perform as expected for various
attacks and other security threats against our products or business reasons, including our or our partner’s incorrect assessment of
could harm the Volvo Group’s operations, reputation and have a needs and potential synergies, a failure to invest sufficient resources
significant adverse effect on earnings and financial position. Timely in the cooperation or a change of strategic direction that the coop-
detection of cybersecurity and other security incidents is becom- eration fails to accommodate. Further, JVs and partnerships may
ing increasingly complex, and the Volvo Group seeks to investigate restrict e.g. our ability to run independent operations within the
and manage incidents with a view to prevent their recurrence. scope of cooperation, and limitations in our or our partner’s opera-
The Volvo Group relies on third parties where significant parts tional and financial resources may restrain the capabilities of the
of maintenance and operations of the IT systems has been out- cooperation.
sourced. The Volvo Group has taken precautions in the selection
and ongoing management of these third parties, but events or
Residual value commitments
incidents caused by vulnerabilities in their operations or products
The Volvo Group sometimes offers customers to acquire Group
could cause disruption of operations, loss or leakage of data,
products with a residual value commitment, meaning that the
reputational risk and financial losses.
customer can return the asset at an agreed date and to an agreed
price. The committed prices are established within each Business
Mergers and acquisitions, partnerships and divestments Area, which assumes the responsibility for maintaining a residual
In addition to the Volvo Group’s in-house work and focus on value matrix aiming to reflect fair future market values. Volvo Group
organic growth, the Volvo Group engages in acquisitions and will have a residual value risk if vehicles subject to residual value
divestments, as well as in JVs, partnerships and other forms of commitments are rebought and the fair market value of the vehicles
cooperation. These are essential parts in executing on our strategy. is below the committed residual value. A residual value commitment
However, there can be no assurance that these transactions and can also become a future used vehicle inventory risk if vehicles are
cooperations become or remain successful, nor that they will not sold, affecting the cash flow negatively. For further information
deliver expected benefits. Acquisitions could e.g. result in incur- on residual value commitments, see Note 13 Tangible assets.
rence of contingent liabilities and an increase in amortization
CLIMATE AND PEOPLE
Pandemics The Volvo Group has identified a number of climate-related

The outbreak of pandemics throughout the world, such as the still t ransitional risks, which are incorporated into the Group’s
ongoing covid-19 pandemic, may lead to major disruptions in the Enterprise Risk Management process. These risks, including
economies of many countries, including the Group’s key markets, their potential financial impact, are assessed as part of macro
and may impact global economic activity as well as Group perfor- and market developments as found in the risk descriptions for
mance negatively going forward. The duration and expected devel- “Regulations”, “Transformation and technology”, “New business
opment of the covid-19 pandemic is unknown, and no predictions models” and “Suppliers and materials”. Physical climate hazards
can be made in relation to future impacts. Any prolongation or can potentially also impact Volvo Group’s operations and supply
worsening of the virus outbreak would, however, be expected to chain as mentioned in the “Industrial operations” risk description.
negatively affect the Group’s financial performance, and could
have a material adverse effect on the Group’s business and finan-
People and culture
cial position.
Volvo Group strongly believes that there is a high correlation
between the Group’s future success and its capability to recruit,
Climate retain and develop qualified personnel. Furthermore, Volvo Group
The scientific consensus indicates that emissions of greenhouse strives to increase health and safety in its operations, and targets
gases continue to alter the composition of the earth’s atmosphere to significantly reduce both the accident rate and the risks associ-
in ways that are affecting, and are expected to continue to affect, ated with our activities. The Volvo Group counts on leveraging the
the global climate. The potential impacts of climate change on the full diversity of its workforce to fulfil customer demands. Managing
Volvo Group’s customers, product offerings, operations, facilities the needed competence shift in the transformation in specialized
and suppliers are uncertain, as they will be particular to local and areas is key to succeed. To meet expectations from employees and
customer-specific circumstances. Overall climate scenario analysis other stakeholders, a strong focus is required on areas such as health
has been conducted to learn more about potential developments and safety, leadership, empowerment, employee engagement,
over the short, medium and long term, see Sustainability Notes on working conditions, inclusive culture and values, sharing of knowl-
page 147. edge, and building diverse teams. Failure to do the right things in
these areas can cause a negative impact on the health, safety and The Volvo Group works to promote human rights interests in
well-being of our personnel, on the Volvo Group’s reputation, as its own operations and throughout the value chain – including the
well as on its image as an employer. Moreover, it can impair the Group’s own operations, supply chain, strategic business partners
Group’s ability to recruit, retain and develop the knowledge and and certain sales transactions – but also on country/region levels
skills necessary to ensure customer success and the transition as well as purchase categories and/or sales segments.
to new technologies. The Volvo Group attempts to monitor its compliance with
applicable laws, policies and guidelines and strives for continuous
improvements, but there can be no assurances that future adverse
Human rights
human rights impacts will not materialize in the Group’s own
The Volvo Group is committed to respecting internationally recog-
organization, or in the Group’s business relationships or in the
nized human rights and avoiding causing or contributing to adverse
value chain. The Group seeks to address adverse human rights
human rights impacts in line with applicable legislation through-
impacts with which it may be involved, however, such events may
out the world, relevant global frameworks such as the United
adversely affect the Group, financially as well as reputationally.
Nations Guiding Principles on Business and Human Rights (UNGP)
and the UN Global Compact.
COMPLIANCE RISKS
Data protection laws Volvo Car Corporation has the exclusive right to use the Volvo name
Focus on Data Protection is increasing from authorities around the and trademark for its products and services. The Volvo Group’s rights
globe resulting in new Data Protection laws entering into force to use the Renault brand and trademarks are related to the truck
and increased activities by Data Protection Authorities in terms of operations only and are regulated by a license from Renault s.a.s.,
sanctions, audits, and court rulings. It becomes even more relevant which owns the Renault brand and trademarks. In addition, the
with Volvo Group operations and products being more data driven Volvo Group owns several other trademarks relating to its business.
(e.g. connected vehicles). The EU General Data Protection Regula- More partnerships and JVs are established involving intellectual
tion (“GDPR”) introduced increased monetary penalties for breaches property arrangements
of the regulation and sets a standard applied in several other data Use in possible conflict with third-party intellectual property
protection laws throughout the jurisdictions in which Volvo Group rights, or third-parties’ unauthorized use of the Volvo Group’s pro-
operates. Non-compliance with data protection laws could expose prietary rights, may have significant business impact on the Group.
the Group to fines and penalties and severe infringements may
potentially cause authorities to issue instructions to stop process-
Legal proceedings
ing of personal data, which could disrupt operations. The Group
In the normal course of business, the Volvo Group is involved in legal
could also face litigations with persons allegedly affected by data
proceedings. These proceedings may relate to a number of topics,
protection violations. Data protection law infringements may
including vehicle safety and other product related claims, warranty
hence involve severe negative impact for the business operations,
claims, commercial disputes, intellectual property claims, allegations
including reputational damage and adverse effect on the Group’s
concerning health, environmental or safety issues, antitrust, tax or
earnings and financial position.
labor disputes and regulatory inquiries and investigations. Further,
AB Volvo and other companies in the Group, as well as their officers,
Intangible assets may be subject to claims alleging failures to comply with stock
The Volvo Group owns or otherwise has rights to patents, trademarks, market regulations, securities law and other applicable rules and
designs and copyrights that relate to the products and services that regulations. Legal proceedings can be expensive, lengthy, take
the Group manufactures and markets. These rights have been up resources that could be used for other purposes and are often
developed or acquired over a number of years and are valuable to difficult to predict. There can be no assurance that provisions, where
the operations of the Volvo Group. Further, in order to safeguard recognized, for a particular legal proceeding will cover the costs of
investments in R&D, the Volvo Group has an intellectual property an adverse outcome, nor that unprovisioned proceedings will not
plan defining the creation and use of its intellectual property rights. give rise to any significant additional expenditure. For information
The share of trade in counterfeit goods as a proportion of global about certain legal proceedings involving entities within the Volvo
trade has grown significantly. Products infringing on Volvo Group’s Group, see Note 21 Other Provisions and in Note 24 Contingent
intellectual property rights are often of substandard quality and poses Liabilities.
risks to the Group regarding safety of customers, vehicle perfor-
mance, quality and emission levels that will affect public health and
Corruption and competition law
the climate, as well as individual brand’s and corporate reputation.
Corruption risks are primarily linked to the Volvo Group’s sales and
AB Volvo and Volvo Car Corporation jointly own the Volvo brand
supply chain activities but may also relate to administrative proce-
and trademarks through Volvo Trademark Holding AB. AB Volvo has
dures, such as licensing and permitting. This includes activities of
the exclusive right to use the Volvo name and trademark for its prod-
Volvo Group employees but may further extend to the activities of
ucts and services and according to a license agreement. Similarly,
the Volvo Group’s business partners and intermediaries. The overall Corruption as well as competition law infringements may involve
risk level therefore is affected by sales volumes, the way of distri- severe negative impacts for the business operations, including
bution and the fact that Volvo Group pursues business operations reputational damage, legal proceedings, fines and imprisonment
also in markets that are considered high risk from a corruption of employees. The Group could also be affected by claims raised by
perspective. persons or entities affected by allegedly non-compliant practices.
Potential risks for non-compliance with competition law (e.g.
price fixing, market sharing, unlawful information exchange, abuse
of market power) are primarily linked to behavior of employees
when interacting with competitors and other external stakeholders
in various situations.
FINANCIAL RISKS
Insurance Interest-rate risk

The Volvo Group generally takes out insurance coverage where it Volvo Group’s net financial debt structure is exposed to fluctuations
is legally or contractually obligated to do so and otherwise against in market interest rates. Movements in interest-rate levels may
such risks, in such amounts and on terms that it considers com- impact the Group’s net income and cash flow or the value of financial
mercially motivated from time to time. Where insurance coverage assets and liabilities.
cannot be procured on such terms, the Group can be exposed to
material uninsured losses, which could have a materially adverse
Currency risk
effect on Group operations and financial standing. For example,
The Volvo Group’s global presence means that business is conducted
the Group is not fully insured against effects from flooding, earth-
in several different currency regions. More than 95% of the Group’s
quakes and other natural disasters.
net sales are generated in countries other than Sweden. The Volvo
Group’s cash flow, profitability, and balance sheet are impacted by
Credit risk fluctuations in foreign exchange rates.
The Volvo Group is exposed to credit risk mainly through its sales
to customers in the Industrial Operations, and its long-term credit
Liquidity risk
receivables in its Financial Services operations. Total exposure as
It is of critical importance for the Volvo Group to assure a sufficient
of December 31, 2022 can be found in Note 15 Customer-financing
payment capability over time, to continuously manage demands
receivables and Note 16 Receivables. The Group is also exposed
and expectations from external stakeholders. Sudden changes in
to financial credit risk due to short-term deposits with the Group’s
the business cycle, unforeseen events within the financial markets
core banks and unrealized results from derivatives used for hedging
(in particular for the Financial Services operations), changes in the
purposes. For further information, please see Note 4 Goals and pol-
Volvo Group’s access to financial markets, and changes in customers’
icies in financial risk management and Note 15 Customer-financing
appetite for financing from the Group, may stress the Group’s
receivables. If several larger customers, dealers, or a core bank, fails
liquidity preparedness or involve fines and penalties. Failure to
to meet its undertakings the Group could suffer significant losses.
properly manage the Group’s liquidity risks, may cause material
adverse impact on earnings capability and financial standing.
Pension commitments
The Volvo Group has substantial pension commitments, some of
Impairment
which are owed under defined benefit plans. Changes in assump-
The Volvo Group has substantial values in goodwill and other intan-
tions of interest and inflation rates, mortality, retirement age and
gible assets on its balance sheet. Goodwill and other intangible
pensionable remunerations could result in significant changes to
assets not yet in use are not amortized, hence there is a risk for
the present value of already accrued benefit obligations as well
impairment if the calculated recoverable amount is lower than the
as the cost of new benefit accruals, affecting funding level of such
carrying amount. The calculated recoverable amounts differ between
plans. The investment performance of pension assets may also
the operating segments and they are, to a varying degree, sensitive
substantially affect funding levels. Defined benefit plan assets are
to changes in the business environment. Instability in the business
managed independently from the Group, with a significant portion
performance and volatility in interest and currency rates may indi-
of plan assets held in shares and other instruments that are exposed
cate a need for impairment. Please see Note 12 Intangible assets.
to market risks which do not fully match the characteristics of
the pension obligation. Please see Note 20 Provisions for post-
employment benefits for further information. If there is a shortfall
in benefit plans, the Volvo Group could be required to make sub-
stantial unexpected cash contributions, which would adversely
affect cash flow and the Group’s financial position.
74
VOLVO GROUP 2022
NOTES TO THE FINANCIAL STATEMENTS
NOTE PAGE NOTE PAGE

1 Accounting policies 75 15 Customer-financing receivables 106
2 Key sources of estimation uncertainty 77 16 Receivables 108
and critical judgments 17 Inventories 110
3 Acquisitions and divestments 78 18 Cash and cash equivalents 111
of operations
19 Equity and number of shares 112
4 Goals and policies in financial risk 80
20 Provisions for post-employment benefits 113
management
21 Other provisions 119
5 Investments in joint ventures, associated 86
companies and other shares and 22 Liabilities 121
participations 23 Assets pledged 122
6 Segment reporting 90 24 Contingent liabilities and contingent 123
7 Revenue 92 assets
8 Other operating income and expenses 94 25 Transactions with related parties 124
9 Other financial income and expenses 95 26 Government grants 124
10 Income taxes 95 27 Personnel 125
11 Non-controlling interest 97 28 Fees to the auditors 130
12 Intangible assets 98 29 Cash flow 130
13 Tangible assets 100 30 Financial instruments 131
14 Leasing 103
Financial Statements
Financial performance Financial position Cash flow statement Changes in

Page 43 Page 46 Page 50 consolidated equity
Page 52
VOLVO GROUP 2022 75 NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
The consolidated financial statements for AB Volvo (publ) and its subsidiaries Annual Accounts Act. In addition, RFR 1 Supplementary Rules for Groups
are prepared in accordance with International Financial Reporting Standards has been applied, which is issued by the Swedish Financial Reporting Board.
(IFRS) issued by the International Accounting Standards Board (IASB), as Amounts in SEK M unless otherwise specified. The amounts within paren-
adopted by the European Union (EU). This Annual Report is prepared in theses refer to the preceding year.
accordance with IAS 1 Presentation of Financial Statements and the S wedish
1:1
Accounting policies Note IFRS standard
Acquisitions and divestments 3, Acquisitions and divestments of operations IFRS 3, IFRS 10

Assets and liabilities held for sale 3, Acquisitions and divestments of operations IFRS 5, IFRS 13
and discontinued o perations
Joint ventures 5, Investments in joint ventures, associated IFRS 11, IFRS 12, IAS 28
companies and other shares and participations
Associated companies 5, Investments in joint ventures, associated IFRS 12, IAS 28
Other shares and participations 5, Investments in joint ventures, associated IFRS 7, IFRS 9, IFRS 13, IAS 28, IAS 32
Operating segments 6, Segment reporting IFRS 8
Revenue 7, Revenue IFRS 9, IFRS 15, IFRS 16
Financial income and expenses 9, Other financial income and expenses IFRS 9
Income taxes 10, Income taxes IAS 12
Non-controlling interest 11, Non-controlling interest IFRS 10, IFRS 12
Research and development 12, Intangible assets IAS 36, IAS 38
Goodwill 12, Intangible assets IFRS 3, IAS 36, IAS 38
Tangible assets 13, Tangible assets IFRS 13, IFRS 16, IAS 16, IAS 36, IAS 40
Leasing 14, Leasing IFRS 16
Inventories 17, Inventories IAS 2
Earnings per share 19, Equity and number of shares IAS 33
Pensions and similar obligations 20, Provisions for post-employment benefits IFRS 2, IAS 19
Residual value risks 21, Other provisions IFRS 15, IAS 37
Product warranty 21, Other provisions IAS 37
Technical goodwill 21, Other provisions IAS 37
Restructuring costs 21, Other provisions IAS 19, IAS 37
Extended coverage and service contracts 21, Other provisions IFRS 15, IAS 37
Insurance operations 21, Other provisions IFRS 4
Contingent liabilities and contingent assets 24, Contingent liabilities and contingent assets IAS 37
Transactions with related parties 25, Transactions with related parties IAS 24
Government grants 26, Government grants IAS 20
Incentive programs 27, Personnel IAS 19
Cash flow statement 29, Cash flow IAS 7
Financial instruments 4, Goals and policies in financial risk management IFRS 7, IFRS 9
15, Customer-financing receivables IFRS 7, IFRS 9, IFRS 13, IFRS 16, IAS 32
16, Receivables IFRS 7, IFRS 9, IFRS 13, IAS 32
18, Cash and cash equivalents IFRS 7, IFRS 9, IFRS 13, IAS 32
22, Liabilities IFRS 7, IFRS 9, IFRS 13, IAS 32
30, Financial instruments IFRS 7, IFRS 9, IFRS 13, IAS 32
Receivables and liabilities in foreign currency

VOLVO GROUP’S ACCOUNTING POLICIES Receivables and liabilities in currencies other than the functional currency
of the reporting entity (foreign currencies) are translated to the functional
The Volvo Group describes the most material accounting policies in con- currency using the closing rate. Exchange rate gains and losses arising
junction with each note with the aim of providing enhanced understanding from operating assets and liabilities impact operating income while
of each accounting area. The Volvo Group focuses on describing the exchange rate gains and losses arising from financial assets and liabilities
accounting choices made within the framework of the prevailing IFRS stan- impact other financial income and expenses. Interest-bearing financial
dard and avoids repeating the actual text of the standard, unless the Volvo assets and liabilities are defined as items included in the net financial posi-
Group considers it particularly important to the understanding of the note’s tion of the Volvo Group (see section Key ratios).
content. The following symbols I/S and B/S show if amounts in the notes Exchange rate differences on loans and other financial instruments in
can be found in the income statement or balance sheet. The total amount foreign currency, which are used to hedge net assets in foreign subsidiaries,
in tables and statements might not always summarize as there are round- joint ventures and associated companies, are offset against translation differ-
ing differences. The aim is to have each line item corresponding to the ences in equity of the respective companies.
source and it might therefore be rounding differences in the total. Refer to ead more in Note 4 Goals and policies in financial risk management, about
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table 1:1 to see in which note each accounting policy can be found and the currency exposure and currency risk management.
applicable IFRS standard with material impact.
The most important exchange rates used in the consolidated financial state-
ments are shown in table 1:2.
Consolidated financial statements
Principles for consolidation
The consolidated financial statements comprise the parent company and sub- 1:2
sidiaries over which the parent company exercises control. Control over a sub-
Exchange rates Closing rate
sidiary exists when the Volvo Group is exposed, or has rights, to variable Average rate as of Dec 31
returns from its involvement with the subsidiary and has the ability to affect
Country Currency 2022 2021 2022 2021
those returns through its power over the company. Joint ventures and associ-
ated companies are recognized by applying the equity method accounting, Australia AUD 7.0136 6.4415 7.0892 6.5625
when the Volvo Group has joint control or exercise significant influence. Intra- Brazil BRL 1.9616 1.5925 1.9746 1.5856
group transactions as well as gains on transactions with joint ventures and Canada CAD 7.7712 6.8453 7.7060 7.0636
associated companies are eliminated in the consolidated financial statements. China CNY 1.5018 1.3307 1.5017 1.4186
Read more in Note 3 Acquisitions and divestment of operations. Euro Zone EUR 10.6300 10.1449 11.1283 10.2269
ead more in Note 5 Investments in joint ventures, associated companies and
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Great Britain GBP 12.4672 11.8022 12.5811 12.1790
other shares and participations. Norway NOK 1.0523 0.9980 1.0572 1.0254
Read more in Note 11 Non-controlling interest. South Africa ZAR 0.6182 0.5809 0.6146 0.5660
South Korea KRW 0.0078 0.0075 0.0083 0.0076
Translation to Swedish kronor when consolidating companies that have United States USD 10.1245 8.5815 10.4371 9.0437
other functional currencies
The functional currency of each Volvo Group company is determined
based on the primary economic environment in which the company oper-
ates. The primary economic environment is normally in which the com- New accounting policies 2022
pany primarily generates and expends cash. The functional currency is in No new or revised accounting standards or interpretations effective from
most cases, the currency in the country where the company is located. AB January 1, 2022 have materially affected the Volvo Group’s financial
Volvo’s and the Volvo Group’s presentation currency is SEK. In preparing statements.
the consolidated financial statements, items in the income statements of
foreign subsidiaries are translated to SEK using monthly average exchange New accounting policies 2023 and later
rates. Balance sheet items are translated into SEK using exchange rates New accounting standards and interpretations that have been published
at year end (closing rate). Exchange differences are recognized in other and are effective from 2023 and later are not considered to have a mate-
comprehensive income and accumulated in equity. rial impact on the Volvo Group’s financial statements.
The accumulated translation differences related to a certain subsidiary,
joint venture or associated company are reversed to the income state-
ment as a part of the gain or loss arising from disposal of the company or
repayment of capital contribution from the company.
2 Key sources of estimation uncertainty and critical judgments
The preparation of the Volvo Group’s financial statements requires the use
of estimates and assumptions that may affect the recognized amounts of
2:1
assets and liabilities at the date of the financial statements. In addition,
the recognized amounts of net sales and expenses during the periods Source of estimation
uncertainty and critical
presented are affected. In preparing the financial statements, manage-
judgments Note
ment has made its best judgments of c ertain amounts included in the
financial statements, materiality taken into account. Actual results may Sales with residual value commit- 7, Revenue
differ from previously made estimates. In accordance with IAS 1, the comments and variable sales price
pany is required to disclose the assumptions and other major sources of Deferred taxes and uncertainty over 10, Income taxes
estimation uncertainties that, if actual results differ, may have a material income tax treatments and claims
impact on the financial statements. Impairment of goodwill and other 12, Intangible assets
intangible assets
Impairment of tangible assets 13, Tangible assets
and residual value risks
SOURCES OF ESTIMATION UNCERTAINT Y Measurement of lease liabilities 14, Leasing
AND CRITICAL JUDGMENTS and right-of-use assets
Allowance for expected 15, Customer-financing
The sources of estimation uncertainty and critical judgments identified credit losses receivables
16, Receivables
by the Volvo Group and which are considered to fulfill these criteria are
presented in connection to the items considered to be affected. Table 2:1 Write down of inventories 17, Inventories
discloses where to find these descriptions. Assumptions when calculating 20, Provisions for
post-employment benefits post-employment
benefits
Provisions for product warranty, 21, Other provisions
other provisions and provisions for
legal proceedings
3 Acquisitions and divestments of operations
Acquisitions during the period

ACCOUNTING POLICY In 2022, the Volvo Group has not made any acquisitions which solely or
jointly have had a material impact on the financial statements.
Acquisitions During 2021, the Volvo Group completed acquisitions which mainly
Companies are consolidated as of the date of acquisition, when the Volvo pertained to Designwerk Technologies AG and SOPROVI Algérie SPA. In
Group obtains control over the operations. Business combinations are April 2021, the Volvo Group acquired 60% of the shares in Designwerk
recognized in accordance with the acquisition method. The identifiable Technologies AG, a Swiss company that develops and sells electromobil-
assets acquired and the liabilities assumed are measured at their fair values. ity products and engineering services within electromobility eco-systems.
A surplus amount from the purchase price paid, possible non-controlling In August 2021, the Volvo Group acquired the remaining 70% of shares in
interest, and fair value of previously held equity interests at the acquisition the former joint venture SOPROVI Algérie SPA (acquisitions done in
date compared to the acquired net assets is recognized as goodwill. All stages), hence the company is now a subsidiary within the Volvo Group.
acquisition-related costs are expensed. Any deficit amount, known as The total impact on the Volvo Group’s balance sheet and cash flow state-
gain from a bargain purchase, is recognized in the income statement. ment in connection with all acquisitions of operations are included in table 3:1.
For acquisitions done in stages, a business combination occurs on the
date when control is achieved. As part of obtaining control, the acquired
identifiable net assets are measured at their fair values and goodwill is 3:1
recognized. The previously held equity interest is remeasured to its fair Acquisitions 2022 2021
value and any resulting gain or loss compared to the carrying amount is Other non-current assets 133 337
recognized in the income statement. For each business combination, the
Cash and cash equivalents – 2
Volvo Group decides whether the non-controlling interest shall be valued
Other current assets 118 274
at fair value or at the non-controlling interest’s proportionate share of the
Non-current liabilities –9 –523
net assets of the acquiree. Transactions between the Volvo Group and
Current liabilities –89 –245
owners with non-controlling interest are recognized in equity if control of
Acquired net assets 153 –155
the subsidiary is retained.
Non-controlling interest –25 – 26
Divestments Goodwill 146 654
Subsidiaries that have been divested are included in the consolidated Purchase price –274 – 474
financial statements until the date of the divestment, when the Volvo Outstanding purchase price 9 –
Group loses control over the subsidiary. A decrease in ownership interest Effect on Volvo Group cash and
of a subsidiary without losing control is accounted for as an equity trans- cash equivalents –265 –472
action. Divestment of operations with the main purpose to dispose
intangible and tangible assets is treated as disposal of intangible and tan-
gible assets.
Divestments during the period
Assets and liabilities held for sale and discontinued operations In 2022, the Volvo Group has not made any divestments which solely or
In a global group like the Volvo Group, activities are continuously ongoing jointly have had a significant impact on the financial statements. The
regarding the sale of assets or groups of assets at minor values. When the Volvo Group has received SEK 145 M in 2022 related to the earnout for
criteria for being classified as assets and liabilities held for sale are fulfilled the divestment of UD Trucks to Isuzu Motors in 2021.
and the asset or group of assets are of material value, the asset or group of During 2021, the Volvo Group completed divestments which mainly
assets, both current and non-current, and the related liabilities are recog- pertained to the divestment of UD Trucks to Isuzu Motors. The divest-
nized on separate lines in the balance sheet. The asset or group of assets ment was completed on April 1, 2021 and resulted in a net gain of SEK 1.7
are measured at the lower of its’ carrying amount and fair value after billion, which had a positive effect on the Volvo Group’s operating income.
deductions for selling expenses. The balance sheet items and the potential In respect of Isuzu Motors’ acquisition of UD Trucks, an additional amount
income statement effect resulting from the revaluation to fair value less up to JPY 15 billion (approx. SEK 1.2 billion) is to be paid to Volvo Group
selling expenses are, if related to Industrial Operations, normally recog- as an earnout subject to the performance of UD Trucks during the years
nized in the segment Group functions & Other, otherwise in the Financial 2021–2023. The earnout will be revaluated continuously throughout the
Services segment. When the sale is completed the result is distributed to period specified. At the time of the sale, the fair value of the additional
the relevant segments. amount was estimated to JPY 6.3 billion (approx. SEK 0.5 billion). It is
recognized as a financial asset at fair value through profit or loss and
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other shares and participations.
impacted the net gain recognized in the period by the same amount.
The total impact on the Volvo Group’s balance sheet, income statement
Read more in Note 11 Non-controlling interest. and cash flow statement in connection with all divestments of operations
Read more in Note 12 Investments in shares and participations in the parent com- are specified in table 3:2.
pany about AB Volvo’s holding of shares in subsidiaries as of December 31, 2022.
Assets and liabilities held for sale

As of December 31, 2022, no assets or liabilities were recognized as held
3:2
for sale (–).
Divestments 2022 2021
Goodwill – –890
Acquisitions and divestments after the end of the period
The Volvo Group has not made any acquisitions or divestments after the end
Other intangible assets – –2,650
of the period that have had a material impact on the financial statements.
Tangible assets – –11,482
Other shares and participations – –854
Deferred tax assets – –2,306
Inventories – –4,763
Accounts receivable – –5,523
Other receivables – –3,364
Cash and cash equivalents – –2,344
Provisions – 1,883
Loans – 20,614
Other non-current liabilities – 1,631
Trade payables – 4,200
Other current liabilities – 2,599
Divested net assets – –3,250
Net gain/loss on divestments affecting
operating income – 1,643
Cash flow and net financial position

2022 2021
Cash and cash equivalents, received 153 4,502

Loan repayment – 20,614
Cash and cash equivalents, divested
operations – –2,344
Effect on Volvo Group cash and
cash equivalents 153 22,773
Effect on Volvo Group
net financial position – 19,064
Details on divestment of UD Trucks 2021
Consideration received or receivable:

Cash 4,506
Fair value of contingent consideration 482
Total disposal consideration 4,988
Carrying amount of divested net assets –3,246
Transaction costs –151

Translation differences in foreign currency
reversed to income 62
Net gain/loss 1,653
4 Goals and policies in financial risk management
The Volvo Group’s global operations expose the Group to financial risks in Volvo Group Treasury, the internal bank of the Volvo Group. Their respon-
the form of interest rate risks, currency risks, credit risks, liquidity risks sibilities include financing of Industrial Operations as well as financing of
and other price risks. The board of AB Volvo has adopted a financial risk the credit portfolio in Financial Services. The Volvo Group balance sheet
policy that regulates how these risks should be controlled and governed is presented per segment where Volvo Group Treasury is part of the Indus-
and defines roles and responsibilities within the Volvo Group. The financial trial Operations and the internal lending from Industrial Operations to
risk policy also establishes principles for how financial activities shall be Financial Services is presented in the balance sheet as internal funding.
carried out, sets mandates and steering principles for the management of During 2022 the volatility in the financial markets has increased. The
financial risks as well as defines the financial instruments to be used for war in Ukraine and rising inflation has affected market rates significantly.
mitigating these risks. Key mandates and steering principles are described Under these conditions the Volvo Group has performed financial activities
in the respective risk section. and managed risk in accordance with the financial risk policy, without any
The board and audit committee of AB Volvo are informed regularly during policy breaches.
the year about the development of the Volvo Group’s financial risks and other ead more in Note 30 Financial instruments about accounting policies for
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matters covered within the financial risk policy. The financial risk policy is financial instruments.
reviewed on an annual basis. The Volvo Group manages financial risk as an Read more in section Financial Management and section Risks and uncertain-
integrated element of the business operations where parts of the responsibil- ties about financial risk management.
ity for the finance operation and financial risk management are centralized to
FINANCIAL RISKS
USD
24.2
INTEREST RATE RISKS CURRENCY RISKS CREDIT RISKS LIQUIDITY RISKS OTHER PRICE RISKS
COMMERCIAL CURRENCY COMMERCIAL

CASH FLOW RISKS COMMODIT Y RISKS
EXPOSURE CREDIT RISK
FINANCIAL CURRENCY FINANCIAL

PRICE RISKS
EXPOSURE CREDIT RISK
BRL
CURRENCY EXPOSURE FINANCIAL
8.7
OF EQUIT Y COUNTERPART Y RISK
INTEREST RATE RISKS
At year-end 2022, the degree of such matching ratio was 100% (99) in
INTEREST RATE RISKS Financial Services which is in accordance with the Group policy.
In addition to the financial assets in Financial Services, the Volvo
Interest rate risk refers to the risk that changed interest rates will affect the Group’s interest-bearing assets at year-end 2022 consisted primarily of
Volvo Group’s net income and cash flow (cash flow risk) or the fair value of cash and cash equivalents. On December 31, 2022, the average interest
financial assets and liabilities (price risk). Following the implementation in on Industrial Operations financial assets was 3.2% (0.4). The increase
2021 of the interest rate benchmark reform, GBP LIBOR was replaced by relates to significantly higher underlying interest rates in most regions
SONIA and USD LIBOR has been replaced by SOFR for all new transac- during the year. The Industrial Operations’ results and profitability are
tions. The Volvo Group has a number of outstanding interest derivative con- closely aligned to the business cycle. Therefore, in order to minimize the
tracts linked to USD LIBOR which will be converted to SOFR in 2023, with interest rate risk, outstanding loans had interest terms corresponding to
no material effect expected in the income statement. an interest rate fixing of between one to three months. The average inter-
est on Industrial Operations financial liabilities at year end amounted to
5.2% (3.6), including the Volvo Group’s credit costs, also affected by the
increase in underlying interest rates.
POLICY Table 4:1 shows the impact on income after financial items in Industrial
Operations’ net financial position, excluding lease liabilities and post-em-
Matching the interest fixing terms of financial assets and liabilities reduces ployment benefits, if interest rates were to increase by 1 percentage point,
the exposure. Interest rate swaps are used to change/influence the inter- assuming an average interest rate fixed term of three months on the liabil-
est fixing term for the Volvo Group’s financial assets and liabilities. Currency ity side.1 The impact on equity is earnings after tax.
interest rate swaps enable borrowing in foreign currencies from different
markets without introducing currency risk.
1 The sensitivity analysis on interest rate risk is based on simplified assumptions. It is not
Cash flow risks unlikely for market interest rates to change by one percentage point on an annual basis.
However, in reality, these rates often rise or decline at different points in time. The sen-
The effect of changed interest rate levels on future currency and interest sitivity analysis also assumes a parallel deferment of the return curve, and that the
flows primarily pertains to Financial Services and Industrial Operations’ interest on assets and liabilities will be equally impacted by changes in market interest
net financial items. The interest rate risk in Financial Services is managed rates. Accordingly, the impact of real interestrate changes may differ from the analysis
presented in table 4:1.
with the objective to achieve a match of interest rate fixings on borrowing
ead more in Note 20 Provisions for post-employment benefits regarding
R
and lending, in order to eliminate interest rate risk. The matching degree is sensitivity analysis on the defined benefit obligations when changes in the
measured excluding equity, which amounted to 8% in Financial Services. applied assumptions for discount rate and inflations are made.
The Volvo Group’s net assets in

different currencies (SEK bn) =
4:1
ead more in section Currency exposure
R Risk net financial Net financial
of equity in this note. position Dec 31, position excl. Impact on income Impact on net financial
2022 post-employment after financial items position if SEK appreciates
benefits and lease if interest rate rises 1% against other currencies 10%
SEK M liabilities (Interest rate risks) (Currency risks)
SEK 35,691 400 –
EUR 9,512 84 –951
USD 13,460 120 –1,346
SEK CNY 4,778 51 –478
68.2
GBP 6,489 57 –649
Other 3,967 50 –397
Total 73,897 762 –3,821
GBP4.9
Read more in section Financial Position about the Industrial Operations Net financial position.
EUR
21.9
KRW 3.1
CNY
15.3
INR 1.9 OTHER

17.7
Price risks market risk limitations. There are several measurements which can be
Exposure to price risk as a result of changed interest rate refers to financial used to define market risk. Volvo Group Treasury is using Value-at-Risk
assets and liabilities with a longer interest rate fixing term (fixed interest). (VaR) as the main tool for mandating market risk (including interest rate
All outstanding loans in Industrial Operations are signed with short inter- risk, currency risk and liquidity risk). Volvo Group Treasury measures VaR
est rate fixings, therefore the price risk is immaterial. over a one day holding period, using a 97.7% confidence level and histor-
For Financial Services, financial assets and liabilities are matched in ical volatility and correlation. The total VaR mandate for Volvo Group Trea-
order to limit risk. Volvo Group Treasury is allowed to take limited active sury is SEK 150 M, and the usage is measured daily. As of December 31,
currency and interest rate positions in relation to the Financial Services 2022, the VaR usage was SEK 40.8 M (11.8). Assets related to Russia are
portfolio. This responsibility is subject to, and shall be within, applicable risk measured and followed up separately.
CURRENCY RISKS
CURRENCY RISKS POLICY
The balance sheet may be affected by changes in different exchange The aim of the Volvo Group’s currency risk management is to secure cash
rates. Currency risks in the Volvo Group’s operations are related to flow from firm flows through currency hedges pursuant to the established
changes in the value of contracted and expected future payment flows Financial risk policy, and to minimize the exposure of financial items in the
(commercial currency exposure), changes in the value of loans and invest- Volvo Group’s balance sheet. Below is a presentation on how this work is
ments (financial currency exposure) and changes in the value of assets conducted for commercial and financial currency exposure, and for
and liabilities in foreign subsidiaries (currency exposure of equity). currency exposure of equity.
Translation exposure from the consolidation of operating income in

foreign subsidiaries
4:2
Sensitivity analysis1 In conjunction with the translation of operating income in foreign subsid-
iaries, the Volvo Group’s income is impacted if currency rates change. The
Risk currency Impact on operating income Volvo Group does not hedge this risk. Graph 4:6 shows the translation
exposure Transaction if currency rate appreciates effect in key currencies when consolidating operating income for 2022 in
2022 exposure from against all other currencies foreign subsidiaries in the Volvo Group.
operating by 10%
SEK bn net flows (Currency risks) Read more in section Currency exposure of equity.
SEK –49 –4,9

Sensitivity analysis for transaction exposure 1
KRW –7 –0,7
The table 4:2 illustrates the impact on operating income if key currencies
GBP 12 1,2
for Volvo Group appreciate by 10% against all other currencies. Hedge
USD 8 0,8
accounting is not applied on derivatives hedging cash flows in foreign
CAD 7 0,7
currency. As a consequence, the impact on equity equals the impact on
The deficit in transaction exposure in SEK is mainly generated from flows operating income.
in GBP, USD, CAD, AUD and NOK against SEK.
Volvo Group currency review
The table and graphs 4:3 to 4:7 show the currency impact on operating
income and illustrate the transaction exposure and currency impact on
Commercial currency exposure
operating income from commercial net flows in foreign currency , transla-
Transaction exposure from commercial flows
tion effect when consolidating operating income in foreign subsidiaries
The Volvo Group conducts manufacturing in 18 countries around the
and currency impact on sales in key c
urrencies.
globe and more than 95% of net sales are generated in countries other
than Sweden. Transaction exposure from commercial flows in foreign ead more about Volvo Group transaction exposure in section C ommercial
R
currency exposure above.
currency is generated from internal purchases and sales between manu-
facturing entities and market companies and external sales and purchases
Financial currency exposure
in foreign currency around the globe. As the predominant parts of the
Loans and investments in the Volvo Group’s subsidiaries are performed
operations in the Volvo Group are situated outside Sweden, the fluctua-
mainly in local currencies through Volvo Group Treasury, which minimizes
tions in currency rates affecting the transaction flows in foreign currency
individual companies’ financial currency exposure. Volvo Group Treasury
are in many cases not against SEK. Industrial Operations’ transaction
uses various derivatives to facilitate lending and borrowing in different
exposure from commercial flows for key currencies is presented in graph
currencies without increasing the risk for the Volvo Group. The net
4:4. The graph represents the transaction exposure from commercial
f inancial position of the Volvo Group is affected by currency fluctuations
operating cash flows in foreign currency, expressed as net surpluses or
since financial assets and liabilities are distributed among the Volvo Group
deficits in key currencies. Commercial net flows increased compared to
companies that conduct their operations using different currencies.
previous year as an effect of improved demand for the Volvo Group’s prod-
Table 4:1 discloses the impact on income after financial items on Indus-
ucts and services. The deficit in SEK and KRW is mainly an effect of man-
trial Operations net financial position, excl. post-employment benefits
ufacturing costs in the plants in Sweden and South Korea, but limited
and lease libilities, if SEK were to strengthen by 10%.
external revenues in those currencies. The surplus in GBP is mainly
generated from internal and external sales to Great Britain. The surplus in
Currency exposure of equity
USD is mainly generated from external sales to entities in USA and
The carrying amount of assets and liabilities in foreign subsidiaries are
emerging markets around the globe. The surplus in CAD is mainly
affected by current exchange rates in conjunction with the translation of
generated from internal and external sales to Canada. The transaction
assets and liabilities to SEK. To minimize currency exposure of equity, the
exposure in Financial Service is limited as the lending is done in local cur-
size of equity in foreign subsidiaries is continuously optimized with respect
rency and the currency risk is managed through the matching in lending
to commercial and legal conditions and in connection with this activity,
and borrowing.
payments of major internal dividends in foreign currency can be subject for
The hedging of the Volvo Group’s commercial currency exposure is exe-
hedging. Currency hedging of equity may occur in cases where a foreign
cuted centrally. The Volvo Group’s consolidated currency portfolio expo-
subsidiary is considered overcapitalized. Net assets in foreign subsidiaries,
sure is the value of forecasted flows in foreign c
urrency. The Volvo Group
associated companies and joint ventures amounted at year end 2022 to
may hedge the part of the forecasted portfolio that is considered highly
SEK 98 billion (88). The need to undertake currency hedging relating to
probable to occur, however during 2022 only future cash flows for spe-
investments in associated companies, joint ventures and other companies
cific orders, decided on case-by-case basis, has been hedged. The Volvo
is assessed on a case-by-case basis.
Group uses forward contracts and currency options to hedge the future
On the map on the previous pages the Volvo Group’s net assets in
payment flows in foreign currency. The hedged amount of firm flows for all
different currencies (SEK bn) are displayed.
periods fall within the framework of the Volvo Group’s financial risk policy.
The Volvo group has no outstanding forward and option contracts for
ead more in Note 30 Financial instruments about Volvo Group’s policy choice
R
hedging commercial risks as of December 31, 2022. on hedge accounting. Information on gain and losses regarding hedging of inter-
nal dividend, refeer to table 30:3.
1 The sensitivity analysis on currency rate risks is based on simplified assumptions. any given time, so the actual effect of exchange rate changes may differ from the
It is not unlikely for a currency to appreciate by 10% in relation to other currencies. sensitivity analysis. Please refer to table 4:2.
In reality however, all currencies usually do not change in the same direction at
4:3
The Volvo Group’s currency review
When the Volvo Group communicates the currency impact on operating income, the following factors are included:
Currency impact on operating income, Volvo Group, SEK billion 2022 2021 Change
Net flows in foreign currency 4,4

Realized and unrealized gains and losses on currency hedging contracts –0.0 –0.0 –0.0
Unrealized gains and losses on receivables and liabilities in foreign currency –0.7 –0.2 –0.6
Translation effect on operating income in foreign subsidiaries 4.5
Total currency impact on operating income, Volvo Group 8.3
Currency impact on net flows in foreign currency is detailed in graph 4:5 and translation effect on operating income in foreign subsidiaries
is detailed in graph 4:6 in key currencies.
4:4 4:5
Transaction exposure from commercial Currency impact on operating income from net flows in foreign
net flows in 2022 and 2021 currency 2022 versus 2021
SEK bn SEK bn
20 1.5
10
1.2
0
–10 0.9
–20 0.6
–30
0.3
–40
–50 0
GBP USD CAD AUD NOK ZAR EUR KRW SEK Other –0.3
12 8 7 6 6 5 3 –7 –49 9 USD CAD GBP AUD NOK ZAR EUR KRW Other
9 10 6 5 5 4 5 –7 –43 6 1.1 0.9 0.6 0.5 0.3 0.3 0.1 –0.3 0.9
Currency flow 2021 Currency flow 2022 Changes in currency rates compared to 2021 (Total SEK 4.4 bn).
Currency effect on operating income from net flows in foreign c

urrency
he graph above represents the transaction exposure from commercial
T
in Volvo Group is presented in the graph above.
operating net cash flows in foreign currency, expressed as net surpluses
or deficits in key currencies.
Read more in section Commercial currency exposure.
4:6 4:7
Translation effect on operating income in 2022 versus 2021 Currency impact on net sales in 2022 versus 2021
SEK M SEK M
2,100 21,000
1,800 18,000
1,500 15,000
1,200 12,000
900 9,000
600 6,000
300 3,000
0 0
–300 –3,000
BRL USD EUR AUD CAD IDR GBP MXN TRY Other USD BRL EUR CNY CAD AUD GBP RUB Other
2,012 1,855 296 212 112 54 46 46 –286 165 20,388 7,302 6,017 2,759 1,674 1,300 1,116 839 2,636
Changes in currency rates compared to 2021 (Total SEK 4,513 M). Changes in currency rates compared to 2021 (Total SEK 44,031 M).
Translation effect when consolidating operating income in foreign Currency effect on net sales from inflows in foreign currency and
subsidiaries for Volvo Group is presented in the graph above. translation effect when consolidating net sales in foreign subsidiaries
for Volvo Group is presented in the graph above.
CREDIT RISKS
Financial credit risk

CREDIT RISKS The Volvo Group’s financial assets are to a large extent managed by Volvo
Group Treasury. All investments must meet the requirements of high
Credit risk is defined as the risk that the Volvo Group does not receive liquidity and low credit risk. According to the Volvo Group’s financial risk
payment for recognized accounts receivables and customer-financing policy, this normally includes using counterparties for investments and
receivables (commercial credit risk), that the Volvo Group’s investments derivative transactions with a credit rating better or equivalent to A– from
are unrealizable (financial credit risk) and that potential profit is not real- one of the well-established credit rating institutions or similar.
ized due to the counterparty not fulfilling its part of the contract when Cash and cash equivalents including marketable securities as of December
using derivative instruments (financial counterparty risk). 31, 2022 amounted to SEK 84 billion (62) and consists primarily of bank
account positions.
Read more in Note 18 Cash and cash equivalents.
POLICY Financial counterparty risk

The use of derivatives involves a counterparty risk, in that a potential loss
The objective of the Volvo Group’s credit risk management is to define, may not be possible to offset (in full or in part) against a potential gain if the
measure and monitor the credit exposure in order to minimize the risk of counterparty fails to fulfill its part of the contract. The Volvo Group is
losses deriving from credit to customers and suppliers, financial credit risk, actively working with limits per counterpart in order to reduce the risk for
counterparty risk and customer finance activities within Financial Services. high net amounts towards individual counterparts. To reduce the exposure
further the Volvo Group enters into master netting agreements, so called
ISDA agreements, with all counterparts eligible for derivative transactions.
Commercial credit risk The netting agreements provide the possibility for assets and liabilities to
The Volvo Group’s credit granting is steered by group policies and be offset under certain circumstances, such as in the case of the counter-
customer-classification rules. The credit portfolio should contain a distri- part’s insolvency. A Credit Support Annex (CSA) often accompanies the
bution among different customer categories and industries. The credit ISDA agreement. The CSA stipulates the terms and conditions under
risk is managed through active credit monitoring, follow-up routines and, which the two parties are required to make cash transfers to each other in
where applicable, product repossession. In addition to this, regular moni- order to further reduce the exposure from the net open positions. The net-
toring ensures that necessary allowances are made for expected credit ting agreements have no effect on the financial performance or the finan-
losses on financial assets. Risk management practices for Financial Ser- cial position of the Volvo Group, since derivative transactions are accounted
vices are presented in note 15 Customer-financing receivables and for for on a gross basis. Table 4:8 shows the effect of netting agreements and
Industrial Operations in note 16 Receivables. Moreover, note 15 includes cash transfers on the Volvo Group’s gross exposure from outstanding
information on gross exposure for customer-financing receivables by past interest and currency risk derivatives as of December 31, 2022.
due status and in note 16 accounts receivables, a gross exposure for
ead more in Note 30 Financial instruments about the Volvo Group’s gross
R
accounts receivables by past due status is presented in relation to allow- exposure from derivatives per type of instrument.
ance for expected credit losses.
The customer-financing receivables in the Volvo Group amounted to
net SEK 194 billion (152) on December 31, 2022. The credit risk of this
portfolio is distributed over a large number of retail customers and dealers.
Collateral is provided in the form of the financed products. In the credit
granting the Volvo Group strives for a balance between risk exposure and
expected return. Syndication of customer-financing receivables is made
in order to reduce concentration risk.
The Volvo Group’s accounts receivables as of December 31, 2022
amounted to net SEK 48 billion (41).
ead more in Note 15 Customer-financing receivables about Volvo Group’s
R
concentration of credit risk in Financial Services.
Read more in Note 16 Receivables.
4:8
The impact from netting agreements and cash transfers on the Volvo Group’s gross exposure from derivatives as of Dec 31, 2022
Netting
Gross amount agreements Cash transfers Net position Change
Interest and currency risk derivatives reported as assets 5,751 –4,399 –129 1,223 79%
Interest and currency risk derivatives reported as liabilities 8,975 –4,399 –4,387 189 98%
LIQUIDITY RISKS
A hybrid bond amounting to EUR 1.5 billion was issued in the Volvo
LIQUIDIT Y RISKS Group in 2014 in order to further strengthen the Volvo Group’s financial
position and prolong the maturity structure of the debt portfolio. The
Liquidity risk is defined as the risk that the Volvo Group would be unable hybrid bond is classified as a loan with an original duration of 61.6 years,
to finance or refinance its assets or fulfill its payment obligations. subordinated to all other financial liabilities currently outstanding.
The first tranche of this bond (EUR 0.9 billion) was repaid in 2020.
After publishing the Volvo Group report on the fourth quarter and full year
2022 a decision has been made to call the remaining tranche (EUR 0.6
POLICY billion) in March, 2023.
ead more in Note 14 Leasing about the maturity for non-current lease liabilities in
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The Volvo Group ensures sound financial preparedness by always keeping table 14:4.
a certain percentage of its sales in liquid assets, mainly as bank account ead more in Note 22 Liabilities about the maturity for non-current loans in
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positions in banks rated at least A- from one of the well-established credit table 22:3.
rating institutions or similar. A sound balance between current and
non-current debt maturities, as well as non-current committed credit
facilities, is intended to secure liquidity preparedness, and thus the Volvo 4:9
Group’s payment capability. Future cash flow including lease liabilities and derivatives
related to non-current and current financial liabilities1, 2
SEK bn
The Volvo Group’s cash and cash equivalents amounted to SEK 84 billion
(62) on December 31, 2022. In addition to this, granted but unutilized 0
credit facilities amounted to SEK 46 billion (42). Graph 4:9 discloses –10
expected future cash flows related to financial liabilities. Capital flow refers
–20
to expected payments of loans, lease liabilities and derivatives. Expected
interest flow refers to the future interest payments on loans, lease liabili- –30
ties and derivatives based on interest rates anticipated by the market. The
–40
interest flow is recognized within cash flow from operating activities. The
maturity structure of the unutilized credit facilities is disclosed in note 22, –50
in table 22:3. The predominant part of expected future cash flows that
–60
will occur in 2023 and 2024 is an effect of the Volvo Group’s normal busi-
ness cycle, with shorter duration in the portfolio within Financial Services –70
compared to Industrial Operations. –80
Financial Services measure the degree to which the duration of borrow
ing and lending matches. The calculation of the matching degree excludes –90
2023 2024 2025 2026 2027 2028 2029 or later
equity, which amounted to 8% in Financial Services. At year-end 2022,
the degree of such matching was 100% (99) for the segment Financial –72.4 –59.9 –36.2 –23.1 –10.2 –0.7 –8.4
Services, which was in line with the Volvo Group’s policy. Volvo Group –9.2 –5.5 –2.7 –1.0 –0.4 –0.1 –0.2
Treasury has, for practical as well as business reasons, the mandate to Capital flow Interest flow
mismatch their portfolio for Financial Services between a matching ratio
of 80–120%. At year-end 2022, the matching ratio was 103% (94). Any
gains or losses from the mismatch impact the segment Group functions & 1 In addition to derivatives included in graph 4:9 there are also derivatives in the
Volvo Group related to financial liabilities recognized as assets, which are expected
other within Industrial Operations. to give a future capital flow of SEK 1.7 billion (2.0) and a future interest flow of
SEK 2.9 billion (– 0.0).
2 T he interest payments related to the hybrid bond are included with an amount
of SEK 0.3 billion (0.6), which pertains to the period through the first call date
for the remaining tranche, in March 2023.
OTHER PRICE RISKS
OTHER PRICE RISKS POLICY
Commodity risks Changes in commodity prices are included in the Volvo Group’s product
Commodity risk refers to the risk that changed commodity prices will cost calculation. Increased commodity prices are therefore reflected in
affect the consolidated earnings within the Volvo Group. Procurement of the sales price of the final products. Purchasing agreements with com-
commodities such as steel, precious metals and electricity are made in the modity suppliers may also be long-term in nature or structured in a way to
Volvo Group on a regular basis where prices are set in the global markets. decrease the volatility in commodity prices.
5 Investments in joint ventures, associated companies and other shares and participations
accordance with the equity method is included in operating income since

ACCOUNTING POLICY the Volvo Group’s investments are business related in nature. For practical
reasons, some of the associated companies are included in the consoli-
dated financial statements with a certain time lag, normally up to one quarter.
Joint ventures
Dividends from joint ventures and associated companies are not included
Joint ventures are companies in which the Volvo Group has joint control
in the consolidated income. The carrying amount of investments in joint
together with one or more external parties. Investments in joint ventures
ventures and associated companies are affected by the Volvo Group’s
are recognized by applying equity method accounting. The Volvo Group's
share of the companies' net income, less depreciation of surplus values
most material holdings in joint ventures are VE Commercial Vehicles, Ltd.,
and dividends received. Investments in joint ventures and associated com-
(VECV) and cellcentric GmbH & Co. KG (cellcentric). Both investments
panies are also affected by the Volvo Group’s share of the companies' other
are joint ventures since common agreement is needed for important
comprehensive income and by the translation difference from translating
matters related to the governance in the joint ventures. The investment in
the companies' equity in the consolidation of the Volvo Group.
VECV aims at strengthening the Volvo Group’s position in the market in
When applying the equity method, losses recognized by joint ventures
India. cellcentric will develop, produce, and commercialize fuel-cell
or associates could indicate impairment and additional impairment losses
systems for use in heavy-duty trucks as the primary focus. Both VECV
might be recognized. For instance, a significant or prolonged decline in
and cellcentric are included in the Trucks segment. During 2022, the
the fair value of the shares is an indication of impairment. However, invest-
Volvo Group, Daimler Truck and the TRATON GROUP created a joint
ments accounted for in accordance with the equity method cannot
venture for charging infrastructure in Europe. The aim is to provide reliable
amount to a negative carrying value. The Group's share of losses are
and accessible high-performance charging stations for all battery electric
therefore not adjusted for, if the holding is of a negative amount. Addi-
heavy-duty vehicle fleet operators. The joint venture is called Milence and
tional losses are provided for to the extent that the Volvo Group has
is included in the Trucks segment.
incurred legal or constructive obligations to make payments on behalf of
the joint venture or the associated company.
Associated companies
Associated companies are companies in which the Volvo Group has a sig-
Other shares and participations
nificant influence. A strong indication of such influence is when the
Other shares and participations recognizes holding of shares in which the
Group’s holding is more than 20% but less than 50% of the voting rights.
Volvo Group does not hold a significant influence. This generally means
Investments in associated companies are recognized by applying equity
the Volvo Group’s holding of shares corresponds to less than 20% of the
method accounting. The ownership in the Chinese automotive manufac-
voting rights. Listed shares are recognized at fair value through other
turer Dongfeng Commercial Vehicles Co., Ltd (DFCV) is classified as an
comprehensive income since the shares are not held for trading. For
associated company and is included in the Trucks segment.
unlisted shares and participations, a fair value cannot be reasonably mea-
sured, hence these are measured at amortized cost. Earned or paid inter-
Equity method
est attributable to these assets is recognized in the income statement as
The Volvo Group’s share of the companies’ income/loss recognized
part of net financial items, in accordance with the effective interest
according to the equity method is included in the Volvo Group’s income
method. Dividends received attributable to these assets are recognized
statement as income/loss from investments in joint ventures and associ-
as income from other investments within operating income.
ated companies. Where appropriate, the income has been reduced by
depreciation of surplus values and the effect of applying different account- ead more in Note 30 Financial instruments, regarding classification and
R
valuation of financial instruments.
ing policies has been considered. Income from companies recognized in
Joint ventures
The Volvo Group's investments in joint ventures are listed below.
5:1
Investments in joint ventures Dec 31, 2022 Dec 31, 2022 Dec 31, 2021 Dec 31, 2021
Percentage holding Carrying value Percentage holding Carrying value
VE Commercial Vehicles, Ltd., (VECV) 45.6 2,860 45.6 2,618

cellcentric 50.0 7,622 50.0 6,678
Other holdings in joint ventures¹ 179 122
Investments in joint ventures 10,661 9,418
1 Other holdings in joint ventures include investments in World of Volvo AB, Force Réseau and Milence.
The following tables present summarized financial information for the Volvo Group’s joint ventures:
5:2
Summarized income statements 2022 2021
Other joint cellcentric Other joint
VECV cellcentric ventures Total VECV (10 months) ventures Total
Net sales 21,900 119 653 22,671 13,912 88 616 14,615

Operating income 1 640 –1,164 –49 –573 248 –1,053 7 –798
Interest income and similar credits 99 – – 99 57 – 0 57
Interest expense and similar charges –29 – – –29 –51 – 0 –51
Other financial income and expenses –1 –7 –12 –19 0 –4 –2 –6
Income taxes –251 – 4 –247 –85 – –2 –87
Income for the period2 458 –1,172 –56 –770 169 –1,057 4 –884
Other comprehensive income 3

–6 7 – 1 –13 3 1 –9
Total comprehensive income 452 –1,164 –56 –768 156 –1,054 5 –893
1 Depreciation and amortization of SEK 744 M (678) are included within operating income.
2 Income for the period in joint ventures includes depreciation of surplus values.
3 Including the Volvo Group’s share of other comprehensive income related to joint ventures. Translation differences from translating joint ventures’ equity in the Volvo
Group are excluded.
5:3
Summarized balance sheets Dec 31, 2022 Dec 31, 2021
Other joint Other joint
VECV cellcentric ventures Total VECV cellcentric ventures Total
Non-current assets 5,871 14,571 1,077 21,519 5,522 13,057 491 19,070
Marketable securities, cash and cash
equivalents 2,236 883 – 3,119 1,629 380 50 2,059
Other current assets 7,419 561 271 8,250 6,007 390 200 6,597
Total assets 15,526 16,014 1,347 32,888 13,158 13,827 741 27,726
Equity1 6,272 15,210 361 21,844 5,741 13,312 320 19,374
Non-current financial liabilities 133 317 – 450 527 – – 529
Other non-current liabilities 512 57 809 1,378 209 159 302 669
Current financial liabilities 6,192 7 – 6,199 4,666 – 20 4,686
Other current liabilities 2,417 423 177 3,017 2,014 355 100 2,469
Total equity and liabilities 15,526 16,014 1,347 32,888 13,158 13,827 741 27,726
1 Including translation differences from translating joint ventures’ equity in the Volvo Group.
Net financial position for the joint ventures (excluding post-employment benefits) amounted to SEK 1,833 M (1,575) as of December 31, 2022. As of
December 31, 2022, the Volvo Group’s share of contingent liabilities in its joint ventures amounted to SEK 110 M (106). Dividends received during
2022 from VECV amounted to SEK 44 M (26).
Associated companies
The Volvo Group’s investments in associated companies are listed below.
5:4
Investments in associated companies Dec 31, 2022 Dec 31, 2022 Dec 31, 2021 Dec 31, 2021
Percentage holding Carrying value Percentage holding Carrying value
Dongfeng Commercial Vehicles Co., Ltd (DFCV) 45.0 9,929 45.0 10,324
Other holdings in associated companies1 992 944
Investments in associated companies 10,922 11,268
1 Other holdings in associated companies include the investment in Blue Chip Jet II HB and WirelessCar Sweden AB.
The following tables present summarized financial information for the Volvo Group’s associated companies:
5:5
Summarized income statements 2022 2021
Other associated Other associated
DFCV companies Total DFCV companies Total
Net sales 33,211 3,892 37,103 57,045 3,818 60,863

Operating income –2,998 78 –2,920 880 141 1,022
Income for the period1 –1,952 57 –1,895 731 39 769
Other comprehensive income 2

–5 – –5 –5 – –5
Total comprehensive income –1,957 57 –1,900 726 39 764
1 Income for the period in associated companies includes depreciation/amortization of surplus values and internal transactions.
2 Including the Volvo Group’s share of other comprehensive income related to associated companies. Translation differences from translating the associated companies’
equity in the Volvo Group are excluded.
5:6
Summarized balance sheets Dec 31, 2022 Dec 31, 2021
Other associated Other associated
DFCV companies Total DFCV companies Total
Non-current assets 21,474 1,327 22,801 20,647 1,207 21,854

Current assets 30,651 1,743 32,394 43,733 1,432 45,164
Total assets 52,124 3,070 55,195 64,380 2,639 67,019
Equity¹ 20,957 1,390 22,348 21,684 1,229 22,913
Non-current liabilities 4,701 545 5,245 5,090 483 5,573
Current liabilities 26,467 1,135 27,602 37,606 927 38,533
Total equity and liabilities 52,124 3,070 55,195 64,380 2,639 67,019
1 Including the translation differences from translating associated companies’ equity in the Volvo Group.
During 2022 no dividend was recevied from DFCV (767).

Other shares and participations

The carrying amount of the Volvo Group’s holding of shares and partici
5:7
pations in other companies is disclosed in the table below.
Income/loss from investments in joint
ventures and associated companies 2022 2021
Read more in Note 30 Financial Instruments, regarding classification and
valuation of financial instruments.
Income/loss joint ventures
VECV 212 80
cellcentric –572 –522 5:8
Other companies –15 2
Holding of shares in listed Dec 31, 2022 Dec 31, 2021
Subtotal –374 –440 and non-listed companies Carrying value Carrying value
Income/loss associated companies
Holdings in listed companies1 6 51
DFCV 1 –969 362
Holdings in non-listed companies 599 488
Other companies 10 11
B/S Other shares and
Subtotal –959 373 participations 605 539
Revaluation, write-down and gain on
divestment of shares
Other companies – 13 1 Changes in fair value is measured through other comprehensive income and
amounts to SEK – 45 M (48).
Subtotal – 13
I/S Income/loss from investments in joint
ventures and associated companies² –1,333 –54
1 Income/loss includes an internal profit elimination of net SEK 37 M (37) and

an adjustment to Volvo Group Accounting policies of SEK –99 M (71).
2 Income/loss from investments in joint ventures include the Volvo Group’s share
of depreciation of surplus values of SEK – M (–) and associated companies
include depreciation of surplus values of SEK 37 M (37).
6 Segment reporting
Each business area is seen as a separate segment, except for the truck
ACCOUNTING POLICY business areas, Volvo Autonomous Solutions and Volvo Energy which are
included in the segment Trucks. This segment also comprises the associ-
Operating segments are reported in a manner consistent with the internal ated companies and joint ventures Dongfeng Commercial Vehicles, VE
reporting provided to the chief operating decision maker. The chief oper- Commercial Vehicles, cellcentric and Milence. The truck segment has
ating decision maker, identified as the Group Executive Board, makes shared operations for product development, purchasing and manufacturing
strategic decisions and is responsible for allocating resources and assess- which are highly integrated, and strategic allocation of resources is done to
ing financial performance of the operating segments. the total segment.
The Volvo Group comprises ten business areas: Volvo Trucks, Mack The segment Group functions & Other includes Arquus, Nova Bus and
Trucks, Renault Trucks, Volvo Autonomous Solutions, Volvo Energy, Volvo common business support functions such as Volvo Group IT and Volvo
Construction Equipment, Volvo Buses, Volvo Penta, Arquus and Volvo Group Real Estate. The costs of these business support functions are
Financial Services. shared between the different business areas based on utilization accord-
ing to principles set by the Volvo Group.
6:1
Con Group functions
struction Volvo & Other Industrial Financial Elimina- Volvo
2022 Trucks Equipment Buses Penta incl. eliminations Operations Services tions Group
Net sales, external

customers 307,344 99,786 17,387 17,108 14,888 456,513 16,966 – 473,479
Net sales, internal 3,192 475 1,196 994 –2,667 3,190 389 –3,579 0
I/S Net sales 310,536 100,261 18,583 18,102 12,221 459,703 17,355 –3,579 473,479
Expenses –277,235 –87,354 –18,235 –15,584 –15,100 –413,507 –16,508 3,581 –426,433
I/S Income from
investments in joint
ventures and associ-
ated companies –1,325 – 5 8 –21 –1,333 – – –1,333
I/S Operating income 31,976 12,907 353 2,527 –2,900 44,862 848 2 45,712
I/S Interest income
and similar credits 1,315 0 –307 1,008
I/S Interest expense
and similar charges –1,512 0 307 –1,205
I/S Other financial
income and expense –437 0 – –437
I/S Income after financial items 44,228 848 2 45,077
Other segment information

Depreciation, amortiza-
tion and impairment –14,914 –2,119 –687 –549 2,341 –15,928 –4,802 – –20,729
Restructuring costs 33 49 –6 1 – 77 0 – 77
Gains/losses from
divestments – – – – – – – – –
Investments in
in-/tangible assets 14,290 1,603 492 900 825 18,109 9,229 –19 27,320
B/S Investments in
joint v entures and
associated companies 20,599 0 100 46 837 21,583 – – 21,583
B/S Assets held
for sale – – – –
B/S Liabilities held
6:2
Con Group functions
struction Volvo & Other Industrial Financial Elimina- Volvo
Net sales, external

customers 228,573 91,722 12,884 13,710 12,186 359,075 13,140 – 372,216
Net sales, internal 2,309 309 767 727 –2,125 1,986 297 –2,283 0
I/S Net sales 230,881 92,031 13,652 14,437 10,061 361,062 13,437 –2,283 372,216
Expenses –203,496 –79,803 –13,577 –12,348 –12,001 –321,225 –10,149 2,285 –329,088
I/S Income from
investments in joint
ventures and associ-
ated companies –36 0 4 3 –24 –54 – – –54
I/S Operating income 27,349 12,228 78 2,092 –1,964 39,783 3,289 2 43,074
I/S Interest income

and similar credits 362 – –4 358
I/S Interest expense
and similar charges –1,172 0 4 –1,167
I/S Other financial
income and expense 926 – – 926
I/S Income after financial items 39,899 3,289 2 43,190
Other segment information

Depreciation, amortiza-
tion and impairment –13,317 –2,097 –716 –504 2,337 –14,297 –4,423 – –18,720
Restructuring costs 143 –3 18 0 0 159 –1 – 157
Gains/losses from
divestments 1,649 –5 – – 0 1,643 – – 1,643
Investments in
in-/tangible assets 10,708 1,338 347 750 590 13,732 9,302 –21 23,014
B/S Investments in
joint v entures and
associated companies 19,746 0 92 42 806 20,685 – – 20,685
B/S Assets held
B/S Liabilities held
6:3
Reporting by Net sales¹ Non-current assets2
geographical
region 2022 2021 2022 2021
Europe 191,165 158,070 83,351 74,941

of which Sweden 12,793 10,160 26,899 26,435
of which France 36,252 30,806 14,435 12,274
of which the UK 23,641 17,511 7,281 8,398
North America 137,154 98,771 27,472 22,459
of which USA 115,499 81,324 25,371 20,522
South America 51,734 30,424 2,780 2,064
of which Brazil 37,196 21,794 2,226 1,582
Asia 64,392 63,154 5,729 5,394
of which China 22,429 29,675 2,381 2,311
Africa and Oceania 29,033 21,797 3,256 2,662
1 The reporting of net sales by geographical region is based
I/S B/S Total 473,479 372,216 122,589 107,520 on where the delivery of the goods or services took place.
2 Non-current assets include tangible and intangible assets
excluding goodwill.
7 Revenue
portionate share of cost of goods sold. The remaining revenue is recog-

ACCOUNTING POLICY nized as a refund liability and the remaining cost of goods sold as a right of
return asset during the commitment period. If the vehicle is not returned
The recognized net sales in Industrial Operations pertain to revenues from the refund liability is recognized as revenue and the right of return asset is
sales of vehicles and services. Revenue from vehicles and services are recognized as cost of goods sold at the end of the commitment period.
recognized when control has been transferred from Volvo Group to the
customer. Control refers to the customers’ ability to use vehicles or ser- Services
vices in its operations and to obtain the associated cash flow related to Services include sale of spare parts, maintenance services, repairs, extended
the use. Vehicles and services are sold separately or as a combined offer. coverage, connectivity solutions and other aftermarket products. The con-
In combined offers where the vehicle and services are separable from trol of the service has been transferred to the customer when the Volvo
each other and the customer can benefit from the vehicle and the service Group incurs the associated cost to deliver the service and the customer
independently, the transaction price is allocated between vehicles and can benefit from the use of the delivered services. For spare parts, revenue
services based on stand-alone selling price according to price lists. is recognized at one point time, normally when it is delivered to the cus-
The recognized net sales in Financial Services pertain to interest tomer. For maintenance services, connectivity solutions and other after-
income related to finance leases and installment credits as well as income market products, revenue is recognized over time, i.e. normally during the
from operating lease contracts. Interest income is recognized during the contract period. When payment for maintenance contracts is received in
underlying contract period and income from operating leasing is recog- advance, the payment is recognized as a contract liability.
nized over the leasing period. Services also includes sales in Financial Services related to finance
lease, installment credits and operating leases. During 2022, revenue
Vehicles from Financial Services operations amounted to SEK 17,355 M (13,437).
Vehicles include sales of new trucks, buses, machines and engines as well ead more in Note 6 Segment reporting regarding net sales by segment and
R
as sales of used trucks, buses, machines, trailers, superstructures and geographical region.
special vehicles. A standard contractual warranty is included as part of the ead more in Note 14 Leasing about lease income on assets under operating
R
sales, read more in note 21 Other provisions about product warranty. The lease and finance income on customer-financing receivables.
customer can pay for the vehicle at the point of sale or defer the payment
by entering into agreements such as installment credits and finance lease.
Revenue is recognized at a specific point in time, when control of the
vehicle has been transferred to the customer, normally when the vehicle SOURCE OF ESTIMATION UNCERTAINT Y
has been delivered to the customer. The value of rebates, returns and vari- AND CRITICAL JUDGMENTS
able sales price have been considered as part of the revenue r ecognition.
If the sale of the vehicle is combined with a residual value commitment Sales with residual value commitments
(buybacks and tradebacks) the criterion of transferring control is based on When the Volvo Group enters into sales transactions of vehicles with resid-
if the customer has a significant economic incentive to exercise the option ual value commitments (buybacks and tradebacks) the judgment whether
to return the vehicle or not. A significant economic incentive exists if the control has been transferred from Volvo Group to the customer and at
repurchase price is higher than the assessed fair market value i.e. net real- what point in time revenue shall be recognized is critical. The judgment
izable value at the end of the residual value commitment period, or if the made is when a significant economic incentive exists or not for the cus-
historical returns indicate that it is probable that the customer will return tomer to return the vehicle at the end of the commitment period. The
the vehicle at the end of the commitment period. Thus, the control has not assessment of significant economic incentive is performed at the incep-
been transferred and the sales transaction is recognized as an operating tion of the contract and the outcome at the end of the commitment period
lease transaction. The revenue and expense are recognized over the resid- can differ from the initial assessment. Factors that are considered and
ual value commitment period in the income statement. Assets under requires judgment is the assessed fair market value i.e. net realizable value
operating leases, a residual value liability, and a deferred lease income are at the end of the residual value commitment period and historical returns.
recognized in the balance sheet. The asset is depreciated over the com- The future mix of vehicles and services is driven by customer demand for
mitment period and the deferred lease income is recognized as revenue products and solutions with lower environmental impact. The gradual shift
over the same period. The residual value liability amount remains into battery electric and fuel cell electric products, as well as supply chain
unchanged until the end of the commitment period. If the vehicle is and production disturbances imply to some extent uncertainties in the
returned at the end of the commitment period, the residual value liability assessment of fair market value.
is paid to the customer and the vehicle is reclassified from assets under

Read more in Note 13 Tangible assets for a description of residual value risks
operating lease to inventory. and the assessment of fair market value.
ead more in Note 14 Leasing about lease income on assets under
R
operating lease. Variable sales price
ead more in Sustainability notes and section EU Taxonomy regulation disclosures
R
In some sales transactions, the sales price is variable such as residual
about taxonomy eligible turnover. value guarantees. In assessing the variable sales price the expected value
method is used and revenue is recognized when it is highly probable that
If the customer is not considered to have a significant economic incentive a reversal will not occur. Both the expected value method and the assess-
to return the vehicle, the sales transaction is recognized in accordance ment of highly probable requires judgments to be able to make estimates.
with the right of return model. Revenue corresponding to the sales amount The estimates are made at the contract start with continuous assessment
less the buyback amount is recognized at the initial sale, as well as a pro- at each reporting period.
7:1
Disaggregation
Group functions
of revenue Construction Volvo & Other Industrial Financial Elimina- Volvo
Net sales per geographical region

Europe 137,177 30,194 6,034 9,417 4,893 187,715 6,705 –3,255 191,165
North America 92,582 22,294 6,521 3,695 6,540 131,632 5,752 –229 137,154
South America 38,254 6,491 3,154 635 –133 48,400 3,338 –5 51,734
Asia 23,988 34,228 1,372 3,302 714 63,604 788 0 64,392
Africa and Oceania 18,535 7,054 1,502 1,054 207 28,352 772 –90 29,033
I/S Net sales 310,536 100,261 18,583 18,102 12,221 459,703 17,355 –3,579 473,479
Net sales per product group

Vehicles 245,681 85,465 14,185 13,221 8,682 367,234 – –3,575 363,659
Services 64,855 14,796 4,398 4,881 3,539 92,469 17,355 –4 109,820
I/S Net sales 310,536 100,261 18,583 18,102 12,221 459,703 17,355 –3,579 473,479
Timing of revenue recognition

Revenue of vehicles and
services recognized at
the point of delivery 291,639 97,555 17,826 18,102 9,522 434,644 – –839 433,805
services recognized over
contract period 18,897 2,706 757 – 2,699 25,059 17,355 –2,740 39,674
I/S Net sales 310,536 100,261 18,583 18,102 12,221 459,703 17,355 –3,579 473,479
7:2
Disaggregation
Group functions
of revenue Construction Volvo & Other Industrial Financial Elimina- Volvo
Net sales per geographical region

Europe 107,798 29,524 5,886 7,464 3,623 154,296 5,929 –2,155 158,070
North America 65,308 16,583 4,089 2,949 5,427 94,356 4,519 –105 98,771
South America 23,569 3,951 882 474 –67 28,810 1,618 –4 30,424
Asia 21,360 36,427 1,371 2,698 455 62,310 843 – 63,154
Africa and Oceania 12,846 5,546 1,423 851 624 21,291 528 –20 21,797
I/S Net sales 230,881 92,031 13,652 14,437 10,061 361,062 13,437 –2,283 372,216
Net sales per product group

Vehicles 175,509 79,390 10,459 10,282 7,026 282,666 – –2,279 280,387
Services 55,373 12,641 3,192 4,155 3,035 78,396 13,437 –4 91,829
I/S Net sales 230,881 92,031 13,652 14,437 10,061 361,062 13,437 –2,283 372,216
Timing of revenue recognition

services recognized at
the point of delivery 213,656 89,780 13,073 14,437 7,628 338,575 – –223 338,352
services recognized over
contract period 17,225 2,251 578 0 2,432 22,486 13,437 –2,061 33,863
I/S Net sales 230,881 92,031 13,652 14,437 10,061 361,062 13,437 –2,283 372,216
7:3
Contract and right of return assets Of which due Of which due
Dec 31, 2022 within 12 months after 12 months Dec 31, 2021 Dec 31, 2020
Contract assets 3,800 1,325 2,475 3,779 5,945

Right of return assets 1,857 348 1,509 1,889 1,152
Parts return assets 201 149 52 167 138
Total 5,858 1,822 4,036 5,835 7,235
Contract assets are recognized within other receivables and include reve- Right of return assets and parts return assets represents the product cost
nue that has been recognized but not yet invoiced for work performed. for the assets that might be returned to the Volvo Group.
7:4
Contract and refund l iabilities Of which due Of which due
Dec 31, 2022 within 12 months after 12 months Dec 31, 2021 Dec 31, 2020
Contract liabilities
Deferred service revenue 21,939 4,446 17,493 18,155 15,826
Advances from customers 8,985 5,892 3,093 7,435 8,010
Other deferred income 2,237 1,829 408 1,928 1,570
Accrued expenses for dealer bonuses
and rebates 5,789 5,767 23 5,009 5,255
Refund liabilities 2,483 783 1,700 2,435 1,543
Total 41,433 18,716 22,717 34,962 32,204
Contract liabilities are recognized within other liabilities and include amounted to SEK 28,187 M (23,732) as of December 31, 2022. Approx-
advance payments received from customers, e.g. advance payments for imately 34% are expected to be recognized as revenue during 2023 and
service contracts and extended coverage, for which revenue is recognized the remaining 66% as revenue during 2024–2026. The change in con-
when the service is provided. Refund liabilities related to the right to return tract and refund liabilities are mainly due to increased deferred service
products and residual value guarantees are included with an amount that revenue. During 2022, revenue has been recognized with SEK 19,745 M
is expected to be paid to the customer if the vehicle or spare part is (16,692) that was included in the c ontract liabilities at the beginning of
returned. In service contracts, the revenue expected to be recognized the period.
over the remaining term of the contract for services not yet delivered
8 Other operating income and expenses
1 In 2021, a capital gain of SEK 1,653 M from the divestment of UD Trucks was
included.
8:1 Read more in Note 3 Acquisitions and divestments of operations.
Other operating income and 2 Including a provision regarding assets related to Russia.
expenses 2022 2021
Read more in Note 15 Customer-financing receivables.
Gains/losses on divestment 3 Read more in Note 16 Receivables.
of group companies1 – 1,643
4 Includes costs for claims arising from the European Commission’s 2016 antitrust
Change in allowances and write-offs for settlement decision and costs for a civil penalty from the National Highway Traffic
doubtful customer-financing receivables2 –3,412 –266 Safety Administration in the US.
Change in allowances and write-offs for Read more in Note 21 Other provisions.
other doubtful receivables3 –842 –263
Damages and litigations 4
–2,733 –775
Other income and expenses –387 –93
I/S Total –7,374 246
9 Other financial income and expenses
ACCOUNTING POLICY 9:1

In other financial income and expenses unrealized revaluation on deriva- Other financial income and
tives used to hedge interest rate exposure as well as realized result and expenses 2022 2021
unrealized revaluation on derivatives used to hedge future cash flow expo-
Unrealized revaluation of derivatives
sure in foreign currency are recognized. The derivatives are recognized at used to hedge interest rate exposure 18 924
fair value through the income statement and no hedge accounting is Realized result and unrealized revalua-
applied. The unrealized revaluation on derivatives used to hedge interest tion on derivatives used to hedge future
rate exposure is mainly related to the debt portfolio within Industrial cash flow exposure in foreign currency 1 32
Operations and customer-financing portfolio within Financial Services Financial instruments at fair value
where fluctuating interest rate levels has a major impact. through income statement 19 956
Read more in Note 1 Accounting policies about receivables and liabilities Exchange rate gains and losses
in foreign currency. on financial assets and liabilities –332 –56

Read more in Note 30 Financial instruments regarding the accounting Financial income and expenses
policy and effects on net income and cash flow for financial assets at fair related to taxes 107 281
value through the income statement. Costs for Treasury function,
credit facilities, etc. –231 –256
I/S Total1 –437 926
1 Other financial income and expenses attributable to financial instruments

amounted to SEK –313 M (900). The amount is specified in note 30 Financial
instruments in table 30:3.
10 Income taxes
SOURCE OF ESTIMATION UNCERTAINT Y

ACCOUNTING POLICY AND CRITICAL JUDGMENTS
Income tax for the period includes current and deferred taxes. Current Deferred taxes
taxes are calculated on the basis of the tax regulations prevailing in the The Volvo Group recognizes deferred tax assets related to tax-loss carry
countries where the group companies have operations. forwards. The deferred tax assets are recognized based on a thorough
Deferred taxes are recognized on differences that arise between the tax- assessment in order to ensure that it is probable that sufficient taxable
able value and carrying value of assets and liabilities as well as on tax-loss profits will be generated in the coming years that will enable the tax-loss
carryforwards. Deferred tax assets are recognized to the extent it is prob carryforwards to be utilized. The assessment is based on an evaluation of
able that they will be utilized against future taxable profits. business plans. In addition, the possibility to offset tax assets and tax liabil
Deferred tax liabilities related to temporary differences on investments ities and the fact that the major part of the tax-loss carryforwards is related
in subsidiaries, joint ventures and associated companies are recognized in to countries with long or indefinite periods of utilization is considered.
the balance sheet except when the Volvo Group controls the timing of the If deferred tax assets related to tax-loss carryforwards are not expected
reversal of the temporary difference related to accumulated undistributed to be realized based on current business plans, valuation allowances are
earnings and it is probable that a reversal will not be done in the foresee recognized. If actual results differ from the business plans, or if business
able future. plans for future periods are adjusted, changes in the valuation allowance
Tax laws in Sweden and certain other countries allow companies to defer may be required. Such recognitions and adjustments could have an
payment of taxes through allocations to untaxed reserves. In the Volvo impact on the financial position and the income for the period.
Group financial statements, untaxed reserves give rise to temporary differ-
ences which are recognized as deferred tax liabilities. Uncertainty over income tax treatments and claims
Tax liabilities are recognized for income tax charges that are probable as The Volvo Group regularly evaluates income tax positions to determine if a
a result of identified tax risks. Hence, when it is probable that the taxation tax liability or a contingent liability shall be recognized. The judgment is
authority or court will not accept an uncertain income tax treatment under based on several factors, such as changes in facts and circumstances, the
tax law, adjustments of the tax liability are made for the estimated out- progress of the case and experience in similar cases. The actual outcome of
come. Tax claims for which no adjustment of the tax liability is c onsidered income tax positions may deviate from the expected outcome and materi-
required are generally reported as contingent liabilities. ally affect future financial statements.
Read more in Note 24 Contingent liabilities and contingent assets.
10:1 10:3
Distribution of income taxes 2022 2021 Specification of deferred Dec 31, Dec 31,
tax assets and liabilities 2022 2021
Current taxes relating to the period –15,081 –9,132
Adjustment of current Deferred tax assets:
taxes for prior periods 12 393 Unused tax-loss carryforwards 1,208 1,066
Deferred taxes originated or Other unused tax credits 633 479
reversed during the period 2,712 –960 Intercompany profit in inventories 1,473 994
Remeasurements of deferred tax assets 249 –248 Write down of inventories 574 494
I/S Total income taxes –12,108 –9,947 Valuation allowance for
doubtful receivables 1,618 1,251
Provisions for warranties 3,941 3,241
Provisions for residual value risks 428 341
The Swedish corporate income tax rate amounted to 21% (21) in 2022.
Lease liabilities 1,300 1,146
Table 10:2 explains the major reasons for the difference between the
Provisions for post-
Swedish corporate income tax rate and the Volvo Group’s effective tax
employment benefits 2,415 3,186
rate, based on income after financial items.
Provisions for restructuring measures 29 50
Other deductible temporary
differences 8,915 6,563
10:2 Deferred tax assets before deduction
for valuation allowance 22,533 18,810
Reconciliation of effective tax rate % 2022 2021
Valuation allowance –692 –527
Swedish corporate income tax rate 21 21 Deferred tax assets after deduction
Difference between corporate tax for valuation allowance 21,841 18,283
rate in Sweden and other countries 4 3
Non-taxable income –1 –2 Netting of deferred tax
assets and liabilities –7,652 –7,336
Non-deductible expenses 3 0
B/S Deferred tax assets, net 14,189 10,947
Current taxes related to prior years 0 –1
Remeasurement of deferred taxes –1 2 Deferred tax liabilities:
Other differences 1 1 Accelerated depreciation on property,
Effective tax rate for the Volvo Group 27 23 plant and equipment 2,148 1,832
Accelerated depreciation
on leasing assets 2,362 2,138
Right-of-use assets, leased 1,243 1,104
The effective tax rate for the Volvo Group, as of December 31, 2022, was
mainly impacted by the country mix in the Volvo Group's earnings and the LIFO valuation of inventories 552 418
provisioning of assets related to Russia. Capitalized product and
software development 2,557 2,177
Untaxed reserves 1,693 2,239
Other taxable temporary differences 2,581 2,348
Deferred tax liabilities 13,137 12,255
Netting of deferred tax

assets and liabilities –7,664 –7,329
B/S Deferred tax liabilities, net 5,472 4,926
Deferred tax assets and liabilities, net 1

8,717 6,021
1 The deferred tax assets and liabilities are recognized in the balance sheet partially
on a net basis, after taking into account offsetting possibilities. Deferred tax
assets and liabilities have been measured at the tax rates that are expected to be
applied during the period when the asset is realized or the liability is settled,
according to the tax rates and tax regulations that have been resolved or enacted
at the balance sheet date.
The total valuation allowance for deferred tax assets amounted to SEK
692 M (527) as of December 31, 2022, whereof SEK 559 M (405) con-
10:5
sisted of an allowance for a tax credit in Brazil.
As of December 31, 2022, the Volvo Group’s gross unused tax-loss Changes in deferred tax assets
and liabilities, net 2022 2021
carryforwards amounted to SEK 4,638 M (4,096) pertaining to deferred
tax assets of SEK 1,208 M (1,066) recognized in the balance sheet. Out of Deferred tax assets and liabilities,
the total deferred tax assets attributable to unused tax-loss carryforwards, net, opening balance 6,021 7,330
SEK 505 M (685) pertained to France and SEK 338 M (76) to Canada. Recognized in income statement 2,961 –1,208
The gross unused tax-loss carryforwards will expire according to table
Recognized in other comprehensive
10:4. income, whereof:
Remeasurements of defined-
benefit pension plans –1,109 –1,699
10:4 Translation differences and other changes 844 1,598
Due date, unused tax-loss Dec 31, Dec 31, Deferred tax assets and liabilities,
carryforwards, gross 2022 2021 net, as of December 31 8,717 6,021
after 1 year 0 7
after 2 years 0 25
after 3 years 30 14 The cumulative amount of undistributed earnings in foreign subsidiaries,
after 4 years 14 11 which the Volvo Group currently intends to indefinitely reinvest outside
after 5 years 297 10 of Sweden and which no deferred income tax have been accounted for,
after 6 years or more 1 4,297 4,029 amounted to SEK 28 billion (28) at year end. Undistributed earnings
Total 4,638 4,096 pertaining to countries where the dividends are not taxable are excluded.

Read more in Note 4 Goals and policies in financial risk management about how
the Volvo Group handles currency exposure of equity.
1 Tax-loss carryforwards with long or indefinite periods of utilization were mainly
related to France and Canada. Tax-loss carryforwards with indefinite periods of
utilization amounted to SEK 2,904 M (3,524) which corresponded to 63% (86)
of the total unused tax-losses carryforward.
11 Non-controlling interest

Owners with a non-controlling interest have a limited ownership of shares Summarized income statement 2022 2021
and voting rights in a subsidiary, thereby also limited rights to the subsidi-
Net sales 19,838 24,319
ary's equity. Non-controlling interest equity is presented separately from
Operating income 731 1,515
equity attributable to owners of AB Volvo. In acquisitions, non-controlling
interests are valued either at fair value or to a proportionate share of the Income for the period 715 1,435
acquired company’s net assets. Ownership changes in non-controlling Other comprehensive income1 586 1,231
interests, not resulting in change of control, are recognized within equity. Total comprehensive income
for the period1 1,301 2,666
Dividend to non-controlling interest 0 606

The Volvo Group has a few non-wholly owned subsidiaries, of which Shan-
dong Lingong Construction Machinery Co. (Lingong), in China, is the larg-
est company with non-controlling interest. Owners with non-controlling
interests hold a 30% shareholding in the company. During 2022, the
profit allocated to the non-controlling interest in Lingong amounted 11:2
to SEK 214 M (430). The accumulated amount allocated to the non- Summarized balance sheet Dec 31, Dec 31,
controlling interest within equity of Lingong amounts to SEK 3,390 M 2022 2021
(3,000).
Non-current assets 2,794 3,166
The following tables present summarized financial information for
Marketable securities,
Shandong Lingong Construction Machinery Co.
cash and cash equivalents 4,933 4,831
Other current assets 16,679 17,918
Total assets 24,406 25,915
Non-current liabilities 2,311 86

Current liabilities 10,794 15,829
Total liabilities 13,105 15,915
Equity attributable to:

Owners of AB Volvo1 7,910 7,000
Non-controlling interest1 3,390 3,000
1 Includes exchange differences from translating equity in foreign subsidiaries in

the Volvo Group.
12 Intangible assets
prove the technical feasibility of completing the new product or software,

ACCOUNTING POLICY so that it will be available for use or sale, before its development expendi-
ture is recognized as an asset. In normal cases, this means that expendi-
Volvo Group applies the cost method for recognition of intangible assets, tures are capitalized only during the industrialization phase of a product
consisting of goodwill, capitalized product and software development development project. Other research and development costs are recog-
and other intangible assets. nized in the income statement as incurred.
ead more in Sustainability notes and section EU Taxonomy regulation
R The Volvo Group has developed a process for conducting product develop-
disclosures about taxonomy eligible capital expenditure. ment projects, which has six phases focused on separate parts of the project.
Every phase starts and ends with a reconciliation point, known as a gate, for
Goodwill which the criteria must be met for the project’s decision making committee to
Goodwill is recognized as an intangible asset with indefinite useful life. For allow the project to progress to the next phase. During the industrialization
non-depreciable assets such as goodwill, impairment tests are performed phase, the industrial system is prepared for serial production and the product
annually, as well as if there are indications of impairments during the year. is launched. A corresponding process is developed for software development.
Goodwill is allocated and tested at the level of cash-generating units which A substantial part of investments is directed towards low-carbon tech-
are identified as the Volvo Group’s operating segments. However, in the seg- nology, which is expected to increase over time. As the transition will take
ment Group Functions & Other three cash-generating units, Nova Bus, place gradually, the running fleets in the transportation sector are likely to
Designwerk and Arquus are included. If the carrying amount of the tested include different technologies for vehicle and machinery propulsion that
cash-generating unit exceeds the calculated recoverable amount, an impair- can be powered by renewable energy such as battery-electric, fuel
ment loss is recognized for the difference. The recoverable amount for a cell-electric or internal combustion powered by lower carbon fuels. Exist-
cash-generating unit is determined by the value in use, which is based on a ing products is therefore expected to generate economic benefits during
discounted cash flow model with a forecast period of five years. The valuation the transition period and be used during its remaining useful life.
is based on a business plan which is an integral part of the Volvo Group’s finan-
cial planning process and represents management’s best estimate of the Other intangible assets
development of the operations. The ongoing transition of the transport sector Other intangible assets include trademarks, distribution networks, licenses
towards new technologies and new service-based business models bring and other rights. When participating in industrial projects in partnership
business opportunities but also transitional risks for the Volvo Group, which with other companies the Volvo Group in certain cases pays an entrance fee
have been integrated into the strategy and business plans. Assumption of 2% to participate, which is capitalized as an intangible asset.
(2) long-term market growth beyond the forecast period and the expected
development of the operations in relation to this environment is a basis for the Amortization and impairment with finite useful life
valuation. In the model, the Volvo Group is expected to maintain stable capital Intangible assets with finite useful life are amortized on a straight line
efficiency over time. Other parameters considered in the calculation are oper- basis over their estimated useful life. Amortization is based on the cost of
ating income, mix of products and services and the shift towards electrified the assets, adjusted by impairments when applicable and estimated useful
and other lower emission technology vehicles, expenses and level of capital lives. Amortization is recognized in the respective function to which it
expenditures. Macroeconomic risks and opportunites are reflected in the esti- belongs, meaning that amortization of product development is part of the
mated future cash flows for each cash-generating unit. The Volvo Group uses research and development expenses in the income statement. Impair-
a discount rate at 10% (10) before tax for 2022. ment tests for amortizable assets are performed if there are indications of
In 2022, the recoverable amount of Volvo Group’s operations exceeded impairment. In addition, impairment tests are performed annually for cap-
the carrying amount for all cash-generating units, thus no impairment was italized development cost for products and software not yet in use by cal-
recognized. The Volvo Group has also analyzed whether a negative adjust- culating the recoverable amount. The recoverable amount is the higher of
ment of several percentage points on the used assumptions for discount the fair value less costs of disposal and the value in use. The value in use is
rate and operating income would result in impairment for goodwill, how- measured as the discounted future cash flows, which the asset is expected
ever none of the cash-generating units would be impaired as a result of to generate either by itself or from the lowest cash-generating unit to
this analysis. The operating parameters applied in the valuation are based which the asset belongs. If the recoverable amount is less than the carry-
on management’s strategy and could indicate higher value than historical ing amount, an impairment is recognized and the carrying amount of the
performance for each cash-generating unit. Furthermore, the Volvo Group asset is reduced to the recoverable amount.
is operating in a cyclical industry why performance could vary over time.
Headroom differs between the cash-generating units and they are sen-
sitive to changes in the assumptions described above to a varying degree. SOURCE OF ESTIMATION UNCERTAINT Y
Therefore, the Volvo Group continuously follows the performance of the AND CRITICAL JUDGMENTS
cash-generating units whose headroom is dependent on the fulfillment of
the Volvo Group’s assessments. Instability in the recovery of the market Impairment of goodwill and other intangible assets
and volatility in interest and currency rates may lead to indications of a When conducting impairment tests of goodwill and other intangible assets,
need for impairment. The most important factors for the future operations estimates have to be made to determine the recoverable amounts of
of the Volvo Group are described in the Volvo Group’s operating seg- cash-generating units. The recoverable amount is based upon manage-
ments, as well as in the Risk management section. ment’s projections of future cash flows and are to a varying degree sensitive
to changes in assumptions and the business environment. The broadening of
Research and development the customer offer with focus to switch to more sustainable solutions accel-
Expenditures for the development of new products and software are recog- erates investments in research and development. The magnitude of invest-
nized as intangible assets if such expenditures, with a high degree of cer- ments and the assessment of future useful life is uncertain due to technology
tainty, will result in future economic benefits for the company. Intangible and infrastructure development, emission regulations, government incen-
assets are amortized over its estimated useful life. tives and customer demand. While management believes that estimates of
The rules require stringent criteria to be met for these development future cash flows and other assumptions made are reasonable, there are
expenditures to be recognized as assets. For example, it must be possible to uncertainties which could materially affect the valuations.
12:1
Intangible assets as of Dec 31, 2022 Capitalized product and Other intangible
Goodwill software development assets Total
Acquisition cost
Opening balance 2022 23,924 49,723 6,833 80,480
Investments – 4,786 604 5,390
Sales/scrapping – –34 –67 –102
Acquired and divested operations1 146 8 98 251
Translation differences 1,567 250 379 2,196
Reclassification at divestment1 – – – –
Reclassifications and other – 20 25 45
Acquisition cost as of Dec 31, 2022 25,636 54,753 7,872 88,261
Accumulated amortization and impairment
Opening balance 2022 – –38,325 –5,086 –43,411
Amortization – –2,852 –118 –2,970
Impairment – – –1 –1
Sales/scrapping – 21 67 88
Acquired and divested operations1 – –1 – –1
Translation differences – –204 –218 –422
Reclassification at divestment1 – – – –
Reclassifications and other – – – –
Accumulated amortization and impairment as of Dec 31, 2022 – –41,361 –5,356 –46,717
B/S Carrying amount as of Dec 31, 2022 25,636 13,393 2,516 41,544
12:2
Intangible assets as of Dec 31, 2021 Capitalized product and Other intangible
Goodwill software development assets Total
Acquisition cost
Opening balance 2021 22,228 46,661 6,846 75,735
Investments – 3,078 644 3,722
Sales/scrapping – –137 –8 –144
Acquired and divested operations1 –236 –4,120 –2,627 –6,983
Translation differences 692 85 129 906
Reclassification at divestment1 1,229 4,147 1,960 7,336
Reclassifications and other 11 9 –110 –91
Acquisition cost as of Dec 31, 2021 23,924 49,723 6,833 80,480
Accumulated amortization and impairment
Opening balance 2021 – –35,725 –5,432 –41,157
Amortization – –2,659 –135 –2,793
Impairment – – – –
Sales/scrapping – 126 7 133
Acquired and divested operations1 – 2,828 1,837 4,664
Translation differences – –67 –101 –168
Reclassification at divestment1 – –2,827 –1,365 –4,192
Reclassifications and other – –2 104 102
Accumulated amortization and impairment as of Dec 31, 2021 – –38,325 –5,086 –43,411
B/S Carrying amount as of Dec 31, 2021 23,924 11,399 1,748 37,070
1 Read more in Note 3 Acquisitions and divestments of operations, for a description of acquired and divested operations as well as assets and liabilities held for sale.
12:3 12:4
Goodwill per cash-generating unit Dec 31, 2022 Dec 31, 2021 Estimated useful life
Trucks 13,237 12,620 Trademarks Max 5 years
Construction Equipment 9,814 8,923 Distribution networks 10 years
Buses 865 826 Product and software development 3–8 years
Volvo Penta 382 356 Other intangible assets 3–5 years
Other cash-generating units 1,337 1,198
Total goodwill value 25,636 23,924
13 Tangible assets
may also be subject to increased risks from physical weather events

ACCOUNTING POLICY depending on climate developments. These risks are monitored and
reflected when estimating the useful life. The depreciation is recognized
The Volvo Group applies the cost method for measurement of tangible in the respective function to which it belongs. Impairment tests are per-
assets, consisting of property, plant, equipment and investment property formed if there are indications of impairment by calculating a recoverable
as well as assets under operating leases. amount which is the higher of the asset’s fair value less cost of disposal
Buildings include owner-occupied properties and investment proper- and its value in use.
ties. Investment properties are properties owned for the purpose of
obtaining rental income and appreciation in value. Investment properties
are recognized at cost. For disclosure purposes, information regarding the 13:1
estimated fair value of investment properties is based on an internal dis-
counted cash flow projection as relevant observable market inputs for the Estimated useful life
assets are not available. The required return is based on current property Type-bound tools 3–8 years
market conditions for comparable properties in comparable locations. Operating leases, rental fleet 3–5 years
Hence, the applied valuation method to measure fair value is classified as
Sales with residual value commitments 3–5 years
level 3 of the fair value hierarchy and there have not been any changes in
Machinery and equipment 5–20 years
valuation method during the year. Land contains land and land improve-
Buildings and investment properties 20–50 years
ments. Machinery and equipment consist of production related assets
Land improvements 20 years
such as machinery, type-bound tools and other equipment. Investments
in property, plant and equipment will increase in connection with building
up capacity for electrified and other lower emission technology vehicles.
However, both electric trucks and trucks with combustion engines can be
produced on the same assembly lines, thus limiting the investments
needed for this transition in the industrial system. Construction in prog- SOURCE OF ESTIMATION UNCERTAINT Y
AND CRITICAL JUDGMENTS
ress are assets under construction and advanced payments. Right-of-use
assets relates to lease contracts with the Volvo Group as a lessee. Impairment of tangible assets
Assets under operating leases are mainly owned by the Volvo Group. Impairment tests are performed if there is any indication that a tangible
These transactions are accounted for as operating lease transactions and asset has been impaired. The impairment tests are based on estimation of
consists of contractual operating lease agreements with customers the recoverable amount of the asset, or the cash-generating unit to which
within Financial Services and rental fleet which are assets used in a fleet the asset belongs. To determine the recoverable amount, projections of
for rental business within Industrial Operations. Some rental fleet assets future cash flows are used, which are based upon internal business plans
are leased by the Volvo Group and later sub-leased to customers as oper- and forecasts. The ongoing transition of the transport sector towards new
ating leases. Sales with residual value commitments within Industrial technologies with electrified and other lower emission technology vehicles
Operations are also recognized within assets under operating leases. bring uncertainties regarding current and future investments in production
Read more in Note 7 Revenue about sales with residual value commitments. facilities as well as estimated useful life. Also, some of the production sites
are located in areas with physical climate risks and may in the long run be
ead more in Note 14 Leasing about right-of-use assets and assets under
R
operating leases. subject to increased stress from physical weather events. Physical risks
bring uncertainties when estimating useful life and indication of impair-
ead more in Sustainability notes and section EU Taxonomy regulation
R ment. While management believes that estimates of future cash flows and
disclosures about taxonomy eligible capital expenditure.
other assumptions made are reasonable, there are uncertainties which
could materially affect the valuations.
Depreciation and impairment
Property, plant, equipment and investment property are depreciated over
Residual value risks
their estimated useful lives. Land is not depreciated. Depreciation is rec-
Volvo Group is exposed to residual value risks related to assets under
ognized on a straight-line basis based on the cost of the assets, adjusted
operating leases which are the risks that the Volvo Group in the future
by residual value when applicable, and estimated useful lives. Right-of-
would have to dispose used vehicles at a loss if the price development of
use assets are generally depreciated over the lease term on a straight-line
these products is worse than what was expected when the contracts
basis. Assets under operating leases are depreciated on a straight-line
were entered. The assessment of residual value risks is based upon an
basis over the contract period. During the contract period, the depreciable
estimation of the used vehicle’s future net realizable value (fair market
amount is adjusted by accelerated depreciation and/or write-downs. The
value) and a declined value may negatively affect the Volvo Group’s oper-
adjustment is recognized through the income statement to correspond to
ating income. High inventories in the truck industry and the construction
estimated future net realizable value to continuously reflect potential
equipment industry and low demand may have a negative impact on the
residual value risks at the end of the contract period. The net realizable
prices of new and used vehicles. The estimated future net realizable value
value is impacted by value of optional equipment, mileage, current condi-
of the vehicles at the end of the contract period is monitored individually
tion, expected future price development, change of market conditions
on a continuing basis. In monitoring the estimated net realizable value of
including the shift towards electrified and other lower emission technol-
each vehicle, management considers current price level of the used vehi-
ogy vehicles, alternative distribution channels, inventory lead-time, repair
cle, supply chain and production disturbances and the transition to elec-
and reconditioning costs, handling costs, indirect costs associated with
trified and other lower emission technology vehicles which imply to some
the sale of used vehicles and legislative demands. Some of the locations
extent uncertainties in the assessment.
Reclassifications Investment properties

Reclassifications and other presented in the tables 13:2 and 13:3 mainly The acquisition value of investment properties at year-end amounted to
consist of construction in progress, rental fleet and assets related to sales SEK 93 M (95). Reclassifications amounted to SEK 0 M (1). Accumulated
with residual value commitments (buyback and tradebacks). depreciation amounted to SEK 39 M (38) at year-end, of which SEK 3 M
For construction in progress, reclassification occurs when the asset is (4) refers to 2022. The net carrying value amounted to SEK 54 M (57).
available for use by transferring the assets to the respective category The estimated fair value of investment properties amounted to SEK 102 M
within property, plant and equipment. (102) at year-end and 97% (97) of the area available for lease was leased
For rental fleet and sales with residual value commitments, reclassifi- out during the year. Operating income was affected by rental income from
cations occur when the vehicle is sold or rented out to customers by trans- investment properties that amounted to SEK 11 M (10) and direct costs
ferring the vehicle from inventory to assets under operating leases. If the that amounted to SEK 1 M (6).
vehicle is returned by the end of the residual value commitment period or
the leasing period, the vehicle is reclassified back to inventory.
13:2
Tangible assets Property, plant, equipment Assets under operating
as of Dec 31, 2022 and investment property leases¹
Sales w.
residual
Machinery Construc- Right- value
and equip- tion in of-use Operating Rental commit-
Buildings Land ment progress assets¹ leases fleet ments² Total
Acquisition cost
Opening balance 2022 34,705 7,107 82,209 8,792 10,965 28,770 4,660 25,095 202,304
Investments 498 103 2,575 8,125 1,475 9,155 – – 21,930
Sales/scrapping –173 –91 –1,866 –39 –521 –9,540 – – –12,230
Acquired and divested operations³ – – 22 3 –1 – 13 – 37
Translation differences 2,880 583 5,150 710 907 2,699 433 2,042 15,403
Reclassified at divestments³ – – – – – – – – –
Reclassifications and other 1,775 205 3,403 –5,318 679 657 –357 304 1,347
Acquisition costs as of Dec 31, 2022 39,685 7,906 91,493 12,273 13,504 31,740 4,749 27,442 228,792
Accumulated depreciation
and impairments
Opening balance 2022 –18,516 –1,406 –64,446 – –5,006 –9,131 –1,568 –7,856 –107,930
Depreciation –1,333 –112 –4,376 – –2,144 –4,741 –677 –3,039 –16,423

Impairment –448 –30 –165 –3 –14 20 –4 –691 –1,336
Sales/scrapping 130 21 1,730 – 450 4,588 – – 6,918
Acquired and divested operations³ – – –7 – 1 – –5 – –11
Translation differences –1,527 –109 –4,011 – –425 –843 –145 –642 –7,701
Reclassified at divestments³ – – – – – – – – –
Reclassifications and other 4 –2 14 – 34 –241 841 3,722 4,372
Accumulated depreciation and
impairments as of Dec 31, 2022 –21,691 –1,638 –71,262 –3 –7,105 –10,348 –1,558 –8,506 –122,111
Carrying amount as of Dec 31,
B/S
2022 17,994 6,268 20,231 12,270 6,399 21,392 3,191 18,936 106,681
1 Read more in Note 14 Leasing about right-of-use assets and assets under operating leases.
2 Read more in Note 7 Revenue about sales with residual value commitments.
13:3
Tangible assets Property, plant, equipment Assets under operating
as of Dec 31, 2021 and investment property leases¹
Sales w.
residual
Machinery Construc- Right- value
and equip- tion in of-use Operating Rental commit-
Buildings Land ment progress assets¹ leases fleet ments² Total
Acquisition cost
Opening balance 2021 31,655 6,544 75,964 6,617 9,452 27,734 4,701 23,332 185,998
Investments 371 110 2,031 6,297 1,211 9,271 – – 19,292
Sales/scrapping –271 –63 –1,363 – –707 –10,063 – – –12,468
Acquired and divested operations³ –8,160 –5,809 –6,964 –102 –648 – 2 –379 –22,060
Translation differences 1,301 189 2,234 334 414 1,585 204 807 7,068
Reclassified at divestments³ 8,460 5,862 7,389 168 831 – – 363 23,074
Reclassifications and other 1,350 275 2,919 –4,522 411 242 –247 973 1,400
Acquisition cost as of Dec 31, 2021 34,705 7,107 82,209 8,792 10,965 28,770 4,660 25,095 202,304
Accumulated depreciation
and impairments
Opening balance 2021 –16,688 –1,276 –59,656 0 –3,498 –8,511 –1,632 –7,662 –98,923
Depreciation –1,182 –92 –4,061 – –1,931 –4,320 –704 –2,995 –15,286

Impairment – – 1 – 1 –35 5 –613 –640
Sales/scrapping 182 7 1,267 – 536 4,601 – – 6,593
Acquired and divested operations³ 5,161 194 5,954 – 316 – –2 57 11,680
Translation differences –714 –39 –1,717 – –154 –491 –64 –254 –3,433
Reclassified at divestments³ –5,285 –199 –6,251 – –376 – – –57 –12,168
Reclassifications and other 10 –1 16 – 100 –375 828 3,668 4,247
Accumulated depreciation and
impairments as of Dec 31, 2021 –18,516 –1,406 –64,446 – –5,006 –9,131 –1,568 –7,856 –107,930
B/S Carrying amount as of Dec 31,
2021 16,189 5,701 17,763 8,792 5,959 19,638 3,092 17,239 94,374
1 Read more in Note 14 Leasing about right-of-use assets and assets under operating leases.
2 Read more in Note 7 Revenue about sales with residual value commitments.
14 Leasing
depreciation and impairment, if needed. The cost of an RoU asset contains

ACCOUNTING POLICY the initial amount of the lease liability adjusted for any lease payments
made before the commencement date, less any lease incentives received.
Volvo Group as the lessor Moreover, any initial direct costs are included, as well as an estimate of
Leasing contracts are defined in two categories, operating and finance costs to be incurred in dismantling, removing or restoring the underlying
leases, depending on the contracts’ financial implications. asset. The leased asset is depreciated on a straight-line basis over the
Operating leases are offered from Financial Services (contractual oper- lease term, or over the useful life of the underlying asset if the ownership is
ating leases) and from Industrial Operations (rental fleet agreements). transferred to the Volvo Group at the end of the lease term. The lease
Sales with residual value commitments (buybacks and tradebacks) are expense is recognized as depreciation of the asset within operating income
also accounted for as operating lease transactions when the customer has and interest expense within the finance net. Payments made are distributed
a significant economic incentive to exercise the option to return the vehicle between interest paid and amortization of the lease liability.
and the control therefore has not been transferred to the customer. Oper- Lease contracts with the Volvo Group as the lessee are primarily con-
ating lease agreements are recognized as tangible assets in assets under tracts for real estate (such as office buildings, warehouses and dealer
operating leases and are valued at cost less accumulated depreciation and premises), company cars and production related assets. For real estate
impairment, if needed. The cost of an asset comprises the acquisition value and company car leases, service components are normally a considerable
and any initial direct costs related to the contract. Depreciation of the asset portion of the contracts and are therefore separated. The service compo-
is recognized on a straight-line basis over the contract period. During the nents are recognized as operating expenses and not included in the RoU
period the depreciable amount is adjusted through the income statement asset and the lease liability. For other lease contracts, both the leased
by depreciations or write-downs to correspond to the estimated future asset and services are included in the RoU asset and the lease liability.
realizable value and reflect residual value risks at the end of the contract If a lease contract includes variable lease payments not dependent on
period. Lease income is equally distributed over the contract period and an index or rate, or include a low value asset or has a lease term that is
recognized within net sales. twelve months or less, the lease payments are recognized as operating
Read more in Note 7 Revenue, about sales with residual value commitments. expenses as they occur.
ead more in Note 13 Tangible assets, about residual value risks related to assets
R
under operating lease.
Finance leases are offered from Financial Services. As Industrial Opera- AND CRITICAL JUDGMENTS
tions manufacture the vehicles which are leased from Financial
Measurement of lease liabilities and right-of-use assets
Services to the customers, the Volvo Group is acting as a manufacturer
When entering a lease contract, judgments related to contract scope,
lessor. Hence, a finance lease asset gives rise to a selling profit which is
lease term and interest rate to be used when discounting future lease pay-
recognized within Industrial Operations. Finance lease contracts are
ments are made which affect the measurement of the lease liability and
mainly recognized as non-current and current customer-financing receiv-
the RoU asset.
ables within Financial Services. The asset is measured at an amount equal
Assessment of contract scope includes judgments whether a leased
to the net investment in the finance lease contract corresponding to the
asset and/or a service component is identified in the contract. In com-
gross investment (future minimum lease payments and unguaranteed
bined contracts, the total contract amount is allocated between the
residual value) discounted with the rate in the finance lease contract and
leased asset and the service by using a market stand-alone price.
reduced by unearned finance income and allowance for expected credit
When determining the lease term of a contract, judgments are also
losses. Assessment of allowance for expected credit losses is reflected in
required. The lease term includes the non-cancellable period. If the Volvo
the valuation of customer-financing receivables and recorded at initial
Group is reasonably certain to use an option to extend the lease, or not to
recognition and reassessed during the contract period. Lease income is
use an option to terminate the lease in advance, this is also considered.
recognized as interest income within net sales in Financial Services. Vari-
The contracts contain a range of different conditions. Extension and ter-
able lease payments not dependent on an index or rate are recognized as
mination options are mainly related to real estate leases. Thus, all relevant
income as they occur. Payments received from finance lease contracts are
facts and circumstances that create an economic incentive to include
distributed between interest income and amortization of the receivable.
optional periods are evaluated. The importance of the underlying asset in
Read more in Note 15 Customer-financing receivables, about finance leases. the operations and its location, availability of suitable alternatives, signifi-
cant leasehold improvements, level of rentals in optional periods com-
Volvo Group as the lessee pared to market rates as well as past practice are examples of factors
Lease contracts are recognized as right-of-use (RoU) assets as well as included in the assessment. Lease terms are negotiated on an individual
interest-bearing lease liabilities in the balance sheet. Lease liabilities are basis and are reassessed if an option is exercised.
recognized within other loans and are measured by the present value of Judgments are also required to determine the interest rate when dis-
future lease payments. The lease payments are discounted by using a rate counting future lease payments and whether the interest rate implicit in
reflecting what the Volvo Group would have to pay to borrow funds to the lease can be readily determined and thereby used, or if the Volvo
acquire a similar asset, with similar collateral and similar term. RoU assets Group’s incremental borrowing rate should be used.
are presented as tangible assets and are valued at cost less accumulated
Volvo Group as the lessor Volvo Group as the lessee
14:1 14:3
Lease income Dec 31, Dec 31, Lease liabilities Dec 31, Dec 31,
2022 2021 2022 2021
Finance leases Non-current lease liabilities 4,806 4,469

Finance income on customer- Current lease liabilities 1,777 1,632
financing receivables 2,766 2,516 Total lease liabilities 6,583 6,101
Total 2,766 2,516
Operating leases
Lease income on assets under
operating lease 11,317 10,937
Total 11,317 10,937 14:4
Non-current lease liabilities maturities, SEK M
During 2022, the profit from sale of vehicles subject to finance leases
amounted to SEK 6,280 M (3,624) and was recognized within Industrial
Operations.
As of December 31, 2022, future lease income from non-cancellable
finance and operating leases (minimum lease fees excluding sales with 2024 2025 2026 2027 2028 2029 or later
1,435 1,044 664 478 307 878
residual value commitments) amounted to SEK 89,441 M (77,181).
Read more in Note 15 Customer-financing r eceivables about finance leases.
During 2022, total cash outflow related to leases amounted to SEK 3,162 M
(2,922), with a distribution of SEK 888 M (834) within operating cash
flow and SEK 2,274 M (2,088) within financing activities.
14:2
Maturity analysis of lease Finance Operating
payments receivable leases leases
2023 24,321 8,765

2024 17,822 5,998
2025 12,738 3,758
2026 7,613 1,750
2027 3,711 968
2028 or later 1,660 337
Total undiscounted lease payments 67,865 21,576
Unguaranteed residual value 1,231

Unearned finance income –5,098
Allowance for expected credit losses –4,598
Customer-financing receivables
(current and non-current) 59,400
14:5
Right-of-use assets Asset under
as of Dec 31, 2022 Machinery operating lease
and Company and rental
Buildings Land equipment cars fleet1 Total
Acquisition cost
Opening balance 2022 8,048 674 967 1,276 423 11,388
Additions to right-of-use assets2 1,881 37 340 281 11 2,550
Acquisition cost as of Dec 31, 2022 9,929 711 1,307 1,557 434 13,938
Accumulated depreciation and impairments

Opening balance 2022 –3,550 –125 –510 –821 –157 –5,163
Depreciation and impairment –1,494 –39 –232 –393 –63 –2,221
Other changes –90 2 3 144 38 97
Accumulated depreciation and impairments as of Dec 31,
2022 –5,134 –162 –739 –1,070 –182 –7,287
Carrying amount as of Dec 31, 2022 4,795 549 568 487 252 6,651
Right-of-use assets Asset under

as of Dec 31, 2021 Machinery operating lease
and Company and rental
Buildings Land equipment cars fleet1 Total
Acquisition cost
Opening balance 2021 6,841 579 801 1,231 439 9,891
Additions to right-of-use assets2 1,207 95 166 45 –16 1,497
Acquisition cost as of Dec 31, 2021 8,048 674 967 1,276 423 11,388
Accumulated depreciation and impairments

Opening balance 2021 –2,341 –99 –366 –693 –141 –3,640
Depreciation and impairment –1,313 –29 –190 –399 –64 –1,995
Other changes 104 3 46 271 48 472
Accumulated depreciation and impairments as of Dec 31, 2021 –3,550 –125 –510 –821 –157 –5,163
Carrying amount as of Dec 31, 2021 4,498 549 457 455 266 6,225
1 Refers to assets leased by the Volvo Group which are later sub-leased to customers as operating lease.
2 Additions to RoU assets mainly relate to new lease contracts signed.
14:6
Recognized in the income statement 2022 2021
Interest expense on lease liabilities within Financial Services –3 –1

Depreciation and impairment of right-of-use assets –2,221 –1,995
Short term lease expense –528 –462
Low value asset expense –66 –91
Variable lease expense –41 –39
Income from sub-leasing right-of-use assets 168 155
Gains or losses arising from sale and leaseback transactions – 13
Gains or losses on right-of-use assets –2 5
Recognized in operating income –2,693 –2,415
Interest expense on lease liabilities within Industrial Operations –252 –237

Recognized in net financial items –252 –237
15 Customer-financing receivables
equipment. However, in the case of customer default, the value of the

ACCOUNTING POLICY repossessed commercial vehicles and equipment may not necessarily
cover the outstanding financed amount. In order to mitigate this risk,
Installment credits, dealer financing and other receivables within customer- Financial Services has strong portfolio management processes based on
financing receivables are held as part of a business model whose objective prudent credit approval, active monitoring of individual loan performance,
is of collecting contractual cash flows. The contractual cash flows are utilization of in-house and external collections, portfolio segmentation
solely payments of principal and interest and are measured at amortized analysis, and on-going monitoring of the economic, p olitical and industry
cost in accordance with the effective interest method. Finance lease con- conditions in each market. In addition, other credit enhancements such as
tracts are valued at amortized cost, for further information on recognition down payments, personal guarantees, credit insurance, liens on other
and classification see note 14 Leasing. property owned by the borrower etc. may be required at the time of origi-
The Volvo Group is applying the simplified expected credit loss model nation or when there are signs of impairment. When customer-financing
for customer-financing receivables, under which the loss allowance is receivables exceed 90 days of overdue collateral repossession is initiated,
measured at an amount equal to lifetime expected credit losses. The although there may be circumstances where repossession is initiated earlier.
allowance is recorded at initial recognition and is reassessed during the When the collateral is repossessed, the net realizable value is established,
contract period. and the vehicle is transferred to inventory and becomes part of the Volvo
Interest income on customer-financing receivables is recognized within Group’s normal business activity of selling used vehicles and equipment
net sales, mainly within Financial Services. Changes to the allowance for and the expected loss on the customer-financing receivable is written off.
expected credit losses are recognized in other operating income and expense. If repossession has not occurred on customer-financing receivables
exceeding 180 days of overdue the expected loss on the receivable is written
off. Financial Services continues to engage in enforcement activity on all
SOURCE OF ESTIMATION UNCERTAINT Y customer financing-receivables written off during the year to attempt to
AND CRITICAL JUDGMENTS recover the contractual amount not previously received from the customer.
ead more in Note 4 Goals and policies in financial risk management,
R
Allowance for expected credit losses
for a description of credit risks, interest risks and currency risks.
The assessment of allowances for expected credit losses on customer-
financing receivables is dependent on estimates including assumptions
As of December 31, 2022, the total allowances for impairment in Finan-
regarding past dues, repossession rates and quality level of repossessed
cial Services amounted to 3.00% (1.82) of the total credit portfolio in the
collateral.
segment. The total allowances for impairment excluding the impact
A collective assessment is made for customer-financing receivables
related to the credit provisions recorded in connection with the Russian
that are not credit impaired by using a vintage layer analysis. The vintage
invasion of Ukraine amounted to 1.64%. This reserve ratio is used as an
layer analysis is based on historical loss experience within a homogenous
important measure for Financial Services and includes operating leases
pool of assets that are collectively assessed. The assets are grouped
and inventory. Allowances for expected credit losses for customer-
based on shared risk characteristics such as type of customer, geograph-
financing receivables has increased since the beginning of the year from
ical area, initial credit risk rating, collateral type and date of initial recogni-
SEK 3,308 M to SEK 6,930 M primarily due to an increase in expected
tion to evaluate the credit losses collectively. The historical loss experi-
credit losses in Russia due to the war in Ukraine. Higher volume in the
ence is used to forecast future losses, adjusted for current and forecasted
credit portfolio has also increased expected credit losses, which was
conditions in the different markets based on management’s evaluation of
partly offset by a decrease in the level of expected credit losses, due to
macro-level and portfolio-level factors, such as GDP, oil prices, unem-
improved financial performance of the customers within Financial Ser-
ployment rates etc. Climate-related risk, such as the transition to electric
vices and the mix of the portfolio.
vehicles, are closely monitored, and reflected in management's evaluation
During 2022 customers continued to perform well and were able to
of current and forecasted conditions in assessing expected credit losses.
make payments on time due to the increased demand for transport and
Volvo Group has not identified material credit impairment related to tran-
construction services. However, the uncertainties in the macroeconomic
sitional and physical climate risks that would require a significant adjust-
environment due to the war in Ukraine, higher inflation, increase in inter-
ment to the credit risk.
est rates and supply chain constraints have contributed to the reserve on
An individual assessment is made for credit impaired customer-financing
customer-financing receivables not credit impaired remaining at a higher
receivables based on the financial condition of the customers and the value
level compared to before the pandemic.
of the underlying collateral and guarantees. The Volvo Group considers a
financial asset credit impaired if it meets one or more of the following ead more in Note 30 Financial instruments, for information on the gain
R
or loss recognized in the operating income arising from derecognition of
criteria; when there are indications that the customer is unlikely to pay, customer-financing receivables in table 30:3.
such as bankruptcy filing, unauthorized transfer of collateral, at surrender of
collateral etc. or, at the latest, when the customer fails to make contractual
payment within 90 days of when the receivable falls due.
Risk management practices

Other than the dealer financing, customer-financing receivables extend
over several years, but normally the customers make monthly payments
throughout the term to reduce the outstanding exposure. The customer-
financing receivables are secured by the financed commercial vehicles and
15:1 15:4
Non-current customer- Dec 31, Dec 31, Credit risk in customer- Dec 31, Dec 31,
financing receivables 2022 2021 financing receivables 2022 2021
Installment credits 64,600 49,081 Customer-financing receivables gross 200,858 154,812

Finance leases 38,122 32,279 Allowance for expected credit losses for
Other receivables 2,342 2,026 customer-financing receivables –6,930 –3,308
B/S Non-current customer- Whereof allowance for credit impaired –573 –617
financing receivables 105,064 83,386 Whereof allowance for not credit impaired –6,357 –2,691
Customer-financing receivables,
net of allowance 193,928 151,504
The effective interest rate for non-current customer-financing receivables

amounted to 5.90% (4.92) as of December 31, 2022.
15:5
15:2 Change of a llowance 2022 2021

Non-current customer-financing receivables maturities, SEK M for expected credit Not Not
losses for customer- credit Credit credit Credit
financing receivables impaired impaired impaired impaired
Opening balance 2,691 617 2,289 611

New valuation allowance
charged to income 3,574 103 519 238
2028 or later Reversal of valuation
2024 2025 2026 2027 allowance charged to
40,667 31,465 20,140 9,244 3,548 income –115 –80 –65 –76
Utilization of valuation
allowance related to
actual losses –0 –125 –0 –386
Movements between not
credit impaired/credit
15:3 impaired1 24 –24 –188 188
Current customer- Dec 31, Dec 31, Translation differences 327 82 129 43
financing receivables 2022 2021 Reclassification2 – – 111 –
Syndication transactions
Installment credits 35,677 26,183 and other –144 – –104 –
Finance leases 21,278 20,823 Allowance for
Dealer financing 28,863 18,952 expected credit losses
Other receivables 3,046 2,160 for customer-financing
receivables as of
B/S Current customer- December 31 6,357 573 2,691 617
financing receivables 88,864 68,118
1 When a receivable becomes credit impaired a transfer of allowance is made to

allowance for credit impaired receivables.
The effective interest rate for current customer-financing receivables 2 Change in accounting treatment for operating leases within Financial Services in
amounted to 5.88% (4.77) as of December 31, 2022. 2021.
15:6
Customer-financing receivables, Dec 31, 2022 Dec 31, 2021
gross exposure 1–30 31–90 >90 1–30 31–90 >90
Not due days days days Total Not due days days days Total
Customer-financing receivables, gross 186,755 10,090 2,999 1,014 200,858 141,281 7,915 4,803 813 154,812
Whereof not credit impaired 185,958 9,767 2,455 326 198,506 140,441 7,415 4,390 113 152,359
Whereof credit impaired 797 323 544 688 2,352 840 500 413 700 2,454
Table 15:6 represents the gross credit exposure on customer-financing

receivables within the Volvo Group per age interval. The lifetime expected
15:7
credit loss allowance for customer-financing receivables not credit Geographic market, percentage of customer-financing portfolio (%)
impaired amounted to SEK 6,357 M (2,691) and allowance for customer-
financing receivables credit impaired amounted to SEK 573 M (617),
included in tables 15:4 and 15:5 . The remaining exposure was secured by Europe, 37.0%
liens on the financed commercial vehicles and equipment and, in certain North America, 37.5%
circumstances, other credit enhancements such as personal guarantees,
Asia, 5.9%
credit insurance, liens on other property owned by the borrower etc. Col-
laterals taken in possession that meet the criteria for recognition in the South America, 15.1%
balance sheet amounted to SEK 202 M (104) as of December 31, 2022. Africa and Oceania, 4.5%
Concentration of credit risk

Customer concentration
The ten largest customers within Financial Services account for 6.5%
(5.7) of the total asset portfolio. The rest of the portfolio is attributable to
a large number of customers and the credit risk is therefore spread across
many customers. During 2022 SEK 12.2 billion (9.8) of customer financ-
ing receivables were syndicated in order to reduce concentration risks.
Concentration by geographical market

Graph 15:7 discloses the concentration of Financial Services portfolio
divided into geographical markets.
ead more in Note 4 Goals and policies in financial risk management about
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credit risks.
ead more in the Board of Directors’ report about Financial Services’

R
development during the year.
16 Receivables

ACCOUNTING POLICY AND CRITICAL JUDGMENTS
Receivables are measured at amortized cost. The Volvo Group is applying Allowance for expected credit losses
the simplified expected credit loss model for accounts receivables, under Accounts receivables are short term by nature and consequently the risk
which the loss allowance is measured at an amount equal to lifetime assessment horizon is short. A collective assessment is made on accounts
expected credit losses. The allowance is recorded at initial recognition receivables not credit impaired. Historical information regarding credit loss
and is reassessed during the contract period. Changes to the allowance experience is used to forecast future losses, adjusted for c
urrent and fore-
for expected credit losses for accounts receivables are recognized in other casted conditions. An individual assessment is made on credit impaired
operating income and expense. accounts receivables based on the financial condition of the customer.
The past years have been affected by the covid-19 pandemic. Most
ead more in Note 30 Financial instruments in section derecognition
R
of f inancial assets, about receivables subject to discounting activities. countries have now eased their restrictions and made changes to the gov-
ernment support programs previously implemented. However, the duration
and future development of the pandemic is still unknown. In addition to this
the past year has also been affected by the war in Ukraine and the ensuing
sanctions as well as high inflationary pressure in many regions which might
increase the risk for customer default. Based on this the assessment pro-
cess for valuation allowances for expected credit losses for accounts
receivables continues to be in focus in order to ensure allowances are in
alignment with the new phase of the economic environment.
Risk management practices

Credit risks are managed through active credit monitoring and follow-up
16:2
routines in accordance with the Volvo Group Credit management direc-
tive. This directive includes different steps to perform when an invoice is Current receivables Dec 31, Dec 31,
2022 2021
not paid at due date. When an increased credit risk is verified, for example
through a bankruptcy, or when an allowance has been unchanged for two Other interest-bearing receivables 1 5,062 1,255
years and it can be demonstrated that all required steps have been per- Tax assets 2,059 1,708
formed, the allowance is reversed and the accounts receivables are writ- Accounts receivables 48,220 40,776
ten off. Apart from certain exceptions the Volvo Group continues to Prepaid expenses and accrued income 3,624 3,225
engage in enforcement activity even after a write-off in order to recover
VAT receivables 5,917 4,205
the contractual amount not previously received.
Interest and currency risk derivatives2 760 840
Due to the prevailing business model in the construction equipment
Contract and right of return assets3 1,822 1,641
industry in China, with longer payment terms to customers, a substantial
Other receivables 7,852 7,526
part of the Volvo Groups accounts receivable is related to customers in
Current receivables, after deduction of
this market. The weakened Chinese construction equipment market is
allowance for expected credit losses on
currently impacting customers’ and dealers’ profitability negatively. This accounts receivable s 75,316 61,176
might affect their ability to honor their obligations to the Volvo Group and
may consequently have a material adverse effect on the Volvo Group’s
financial result and position. 1 The amount is the current part of other interest-bearing receivables in note 30
Renegotiated receivables are on a slightly lower level than last year, Financial instruments, table 30:1 .
with the majority of the exposure related to renegotiated receivables 2 The amount is the current part of interest and currency risk derivatives in note 30
within Construction Equipment in China. Renegotiated receivables con- Financial instruments, table 30:1 .
tinue to be closely monitored for on-going payment performance and 3 Read more in Note 7 Revenue, about contract and right of return assets.
signs of impairment.
As of December 31, 2022, the total allowance for expected credit losses
for accounts receivables amounted to 3.02% (2.03) of total accounts 16:3
receivables. The increase in allowances is primarily due to the weaker con-
Change of allowance
struction equipment market in China this year compared to last year. for expected credit losses
ead more in Note 4 Goals and policies in financial risk management, regarding
R on accounts receivables 2022 2021
credit risk.
Opening balance 846 771
New allowance charged to income 991 433
Reversal of allowance charged to income –162 –177
16:1
Utilization of allowance related to actual losses –94 –144
Non-current receivables Dec 31, Dec 31,
Translation differences 53 61
2022 2021
Reclassifications, etc1 –133 –99
Other interest-bearing receivables 1 676 436 Allowance for expected credit losses on
Interest and currency risk derivatives2 4,991 2,090 accounts r eceivables as of December 31 1,501 846
Contract and right of return assets3 4,036 4,195
Other receivables 3,122 4,257
1 Whereof reclassification to other non-current receivables of SEK –127 M (–104).
Non-current receivables 12,825 10,978
1 The amount is the non-current part of other interest-bearing receivables in note

30 Financial instruments, table 30:1 .
2 The amount is the non-current part of interest and currency risk derivatives in
note 30 Financial instruments, table 30:1 .
3 Read more in Note 7 Revenue, about contract and right of return assets.
16:4
Age analysis of accounts receivables Dec 31, 2022 Dec 31, 2021
Not Due 1–30 31–90 >90 Total Not Due 1–30 31–90 >90 Total
Accounts receivables, gross 43,023 2,279 2,086 2,334 49,721 37,173 1 ,813 1,258 1,377 41,622
Allowance for expected credit losses
on accounts receivables –678 –65 –54 –704 –1,501 –241 –59 –53 –493 –846
B/S Accounts receivables, net 42,345 2,214 2,032 1,630 48,220 36,932 1,753 1,205 885 40,776
17 Inventories

Inventories are measured at the lower of cost and net realizable value. Inventories Dec 31, Dec 31,
2022 2021
The cost is established by using the first-in, first-out principle (FIFO) and is
based on a standard cost method, including costs for all direct manufac- Finished products 37,854 32,297
turing expenses and the attributable share of capacity and other manu Production materials etc. 37,835 31,619
facturing-related costs. The standard costs are reviewed regularly and B/S Inventories 75,689 63,916
adjustments are made based on current conditions. Manufacturing costs
are based on normal capacity utilization which are allocated to inventory
while unabsorbed cost due to changes in production volume are recog-
nized in the income statement as incurred. Costs for research and develop-
The total value of inventories, net after write-downs, was SEK 75,689 M
ment, selling, administration and financial expenses are not included.
(63,916) as of December 31, 2022. Inventories recognized as cost of sold
Net realizable value is calculated as the selling price less costs attribut-
products during the period amounted to SEK 346,539 M (273,872).
able to the sale.
17:2
AND CRITICAL JUDGMENTS Change in write-down of inventories 2022 2021
Opening balance 3,581 3,452

Write-down of inventories
Change in write-down of
The calculation of net realizable value involves estimation of a future sales
inventories charged to income 380 334
price, which is dependent on several parameters, such as market demand,
Scrapping –259 –373
model changes and development of used products prices. If the esti-
Translation differences 322 171
mated net realizable value is lower than cost, a write down of inventories
Reclassifications etc. –3 –3
is made.
Write-down of inventories
as of December 31 4,021 3,581
18 Cash and cash equivalents
Cash and cash equivalents as of December 31, 2022, include SEK 2.3 billion
ACCOUNTING POLICY (2.8) that is not available for use by the Volvo Group and SEK 14.5 billion
(8.7) where other limitations exist, mainly cash and cash equivalents in
Cash and cash equivalents include highly liquid interest-bearing securities countries where exchange controls or other legal restrictions apply. There-
that are considered easily convertible to cash. These include marketable fore, it is not possible to immediately use these cash and cash equivalents
securities, with a date of maturity less than three months at the time of in other parts of the Volvo Group, however there is normally no limitation to
investment. Interest-bearing securities with a date of maturity exceeding use them for the Volvo Group’s operation in the respective country.
three months at the time of investment are recognized as marketable
securities.
ead more in Note 30 Financial instruments, about accounting policies for
R
financial instruments.
18:1
Cash and cash equivalents Dec 31, Dec 31,
2022 2021
Cash in banks 54,636 46,286

Marketable securities with original
duration less than 3 months1 5,109 1,803
Time deposits in banks 24,141 14,038
B/S Cash and cash equivalents 83,886 62,126
1 Additionally the Volvo Group recognized outstanding marketable securities

with original duration exceeding 3 months of SEK 93 M (167) in government
securities as of December 31, 2022.
19 Equity and number of shares

Dividend resolutions are approved at the annual general meeting or, in Change in other reserves Holding of
certain cases, during an extraordinary general meeting. When the deci- shares at
fair value
sion has been approved, equity is reduced and the dividend is reported as
a liability to the shareholders in the balance sheet until the payment has Opening balance 2022 8
taken place. Remeasurements of holdings of
Earnings per share before dilution is calculated as income for the shares at fair value –45
period, attributable to the owners of AB Volvo, divided by AB Volvo’s aver- Disposal –
age number of outstanding shares for the fiscal year. Diluted earnings per
Balance as of December 31, 2022 –37
share is calculated as income for the period attributable to the owners of
AB Volvo, divided by AB Volvo’s average number of outstanding shares
after dilution for the fiscal year. If during the year there were potential
shares redeemed or expired, they are included in the average number of
shares used to calculate the earnings per share after dilution.
19:2
Information regarding Dec 31, Dec 31,
The Annual General Meeting, held on April 6, 2022, resolved that an ordi- number of shares 2022 2021
nary dividend of SEK 6.50 (6.00) per share and an extraordinary dividend
of SEK 6.50 (18.50) per share, totaling SEK 13.00 (24.50) per share Own Series A shares – –
should be paid to shareholders. During 2022, the Volvo Group distributed Own Series B shares – –
SEK 26.4 billion (49.8) to the shareholders. Total own shares – –
The share capital of the Parent company amounted to SEK 2,562 M Own shares in % of total
(2,562) on December 31, 2022 and is divided into two series of shares, A registered shares – –
and B. Both series carry the same rights, except that each Series A share
carries the right to one vote and each Series B share carries the right to Outstanding Series A shares 444,987,875 444,987,946
one tenth of a vote. The shares’ quota value is SEK 1.26 (1.26). During Outstanding Series B shares 1,588,464,209 1,588,464,138
2022 AB Volvo converted a total of 71 Series A shares to Series B shares. Total outstanding shares 2,033,452,084 2,033,452,084
Unrestricted equity in the Parent company as of December 31, 2022
Total registered Series A shares 444,987,875 444,987,946
amounted to SEK 59,504 M (61,311).
Total registered Series B shares 1,588,464,209 1,588,464,138
For the year 2022, the Board of Directors proposes an ordinary divi-
Total registered shares 2,033,452,084 2,033,452,084
dend of SEK 7.00 per share and an extraordinary dividend of SEK 7.00
per share, a total of SEK 14.00 per share amounting to SEK 28.5 billion. Average number of
outstanding shares 2,033,452,084 2,033,452,084
ead more in Changes in equity in the Parent company about AB Volvo’s share
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capital.
19:3
Series A shares Series B shares Total
Outstanding shares 2022 2021 2022 2021 2022 2021
Outstanding shares opening balance 444,987,946 448,113,346 1,588,464,138 1,585,338,738 2,033,452,084 2,033,452,084
Converting Series A shares to Series B shares –71 –3,125,400 71 3,125,400 – –
Outstanding shares as of December 31 444,987,875 444,987,946 1,588,464,209 1,588,464,138 2,033,452,084 2,033,452,084
19:4
Information regarding shares 2022 2021
Number of outstanding shares, December 31, in millions 2,033 2,033

Average number of shares before dilution in millions 2,033 2,033
Average number of shares after dilution in millions 2,033 2,033
Average share price, SEK 179.32 208.80
Net income attributable to owners of AB Volvo, SEK M 32,722 32,787
Basic earnings per share, SEK 16.09 16.12
Diluted earnings per share, SEK 16.09 16.12
20 Provisions for post-employment benefits
The following tables disclose information about defined benefit plans. The
ACCOUNTING POLICY Volvo Group recognizes the difference between the obligations and the
plan assets, adjusted for potential asset ceilings, in the balance sheet. The
The Volvo Group’s post-employment benefits, such as pensions, health- disclosures refer to assumptions applied for actuarial calculations, recog-
care and other benefits are mainly settled by means of regular payments nized costs during the financial year and the value of obligations and plan
to independent authorities or bodies that assume pension obligations and assets at year-end. The tables also include a reconciliation of obligations
administer pensions through defined contribution plans. For defined con- and plan assets during the year.
tribution plans, expenses for premiums are recognized in the income
statement as incurred.
Part of the post-employment benefits are defined benefit plans where 20:1
the obligations remain within the Volvo Group and are secured primarily
Assumptions applied for Dec 31, Dec 31,
by proprietary pension foundations. The Volvo Group’s largest defined actuarial calculations 2022 2021
benefit plans relate to subsidiaries in the USA and comprise both pen-
sions and other benefits, such as healthcare. Other large-scale defined Sweden
benefit plans apply to white collar employees in Sweden (mainly through Discount rate, %1 3.95 2.00
the ITP pension plan) and employees in Great Britain, Belgium and France. Inflation, %2 2.00 1.75
Actuarial calculations are made for all defined benefit plans, subject to Expected salary increase, % 2.65 2.40
materiality, in order to determine the present value of the obligation for Assumed life expectancy on
benefits vested by its current and former employees. The actuarial calcu- retirement at age 65 (Male/Female)
lations are prepared annually and are based upon actuarial assumptions Retiring today (member age 65), year 22.2/24.4 20.9/23.5
that are determined at the end of the reporting period. Changes in the Retiring in 25 years
present value of obligations due to revised actuarial assumptions and (member age 40 today), year 24.6/26.8 22.7/24.6
experience adjustments constitute remeasurements.
USA
Provisions for post-employment benefits in the Volvo Group’s balance
Discount rate, %1, 3 5.00–5.35 1.15–2.81
sheet correspond to the present value of obligations at year-end, less fair value
of plan assets. All changes in the net defined liability (asset) are recognized Inflation, % 2.50 2.20
when they occur. Service cost and net interest expense (income) are recog- Expected salary increase, % 3.68 3.50
nized in the income statement, while remeasurements such as actuarial gains Assumed life expectancy on
and losses are recognized in other comprehensive income. Special payroll tax retirement at age 65 (Male/Female)
is included in the pension liability in pension plans in Sweden and B
elgium. Retiring today (member age 65), year 20.5/22.4 20.5/22.3
Retiring in 25 years
(member age 40 today), year 22.4/24.2 22.4/24.1
SOURCE OF ESTIMATION UNCERTAINT Y Great Britain

AND CRITICAL JUDGMENTS Discount rate, %1 4.95 1.80
Inflation, % 3.15 3.30
Assumptions when calculating post-employment benefits
Expected salary increase, % 0.00 0.00
Provisions and costs for post-employment benefits, mainly pensions and
Assumed life expectancy on
health care benefits, are dependent on actuarial assumptions. The actuarial retirement at age 65 (Male/Female)
assumptions and calculations are made separately for each defined benefit
Retiring today (member age 65), year 22.2/23.9 22.1/23.8
plan. The most significant assumptions are discount rate and inflation.
Retiring in 25 years
Inflation assumptions are generally set as a long term assumption based on
(member age 40 today), year 24.3/26.7 23.9/26.4
an evaluation of external market indicators. A sensitivity analysis is included
in graph 20:6 and shows the effect on the defined benefit obligations if Belgium
significant assumptions are changed. There are also other assumptions Discount rate, %1 4.17 1.21
made such as salary increases, retirement rates, mortality rates, health care Inflation, % 2.00 1.50
cost trends rates and other factors. The salary increase assumptions reflect Expected salary increase, % 2.86 2.51
the historical trend, the near-term and long-term outlook and assumed
France
inflation. Retirement and mortality rates are based primarily on officially
Discount rate, %1 4.19 1.19
available mortality statistics. Healthcare cost trend assumptions are based
on historical data as well as the near-term outlook and an assessment of Inflation, % 2.00 1.50
likely long-term trends. The Volvo Group has engaged a global actuary in Expected salary increase, % 3.01 2.50
order to ensure that a professional assessment is made and that assump-
tions are consistently developed across jurisdictions. The actuarial assump-
tions are reviewed annually by the Volvo Group and m odified when deemed 1 The discount rate for each country is determined by reference to market yields on
high quality corporate bonds. In countries where there is no functioning market in
appropriate.
such bonds, the market yields on government bonds are used. The discount rate
A sharp rise in actual and expected inflation has led to tighter monetary for the Swedish pension obligation is determined by extrapolating current market
policy actions by central banks globally, with few exceptions. Long and rates along the yield curve of mortgage bonds.
short term interest rates have generally experienced sharp upward move- 2 T he long term inflation assumption is 2.00%. The pension obligations in Sweden
ments during the year, and in many cases with speed and volatility not seen have been adjusted for short-term inflation for the year 2023.
in several decades. The value of risk assets has been negatively impacted 3 For all plans except three the discount rate used is within the range 5.15–5.22%
given the circumstances. Funding levels for the Volvo Group’s pensions (2.47–2.81).
plans remain strong despite challenging financial market conditions.
20:2 20:4
Summary of provisions for Dec 31, Dec 31, Costs for the period, post-employ-
post-employment benefits 2022 2021 ment b
enefits other than pensions 2022 2021
Obligations –52,862 –65,122 Current year service costs 106 110

Fair value of plan assets 46,844 55,317 Interest costs 134 104
Net provisions for post-employment Interest income –31 –28
benefits –6,018 –9,805 Past service costs 0 4
Gain/loss on settlements – –
Remeasurements 99 148
Total costs for the period 308 338
20:3
Pension costs 2022 2021
Current year service costs 1,553 1,943

Interest costs 1,325 1,062
Interest income –1,255 –917
Past service costs 13 –67
Gain/loss on settlements –22 –51
Pension costs for the period,
defined benefit plans 1,614 1,971
Pension costs for defined contribution plans 3,653 2,958

Total pension costs for the period 5,267 4,928
20:5
Sweden USA Great Britain Belgium France USA
Pensions Pensions Pensions Pensions Pensions Other benefits
Average duration of the obligations, years 19.8 8.8 12.6 10.2 11.2 8.5
The analysis in graph 20:6 presents the sensitivity of the defined benefit tions constant. In practice, this is not probable, and a change in the
obligations when changes in the applied assumptions for discount rate assumption may be correlated. The sensitivity analysis for a change in
and inflation are made. The sensitivity analysis for the discount rate is long-term inflation correlates with other inflation linked assumptions.
based on a change in the assumption while holding all other assump- Depending on specific plan and benefit design, the sensitivity effect on
the obligation differs for the respective assumptions.
20:6
SENSITIVITY
ANALYSIS 2022 − Effect on obligation, SEK M +
If discount rate increases 0.5% If discount rate decreases 0.5%
Sweden Pensions –1,813 2,015
USA Pensions –628 831
Great Britain Pensions –331 361

Belgium Pensions –137 155
France Pensions –130 141

USA Other benefits –114 123
Other plans –115 132
If inflation decreases 0.5% If inflation increases 0.5%

Sweden Pensions –1,769 1,979
USA Pensions 0 0
Great Britain Pensions –217 201
Belgium Pensions –103 114

France Pensions –5 5
USA Other benefits 0 0
Other plans –39 43
20:7
Obligations in defined benefit plans Great USA
Sweden USA Britain Belgium France Other Other
Pensions Pensions Pensions Pensions Pensions benefits plans Total
Obligations opening balance 2021 26,677 20,273 7,533 3,750 2,680 3,363 3,644 67,920
Acquisitions, divestments and other changes 0 –6 – –3 – 0 66 56
Current year service costs 861 547 0 213 170 51 211 2,053
Interest costs 385 459 123 31 24 70 74 1,165
Past service costs 69 55 – –106 – 0 –19 –1
Settlements – –1,140 – – – – –2 –1,142
Employee contributions – – – – – 29 53 82
Remeasurements1:
– Effect of changes in demographic assumptions – 59 – – 0 –23 –37 –1
– Effect of changes in financial assumptions –3,255 –1,155 –179 –186 –109 –172 –130 –5,185
– Effect of experience adjustments –238 –37 – –59 –111 152 27 –267
Exchange rate translation – 2,154 742 73 52 348 135 3,505
Benefits paid –551 –1,389 –286 –106 –106 –338 –288 –3,064
Obligations as of December 31, 2021 23,948 19,819 7,934 3,607 2,600 3,480 3,735 65,122
of which
Funded defined benefit plans –23,517 –19,088 –7,934 –3,579 –15 – –2,567 –56,699
Acquisitions, divestments and other changes 0 0 – 0 – 0 –6 –5

Current year service costs 819 225 – 205 167 39 203 1,659
Interest costs 475 581 144 44 32 95 89 1,460
Past service costs 25 0 – – – – –12 12
Settlements – –934 – – – – –143 –1,077
Employee contributions – 0 – 0 0 20 58 79
Remeasurements1:
– Effect of changes in demographic assumptions 602 – – – 17 –20 0 598
– Effect of changes in financial assumptions –6,516 –5,034 –3,027 –1,002 –810 –777 –800 –17,967
– Effect of experience adjustments 590 –209 426 165 106 136 20 1,234
Benefits paid –587 –1,306 –287 –132 –73 –364 –203 –2,953
Obligations as of December 31, 2022 19,357 16,190 5,465 3,203 2,264 3,132 3,252 52,862
of which
Funded defined benefit plans –18,984 –15,542 –5,465 –3,203 –12 – –2,268 –45,475
1 Out of the total remeasurement of the defined benefit obligation, SEK 16,227 M (5,601) has been recognized in Other Comprehensive Income, and –92 M (–148) in the
Income Statement.
20:8
Fair value of plan assets in funded plans Great USA
Plan assets opening balance 2021 17,892 20,917 7,480 2,804 15 33 2,063 51,203
Acquisitions, divestments and other changes 0 –3 – 0 –1 – 51 47

Interest income 264 478 123 23 0 – 56 944
Settlements – –1,090 – – – – – –1,090
Remeasurements1 2,368 –119 –561 171 0 – –46 1,813
Asset ceiling – – 464 – – – 16 479
Employer contributions 322 – 65 163 – – 215 766
Employee contributions – 30 – – – – 54 84
Benefits paid –1 –1,387 –286 –102 0 0 –223 –2,000
Plan assets as of December 31, 2021 20,845 21,013 8,024 3,113 14 37 2,271 55,317
Acquisitions, divestments and other changes 0 0 – 0 1 0 0 2

Interest income 417 617 146 39 0 – 67 1,286
Settlements – –901 – – – – –154 –1,055
Remeasurements1 –2,274 –5,484 –3,349 –480 – – –239 –11,826
Asset ceiling – – 481 – – – 14 495
Employer contributions –156 16 66 158 – – 328 411
Employee contributions – 34 – 0 – – 58 93
Benefits paid –1 –1,302 –287 –132 –1 – –144 –1,867
Plan assets as of December 31, 2022 18,831 17,218 5,362 2,972 15 42 2,403 46,844
1 Out of the total remeasurement of the plan assets, SEK –11,331 M (2,292) has been recognized in Other Comprehensive Income.
20:9
Net provisions for post-employment benefits Great USA
Net provisions for post-employment benefits

as of December 31, 2021 –3,102 1,194 91 –494 –2,586 –3,443 –1,464 –9,805
of which reported as:

B/S Net pension assets – 2,234 104 – – 34 – 2,372
B/S Provisions for post-employment benefits –3,102 –1,040 –13 –494 –2,586 –3,477 –1,464 –12,177
Net provisions for post-employment benefits
as of December 31, 2022 –525 1,029 –103 –231 –2,249 –3,089 –849 –6,018
of which reported as:

B/S Net pension assets 389 2,005 25 – – 42 266 2,727
B/S Provisions for post-employment benefits –914 –976 –128 –231 –2,249 –3,132 –1,115 –8,745
Sweden foundation are mainly invested in interest-bearing securities and in alterna-

The main defined benefit plan in Sweden is the ITP2 plan which is based tive assets, in accordance with a strategic allocation that is determined by
on final salary. The plan is semi-closed, meaning that only new employees the foundation’s Board of Directors. As of December 31, 2022, the fair
born before 1979 enters the ITP2 solution. The Volvo Group’s pension value of the foundation’s plan assets amounted to SEK 18,810 M (20,822),
foundation in Sweden was formed in 1996 to secure obligations relating of which 6% (35) was invested in equity instruments. At the same point in
to retirement pensions for white collar workers in Sweden in accordance time, retirement pension obligations attributable to the ITP plan amounted
with the ITP plan. The plan assets in the Volvo Group’s S wedish pension to SEK 18,970 M (23,496).
Swedish companies can secure new pension obligations through

alance sheet provisions or pension fund contributions. Furthermore, a
b
20:10
credit insurance policy must be taken out for the value of the obligations. In
Plan assets by category as of December 31, 2021¹
addition to benefits relating to retirement pensions, the ITP plan also
includes, for example, a collective family pension, which the Volvo Group
Cash and cash equivalents, 869 (2%)
finances through an insurance policy with the Alecta insurance company.
Equity instruments, 11,274 (20%)
According to an interpretation from the Swedish Financial Reporting
Board, this is a multi-employer defined benefit plan. For the fiscal year Debt instruments, 38,771 (69%)
2022, the Volvo Group did not have access to information from Alecta that Real estate, 1,682 (3%)
would have enabled this plan to be recognized as a defined benefit plan. Assets held by insurance company, 2,658 (5%)
Accordingly, the plan has been recognized as a defined contribution plan. Other assets, 584 (1%)
The Volvo Group estimates it will pay premiums of about SEK 210 M to
Alecta in 2023. The collective consolidation level measures the apportion-
Plan assets by category as of December 31, 2022¹
able assets in relation to the insurance commitment. According to Alecta’s
consolidation policy for defined benefit pension insurance, the collective
consolidation level is normally allowed to vary between 125% and 175%. Cash and cash equivalents, 509 (1%)
Alecta’s preliminary consolidation ratio amounts to 172% (172). If the Equity instruments, 2,985 (6%)
consolidation level falls short or exceeds the normal interval, one measure Debt instruments, 38,450 (82%)
may be to increase the contract price for new subscription or to introduce Real estate, 2,057 (5%)
premium reductions. Assets held by insurance company, 2,274 (5%)
The Volvo Group’s share of the total saving premiums for ITP2 in Alecta
Other assets, 623 (1%)
as of December 31, 2022 amounted to 0.23% (0.24) and the share of the
total number of active policy holders amounted to 1.77% (1.72).
All employees in Sweden benefit from a jubilee awards plan according
to which they receive a certain number of shares after they have rendered
25, 35 and 45 years of services. This plan is accounted for as a share-
based payment program, where the fair value of the equity-settled pay- 20:11
ments is determined at the grant date. The plan is recognized as other Fair value of plan assets Dec 31, 2022 Dec 31, 2021
liabilities.
Cash and cash equivalents 509 869
USA With a quoted market price
In the USA, the Volvo Group has tax qualified pension plans, post-retirement Equity instruments 553 8,476
medical plans and non-qualified pension plans. The tax qualified pension Debt instruments 38,013 38,413
plans are funded while the other plans are generally unfunded. There are Real estate 0 20
five funded defined benefit plans, whereof all are closed to new entrants. Derivatives 13 –15
Three out of five plans are open for future accruals. The Volvo Group’s
Other 1,092 1,001
subsidiaries in the USA mainly secure their pension obligations through
With an unquoted market price
transfer of funds to pension plans. The US Retirement Trust manages the
Other 6,717 7,074
assets related to the five funded plans. The strategic allocation of plan
assets must comply with the investment policy as decided by the Board Total1 46,898 55,838
of Directors of the Trust. All members of the board are nominated by the
company although each member is subject to strict regulatory require-
1 Excluding asset ceiling of SEK 54 M (521).
ments on fiduciary responsibility. As of December 31, 2022, the total
value of pension obligations secured by pension plans of this type
amounted to SEK 15,542 M (19,088). At the same point in time, the total
value of the plan assets in these plans amounted to SEK 17,218 M
(21,013), of which 8% (13) was invested in equity instruments.
The regulations for securing pension obligations s tipulate certain mini-
mum levels concerning the ratio between the value of the plan assets and
the value of the obligations. During 2022 and 2021 no contributions were
made by the Volvo Group to the USA pension plans.
Great Britain Investment strategy and risk management

In Great Britain, the Volvo Group has five defined benefit pension plans, The Volvo Group manages the allocation and investment of pension plan
which are all funded. The pension funds are set up as separate legal enti- assets with the purpose of meeting the long term objectives. The main
ties, which are governed by a professional trustee. All plans are closed to objectives are to meet present and future benefit obligations, provide
new entrants and closed for future accruals to existing members. The allo- sufficient liquidity to meet such payment requirements and to provide a
cation of plan assets must comply with the investment strategy agreed total return that maximizes the ratio of the plan assets in relation to the
between the company and the professional trustee. For three of the plans, plan liabilities by maximizing return on the assets at an appropriate level of
if a net surplus is recognized in the balance sheet when the pension risk. The final investment decision often resides with the local trustee, but
scheme runs-off, the Volvo Group has an unconditional right to the sur- the investment policy for all plans ensures that the risks in the investment
plus of that plan or plans. For two plans this is not strictly legally the case portfolios are well diversified. The primary risk mitigating activity in the
and therefore an asset ceiling is applied. As of December 31, 2022, the long run is to close defined benefit plans to new entrants or to future accru-
total value of pension obligations amounted to SEK 5,465 M (7,934). At als for existing members and replace these plans with defined contribution
the same point in time, the total value of the plan assets in these plans plans when and where possible. The risks related to already accrued pension
amounted to SEK 5,362 M (8,024), of which 4% (5) was invested in equity obligations, e.g. longevity and inflation, as well as buy out premiums and
instruments. During 2022, the Volvo Group contributed SEK 66 M (65) to matching strategies are monitored on an ongoing basis in order to further
the Great Britain pension plans. limit the Volvo Group’s exposure where and when possible.
In the last couple of years, some of the defined benefit plans have been
Belgium closed to new entrants and replaced by defined contribution plans in order
In Belgium, the Volvo Group has four traditional defined benefit pension to reduce risk for the Volvo Group.
plans based on final salary, whereof all are closed to new entrants. All plans In Sweden, the minimum funding target is decided by PRI Pensions
are open for future accruals. Two plans are funded via an external pension garanti. This is mandatory in order to stay in the system and get insurance
fund with a legally ringfenced Volvo section and two are funded via the for the pension liability. The contributions usually represent one year’s new
group insurance product referred to in Belgium as Branch 21. Benefits are accrued benefits plus any shortfall towards the minimum funding target
paid as a lump sum at retirement. There is also an open defined contribu- unless there is a surplus according to local scheme valuation principles.
tion pension plan as well as a local profit sharing program whereby any In the USA, the minimum funding target is decided by the c ompany in
pay-outs are contributed to a defined contribution pension plan managed order to avoid penalties, keep flexibility and avoid extensive filing with the
by the own pension fund or through a group insurance. All defined contribu- Internal Revenue Service and participants in the pension plan. The mini-
tion pension plans in Belgium have a statutory minimum return guarantee mum contributions usually represents one year’s accrued benefits plus a
and are therefore accounted for as defined benefit plans. The strategic seventh of any deficit unless a scheme is showing a surplus according to
asset allocation of plan assets must comply with the investment policy as local scheme valuation principles.
proposed by the Volvo Group and formally adopted by the Board of Direc- In Great Britain, there is no minimum funding ratio. There is a regulatory
tors of the pension fund. As of December 31, 2022, the total value of pen- requirement for each scheme to perform triennial valuations whereby
sion obligations amounted to SEK 3,203 M (3,607). At the same point in any scheme showing a deficit must develop a recovery plan that returns
time, the plan assets of these plans amounted to SEK 2,972 M (3,113), of the scheme to a fully funded basis within a reasonable time frame. The
which 9% (27) was invested in equity instruments. During 2022, the recovery plan shall be agreed with the company and submitted to the
Volvo Group contributed SEK 158 M (163) to the Belgium pension plans. regulator for approval.
In Belgium, the minimum funding level is regulated by law and monitored
France by the financial supervisory authority, FSMA. The framework for the mini-
In France, the Volvo Group has two types of defined benefit plans, mum funding requirement is based on a discount rate, which is based on
Indemnité de Fin de Carrière (IFC) and jubilee awards plan. The plans are the expected return of the plan assets. The pension fund must be fully
unfunded. The IFC is compulsory in France. The benefits are based on the funded on this basis at all times. The contribution policy of the pension fund
Collective Bargaining Agreement applicable in the company, on the is designed to provide stability in contributions over the duration of the plan.
employee’s seniority at retirement date and on the final pay. The benefit In 2023, the Volvo Group estimates to transfer an amount of SEK 300–
payment is due only if employees are working for the company when they 500 M to pension plans.
retire. The jubilee award plan is an internal agreement and the benefit is
based on the employee’s seniority career at 20, 30, 35 and 40 years. As
of December 31, 2022, the total value of pension obligations amounted to
SEK 2,264 M (2,600).
21 Other provisions
value exposure does not meet the definition of a provision, the gross exposure
ACCOUNTING POLICY is reported as a contingent liability.
Read more in Note 24 Contingent liabilities and contingent assets.
Provisions are recognized in the balance sheet when a legal or construc-
tive obligation exists as a result from a past event, it is probable that an Provisions for service contracts
outflow of resources will be required to settle the obligation and the Service contracts offer the customer preventive maintenance according to
amount can be reliably estimated. When these criteria are not met, a con- an agreed service plan. The provision is intended to cover the risk that the
tingent liability may be recognized. expected cost of providing services and repairs under the service contract
exceeds the expected revenue.
Provisions for product warranty
Provisions for product warranty are recognized as cost of sales and Other provisions
include contractual warranty and campaign warranty. Provisions for con- Other provisions mainly includes provisions for legal disputes, provisions
tractual warranty are recognized when the products are sold. Provision for for externally issued credit guarantees and other provisions, unless sepa-
campaigns in connection with specific quality problems are recognized rately specified.
when the campaign is decided. Long-term provisions as above are mainly expected to be settled within
2 to 3 years.
Provisions for technical goodwill
Technical goodwill is coverage in excess of contractual warranty or cam-
paigns in order to maintain a good business relation with the customer. AND CRITICAL JUDGMENTS
The provisions for technical goodwill are determined based on historical
statistics for customers where an element of constructive obligation exists. The uncertainties about the amount or timing of outflows vary for different
kind of provisions. Regarding provisions for product warranty, extended cov-
Provisions for extended coverage erage, residual value risks and service contracts, the provisions are based on
An extended coverage is a product insurance sold to a customer to cover historical statistics and estimated future costs, which is why the provided
a product according to specific conditions for an agreed period as an addi- amount has a high correlation with the outflow of resources. Regarding pro-
tional insurance to the factory contractual warranty. The provision is visions for disputes, like tax and legal disputes, the uncertainty is higher.
intended to cover the risk that the expected cost of providing services
under the extended coverage contract exceed the expected revenue. Provisions for product warranty
Warranty provisions are estimated with consideration of historical statis-
Provisions in insurance operations tics with regard to known changes in warranty claims, warranty periods,
Volvo Group has a captive insurance company and the provisions in insur- the average time-lag between faults occurring until claims are received by
ance operations are related to third party claims addressed to companies the company and anticipated changes in quality indexes. The actual out-
within the Volvo Group. The claims reserve also includes a provision for come of product warranties may deviate from the expected outcome and
unreported losses based on past experience. The unearned premium materially affect the warranty costs and provisions in future periods.
reserve is reported within other current liabilities. Refunds from suppliers, that decrease the Volvo Group’s warranty costs,
are recognized to the extent these are considered to be certain.
Provisions for restructuring costs
A provision for decided restructuring measures is recognized when a Other provisions
detailed plan for the implementation of the measures is complete and The Volvo Group works actively to ensure compliance with applicable
when this plan is communicated to those who are affected. A provision environmental laws and regulations, which are often complex and uncer-
and costs for termination benefits as a result of a voluntary termination tain. If the Volvo Group fails to meet climate related targets or regulatory
program is recognized when the employee accepts the offer. Normally requirements it could be subject to significant penalties and other sanc-
restructuring costs are included in other operating income and expenses. tions which could materially affect the financial statements.
Provisions for residual value risks Provisions for legal proceedings

Residual value risks are the risks that the Volvo Group in the future would The Volvo Group regularly reviews the development of significant out-
have to dispose used vehicles at a loss if the price development of these standing legal disputes in which the Volvo Group companies are parties,
products is worse than expected when the contracts were entered. The both regarding civil law and tax disputes, in order to assess the need for
residual value risks pertain to operating lease contracts and sales transac- provisions and contingent liabilities in the financial statements. Among the
tions with residual value commitments (buybacks and tradebacks) where factors that the Volvo Group considers in making decisions on provisions
the Volvo Group has a residual value commitment. The majority of these and contingent liabilities are the nature of the dispute, the amount claimed,
contracts are recognized as assets under operating leases or as right of the progress of the case, the opinions of legal and other advisers, experi-
return asset in the balance sheet. During the period, the depreciable ence in similar cases, and any decision of the Volvo Group’s management
amount is adjusted through the income statement to correspond to esti- as to how the Volvo Group intends to handle the dispute. The actual out-
mated future net realizable value to continuously reflect potential residual come of a legal dispute may deviate from the expected outcome of the
value risks at the end of the contract period. dispute. The difference between actual and expected outcome of a dispute
Read more in Note 13 Tangible assets about residual value risks. might materially affect future financial statements, with an adverse impact
upon the Volvo Group’s operating income, financial position and liquidity.
Residual value commitments that are independent from the sales trans Provisions for legal disputes are included within other provisions in
action are not recognized as assets under operating leases or as right of table 21:1.
return in the balance sheet, hence the potential residual value risks related Read more in Note 24 Contingent liabilities and contingent assets.
to these contracts are recognized as provisions. To the extent the residual
21:1
Carrying Acquired and Other Carrying Of which Of which
value as of divested Translation reclassi value as of due within due after
Dec 31, 2021 Provisions Reversals Utilizations operations2 differences fications2 Dec 31, 2022 12 months 12 months
Provisions
for product
warranty1 15,170 9,850 –2,173 –7,229 1 1,251 –29 16,841 8,264 8,577
Provisions
for technical
goodwill 660 3 –22 –354 – 69 –10 346 346 –
Provisions
for extended
coverage 505 496 –174 –275 – 55 85 692 247 445
Provisions
in insurance
operations 740 283 –190 –69 – 84 – 848 – 848
Provisions for
restructuring
costs 605 7 –89 –339 – 28 0 212 205 7
Provisions
for residual
value risks 334 683 –290 –458 – 47 –57 259 143 116
Provisions
for service
contracts 406 673 –293 –278 – 42 8 558 247 311
Other
provisions 3,4 4,750 6,276 –1,291 –3,576 3 521 –924 5,759 3,667 2,092
B/S Total 23,170 18,271 –4,522 –12,578 4 2,097 –927 25,515 13,119 12,396
1 Including a provision for emission control component. For more information see below.
3 A reclassification to other liabilities regarding deferred leasing income was made during 2022 amounting to SEK 940 M.
4 Includes costs for claims arising from the European Commission’s 2016 antitrust settlement decision and costs for a civil penalty from the National Highway Traffic
Safety Administration in the US. Read more in Note 24 Contingent liabilities and contingent assets about the European Commission’s 2016 antitrust settlement
decision.
The Volvo Group has detected that an emissions control component used in relating to the estimated costs to address the issue. Negative cash flow
certain markets and models, may degrade more quickly than expected, effects started in 2019 and will continue in the coming years. The Volvo Group
affecting the vehicles emission performance negatively. The Volvo Group will continuously assess the size of the provision as the matter develops.
made a provision of SEK 7 billion impacting the operating income in 2018,
22 Liabilities
Non-current liabilities
ACCOUNTING POLICY The tables below disclose the Volvo Group’s non-current liabilities with
the largest loans listed by currency. Loans in the Volvo Group’s subsidiaries
Loans are measured at amortized cost using the effective interest rate are mainly denominated in local currencies through Volvo Group Treasury
method. A hybrid bond issued by the Volvo Group is classified as debt in which minimizes the currency exposure in the individual companies. Volvo
the Volvo Group’s financial reporting as it constitutes a contractual obliga- Group Treasury uses various derivatives to facilitate lending and borrowing
tion to make interest payments and repay the nominal amount of the debt in different currencies without increasing the risk for the Volvo Group.
to the holder of the instrument.
ead more in Note 4 Goals and policies in financial risk management on how the
R
ead more in Note 30 Financial instruments for accounting policies related to
R funding for Industrial operations and Financial Services respectively is managed
financial instruments. and presented in the Volvo Group’s balance sheet.
22:1
Non-current bond loans and other loans Actual interest rate Effective interest rate
Currency/start year/maturity Dec 31, 2022, % Dec 31, 2022, % Dec 31, 2022 Dec 31, 2021
Bond loans
EUR 2012–2022/2024–20781 0.00–4.79 0.00–4.79 78,319 50,052
SEK 2020–2022/2024–2027 0.50–4.29 0.50–4.29 18,054 24,282
NOK 2019–2020/2024 4.39–4.45 4.46–4.52 1,691 2,820
HKD 2019/2024 2.31 2.31 969 840
USD 2019–2022/2029 2.10–2.96 2.10–2.96 730 452
GBP 2022/2026 4.77 4.77 3,125 –
JPY – 919
B/S Total bond loans2, 3 102,887 79,365
Other loans
USD 2014–2020/2024 0.49–3.00 0.71–3.00 830 2,875
EUR 2016–2022/2024–2028 0.15–3.06 0.15–3.08 5,832 4,031
MXN 2020–2022/2024–2026 11.11–12.18 11.69–12.89 2,302 1,449
JPY 2019/2024 0.37 0.37 792 1,570
BRL 2013–2022/2024–2029 9.88–13.65 9.88–13.65 8,526 5,258
AUD 2020–2022/2024–2026 3.77–4.52 3.84–4.61 658 119
CNY 2021–2022/2024–2026 2.61–4.40 2.61–4.40 2,673 1,222
SEK 2022/2024 2.44 2.46 1,998 –
CAD 2022/2024 5.57 5.68 771 –
Loans in other currencies 2,318 1,901
Lease liabilities 4,806 4,469
Revaluation of outstanding derivatives to SEK4 4,179 1,917
B/S Total other loans2, 3 35,684 24,812
22:2
Other non-current liabilities Dec 31, 2022 Dec 31, 2021
Deferred leasing income5, 6 6,928 5,129

Residual value liabilities6 9,747 9,049
Deferred service revenue6 17,493 14,440
Refund liabilities6 1,700 1,698
Advances from customers6 3,093 2,923
Outstanding interest and currency risk derivatives 4 3,011 80
Other liabilities 3,577 3,512
B/S Total other liabilities 45,549 36,831
1 Including the remaining tranche of the hybrid bond of EUR 0.6 billion.
2 L oans to finance the credit portfolio in Financial Services amounted to SEK 96,129 M (73,180) in bond loans and SEK 23,751 M (18,141) in other loans.
3 Non-current loans of SEK 1,093 M (3,030) were secured by assets pledged. Read more in Note 23 Assets pledged.
4 Read more in Note 30 Financial instruments, table 30:1 regarding non-current part of outstanding interest and currency risk derivatives.
5 A reclassification from other provisions regarding non-current deferred leasing income was made during 2022 amounting to SEK 557 M.
6 Read more in Note 7 Revenue regarding contract and refund liabilities, and sales with residual value commitments.
22:3 22:5
Maturity Not utilized Other current liabilities Dec 31, Dec 31,
Bond loans and non-current credit 2022 2021
Year other loans facilities
Trade payables 90,177 76,745
2024 59,949 22,249 Tax liabilities 6,907 4,287
2025 36,372 1,000 Advances from customers1 5,892 4,511
2026 22,772 22,257 Wages, salaries and withholding taxes 14,805 13,287
2027 10,200 – VAT liabilities 5,717 4,447
2028 717 – Accrued expenses for dealer
2029 or later 8,562 – bonuses and rebates1 5,767 4,998
Total 138,571 45,505 Other accrued expenses 15,071 11,744
Deferred leasing income1, 2 3,852 3,250
Deferred service revenue1 4,446 3,715
ead more in Note 14 Leasing, table 14:4 for maturities of non-current lease
R Other deferred income1 1,829 1,599
liabilities.
Residual value liabilities1 4,559 4,882
Refund liabilities1 783 737
The Volvo Group issued a hybrid bond in 2014 of EUR 1.5 billion. The first
tranche of EUR 0.9 billion was repaid in 2020. After the publishing of the Other financial liabilities 330 237
Volvo Group report on the fourth quarter and full year 2022 a decision has Interest and currency risk derivatives3 64 127
been made to call the second tranche of EUR 0.6 billion on the call date in Other liabilities 6,403 6,444
March, 2023. This will have no impact on the financial position of the Current liabilities 166,601 141,010
Volvo Group.
The predominant part of loans that mature in 2024 is an effect of the
1 ead more in Note 7 Revenue, regarding contract and refund liabilities, and
R
Volvo Group’s normal business cycle, with shorter duration in the Finan-
sales with residual value commitments.
cial Services portfolio compared to Industrial Operations.
2 A reclassification from other provisions regarding current deferred leasing income
Granted but not utilized credit facilities consist of stand-by facilities for was made during 2022 amounting to SEK 383 M.
loans. A fee is charged for granted credit facilities and recognized in the 3 ead more in Note 30 Financial instruments, table 30:1 regarding current
R
income statement within other financial income and expenses. part of outstanding interest and currency risk derivatives.

Non-interest-bearing current liabilities amounted to SEK 166,601 M
(141,010), or 70% (74) of the Volvo Group’s total current liabilities.
Current liabilities
22:4
Current bond loans and other loans
Bond loans
Dec 31,
2022
37,794
Dec 31,
2021
21,747
23 Assets pledged
B/S Total bond loans1, 2 37,794 21,747

23:1
Other loans 31,084 25,812
Lease liabilities 1,777 1,632 Assets pledged Dec 31, Dec 31,
2022 2021
Revaluation of outstanding derivatives to SEK 3
1,722 255
B/S Total other loans1, 2 34,583 27,700 Property, plant and
equipment mortgages 60 48
Assets under operating leases 249 246
1 Loans to finance the credit portfolio in Financial Services amounted to SEK Customer-financing receivables 3,273 6,449
37,776 M (21,747) in bond loans and SEK 28,019 M (21,819) in other loans. Total assets pledged 3,582 6,742
2 C urrent loans of SEK 1,994 M (3,138) were secured by assets pledged.
Read more in Note 23 Assets pledged.
3 ead more in Note 30 Financial instruments, table 30:1 regarding current
R
part of outstanding interest and currency risk derivatives.
Non-current and current loans of SEK 3,087 M (6,168) were secured by
assets pledged to an amount of SEK 3,582 M (6,742).
Other current loans include current maturities of non-current loans of
Under the terms of asset-backed securitizations, SEK 2,783 M (5,977) of
SEK 24,726 M (12,112).
securities have been issued tied to US-based loans, secured by customer-
financing receivables, SEK 3,273 M (6,449), with trucks and construction
equipments as collaterals. In 2022 no securities were signed (0).
Read more in Note 22 Liabilities.
24 Contingent liabilities and contingent assets
Other contingent liabilities amounted to SEK 6,251 M (5,222) and include

ACCOUNTING POLICY for example bid and performance clauses and legal proceedings.
A contingent liability is recognized for a possible obligation, for which it is Legal proceedings
not yet confirmed that a present obligation exists that could lead to an Starting in January 2011, the Volvo Group, together with a number of
outflow of resources. Alternatively, there is a present obligation that does other truck manufacturers, was investigated by the European Commis-
not meet the definitions of a provision or a liability as it is not probable that sion in relation to a possible violation of EU antitrust rules. In July 2016
an outflow of resources will be required to settle the obligation or a suffi- the European Commission adopted a settlement decision against the
ciently reliable estimate of the amount of the obligation cannot be made. Volvo Group and other truck manufacturers finding that they were
A contingent asset is a possible asset that arises from past events that involved in an antitrust infringement which, in the case of the Volvo Group,
will be confirmed by uncertain future events not wholly within the control covered a 14-year period from 1997 to 2011. The Volvo Group paid a mon-
of the Volvo Group. A contingent asset is disclosed where an inflow of etary fine of EUR 670 million.
economic benefits is probable. Following the adoption of the European Commission’s settlement deci-
sion, the Volvo Group has received and is defending itself against a signif-
icant number of private damages claims brought by customers and other
third parties alleging that they suffered loss, directly or indirectly, by rea-
24:1 son of the conduct covered in the decision. The claims relate primarily to
Contingent liabilities Dec 31, Dec 31, Volvo Group trucks sold during the 14-year period of the infringement
2022 2021 and, in some cases, to trucks sold in certain periods after the infringement
ended. Some claims have also been made against the Volvo Group that
Credit guarantees issued for
relate to trucks sold by other manufacturers. The truck manufacturers
customers and others 5,947 7,421
subject to the 2016 settlement decision are, in most countries, jointly and
Tax claims 5,661 4,926
severally liable for any losses arising from the infringement.
Residual value commitments 342 402
In the region of 3,000 claims are being brought in over 20 countries
Other contingent liabilities 6,251 5,222
(including EU Member States, the United Kingdom, Norway and Israel) by
Total contingent liabilities 18,201 17,971 large numbers of claimants either acting individually or as part of a wider
group or class of claimants. Further claims may be commenced. The liti-
gation in many countries can be expected to run for several years.
Several hundred thousand trucks sold by the Volvo Group are currently
Total contingent liabilities at December 31, 2022, amounted to SEK 18,201 subject to claims against it or other truck manufacturers, with claimants
M (17,971). alleging that the infringement resulted in an increase in the prices paid for
Volvo Group trucks which directly or indirectly caused them loss.
Credit guarantees issued amounted to SEK 5,947 M (7,421). The recog- The Volvo Group maintains its firm view that no damage was caused to its
nized amount for credit guarantees corresponds to the gross exposure and customers or any third party by the conduct set out in the settlement deci-
has not been reduced by the value of counter guarantees received or other sion, and in fact, the Commission did not assess any potential effects on
collaterals such as the right to repossess products. The value of counter the market. The transaction prices our customers paid for their trucks
guarantees and other collaterals reducing the exposure is dependent on were unaffected by the infringement and were the outcome of individual
the development of used products prices and on the possibility to repos- negotiations across all elements of their purchasing requirements, includ-
sess products. ing not only the prices for new trucks but also (where relevant) associated
A major part of the credit guarantees pertains to the credit guarantees products and services sold together with new trucks such as service con-
related to Chinese dealers and retail customers within Construction tracts, financing, buy-back guarantees etc.
Equipment. Litigation developments so far have been mixed with some adverse
developments, although uncertainty remains high and it is inherent in
Tax claims amounted to SEK 5,661 M (4,926) and pertain to charges complex litigation that outlooks and risks fluctuate over time.
against the Volvo Group for which the criteria for recognizing a tax liability At this stage it is not possible to make a reliable estimate of the total lia-
or a provision were not met. Global companies such as the Volvo Group bility that could arise from such proceedings given the complexity of the
are occasionally involved in tax processes of varying scope and in various claims and the different (and in some cases relatively early) stages to which
stages. Volvo Group regularly assesses these tax processes. When it is national proceedings have progressed. However, the litigation is substantial
probable that additional taxes must be paid and the outcome can be rea- in scale and any adverse outcome or outcomes of some or all of the litiga-
sonably e stimated, the required provision is made. Out of total tax claims, tion, depending on the nature and extent of such outcomes, may have a
SEK 1.7 billion (1.3) is related to a transfer price audit in Brazil and SEK material negative impact on the Volvo Group’s financial results, cash flows
2.5 billion (2.2) are related to two custom duties audits in India. and financial position. To date, the Volvo Group has recognized a cost of
SEK 630 M, which relates to certain limited aspects of the litigation that
Residual value commitments amounted to SEK 342 M (402) and were are currently capable of estimation. This is Volvo Group’s current assess-
attributable to sales transactions with residual value commitments (buy- ment, which may change depending on the progress of the litigation.
backs and tradebacks) that are independent from the sales transaction The Volvo Group is also involved in a number of legal proceedings other
and therefore not recognized as assets in the balance sheet. The amount than those described above. The Volvo Group’s assessment is that such
corresponds to the gross exposure and has not been reduced by the esti- other legal proceedings in aggregate are not likely to entail any risk of
mated net selling price of used products taken as collaterals. To the extent having a material effect on the Volvo Group’s financial position.
the used products pertaining to those transactions are expected to be
disposed at a loss, a provision for residual value risk is recognized. Read more in Note 21 Other provisions.
Read more in Note 21 Other p

rovisions about provisions for residual value risks. There were no contingent assets as of December 31, 2022 (–).
25 Transactions with related parties
ACCOUNTING POLICY
The Volvo Group engages in transactions with some of its related parties,
25:1
such as associated companies and joint ventures. The transactions arise in
the ordinary course of business and are conducted on commercial terms Sales of goods, Purchases of
services and other goods, services
and market prices. They mainly consist of sales of vehicles, parts, equip- income and other expense
ment and services as well as purchases of parts, engines and vehicles for
2022 2021 2022 2021
resale. Transactions between AB Volvo and its subsidiaries have been
eliminated in the consolidated financial statements and transactions with Associated companies 1,557 899 145 60
the Board of Directors and the Group Executive Board consist of remuner- Joint ventures 2,336 1,575 1,260 935
ations, which are not disclosed in this note.
Read more in Note 5 Investments in joint ventures, associated companies and
ead more in Note 27 Personnel about remunerations to the Board of Directors

R 25:2
and the Group Executive Board. Receivables Payables
ead more in Corporate Governance Report about Board of Directors and
R Dec 31, Dec 31, Dec 31, Dec 31,
Group Executive Board. 2022 2021 2022 2021
Associated companies 113 48 63 30

Joint ventures 472 353 122 69
The Volvo Group’s transactions with related parties are presented in table
25:1 and 25:2 .
26 Government grants
ACCOUNTING POLICY
Government grants are financial grants from governmental or supra In 2022, government grants of SEK 689 M (895) were received, and SEK
national bodies that are received in exchange for fulfillment of certain con- 701 M (936) were recognized in the income statement.
ditions by the Volvo Group. The financial grants are recognized in the Government grants includes tax credits of SEK 312 M (309) related to
financial statement when there is a reasonable assurance that the condi- product development, which were primarily received in France and in the
tions will be complied with and that the grants will be received. United States. Other grants were mainly received from Swedish, Chinese
Government grants related to assets are presented in the balance sheet and US governmental organizations and from the European Commission.
either as deferred income or as a deduction of the carrying amount of the
related assets. G overnment grants related to income are reported as a
deferred income in the balance sheet and recognized in the income state-
ment to match the related costs. If the costs incurred before the grants have
been received, but there is an agreement that grants will be received, grants
are recognized in the income statement to match the related costs.
27 Personnel
one year of the pre-tax base salary for the other Executives. The holding
ACCOUNTING POLICY requirements for the Executives shall cease upon termination of an Exec-
utive’s employment, and the Board of Directors may grant such other
Incentive programs exceptions to the requirements as the Board deems appropriate.
The Volvo Group has a long-term and a short-term incentive program that is Further cash remuneration may be awarded in extraordinary circum-
accounted for in accordance with IAS 19 Employee benefits. During the stances, provided that such extraordinary arrangements are limited in time
vesting period, the incentive program is recognized as an expense and as a and only made on an individual basis, either for the purpose of recruiting or
short-term liability. retaining Executives, or as remuneration for extraordinary performance
beyond the individual’s ordinary tasks. Such remuneration may not exceed
an amount corresponding to 100 per cent of the annual base salary. Any
Policy for remuneration to senior executives, approved by the Annual resolution on such remuneration shall be made by the Board of Directors
General Meeting on 6 April 2022 based on a proposal from the Remuneration Committee.
The Annual General Meeting 2022 decided upon the following policy on For the President and CEO, pension benefits shall be granted on the
remuneration and other terms of employment for the members of the basis of a defined contribution plan. The pensionable salary shall include
Volvo Group Executive Board. base salary only. The pension contributions for the President and CEO
These guidelines are forward-looking, i.e. they are applicable to remu- attributable to the annual base salary shall amount to not more than 35
neration agreed, and amendments to remuneration already agreed, after per cent of the base salary.
the proposed adoption of these guidelines by the 2022 annual general Other benefits may include, for example, life insurance, medical and
meeting. These guidelines do not apply to any remuneration decided or health insurance, and company cars. Premiums and other costs relating to
approved by the general meeting. Any new share-based incentive plans such benefits may amount to not more than 3 per cent of the annual base
will, where applicable, be resolved by the general meeting, but no such salary for the President and CEO.
plan is currently proposed. For other Executives, pension benefits shall be granted on the basis of
a defined contribution plan except where law or collective agreement
The guidelines’ promotion of the Volvo Group’s business strategy, require a defined benefit pension. The pensionable salary shall include
long-term interests and sustainability base salary and, where required by law or collective agreement, incen-
It is a prerequisite for the successful implementation of the Volvo Group’s tives. The total pension contributions for other Executives shall amount to
business strategy and safeguarding of its long-term interests, including not more than 35 per cent of base salary, unless a higher percentage
its sustainability, that the Group can recruit, retain and develop senior results from the application of law or collective agreement.
management. These guidelines enable AB Volvo to offer Executives a Other benefits may include, for example, life insurance, medical and
competitive total remuneration. More information regarding the Volvo health insurance, and company cars. Premiums and other costs relating to
Group’s business strategy is available in the Volvo Group Annual and Sus- such benefits may amount to not more than 10 per cent of the annual base
tainability Report. salary for other Executives.
Remuneration for Executives that reside outside Sweden or reside in
Types of remuneration Sweden but having a material connection to or having been residing in a
Volvo Group remuneration to Executives shall consist of the following country other than Sweden may be duly adjusted to comply with manda-
components: base salary, short-term and long-term variable incentives, tory rules or local practice, taking into account, to the extent possible, the
pension benefits and other benefits. overall purpose of these guidelines.
Short-term incentives may, for the President and CEO, amount to a In addition to remuneration set out above, Executives who relocate for
maximum of 100 per cent of the base salary and, for other Executives, the purposes of the position or who work in other multiple countries may
a maximum of 80 per cent of the base salary. also receive such remuneration and benefits as are reasonable to reflect
Long-term incentives may, for the President and CEO, amount to a the special circumstances associated with such arrangements, taking
maximum of 150 per cent of the base salary and, for other Executives, a into account the overall purpose of these guidelines and alignment with
maximum of 80 per cent of the base salary. The current long-term incen- the general policies and practices within the Volvo Group applicable to
tive plan for the Group’s senior management, including the Executives, cross border work.
was introduced in connection with the 2016 annual general meeting. The
objective of the program is to drive long-term value creation and align the Termination of employment
interests of the senior management with those of the shareholders. To Upon termination of an Executive’s employment, the notice period may
achieve this, the program operates on a four-year cycle; with a perfor- not exceed twelve months. Base salary during the notice period and sev-
mance based annual award, which is invested in Volvo shares with a man- erance pay may not together exceed an amount corresponding to the base
datory lock-in period of three years. There will be no payout under the salary for two years.
long-term incentive program if the Annual General Meeting that is held in Executives that reside outside Sweden or reside in Sweden but having
the year following the performance year, decides not to distribute any div- a material connection to or having been residing in a country other than
idends to the shareholders. The program is funded on an annual basis by Sweden may be offered notice periods for termination and severance pay-
an award, measured against performance criteria established by the ment as are reasonable to reflect the special circumstances, taking into
Board of Directors. The after-tax portion of this payment must be imme- account the overall purpose of these guidelines and alignment with the
diately invested in AB Volvo shares which must be held for a minimum of general policies and practices within the Volvo Group.
three years. In this way, the Executives will build up a shareholding in the
company and have a vested interest over the longer-term development in Criteria for awarding variable cash remuneration, etc.
the value of the shares. At the end of the three year period, the Executives Short-term and long-term incentives shall be linked to predetermined and
may sell their shares, if they meet the requirement for owning shares val- measurable criteria. The criteria – which for example may relate to EBIT,
ued at two years of the pre-tax base salary for the President and CEO and cash flow, return on capital employed or similar ratios, or sustainability tar-
gets – shall be devised to promote the Volvo Group’s strategy and long- AB Volvo and its executive management. The President and CEO and
term value creation and strengthen the link between achieved perfor- other members of the executive management do not participate in the
mance targets and reward. The criteria for short-term and long-term Board of Directors’ processing of and resolutions regarding remunera-
incentives shall be determined by the Board of Directors annually. The sat- tion-related matters in so far as they are affected by such matters.
isfaction of the criteria shall be measured over periods of one year each.
To which extent the criteria for awarding variable remuneration has Derogation from the guidelines
been satisfied shall be determined when the relevant measurement period The Board of Directors may temporarily resolve to derogate from the
has ended. The Board of Directors is responsible for the determination of guidelines, in whole or in part, if in a specific case there is special cause for
variable remuneration to all Executives. the derogation and a derogation is necessary to serve the Volvo Group's
long-term interests, including its sustainability, or to ensure the Group's
Claw-back and adjustments financial viability. As set out above, the Remuneration Committee's tasks
Executives participating in the Volvo Group’s current short-term and long- include preparing the Board of Directors' resolutions in remuneration-related
term incentive plans are obliged, in certain circumstances and for speci- matters. This includes any resolutions to derogate from the guidelines.
fied periods of time, to repay, partially or in its entirety, variable incentive
awards already paid if payments have been made by mistake or been Description of material changes to the guidelines and how the views of
based on intentionally falsified data or in the event of material restatement shareholders' have been taken into consideration
of the Volvo Group’s financial results. Furthermore, the Board of Directors In order to bring the total remuneration towards more market competitive
may decide on adjustments of pay-out under the incentive plans (before level, it is proposed to increase the maximum long-term incentive oppor-
payment has been made) in case of extraordinary circumstances or to tunity level for the President and CEO, from maximum 100% of base sal-
adjust for unforeseen one-timers. ary as of today to maximum 150% of the base salary. In addition, increas-
ing the long-term incentive where the pay-out is 100% invested into
Salary and employment conditions for employees Volvo shares subject to a three-year holding period will further strengthen
In the preparation of the Board of Directors’ proposal for these remunera- the alignment with long-term shareholder interest. The only further
tion guidelines, the Board has considered that the various benefits offered changes proposed to the Remuneration Policy are editorial changes as
to the Executives need to be aligned with the general structures applica- well as a clarification on pensionable salary in relation to incentives.
ble for employees of AB Volvo at levels that are competitive in the market. During 2021, the company has carefully considered feedback received
Thus, salary and employment conditions for other AB Volvo employees from shareholders and proxy advisors in connection with the Annual General
have been taken into account by including information thereon in the Meeting 2021 and otherwise during the year. For further information,
Remuneration Committee’s and the Board of Directors’ basis of decision please refer to the section Looking ahead to 2022 in the Remuneration
when evaluating whether the guidelines and the limitations set out herein Report 2021.
are appropriate.
Fees paid to the Board of Directors
The decision-making process to determine, According to a resolution adopted at the Annual General Meeting 2022,
review and implement the guidelines fees to the Board of Directors appointed at the Annual General Meeting for
The Board of Directors has established a Remuneration Committee. The the period until the close of the Annual General Meeting 2023 shall be paid
Committee’s tasks include preparing the Board of Directors’ decision to as follows: The Chairman of the Board should be awarded SEK 3,850,000
propose guidelines for executive remuneration. The Board of Directors (3,700,000) and each of the other members SEK 1,150,000 (1,100,000)
shall prepare a proposal for new guidelines at least every fourth year and with exception of the President and CEO of AB Volvo, who does not
submit it to the general meeting. The guidelines shall be in force until new receive a director’s fee. In addition, SEK 405,000 (390,000) should be
guidelines are adopted by the general meeting. The Remuneration Com- awarded to the Chairman of the Audit Committee and SEK 190,000
mittee shall also monitor and evaluate plans for variable remuneration for (180,000) to each of the other members of the Audit Committee, and SEK
Executives, the application of the guidelines for executive remuneration as 170,000 (165,000) to the Chairman of the Remuneration Committee and
well as the current remuneration structures and compensation levels in the SEK 125,000 (118,000) to each of the other members of the Remunera-
Group. The members of the Remuneration Committee are independent of tion Committee, and SEK 200,000 (-) to the Chairman of the Volvo CE
27:1
Remuneration to the Group Fixed remuneration Variable remuneration
Executive Board Other Short-term Long-term Other Pension
SEK Fixed salary benefits1 incentives incentives remunerations2 premiums
President and CEO 17,496,875 279,057 13,910,861 19,183,651 1,198,758 6,035,732

Deputy CEO 9,543,330 210,731 6,051,464 5,563,479 531,456 3,231,198
Other members of the
Group Executive Board3 95,635,834 14,565,147 51,590,551 51,916,788 1,434,960 30,022,143
Total 2022 122,676,039 15,054,935 71,552,876 76,663,918 3,165,174 39,289,073
Total 2021 111,546,898 18,698,388 77,889,953 60,433,152 1,742,236 38,044,393
1 Other benefits mainly pertain to company cars and, various insurances and expatriate support costs.
2 O ther remunerations include payments to Swedish individuals in the Group Executive Board in connection to a change in their pension benefits.
3 The Group Executive Board comprised, excluding the President and CEO and Deputy CEO, of 13 (13) members at the end of the year.
Transformation Committee and SEK 170,000 (-) to each of the other As part of the agreement to change the pension set-up as per July 1, 2021,
members of the Volvo CE Transformation Committee. a final lump sum cash payment of SEK 531,456 (343,792) was paid out
during the year. Other benefits, mainly pertaining to company car and insur-
Terms of employment and remuneration to the President and CEO ance benefits, amounted to SEK 210,731 (151,640).
Fixed salary, short-term and long-term incentives The Deputy CEO also participated in the long-term incentive program
The President and CEO is entitled to a remuneration consisting of a fixed decided by the Board of Directors in 2022. The long-term incentive amounted
annual salary and short-term and long-term incentives. During the financial to SEK 5,563,479 (4,595,140), which was 59.4% (52.8) of the annual
year 2022, the short-term incentive is based on operating income, operating base salary and the full net amount shall be invested in Volvo B shares.
cash flow and electric vehicle volume for the Volvo Group; the long-term There is to be no pay-out of the amount if the Annual General Meeting
incentive is based on operating income and return on capital employed. The held in 2023 decides not to distribute any dividends to the shareholders for
short-term incentive amounts to a maximum of 100% of the annual base 2022.
salary and the long term incentive amounts to a maximum of 150% of the
annual base salary. Pensions
For the financial year 2022, the President and CEO received a fixed salary The Deputy CEO participated in the collective bargain agreement (ITP)
including vacation payment of SEK 17,496,875 (16,308,335) and a short- and the Volvo Executive Pension (VEP) plan. The VEP plan is a defined
term incentive of SEK 13,910,861 (14,157,306). The short-term incentive contribution (DC) plan with a contribution amounting to 35% of the
was 80.7% (88.1) of the annual base salary. annual base salary exceeding 30 income base amounts (SEK 2,130,000
As part of the agreement to change the pension set-up as per July 1, 2021, in 2022). For VEP, there were no commitments other than the payment of
a final lump sum cash payment of SEK 1,198,758 (745,091) was paid out the contributions.
during the year. Other benefits, mainly pertaining to a company car and Total pension premiums for the Deputy CEO amounted to SEK 3,231,198
insurance benefits, amounted to SEK 279,057 (299,575). (3,624,790) in 2022.
The President and CEO was also participating in the long-term incen-
tive program decided by the Board of Directors in 2022. During the finan- Severance payments
cial year the outcome of the long-term incentive program amounted to The employment contract for the Deputy CEO contains rules governing
SEK 19,183,651 (10,608,905), which was 111.3% (66.1) of the base sal- severance payments when AB Volvo terminates the employment. The
ary. The full net amount shall be invested in Volvo B shares. There is to be notice period upon termination by the company shall not exceed 12 months
no pay-out of the amount if the Annual General Meeting held in 2023 and the notice period upon termination by the Deputy CEO shall not
decides not to distribute any dividends to the shareholders for 2022. exceed 6 months. In addition, in the event of termination by the company,
the Deputy CEO is entitled to a maximum of 12 months’ severance pay.
Pensions
The President and CEO was covered by a pension benefit in the form of a Remuneration to the Group Executive Board
defined contribution (DC) plan with a contribution amounting to 35% of Fixed salary, short-term and long-term incentives
the annual base salary. There were no commitments other than the pay- Members of the Group Executive Board receive short-term and long-term
ment of the contributions. incentives in addition to fixed salaries. During the financial year 2022, the
Total pension premiums for the President and CEO amounted to SEK short-term incentive is based on operating income, operating cash flow
6,035,732 (7,218,565) in 2022. and electric vehicle volume for the Volvo Group; the long-term incentives
are based on operating income and return on capital employed. In 2022,
Severance payments short-term and long-term incentives, for Group Executive Board members
The President and CEO has a 12 months' notice period upon termination by excluding the President and CEO, could each amount to a maximum of
AB Volvo and a 6 months' notice period upon termination on his own initia- 80% of the annual base salary.
tive. If terminated by the company, the President and CEO is entitled to a For the financial year 2022, fixed salaries amounted to SEK 95,635,834
severance payment equivalent to 12 months’ salary. In the event of new (86,395,346) for the Group Executive Board members excluding the Pres-
employment during the severance period, the severance pay is reduced ident and CEO and the Deputy CEO. The short-term incentive amounted to
with an amount equal to 100% of the income from the new employment. SEK 51,590,551 (57,600,553) for the Group Executive Board members
excluding the President and CEO and the Deputy CEO. Short-term incen-
Terms of employment and remuneration to the Deputy CEO tive was in average 59.0% (68.3) of the annual base salary. As part of the
Fixed salary, short-term and long-term incentives agreement to change the pension set-up as per July 1, 2021, for the Group
The Deputy CEO receives short-term and long-term incentives in addition Executive Board members in the Swedish pension plan, final lump sum
to a fixed salary. During the financial year 2022, the short-term incentive cash payments were made during the year in a total amount of SEK
is based on operating income, operating cash flow and electric vehicle 1,434,960 (653,353). Other benefits, including company cars, housing,
volume for the Volvo Group; the long-term incentive is based on operating and expatriate support costs, amounted to SEK 14,565,147 (18,247,173).
income and return on capital employed. In 2022, short-term and long- The Group Executive Board also participated in the long-term incentive
term incentives, for the Deputy CEO, could each amount to a maximum of program decided by the Board of Directors in 2022. The long-term incen-
80% of the annual base salary. tive amounted to SEK 51,916,788 (45,229,106) for the Group Executive
For the financial year 2022, the Deputy CEO received a fixed salary Board members, excluding the President and CEO and the Deputy CEO,
including vacation payment of SEK 9,543,330 (8,843,217) and a short- which was 59.4% (52.8) of the annual base salaries. The full net amount
term incentive of SEK 6,051,464 (6,132,094). The short-term incentive shall be invested in Volvo B shares. There is to be no pay-out of the amount
was 64.6% (70.5) of the annual base salary. if the Annual General Meeting held in 2023 decides not to distribute any
dividends to the shareholders for 2022.
Pensions Volvo Group's total cost for remuneration and benefits to the Group
The Group Executive Board members enrolled in the Swedish pension Executive Board
plan participated in the collective bargain agreement (ITP), as well as the The total cost for remuneration and benefits to the Group Executive Board
Volvo Executive Pension (VEP) plan. The VEP plan is a defined contribu- amounted to SEK 411 M (380) and pertained to fixed salaries, short-term
tion (DC) plan with a contribution amounting to 35% of the annual base and long-term incentives, other benefits and pensions. It also included
salary exceeding 30 income base amounts (SEK 2,130,000 in 2022). For social fees on salaries and benefits, special payroll tax and additional
VEP, there were no commitments other than the payment of the contribu- costs for other benefits.
tions.
Pension premiums for the Group Executive Board, excluding the President Long-term incentive programs
and CEO and the Deputy CEO, amounted to SEK 30,022,143 (27,201,038) Long-term incentive program from 2016
in 2022. In 2016, the Board of Directors approved a long-term cash-based incen-
tive program comprising the top 300 persons from senior management,
Severance payments including Executives, in the Volvo Group. For more information, please
The employment contracts for Group Executive Board members contain refer to Types of remuneration on page 125. During 2022, it was decided
rules governing severance payments when AB Volvo terminates the to increase the program size with an additional 100 slots to accommodate
employment. For Executives resident in Sweden, the notice period upon attraction and retention of employees with rare and/or deep expertise and
termination by the company shall not exceed 12 months and the notice skills that are hard to find in the external market and are key to the Volvo
period upon termination by the Executive shall not exceed 6 months. In Group's transformation journey.
addition, in the event of termination by the company, the Executive is enti-
tled to a maximum of 12 months’ severance pay.
Executives resident outside Sweden or resident in Sweden but having
a material connection to or having been resident in a country other than
Sweden may be offered notice periods for termination and severance pay-
ment that are competitive in the country where the Executives are or have
been resident or to which the Executives have a material connection, pref-
erably solutions comparable to the solutions applied to Executives resi-
dent in Sweden.
27:2
Average number of 2022 2021
employees Number of employees of which women, % Number of employees of which women, %
AB Volvo
Sweden 282 50 283 49
Subsidiaries
Sweden 22,013 25 20,538 24
Western Europe (excl. Sweden) 20,817 18 20,383 17
Eastern Europe 6,224 22 6,584 20
North America 17,459 21 16,301 21
South America 7,110 19 6,358 17
Asia 10,137 18 11,384 16
Other countries 2,275 19 2,128 19
Volvo Group total 86,316 21 83,958 20
27:3
Board members and other senior executives 2022 2021
Number at year-end of which women, % Number at year-end of which women, %
AB Volvo
Board members1 11 45 11 45
CEO, Deputy CEO and other senior executives 15 33 15 27
Volvo Group
Board members 561 25 555 25
Presidents and other senior executives 613 28 597 27
1 Board members elected by the Annual General meeting.
27:4
Wages, salaries and other 2022 2021
remunerations Board and of which Other Board and of which Other
SEK M Presidents variable salaries employees Presidents variable salaries employees
AB Volvo1 88.0 41.8 399.9 73.5 34.4 404.9

Subsidiaries 816.4 216.3 48,226.6 706.2 184.9 41,404.9
Volvo Group total 904.4 258.0 48,626.4 779.7 219.3 41,809.8
27:5
Wages, salaries and other 2022 2021
remunerations and social costs Wages, salaries Wages, salaries
SEK M remuneration Social costs Pension costs remuneration Social costs Pension costs
AB Volvo 2
487.9 140.2 121.6 478.4 138.8 156.0
Subsidiaries 49,043.0 10,541.4 5,145.9 42,111.1 9,287.3 4,772.0
Volvo Group total3 49,530.9 10,681.6 5,267.5 42,589.5 9,426.1 4,928.0
1 Including current and former Board members, President and CEO and Deputy CEO.
2 The parent company’s pension costs, pertaining to Board members and P
residents are disclosed in note 3 Administrative expenses in the annual report of the parent company.
3 O f the Volvo Group’s pension costs, SEK 93 M (89) pertain to Board members and Presidents, including current and former Board members, Presidents and CEO, Deputy
CEO and other senior executives. The Volvo Group’s outstanding p ension obligations to these individuals amount to SEK 567 M (625). The cost for non-monetary benefits
in the Volvo Group amounted to SEK 3,409 M (2,877) of which SEK 33 M (30) pertained to Board members and Presidents. The cost for non-monetary b enefits in the
parent c ompany amounted to SEK 7.4 M (6.0) of which SEK 0.4 M (0.0) to Board members and P resident.
28 Fees to the auditors
The audit assignment involves review of the Annual report and financial
accounting and the administration by the Board and the President.
28:1
Audit-related assignments mean quality assurance services required by
Fees to the auditors 2022 2021 enactment, articles of association, regulations or agreement. The amount
Deloitte
includes the fee for reviewing the half-year report. Tax services include
both tax consultancy and tax compliance services. All other tasks are
– Audit fees 122 105
defined as other services.
whereof to Deloitte AB 41 35
– Audit-related fees 8 6
whereof to Deloitte AB 3 2
– Tax advisory services – 1
whereof to Deloitte AB – –
– Other fees 5 6
whereof to Deloitte AB – –
Total 135 118
Audit fees to others 2 3

Volvo Group Total 137 121
29 Cash flow
ACCOUNTING POLICY
Cash flow statement

The cash flow statement is prepared in accordance with the indirect 29:1
method. The cash flows of foreign group companies are translated at aver- Other non-cash items 2022 2021
age rates. Changes in group structure, acquisitions and divestments are
recognized gross and are included in cash flow from investing activities, in Allowance for expected credit losses on
accounts receivables/customer-financing
the items Acquired operations and Divested operations. receivables1 4,260 534
Gains/losses on divested operations2 – –1,643
Operating cash flow
Unrealized exchange rate gains/losses
The operating cash flow is a measure of the amount of cash generated by on accounts r eceivables and payables 455 34
the Volvo Group’s regular business operations. The operating cash flow Unrealized exchange rate gains/losses
also includes investments and disposals of intangible and tangible assets, on other operating assets and liabilities 283 114
which are part of the investing activities. Provision for incentive programs 1,761 1,523
Read more in Note 18 Cash and cash equivalents. Gains/losses on disposals of
in-/tangible assets –232 27
Gains/losses on divestments of
shares and participations –109 15
Results from investments in joint ventures 1,333 67
Service cost related to pensions 1,659 2,053
Deferred sales with residual value
commitments –3,957 –3,154
Provision for restructuring – –160
Other changes3 1,512 –409
Total other non-cash items 6,964 –998
1 The increase mainly refers to the financial impact related to Russia.

2 In 2021 Volvo Group divested the UD Trucks operations with a capital gain of
SEK 1.7 billion.
3 includes costs for claims arising from the European Commission's 2016 antitrust
settlement decision and costs for a civil penalty from the National Highway Traffic
Safety Administration in the US.
29:2
Changes in loans 2022 Cash flows Non-cash items
Reclassi
fications Unrealized
December New Repayment of and other currency Currency December 31,
31, 2021 borrowings borrowings changes1 effects translation 2022
Current bond loans and other loans 49,447 100,699 –136,196 51,763 131 6,532 72,377
Non-current bond loans and other loans 104,177 74,108 –1,970 –50,958 2,259 10,955 138,571
Interest and currency risk derivatives –2,013 – – – 306 –23 –1,730
Realized derivatives – – 2,605 – – – –
Cash transfers2 – 4,191 –7,990 – – – –
Other – –1,466 3 – – – – –
Cash flow impact from changes in loans 177,532 –143,551
Changes in loans 2021 Cash flows Non-cash items

Reclassi
fications Unrealized
December New Repayment of and other currency Currency December 31,
31, 2020 borrowings borrowings changes1 effects translation 2021
Current bond loans and other loans 58,258 54,274 –88,200 27,772 –5,127 2,470 49,447
Non-current bond loans and other loans 95,166 36,101 –5,981 –26,913 1,501 4,302 104,177
Interest and currency risk derivatives –5,496 – – – 3,484 – –2,013
Realized derivatives – – –766 – – – –
Cash transfers2 – – –1,160 – – – –
Other – –1,234 3 –5 – – – –
Cash flow impact from changes in loans 89,141 –96,113
1 Includes remeasurements of lease liabilities which had no impact on cash flow.

2 C ash transfers for Credit Support Annex (CSA) agreements are used to reduce the exposure from net open positions on interest and currency risk derivatives.
The netting agreements have no effect on the financial performance or the net financial position of the Volvo Group.
3 During 2022, new lease liabilities of SEK 1.5 billion (1.2), included in non-current other loans, were adjusted as non-cash items.
ead more in Note 4 Goals and policies in financial risk management about
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Credit Support Annex (CSA) agreements.
Net borrowings increased by SEK 34.0 billion (–7.0), mainly as an effect of
higher new business volume in Financial Services. ead more in Note 22 Liabilities regarding Current loans and
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Syndications were performed in Financial Services to an amount of Non-current loans.
SEK 12.2 billion (9.8). All syndications impacted cash flow this year. ead more in Board of Director's report about Cash flow statement
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and Financial position.
30 Financial instruments
For forward exchange contracts the basis is the forward premium based
ACCOUNTING POLICY on current spot rate for each currency and future date. The fair value is then
discounted based on the forward rates as per the balance sheet date.
Financial assets and liabilities are recognized on the transaction date accord- Holding of shares are classified as level 1 for listed shares and level 3 for
ing to the contractual terms of the instrument. Transaction costs are included non-listed shares. Call options are classified as level 3 and are based on the
in the assets’ fair value, except in cases in which the change in value is recog- Black & Scholes option pricing formula.
nized in the income statement. The transaction costs that arise in conjunction
with the admission of financial liabilities are amortized over the term of the Financial assets and liabilities measured at fair value
loan as financial cost. through the income statement
A financial asset is derecognized from the balance sheet when the Volvo Group’s financial assets and liabilities held for trading are recog-
rights to the cash flows from the asset have expired at maturity or when nized at fair value through the income statement. As presented in table
all significant risks and rewards related to the asset have been transferred 30:1, these instruments are derivatives, used for hedging interest and
to a third party. currency risks and marketable securities, further presented in note 18
The fair value of financial assets is determined based on valid market Cash and cash equivalents.
prices, when available. If market prices are unavailable, the fair value is deter- Derivatives used for hedging interest rate exposure financing the cus-
mined for each asset through the use of various measurement techniques. tomer financing porfolio within Financial Services as well as the debt port-
The fair value of financial instruments is classified based on the degree that folio in Industrial Operations are included in this section. Unrealized gains
market values have been utilized when measuring fair value. The majority and losses from fluctuations in the fair value of the financial instruments are
of financial instruments measured at fair value held by Volvo Group is clas- recognized in other financial income and expenses. The Volvo Group
sified as level 2. The valuation of level 2 instruments is based on market intends to hold these derivatives to maturity, which is why, over time, the
conditions using quoted market data existing at each balance sheet date. market valuation will have no impact on financial performance or cash
The basis for the interest is the zero-coupon-curve in each currency which flow.
is used to calculate the present value of all the estimated future cash flows.
Financial instruments used for hedging currency risks arising from Financial assets measured at amortized cost
future firm commercial cash flows are also recognized in this section. Customer-financing receivables are held as part of a business model
During 2022 no hedging has been performed on future firm commercial whose objective is to collect contractual cash flows. The contractual cash
cash flows. When hedging future cash flows for specific orders the classi- flows are solely payments of principal and interest and are valued at amor-
fication in the income statement is decided on a case by case basis. In tized cost in accordance with the effective interest method. In this cate-
2022, gains and losses from derivatives hedging currency risks for spe- gory the Volvo Group also includes accounts receivables and holding of
cific orders of SEK 44 M (–3) have been recognized in operating income shares in non-listed companies for which a fair value cannot reasonably be
and SEK 1 M (32) in other financial income and expenses. determined. The carrying value has been analyzed and compared with an
Read more in Note 4 Goals and policies in financial risk management. estimated fair value. The carrying value is a reasonable approximation of
the fair value.
Read more in Note 5 Investments in joint ventures, associated c ompanies and
Financial assets measured at fair value through other
comprehensive income Read more in Note 15 Customer-financing receivables.
In this category the Volvo Group includes holding of shares in listed compa- Read more in Note 16 Receivables.
nies as the shares are not held for trading. Changes in fair value is measured
through other comprehensive income and amounted to SEK –45 M (48). Hedge Accounting is not applied by the Volvo Group.
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Information regarding carrying amounts and fair values

In table 30:1, carrying amounts are compared with fair values for all of the
Volvo Group’s financial instruments.
30:1
Carrying amounts and fair values on financial instruments Dec 31, 2022 Dec 31, 2021
Carrying Fair Carrying Fair
value value value value
Assets
Financial assets measured at fair value through the income statement
Interest and currency risk derivatives1 Note 16 5,751 5,751 2,930 2,930
Other derivatives2 564 564 564 564
B/S Marketable securities Note 18 93 93 167 167
6,408 6,408 3,661 3,661
Financial assets measured at fair value through other comprehensive income

Holding of shares in listed companies Note 5 6 6 51 51
Financial assets measured at amortized cost

B/S Accounts receivables Note 16 48,220 48,220 40,776 40,776
Customer-financing receivables Note 15 193,928 193,928 151,504 151,504
Holding of shares in non-listed companies Note 5 599 599 488 488
Other interest-bearing receivables 3 Note 16 5,738 5,738 1,692 1,692
248,485 248,485 194,460 194,460
B/S Cash and cash equivalents Note 18 83,886 83,886 62,126 62,126
Liabilities Note 22
Financial liabilities measured at fair value through the income statement
Interest and currency risk derivatives 4 8,975 8,975 2,379 2,379
Financial liabilities measured at amortized cost 5
Non-current bond loans and other loans 134,392 130,794 102,259 103,536
Current bond loans and other loans 70,655 70,475 49,192 49,329
B/S Trade Payables 90,177 90,177 76,745 76,745
295,224 291,446 228,197 229,610
1 The Volvo Group’s gross exposure from derivatives reported as assets was reduced by 4 The Volvo Group’s gross exposure from derivatives reported as liabilities was reduced
79% (80) by netting agreements and cash deposits to SEK 1,223 M (588). by 98% (94) by netting agreements and cash deposits to SEK 189 M (148).
2 T he input data used in the valuation model for calculating the fair value has not 5 In the Volvo Group balance sheet, financial liabilities include loan-related deriva-
changed during 2022. tives amounting to SEK –5,900 M (–2,173). The credit risk is included in the fair
3 T he amount includes Cash deposits for Credit Support Annex (CSA) agreements, value of loans.
where the receivable amounted to SEK 4,959 M (1,160). The agreements have no ead more in Note 4 Goals and policies in financial risk management about
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effect on the financial performance or net financial position of the Volvo Group. Credit Support Annex (CSA) agreements.
Derecognition of financial assets have to pay in case of default of the customers. The likelihood for all custom-
The Volvo Group is involved in discounting activities to reduce financial risks. ers going into default at the same time is considered to be low. The gross
An evaluation is performed to establish whether substantially all the risks exposure for the Volvo Group amounted to SEK 5.9 billion (7.4) related to
and rewards have been transferred to an external party when entering into credit guarantees issued for customers and others and is part of the Volvo
an agreement. The Volvo Group’s intention is not to be involved in Group’s contingent liabilities. This amount has not been reduced by the value
discounting activities if not substantially all the risks and rewards can be of counter guarantees received or other collaterals such as the right to repos-
transferred to an external party. As of December 31, 2022, there were no sess the products.
transferred financial assets in the Volvo Group that did not fulfill the Read more in Note 21 Other provisions.
requirements for derecognition.
Read more in Note 24 Contingent Liabilities.
Financial assets are derecognized from the balance sheet when the
rights to the cash flows from the assets have expired or when substan-
tially all risks and rewards have been transferred. Involvement in these Gains, losses, interest income and interest expenses from
assets is reflected in the Volvo Group’s b
alance sheet as part of the exter- financial instruments
nal credit guarantees. They are valued at best estimate and recognized as Table 30:3 shows how gains and losses, as well as interest income and
provisions in the balance sheet to an amount of SEK 0.2 billion (0.2). interest expenses have affected income after financial items in the Volvo
The Volvo Group’s maximum loss exposure is considered being the total Group divided by the different categories of financial instruments.
recourse relating to transferred and derecognized assets that are part of the
recognized credit guarantees, i.e. the total amount the Volvo Group would
In table 30:2, outstanding derivatives hedging currency and interest rate risks are presented.
30:2
Outstanding derivative instruments Dec 31, 2022 Dec 31, 2021
Nominal amount Carrying value Nominal amount Carrying value
Interest-rate swaps
– receivable position 217,951 5,532 112,571 2,779
– payable position 162,277 –8,616 202,829 –2,265
Forward and futures
– receivable position – – – 0
– payable position – – – –
Foreign exchange derivatives
– receivable position 33,932 218 13,457 150
– payable position 30,486 –359 10,719 –114
Options purchased
– receivable position 56 0 5,068 1
Options written
– payable position 56 0 – –
Total –3,224 551
30:3
Recognized in operating income 2022 2021
Gain/ Interest Interest Gain/ Interest Interest
Loss income expense Loss income expense
Financial assets and liabilities at fair value through the income statement
Currency risk derivatives1, 2 133 – – –264 – –
Marketable securities 16 – – 13 – –

Accounts receivables/trade payables 3 –1,600 – – 32 – –
Cash and cash equivalents 77 – – 46 – –
Customer-financing receivables 4 145 10,005 – 366 7,020 –
Holding of shares in listed companies5 0 – – 0 – –
Holding of shares in non-listed companies 132 – – –16 – –
Financial liabilities measured at amortized cost6 – – –4,599 – – –2,451
Impact on operating income –1,099 10,005 –4,599 177 7,020 –2,451
Recognized in net financial items7, 8 2022 2021

Gain/ Interest Interest Gain/ Interest Interest
Loss income expense Loss income expense
Financial assets and liabilities at fair value through the income statement
Marketable securities 3 1 – 0 0 –
Interest and currency rate risk derivatives1, 2 –4,816 –35 –1,470 –2,784 –7 –1,075

Cash and cash equivalents – 1,042 – – 365 –
Financial liabilities measured at amortized cost 4,499 – 432 3,684 – 126
Impact on net financial items7, 8 –313 1,008 –1,038 900 358 –949
1 Accrued and realized interest related to financial assets and liabilities measured for expected credit losses on customer-financing receivables is provided in note
at fair value through the income statement is included in the amounts for gains 15 Customer-financing receivables and note 8 Other o perating income and
and losses. expenses.
2 T he Volvo Group uses forward contracts and currency options to hedge the value 5 C hanges in fair value on shares and participations in listed companies through
of future cash flows in foreign currency. Both unrealized and realized result of other comprehensive income amounted to SEK –45 M (48).
currency risk contracts is included in the table. The amount includes gains/losses Read more in Note 5 Investments in joint ventures, associated c
ompanies
of SEK 177 M (–261) due to hedging of cash flow in foreign currency from divi- and other shares and participations.
dends paid to group companies.
6 Interest expenses attributable to financial liabilities measured at amortized cost
3 Information regarding changes in allowance for expected credit losses on accounts recognized in operating income include interest expenses for financing o perating
receivables is provided in note 16 Receivables and note 8 Other o perating income lease activities, which are not classified as financial instruments.
and expenses. The amount includes gains/losses of SEK –199 M (228) from
revaluation of receivables in foreign currency related to dividends paid to group 7 In gain/loss, interest income and expenses related to financial instruments
companies. recognized in net financial items, SEK –313 M (900) was recognized in
other financial income and expenses.
4 T he amount includes gains/losses due to derecognition of assets where SEK –11 M
(266) is related to the sale of customer-financing receivables and SEK 155 M (99) Read more in Note 9 Other financial income and expenses.
is related to early buy-out revenue. Information regarding changes in allowance 8 Interest expenses attributable to pensions reported in net financial items of
SEK –167 M (–219) are not included in this table.
135
VOLVO GROUP 2022
PARENT COMPANY AB VOLVO
NOTE PAGE
1 Accounting policies 140
2 Revenue and intra-group transactions 140
3 Administrative expenses 140
4 Other operating income and expenses 140
5 Income from investments 141
in group companies
6 Income from investments in joint 141
ventures and associated companies
7 Income from other investments 141
8 Interest expenses and similar charges 141
9 Other financial income and expenses 141
10 Appropriations 141
11 Income taxes 142
12 Investments in shares and participations 143
13 Other non-current receivables 145
14 Other receivables 145
15 Untaxed reserves 145
16 Provisions for post-employment benefits 145
17 Non-current liabilities 146
18 Other liabilities 146
19 Contingent liabilities 146
20 Cash flow 146
VOLVO GROUP 2022 136 PARENT COMPANY AB VOLVO
Parent company AB Volvo

Corporate registration number 556012-5790.
The amounts within parentheses refer to the preceding year.
Board of Directors’ report holders’ equity in the subsidiaries (including equity in untaxed reserves but
AB Volvo is the parent company of the Volvo Group and is headquartered in excluding non-controlling interests) amounted to SEK 158,195 M (129,512).
Gothenburg, Sweden. The operations c omprise of the Volvo Group’s head- Investments in joint ventures and associated companies amounted to
quarters with staff, together with some corporate functions. SEK 8,946 (8,946), whereof SEK 8,938 M (8,938) belongs to companies
Income from investments in group companies include dividends which are accounted to the equity method in the consolidated accounts. The
amounting to SEK 5,177 M (48,654). equity portion of these companies amounted to SEK 10,986 M (11,150).
The carrying value of shares and participations in group companies Financial net debt amounted to SEK 22,213 M (42,877).
amounted to SEK 70,987 M (67,683), of which SEK 70,022 M (66,720) per AB Volvo’s risk capital (equity plus untaxed reserves) amounted to
tained to shares in wholly owned subsidiaries. The corresponding share- SEK 76,903 M (81,210) corresponding to 70% (60) of total assets.
Income statement
Net sales 2 258 266

Cost of sales 2 –258 –485
Gross income 0 –219
Administrative expenses 2, 3 –1,469 –1,329

Other operating income and expenses 4 –132 101
Operating income –1,601 –1,447
Income from investments in group companies 5 5,177 44,931

Income from investments in joint ventures and associated companies 6 34 787
Income from other investments 7 – –1
Interest income and similar credits 52 1
Interest expenses and similar charges 8 –750 –546
Other financial income and expenses 9 107 –17
Income after financial items 3,019 43,708
Appropriations 10 26,798 15,813

Income taxes 11 –5,188 –3,190

Other comprehensive income, net of income taxes – –
Total comprehensive income for the period 24,629 56,331
Balance sheet
SEK M Note Dec 31, 2022 Dec 31, 2021
Assets
Non-current assets
Tangible assets 7 7
Financial assets
Shares and participations in group companies 12 70,987 67,683
Investments in joint ventures and associated companies 12 8,946 8,946
Other shares and participations 12 2 1
Other non-current receivables 13 593 487
Deferred tax assets 11 217 242
Total non-current assets 80,752 77,366
Current assets
Current receivables
Receivables group companies 29,316 56,546
Other receivables 14 251 1,235
Total current assets 29,567 57,781
Total assets 110,319 135,147
Equity and liabilities

Equity
Restricted equity
Share capital 2,562 2,562
Statutory reserve 7,337 7,337
Unrestricted equity
Non-restricted reserves 390 390
Retained earnings 34,485 4,590
Total equity 69,403 71,210
Untaxed reserves 15 7,500 10,000
Provisions
Provisions for post-employment benefits 16 259 275
Other provisions 0 –
Total provisions 259 275
Non-current liabilities 17
Liabilities to group companies 400 5,739
Other liabilities 5 6
Total non-current liabilities 405 5,745
Current liabilities
Trade payables 195 133
Other liabilities to group companies 28,819 45,414
Tax liabilities 3,235 1,836
Other liabilities 18 503 534
Total current liabilities 32,752 47,917
Total equity and liabilities 110,319 135,147
Cash flow statement

Operating activities
Operating income –1,601 –1,447
Depreciation and amortization – 0
Other non-cash items 20 90 69
Total change in working capital whereof 1,093 625
Change in accounts receivable –3 14
Change in trade payables 71 55
Other changes in working capital 1,025 556
Interest and similar items received 50 1
Interest and similar items paid –749 –546
Other financial items –37 –16
Dividends received from group companies 5 37,380 15,933
Dividends received from joint ventures and associated companies 6 34 1,213
Group contributions received 15,813 1,020
Income taxes paid –3,764 –2,261
Cash-flow from operating activities 48,309 14,591
Investing activities
Disposals of in-/tangible assets – 0
Investments of shares in group companies 12 –1,604 –4,580
Divestments of shares in group companies 5, 12 – 4,504
Investments of shares in non-group companies 12 –1 –1
Interest-bearing receivables 13 –105 –150
Cash-flow after net investments 46,599 14,364
Financing activities
New borrowings 20 250 35,456
Repayment of borrowings 20 –20,414 –
Dividends to owners AB Volvo –26,435 –49,820
Other 0 0
Change in cash and cash equivalents 0 0
Cash and cash equivalents, beginning of year – –
Cash and cash equivalents, end of year – –

Changes in equity
Restricted equity Unrestricted equity
Statutory Share premium Retained Total
SEK M Share capital reserve reserve earnings Total equity
Balance at December 31, 2020 2,562 7,337 390 54,410 54,800 64,699
Income for the period – – – 56,331 56,331 56,331

Other comprehensive income for the period – – – – – –
Total comprehensive income for the period – – – 56,331 56,331 56,331

Dividends to owners of AB Volvo – – – –49,819 –49,819 –49,819
Share based payments – – – –1 –1 –1
Transactions with shareholders – – – –49,820 –49,820 –49,820
Income for the period – – – 24,629 24,629 24,629

Other comprehensive income for the period – – – – – –
Total comprehensive income for the period – – – 24,629 24,629 24,629

Dividends to owners of AB Volvo – – – –26,435 –26,435 –26,435
Share based payments – – – –1 –1 –1
Transactions with shareholders – – – –26,436 –26,436 –26,436
Read more in Note 19 Equity and number of shares in the consolidated financial statements about the share capital of the parent company.
Notes to financial statements

The amounts within parentheses refer to the preceding year.
1 Accounting policies 2 Revenue and intra-group t ransactions
The parent company has prepared its financial statements in accordance The recognized net sales of SEK 258 M (266) pertain mainly to revenues
with the Swedish Annual Accounts Act (1995:1554) and RFR 2, Account- from sale of services to group companies SEK 242 M (238). Revenue is
ing for legal entities. According to RFR 2, the parent company shall apply recognized when the control of the service has been transferred to the
all the International Financial Reporting Standards endorsed by the EU as customer, which is when the parent company incurs the associated cost to
far as this is possible within the framework of the Swedish Annual deliver the service and the customer can benefit from the use of the deliv-
Accounts Act. ered services.
The changes in RFR 2 applicable to the fiscal year beginning January 1, Purchases from group companies amounted to SEK 422 M (322).
2022, has not had any significant impact on the parent company.
There are no announced changes in RFR 2 applicable to the fiscal year
beginning January 1, 2023 or later.
The accounting policies applied by the Volvo Group are described in the
respective notes in the consolidated financial statements. The main devi-
3 Administrative expenses
ations between the accounting policies applied by the Volvo Group and Personnel
the parent company are described below. Wages, salaries and other remunerations amounted to SEK 488 M (478),
Shares and participations in group companies and Investments in joint social costs to SEK 140 M (139) and pension costs to SEK 61 M (143).
ventures and associated companies are recognized at cost in the parent com- Pension cost of SEK 12 M (14) pertained to Board Members and the Presi-
pany and test for impairment is performed annually. In accordance with RFR dent. The parent company has outstanding pension obligations of SEK 7 M
2, the parent company includes costs related to acquisition of a business in (5) to these individuals.
the acquisition value. Dividend is recognized in the income statement. All The number of employees at year end was 279 (284).
holding of shares are recognized as financial assets and the result is reported
ead more in Note 27 Personnel in the consolidated financial statements about the
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in the income from financial items.
average number of employees, wages, salaries and other remunerations including
The parent company applies the exception in the application of IFRS 9 incentive program as well as Board members and senior e xecutives by gender.
which concerns accounting and measurement of financial contracts of guar-
antee in favor of subsidiaries and associated companies. The parent company
recognizes the financial contracts of guarantee as contingent liabilities. 3:1
RFR 2 includes an exception in regard to IFRS 16, allowing all lease
contracts to be accounted for as operational lease contract when the Fees to the auditors 2022 2021
parent company is a lessee. Deloitte AB
Group contributions are recognized in accordance with the alternative rule
– Audit fees 27 17
in RFR 2 and are presented as appropriations.
– Audit-related fees 1 9
According to RFR 2, application of the regulations in IAS 19 regarding
Total 28 26
defined benefit plans is not mandatory for legal entities. However, IAS 19
shall be applied for supplementary disclosures when applicable. RFR 2
refers to the Swedish law on safeguarding of pension commitments
ead more in Note 28 Fees to the Auditors in the consolidated financial
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(“tryggandelagen”) related to recognition of provisions for post-employment s tatements for a description of the different categories of fees.
benefits in the balance sheet and of plan assets in pension foundations.
Volvo Group applies IAS 19 Employee Benefits in the consolidated
4
financial statements. This implies differences, which may be significant,
in the accounting of defined benefit pension plans as well as in the
Other operating income and expenses
accounting of plan assets invested in the Volvo Pension Foundation.
The accounting principles for defined benefit plans differ from IAS 19
mainly relating to:
• Pension liability calculated according to Swedish accounting 4:1
principles does not take into account future salary increases. Other operating income and
• The discount rate used in the calculations is set by PRI Pensions expenses 2022 2021
garanti and Finansinspektionen, respectively.
Royalties received 41 107
• Changes in the discount rate, actual return on plan assets and other
Write-offs of receivables –184 0
actuarial assumptions are recognized directly in the income statement
and in the balance sheet. Realized and unrealized exchange rates
gains and losses 30 14
• Deficit must be either immediately settled in cash or recognized as
Donations, grants and Volvo Profit sharing
a liability in the balance sheet. program –17 –9
• Surplus cannot be recognized as an asset, but may in some cases
Other income and expenses –2 –11
be refunded to the company to offset pension costs.
I/S Total –132 101
5 Income from investments in group companies 6 Income from investments in joint ventures and
associated companies
Income from investments in joint ventures and associated companies

includes dividend from Dongfeng Commercial Vehicles Co., Ltd. by SEK – M
5:1
(767) and from VE Commercial Vehicles, Ltd. by SEK 34 M (20).
Income from investments in
group companies 2022 2021
Dividends received
VNA Holding Inc., USA
Volvo China Investment Co. Ltd, China
3,814
1,099
2,678
3,064
7 Income from other investments
Volvo Group UK Ltd., Great Britain 70 109 AB Volvo has not had any transactions from other investments which have
Volvo Malaysia Sdn Bhd, Malaysia 62 80 had a significant impact on the financial statements.
Volvo Danmark A/S, Denmark 63 20
Volvo Norge AS, Norway 52 –
VFS Servizi Finanziari Spa, Italy
Volvo Business Services International AB (for-
mer Volvo Autonomous Solutions AB), Sweden
17
–
–
21,176
8 Interest expenses and similar charges
Volvo Construction Equipment AB, Sweden – 5,779
Interest expenses and similar charges totaling SEK 750 M (546) include
Volvo Treasury AB, Sweden – 5,000
interest of SEK 750 M (546) to group companies.
Volvo Lastvagnar AB, Sweden – 2,550
Volvo Powertrain AB, Sweden – 1,800
9
Volvo Investment AB, Sweden – 1,700
JSC Volvo Vostok, Russia – 1,308
Other financial income and expenses
Volvo Penta AB, Sweden – 1,030
Volvo Information Technology AB, Sweden – 1,000
Other financial income and expenses include exchange rate gains and
Volvo Group Venture Capital AB, Sweden – 650
losses received by SEK 128 M (2) and costs for credit rating and stock
Volvo Financial Services AB, Sweden – 500 exchange listing cost by SEK 18 M (18).
Volvo Group Italia SpA, Italy – 132
Volvo Group Insurance Försäkrings AB, Sweden – 75
10
Volvo Information Technology GB Ltd.,
Great Britain – 3
Subtotal 5,177 48,654
Appropriations
Reversal impairment of shares Appropriations include a net of group contributions of SEK 24,298 M
UD Trucks Corporation, Japan – 1,260 (15,813) and reversal of tax allocation reserve of SEK 2,500 M (–).
Subtotal – 1,260
Gains/losses from divestment of shares
UD Trucks Corporation, Japan – –4,980
Volvo Logistic UK Ltd., Great Britain – 0
Volvo Information Technology GB Ltd.,
Great Britain – –3
Subtotal – –4,983
Income from investments in group companies 5,177 44,931
11 Income taxes
Income taxes were distributed as follow:
11:1 11:2
Income taxes 2022 2021 Income taxes for the period 2022 2021
Current taxes relating to the period –5,163 –3,078 Income before taxes 29,817 59,521
Adjustment of current taxes for prior period 0 –56 Income tax according to applicable tax rate –6,142 –12,261
Deferred taxes –25 –56 Capital gains/losses – –1,072
I/S Total income taxes –5,188 –3,190 Non-taxable dividends 1,073 10,185
Other non-deductible expenses –29 –14
Other non-taxable income 0 281
Withholding tax –58 –259
The main reasons for the difference between the corporate income tax of
Adjustment of current taxes for prior period 0 –56
20.6% and the income tax for the period are disclosed in table 11:2.
Other taxable not recorded income –31 –
Deferred taxes relate to estimated tax on temporary differences. The
Remeasurement of deferred tax assets 9 –4
revaluation of deferred taxes is based on the tax rate that is expected for
the period when the asset is realized or the liability is adjusted. Current tax on standardized method –10 10
Income taxes for the period –5,188 –3,190
11:3
Specification of deferred Dec 31, Dec 31,
tax assets 2022 2021
Provisions for post-employment benefits 217 242

B/S Deferred tax assets 217 242
12 Investments in shares and participations
Shares and participations in group companies America was received in form of dividend from Volvo Autonomous Solu-
During 2022 investment in VFS Renting Sociedade Unipessoal Lda. has tions AB by SEK 176 M. The whole investment in Volvo Equipamentos de
been made by SEK 3 M and in Rental Business Solution S.R.L. by SEK 2 M. Construcao Latin America was transferred to Volvo Construction Equip-
Shareholder´s contribution has been provided to Volvo Treasury AB by ment AB in form of shareholder´s contribution by SEK 516 M.
SEK 1,700 M, to Volvo Autonomous Solutions AB by SEK 1,240 M, to
Volvo Group Venture Capital AB by SEK 350 M and to VFS Renting Investments in joint ventures and associated companies
Sociedade Unipessoal Lda. by SEK 9 M. No significant transactions have affected the value of investment in joint
During 2021 investment in Volvo Fuel Cell Holding AB was made by ventures and associated companies during 2022 and 2021.
SEK 3,000 M and in Volvo Energy AB including a shareholder´s contribu-
tion by SEK 200 M. Shareholder´s contribution was also provided to Other shares and participations
Volvo Investment AB by SEK 1,380 M. Shares in UD Trucks was divested No significant transactions have affected the value of other shares and
by SEK 8,928 M. Shares in Volvo Equipamentos de Construcao Latin participations during 2022 and 2021.
12:1
Changes in AB Volvo´s holding of Joint ventures
shares and participations Group and associated Other shares and
companies companies participations
2022 2021 2022 2021 2022 2021
Opening balance 67,683 71,857 8,946 8,946 1 1

Acquisitions/New issue of shares 5 3,176 – – – –
Divestments/Redemption of shares – –11,196 – – – –
Shareholder’s contribution 3,299 2,096 – – 1 1
Impairment of shares and participations – – – – – –1
Reversal impairment of shares and participations – 1,750 – – – –
B/S Carrying value, as of December 31 70,987 67,683 8,946 8,946 2 1
12:2
Holding of shares in joint ventures, associated Dec 31, 2022 Dec 31, 2022 Dec 31, 2021
companies and other shares and participations Registration Percentage Carrying Carrying
number holding1 value2 value2
Dongfeng Commercial Vehicles Co. Ltd., China – 45.0 7,197 7,197

VE Commercial Vehicles Ltd., India3, 4 – 34.7 1,616 1,616
World of Volvo AB, Sweden4 559233-9849 50.0 125 125
Other investments – 10 9
Total carrying value, joint ventures, a
ssociated companies
and other shares and participations 8,948 8,947
1 The percentage holding refers to the parent c

ompany AB Volvo’s holding.
2 Refers to AB Volvo’s carrying value of its holding.
3 The total holding by Volvo Lastvagnar AB and AB Volvo is 45.6%.
4 In Volvo Group the companies are reported as joint ventures, consolidated according to equity method.
AB Volvo owns, directly or indirectly, 290 (279) legal entities. The direct owned entities are listed in below table.
12:3
Holding of shares in group companies Dec 31, 2022 Dec 31, 2021
Registration Percentage Carrying Carrying
number holding1 value2 value2
Volvo Lastvagnar AB, Sweden 556013-9700 100 8,711 8,711

Volvo Business Services International AB (former Volvo Autonomous Solutions AB),
Sweden 556539-9853 100 8,134 8,134
Volvo Bussar AB, Sweden 556197-3826 100 3,033 3,033
Volvo Construction Equipment AB, Sweden 556021-9338 100 8,076 8,076
AB Volvo Penta, Sweden 556034-1330 100 586 586
VNA Holding Inc., USA – 100 3,688 3,688
Volvo Financial Services AB, Sweden 556000-5406 100 2,667 2,667
Volvo Treasury AB, Sweden 556135-4449 100 14,744 13,044
Volvo Investment AB, Sweden 556519-4494 100 4,268 4,268
Volvo Lastvagnar Sverige AB, Sweden 556531-8572 100 2,355 2,355
Volvo Fuel Cell Holding AB, Sweden 559275-6729 100 3,000 3,000
Volvo China Investment Co Ltd., China – 100 1,302 1,302
Volvo Automotive Finance (China) Ltd., China – 100 491 491
Volvo Group UK Ltd., Great Britain3 – 35 350 350
Volvo Group Mexico SA, Mexico – 100 543 543
Volvo Group Venture Capital AB, Sweden 556542-4370 100 719 369
Volvo Powertrain AB, Sweden 556000-0753 100 898 898
Volvo Information Technology AB, Sweden 556103-2698 100 1,511 1,511
Volvo Parts AB, Sweden 556365-9746 100 200 200
Volvo Group Insurance Försäkrings AB, Sweden 516401-8037 100 182 182
Volvo Business Services AB, Sweden 556029-5197 100 118 118
Volvo Danmark A/S, Denmark – 100 157 157
VFS Servizi Financiari Spa, Italy4 – 25 101 101
Kommersiella Fordon Europa AB, Sweden 556049-3388 100 2,693 2,693
Volvo Norge AS, Norway – 100 50 50
Volvo Malaysia Sdn Bhd., Malaysia – 100 48 48
JSC Volvo Vostok, Russia5 – 75 177 177
Volvo Group Italia Spa, Italy6 – 65 335 335
Volvo Logistics AB, Sweden 556197-9732 100 385 385
VFS Latvia SIA, Latvia – 100 9 9
VFS Int Romania Leasing Operational, Romania – 100 2 2
Volvo Energy AB, Sweden 559285-4169 100 200 200
VFS Renting Sociedade Unipessoal Lda., Portugal – 100 12 –
Rental Business Solution S.R.L., Italy4 – 49 2 –
Volvo Autonomous Solutions AB (former Volvo Lindholmen AB), Sweden 559285-4219 100 1,240 –
Other holdings – 0 0
Total carrying value group companies7 70,987 67,683
1 The percentage holding refers to the parent c

ompany AB Volvo’s holding.
2 Refers to AB Volvo’s carrying value of its holding.
3 Total holding by Volvo Lastvagnar AB and AB Volvo is 100%.
4 Total holding by Volvo Group Italia Spa and AB Volvo is 100%.
5 Total holding by AB Volvo and Volvo Trucks Region Central Europe GmbH is 100%.
6 Total holding by Renault Trucks (SAS), Volvo Lastvagnar AB, Volvo Bussar AB, AB Volvo Penta and AB Volvo is 100%.
7 A B Volvo´s share of shareholder´s equity in subsidiaries (including equity in untaxed reserves) was SEK 158,195 M (129,512).
13 Other non-current receivables
Defined benefit plans: post-employment benefit plans where the compa-

13:1 ny’s undertaking is to provide predetermined benefits that the employee will
receive on or after retirement. These benefit plans are secured through
Dec 31, Dec 31,
2022 2021 balance sheet provisions or pension fund contributions. Furthermore, a credit
insurance policy has been taken out for the value of the obligations. The main
Other non-interest bearing receivables 193 337 defined benefit plan is the ITP2 plan which is based on final salary. The plan is
Other interest bearing receivables 400 150 semi-closed, meaning that only new employees born before 1979 have the
B/S Total non-current receivables 593 487 possibility to choose the ITP2 solution. The ITP2 plan for the company is
funded in Volvo Pension Foundation. Pension obligations are calculated annu-
ally, on the balance sheet date, based on actuarial assumptions.
Other non-interest bearing receivables include an amount of SEK 193 M The defined benefit obligations are calculated based on the actual s alary
(337) and refers to an earnout connected to the divestment of UD Trucks levels at year-end and based on a discount rate of 2.85% (3.84) for the ITP2
which was completed in 2021. plan and 0.2% (– 0.1) for other pension obligations. Assumptions for discount
rates and mortality rates are determined annually by PRI Pensionsgaranti for
Read more in Note 3 Acquisitions and divestments of operations in the ITP2 and Finansinspektionen for other pension obligations, respectively.
consolidated financial statements about the divestment of UD Trucks. Provisions for post-employment benefits in the parent company’s
balance sheet correspond to the present value of obligations at year end,
less fair value of plan assets.
14 Other receivables
16:1
Obligations in defined
14:1 benefit plans Funded Unfunded Total
Dec 31, Dec 31,
2022 2021 Obligations opening balance 2021 731 268 999
Accounts receivable 6 5 Service costs 24 20 44

Prepaid expenses and accrued income 172 172 Interest costs 29 0 29
Other receivables 73 1,058 Benefits paid –25 –13 –38
B/S Total other receivables 251 1,235 Obligations as of
December 31, 2021 759 275 1,034
Service costs 134 –4 130

Interest costs 24 1 25
Prepaid expenses and accrued income include an amount of SEK 144 M Benefits paid –28 –13 –41
(144) and refers to an earnout connected to the divestment of UD Trucks Obligations as of
which was completed in 2021. December 31, 2022 889 259 1,148
There is no valuation allowance for doubtful receivables at the end
of the year. Fair value is not considered to differ from carrying value.
15 Untaxed reserves
16:2
Fair value of plan assets in funded plans
Untaxed reserves include tax allocation reserve of SEK 7.500 M (10.000). Plan assets opening balance 2021 1,057
Actual return on plan assets 153

Contributions and compensation to/from the fund 0
16 Provisions for post-employment benefits

Plan assets as of December 31, 2021
Actual return on plan assets

Contributions and compensation to/from the fund
1,210
–130
0
The parent company has two types of pension plans, defined contribution Plan assets as of December 31, 2022 1,080
plans and defined benefit plans.
Defined contribution plans: post-employment benefit plans where the
company makes regular payments to separate entities and has no legal or
constructive obligation to pay further contributions. The expenses for
defined contribution plans are recognized during the period when the
employee provides service.
18 Other liabilities
16:3 18:1
Provisions for post-employment Dec 31, Dec 31, Dec 31, Dec 31,
benefits 2022 2021 2022 2021
Obligations1 –1,148 –1,034 Wages, salaries and withholding taxes 327 324
Fair value of plan assets 1,080 1,210 Accrued expenses and prepaid income 169 204
Surplus (+) / deficit (–) –68 176 Other liabilities 7 6
B/S Total other liabilities 503 534
Limitation on assets in accordance with
RFR2 (when plan assets exceed
corresponding obligations) –191 –451
B/S Net provisions for No collateral is provided for current liabilities.
post-employment benefits2 –259 –275
1 The ITP2 obligations amount to SEK –874 M (–746).

19 Contingent liabilities
2 ITP2 obligations, net, amount to SEK 0 M (0).
Contingent liabilities as of December 31, 2022, amounted to SEK 332,755 M
(284,913) of which SEK 332,694 M (284,861) pertained to group com-
panies.
16:4 Credit guarantees are included to an amount corresponding to the
Pension costs 2022 2021 credit limits. Credit guarantees amounted to SEK 317,482 M (272,306).
The total amount pertained to group companies.
Service costs 130 44 The utilized portion at year-end amounted to SEK 187,824 M (135,841),
Interest costs1 25 29 of which SEK 187,807 M (135,826) pertained to group companies.
Interest income1 –132 –27
20
Pension costs for defined benefit plans 23 46
Pension costs for defined contribution plans 32 44 Cash flow

Special payroll tax/yield tax 2 6 50
Cost for credit insurance FPG 0 3
Total costs for the period 61 143 20:1
Other non-cash items 2022 2021
1 Interest income, net of SEK 24 M (29) is included in financial items. Gains/losses on divestment of shares
2 Special payroll tax/yield tax are calculated according to Swedish and participations – 219
Tax law and accrued for in current liabilities. Transfer price adjustments –35 –160
Realized currency effect
related to dividends 152 –
17 Non-current liabilities
Other changes
Total other non-cash items
–27
90
10
69
17:1
Maturity 20:2
Change in loans Non-current Current
2024–2028 402 liabilities to liabilities to
2029 or later 3 group companies group companies
B/S Total non-current liabilities 405 Loan Loan/Cashpool
Volvo Treasury AB Volvo Treasury AB
December 31, 2020 5,589 1,708

Cash flows
new borrowings 150 35,306
Other – –1
December 31, 2021 5,739 37,013
Cash flows
new borrowings 250 –
Cash flows repay-
ments of borrowings – –20,414
Reclassification –5,589 5,589
Other – –144
December 31, 2022 400 22,044
147
VOLVO GROUP 2022
SUSTAINABILIT Y NOTES
PAGE PAGE
About the report 147 Human rights 170
Impacts, stakeholders and material topics 148 Human rights governance and program 170
Climate and environment 150 Policy commitment and salient risks 171
Strategy and governance 150 Value chain approach 171
Metrics and targets 151 Awareness and grievance mechanism 172
Risk management, R&D disclosure 153 Specific reports 173
Energy and emissions 154 Responsible sales 175
Environmental management 157 Supply partners and responsible purchasing 176
EU Taxonomy regulation disclosures 159 Supplier social assessment 176
Employees and development 163 Supplier environmental assessment 177
Employment 163 Sustainable minerals program 177
Employee relations 164 Business ethics and compliance 178
Diversity and equal opportunities 164 Compliance, Anti-corruption, Competition
law 178
Training and education 165
Whistle-blower reporting, Tax, Public policy 179
Safety 167
Complementary disclosures 180
Occupational health and safety 167
Complementary general disclosures 180
Customer health and safety 169
GRI index 182
TCFD index 185
About the report

These Sustainability notes include the Volvo Group’s col-
lected sustainability disclosures. As sustainability topics Reporting standards used Topics related to this report
are top strategic issues and well integrated in the busi- This report has been prepared in accordance with the Complementary information is available on
ness and operating model of the Volvo Group, additional Global Reporting Initiative’s (GRI) Standards 2021. volvogroup.com/report2022. This includes:
disclosures relevant for sustainability are found in other
GRI is complemented by other relevant frameworks • S ASB index, Industrial Goods and Machinery
parts of the Annual Report and included by reference.
where stated, including the Task Force on Climate- • L ocations of major operations
related Financial Disclosures (TCFD). Relevant disclo- • Membership in associations
sures have been translated to the UN Sustainable • C ode of Conduct and related policies
Development Goals (SDGs) using the report guide
Business Reporting on the SDGs by the GRI and UN
Global Compact’s
VOLVO GROUP 2022 148 SUSTAINABILIT Y NOTES
Impacts, stakeholders and material topics
Business model Materiality

The Volvo Group´s strategy includes sustainability priorities and is pre- The Volvo Group’s strategy responds to a range of sustainability-related
sented on pages 10-29. The Group’s business model is outlined on pages issues. This means considering the impact on the world around us as an
22-27. With business operations in more than 190 countries of which integral part in the long-term success of our business. In 2022, sustain-
many are classified as high-risk countries from an environmental, human ability impacts and associated risks were reviewed for each sustainability
rights or corruption perspective we need to ensure that we pursue our topic in this report. In this work, the scale and scope of the impact was
business operations in a responsible manner. Environmental, social and assessed.
financial sustainability aspects as well as ethical business conduct are • Scope is defined as breadth of impact – number of people or
integrated into the Volvo Group overall strategy and business model and size of areas positively or potentially negatively impacted.
also incorporated into our processes and policies. • Scale is defined as depth of impact – importance of the Volvo
Group’s contribution, or connection to potential impact.
Strategic framework for sustainable development
The Volvo Group’s framework to drive sustainability and performance Risk and opportunities are gathered from the Group’s Enterprise Risk
revolves around people, climate and resources, and is aligned with the process and business strategy. The result is used as an overall indicator
Sustainable Development Goals and Targets from the United Nations. of materiality.
Our sustainability priorities have been established in dialogue with a As input to the materiality review, we use internal and external knowl-
network of sustainability professionals and management of all Truck edge and experience on life-cycle assessments and GHG emissions
Divisions, Business Areas as well as the Executive Management of the inventory, external risk mapping on environmental and social impacts,
Volvo Group and the Board of Directors. human rights reviews, supplier self-assessment and audits finding, and
As described in the CEO letter on pages 6-9 and further outlined in other sources of information.
the Group’s strategy section and explained in detail in these sustainability
statements, the Volvo Group is determined to drive the transition to sus- Stakeholder feedback
tainable transport and infrastructure solutions. This means improving our Stakeholder perspectives are always considered in strategy updates
positive impacts and reducing negative impacts. and major decisions and material sustainability aspects are considered
as part of any other strategic matter. The approach is to have an open
Policies and commitments dialogue with relevant stakeholders, prior to e.g., organization changes
The Volvo Group Code of Conduct is a Group-wide policy that sets the or establishment on new sites, to ensure relevant views are considered.
standards on how we conduct business – ethically and in compliance We also consider stakeholder views in reporting processes. In this work,
with applicable laws and regulations. It applies everywhere we operate, input from stakeholders includes views from customers, investors, employ-
for our employees and everyone else who works on our behalf. In addition ees, supply chain partners and stakeholders in the community. These views
to the Code of Conduct, the Volvo Group’s policies on competition, are mainly used to validate that we report on the right matters. While differ-
human rights, data privacy, anti-corruption and export control, tax and ent stakeholders raise concerns or ask for specific information on different
environment are complemented with compliance programs and manage- topics certain sustainability topics are common for most stakeholder
ment systems for effective policy deployment. Policies are further sup- groups. During 2022, such topics have revolved mainly around climate
ported by programs including due diligence procedures. In line with our impacts and mitigations. Other issues that have been discussed relate
decentralized model each business area is responsible for ensuring com- to human rights, health, employment and reskilling, and diversity.
pliance with the Volvo Group’s minimum requirements and standards for Customers feedback has been gathered via the Volvo Group’s Busi-
sustainable and responsible business conduct. Business areas are also ness Areas who responds to a range of sustainability-related matters.
free to complement existing policies and compliance programs with Business Areas also follow up specific sustainability issues with selected
more stringent requirements. accounts. In addition, questionnaires from customers to Volvo Group via
third parties have become more widely used. These third party hosted
Risks and mitigation questionnaires seek to track effectiveness of a wide range of sustain
The Volvo Group’s enterprise risk management process includes sustainability topics, each specifying feedback or improvement potential. This
ability-related risks. Principal risks, including several sustainability-related type of feedback is used a relevant proxy for customer requirements in
risks, are reported in the overall Risks and uncertainties section, see our main sectors.
pages 68–73. These Sustainability notes include more details on risks Employee feedback has been sought via a Group-wide pulse survey
and mitigation activities and complement information where a specific and in dialogues related to internal summits. An open survey focusing on
topic has not yet been qualified as a principal Group-wide risk. sustainability topics was also made available to some employees during
the year to track anonymized feedback on material issues.
Key Performance Indicators Shareholder and investor feedback has been gathered from direct
KPI’s in relation to the environment, employees, social factors, human dialogues, and events coordinated by the Group’s Investor Relations
rights and business ethics are reported for each material topic in these function. During the year, many dialogues have focused directly on
Sustainability notes. sustainability impacts.
We also reviewed reports on the Group’s and peers’ sustainability per-
Governance formance as a proxy for the expectations from stakeholder perspectives.
The overall governance of sustainability is described in the Corporate Such reports include risk assessments, comparison with industry peers
Governance report on page 189 and 199. Some disclosures in that and materiality heat maps, sometimes including double materiality per-
section are repeated in these statements under relevant topics, or are spectives. While the reports may differ in method, the overall input from
further explained and highlighted. the reports is used to assess strengths and weaknesses to the Group’s
sustainability priorities and where reporting can be improved.
Supply partners’ feedback is sought in direct contact via Volvo Group’s on pages 150-181. This can be done through projects, collaboration, or
procurement staff, this can include assessments of sustainability risks memberships of associations. In addition, the Group’s communication
conducted by Volvo Group, but also expectations from suppliers on Volvo function monitor matters of interest via media and social media. In 2022,
Group. Conferences and summits with supply partners are also organized the Group also used an open survey in social media channels and its web-
to formalize joint strategies and ways of working. pages to retrieve input on materiality.
Other stakeholders are often represented by authorities and other Most matters are reported in accordance with the GRI Standards,
organizations and to some extent media. Topic-specific feedback from such while some are more briefly described. See GRI-index on page 182-184
stakeholders and individuals is also gathered by functions within Group, for details.
Divisions and Business Areas as explained in topic-specific disclosures
Report content
The Volvo Group applies GRI’s reporting principles on stakeholder inclusiveness, sustainability context, materiality and completeness and works to
implement the recommendations of the TCFD. Sustainability topics have been structured in six main areas – Climate and environment, Employees
and development, Safety, Human rights, Supply partners and responsible purchasing, and Business ethics and compliance, reflecting our priorities
and ways of working.
Area Comment on content, boundaries, and impacts
Climate and environment We believe the most meaningful effort we can do in the global climate transition is to drive decar-
bonization of the transport and other sectors of society where the Group is active. The transition
to a low carbon economy relies on reduced environmental impacts from customer use phase,
production and value chain.
Employees and development A number of employee-related topics are key to deliver on the Group’s strategy, mission and vision,
and to create engaging work environments. This includes job creation and employee retention,
social dialogue for better workplaces, diversity, and competency development.
Safety Our vision is 100% safe products and operations. This includes occupational health and safety in
our operations as well as the health and safety of customers, business partners and road users.
Human rights We are committed to respecting internationally recognized human rights. Human rights impacts
may materialize not only within our own organization, but also through our business relationships
and in the value chain.
Supply partners and Responsible purchasing Our supply partners play an integral role in realizing our sustainability strategy across the full value
chain. Volvo Group has the opportunity to influence the sustainability transformation throughout
the supply network beyond tier one suppliers.
Business ethics and compliance We believe in treating others with respect and in fair competition, because in transparent markets
without corruption, the best solutions win and companies dare to invest for the future. This includes
compliance with laws and regulations, as well as the standards and ambitions that we set for our work.
Climate and environment

GOVERNANCE, STRATEGY, OPPORTUNITIES AND RISKS
The ambition to drive decarbonization affects all aspects of Group oper-

ations, including sourcing, logistics, research and product development,
Connection to Agenda 2030 and reporting standards production, sales and co-operations. A key driver for achieving targets is to
put electric trucks, buses, construction equipment and drivelines in use,
but the Group believes transition will include different technologies that
can be powered by renewable energy. These solutions can be battery-
electric, fuel cell-electric or vehicles propelled with low GHG intensity
Main connections to the UN SDGs and targets energy sources for combustion engine drivelines. The picture on the next
7.3 Double energy efficiency page illustrates a possible transition path for this driveline technology.
11.2 Sustainable transport systems The Group expects electrification and other transition towards decar-
12.2 Sustainable management of natural resources bonization to happen segment by segment, market by market and region
13.3 Knowledge and capacity building to meet climate change by region. The possibility to successfully introduce transitionary products
and services will depend on the competitiveness of the Group’s offer, but
also on several external factors, such as customers’ climate ambitions,
regulatory developments, public subsidies to different sectors of the
economy and availability of low-carbon energy. It is currently not possible
to make reliable predictions of transition pace or technology preferences
in the longer term in a particular market or region, however, the Group
Referenced reporting standards aims to drive transformation in business segments where it is active,
GRI 201 – Economic performance regardless of whether it will happen at a faster or slower pace than
TCFD recommendations expected. Overall, significant effects on GHG emissions of fully electric
vehicles are expected during the second half of this decade.
The Volvo Group supports the implementation of the recommendation of the Advocacy
Task Force on Climate-Related Financial Disclosures (TCFD). The below is As part of its science-based targets and business plan, the Volvo Group
the third time the Group is reporting having regard to TCFD and this report advocates for a transition in line with the Paris Agreement. The Group
sets forth the Group’s disclosures on its overall governance, strategy and assesses the overall positions and lobbying activities of trade organiza-
management of climate related risks and opportunities, including relevant tions in which the Group is a member. During 2021 and 2022, 21 organiza-
climate related metrics and targets, see TCFD index on page 185. The Volvo tions have been reviewed on their public positions on the Paris Agreement
Group recognizes that there continues to be more work to be done in and matters closely related to climate change mitigation, read more in the
developing the disclosures to align with each of the recommendations of the section Public Policy on page 179.
TCFD and to take account of all guidance on metrics, targets and transition
plans. The Group also follows the development of the European and Governance
International reporting standards on the topic and activities are gradually The AB Volvo Board of Directors and the Executive Board are ultimately
being initiated to further develop these disclosures. responsible for the oversight of the Volvo Group’s climate-related risks and
opportunities and are responsible for setting the strategic direction of the
Strategy Group, as further detailed on page 189 in the Corporate Governance Report.
The Volvo Group supports the ambitions of the Paris Agreement – to keep A number of cross-functional working groups consolidate and prepares
the increase of the global average temperature to well below 2 °C above information for consideration in strategic decision-making at the Board of
pre-industrial levels and to pursue efforts to limit the temperature increase Director and Executive Board level. Groups with representation from
to 1.5 °C. To this end, the Group believes the most meaningful effort it can executive management meet regularly during the year, focusing on the
do in the global climate transition is to drive decarbonization of the trans- Group’s climate goals and on sustainability disclosures. The Volvo Group
port- and other sectors of society where the Group is active. follows up on revenues and investments related to fully electric vehicles
The Group’s longer-term goal is to help customers reach net-zero green- monthly, and every quarter the Executive Board reviews the Group’s prog-
house gas (GHG) emissions by 2050. Given that the average lifetime of ress on science-based targets. The Executive Board reports this progress
the Group’s products is approximately 10 years, the Group is targeting to the AB Volvo Board regularly.
net-zero value chain emissions by 2040. The Group has committed to the
SBTi Business Ambition for 1.5 °C and set ambitious science-based Remuneration
targets in relation to its emissions in pursuit of its net-zero targets. The A key driver for achieving our Science-Based targets is to put electric
Group has also set milestone targets along the way. Please see pages 153- trucks, buses, construction equipment and drivelines in use. Sales volume
156 for details on the 2030 GHG targets and other Group metrics applied. of fully electric vehicles and machines has therefore been included in the
Volvo Group’s short-term incentive program to drive a rapid climate transi-
tion. Read more in note 27 on page 127.
At least
Volvo Group
35% Customers’
net-zero value
electric rolling fleets
chain GHG
vehicles net-zero
emissions
Illustrative scenario for 1.5 °C 2030
Technology roadmap illustrating the

100% decarbonization of customers’ use-
phase. In addition to the technology
Battery development and Volvo Group offer,
Electric the needed decarbonization of energy
is illustrated in the background. The
Share arrows illustrate an uncertainty in
of new future preferences and viability of
vehicles
Internal Fuel cell propulsion alternatives.
Combustion
Engine
BioLNG
0% HVO, electrofuels, hydrogen etc.
2020 2030 2040 2050
Fossil-based energy Fossil-free energy
Metrics and targets
This section summarizes the main relevant climate related metrics and targets for the Volvo Group. More context and details are found in additional
parts of this reports according to GRI standards and reporting on the EU Taxonomy regulation.
Greenhouse gas emissions, scope 3 Targets (relative to baseline 2019)

A key element to achieve the ambition of net-zero greenhouse gas emissions • Trucks: reduce emissions per vehicle-km by 40% by 2030
by 2040, is to develop products that help reduce our customers’ emissions • Buses: reduce emissions per vehicle-km by 40% by 2030
– as over 95% of life-cycle emissions occur during the use of sold products. • Construction equipment: reduce absolute emissions 30% by 2030
Developing products and solutions that reduce the GHG footprint of our • Volvo Penta: reduce absolute emissions by 37.5% by 2034
customers is a significant priority in the Volvo Group's strategy, and science- Actions and follow up on page 155
based targets have been set per operating segment.
Greenhouse gas emissions, Scope 1 and 2 Targets (relative to baseline 2019)

Emissions from our own operations and from purchased energy make up • Own operations: reduce absolute GHG emission by 50% by 2030
a relatively low proportion of the total life-cycle emissions – less than 1% Actions and follow up on page 155-156
– yet they are important due to the direct operational control. Targets are
set to increase energy efficiency in operations and to reduce the carbon
intensity of the energy used.
Other climate and environmental metrics Targets

A range of environmental and efficiency metrics are followed up as part of • Energy in own operations: Saving initiatives of 150 GWh
the Group’s operational performance. These revolve around energy conser- implemented 2021–2025
vation, freight CO2 efficiency and minimizing waste. Energy and emissions >> page 155-156
Electric vehicle sales Targets

The Volvo Group is introducing electric and other solutions helping to • Increase fully electric sales to at least 35% by 2030
decarbonize customers' operations. The ambition is illustrated above. Volvo Group strategy >> page 16
Capital deployment
Share of research and development to low-carbon products and services >> page 153
Internal carbon pricing

The Volvo Group is exploring different approaches to internal carbon pricing and in 2022, a number of pilots have been initiated to capture learnings
and determine next steps.
Climate related risks and opportunities eral segments. More and more companies, with transport emissions mak-
The transition of the transport sector offers significant challenges for the ing up a significant part of their total GHG emissions, are establishing
Volvo Group, but it also offers a number of business opportunities. net-zero commitment and science-based targets. This presents an oppor-
tunity for the Volvo Group in providing solutions that enable the reduction
Climate-related risks of such emissions (read more on page 12). The Volvo Group estimates that
Climate-related risks can be divided into two categories, transitional cli- there is a potential to increase revenues by over 50% over the lifecycle
mate risks and physical climate risks. Transitional climate risks include for when comparing an electric vehicle to a conventional version. This is pri-
instance technology-related risks, policy- and legal-related risks, market marily based on the higher sales value of an electric vehicle but also on
risks and reputational risks. Physical climate risks include both acute phys- increased revenues from autonomous solutions, new digital services and
ical risks, such as extreme weather events, and chronic physical risks, for services connected energy solutions. Other factors expected to drive
instance those arising due to changing weather patterns, rising mean tem- growth are increased service contract penetration and an increase in the
perature and rising sea levels. The Volvo Group is exposed to a number of duration of the contracts.
climate-related risks, as set out below. These opportunities are associated with investment costs, both in R&D
as well as property plant and equipment in the short to medium term.
Transitional risks Volvo Group also engages in partnerships and collaboration with other
A number of climate-related transitional risks have been identified, which companies, whose core competencies are needed to develop new tech-
are incorporated in the Volvo Group Enterprise Risk Management process. nology for transport and infrastructure solutions.
Transitional risks may be material for the Volvo Group in the short, medium
and long term. These risks, including their potential impact, are described External dependencies and collaborations
in more detail on page 68–73 under the following risk categories: The transition to net-zero emissions in the transport sector depends on a
• Regulations, page 69 variety of factors, but we believe the main long-term solutions are electrifi-
• Transformation and technology, page 69-70 cation and development of other zero emission technology. Electrification
• New business models, page 70 depends not only on the product and service offering but also on external
• Suppliers and materials, page 70 factors such as the existence of a functioning charging infrastructure and
access to renewable energy sources to power battery electric and fuel cell
Physical risks electric products. Customer demand in different markets is also dependent
Physical risks, including climate risks, in relation to main sites where the on factors such as availability of the necessary infrastructure and energy,
Group is operating are reviewed on a regular basis as part of the Group’s governmental incentives for green technologies and the price of fossil fuel.
property management and insurance programs. Longer term climate risk The Volvo Group strives to have products and solutions available in pace
analysis has also been performed for selected sites, as part of the Taxon- with customer demand by using a highly flexible production system.
omy implementation work. Different physical risks are an inherent part of Recognizing the need for collaboration on a system-wide basis, the
operations at all Group sites. Some of the locations may also be subject to Volvo Group has taken part in a number of multi-stakeholder initiatives.
increased risks from physical weather events in the longer term, depend- One such initiative is the First Movers’ Coalition, which assembles
ing e.g. on climate developments. The Group intends to continue monitor- cross-industry purchasing commitments to drive development of low-
ing these risks, and take actions to seek to mitigate them when consid- carbon technologies. The Volvo Group is also investing in joint ventures
ered to be appropriate. Reporting on physical risks will also be expanded, and strategic partnerships in adjoining sectors, such as energy, steel,
if such risks were to emerge as material from a Group perspective in the future. charging infrastructure and energy storage, which seek to develop, or facil-
itate the use of, transitionary technologies and products.
Climate-related opportunities
The Volvo Group strives to lead the development of new technologies and Scenario analysis
is continuing to develop an extensive portfolio of products and services The Volvo Group has initiated work with scenario analysis to better under-
using new technologies. We aim to continue to provide high quality stand potential development of climate related uncertainties. This
products and services to our customers, while at the same time enabling includes exploring climate scenarios from the International Energy Agency
our customers to reduce their environmental impact. and International Panel on Climate Change (IPCC), as well as secondary
To this end, the Volvo Group is broadening its offer of products that can sources interpreting those scenarios specifically in relation to the trans-
be powered by renewable energy through the introduction of battery- port sector. A normative scenario analysis was conducted in the establish-
electric vehicles as described on pages 12-16. The Group also invests in fuel ment of the Group’s science-based targets. As part of establishing strate-
cell technology with the ambition to have a heavy-duty hydrogen offer avail- gies and plans in line with the Group’s net-zero commitment, analyses
able during the second half of this decade and continues to offer products have been performed to understand the level of emission reductions
that can be powered by renewable liquid and gaseous fuels like HVO needed to follow the pathways aligned with the ambitions in the Paris
(hydrogenated vegetable oil) and biogas. In addition to new technology Agreement. The analyses provide input on important factors such as mod-
products, the Volvo Group has developed a range of service solutions that elling customer demand, regulatory requirements, infrastructure roll-out,
help to reduce the number of transports needed by optimizing fill rates, access to renewable energy and governmental incentives for clean tech-
consolidating transports and choosing the most effective routing. nologies which in turn are essential inputs to the respective Business
Customer demand for products and solutions with lower environmen- Areas’ plans.
tal impact is increasing, although the transition pace differs between In addition to this transition scenario, the Volvo Group analyzed physi-
business areas and regions. When using electricity as main power source cal risks for the Group’s main locations based on different representative
in transport operations, the operational costs are in general reduced. At concentration pathway (RCP) scenarios developed by the IPCC. In this
the same time, the capital cost increases. This rebalancing can represent work, RCP 2.6, RCP 4.5 and RCP 8.5 were used.
an increasingly more attractive use case for fully electric vehicles in sev-
Risk management In addition to the ERM process, climate risks are also considered and
In accordance with the decentralized Volvo Group governance model, managed in other Group processes, such as the scenario analysis work
each Business Area and Truck Division is accountable for its own risk (see above) and in the business continuity and risk mitigation planning for
management. Once risks have been identified, Truck Divisions, Business the Group’s operational sites.
Areas and Group functions report them in the ERM process using an inte-
grated multi-disciplinary approach. The ERM process includes all types of Financial planning
risks for the Volvo Group, so the processes for identifying, assessing and The Volvo Group’s investment plan includes a technology roadmap to
managing climate and other sustainability related risks are fully integrated increase zero-emission vehicles or low-emission vehicles that can enable
into the Volvo Group’s wider risk management. net-zero transport solutions. These include solutions based on electric
The risks identified in the ERM process undergo a materiality analysis. and renewable liquid and gaseous fuels.
The Group recognizes that some externalities impact the business in sev- Investments in property, plant and equipment will increase in connec-
eral ways and climate change is a good example of this as it poses both tion with the Group building up capacity for the above activities. However,
long-term strategic risks, for instance as a result of technology shifts and thanks to the Group’s modular product architecture CAST (read more on
increasing government regulations, and short to medium term risks, for page 18) both electric trucks and trucks with combustion engines can be
example in relation to customer satisfaction, physical disruptions of the produced on the same assembly lines, thus limiting the investments
production system and requirements of environmental regulation. The needed for this transition in the industrial system.
materiality analysis is conducted with internal and external stakeholders, Part of the investments in R&D, as well as in property plant and equip-
and the risks that are classified as material are risks which can, separately ment, is directly invested in the Group’s current industrial system and
or in combination, have a material adverse effect on the Group’s business, tools at suppliers. Beyond this, the Volvo Group is collaborating in joint
strategy, financial performance, cash flow, shareholder value or reputa- ventures and strategic partnerships where additional significant invest-
tion. See page 68-73 for more information. ments are made.
DISCLOSURES ON RESEARCH AND DEVELOPMENT INVESTMENTS
The Volvo Group’s total investments in R&D, excluding the effects from the R&D expenses
net of capitalized and amortized R&D, amounted to SEK 24.6 billion. The
Group’s R&D project portfolio has been categorized into four main catego-
ries to provide a more transparent overview of the Group’s R&D invest- Low/zero emission, 26%
ments during the year. The classification of R&D expenses in this section is
Platform/enabler, 25%
based on a Group internal categorization of investments. Hence it does not
Fuel efficiency/other environmental
align directly with the EU Taxonomy or other external standard.
improvement, 13%
Neutral, 36%
• Low- and zero-emission projects – directly associated with prod-
ucts with low or zero tailpipe emissions, following the definitions of
the substantial contribution criteria in the EU Taxonomy.
• Platform and enabler projects – associated with the development of
technology common to both conventional products as well as low or In 2022, approximately 26% of the Volvo Group’s gross R&D expenses¹
zero emission vehicles based on the Group’s modular architecture (CAST). were considered low- and zero-emission, an additional 38% were related
This includes development of technologies such as common electrical to fuel efficiency and pollution prevention, or projects in shared technology
architecture, cabs, aerodynamics, connectivity and safety features. projects.
• Fuel efficiency and other environmental improvement projects –
1 Excluding effects from capitalization and amortization.
associated with the improvement of the environmental performance
of internal combustion engine vehicles, e.g. fuel efficiency, emissions
reduction, bio-LNG and other low-carbon fuel projects. These invest-
ments are important for the transition to lower GHG emissions in
addition to electrification.
• Neutral projects – all the remaining projects. Some of these invest-
ments may result in certain environmental benefits, but they have not
been assessed as significant, for example a quality update to an exist-
ing asset.
ENERGY AND EMISSIONS
Emissions metrics, targets and disclosures are based on the Green-

house Gas (GHG) Protocol corporate standard. Emissions from use of sold
Connection to Agenda 2030 and reporting standards products – scope 3.11 of the GHG protocol – is identified as the main
material category in the baseline GHG inventory, representing over 95% of
the total emission footprint. When nothing else is stated, GHG emissions
are adjusted for acquisitions and divestments according to the accounting
principles of the GHG protocol. The Volvo Group has reported climate-
Main connections to the UN SDGs and targets related information, targets and results since the beginning of the 2000s.
7.3 Double rate of energy efficiency The approach of managing climate-related risks has served the Volvo
8.4 Resource efficiency in production Group well, both in terms of reducing emissions in line with targets set and
11.2 Sustainable transport systems in terms of developing new technologies and business plans to meet the
12.2 Sustainable management of natural resources transition towards fossil-free transports.
Science-based targets for Scope 1, 2 and 3 emissions

The Volvo Group committed to the Science-Based Targets initiative (SBTi)
“Business Ambition for 1.5 °C” in 2020 and validated its set targets in June
2021. The Volvo Group is targeting a net-zero value chain offer by 2040.
Given that the average life-time of the Group’s products is approximately 10
Referenced reporting standards years, this should allow the Group's customers to achieve net-zero value
GRI 302 – Energy chain greenhouse gas emissions by 2050. The pace of change is particularly
GRI 305 – Emissions important, and the Group has set ambitious milestone targets along the way.
TCFD recommendations
The targets are set in different ways for the Group’s different segments.
What they have in common is that they are all contributing to the ambitions
of the Paris Agreement.
Methods and data collection

The Volvo Group’s Environmental Policy is the steering document address- Scope 1 and 2 emissions method and data collection
ing risks and opportunities in areas such as emissions, resource use, chem- Environmental impacts and greenhouse gas inventory are established
icals and residuals. Strategic priorities related to environment and climate according to the Greenhouse Gas Protocol’s Corporate Accounting and
are based on product life cycle assessments and aim to reduce emissions Reporting Standard, which is a standardized framework for quantifying
and other climate-related risks where they make the most impact. and reporting GHG emissions in CO₂-equivalents (CO₂e).
Part of value Scope 1, 2 or 3 Approximate share based 2019 2022

chain on baseline GHG inventory Baseline
Mton Volvo Group’s Science Based Targets

are set to reach net-zero value chain
Production, Scope 1 <0.5% 0.250 0.243 GHG emissions by mid-century at the
technical Direct emissions latest. The ambition is to reach this
centers, already by 2040.
warehouses
and dealerships
Scope 2 <0.5% 0.125 0.081
Indirect emissions from
purchased energy
Use of sold Scope 3.11 use phase ~95% 323 287

products Indirect emissions
from use of sold
products
Other indirect Other Scope 3 These other indirect emission are not yet
emissions Approximately 4% of the greenhouse gas inventory are related to purchased included in the report. However, internal
goods and services, transportation and distribution, waste generated in targets exists for certain areas such as
operations business travel, employee commuting etc. goods transportation.
Less than 1% of the total emission inventory are connected to Scope 1 which is an important measure to increase the efficiency in the transport
and 2, including production plants, engineering centers, offices and deal- sector and reduce emissions of GHG. Since the calculation methodology
erships. These are under the Volvo Group’s direct management and higher is being developed, and e.g. different sources for emission factors and
level of control. methods may be used for determining the activity data (annual usage, dis-
tance travelled etc.), the Volvo Group’s emission data may not be fully com-
Scope 3 use phase emissions method and data collection parable to that of other entities. We also expect that the Group’s method to
Scope 3 emission results are reported to indicate the progress toward the calculate the emission footprint may be developed further over time, and
net-zero SBTi targets for the Volvo Group products. The methodology for this may well alter results and, to ensure proper comparison, the baseline.
calculating emissions from use of sold products has been designed to meet If the calculation method is developed or assumptions used are adjusted in
the requirements provided in the relevant standards of the GHG Protocol; any material way, we intend to report on that in a transparent manner. As
namely the GHG Protocol Corporate Standard, the GHG Protocol Corporate matters currently stand, the data is directionally useful but is subject to the
Value Chain (Scope 3) Accounting and Reporting Standard, and Technical limitations expressed above.
Guidance for Calculating Scope 3 Emissions, which includes expected life-
time emissions from all applicable products sold in the reporting period. Other scope 3 emissions
The target methodology and boundaries are following the SBTi Trans- The remaining part of indirect emissions based on 2019 baseline inventory
port Science Based Target setting guidance and the target setting account for approximately 4% of emissions in scope. These are included in
requirements and tools from the SBTi. The methodology is based on the work for net-zero value chain greenhouse gas emissions, but they are
activity data on product annual usage, years in service, energy consump- not yet subject to validated science-based targets. For some areas, targets
tion and associated well to wheel GHG emission factors for the different are already existing, for example freight transports.
energy sources utilized (diesel, electricity etc.). For product annual usage,
data is in six months arrear for trucks and buses to due to a time lag in Targets and results 2022
obtaining logged usage data.
In absence of a standardized test procedure for trucks, as well as other Own operations scope 1 and 2
Volvo Group products, manufacturers are invited to present and justify The Volvo Group’s total own scope 1 and 2 emissions make up less than
their own estimates or simulations based on fuel consumption and specific 1% of total GHG inventory. The main ways to reduce these emissions are
activity data. The applied expected activity data and other parameters are continuous work with energy efficiency improvements and sourcing of
associated with a level of uncertainty and may be subject to change due to more renewable energy where possible. Initiatives to reduce energy use by
implementation of regulations or global, regional, or national policy 18 GWh were implemented during 2022 and the target is to implement
changes, or improved data quality. From a sensitivity analysis perspective, saving worth of 150 GWh between 2021 and 2025.
changes in any of the parameters will impact outcome, but changes of The GHG emission from own operations were 13% lower 2022 com-
assumptions of products’ years in service currently have more significant pared to 2019. Direct emissions (scope 1) were at a similar level to previous
impact on calculated results. year despite higher production volumes of trucks. The indirect emissions
Furthermore, the calculations do not take into account all aspects of e.g. from own operations (scope 2) were reduced as a result of increased share
the efficiency improvements in increased load in tones per vehicle km of renewable energy sources, but also due to reduced volumes in regions
with higher GHG intensity of purchased electricity.
Use phase, scope 3

Calculated GHG emissions from use of sold products amounted to
approximately 287 million tons 2022 compared with 323 million tons in
SBTi approved targets, from baseline 2019 2019. The calculated reduction in total GHG emissions is a combination
of impacts from energy efficiency measures, changes in sales volumes
and product mix.
Scope 1–2 Target 2030 Status 2022
OWN –50%
OPERATIONS absolute emissions –13% Trucks
The reduction in 2022 amounted to –4% (–2%) vs 2019 baseline for the
–40% intensity target. The reduction is mainly a result of products with lower
Target 2030
Status 2022 greenhouse gas intensity. However volumes and product mix have somewhat
– 40%
Scope 3 use phase
TRUCKS
emissions per vehicle-km
– 4% decreased the overall total improvement of emissions per vehicle-kilometer.
Target 2030 Buses

Status 2022
– 40% The result for buses in 2022 was –7% (+7%) vs 2019 baseline for the
Scope 3 use phase
BUSES
emissions per vehicle-km
–7% –40% intensity target. The reduction is mainly due to product mix effects
with more products with relatively low greenhouse gas intensity being
Scope 3use phase Target 2030
Status 2022 placed on the market in both main segments, city and coach buses.
CONSTRUCTION – 30% –11%
EQUIPMENT absolute emissions Construction equipment
For construction equipment, the result was –11% (+17%) vs 2019 base-
Target 2034
Status 2022 line on the absolute emissions target. While a range of more energy effi-
– 37.5%
Scope 3 use phase
VOLVO PENTA
absolute emissions
+5% cient products have been launched, the most significant effect is explained
by lower sales volumes, most notably in Asia.
Volvo Penta Overall, different regulatory requirements, availability of low GHG energy
The result for Volvo Penta was +5% (–5%) vs 2019 baseline on the abso- sources and associated infrastructure impacts the market conditions and
lute emissions target. The result is mainly driven by product mix and customer demands. These market factors have significant impact on
volumes, with increased volume demands particularly on engines and average GHG intensity of products sold and used in different countries
solutions with high power. and regions. At the same time, the Volvo Group is operating in cyclical
industries which are linked to economic activity, such as the GDP devel-
opment and sales volumes and mix, which can vary considerably from one
year to the next. These factors can together significantly impact the result
in the total calculated GHG emissions.
Detailed energy and emission performance

Several data points and tables are restated. These restatements are
Out of scope CO₂ emissions*
marked with an asterisk (*) and are mainly related to refinements in
Metric tons x1,000 2022 2021 2019
reporting methodologies for the Group's foundry operations and improve-
ments in reporting from certain smaller entities. Biogenic CO₂ 9 8 3
The baseline 2019 is included in tables where relevant for tracking on
established Group targets. Longer time series are found on page 220.
Energy use within the organization*

Calculated scope 3 emissions, category 11, use of sold products (Connected to scope 1 and 2 emissions)
Energy GWh 2022 2021 2019
Metric tons x1,000,000 CO₂e 2022 2021 2019
Natural gas Scope 1 514 561 565
Trucks total 198 180 219 Diesel Scope 1 304 317 312
Buses total 6 5 14 Other Scope 1 222 203 190
Construction Equipment 62 82 70 Electricity Scope 2 1,093 1,101 1,089
Volvo Penta 21 19 20 District heating Scope 2 234 255 216
Total use of sold product 287 286 323 Total 2,367 2,437 2 372
Of which renewable energy % 48% 40% 35%
Relative energy use 2022 2021 2019
Scope 1 and 2 GHG emissions and sources of emissions* Net sales,

Metric tons x1,000 CO₂e 2022 2021 2019 Industrial operations, SEK bn 460 361 418
MWh /
Natural gas Scope 1 104 115 116 Energy / net sales SEK M 5.1 6.8 5.7
Diesel Scope 1 78 82 82
Other Scope 1 61 55 52
Total scope 1 Scope 1 243 252 250
Electricity Scope 2 71 103 107 Energy saving initiatives
The target is to implement energy saving initiatives 2021–2025 that
District heating Scope 2 10 12 18
together save 150 GWh per year from 2025.
Total scope 2, market based Scope 2 81 115 125
Energy savings 2022 2021 2020
Total scope 2, location based Scope 2 180 204 215
Total Scope 1 and 2 324 367 375 Annual implemented initiatives GWh 18 15 37
Scope 1, 2 GHG emissions intensity* Other emissions to air*

Scope 1 and 2 2022 2021 2019 Nitrogen oxides (NO X ), sulphur oxides (SO X ) and solvents
Metric tons 2022 2021 2020
Net sales, Industrial o
perations, SEK M 460 361 418
Products delivered, (x1,000) 319 307 329 NO X tons 198 221 190
CO₂ (scope 1 and 2) by net sales 0.70 1.02 0.90 SO X tons 2.9 5.0 3.7
CO₂ (scope 1 and 2) by products delivered 1.02 1.20 1.14 Solvents (VOC) tons 1,398 1,309 1,224
ENVIRONMENTAL MANAGEMENT
Water
Risks of effluents are mitigated through active environmental manage-
Connection to Agenda 2030 and reporting standards ment and control in the Group’s operations. The Volvo Group manage-
ment system sets certain minimum requirements. Water use has not been
deemed as a highly material topic in the Group’s materiality assessment,
however it is included in this report due to specific interest and tracking
from certain stakeholders.
Main connections to the UN SDGs and targets
6.4 Increase water use efficiency
8.4 Improve resource efficiency in production Water consumption in production
12.2 Sustainable management of natural resources
2022 2021 2020
12.4 Responsible management of chemicals
12.5 Reduce waste generation Total water consumption, Mega-liters 4,566 4,628 4,856
Relative water consumption,
Cubic meters/SEK M net sales 9.9 12.8 14.9
At Group level, only total water consumption is available, not by source.
Referenced reporting standards Waste and recycling

GRI 307 – Environmental Compliance 2016 The Volvo Group has established waste reduction strategies with the
long-term objective to become landfill free. Volvo Group’s sites either
have in place or are in the process of developing landfill-free objectives.
This work is supported by a directive and guidelines setting out the criteria
The Volvo Group’s Environmental Policy is the steering document for for when a Volvo Group site can be considered a landfill-free site. As part
managing risks in areas such as emissions from production, resource use, of this the Group’s operating sites apply the waste hierarchy, which prior-
chemicals and residuals. It is based on the principles of lifecycle manage- itizes reuse and recycling over disposal, but also minimization and preven-
ment and continuous improvement. tion of waste.
The Group’s ISO 14001 certified environmental management system The increase in material to landfill was due to higher degree of con-
covers approximately 95% of p roduction facilities and 90% of distribu- struction and soil remediation projects.
tion centers. The management system is used in a hierarchical way to
deploy effective environmental work in the Group’s divisions and business
areas. This means that the Business Areas and Truck Divisions are all Waste by type and disposal method
responsible for their environmental performance in the same way as for
Metric tons 2022 2021 2020
financial or other performance. Environmental management is also part of
supplier assessments, read more on page 176–177. Recycling, metal scrap from
In 2021 and 2022, the Volvo Group has reviewed its environmental operations 113,781 111,260 82,076
management from the requirements of the relevant Do no significant Recycling, other metal scrap 23,877 16,865 13,338
harm criteria outlined in the EU Taxonomy Climate Delegated Act pertain- Recycling, non-metal 153,932 158,776 139,272
ing to the Group's activities. % recycling of total 84% 86% 86%
Composting 2,624 2,433 1,868
Incineration with energy recovery 29,278 23,269 18,171
% recycled, composted or
energy recovery 93% 94% 93%
Incineration without energy
recovery 1,774 2,027 1,634
Treatment by professional waste
contractor 11,493 11,116 9,943
Landfill 6,705 5,858 6,043
Landfill, only inert material 4,827 470 691
Total residuals 348,292 332,075 273,037
Whereof hazardous wastes 36,800 53,314 51,712

Transition to a circular economy Environmental compliance

Circularity includes a range of issues relating to product design, manufac- No significant environmental incidents or spills were recorded during 2022.
turing and ways of doing business. It has been recognized that circularity In 2022 the Volvo Group had 12 licensed facilities in Sweden. For some facil-
and moving upwards in the waste hierarchy is challenging. Where rele- ities the environmental permits are under review due to planned changes.
vant, environmental design tools are used that further outline ways to sup-
port the transition towards circular economy. This includes evaluations of Biodiversity
design criteria for durability, recyclability and remanufacturing as well as The Volvo Group strives to consider and manage both direct and indirect
avoiding certain substances that would hinder reuse and recycling at the environmental impacts. Regarding biodiversity, the value chain perspec-
end of the use phase. The environmental design tools used are furthering tive can be divided in three main areas – our own operations, supplied
the Group’s environmental policy. material and impact during use of sold products.
Within the own operations, risks are considered both for the establish-
Substances and materials of concern ment of new operations as well as for the ongoing operation. The Group
Some of the materials used in Volvo Group’s products come in scarce sup- has implemented minimum environmental requirements helping to pre-
ply and some materials and substances are potentially hazardous. The vent negative environmental impact from material environmental aspects.
Group works to reduce its dependency on such materials and substances The requirements are applicable for all operations in absence of more
with the aim to protect both people and the environment and to secure stringent regulatory requirements. The Group’s operating sites are typi-
sustainable supply. In collaboration with partners, the Volvo Group proac- cally located in since long established industrial areas. In the event of new
tively evaluates alternatives in the design and supply processes to mini- establishments, procedures are followed to mitigate potential negative
mize and eliminate use of scarce materials and substances of concern. impacts on protected areas and species.
During 2022, the Group has continued to screen the use of chemicals and Upstream in the value chain, Group supply chain partners are evaluated
substances in product, components, and production to secure that pollu- with similar requirements.
tion is prevented as part of aligning with the EU Taxonomy, see page 159. One of the biodiversity risks in the transport sector is the production of
Scarce materials may lead to a variety of difficulties such as higher fuels. Biobased fuels continue to be important alternatives to conven-
costs and increased risk for corrupt behavior or adverse human rights tional diesel in several markets to reduce fossil greenhouse gas emissions
impacts when sourced from high-risk areas. Volvo Group is running a ded- in the short term. However, the availability of sustainable biofuels does
icated supplier Sustainable Minerals Program, currently focusing on tin, not meet demand in all areas.
tungsten, tantalum, gold and cobalt, to support sourcing of materials in a
responsible way. The program is built on the five-step framework of the
OECD Due Diligence Guidance for Responsible Supply Chains of Minerals
from Conflict-affected and High-risk Areas with respect to social and envi-
ronmental topics, as well as on the tools of the Responsible Minerals Ini-
tiative, to which the Volvo Group is a member, read more on page 177.
EU TAXONOMY REGULATION DISCLOSURES
The EU Taxonomy Regulation EU 2020/852 (‘the EU Taxonomy’) is a to align with new regulatory guidance provided, as market practice devel-
classification system for sustainable economic activities in relation to the ops and as the general knowledge of the Taxonomy requirements matures.
European Union’s six environment objectives:
1. Climate change mitigation Methodology to identify eligible activities
2. Climate change adaptation The Volvo Group has identified that a proportion of its economic activities
3. Sustainable use and protection of water and marine resources qualify as eligible under the Taxonomy Regulation EU 2020/852 (Annex 1
4. Transition to a circular economy to Commission Delegated Regulation (EU) 2021/2139) the “Delegated
5. Pollution prevention and control Climate Act”.
6. Protection and restoration of biodiversity and ecosystems. • The Group develops and manufactures trucks and buses, which are
eligible pursuant to section 3.3 Manufacture of low-carbon technolo-
An activity is considered sustainable according to the EU Taxonomy when gies for transport of the Delegated Climate Act (’3.3 Activities’).
it contributes substantially to one or several of the objectives, without • The Group develops and manufactures construction machinery and
causing significant harm to the others, and at the same time meets certain engines, part of which are eligible pursuant to section 3.6 Manufac-
defined minimum safeguards. In 2021, the taxonomy reporting covered ture of other low-carbon technologies of the Delegated Climate Act
eligible economic activities. Eligible in this context means activities iden- (’3.6 Activities’).
tified in the technical screening criteria, so far only available for the first
two environmental objectives on climate. In 2022, the reporting on taxon- Both activities are defined as enabling activities in relation to the climate
omy alignment has been added to the disclosure requirements. change mitigation objective and are of strategic importance in the Volvo
In absence of regulatory guidance in many respects, the Volvo Group has Group’s transition towards a net-zero greenhouse gas emissions value
found that there is a large scope for interpretation in relation to several chain. See more on pages 151 and 155-156.
aspects of the Taxonomy. We have therefore deemed it necessary to Eligible activities of the Volvo Group are based on guidance provided
develop our own internal considerations. Our disclosure in 2022 is based under the Commission notice on the interpretation of certain legal provi-
on our current understanding of the rules and may be amended in the future sions of the Disclosures Delegated Act under Article 8 of EU Taxonomy
Turnover KPI Significant

contribution Do no significant harm
Climate Water and Taxonomy- Category
Absolute Climate change marine Circular Pollution Biodiversity Minimum aligned (Enabling
turnover Proportion of change adaptation, resources, economy, prevention, and ecosys- safeguards, proportion , or Transi-
Table 1 Codes SEK M turnover, % mitigation, % Y/N Y/N Y/N Y/N tems, Y/N Y/N 2022, % tion)
Economic activities
A. TAXONOMY-ELIGIBLE ACTIVITIES %
A.1. Environmentally sustainable activities (taxonomy-aligned)

Manufacturing of low carbon
technology for transportation 3.3 4,023 0.8 100% Y Y Y Y Y Y 0.8 E
Manufacturing of other low
carbon technology 3.6 273 0.1 100% Y Y Y Y Y Y 0.1 E
Turnover of taxonomy- aligned (A.1) 4,296 0.9 100% 0.9
A.2 Taxonomy-eligible (but not taxonomy-aligned activities)

technology for transportation 3.3 332,716 70
Qualitative information related to turnover
Manufacturing of other
low carbon technology 3.6 432 0.1 The total turnover reported covers the revenue recognized, as
Turnover of taxonomy-eligible (but not explained in Note 7, (page 94), and includes revenues from the Volvo
taxonomy-aligned activities) (A.2) 333,148 70 Group’s Industrial Operations as well as from financial and operating
leases. The Taxonomy disclosures on eligible turnover includes net
Total eligible + aligned (A.1 + A.2) 337,444 71
sales from vehicles and services, including repair, maintenance and
spare parts. Compared to 2021, the scope of eligible activity has
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES been broadened with the inclusion of spare parts and certain used
Turnover of taxonomy- vehicles and services. Spare parts are considered aligned when they
non-eligible activities (B) 136,035 29 are used in or linked to an aligned vehicle. The eligible activities under
Total (A + B) 473,479 100 3.6 include net sales from low-carbon machines, i.e. only machines
that enable zero tailpipe emission operations. The aligned turnover
derives from the part of the eligible scope which fulfills all the techni-
Table 2. Voluntary information* cal screening criteria.

carbon technology (not aligned) 119,676 25 * Voluntary information
The voluntary information in Table 2 applies the same interpretation of the
eligibility scope for 3.6 Activities as for 3.3 Activities. See explanation of
mandatory and voluntary information on page 162.
Regulation on the reporting of eligible economic activities and assets, Substantial contribution
dated October 6, 2022 (the “Commission Notice”) with respect to the The Volvo Group has identified a number of activities, by product, that fulfil
Taxonomy-eligibility requirements. However, as alternative approaches to the technical screening criteria of substantially contributing to climate
determining eligibility exist, additional Taxonomy-eligibility information change mitigation. These are referred to as potentially taxonomy-aligned
have on a voluntary basis been included for transparency purposes. In and consist of trucks and buses with zero tailpipe emissions, as well as low
2022, the Group has broadened its reporting of eligible 3.3 Activities to emission buses (3.3 Activities), construction machines and other zero tail-
include a larger share of related repair and maintenance activities. pipe emission technology (3.6 Activities).
Methodology to identify aligned activities Doing no significant harm

For an economic activity to be considered taxonomy-aligned – and hence Potentially taxonomy-aligned products and relevant manufacturing sites
environmentally sustainable – it needs to substantially contribute to at have been assessed against each of the do no significant harm (DNSH)
least one of the EU's six environmental objectives and not significantly criteria, as further detailed below. As previously noted, in absence of regu-
harm any of the others. In addition, it needs to be carried out in adherence latory guidance and market practice, we have found that there is a large
with certain minimum safeguards as regards social and governance scope for interpretation of the DNSH criteria and have therefore deemed
aspects of sustainability. it necessary to interpret and concretize the set-out criteria based on the
CapEx KPI Significant

CapEx Proportion of change adaptation, resources, economy, prevention, and ecosys- safeguards, proportion, or Transi-
Table 1 Codes SEK M CapEx, % mitigation, % Y/N Y/N Y/N Y/N tems, Y/N Y/N 2022, % tion)
Economic activities
technology for transportation 3.3 2,452 13 100% Y Y Y Y Y Y 13 E
carbon technology 3.6 96 1 100% Y Y Y Y Y Y 1 E
Taxonomy- aligned (A.1) 2,548 14 100% 14

Qualitative information related to capital expenditures
low carbon technology 3.6 2 0 The taxonomy disclosure on eligible capital expenditures (CapEx) for,
Taxonomy-eligible (but not taxono- 3.3 Activities, includes CapEx for product development and additions
my-aligned activities) (A.2) 11,628 64 to property, plant and equipment. As for the 3.6 Activities the eligible
CapEx include the same categories as for 3.3 Activities but is restricted
Total eligible + aligned (A.1 + A.2) 14,176 78
to low-carbon machines. Capitalized product and software develop-
ment, other intangible assets, and investments in property, plant and
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES equipment are included in the information provided, see Note 12 and 13
Taxonomy non-eligible activities (B) 4,120 22 (page 98-102 for details).
Total (A + B) 18,296 100 Reported aligned investments consist of research and development
(R&D) projects directly related to taxonomy-aligned products (low-car-
bon technologies), which are part of a plan to grow the aligned activities
Table 2. Voluntary information*
or to make eligible activities aligned. For CapEx related to property,
plant and equipment, the part of the investment that is related to taxon-
Manufacturing of other low omy-aligned activities are added. A large portion of the CapEx invest-
carbon technology 1,758 10
ments benefit both taxonomy aligned and non-aligned vehicles and
machines, developed on the same technology platform and manufac-
tured in the same sites. For these types of investments, an allocation
key is used based on the split of volumes between taxonomy aligned
and non-aligned products. CapEx related to the purchase of output from
taxonomy-aligned economic activities are not part of the report 2022 as
they are not deemed material related to other eligible activities.
*Voluntary information
The voluntary information in Table 2 applies the same interpretation of the eligi-
bility scope for 3.6 Activities as for 3.3 Activities. See explanation of mandatory
and voluntary information on page 162.
specific context of the Group, thereby creating our own detailed guidance. Climate change adaptation
The reporting of aligned activities is thus, to a certain degree, based on an Physical risks are reviewed on a regular basis as part of the Group’s prop-
adopted interpretation of the DNSH criteria applicable to Volvo Group eligi- erty management and insurance programs. In our assessment of compli-
ble activities. ance with the DNSH criteria, relevant sites have carried out local risk
Overall, there are challenges related to the global scope of the Group’s assessments on relevant climate hazards. In addition, an overall inventory
operations and variances in the regulatory landscape of different jurisdic- of potential climate hazards has been performed based on the geograph-
tions. Activities within the EU have been prioritized to secure alignment ical location of relevant Volvo Group sites and potential development in
with the DNSH criteria. Activities outside the EU have been prioritized different climate scenarios as presented by the UN Intergovernmental
based on size of turnover and complexity in translating the demands to a Panel on Climate Change.
local context. A minor part of the potentially aligned activities by turnover
are not yet fully screened for the DNSH criteria. The methodology to assess Sustainable use and protection of water and marine resources
alignment will be evaluated as regulatory guidance and general reporting With respect to the criteria for water, the Volvo Group has identified a limited
practices evolve. number of activities with direct emissions of industrial wastewater or being
In conclusion, all activities reported as aligned have been assessed to subject to water stress, which have been deemed relevant for the alignment
meet all DNSH criteria, as set out below. criteria. In such cases, environmental impact assessments and water man-
agement plans have been reviewed with respect to relevant sites.
OpEx KPI Significant

OpEx Proportion of change adaptation, resources, economy, prevention, and ecosys- safeguards, proportion , or Transi-
Table 1 Codes SEK M OpEx, % mitigation, % Y/N Y/N Y/N Y/N tems, Y/N Y/N 2022, % tion)
Economic activities
technology for transportation 3.3 4,136 18 100% Y Y Y Y Y Y 18 E
carbon technology 3.6 785 3 100% Y Y Y Y Y Y 3 E
Taxonomy- aligned (A.1) 4,921 21 100% 21

Qualitative information related to operational expenses
low carbon technology 3.6 21 0.1 Most of the taxonomy disclosure on eligible operating expenses (OpEx)
Taxonomy-eligible (but not taxonomy- includes non-capitalized R&D expenses for new product develop-
aligned activities) (A.2) 13,913 59 ment. In addition, for 2022, costs for the repair and maintenance of
Total eligible + aligned (A.1 + A.2) 18,834 80 property, plant and equipment and short-term leases are included.
For 3.3 Activities, all expenses related to transport vehicles are
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
included but as for the activities eligible under 3.6, only expenses
Taxonomy non-eligible activities (B) 4,673 20 related to low-carbon machines are included. In this KPI, R&D is the
Total (A + B) 23,507 100 material part in terms of aligned expenses. R&D expenses in 2022
amounted to almost SEK 20 billion and the taxonomy-aligned part
Table 2. Voluntary information* was approximately 25%. Aligned R&D expenses are identified as
projects which can be directly related to already taxonomy-aligned
products, be part of a plan to grow aligned activities or to make eligi-
carbon technology (not aligned) 4,335 18
ble activities aligned. For the R&D expenses benefitting both taxono-
my-aligned as well as non-aligned activities an allocation key is used
based on the same principles as for CapEx investments. The other
part of OpEx – repair and maintenance related to the functioning of
the plants and short-term leases – amounted to approximately SEK
3.6 billion. The proportion of such aligned OpEx is based on share of
aligned revenues during the year, which reflects the resources used
by taxonomy-aligned production in the plants.
*Voluntary information
The voluntary information in Table 2 applies the same interpretation of the eli-
gibility scope for 3.6 Activities as for 3.3 Activities. See explanations of man-
datory and voluntary information on page 162.
Transition to a circular economy Reporting

As it relates to transition to a circular economy, the assessments made None of the activities of, or Volvo Group investments in, joint ventures and
have identified several such practices implemented in the Group, where associated companies are included in this report, see Note 5 on page 86
feasible. This includes applying the waste hierarchy and establishing for more information about joint ventures.
waste reduction targets in manufacturing, as well as product design pro- As the Volvo Group so far considers its eligible activities pursuant only
cesses where considerations have been made on durability, recyclability to the climate change mitigation objective, and as 3.3 Activities and 3.6
and choice of materials and other strategies to facilitate transition to a Activities are conducted in different operating segments of the Group, no
circular economy. activities should have been double counted when calculating the Taxonomy
KPIs presented. For the same reason, the reporting template is also simplified.
Pollution prevention and control
The pollution prevention and control criteria both refers to and builds upon Mandatory and voluntary information
existing EU substance regulations. Further to referencing existing EU pro- The mandatory disclosure in Table 1 is based on the guidance provided by
hibitions and limitations on the use of certain substances, the EU Taxon- The Commission Notice, referred to in the eligibility section above. In rela-
omy sets out that the use of certain additional substances (substances on tion to 3.3 Activities, the Commission notice sets forth that the reference
the EU REACH Candidate List and substances with similar characteris- to “low carbon” should not be considered when determining Taxono-
tics), which are not currently restricted in EU substance regulations, are to my-eligibility. This interpretation therefore takes into account that most of
be acceptable only if the use is ‘essential for society’. the Group’s transport vehicles are Taxonomy-eligible. For 3.6 Activities,
In absence of further regulatory guidance, the Volvo Group has devel- eligibility depends on the objective of the activity, which should be aimed
oped its own set of criteria for determining the type of uses that are at substantial savings of life cycle greenhouse gas emissions in other sec-
‘essential for society’ and how to identify the substances which are to be tors of the economy. The implication of this is that a truck or bus (3.3
made subject to this test. Our essential use test builds upon existing Activity) with an internal combustion engine is in scope of eligibility, but
essential use concepts found in EU substance regulations and interna- an excavator or hauler (3.6 Activity) with the same type of combustion
tional treaties (most notably the Montreal Protocol) and considers, inter engine is not eligible. To enable a transparent view of all manufacturing
alia, safety and regulatory requirements relevant for our products, product activities in the Volvo Group, a voluntary disclosure has been added to the
performance and the availability of commercially viable alternatives. A reporting scope. Table 2 for each KPI includes voluntary reported infor-
materiality threshold has been applied. Assessments have been carried mation applying the same interpretation of the eligibility scope for 3.6
out by way of comparing our inventory of substances used in products Activities as for 3.3 Activities. The voluntary information does not impact
and manufacturing processes to the substances of high concern refer- the alignment reporting, only eligibility.
enced in the EU Taxonomy.
Investment plan (CapEx plan)
Protection and restoration of biodiversity and ecosystems The Volvo Group has an overall ambition to reduce greenhouse gas emis-
With respect to the criteria for biodiversity, the Volvo Group has screened sions in its value chain. Development of vehicles and machines with zero
its activities at each relevant site based on the significance of impact on tailpipe emissions is a key driver in this overall strategy (read more on
biodiversity and protected areas or species. The Volvo Group’s manufac- pages 150-151). A substantial part of investments is directed towards zero
turing sites have not been deemed to have a significant direct impact and tailpipe emissions technology, which is expected to increase over time.
hence the further assessment regarding biodiversity has been limited to Investment plans are subject to continuous evaluation, which may affect
recently developed activities in exploration or activities located at such a share of alignment reported in the future. Based on the guidance provided
distance that they could impact protected areas. at the time of this report’s publication, we have concluded that aligned
investments are those that are part of the plan to expand taxonomy-aligned
Minimum safeguards business, or to make an eligible activity aligned. All investments in R&D,
It is understood that the minimum safeguard criteria mean that proce- property, plant and equipment made to enable and develop vehicles and
dures are to be in place as regards Anti-Corruption, Fair Competition, Tax- machines fulfilling the technical screening are included. These are mainly
ation and Human Rights, and that the Group is not to be exposed to ‘con- related to vehicles and machines with zero tailpipe emissions. The DNSH
troversial weapons’, which refers to anti-personnel mines, cluster criteria are assessed on product level, according to the technical screening
munitions, chemical weapons and biological weapons. criteria. The Volvo Group may also investigate closing potential gaps relat-
The minimum safeguard criteria have been assessed at Group level, and ing to the DNSH criteria. Such investments will also be included in the plan
when doing so it has been concluded that all wholly owned entities of the for taxonomy-alignment.
Group, and thus all economic activities identified as potentially taxono- In 2022, the taxonomy-aligned investments amounted to SEK 7.5 bil-
my-aligned, are covered by our Group-wide policies and procedures. For lion. These investments are expected to grow as the Volvo Group pro-
more information on relevant policies and procedures, see Human Rights gresses towards its target of 35% of vehicle sales being fully electric by
(page 170), Anti-Corruption (page 178), Competition Law (page 178) and 2030 (read more on page 16), and the Group’s commitment and action
Tax Policy (page 179). We have furthermore concluded that the Volvo Group plan for net-zero value chain greenhouse gas emissions.
does not manufacture or sell any vehicles or attributes specifically designed
to carry or otherwise deal with controversial weapons (as defined above).
Employees and development

The Volvo Group Code of Conduct is the foundation for responsible busi-
ness conduct that builds trust with stakeholders in societies where the
Connection to Agenda 2030 and reporting standards Group operates. As an integral part of daily operations, the leaders of Busi-
ness Areas, Truck Divisions and Group Functions are accountable for areas
such as employment practices, labor relations, people development and
diversity. To do this effectively, they are supported by both local and cen-
tral HR professionals, experts and leaders. In addition to the topics listed
Main connections to the UN SDGs and targets herein, different countries, regions and units may address specific areas in
4.3 Equal access to affordable, technical, line with the local context and needs.
vocational and higher education
4.4 Increase the number of people with relevant skills
5.1 End discrimination against women and girls EMPLOYMENT
5.5 Ensure women’s full participation in leadership and
decision making
To create an inclusive, safe, and engaging work environment built on care
for people is an essential focus area for Volvo Group. The view on people
as the company’s most valuable asset will not diminish with increasing
automation and digitalization. Instead, a competence shift with upskilling
and reskilling in multiple dimensions is fundamental for Volvo Group’s per-
form and transform strategy. The approach is to invest in people, to
encourage lifelong learning, to grow talent, and to create an inclusive and
Referenced reporting standards people centric culture where everyone is encouraged to contribute.
GRI 401 – Employment 2016 The topics in this section are viewed under one common management
GRI 402 – Labor management relations 2016
approach to increase positive impacts on employees as well as reduce
GRI 404 – Training and education 2016
GRI 405 – Diversity and equal opportunities 2016
potential negative ones. Performance indicators are followed in all areas
and targets are established for a selected few.
• Health and safety – to reduce lost time accidents by 50% by 2030
from 2019.
• Diversity – to have at least 35% female employees in general and in
leadership position by 2030.
• Wellbeing at work – to have at least 85% employee engagement and
at least 85% of employees recommending Volvo Group as a great
place to work, by 2030.
Employee turnover and new employee hires

Employee turnover 1, % New hires
Per age, gender 2022 2021 Per age, gender 2022 2021
and total Age and total Age and total and total Age and total Age and total
<40 40+ All <40 40+ All <40 40+ All <40 40+ All
Europe 11 7 8 10 7 8 Europe 4,513 1,735 6,248 3,816 1,292 5,110

Men 11 7 8 10 7 8 Of which women 30% 28% 30% 31% 23% 29%
Women 10 7 8 9 8 8 North America 2,413 1,218 3,631 2,374 1,127 3,501
North America 20 11 14 17 9 12 Of which women 25% 28% 26% 21% 24% 22%
Men 20 10 14 16 9 12 South America 689 166 855 1,164 227 1,392
Women 20 12 15 19 8 12 Of which women 27% 25% 27% 20% 25% 21%
South America 8 5 6 8 5 7 Asia/Pacific 1,651 212 1,863 1,148 149 1,300
Men 7 5 6 9 5 7 Of which women 30% 22% 29% 23% 16% 22%
Women 9 5 8 8 6 7 Africa 33 20 53 84 11 96
Asia/Pacific 14 8 8 12 8 7 Of which women 36% 30% 34% 32% 27% 31%
Men 13 8 7 12 8 7 Group total 9,299 3,351 12,650 8,586 2,806 11,399
Women 16 8 11 12 7 9 Of which women 29% 27% 28% 26% 23% 25%
Africa 9 6 8 6 7 7
Men 10 6 8 6 7 7
Women 4 8 6 4 9 6
Group total 13 8 9 11 8 9
Men 13 8 9 11 8 9 1 The total employee turnover rate is the proportion of employees who left
Volvo Group both voluntary (such as retirements and resignations) and invol-
Women 12 8 10 11 8 9 untary (including due to redundancy).
Additional indicators tracked on Group level without outcome-oriented DIVERSIT Y AND EQUAL OPPORTUNITIES
targets are retention rates, employee turnover, coverage of collective bar-
gaining and access to training. Volvo Group considers diversity and inclusion as critical to its ability to
Over time, Volvo Group has developed pragmatic solutions and ways of perform in current operations and transform into a long-term sustainable
working to adjust according to changing demands. Volvo Group works in business. The Group’s work includes a wide range of aspects, such as cul-
close dialogue with employee representatives for the deployment of solu- ture, generations, competence, background and gender. Recognizing that
tions that help to maintain and strengthen the competence needed for the different regions and countries have individual challenges, the ambition is
Group as well as reducing negative social consequences. This can include to actively work with locally relevant and authentic diversity vectors.
utilizing time-banks to reduce labor time, furlough, re-skilling or upskilling Globally, gender diversity has been identified as the main strategic vec-
for continued employability, early retirement, financial compensation, tor. The Group’s operations and main sectors served have traditionally
internal mobility programs and outplacement via third parties. been characterized by relatively low representation of women. This chal-
lenge has also been recognized in technology and engineering profes-
sions and education. Volvo Group has the target of reaching at least 35%
EMPLOYEE RELATIONS women in the workforce, both in general and in management positions by
2030. Using a broad set of metrics to understand how the Group is
Volvo Group bases the relation between the company and employees, attracting, utilizing, and retaining talent allows for a better understanding
including employee representatives and unions, on honesty, transpar- of systemic barriers. Data and insights are used to create focus and make
ency, fairness and creativity. These basic principles were jointly developed meaningful progress to drive sustainable change. There is a conviction
with the Global Works Council members and guide how to act together that continuous efforts to create a highly inclusive work culture, can
when maneuvering Volvo Group through necessary business changes. unleash the full potential of the diverse population of people. With this
For Volvo Group it is essential to secure a good dialogue with all employ- approach Volvo Group is seeing acceleration in areas traditionally more
ees. To ensure a structured dialogue, Volvo Group uses the yearly Pulse difficult to attract and retain women, including industrial and workshop
survey, frequent performance touchpoints and regular department or environments.
town-hall meetings. Another fundamental element is the yearly Volvo As part of a broader approach to diversity and inclusion, Volvo Group is
Global Dialogue in which about 50 employee representatives from over also expanding the scope of diversity. This work is more distinct at local
20 different countries meet with the CEO and Volvo Group Management units and sites and the efforts are not limited to the global metrics used but
members to discuss the current business situation and strategic initia- acknowledges the evolving nature of diversity and the significant impact
tives of the Group, but also specific future opportunities in respect of new local cultural context plays. To stay globally aligned but locally authentic,
Business Areas, digitalization and needed competence shifts. the Group is leveraging increased support and structure through global
In 2022, the Volvo Global Dialogue meeting was conducted as a face-to- company frameworks and principles, that are executed in the context of
face meeting to discuss e.g., the industry transformation efforts, as well as local entities' culture. Internal networks for and best practice sharing
the actual business situation for the brands and the Group. across the organisation put focus on inclusion as a means to drive diversity,
In addition, three ordinary and two deputy members appointed by which is believed to accelerate the work. The main active networks in the
employee organizations are part of the AB Volvo Board of Directors and area of diversity and inclusion are for women, women in engineering,
thus involved in the strategic direction of the Group. LGBTQI+, diverse Abilities, multiculturalism and young professionals.
Process regarding operational changes Diversity of governance bodies and employees

Prior to major organizational changes, the employee representatives
Age diversity of the 2022 2021 2020
and relevant authorities are informed and consulted in accordance Volvo Group workforce, % <40/40+ <40/40+ <40/40+
with legal and contractual requirements. In 2022, the Group con-
ducted eight information meetings with the European Works Council, Europe 37/63 36/64 36/64
complemented by 150 meetings with local employee representatives North America 38/62 36/64 33/67
and unions in different countries to consult on changes and their spe-
South America 60/40 61/39 61/39
cific impact on a local level.
An estimated 41% of regular employees around the world are Asia/Pacific 58/42 57/43 51/49
members of an independent trade union. Approximately 72% of Africa 53/47 54/46 54/46
employees globally are covered by Collective Bargaining Agreements. Group average 41/59 40/60 40/60
This shows a significantly higher union density rate or coverage of
collective bargaining than the average compared to the International
2022 2021 2020
Labor Organization statistics, especially in the Group’s major markets Gender diversity of the Women/ Women/ Women/
like Sweden, the US, Poland and Brazil. Volvo Group workforce, % Men Men Men
Europe 23/77 22/78 21/79

North America 22/78 21/79 21/79
South America 19/81 18/82 17/83
Asia/Pacific 22/78 17/83 14/86
Africa 24/76 26/74 24/76
Group average 22/78 21/79 19/81
TRAINING AND EDUCATION

Gender diversity over time, share of women, %
Leadership, learning and development is a vital contributor to the transfor-
2022 2021 2020 2019 2018 mation of the Group and to employees’ employability. Raised awareness
about lifelong learning in the teams and organization helps bring forward
All employees 22 21 19 19 18
both needs and tangible progress. Volvo Group University is focused on
Manager (all levels) 24 23 20 20 19
providing high quality training across business areas, divisions or func-
Presidents and other
tions. The ambition is to provide training and development opportunities
senior executives 28 27 26 26 25
for all employees in all locations, with a consistent and quality assured
AB Volvo Board
(Elected by the AGM) 45 45 36 40 40 learning portfolio. This spans from leadership development, across key
competences such as sales and price management for commercial areas,
to technologies related to electrification, automation and agile ways of
working. Compliance and IT security training is enforced to raise aware-
ness of risks and highlight the need for caution for all employees.
Volvo Group applies a 70:20:10* approach when it comes to learning,
and most of employees' development takes place during the course of a
working day, in the teams. To ensure access to training, a large part of
instructor led programs are made available virtually. This allows employ-
ees outside the major sites to join training activities and build networks
across the Group.
Business operations drive development of the competences specific to
their needs and learning opportunities are made available on site. Training
is closely linked to the transformation journey and carefully timed with e.g.
the introduction of new products or new working procedures. A “Click’n’Learn”
concept gives employees access to a multitude of digital training oppor-
tunities - both local and global. This approach allows for a large number of
Female Mechanic and Driver Development Programs in South Korea employees to continuously expand their knowledge in critical areas and
Starting in late 2021 and throughout 2022, the Volvo Trucks organi- provides a base for individual development, as well as learning and reflect-
zation in South Korea led two competence development programs ing together. Information on the investment in training for business areas,
specifically for women. A technical truck program aimed at the develop
divisions and functions is captured through a learning management sys-
ment of female truck mechanics and the Iron Woman program for the
development of female truck drivers.
tem that provides different perspectives on how well Volvo Group reaches
These programs have been developed to deal with ongoing labor its ambitions.
issues in the industry. South Korea, like many markets globally, has
traditionally not seen many women participate in the transport
industry. Feedback from customers as well as internal mechanic
shortages, led the team in South Korea to identify a key opportunity *70:20:10 approach to learnings
to attract and retain more women into these roles. Through the lead- Surveys and research have shown that approximately 70% of learn-
ership of GS Park, Managing Director of Volvo Trucks South Korea, ing occurs through experience and practice on the job; about 20%
these initiatives are driving almost instant outcomes, benefiting the through other people – in conversations, networking, asking the right
South Korea organization and its customers, and also supporting questions of the right people; and about 10% of learning comes for-
broader societal change in South Korea. mally as knowledge base. In the design of formal training solutions,
The 2022 program developed 14 female mechanics and truck Volvo Group gives due consideration to the 70 and 20 by e.g. con-
drivers who are now working throughout the Volvo Trucks’ service necting work related assignments, coaching, mentoring and active
workshops and on the roads around South Korea. In January 2023, networking.
the next round of apprentices for the Volvo female mechanic devel-
opment program began, and Volvo Trucks South Korea is proud to
continue to lead the way in this development.
Servitization Learning Expedition

Servitization creates new opportunities to move beyond selling prod-
ucts to selling integrated packages of products and digital services
tailored to the specific needs of customers. The Volvo Group has set
a bold vision, where 50% of the revenues should come from services
and solutions by 2030.
But how to shift the mindset and ways of working to achieve the
goal? This important question prompted an intense cross-functional
effort to create a foundational training program, suitable for all Volvo
Group employees. The Servitization Learning Expedition that resulted
from this collaboration aims to trigger awareness and dialogue. The
course is a 7-module eLearning path with a practical approach that
allows participants to become acquainted with the key concepts,
new business and service/product models, and examples already
underway within the company.
All Volvo Group, employees are encouraged to complete the train- Upskill @GTO program
ing program to discover why services and solutions will become an Continuous learning has been a Volvo Group priority for a long time.
increasingly important revenue stream for the company. Participants It is important for the company to have people with the rights skills,
will also gain new views on how to create services and solutions for and equally important for employees to access the right development
the future, discover possibilities to apply agile ways of working, and for long term employment, engagement and life-long learning.
utilize a design thinking approach to expand existing services. The Upskill @GTO program sponsored by Volvo Group North
America celebrates its second year following the initial pilot in 2021.
Aligned with Volvo Group’s strategic 2030 goals, this multi-site col-
laborative program features a total of ten teams. In total, 48 early
adopters of emerging technologies – both office-based and indus-
trial workers – from six different US based sites participated.
Over an eight-month period, the teams met for 5-day immersive
learning sessions of academic studies mixed with hands-on applica-
tion. In addition to receiving training in the areas of Artificial Intelli-
gence & Machine Learning (AI/ML), Industrial Internet of Things
(IIOT), and Virtual Reality, participants spent many hours applying
what they learned, assisted by university interns specializing in these
areas of expertise.
Each team was challenged to solve a current business problem
and propose a viable solution and accompanying prototype. Some
teams attempted to achieve “moonshot” goals, moving beyond the
task at hand by continuously applying agile and design-thinking
methodology alongside use of emerging technologies.
The Upskill @GTO program culminated in a traveling roadshow in
which teams stopped at multiple sites to demonstrate their prototypes,
share knowledge, and engage in meaningful dialogue with colleagues
about using emerging technologies to solve business challenges.
Vocational training is an important factor in driving prosperity. In addition

to training for employees and distributors, the Group initiates, supports or
runs vocational training programs across the world focusing on practical
skills for mechanics, bus or truck drivers and machine operators. Volvo
Group specialists can be directly involved as teachers or trainers and in some
countries the Group cooperates with technical colleges and universities.
In several markets, the Volvo Group and its customers have experi-
enced a mismatch between skills and business needs. In many of these
markets the Volvo Group therefore works together with national and inter-
national aid agencies to provide the education needed for increasing
employment and opportunities for people to be self-sufficient.
Such projects aim at creating employment opportunities in the heavy-
duty machinery and commercial vehicles industry. The projects are
designed to improve the relevance and quality of technical and vocational
training and education in our sector and to ensure that experienced and
new professionals are equipped with marketable skills that enhance their
employability. Read more on volvogroup.com
Safety
OCCUPATIONAL HEALTH AND SAFET Y
Leadership
Safety leadership is a key component in a successful safety culture.
Connection to Agenda 2030 and reporting standards Safety leadership is oriented towards learning and continuous improve-
ment, spending time in the field, and on dialogue. Leaders are equipped to
be on top of the health and safety matters in their teams.
These priorities are supported by a global network of over 200 expert prac-
Main connections to the UN SDGs and targets titioners on occupational health and safety – including doctors, nurses,
3.3 End epidemics of communicable diseases safety engineers, psychologists, and ergonomists who collaborate to find
8.8 Promote safe working environments and share best practices. One of the Group activities to spread good prac-
tices is the Volvo Group Health & Safety Award, an annual event recogniz-
ing achievements and efforts across the organization. In 2022, more than
80 applications were submitted, read more in the strategy section on page 41.
Occupational health and safety management system

Each business area, division and function is accountable and responsible
Referenced reporting standards for managing health, safety and well-being. Volvo Buses and Volvo Con-
GRI 403 – Occupational health and safety 2018 struction Equipment have continued to certify their parts of the manage-
ment systems according to ISO 45001. Others Business Areas have been
developing internal safety management systems with regular assess-
ments and coaching as an integral part the Volvo Group Management
In the Volvo Group, we know that it is our people who will move the com- System (VGMS) and Volvo Production System (VPS). This helps to ensure
pany ahead. To make it happen, we strive for a workplace where all col- that there are written procedures, internal controls, clear ownership and
leagues come home safe - every day. The Volvo Group Health and Safety management review, and that deviations are acted upon. The scope of
Policy gives direction on how workplace safety, health and wellbeing shall prevention work includes both physical and psychological health, and
be handled within the Group. The policy covers both direct employees, con- workplace safety. It covers all employees working for Volvo Group on- or
sultants and other people working on Volvo Group sites. off-site, as well as the time spent commuting to and from work.
Safety culture Hazard identification, risk assessment and incident investigation

In 2022, the Group’s Health and Safety vision for 2030 was redesigned to Volvo Group and its subsidiaries apply tools and processes to manage risk
emphasize on a health and safety culture of care. The aim is to reach a truly and create productive working environments. Risk assessments are carried
integrated safety culture that represents a transition from a systems-based, out on a regular basis at all levels from shop floor to office. Health and safety
management-led safety culture to one that is focused on people. In this professionals ensure the quality of risk assessments and involve line
culture, near misses and errors are used to improve. People are made management and union representatives in this work. Potential risks are in
aware of what to do and how to act in situations that may impact their focus during internal assessments and external audits, where typically a
well-being, but most importantly – we take care of ourselves and of oth- sample of risk assessments and corrective and preventative actions are
ers. To strengthen this culture and systematic approach, prioritized actions reviewed.
have been selected based on lessons learnt across the organization. Managers and employees are reviewed in their knowledge of their own
major risks. Measures to mitigate or eliminate the identified risks are
Defining common measurements defined and implemented, and risk assessments are reviewed and updated
The Volvo Group is in the process of defining common measurements to periodically or after any incident has occurred. The Group is in the process
strengthen the health and safety culture. A key element is to address risks of developing a more systematic approach to serious incidents with focus
as early as possible. Prevention of serious injuries and fatalities, with tar- on the most significant risks.
geted approaches towards high-risk activities, has been a focus area Recordable accidents are reported and followed up at the unit level and
during this year. Shared awareness of the most significant risks is the cor- further up in the organization, continuing up to the Group level. Investiga-
nerstone of the company’s safety culture. tions resulting in corrective and preventative actions must be deployed after
each recordable accident. In cases where the issue is linked to risks that
Mental health may be relevant for other units – the causes of the accident and the correc-
More focus is shifted to actions towards a higher level of well-being, as tive and preventative measure to avoid a repeat are shared with other rele-
opposed to health problems. In this work, we have identified needs to vant units within the global health and safety network. In certain cases,
develop a more structured process to follow up on mental health suitable directives are built to be deployed throughout the company as part of a
for our widespread global operations. preventative measure.
Based on the risk assessment carried out for a specific machine, process In some countries/organizations such services can be supplied by third
or work area, employees receive training, so they understand the risks and parties. If so, they are required to ensure data privacy in accordance with
how to manage them – through following defined procedures or wearing applicable regulations. Occupational health services play a major role in
personal protective equipment, for example. health promotion. These service providers manage confidential data-
When defining corrective or preventative actions in response to identi- bases and can help to provide anonymized reports about relevant health
fied risk, the Volvo Group Health and Safety Policy requires that the hierar- aspects – diabetes, cardiovascular disease, stress levels, etc. – to imple-
chy of control measures principles be applied. The first option is hazard ment relevant preventive and corrective actions.
elimination. If hazard elimination is not possible, substitution, engineering In 2022, the Group continued to deal with the effects of the covid-19
controls, administrative controls and personal protective equipment are pandemic. Significant efforts were put in place to hinder and slow down
applied. The policy is distributed and made visible on the walls of factories the spread of the pandemic and protect employees. In many countries,
and offices within the company. Volvo Group has arranged on-site vaccination via third party health ser-
Employees are asked to report accidents, incidents and unsafe acts and vice providers.
conditions – as they are a vital source of improvements and highlight oppor-
tunities to better control the associated risk. The Volvo Group’s Code of Worker participation, consultation and communication
Conduct and related processes make it clear that any management repri- on occupational health and safety
sals against individuals making such reports in good faith are not tolerated. Worker representatives are appointed to health and safety committees by
If a manager or colleague acts against the Code of Conduct – a whistle employees. Depending on the type of business area, health and safety
blower process can be used to escalate this. committees operate on the factory level, retail office level or unit level.
Health and safety coordinators are employed to support team leaders The main objective of the committees is to bring together worker and
and managers in the organization. Periodic training is also organized on management representatives, define actions and jointly agree on mea-
health and safety procedures, roles and responsibilities for managers and sures needed to improve health and safety performance. Committees
health and safety coordinators. meet on a regular basis and decisions taken shall be communicated to the
workforce, acted upon and followed up. The committees could also be
Ergonomics in focus involved in accident and incident investigations and support in additional
Ergonomics is a prioritized area across the Volvo Group and individual corrective or preventative measures.
workstations are regularly assessed for improvements. Operators,
employees and consultants also receive training on occupational ergo- Worker training on occupational health and safety
nomics tailored to specific areas, whether manufacturing, administration All employees and consultants are provided health and safety training as
or when working from home. Training centers on many of the Group’s well as other Code of Conduct training as part of their induction training.
sites also offer and promote training courses opportunities on focused More specific training is provided depending on the job responsibilities.
themes within ergonomics. Specific training for potentially hazardous jobs – such as working with
Ergonomics guidelines exist for specific roles. In manufacturing for electricity or hazardous substances, at heights and in high heat conditions
example, guidelines summarize the main ergonomics specifications and – is mandatory for employees working in these environments and needs
provide general principles for an ergonomic-based approach to worksta- to be repeated on a regular basis. All training is provided during working
tions design and layout. hours. The effectiveness of these trainings is assessed locally depending
on each organization and country.
Occupational health services
Occupational health services are provided to employees at most units and Workers covered by an occupational health and safety
vary from one country to another depending on the specific needs of the management system
unit, the level of health service provided and local legislation. In many The Volvo Group Management System includes health and safety manage-
countries and locations, health services are supported by company doc- ment based on legal requirements and covers all employees and consul-
tors and nurses, psychologists, physiotherapists and ergonomists. tants, and these are all included in the safety reporting presented below.
The percentage of employees and consultants who have been covered by an
internal audit cannot be reported. The data is not available.
By December 2022, 60 sites covering around 30% of Volvo Group’s
Rates of injury and number of work-related fatalities 2014–2022 employees have chosen to certify their operations according to ISO 45001.
Volvo Buses and Volvo Construction Equipment are two business areas that
have chosen to certify their entire operations.
Work-related injuries
Lost time acci- Volvo Group tracks the accidents and accident rates in all locations includ-
dent rate (LTAR) 15 16 17 18 19 20 21 22
ing plants, workshops and offices in all countries of operations. In 2022,
per 200,000 1.38 1.06 1.00 1.22 1.22 0.87 1.03 1.00
the accident rate was 1.00 per 200,000 worked hours.
worked hours.
Health and safety data is reported at operating unit level and consolidated
Number of
accidents with at Business Area/Truck Division and Group level. The data is collected quar-
lost time 980 809 789 972 1,004 656 735 786 terly at the Group level and on a monthly basis by several Business Areas and
Number of fatali- Truck Divisions. Work is ongoing to facilitate consolidation of data across the
ties Employees 0 0 3 1 0 0 0 0 Group. While many different KPIs are reported for different needs, lost time
Number of fatali- accidents and lost time accident rate are the outcome oriented KPIs used on
ties Contractors 0 0 0 2 0 0 0 0 Group level. Work is ongoing to identify other global KPIs.
Measurements of high-consequence or serious work-related injuries in line with general data privacy laws. Throughout the year many countries
and related hazards are used in many parts of the organization but without have used pulse surveys and engagement tools to understand attitudes
common definitions and consolidation systems so far. As such, they are and feelings in general, and in particular to a shift where work-life is
not consolidated at Group level but are shared in health and safety net- affected by remote work and social distancing. This approach has been
works for learning purposes and risk mitigation. useful and actions have been taken in response.
Promotion of worker health Prevention and mitigation of occupational health and safety impacts
The Volvo Group has for a long time provided various health promoting directly linked by business relationships
activities beyond occupational safety. These programs are often provided In accordance with the Volvo Group’s Supplier Code of Conduct, on-site
by external partners. Health promotion programs may cover topics such audits are performed at suppliers on a wide variety of sustainability topics.
as preventing communicable diseases, substance abuse, obesity, healthy Health and safety are central elements to this process. Read more about
lifestyle, physical exercise, nutrition, sleep and stress management. The this on page 176–177 – Supplier social assessments.
psychological work environment is growing in focus, and many tools are Occupational safety, as well as road safety, are central elements in the
available to support in preventing issues and promoting good mental Group’s offer to end-users. Volvo Group provides customer solutions and
health. There are various types of tools that can be used depending on training to increase safe behavior and safe product use. Please read more
specific and individual needs. The confidentiality of individuals is protected about customer health and safety below.
CUSTOMER HEALTH AND SAFET Y
Volvo Group’s products are used in complex and challenging environ-

ments. Every year, an estimated 1.3 million people lose their lives in road
Connection to Agenda 2030 and reporting standards traffic accidents worldwide, and many millions are seriously injured. In
addition, there are occupational health and safety risks in and around vehi-
cles and machines, both on the road and in construction and work sites.
Issues such as noise and air pollution are also considered in customer
health and safety.
Main connections to the UN SDGs and targets A holistic approach means addressing all these concerns in a proactive
3.6 Halve road traffic accidents and systematic way. Volvo Group works systematically with in-depth
8.8 Promote safe working environments accident research to understand the context and challenges facing cus-
11.2 P rovide access to safe, affordable and sustainable tomers in their operations. This knowledge is then used in product devel-
transport systems for all, improving road safety. opment to achieve continuous improvements. Volvo Group also works
with partners in academia and policy makers to promote progress in road
traffic safety and enable safer solutions to be brought to the market. By
designing the best solutions to address these global health and safety
challenges the Volvo Group both contributes to the Sustainable Develop-
ment Goals and delivers on its commitment to offer the most competitive
solutions to customers and business partners. The knowledge gained on
Referenced reporting standards safety is shared via communication and training programs in many mar-
GRI 416 – Customer health and safety 2016 kets where the Group operates to raise awareness and promote a safe
driving behavior.
Assessment of the health and safety impacts

Volvo Group has a value chain approach to customer health and safety Product safety makes up the foundation for the Group’s safety vision. A safe
that considers the effects on customers, end users and indirect stake- product is free of safety-related defects, compliant with relevant regula-
holders. The Group’s business and the products it offers target a wide tions and industry standards, and safe to use during its normal life cycle.
range of application areas and impact many categories of people, such as Proactively, all product lines are assessed for health and safety impacts
drivers and operators, commuters, as well as other traffic system users with the purpose of securing that it is designed to be safe and to find qual-
like cyclists and pedestrians. ity improvements. After the product has been released to the market,
The vision is zero accidents with Volvo Group products, and the offer- safety assessments include continuous audits in production as well as
ing of world-leading products and solutions for sustainable transports is investigations of real accidents. Issues that are identified in the assess-
an important part of getting closer to our vision. ments are further investigated. Issues that after investigation are judged
as safety-related defects lead to a recall of the product so that the issue
can be rectified.
Human rights
The Volvo Group is committed to respecting internationally recognized
human rights. Negative human rights impacts may potentially materialize
Connection to Agenda 2030 and reporting standards not only within our own organization, but also through our business rela-
tionships and in the value chain. We also seek to address adverse human
rights impacts with which the Volvo Group is involved. We are continuing
to strengthen and align our human rights work with the following interna-
tional frameworks:
Main connections to the UN SDGs and targets • UN International Bill of Human Rights.
5.1 End discrimination against women and girls
8.7 Take immediate and effective measures to eradicate forced • ILO’s fundamental conventions.
labour, end modern slavery and human trafficking • UN Global Compact.
8.8 P rotect labor rights and promote safe and secure working
• UN Guiding Principles on Business and Human Rights.
environments for all workers
• OECD Guidelines for Multinational Enterprises.
• Children’s Rights and Business Principles.
This is an ongoing journey and the Volvo Group has adopted a risk-based
approach where we prioritize and focus on the areas where we consider
that we have the highest risks for adverse human rights impacts. We also
Referenced reporting standards recognize that a core tenet of many of these frameworks is tracking and
GRI 406 – Non-discrimination 2016 monitoring performance to drive continuous improvement and using
GRI 407 – Freedom of association and collective bargaining 2016 experiences as a source of continuous learning. This report sets out our
GRI 408 – Child labor 2016 progress to date, but we acknowledge there is more to be done.
GRI 409 – Forced or compulsory labor 2016 The Volvo Group reports on its human rightsrelated work under applicable
GRI 412 – Human rights assessments 2016
laws and regulations, including national laws under the EU’s non-financial
UN Guiding Principles Reporting framework
reporting directive, and the Modern Slavery legislation in Australia and the
United Kingdom. In 2022, we published Modern Slavery Statements for
relevant companies within the Volvo Group in line with these legal disclo-
sure requirements.
VOLVO GROUP HUMAN RIGHTS PROGRAM – MAIN ELEMENTS
1 2 3
Policy commitment Human rights due diligence Access to remedy
Training and raising awareness
Identify and
assess
Grievance
Policy
channels, and
commitment
Commu- Integrate remediation
to respect
nicate findings of negative
human rights
impacts
Track and
monitor
Human rights governance and oversight

The Volvo Group’s human rights governance follows our allocation of busi-
ness accountability and includes several cross-functional governance fora CLIMATE RESOURCES PEOPLE
across the company. At the Group level, the strategic direction on human
Climate & Hazardous materi- Health, safety & facilities
rights is overseen by the Volvo Group Human Rights Board composed of
environmental als & substances Fair employment & work-
relevant members of the Executive Board. impacts Minerals & metals ing conditions
Implementation of the Human Rights Program is supported by a cross- from conflict- Freedom of association
functional reference group and a working group with members from rele- affected and & collective bargaining
vant Group functions, Truck Divisions and Business Areas. high-risk areas
Non-discrimination
& fair treatment
Human Rights program Forced labor & modern
In 2022, the Volvo Group Executive Board adopted a Group-wide Human slavery
Rights Program. The Volvo Group Human Rights Program describes how Child labor & children’s
we implement our commitment to respect human rights as set out in our rights
Human Rights Policy. The purpose of the Human Rights Program is to Sales to conflict-affected
ensure that Volvo Group can systematically identify, mitigate and address & high-risk areas
human rights risks and ensure continuous improvement in our processes.
The program provides further clarity to the organization on the Volvo
Group’s ambition on human rights, applicable standards, salient human
rights risks, human rights due diligence strategy, and human rights gover- The human rights due diligence and mitigation efforts adopt a risk-based
nance across various levels of the Volvo Group. approach considering country-specific risk levels and our operational con-
In the process of implementing the Human Rights Program, we have text in the country, inherent risks in certain purchasing categories and
identified the need to further strengthen and develop central tools and sales segments, and potential concerns brought to our attention by inter-
processes to manage the Group’s human rights work. This work is under- nal and external stakeholders. This means that our divisions managing
way and intends to facilitate greater harmonization, accountability and research and development, manufacturing and procurement focus on cer-
Group-wide awareness. tain human rights risks, and our business areas and market companies
focus on others. The most important risks for our divisions and business
Human Rights Policy commitment areas make up the Group’s salient issues.
The Volvo Group launched a standalone Human Rights Policy in 2021. This
policy sets the common threshold for our commitment to respect human Human rights due diligence across the value chain
rights and applies to all Volvo Group entities, employees and others working Our human rights work aims to identify, prevent, and mitigate potential or
at our sites. The Human Rights Policy is complemented by the Volvo Group’s actual adverse human rights risks and impacts. The Volvo Group’s scope
Code of Conduct, the Volvo Group Human Rights Program and specific pol- of responsibility, influence, and leverage varies across different parts of
icies, directives and guidelines developed by our Truck Divisions and Busi- the value chain and operational contexts. Therefore, our human rights
ness Areas in several human rights-related areas. These include health and related processes and activities should be adopted to reflect the context
safety, responsible purchasing through our Supply Partner Code of Conduct of our role within the respective parts of our value chain including own
(updated in 2021), human resources, responsible sales, and whistleblowing. operations, the supply chain, business partners and sales deals.
To help facilitate systematic and ongoing human rights due diligence
Salient human rights risks throughout the Volvo Group, each year we adopt and implement a Human
The Human Rights Policy is based on the Group’s sustainability priorities Rights Plan listing prioritized activities for the year to come.
and highlights risks related to people, climate and resources. Human rights
risks may be associated with our activities and business relationships in all of
these areas. The Human Rights Policy describes the Volvo Group’s ten
salient human rights risks across these three areas, see illustration.
Our own operations responsible sourcing of raw materials, environmental performance, and
At a Group level, country-by-country human rights reviews are carried out business ethics. While issues differ across the supply chain depending on
with the ambition to cover all operations, employees, and other personnel countries and processes, a number of risks related to human rights has
at our sites in the reviewed country. These reviews are conducted using a been identified, which are addressed through the Group’s responsible
methodology developed in accordance with internationally recognized purchasing program, read more on page 176.
practices and includes the following main elements:
• Desktop analyses based on internal data such as workforce data, local Business partners – truck assembly and bus body building
policies, internal expert interviews, employee survey responses and In addition to our owned manufacturing operations, the Volvo Group collab-
collective bargaining agreement, and external sources such as country orates with private business partners to assemble trucks and build bus bod-
human rights reports and human and labor rights laws. ies on our chassis in line with customer specific requirements. Some of
• Self-assessments by country management teams and local human these partners are located in countries with elevated human rights risks.
resources departments. Ongoing activities to secure that business partners operate in line with
Group requirements include e.g. to implement social and environmental
• On-site visits with country management and human resources, and
requirements in contractual agreements, requirements on self-assess-
local internal subject matter experts, employees and third party person-
ments and on-site reviews.
nel onsite. If appropriate also including external expert organizations.
In 2021 a follow-up review was conducted at a truck assembly partner in
• Corrective actions and follow-up after each review with agreed action Malaysia focusing on employment practices. The review was completed in
plans and accountability within the local management and communi- 2022 and learnings from the reviews feed into our continued work with
cation to relevant members of the Executive Board. human rights due diligence.
Human rights reviews are often overlapping with several other internal In 2021, Volvo Buses analyzed the risk profiles of its bus body builders
processes, such as those related to non-discrimination, health and safety, from a human rights perspective and included human and labor rights
employee relations, quality and environmental management. Findings related requirements in contractual agreements with body builders identi-
from reviews within the respective areas can highlight improvement areas fied as high risk. In 2022, Volvo Buses initiated human rights training with
in other processes, including human rights work. business partners.
Reviews in own operations have been performed in India (2017), South In addition, risks have also been identified related to employment condi-
Africa (2018), and Mexico (2019). This type of review activities had to be tions for truck drivers in the road transport sector in Europe. Even though
paused in 2020 and 2021 due to the covid-19 pandemic. Following a revision the Supply Partner Code of Conduct sets out minimum requirements for all
of the process and methodology we restarted the review processes and in partners, including logistics service providers, the varying regulation in
2022, with reviews initiated in Turkey, UAE, Algeria and Morocco. The target Europe as regards drivers’ employment conditions requires broader indus-
is to perform human rights reviews covering all own operations in countries try collaboration. Consequently, the Volvo Group is involved in CSR
with elevated human rights concerns by 2025. Europe’s Responsible Trucking Initiative, which aims to improve employ-
ment and working conditions for truck drivers in the road transport sector
Our supply network across Europe. The initiative has released social guidelines for common
The Volvo Group’s Supply Partner Code of Conduct sets minimum expectations towards suppliers and sub-contractors on human rights,
requirements, and aspirations for our suppliers in the areas of climate, working conditions and business ethics, read more at www.csreurope.org/.
resources and people, including human and labor rights, health and safety,
Responsible business activities 2022
Supplier sustainability audit or training

Human rights reviews in own
operations (initiated)
Screening of certain sales deals to
commercial end-users
Our sales channels and the use of products Stakeholder engagement related to human rights
Certain sales deals are assessed for risks related to human rights, primarily Our human rights work includes ongoing dialogues with unions, and
in connection with direct sales deals involving customer financing and sup- engagements with employees, customers and investors, as well as NGOs,
port from export credit guarantees as well as sales to certain high-risk end and other societal actors on our human rights approach and performance.
users such as the military and law enforcement. Certain sales deals are also In 2022, our engagement with external stakeholders primarily related to
assessed in specific customer segments such as the fossil fuels sector, our overall human rights governance and policy, sourcing from conflict-
mining, and sales to conflict-affected areas with particular human rights affected areas, and sales to military end-users and to customers in certain
risks. This part of the human rights and related sustainability assessment is markets. See pages 175 for more details on Responsible sales including
further described in a separate section on Responsible sales on page 175. our response and actions on stakeholder concerns.
Human rights awareness Grievance channels and access to remedy

Training and raising awareness for our colleagues and relevant business Employees, representatives of the Volvo Group, and external stakeholders
partners is a key element of our human rights work and an area where it is can report any instances of breach of our Code of Conduct and other pol-
recognized that continued improvement is needed. In addition to the icies, including human rights violations, where the Volvo Group or any of
Group’s overall Code of Conduct training which includes certain aspects its representatives are believed to be involved. Grievances can be reported
of human rights, many parts of the organization have held human rights through internal and publicly available grievance channels described in our
awareness sessions during the year. In total, some 2,000 individuals, Code of Conduct, including the Volvo Group Whistle. Reports can be
many of which in sales areas and market management, have been trained made anonymously wherever permitted by local law.
in such human rights, including specific sessions directed to management The Volvo Group aims to provide for or cooperate in the remediation of
teams. These overall human rights awareness initiatives complement negative human rights impacts if our activities have caused or contributed to
other specific training on related topics such as diversity and inclusion, them and seek to play a role in the remediation of negative human rights
health and safety, non-discrimination and anti-harassment, equal pay and impacts that we may be directly linked to in our operations, products, ser-
living wage, responsible purchasing and responsible sales. vices, or business relationships.
See page 179 for more information on our grievance channels and the
types of concerns reported in 2022.
Specific disclosures on salient human rights risks
Climate and environmental impacts

We recognize the importance of the transition to a low carbon economy envisaged by the Paris Agreement, and that a safe and clean environment is
essential for the full enjoyment of human rights. > Read more on page 150-156
We are actively working to reduce climate and negative environmental impacts in our operations and our value chain. Our ongoing environmental
work includes impact assessments and continuous improvements > Read more on page 157–158
Hazardous materials and substances

We have a target to phase out potentially hazardous materials and substances, where possible, and to secure their safe and responsible handling
throughout the value-chain > Read more on page 158
Minerals and metals from conflict-affected and high-risk areas

A dedicated Sustainable Minerals Program supports our efforts to pursue due diligence for supply chain transparency and to promote responsible
sourcing, extraction, and handling of such materials. > Read more on page 177
Health and safety

As a human centric company, safety is a priority in everything we do. We have a vision for zero accidents with Volvo Group products and in our
workplaces. > Read more on page 167–168
Fair employment and working conditions

The Volvo Group assesses potential gaps in employment and working conditions in our due diligence activities in own operations and in the supply
chain. Our policies such as the Code of Conduct, Human Rights Policy, Supplier Code of Conduct, and global and local human resources guidelines
spell out our expectations.
In 2022 we began to define what fair living wages mean to the Volvo Group. This was done with guidance from the Fair Wage Network and by
reviewing the approach of other large organizations and their experiences. With this input, work was initiated in twelve countries to identify potential
gaps. Similar activities are expected in 2023 with the remaining 45 countries where the Volvo Group has employees, in order to have a full view of
any potential living wage gaps, to then agree on any necessary mitigation plans.
Specific disclosures on salient human rights risks
Freedom of association and collective bargaining

Legal compliance is the foundation for Volvo Group’s activities. Varying country legislation on union independence means the approach to managing
freedom of association and collective bargaining may differ from one country to another. The Volvo Group respects the right of all employees to form
and join an association to represent their interests as employees, to organize, and to bargain collectively or individually, as well as the right to refrain
from joining a union.
We assess risks related to freedom of association and collective bargaining as part of our overall human rights due diligence in our own operations
and in the supply chain. Human and labor rights issues, as well as other relevant topics, can also be raised during the Volvo Global Dialogue – a global
forum where employee representatives engage in discussions with the Volvo Group’s executive management. Such concerns can also be raised at
any time to managers, to manager’s managers or through the Volvo Group Whistle.
As reported in the section on Labor-management relations, an estimated 41% of regular employees around the world are members of an
independent trade union. Approximately 72% of employees globally are covered by Collective Bargaining Agreements.
Our Supplier Code of Conduct requires suppliers to respect their employees’ right to freedom of association and their right to collective
bargaining. It also provides that where local law sets restrictions on the right to freedom of association and collective bargaining, the supplier
shall allow alternative forms of worker representation, association, and bargaining.
> Read more on employee relations on page 165 and responsible purchasing on page 176.
Non-discrimination and fair treatment

At the Volvo Group, we do not tolerate harassment and or discrimination and aim to mitigate unconscious bias.
In 2022, 39 allegations perceived as related to discrimination or harassment were reported via the Volvo Group Whistle, included in the category
Fair Workplace Management on page 179. All reports were investigated, with eight being in progress at year-end. Four of the closed reports were
substantiated. Most cases resulted in corrective actions, such as training, coaching or changes to processes or routines. Moreover, seven cases
alleging sexual harassment were reported in 2022 which are included in the category Violations of privacy or private sphere. Of these, three were
substantiated and f ollowed with disciplinary measures, one was unsubstantiated with further corrective actions and three were in progress at year-
end.
The Volvo Group provides awareness trainings to prevent harassment and discrimination. This is done with the Volvo Group Code of Conduct as
the core foundation. In addition, special courses on prevention of harassment and discrimination are offered for managers in some jurisdictions, for
example the training Civil Treatment for Leaders in the US.
> Read more about our approach on diversity, equity, and inclusion on page 164.
Forced labor and modern slavery

The Volvo Group assesses risks related to forced and compulsory labor as part of our overall human rights due diligence in our own operations and rele-
vant parts of the value chain. In 2022, no cases of forced or compulsory labor were identified at own operations or during supplier sustainability audits.
During the year, we published Modern Slavery Statements for relevant companies within the Volvo Group in line with legal disclosure requirements.
> Read more about Code of Conduct training on page 178-179.
Child labor and children’s rights

The Volvo Group assesses risks related to child labor and children’s rights as part of our overall human rights due diligence in our own operations and
relevant parts of the value chain. In 2022, no cases of child labor were identified at own operations or in supplier sustainability audits.
When considering human rights, we look at a range of aspect where we can have an impact. On road traffic safety, one area close to our business
is road traffic safety and in this context, children’s rights as road users are emphasized. Our global campaign Stop. Look. Wave. is designed to teach
children all around the world about traffic safety and to spread the awareness of the rights of all road users.
In connection with our Sustainable Minerals Program in the supply chain, we are also considering how the Volvo Group can be more involved on
the ground to prevent child and forced labor in the conflict minerals supply chains through collaboration with local civil society organizations.
> Read more about road and traffic safety on page 169, and responsible purchasing on pages 176–177.
Sales to conflict-affected and high-risk areas

The sale and use of our products in conflict and other high-risk contexts could result in potential adverse human rights impacts. Therefore, we make
extended reviews of certain sales deals – involving customer financing and support from export credit guarantees, sales to certain high-risk end
users such as military and law enforcement end-users, and sales to conflict-affected areas.
> Read more about responsible sales activities on next page.
RESPONSIBLE SALES
The Volvo Group has processes and policies with the aim to ensure that In 2022, Volvo Group assessed 46 potential transactions to selected
our business is conducted in compliance with applicable laws and regula- military and government end-users in various countries. Depending on
tions, including sanctions and export control regimes. In addition, we the country of end-use, sales deals either require a decision by the Volvo
assess certain sales deals for risks related to human rights, environmental Group’s Military Sales Committee (comprising relevant members of our
factors and business ethics as part of knowing the customer or end-user executive management) or a recommendation from Group Functions to
processes. These assessments are primarily carried out in connection the Business Area for its own decision.
with direct sales involving customer financing and support from export
credit guarantees, sales to certain high-risk end users, such as the mili- Stakeholder questions on sales to certain markets
tary, and sales to conflict-affected areas. In addition to questions around our approach on sales to military end-users,
the Volvo Group has received specific questions on use of the Group’s
Assessment of commercial sales deals products in Israel and in jade mining in northern Myanmar. These questions
When assessing sales deals, we use external risk databases and tools were raised several years back, but we still keep dialogue with interested
such as Verisk Maplecroft, and RepRisk for risk identification. The find- stakeholders.
ings are assessed, described, and escalated to relevant fora within our In Israel, the sale of our trucks, buses, construction equipment and other
Business Areas or to Group Functions. Actions for identified findings typ- products is made via a private importer. These sales are not targeted towards
ically include engagement with our customers with the aim to support any specific areas within Israel and the products could be used in many
them to mitigate identified risks. In some cases, we may also engage with different applications by different users. Further, our products have a long-
other external organizations such as embassies or NGOs. If the risks are life span and may be rented out and change ownership many times during
considered too high and difficult to mitigate, we may decide not to pro- their life cycle and we are limited in our possibilities to influence how and
ceed. In our assessments, we consider country risk levels, customer seg- where our products will be used throughout their entire life cycle.
ments, end-users and intended end-use of our products. Our Business In 2018, a Swedish NGO published a report on environmental and human
Areas have the responsibility to perform these assessments, with support rights-related risks in the jade mining sector in northern Myanmar also fea-
from Group Functions when needed. turing our products. Volvo Construction Equipment has since then engaged
In 2022, 145 such assessments have been performed by the Group’s with an external organization to assess human rights risks in the country.
Business areas, mainly related to customer financing and sales to certain The efforts were acknowledged by the NGO’s follow-up report in 2020.
high-risk markets. Some of these assessments identified issues related to Since 2020, our dealer is no longer selling to the jade mining sector.
potential adverse impacts on the environment and communities, lack of Together with our dealer, we have intensified due diligence of sales deals
respect for human and labor rights, poor employment conditions, occupa- focusing on the end-user and intended end-use.
tional health and safety, and unethical business behavior.
Governance and awareness
Sales to military end-users As part of the continuous improvement, the Volvo Group’s business areas
The Volvo Group’s Business Areas are required to escalate potential sales continued to strengthen their approach to responsible sales including
to military end-users in certain countries for assessment by Group Func- governance, screening procedures, and training and awareness. In 2022,
tions before submitting an offer. Military end-users include the armed a new online training focusing on responsible sales was made available
forces and other armed law enforcement agencies. Factors such as the and finalized by approximately 300 individuals in the Volvo Group.
existence of arms embargoes, armed conflicts, political instability, and In addition, a number of in-depth awareness sessions on responsible
human rights-related risks are considered in this assessment. This pro- sales were held, recorded and distributed on Volvo Group’s internal web-
cess is governed by an internal directive on military sales and is on top of pages.
any export license requirements from national authorities. The European
Union’s common rules governing control of exports of military technology
and equipment include several criteria on respect for human rights and
international humanitarian law, which member states are expected to
consider when granting such export licenses.
Supply partners and responsible purchasing

SUPPLIER SOCIAL AND ENVIRONMENTAL ASSESSMENTS
try or market, commodities, processes or work areas of the suppliers. The

risk assessment is based on external tools bringing an updated view of
Connection to Agenda 2030 and reporting standards
risks related to human and labor rights, environmental and business
ethics risk across the globe. As a complement, risks can be flagged during
any type of supplier audit, training or visit. The Volvo Group carries out
most audits and reviews with internal resources with a shared responsi-
bility between procurement staff and specialized auditors, whose tasks it
is to ensure that proper actions are taken to resolve identified gaps.
Main connections to the UN SDGs and targets
8.8 Protect labor rights and promote safe working environments
Self-assessments
12.4 Responsible management of chemicals and waste
Volvo Group utilizes a standardized questionnaire for the automotive industry
13.3 Knowledge and capacity building to meet climate
change mitigation focused on sustainability in the supply network. The self-assessment
questionnaire (SAQ), considers sustainability performance within human
rights, working conditions, as well as environmental and responsible supply
chain management. Potential supply partners are invited to conduct the
SAQ and the result is used in the supply partner selection process. For a
selected partner, the self-assessment result will result in a corrective action
plan if it falls below a risk threshold. To drive continuous improvement the
rating is valid for three years, thereafter a new assessment is needed.
Referenced reporting standards
In total, 1,530 sustainability self-assessments were performed in
GRI 414 – Supplier social assessment 2016
GRI 308 – Supplier environmental assessment 2016 2022. From a total Volvo Group direct material spend perspective 89%
of the supply partners had conducted the assessment, out of which over
99% had a recorded approved rating. In high-risk areas, the correspond-
ing result was 93%, out of which 95% had a recorded approved rating.
The Volvo Group supply partners play an integral role in realizing our sus- On-site audits
tainability strategy across the full value chain. With more than 50,000 tier New supply partners of direct material in high-risk countries are subject to
one supply partners worldwide delivering 2.5 billion parts, Volvo Group additional due diligence assessments through on site audits. Indirect
has the opportunity to influence the sustainability transformation through- material supply partners are audited when the suppliers are located in a
out the supply network beyond tier one suppliers. high-risk country and the annual spend exceeds a pre-defined threshold.
The foundation of the Volvo Group Responsible Purchasing program is After some time of lower audit activity due to travel and meeting
our supply partner due diligence activities based on commitment, assess- restrictions due to the covid-19 pandemic, the number of audits has
ment, action and reporting. increased as restrictions in many countries have been removed. In 2022,
137 on-site audits were carried out. The Code of Conduct audit procedure
Commitment is focused on a wide range of aspects, such as human rights, working
The Supply Partner Code of Conduct is the platform for our collaboration in conditions, environment and business ethics. The responsibility of
building sustainable supply networks. Not only does it outline our current improvements and corrective actions always lies with the supply partners
sustainability requirements, which supply partners shall comply with. It also themselves, where non-compliance cases are managed by the responsi-
includes aspirations through which supply partners are encouraged to evolve ble buyer together with the auditor until resolved.
to further advance sustainable performance and impact in the areas covered Overall, the sustainability assessment of supply partners focuses on
by the Code of Conduct. The Supply Partner Code of Conduct is based on developing a sustainable supply base and establishing a strong partner-
the Volvo Group's sustainability ambitions in the areas of people, resources, ship. The results are used in the sourcing decisions. Those who fail to
and climate and outlines amongst other the mandatory pathway for all supply address critical issues risk not to be rewarded with a contract or having
partners to establish net-zero greenhouse gas emission supply networks by their contracts terminated.
2040 at the latest, and their commitment towards circularity. It is also
guided by the Automotive Industry Guiding Principles of Drive Sustainability Building knowledge
as well as frameworks such as the OECD Guidelines for Multinational Enter- Volvo Group Purchasing employees receive regular mandatory trainings
prises, the UN Guiding Principles of Business and Human Rights and other on the concept of sustainability and on the content of our Code of Con-
international frameworks as explained in the section on human rights, see duct. In collaboration with Drive Sustainability, Volvo Group continuously
more on page 170. work to also train and develop supply partners in sustainability and
responsible purchasing. In 2022, Volvo Group invited and onboarded sup-
Assessment ply partners located in USA, Germany, and Italy to participate in live sus-
The sustainability assessments of the supply partners cover primarily tier tainability trainings. We have also actively participated and invited suppli-
one suppliers and are conducted through supply partners’ self-assess- ers to the Drive Sustainability e-learning, offering a basic introduction to
ments as well as targeted in depth on-site audits. A risk-based approach Drive Sustainability and sustainable purchasing. During 2022, represen-
is used, where prioritization of audits is made by reviewing risks by coun- tatives from 85 supply partners completed the e-learning.
Social impacts in the supply network and actions taken In 2022, 834 tier one supply partners were included in the Volvo
In 2022, deviations were found within the areas of health and safety, Group’s sustainable minerals program. With this as a base, 802 of them
working hours and sustainability communication towards sub-suppliers. were identified as relevant for 3TG minerals, and 334 for cobalt. The
In the area of health and safety, the deviations related mainly to emer- majority of the invited companies already collaborate and all invited have
gency and fire preparation as well as management of hazardous waste. In been assessed on the parameters of (a) strength of Human Rights Due
the area of working hours, the findings were related to excessive working Diligence program and (b) association with smelters or refiners of concern
hours. Within the area of supplier communication, the deviations were in their supply network. As a result, 335 smelters or refiners (SORs) were
found around inconsistent sub-supplier Codes of Conduct, as well as lack identified to be included in the Volvo Group’s supply network. Approxi-
of cascading requirements, information and training to sub-contractors mately 73% of them have been certified “conformant” by the Responsible
about social, environmental or business ethics requirements. The findings Minerals Assurance Process (RMAP), on behalf of the global organization
from the audits are communicated to the supply partners, which are RMI. Volvo Group co-funds independent third-party audits of SORs due
expected to set up and implement a corrective action plan in a timely man- diligence practices through a partnership with RMI and finances the RMAP.
ner. Such corrective actions are then monitored by the responsible buyer The ambition of the Volvo Group's Sustainable Minerals program is to drive
in cooperation with the auditor and the Responsible Purchasing Team. All full transparency by 2025, where all supply partners in scope are to be com-
have confirmed corrective actions to be taken. pliant with our Responsible Purchasing standards and requirements.
Environmental impacts in the supply network and actions taken GHG emissions embedded in purchased goods and services
In 2022, minor deviations related to hazardous waste management were Volvo Group has a clear ambition for net-zero value chain and greenhouse
found, these were connected to the deviations above. All have confirmed gas emissions by 2040. Reducing indirect emissions from purchased
corrective actions to be taken. goods and services includes working with partners to decarbonize the
Volvo Group supply network, shifting to fossil-free materials, working with
Specific supply network topics circular business models and recycling, as well as ensuring the use of
Considering common supply network challenges in the Group's sector we renewable energy in the process and production of materials. In 2022, a
have identified some areas important to address in addition to the above. thorough cradle-to-gate* analysis was performed of GHG emissions
This is especially relevant for certain minerals and materials and green- related to purchased goods and services for the Group’s truck products.
house gas (GHG) emissions embedded in purchased goods and services. The analysis has been utilized to set decarbonization targets for Volvo
Group Trucks upstream emissions from now and the trajectory to 2040
Sustainable Minerals Program net-zero. Transformational activities have been initiated, to gradually
As part of the Supply Network Due Diligence program, the Volvo Group reduce the greenhouse gas emissions, and these will be accelerated from
has a specific focus on a range of selected minerals and materials. The 2023 and towards 2040. Targets are not yet consolidated for the full Volvo
Group’s ambition is to support its supply partners to secure sustainable Group GHG scope 3.1. In parallel, Volvo Group Purchasing has during 2022
supply networks and the ultimate aim is to secure an environmentally and been strengthened by establishing a dedicated team with experts of fos-
socially sound supply network of components and minerals. Tin, tanta- sil-free material as well as a team focusing on circularity and remanufactur-
lum, tungsten, gold (3TG) and cobalt are the main focus of our Sustain- ing to support the implementation of a decarbonized supply network.
able Minerals Program, where we accelerate the supply chain activities
* Cradle-to-gate is the part of the product life-cycle before transferred to the cus-
even more and go deeper and wider to make risk assessments and drive tomer. In the Volvo Group’s overall GHG emission inventory, the use-phase emis-
sustainable corrective actions. In addition, we also include other minerals sions make up over 95% of the total life-cycle emission and is therefore top prior-
of strategic importance such as lithium, nickel and graphite. These mate- ity for decarbonization. The cradle- to-gate makes up approximately 4% of which
the main part is made up by GHG scope 3.1: purchased goods and services.
rials are part of our global supply chains and are used in a variety of mate-
rials and components. As part of this work, Volvo Group is a member of
Responsible Minerals Initiative (RMI), see information below.
Examples of industry collaborations for sustainable supply networks
The Responsible Minerals Initiative (RMI)

RMI is a collaborative platform addressing responsible mineral sourcing issues in global and trucking. These sectors are responsible for 30% of global emissions–a propor-
supply networks. Volvo Group is working with RMI with the aim to ensure responsible tion expected to rise to over 50% by mid-century without urgent progress on clean
and sustainable sourcing of tin, tantalum, tungsten and gold (sometimes referred to as technology innovation. More than 60 companies and countries make up the FMC,
conflict minerals), as well as cobalt. Through RMI, participants develop and gain access of which Volvo Group is a founding member. Volvo Group has as member pledged
to tools and resources to ensure regulatory compliance and support responsible sourcing e.g. that by 2030 at least 10% of the primary aluminium purchases will have near-
of minerals from conflict-affected and high-risk areas. zero carbon emissions. A similar target is placed on steel. These pledges can only
be achieved by purchasing advanced technology that in many cases is not yet com-
DRIVE Sustainability mercially available. Commitments such as these will create a market tipping point
DRIVE Sustainability is a network of eleven leading automotive companies working that accelerates the affordability of clean technologies and drives long-term trans-
towards enhancing sustainability throughout the automotive industry by leveraging a formation.
common voice and by engaging with our supply chain partners, stakeholders and related
sectors on impactful activities. Volvo Group is active in several working groups within the Global Battery Allicance
initiative to leverage a circular and sustainable automotive value chain. The Global Battery Alliance a public-private collaboration platform under the umbrella of
the World Economic Forum. The vision is to create a circular and sustainable battery value
The First Movers Coalition chain set on ten guiding principles covering issues from the circular recovery of battery
The First Movers Coalition (FMCis a coalition of companies formed using their purchasing materials, ensuring transparency of greenhouse gas emissions and their progressive
power to create early markets for innovative clean technologies across eight of the hard to reduction, to eliminating child and forced labor.
abate sectors – aluminium, aviation, chemicals, carbon removal, concrete, shipping, steel
Business ethics and compliance

The Volvo Group has supplemented the anti-corruption principles in the
Code of Conduct with a dedicated anti-corruption policy and detailed
Connection to Agenda 2030 and reporting standards instructions and guidelines. Among other things, these include books and
records requirements, a mandatory risk-based anti-corruption due dili-
gence process for new and existing third party intermediaries, a prohibition
for facilitation payments, and rules and procedures for gift and hospitality,
third party remuneration, sponsorships and charitable donations. Where
Main connections to the UN SDGs and targets deemed necessary, we have further documents in adjacent areas such as
16.5 Substantially reduce corruption and bribery anti-money laundering and fraud reporting.
Group Compliance is responsible for designing and developing the Volvo
Group anti-corruption compliance program and monitoring the imple-
mentation across the Group. A network of compliance officers in the busi-
ness areas and divisions work closely with Group Compliance to ensure
the implementation in their respective areas.
Referenced reporting standards
GRI 205 – Anti-corruption 2016
COMPETITION LAW
The Volvo Group strictly prohibits any conduct that would violate compe-
tition laws and regulations. The Volvo Group competes on the merit of its
COMPLIANCE PROGRAMS products and services and trusts that its products and services will suc-
ceed in a fair and competitive marketplace. Employees at all levels are
Our Code of Conduct states that we earn our business fairly and lawfully. prohibited from participating, or otherwise becoming involved, in any con-
Conducting business in line with applicable laws and regulations is the duct – particularly anti-competitive agreements with competitors – that
best basis for sustainable success and the best way to protect our reputa- would violate competition laws. The Volvo Group also expects its business
tion. A dedicated Group Compliance function oversees the implementa- partners to adopt and enforce comparable competition law principles and
tion of a compliance management system approach for core compliance includes these requirement in contractual agreements.
areas, such as competition and anti-corruption laws, export control regu- The Group’s exposure to competition law risks stems from various factors.
lations and data privacy. The different business areas have established First, the Volvo Group has a global footprint with diverse business opera-
compliance functions to manage the implementation of the compliance tions in multiple countries, most of which have competition law regimes in
management system in their areas and cover additional compliance areas, place. Second, Volvo Group employees interact with employees of com-
such as anti-money laundering or emission compliance, to the extent petitors in a range of different contexts, including via trade associations,
needed. The Volvo Group’s compliance management system amongst industry gatherings, trade fairs, publicly funded projects, benchmarking
other things includes policies, guidelines and procedures, regular compli- activities, M&A projects, etc. Each interaction carries inherent competi-
ance communication and training, as well as assurance activities such as tion law risk in the form of collusion with competitors, for instance through
effectiveness testing and auditing. The Volvo Group has further imple- exchange of commercially sensitive information. Third, relationships with
mented group-wide Whistleblowing channels that can be used by internal third party business partners can expose the Volvo Group to competition
and external parties for all compliance areas. In 2022, no cases of signifi- law risk, e.g., in the form of anti-competitive agreements with customers
cant non-compliances with laws and regulations have been recorded. or suppliers (vertical and horizontal restraints).
The Volvo Group has supplemented the principles of fair competition in
the Code of Conduct with a dedicated competition law policy, as well as
ANTI-CORRUPTION detailed instructions and best practice guidelines. These include guide-
lines on commercially sensitive information, trade associations, bench-
The Volvo Group strictly prohibits and condemns all forms of corruption, marking, document creation and retention, private dealers, suppliers and
including bribery. This is not only because it is illegal, but also because body builders, and employment information, as well as a comprehensive
corruption distorts the market, interferes with free competition, and handbook on collaborations with competitors.
undermines social development. Volvo Group employees at all levels are Group Compliance is responsible for designing and developing the Volvo
prohibited from participating, or otherwise becoming involved, in any Group competition law compliance program and monitors the implementa-
form of corruption, including offering or accepting, directly or indirectly, tion across the Group. A network of compliance officers in the business
bribes, excessive gifts or hospitality or facilitation payments. The Volvo areas and divisions work closely with Group Compliance to ensure the
Group expects all its business partners to adopt and enforce comparable implementation in their respective area.
anti-corruption principles and does not tolerate that they get involved in
corruption in any form. Compliance communication and training
The exposure of the Volvo Group and its employees to corruption risks Volvo Group’s top management, Group Compliance and other internal
stems from various risk factors. For instance, the company has a global stakeholders regularly communicate the importance of compliance with
footprint with business operations in many countries, including countries all applicable laws in various forms. To ensure that all employees have the
that are high-risk from a corruption perspective. The Volvo Group busi- required knowledge, the Volvo Group has developed a compliance train-
ness involves high-value contracts and direct and indirect participation in ing strategy that tailors training to individual training needs in a risk-based
private and public tender procedures. Further, the company is exposed to manner. This includes eLearning courses for competition law, anti-corrup-
third-party compliance risks due to its interactions with a broad range of tion, export control and data privacy for a broad basis of employees as
business partners and other third parties, such as officials or representa- well as targeted instructor led training in these compliance areas for
tives of government bodies or institutions.
employees working in roles with elevated risk levels. In 2022, 58,892 The Volvo Group strives to comply with domestic and international tax
employees completed the Volvo Group’s annual Code of Conduct e-learn- reporting requirements and shall act transparently towards Tax Authori-
ing. Based on identified risk exposure the Volvo Group further provided ties, by providing them with all relevant information requested to assess
targeted instructor-led training. In 2022, this included 1,477 individuals the Group’s compliance with tax laws and regulations.
attending in-depth anti-corruption training and 1,520 individuals attend- The Volvo Group seeks to ensure that taxes are paid where value is cre-
ing in-depth competition law training. ated by adhering to applicable transfer pricing rules and guidelines as
developed by the OECD and other standard setting and regulatory bodies.
The Volvo Group shall manage its operations in a tax conscious manner,
WHISTLEBLOWER REPORTING notably by avoiding double taxation, safeguarding its deferred tax assets
and applying tax consolidation according to local legislations. The Volvo
In Volvo Group, we believe that a vivid speak-up culture is a crucial element Group shall not engage in aggressive tax planning activities through
for the company’s success, can help uncover misconduct, and prevent vio- structures in tax havens or otherwise.
lations of the law. We also believe in the open-door policy and encourage The average corporate tax rate of the Volvo Group for the last five years
employees to report their concerns to their local organization first. We is 23% (23).
offer group-wide reporting channels, including the Volvo Group Whistle,
hosted by a third party and open to anyone within or outside the company
to ask a question or report a concern related to the Volvo Group Code of PUBLIC POLICY
Conduct. We regularly communicate about our whistleblowing channels
internally and provide detailed information about our whistle blowing The Volvo Group has a continuous dialogue with authorities, regulators
channels on our public website. and policymakers on issues relevant for us and our customers’ business
The Whistleblowing and Global Investigations function is an indepen- and operations. The dialogue is guided by yearly priorities approved by the
dent unit within Group Compliance. In 2022, Group Compliance received Executive Board. The Group is engaged in direct and indirect advocacy
171 concerns through several available reporting channels. All reports related to public policy, mainly in the EU and the US. Associated costs are
were investigated. 16 of the reported cases were categorized as sus- reported to lobby registers for transparency. In 2022, the cost reported
pected corruption or conflict of interest of which three were closed sub- for lobbying in the EU and the US was approximately SEK 14 M.
stantiated, with appropriate disciplinary and remediation actions taken. The Volvo Group observes neutrality with regard to political parties and
investigations were in progress as at year-end. their representatives. The Volvo Group Code of Conduct and related poli-
cies serve as the foundation for our position on public policy.
The Volvo Group’s advocacy efforts are based on the following guiding
principles, set by the Executive Board:
Whistleblower concerns escalated to Group Compliance • In line with the Paris Climate Agreement
• Based on level playing field via fair and free trade
2022 2021
• Supporting technology neutrality and global standards
Type of concerns reported No. % No. % • With long term prerequisites for clarity and predictability
Fair workplace violations 79 46% 48 40%
Offences against company assets 31 18% 24 20% Volvo Group holds a vast number of memberships via trade associations,
Business conduct offences 24 14% 25 21% other organizations and sponsorships providing possibilities to evaluate
and provide input on proposed regulations and policies. The Group does
Offenses endangering the environ-
ment or health and safety 11 7% 13 11% not consider a membership being equal to aligning with all positions, but
Violations of privacy or private sphere 9 5% 4 3% cares to secure that the views do not oppose the Volvo Group’s ambition
Offenses against financial integrity 1 1% 0 0% or hinder its development.
Inquiries 16 9% 7 6% Volvo Group has continued reviewing certain memberships and their
positions on climate change. In total, 21 organizations have been reviewed
171 100% 121 100%
based on their importance for Volvo Group’s business and industry, that
they operate in regions or countries where Volvo Group has significant
business, and the possibility for Volvo Group to influence the position of
the association. All the evaluated organizations were aligned or partly
TAX POLICY – KEY PRINCIPLES aligned with Volvo Group’s ambitions for progress in line with the Paris
Climate agreement. A non-exhaustive list of memberships is available on
The Volvo Group has a clear policy on how to manage tax across the orga- volvogroup.com/advocacy.
nization. The policy is adopted by the Volvo Board of Directors and estab-
lishes the following key principles:
The Volvo Group shall comply with the tax laws and regulations in all
countries where we operate. Tax compliance is a matter of legal adher-
ence and responsible business behavior. Tax compliance therefore
requires consideration of both the wording and the spirit of the law. Where
tax laws and regulations are unclear, prudence shall be observed by apply-
ing a high standard of professional integrity to maintain the Volvo Group’s
reputation as a compliant taxpayer contributing to society wherever oper-
ations take place.
Complementary disclosures
Organizational details Restatements
Name of the organization Several data points have been restated for emission-related data on page
The name of the company issuing this report is AB Volvo (publ). The com- 156. These are mainly related to refinements in reporting methodologies
pany is the parent company of the Volvo Group. for the Group's foundry operations and improvements in reporting from
certain smaller entities. It impacts datapoints from 2019-2021 on energy
Ownership and legal form usage, CO2e, NOx and solvents. The restatements are not considered
AB Volvo (publ) is a publicly held company, and its shares are listed on the material. As an example, GHG scope 1 and 2 for 2019 was adjusted from
stock exchange Nasdaq Stockholm, Sweden. 369 to 375 thousand tons.
Location of headquarters and operations External assurance

The Volvo Group is headquartered in Gothenburg, Sweden, has produc- The Volvo Group’s sustainability disclosures has been subject to limited
tion in 18 countries and sells its products in almost 190 markets. The assurance in accordance with ISAE 3000. Refer to the Auditor’s state-
company was founded in Sweden in 1927 where the Volvo Group still ment of the Limited assurance on page 211. The Group’s auditors also
operates a significant part of its operations. Other significant operations issue a statutory opinion in accordance with the audit standard RevR 12
are found in the US, B
razil, India, France and China. as defined on page 211 under the title The auditor’s opinion regarding the
For more information about major production facilities, please refer to statutory sustainability report.
volvogroup.com/report2022.
Activities and workers
Entities included in the report Activities, value chain and other business relationships
See pages 144, in the financial statements. The Volvo Group used the same The Volvo Group is one of the world’s leading manufacturers of trucks,
scope for the sustainability reporting as for the audited consolidated finan- buses, construction equipment and marine and industrial engines. The
cial statements. No specific entities categorically excluded. Some smaller Group also provides complete solutions for financing and service. The
sites may be excluded in emissions reporting due to materiality. Volvo Group’s brand portfolio consists of Volvo, Volvo Penta, Rokbak,
Renault Trucks, Prevost, Nova Bus, Mack and Arquus. We partner in alli-
Reporting period, frequency and contact point ances and joint ventures with the SDLG, Milence, Eicher, Dongfeng and
Reporting cycle cellcentric brands. Refer to page 221 for a summary of products delivered.
The reporting cycle is annual. No significant restatements have been
made. The reporting period is January 1, 2021 to December 31, 2022. The Own operations
date of the most recent report was February 25, 2022. The Volvo Group own operations as made of around 60 larger manufac-
turing plants across the world. The most significant operations are in
Contacts Sweden, the US, Brazil, India, France and China. See more details on
See page 223. volvogroup.com/report2022.
Information on employees and other workers

Total number of employees by employment contract, by gender and region
Permanent Temporary Agency/consultants Total workforce
Total Of which Total Of which
employees women, % employees women, %
Europe 51,153 22% 1,667 35% 9,191 62,011

North America 17,815 22% 530 31% 745 19,090
South America 6,665 19% 627 25% 162 7,454
Asia and Pacific 11,112 17% 678 30% 837 12,627
Africa 941 23% 27 44% 5 973
Group total 87,686 21% 3,529 32% 10,940 102,155
Total number of employees by employment type, by gender

Full time Part time Agency/consultants Total workforce
Total Of which Total Of which
employees women, % employees women, %
Group total 86,990 21% 4,225 40% 10,940 102,155
Supply chain Health and safety data is reported at operating unit level and consoli-
As one of the world’s leading manufacturers of trucks, buses, construc- dated at Business Area, Truck Division and Group level.
tion equipment and marine and industrial engines, the Volvo Group is Other employee-related data is reported and quality assured at legal
highly reliant on robust global and local supply chains to deliver compo- entity level, consolidated and quality assured at a shared service center
nents, parts and complete services and systems. The Group’s supply net- and controlled and reviewed at Group level.
work is made up of more than 50,000 supplier locations globally. The Compliance-related information is gathered using a case management
supply chain includes material such as steel, aluminum and plastic, com- system from the Code of Conduct help and whistleblower reporting line
ponents and systems used in machinery and vehicles, many of which are provided by a third party.
sub-assembled outside the Volvo Group’s own operation. The Volvo Qualitative data is collected from a range of functions responsible for
Group utilized truck assembly partners and bus body builders to carry out driving each material sustainability topic.
certain assembly processes for the final product.
In 2022, the Volvo Group bought goods and services for SEK 333 billion. Governance disclosures
The Volvo Group’s reporting approach is to include disclosures related to
Downstream value chain governance in the Corporate Governance Report which is based on the
The Volvo Group’s Business Areas support customers in the main seg- reporting requirements from the The Swedish Corporate Governance
ments, Trucks, Buses, Construction Equipment, Marine drive systems Code. The GRI-index on next page included page references to the place
and industrial motors. Customers and end users are extremely wide. where each relevant governance disclosure is addressed.
Direct customers are typically operating smaller or larger transport vehi-
cles fleets, construction machinery fleets, public transportation, or indi- Annual total compensation ratio
vidual vehicles. Among end-users are transport buyers, freight compa- This disclosure cannot be reported fully according to the definition in the
nies, municipalities, operators of construction sites, quarries, and mining GRI standard. The Group is in the process of updating systems to collect
companies. More information on products, services and segments and the data in a more effective way and the metric will be included in future
markets served are presented on paged 5 and 54-65. reports. Until then, average annual compensation is used as an indicator
for compensation ratio.
Significant changes to the organization and its supply chain
In 2022, there were no significant changes.
Precautionary principle or approach 2022 2021 2020

A precautionary principle is applied. This is exemplified by the life-cycle man-
agement approach taken when developing trucks, buses, construction equip- Wages, salaries & other
ment and other vehicles and machinery. Applying life-cycle approach provides remunerations, SEK M 54,798 47,518 44,517
insights for decision making on environmental gains and potential trade-offs. Average employees 86,316 83,958 89,573
This approach is the foundation for the Volvo Group Environmental Policy. Average cost per
employee, SEK 634,853 565,968 496,996
Data collection Total cost CEO, SEK M 58.1 49.3 43.9

Quantitative data for the sustainability disclosures are consolidated in dif- Ratio of CEO to average
employee 92 87 88
ferent systems.
Environmental data is reported at site level following the setup of the
environmental management system. The data is controlled internally by
an environmental coordination network and consolidated at Business
Area, Truck Division and Group level.
G R I I N D E X 20 2 2
This report has been prepared in accordance with GRI Standards 2021.
This index is part of the GRI disclosure format.
GENERAL DISCLOSURES Page Omission/comment
Standard: GRI 2 General Disclosures 2021

2-1 Organizational details 180
2-2 Entities included in the organization’s sustainability reporting 180, 144
2-3 Reporting period, frequency and contact point 180
2-4 Restatements of information 180
2-5 External assurance 180
2-6 Activities, value chain and other business relationships 180–181
2-7 Employees 180
2-8 Workers who are not employees 180
2-9 Governance structure and composition 187–192
2-10 Nomination and selection of the highest governance body 187–189
The Corporate Governance Report is pri-
2-11 Chair of the highest governance body 189, 194–195 marily based on the Swedish Corporate
2-12 Role of the highest governance body in overseeing 189, 199 Governance Code. Hence all disclosures are
the management of impacts not fully according to the GRI Standards.
2-13 Delegation of responsibility for managing impacts 187

2-14 Role of the highest governance body in sustainability reporting 191
2-15 Conflicts of interest 189
2-16 Communication of critical concerns 179
2-17 Collective knowledge of the highest governance body 194
2-18 Evaluation of the performance of the highest governance body 190
2-19 Remuneration policies 190, 204–205
2-20 Process to determine remuneration 190, 126
2-21 Annual total compensation ratio 181 Average cost per employee has been used
in the calculation as data on median cannot
be made available in a practical way.
2-22 Statement on sustainable development strategy 6–9, 148

2-23 Policy commitments 170
2-24 Embedding policy commitments 171
2-25 Processes to remediate negative impacts 173
2-26 Mechanisms for seeking advice and raising concerns 173, 179
2-27 Compliance with laws and regulations 179
2-28 Membership associations volvogroup.com/report2022
2-29 Approach to stakeholder engagement 148–149

2-30 Collective bargaining agreements 164
MATERIAL TOPICS
3-1 Process to determine material topics 148–149
3-2 List of material topics 149, 183–184
SPECIFIC DISCLOSURES Page Omission/comment
ECONOMIC CATEGORIES
Standard: Economic performance 2016
3-3 Management of material topics 150–153
201-2 Financial implications and other risks and opportunities 150–153 The report is structured on the recommenda-
due to climate change tions by the TCFD, see index on page 185.
Standard: Anti-corruption 2016

3-3 Management of material topics 178
205-2 Communication and training about anti-corruption 178–179 All details proposed by GRI are not reported.
policies and procedures Data are not aggregated in the way proposed
by the standard.
205-3 Confirmed incidents of corruption and actions taken 179

ENVIRONMENTAL CATEGORIES
Standard: Energy 2016
302-1 Energy consumption within the organization 156
302-3 Energy intensity 156
Standard: Emissions 2016
305-1 Direct (Scope 1) GHG emissions 155–156
305-2 Energy indirect (Scope 2) GHG emissions 155–156
305-3 Other indirect (Scope 3) GHG emissions 155–156
305-4 GHG emissions intensity 155–156
Standard: Environmental compliance 2016
3-3 Management of material topics 157–158
307-1 Non-compliance with environmental laws and regulations 158
Standard: Supplier environmental assessment 2016
308-1 New suppliers that were screened using environmental criteria 176 Percentage of total cannot be reported. The data is
not available. 1,530 suppliers were screened.
308-2 Negative environmental impacts in the supply chain and actions taken 177
SOCIAL CATEGORIES
Standard: Employment 2016
401-1 New employee hires and employee turnover 163
Standard: Labor management relations 2016
402-1 Minimum notice periods regarding operational changes 164 Number of weeks notice provided is not reported.
Data is not available on aggregated Group level.
The disclosure explains the process regarding
operational changes.
Standard: Occupational health and safety 2018

403-1 Occupational health and safety management system 167
403-2 Hazard identification, risk assessment, and incident investigation 167
403-3 Occupational health services 168
403-4 Worker participation, consultation, and communication on 168
403-5 Worker training on occupational health and safety 168
403-6 Promotion of worker health 169
403-7 Prevention and mitigation directly linked by business relationships 169
403-8 Workers covered by an occupational health and Safety management system 168 Data on coverage by a system that has been
internally audited is not available.
403-9 Work-related injuries 168 Data is not available on Group level for all detailed
disclosures. Work is in progress to develop reporting.
Standard: Training and education 2016

404-2 Programs for upgrading employee skills and transition assistance programs 165–166
Standard: Diversity and equal opportunities 2016
405-1 Diversity of governance bodies and employees 164–165
Human rights
3-3 Management of material topics (combined for all human rights topics) 170–172
406-1 Incidents of discrimination and corrective actions taken 174
407-1 Operations and suppliers in which the right to freedom 173 The reporting structure is based on The UN
of association and collective bargaining may be at risk Guiding Principles Reporting framework.
408-1 Operations and suppliers at significant risk for incidents of child labor 173 Operations reviewed are prioritized based on
409-1 Operations and suppliers at significant risk for incidents 174 risk. Therefore, the percentage of total
of forced or compulsory labor operations reviewed is not available.
412-1 Operations that have been subject to human rights reviews 174
or impact assessments
Standard: Supplier social assessment 2016
414-1 New suppliers that were screened using social criteria 176 Percentage of total cannot be reported, the data is
not available. 1,530 suppliers were screened.
414-2 Negative social impacts in the supply chain and actions taken 176–177
Standard: Customer health and safety 2016
416-1 Assessment of the health and safety impacts of product 169
and service categories
Other disclosure: EU Taxonomy regulation disclosures
Taxonomy-eligible and aligned Turnover, CapEx, OpEx 159–161
TCFD INDE X
Information relevant to the recommendations from TCFD is integrated in Most of the information is included in the section on climate and environ-
different parts of the report. This index includes references to relevant ment on page 150-156, but there is also relevant information in the sec-
part on governance, strategy och and management of climate-related tions on risk and corporate governance.
risks and opportunities, including climat-relaterad metrics and targets.
Index of TCFD recommended disclosures Page reference
Governance The Board’s oversight of climate-related risks and opportunities. 150, 189
The organizations governance around
climate-related issues and opportunities The Management’s role in assessing and managing climate-related risks 150, 199
and opportunities.
Strategy The climate-related risks and opportunities the organization has identified 152–153
Actual and potential impacts of climate- over the short, medium and long term.
related risks and opportunities on the
organization’s business, strategy and The impact of climate-related risks and opportunities on the organization’s 152–153
financial planning where such information businesses, strategy and financial planning.
is material
The resilience of the organization’s strategy taking into consideration 150–153
different climate-related scenarios, including a 2 °C or lower scenario.
Risk Management The company’s processes for identifying and assessing climate-related risks. 68, 152–153
Actual and potential impacts of climate-
related risks and opportunities on the The organization’s processes for managing climate-related risks. 68, 152–153
organization’s business, strategy and
financial planning where such information The processes for identifying, assessing and managing climate-related risks 68, 152–153
is material are integrated into the organization’s overall risk management.
Metrics and targets The metrics used by the organization to assess climate-related risks 151, 153, 154
Actual and potential impacts of climate- and opportunities in line with its strategy and risk management process.
related risks and opportunities on the
organization’s business, strategy and The Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the 154–155
financial planning where such information related risks.
is material
The targets used by the organization to manage climate-related risks 155–156
and opportunities and performance against targets.
186
VOLVO GROUP 2022
CORPORATE GOVERNANCE REPORT
The Volvo Group appreciates sound corporate governance

as a fundamental base in promoting its long-term strategic
objectives and in achieving a trusting relation with
shareholders and other key stakeholders. High standards
when it comes to transparency, reliability and ethical values
are guiding principles within the Volvo Group’s operations.
The Swedish Corporate Governance Code Corporate Governance Model
AB Volvo’s shares are admitted to trading on the stock exchange Nasdaq At the General Meetings of AB Volvo, which is the parent company of the
Stockholm’s main market. As a listed company, Volvo applies the Volvo Group, the shareholders exercise their voting rights with regard to
Swedish Corporate Governance Code (the Code), which is available at for example the composition of the Board of AB Volvo and the election of
www.corporategovernanceboard.se. auditors.
This Corporate Governance Report has been prepared in accordance An Election Committee, appointed by the Annual General Meeting,
with the Swedish Annual Accounts Act and the Code, and is separate submits proposals to the General Meeting concerning the election of Board
from the Annual Report. The report has been reviewed by, and includes a members and Chairman of the Board as well as proposals for resolutions
report from, Volvo's auditors. concerning remuneration of the Board. When applicable, the E
lection
Committee also submits proposals to the General Meeting for the election
of external auditors and for resolutions concerning fees to the auditors.
The Board is ultimately responsible for Volvo’s organization and the
management of its operations.
In addition, the Board appoints the President and CEO of AB Volvo.
The CEO is in charge of the daily management of the Group in accordance
with the guidelines provided by the Board.
VOLVO GROUP 2022 187 CORPOR ATE GOVERNANCE REPORT
1
Shareholders
Vote at the General Meetings

AB VOLVO
2 Elects Auditor
General Meeting
Appoints Submits proposals concerning election of Board

Election members, auditors and Election Committee for
5 Audit Committee Committee the upcoming Annual General Meeting.
8 Auditor
6 Remuneration Committee 3 Election Committee
7 Volvo CE Transformation
Committee
Elects Board
Prepare
part of the
Board’s work.
4
Board of Directors
The auditors review
the interim report for
the period January 1
to June 30 and audit
Appoints President/CEO the annual report
and consolidated
10 financial s tatements.
11
President/CEO
9 Group Internal Audit
12 Internal Control over

Financial Reporting
11
Business Areas/
Truck Divisions
Operations
1 SHARES AND SHAREHOLDERS 2 GENERAL MEETING
Volvo has issued two classes of shares: series A and series B. At a General General
Meeting, series A shares carry one vote and series B shares one-tenth of The General Meeting is Volvo’s highest decision-making body. The Annual
a vote. The two share classes carry equal rights in the assets and earnings General Meeting is held within six months of the end of the financial year,
of the company. According to a special share conversion clause in the Arti- normally in Gothenburg, Sweden.
cles of Association, holders of series A shares are entitled to request that In addition to what follows from applicable law regarding shareholders’
their series A shares be converted to series B shares. Implementation of right to participate at General Meetings, under Volvo’s Articles of Associ-
such conversions, which occurs on a regular basis, entail that the total ation shareholders must give notice of their attendance (within the time
number of votes in the company decreases. stated in the convening notice) and, when applicable, notify the company
The share register of AB Volvo is maintained by Euroclear Sweden AB. of any intention to bring assistants.
On December 31, 2022, Volvo had 373,101 shareholders according to the A shareholder who wants the General Meeting to consider a particular mat-
share register. The largest shareholder, in terms of votes on that date was ter must submit a request to the Board in sufficient time prior to the General
AB Industrivärden, with 27.8 percent of the votes. As per the same date, Meeting to the address provided on Volvo’s website, www.volvogroup.com.
Geely Holding held 16.0 percent of the votes, AMF and AMF Funds held The Annual General Meeting 2022 was held on April 6, 2022, and was
5.4 percent of the votes, Alecta held 4.3 percent of the votes and AFA carried out through postal voting, without any physical attendance, pur-
Insurance held 2.3 percent of the votes. suant to temporary legislation. As communicated by the Swedish Corpo-
For more information about the Volvo share and its shareholders, rate Governance Board in January 2022, this is not to be considered a
please refer to the Board of Director’s Report on pages 66–67 of the deviation from the Code.
Annual Report.
Annual General Meeting 2023
Volvo’s Annual General Meeting 2023 will be held on Tuesday, April 4, 2023
at Konserthuset, Gothenburg, Sweden. For further information about the
Annual General Meeting 2023, please refer to the end of the Annual Report
and Volvo’s website, www.volvogroup.com.
3 ELECTION COMMITTEE
Duties Composition
The Election Committee is elected by the General Meeting. The Election In accordance with the current instructions for Volvo’s Election Commit-
Committee shall perform the tasks that are incumbent upon the Election tee (adopted by the Annual General Meeting 2019), the Annual General
Committee according to its instructions from the General Meeting and Meeting shall elect five members to serve on the Election Committee, of
the rules of the Code. The main task is to prepare and present proposals to whom four shall represent the largest shareholders in the company in
the Annual General Meeting on behalf of the shareholders for the election terms of votes, who have expressed their willingness to participate in the
of Board members, Chairman of the Board and Board remuneration and, Election Committee. In addition, one of the members shall be the Chair-
when applicable, proposals for auditors and fees to the auditors. man of the AB Volvo Board. Volvo’s Annual General Meeting 2022
In addition, the Election Committee presents proposals for members of resolved to appoint the following individuals as members of the Election
the Election Committee for the following year, in accordance with prevail- Committee:
ing instructions for Volvo’s Election Committee. • Pär Boman (AB Industrivärden)
• Anders Oscarsson (AMF and AMF Funds)
• Magnus Billing (Alecta)
• Anders Algotsson (AFA Insurance)
• Carl-Henric Svanberg, Chairman of the Board
The Election Committee appointed Pär Boman as Chairman of the Election

Committee.
4 BOARD OF DIRECTORS
Duties The Board’s work in 2022

The Board is ultimately responsible for Volvo’s organization and manage- The Board’s work is mainly performed within the framework of formal
ment of the company’s operations. The Board is responsible for the Board meetings and through meetings in the committees of the Board. In
Group’s long-term development and strategy, for regularly controlling and addition, regular contact is maintained between the Chairman of the
evaluating the Group’s operations and for the other duties set forth in the Board and the CEO in order to discuss ongoing business and to ensure
Swedish Companies Act. that the Board’s decisions are executed.
In 2022, there were eleven ordinary Board meetings, four extraordinary
Composition Board meetings and one statutory Board meeting. During 2022 the
In 2022, AB Volvo’s Board consisted of eleven members elected by the Board applied a meeting structure with fewer, but longer, physical meet-
Annual General Meeting and three members, of which one resigned in August, ings combined with more frequent digital meetings in order to get the
2022, and two deputy members appointed by employee organizations. most value out of the in person meetings, increase meeting efficiency and
The Annual General Meeting 2022 re-elected Matti Alahuhta, Eric Elzvik, reduce the CO2 impact by travelling less. Consequently, all of the extraor-
Martha Finn Brooks, Kurt Jofs, Martin Lundstedt, Kathryn V. Marinello, dinary Board meetings and several of the ordinary Board meetings during
Martina Merz, Hanne de Mora, Helena Stjernholm and Carl-Henric Svan- 2022 were held as video conferences. The attendance of the Board mem-
berg as Board members and Jan Carlson was elected as a new Board members at the Board meetings during 2022 is presented in the table on page
ber. The previous Board member Eckhard Cordes did not stand for re-elec- 192. The company’s auditor attended one Board meeting during the year.
tion. The Annual General Meeting re-elected Carl-Henric Svanberg as In 2022, turbulent developments in the world affected the Volvo Group
Chairman of the Board. A more detailed presentation of each Board mem- in many aspects. Hence, monitoring and considering the effects thereof
ber is set out in the “Board of Directors” section on pages 194–195. have been an important part of the Board’s work. The consequences of
Prior to the Annual General Meeting 2022, the Election Committee the war in Ukraine, with a priority on questions relating to the health and
announced that it had applied the provisions of rule 4.1 of the Code as board safety of colleagues and business partners, and the Volvo Group’s strate-
diversity policy. The aim is that the Board as a collective should possess the gic directions in relation thereto have been a focus area throughout the
required mix in terms of background and knowledge, whereby an even gen- year. The continued strains on the supply chain and industrial system, due
der distribution is taken into particular account. The result of the Election to e.g. shortages of labor, materials, components and transport services,
Committee’s application of the diversity policy is a Board that represents a have also been a challenge during the year. Costs related to energy, mate-
mix of both professional experience and knowledge as well as geographical rial and supply chain disruptions continued to increase throughout 2022.
and cultural backgrounds. 45 percent (five out of eleven) of the Board mem- The Board has closely monitored and followed-up on the effects of the
bers elected by the Annual General Meeting are women. higher inflation on the Volvo Group and its profitability and initiated sev-
eral proactive activities in relation thereto. In addition, the Board has
Independence requirements spent a great deal of time considering how to assess and communicate
The Board of Directors of AB Volvo is subject to the independence require- certain key issues related to the short-term risks described in Note 2 to
ments prescribed in the Code. the financial statements.
Prior to the Annual General Meeting 2022, the Election Committee The Volvo Group’s sustainability work and objectives are integrated
presented the following assessment of the independence of Board mem- parts of the Volvo Group’s business and are regularly followed-up by the
bers elected at the Annual General Meeting 2022. Board. The focus on sustainability and the corresponding alignment of the
Carl-Henric Svanberg, Matti Alahuhta, Jan Carlson, Eric Elzvik, Martha product portfolio of the Volvo Group has continued during 2022, with a
Finn Brooks, Kurt Jofs, Kathryn V. Marinello, Martina Merz and Hanne de particular focus on strategic decisions for electromobility. To meet the
Mora were all considered independent of the company and company growing demand for battery electric heavy-duty vehicles and machines,
management, as well as the company’s major shareholders. the Volvo Group has initiated the process to establish a large-scale pro-
Martin Lundstedt, as President of AB Volvo and CEO of the Volvo duction plant for battery cells in Mariestad, Sweden, and to start to pro-
Group, was considered independent of the company’s major shareholders duce battery modules in the Volvo Group’s truck plant in Ghent, Belgium.
but not of the company and company management. The Volvo Group’s climate targets under the Science Based Targets initia-
Helena Stjernholm was considered independent of the company and tive (for further information, see pages 154–156) are, together with back-
company management but not in relation to one of the major sharehold- ground materials, followed-up by the Board on a quarterly basis. At the
ers, due to her capacity as President and CEO of AB Industrivärden. Board meeting in December 2022, the Board spent time on the Group’s
broader work related to sustainability and focusing on communication,
Work procedures future environmental impacts and expectations on human rights, as well
Every year, the Board adopts work procedures for the Board’s work. as regulations relating to strategy, performance and reporting. The Board
The work procedures outline how the Board’s duties should be distributed, is involved in on-going work to strengthen the reporting and enable con-
including the specific role and duties of the Chairman, instructions for the divi- solidated follow-ups within the area of sustainability.
sion of duties between the Board and the President and for the reporting of
financial information to the Board. The Board has also adopted specific instruc-
tions for the Board’s committees, which are linked to the work procedures.
The speed of transformation of the industry is accelerating and, in light As part of the yearly evaluation, Board members were asked to complete
thereof, the Board has devoted most of its time to strategic topics, with a questionnaire and assess various areas related to the Board’s work from
particular focus on electrification, digitalization, autonomous solutions their own perspective. The areas evaluated for 2022 included the Board’s
and new productivity services. These technologies play an essential part composition, understanding of key stakeholders, the management and
in the Volvo Group’s ambition to lead the transformation and, electrifica- focus of Board meetings, Board support and committees and how the
tion in particular, in the transition to a decarbonized transport system. As Board addresses issues related to strategy and strategic priorities, sustain-
a part of the ongoing technology shift, the Volvo Group continues to ability, potential risks, succession planning and people oversight. The areas
develop the strategic partnerships previously entered into with focus on covered by the evaluation may differ from one year to another to reflect the
autonomous solutions, electrification and charging infrastructure. development of the Board’s work and the Volvo Group, and in 2022, there
The Board’s ambition is to stay close to the business and the Board was a particular focus on key strategic topics including sustainability, digital
receives continuous up-dates on the status and development of the opportunities and threats, the evolution of the competitive landscape, and
Group’s transformation work and strategies in relation thereto. Further- the impact of geopolitical and macroeconomic events.
more, the Board has devoted time to talent review and succession plan- Separate evaluations were conducted of the Board as a collective, the
ning and on the review and follow-up of the company’s quality work. Chairman of the Board, the Audit Committee, the Remuneration Commit-
Related to this work, the Board usually makes a yearly visit to the compa- tee and the Volvo CE Transformation Committee. The results of the eval-
ny’s operations throughout the world. In October 2022, the Board trav- uations of the Board as a collective and the Chairman of the Board will be
elled to the US and visited the head office of the Volvo Group’s North discussed by the Board. The results of the evaluations of the committees
American business in Greensboro and the Volvo Group’s truck assembly will be discussed by the relevant committee. In addition, the results of the
plant in New River Valley. evaluations of the Board as a collective and the Chairman of the Board are
During 2022, the Board resolved on an overall financial plan and invest- shared with the Election Committee.
ment framework for the Group’s operations. In addition, the Board regu-
larly monitors the Group’s earnings and financial position and maintains Remuneration of Board Members
continuous focus on risk related issues such as overall risk management The Annual General Meeting resolves on fees to be paid to the Board mem-
and ongoing legal disputes and investigations. The Board proposed a dis- bers elected by the Annual General Meeting. For information about Board
tribution of an ordinary dividend of SEK 6.50 per share and an extraordi- remuneration adopted by the Annual General Meeting 2022, please refer to
nary dividend of SEK 6.50 per share, which was resolved by the Annual Note 27 "Personnel" in the Group’s notes in the Annual Report.
General Meeting 2022. Furthermore, the Board regularly reviews the
management’s short and long-term incentive programs to ensure that Remuneration of Board members, 2022
they fulfill their purpose and drive the right behavior in the current busi- (from AGM on April 6, 2022) SEK
ness environment.
In 2022, the Board also resolved to establish a Volvo CE Transforma- Chairman of the Board 3,850,000
tion Committee with a specific focus on the strategic direction and trans- Board member 1 1,150,000
formation of the Volvo Construction Equipment business area. The main Chairman of the Audit Committee 405,000
purpose of the committee being to ensure that Volvo Construction Equip- Member of the Audit Committee 190,000
ment is successful in the transformation. Chairman of the Remuneration Committee 170,000
Member of the Remuneration Committee 125,000
Evaluation of the Board’s work Chairman of the Volvo CE Transformation Committee 200,000
In 2023, the Board performed its yearly evaluation of the Board’s work Member of the Volvo CE Transformation Committee 170,000
during the previous year. The purpose of the evaluation is to further 1 With the exception of the President.
develop the Board’s efficiency and working procedures and to determine
the main focus of the Board’s coming work. In addition, the evaluation
serves as a tool for determining the competence required by the Board
and for analyzing the competence that already exists in the current Board.
By that, the evaluation also serves as input for the Election Committee’s
work with proposing Board members.
The Board’s committees
5 AUDIT COMMITTEE
Duties Composition and work in 2022

The Board has an Audit Committee primarily for the purpose of supervis- At the statutory Board meeting following the Annual General Meeting
ing the accounting and financial reporting processes and the audit of the 2022, the following Board members were appointed members of the
annual financial statements. Audit Committee:
The Audit Committee’s duties include preparing the Board’s work to • Eric Elzvik
assure the quality of the Group’s financial reporting by reviewing interim
• Martha Finn Brooks
reports, the Annual Report and the consolidated accounts. The Audit
Committee also has the task of reviewing and over-seeing the Group’s • Helena Stjernholm
legal and taxation matters as well as compliance with laws and regula-
tions that may have a material impact on financial reporting. Furthermore, Eric Elzvik was appointed Chairman of the Audit Committee.
the Audit Committee has the task of reviewing and overseeing the impar- The Audit Committee met with the external auditors without the pres-
tiality and independence of the company’s auditors. The Audit Committee ence of management on two occasions in 2022 in connection with Audit
is also responsible for evaluating both internal and external auditors’ work Committee meetings. The Audit Committee regularly met with the Head
and, when applicable, handling the tender process for audit services. In of Group Internal Audit in connection with Audit Committee meetings.
addition, it is the Audit Committee’s task to preapprove what other ser- The Election Committee’s assessment of independence of the Audit
vices, beyond auditing, the company may procure from the auditors. The Committee members, in accordance with the requirements in the Code,
Audit Committee also adopts guidelines for transactions with companies prior to the Annual General Meeting 2022 is presented above under the
and persons closely associated with Volvo. Further, the Audit Committee “Independence requirements” section on page 189.
evaluates the quality, relevance and effectiveness of the Group’s system The Audit Committee and the external auditors, among other tasks,
for internal control over financial reporting, as well as with respect to the discussed the external audit plan and the view of risk management. The
internal audit and risk management, and discharge any other duties of an Audit Committee held nine ordinary meetings and four extraordinary
audit committee according to law or its instructions. Finally, the Audit Com- meetings during 2022. The attendance of Board members at the commit-
mittee oversees developments within the ESG (Environmental, Social and tee meetings is presented in the table on page 192. The Audit Committee
Governance) standards, and the Group’s reporting in these areas. reports the outcome of its work to all members of the Board on a regular
basis and the minutes of the Audit Committee meetings are available for
all Board members.
6 REMUNERATION COMMITTEE
Duties Composition and work in 2022

The Board has a Remuneration Committee for the purpose of preparing At the statutory Board meeting following the Annual General Meeting
and deciding on issues relating to the remuneration of senior executives in 2022, the following Board members were appointed members of the
the Group. The duties of the Committee include making recommendations Remuneration Committee:
to the Board on the Board’s decisions regarding terms of employment and • Carl-Henric Svanberg
remuneration of the CEO and the Deputy CEO of AB Volvo, principles for
• Matti Alahuhta
the remuneration, including pensions and severance payments, of other
members of the Group Executive Board and principles for variable salary • Kurt Jofs
systems, share based incentive programs and for pension and severance
payment structures for other senior executives in the Group. Carl-Henric Svanberg was appointed Chairman of the Remuneration
The Remuneration Committee shall also monitor and evaluate ongoing Committee.
programs and programs concluded during the year for the variable remu- The Election Committee’s assessment of the independence of the Remu-
neration of senior executives, application of the guidelines for remunera- neration Committee members, in accordance with the requirements in the
tion to the Volvo Group Executive Board, and the current remuneration Code, prior to the Annual General Meeting 2022 is presented above under the
structures and levels in the Group. “Independence requirements” section on page 189.
The Board shall prepare a remuneration report for each financial year The Remuneration Committee held four ordinary meetings and one extraor-
detailing the remuneration that is covered under the guidelines. The remu- dinary meeting during 2022. The attendance of Board members at commit-
neration report shall include the total remuneration, i.e. both compensa- tee meetings is presented in the table on page 192. The Remuneration Com-
tion that has been and remains to be paid out, and outline how such remu- mittee reports the outcome of its work to all members of the Board on a
neration correlates to the guidelines. The remuneration report also regular basis.
provides details on the remuneration of AB Volvo’s President and CEO and
Deputy CEO. The remuneration report shall be submitted to the Annual
General Meeting for approval.
7 VOLVO CE TRANSFORMATION COMMITTEE
Duties Kurt Jofs was appointed Chairman of the Volvo CE Transformation Com-
The Board has a Volvo CE Transformation Committee, which was estab- mittee.
lished during 2022, that focuses on the strategic direction and transfor- The Election Committee’s assessment of the independence of the Volvo
mation of the Volvo Construction Equipment business area. The main pur- CE Transformation Committee members, in accordance with the require-
pose of the committee is to ensure that Volvo Construction Equipment is ments in the Code, prior to the Annual General Meeting 2022 is presented
successful in the transformation. above under the “Independence requirements” section on page 189.
The Volvo CE Transformation Committee held three ordinary meetings
Composition and work in 2022 during 2022. The attendance of Board members at committee meetings is
At the statutory Board meeting following the Annual General Meeting presented in the table below. The Volvo CE Transformation Committee
2022, the following Board members were appointed members of the reports the outcome of its work to all members of the Board on a regular basis.
Volvo CE Transformation Committee:
• Kurt Jofs
• Matti Alahuhta
• Lars Ask
• Mari Larsson
• Hanne de Mora
• Helena Stjernholm
The Board’s composition and attendance at meetings January 1, 2022 – December 31, 2022
Board Volvo CE Board Volvo CE

meetings Audit Remu- Transfor- meetings Audit Remu- Transfor-
(16 incl. Com- neration mation (16 incl. Com- neration mation
statu- mittee Commit- Committee statu- mittee Commit- Committee
Member tory)1 (13)1 tee (5)1 (3) Member tory)1 (13)1 tee (5)1 (3)
Carl-Henric Svanberg 16 5 Lars Ask, employee

Martin Lundstedt 16 representative 13 3
Matti Alahuhta 16 5 3 Mats Henning, employee
representative 14
Jan Carlson2 10
Mikael Sällström,
Eckhard Cordes 3
6 employee representative7 9 2
Eric Elzvik 15 13 Camilla Johansson,
Martha Finn Brooks 4 16 8 employee representative 16
Kurt Jofs 16 5 3 Mari Larsson, employee
Kathryn Marinello 16 representative 16 3
Martina Merz5 15 Total number of meetings 16 13 5 3
Hanne de Mora6 16 5 3
Helena Stjernholm 16 13 3
Total number of meetings 16 13 5 3
1 Whereof extraordinary meetings: four for the Board, four for the Audit Committee and one for the Remuneration Committee.
2 Jan Carlson joined the Board in April 2022 and has since attended all Board meetings during 2022.
3 Eckhard Cordes partly attended the ordinary Board meeting in April 2022. Eckhard Cordes resigned from the Board in April 2022.
4 Martha Finn Brooks partly attended the quarterly report review Board meetings in April and July 2022. Martha Finn Brooks was appointed member of the
Audit Committee in April 2022.
5 Martina Merz partly attented the ordinary Board meetings in February, April and August/September 2022.
6 Hanne de Mora partly attended the ordinary Board meeting in June 2022. Hanne de Mora resigned from the Audit Committee in April 2022.
7 Mikael Sällström resigned from the Board in August 2022.
President and CEO Martin

Lundstedt during a tour of
the Volvo Group’s truck
assembly plant in New River
Valley, Virginia, together
with plant manager Koen
Knippenberg, Vice President
and General Manager Group
Trucks Operations.
Board of Directors
Board members elected by the Annual General Meeting
Carl-Henric Svanberg Matti Alahuhta Jan Carlson Eric Elzvik Martha Finn Brooks Kurt Jofs
Chairman of the Board Member of the Remuneration Chairman of the Audit Member of the Audit Chairman of the Volvo CE
Chairman of the Remuneration Committee Committee Committee Transformation Committee
Committee Member of the Volvo CE Member of the Remuneration
Transformation Committee Committee
Education
MSc in Applied Physics, MSc, Dr Sc. MSc in Physics and Electrical MSc Business Administra- BA Economics and Political MSc, KTH Royal Institute of
Linköping Institute of Tech- Doctor of Science, Helsinki Engineering from University tion, Stockholm School of Science, Yale U
niversity. Technology, Stockholm.
nology, BSc Business Admin- University of Technology. of Linköping. Economics. MBA International Business
istration, University of Uppsala. from Yale School of Manage-
ment, Yale University.
Born
1952 1952 1960 1960 1959 1958
Member of the Volvo Board
Chairman of the Volvo Board Since April 2, 2014. Since April 6, 2022. Since April 5, 2018. Since March 31, 2021. Since June 18, 2020.
since April 4, 2012.
Position and Board memberships
Chairman of the European Board Chairman: DevCo Part- Board Chairman: Autoliv Inc. Board Chairman: GlobalCon- Board Member: Constellium, Board Member: Telefonaktie-
Round Table of Industry ners Oy. Board Member: Telefonaktie- nect Group. CARE USA and CARE Enter- bolaget LM Ericsson, Feal AB
(ERT). Board Member: Kone Corpo- bolaget LM Ericsson (pro- Board member: Telefon prise Inc. and Arjeplog Hotel Silverhat-
ration. posed as new Chairman for aktiebolaget LM Ericsson and ten AB.
the Ericsson Annual General Landis+Gyr Group AG.
Meeting 2023 planned to be
held on March 29, 2023).
Principal work experience
Has held various positions at Has held several manage- Has held various positions Joined ABB in 1984 and has Has held various manage- Previous positions include
Asea Brown Boveri (ABB) ment positions in the Nokia within the Autoliv Group since held several management ment positions in Cummins Executive Vice President and
and Securitas AB, President Group – President of Nokia 1999, including President positions in the Finance truck and bus businesses responsible for Telefonaktie-
and CEO of Assa Abloy AB, Telecommunications, Presi- Autoliv Europe, Vice Presi- function at ABB in Sweden, from 1986–2002. From bolaget LM Ericsson’s Net-
President and CEO of Tele- dent of Nokia Mobile Phones dent Engineering of Autoliv Singapore and Switzerland 2002–2005 Martha was works business 2003–2008,
fonaktiebolaget LM Ericsson, and Chief Strategy Officer of and President Autoliv Elec- – most recently as Group CEO, Rolled Products and CEO of Segerström & Svens-
Board Chairman of BP plc, the Nokia Group, President of tronics. President and CEO of CFO between 2013 and 2017 SVP in Alcan Inc. and from son 1999–2001, CEO of Lin-
member of External Advisory Kone Corporation 2005– Autoliv Inc. 2007–2018 and and previously as CFO for the 2005–2009 she was the jebuss 1996–1999 and vari-
Board of the Earth Institute at 2014 and 2006–2014 also Chairman of Autoliv Inc. since Divisions Discrete Automa- President and COO of Novelis ous positions within ABB and
Columbia University and the CEO. Previous Board assign- May 2014. President and tion & Motion and Automa- Inc., global leader in alumi- Telefonaktiebolaget LM
Advisory Board of Harvard ments include Vice Chairman CEO and Chairman of Veo- tion Products and a position num rolled products and recy- Ericsson. Previous Board
Kennedy School. Previous of Metso Outotec and mem- neer Inc. 2018–2022. Previ- as Head of M&A and New cling. Martha has been assignments include Board
assignments also include ber of the Board in ABB Ltd. ous positions also include Ventures and also as Head of a Board Member of Har- Chairman of Tieto, Vesper
Chairman of the Royal Swed- President of Saab Combitech Corporate Development. Cur- ley-Davidson, International Holding AB and Höganäs AB.
ish Academy of Engineering and of Swedish Gate Array. rently, senior industrial Paper, Bombardier, Jabil and
Sciences (IVA). advisor to EQT. privately held Algeco Scots-
man.
Holdings in Volvo, own and related parties
2,000,000 Series B shares. 146,100 Series B shares. None. 7,475 Series B shares. 10,500 American depositary 47,515 Series B shares.
receipts representing Volvo B
shares (ADRs).
Board members appointed by the employee organizations
Lars Ask Member of the Mats Henning Member of the

Employee representative, Volvo Board Employee representative, Volvo Board
ordinary member Ordinary member since ordinary member Since May 9, 2014.
Member of the Volvo CE April 6, 2016. Deputy Born Background within Volvo
Transformation Committee member from June 16, 1961 With Volvo since 1982.
Born 2009–2016.
Holdings in Volvo, own
1959 Background within Volvo and related parties
With Volvo since 1982. 293 Series A shares,
Holdings in Volvo, own 758 Series B shares.
and related parties
116 Series B Shares.
Board members elected by the Annual General Meeting
Martin Lundstedt Kathryn V. Marinello Martina Merz Hanne de Mora Helena Stjernholm
President and CEO Member of the Audit Committee
Member of the Volvo CE
Transformation Committee
Education
MSc, Chalmers University of Technol- BA from State University of BS from University of Cooperative BA in Economics from HEC MSc Business Administration,
ogy. New York at Albany, MBA & Doc- Education, Stuttgart. in Lausanne, MBA from IESE Stockholm School of Economics.
torate from Hofstra University. in Barcelona.
Born
1967 1956 1963 1960 1970
Member of the Volvo Board
Since April 6, 2016. Since April 2, 2014. Since April 1, 2015. Since April 14, 2010. Since April 6, 2016.
Position and Board memberships
President and CEO of AB Volvo. President and CEO of PODS. CEO of thyssenk rupp AG. Board Chairperson: Microcaps AG. President and CEO of AB Indus-
Board Chairman: Permobil AB and the Board Chairperson: Concentrix. Board Member: Siemens AG. Board Member: IMD Supervisory trivärden.
European Automobile Manufacturers’ Board Member: Ares Acquisition Board and Nestlé S.A. Board Member: AB Industrivärden,
Association (ACEA CV BOD). Corporation. Sandvik AB, Telefonaktiebolaget
Board Member: Autoliv Inc. and the LM Ericsson and the Confederation
Confederation of Swedish Enterprise. of Swedish Enterprise.
Member: European Round Table of Member: The Royal Swedish Acad-
Industry (ERT) and the Royal Swedish emy of Engineering Sciences (IVA).
Academy of Engineering Sciences (IVA).
Principal work experience
President and CEO of Scania 2012– Several management positions at Until January 2015, CEO for Chas- Credit Analyst Den Norske Credit- Between 1998 and 2015, employed
2015. Prior to that, various manage- Citibank, Chemical Bank New York sis Brakes International. Has, during bank in Luxemburg 1984. Various by the private equity firm IK Invest-
rial positions at Scania since 1992. (now JP Morgan Chase), First Bank almost 25 years held various man- positions within brand management ment Partners (former Industri Kap-
Co-chairman of the UN Secretary - Systems and First Data Corpora- agement positions in Robert Bosch and controlling within Procter & ital) where she held v arious posi-
General’s High-Level Advisory Group tion, Division President General GmbH, most recently as Executive Gamble 1986–1989, Partner McK- tions. She was a Partner with
on Sustainable Transport 2015– Electric Financial Assurance Part- Vice President Sales and Marketing insey & Company, Inc. 1989–2002, responsibility for the Stockholm
2016. Previous Board assignments nership Marketing and Division in the Chassis System Brakes divi- one of the founders and owners, office. She was also a member of
include Board member of Concentric President General Electric Fleet sion combined with responsibility also Board Chairperson of the global IK’s Executive Committee. Prior to
AB. Services, President and CEO of for regions China and Brazil and consulting firm and talent pool that she worked as a consultant for
Ceridian Corporation and subse- previously CEO of the subsidiary a-connect (group) AG from 2002 Bain & C ompany.
quently also Chairman, Board Chair- Bosch Closure Systems, also mem- until May 2021. Previous Board
man, President and CEO of Stream ber of the Board of Management assignments also include Board
Global Services, Inc. Senior Advisor of Brose Fahrzeugteile GmbH & member of Metso Outotec Oyj.
Ares Management, LLC. Board Co.
Member of Nielsen, RealPage, Gen-
eral Motors Co. and MasterCard
US. Until 2020 President and CEO
of Hertz Global Holdings.
251,681 Series B shares, None. 4,500 Series B shares. 22,650 Series B shares. 8,000 Series B shares.
300,000 call options in Series B
shares.
Deputies appointed by the employee organizations Secretary to the board
Camilla Johansson Mari Larsson Nina Aresund

Employee representative, Employee representative, Secretary to the Board
deputy member deputy member Master of Laws
Born Member of the Volvo CE Born
1966 Transformation Committee 1974
Member of the Born Member of the
Volvo Board 1978 Volvo Board
Deputy member since April Member of the Secretary to the Board since
6, 2016. Volvo Board January, 2023.
Background within Volvo Deputy member since May Background within Volvo
With Volvo since 1997. 22, 2015. Executive Vice President
Holdings in Volvo, own Background within Volvo Group Legal & Compliance
and related parties With Volvo since 2004. and General Counsel.
643 Series A shares, Holdings in Volvo, own Holdings in Volvo, own
508 Series B shares. and related parties and related parties
605 Series A shares, 11,487 Series B shares.
258 Series B shares.
8 EXTERNAL AUDITING 9 GROUP INTERNAL AUDIT
Volvo’s auditors are elected by the Annual General Meeting. The auditors Volvo’s internal audit function, Group Internal Audit, provides the Board
review the interim report for the period January 1 to June 30 and audit the and the Group Executive Board with an independent, risk based and
annual financial statements and consolidated accounts. The auditors also objective assurance on the effectiveness and the efficiency of the gover-
review the Corporate Governance Report and confirms whether the nance, risk management and control systems of the Volvo Group. Group
Group has presented a Sustainability Report. The auditors report the Internal Audit runs from time to time advisory work as well. Group Internal
results of their audit in the Audit Report and in an opinion on the Corpo- Audit helps the organization to accomplish its objectives by bringing a
rate Governance Report and provides an opinion on whether the guide- systematic, disciplined approach to evaluate and to improve the effective-
lines for remuneration to the Volvo Group Executive Board have been ness of risk management, control and governance processes.
complied with, which they present to the Annual General Meeting. Group Internal Audit performs internal audits in selected focus areas,
The current auditor, Deloitte AB, was elected at the Annual General identified through an independent risk assessment process involving key
Meeting 2022 for a period of one year. Jan Nilsson is responsible for the stakeholders, input from past audits and from the other assurance func-
audit of Volvo and is the Auditor-in-Charge. tions including the external auditors. This audit plan is approved by the
For information about Volvo’s remuneration of the auditors, please refer Audit Committee. In addition, special assignments requested by manage-
to Note 28 “Fees to the auditors” in the Group’s notes in the Annual Report. ment and the Audit Committee can be performed. The audits cover,
among other things, assessments on the adequacy and effectiveness of
the Volvo Group’s processes for controlling its activities and managing its
risks and evaluation of compliance with policies and directives.
The head of Group Internal Audit reports directly to the CEO, the
Group’s General Counsel and the Audit Committee.
For additional information on internal control over financial reporting,
see pages 202–203.
10 GOVERNANCE PRINCIPLES AND ORGANIZATIONAL STRUCTURE
Volvo’s strategy The Volvo Group’s truck business is supported by the three Truck Divi-
The Volvo Group’s mission is to “Drive prosperity through transport and sions: Group Trucks Technology (GT T), Group Trucks Purchasing (GTP)
infrastructure solutions”. The Volvo Group has the ambition to drive pros- and Group Trucks Operations (GTO).
perity socially, environmentally and financially, by striving for transport The business of the Volvo Group is organized in ten Business Areas:
and infrastructure solutions that are safe, fossil-free and productive. The Volvo Trucks, Renault Trucks, Mack Trucks, Volvo Construction Equip-
Volvo Group drives the transformation in its industry to shape the world ment, Volvo Energy, Volvo Buses, Volvo Penta, Volvo Financial Services
we want to live in. Based on the Group’s strategic priorities and Volvo (VFS), Volvo Autonomous Solution (VAS) and Arquus. In addition, Nova
Group 2030 ambitions, each Business Area defines its own operational Bus is a separate legal and operational entity within the Volvo Group.
plans. The long-term plans, such as the Group’s industrial and product Each Business Area and Truck Division has its own quarterly Business
plans, are also crucial parts of the Group’s strategic direction. For more Review Meeting (BRM) to support strategic development and business
information about the Volvo Group’s strategy, please refer to pages 10–21 performance, where key decisions for the respective Truck Divisions or
of the Annual Report. Business Areas are made.
For cross-functional alignment and interaction between different func-
Governance documents tions and organizations and for taking specific decisions which are some-
Another key component of the Group’s governance is its policies and times not part of the line organizations ordinary responsibilities, several
directives, such as the Code of Conduct and policies pertaining to invest- cross-functional decision forums have been formalized, including: People
ments, financial risks, accounting, financial control and internal audit, Board, Digital and IT Product Board, Connected Solutions Board, Product
which contain Group-wide operating and financial rules for the opera- Board, Quality Board and Sales and Operational Planning.
tions, as well as responsibility and authority structures. With this governance model, Volvo can utilize the synergies of having
global organizations for product development, purchasing and manufac-
Organizational structure turing, while maintaining clear leadership and responsibility for each busi-
The Volvo Group is organized into five Group Functions, three Truck Divi- ness area to make sure that customer needs are met. The aim of the gov-
sions and ten Business Areas. The five Group Functions (Group Finance, ernance model is that all Business Areas are driven according to the same
Group Legal & Compliance, Group People & Culture, Group Communica- distinct business principles, whereby each Business Area can follow and
tion and CDO¹ Organization) are tasked with supporting the entire organi- optimize its own earnings performance and cash flow generation in the
zation with expertise within each Group Function area, developing stan- short- and long-term.
dards through policies, directives and guidelines and providing services
and/or products for the entire Group.
Volvo Group organization
Valid as per December 31, 2022

Executive Assistant &
Group CEO
Head of CEO Office
Deputy CEO Group People & Culture
Group Finance Group Communication
Group Legal & Compliance CDO1) Organization

BUSINESS AREAS
Volvo Volvo
Volvo Renault Mack Volvo Volvo Volvo Volvo
Financial Autonomous Arquus
Trucks Trucks Trucks CE Energy Buses Penta
Services Solutions
TRUCK DIVISIONS
Group Trucks Technology
Group Trucks Purchasing

Group Executive Board members
Group Trucks Operations Extended Group Management members
1 Chief Digital Office

11 GROUP EXECUTIVE BOARD AND GROUP MANAGEMENT
The CEO is responsible for managing the day-to-day operations of the Remuneration of the Group Executive Board
Volvo Group and is authorized to make decisions on matters that do not AB Volvo’s Annual General Meeting shall, at least every fourth year,
require AB Volvo Board approval. The CEO leads the operations of the resolve on guidelines for remuneration to the members of the Group Exec-
Volvo Group, e.g. through the Group Executive Board, the extended utive Board, based on a proposal from the Board. For information about
Group Management and the cross-functional forums. the guidelines adopted by the Annual General Meeting 2022, please refer
The Group Executive Board is the highest operational decision forum to Note 27 “Personnel” in the Group’s notes in the Annual Report.
and is chaired by the President and CEO of the Volvo Group, Martin Lund-
stedt. Furthermore during 2022, the members of the Group Executive Changes to the Group Executive Board and Group Management
Board are the Deputy CEO, Executive Vice Presidents of the Group Func- On March 15, 2022, Tina Hultkvist replaced Jan Ytterberg, who contin-
tions, Executive Vice Presidents and Presidents of Volvo Trucks, Renault ued as Volvo Group senior advisor, as Chief Financial Officer and joined
Trucks, Mack Trucks, Volvo Construction Equipment and Volvo Energy as the Volvo Group Executive Board. On December 31, 2022, Jan Gurander
well as the Executive Vice Presidents of the Truck Divisions. resigned from his role as Volvo Group Deputy CEO but continued to stand
The members of Group Management report directly to the CEO and available to the President and CEO Martin Lundstedt’s disposal. On Jan-
include the Presidents of Volvo Buses, Volvo Penta, Volvo Autonomous uary 1, 2023, Nina Aresund replaced Sofia Frändberg, who continued as
Solutions (VAS), Volvo Financial Services (VFS) and Arquus respectively. a senior leader for the Volvo Group, as Executive Vice President Group
The Group Executive Board and Group Management meet to align on Legal & Compliance and General Counsel and member of the Volvo Group
Group matters bi-monthly. Executive Board. On February 3, 2023, Tina Hultkvist resigned as Chief
Financial Officer and member of the Volvo Group Executive Board where-
upon Jan Ytterberg stepped in as acting Chief Financial Officer.
The Board of Directors’

visit to the Volvo Group’s
truck assembly plant in
New River Valley, Virginia.
Sustainability and climate related matters The most relevant cross-functional forums and working groups for sus-
Sustainability is of strategic importance to the Group and the accountabil- tainability related matters are:
ity to drive sustainability performance primarily lies with the Truck Divi- • The Group Executive Board, where top sustainability related targets
sions and Business Areas. The organizational structure described in this and ambitions, risks and opportunities are managed. One example is
Corporate Governance Report applies to all strategic topics within the the Volvo Group’s science-based climate targets which are followed
Volvo Group, including climate and sustainability matters. For sustainabil- up in the Group Executive Board every quarter.
ity related matters, the Volvo Group relies on an integrated approach to • The Product Board, headed by the Chief Technology Officer, where
ensure that environmental, social and economic topics are considered in climate related opportunities and risks are managed primarily as part
all relevant decision-making. Opportunities and risks related to sustain- of the transition towards fossil-free transportation.
ability are identified in all Truck Divisions and Business Areas, and may
• The People Board, headed by the Executive Vice President and Head
relate to e.g. government regulation, technology development, customer
of People & Culture, which focuses on all significant employee related
satisfaction and physical risks. The principal risks are consolidated in the
matters such as training, health and safety, diversity, inclusion and
Volvo Group’s enterprise risk management process and managed by the
talent management.
Group Executive Board and the Truck Divisions, Business Areas and
Group Functions. • The Environmental Committee, a delegated committee from Group
On Group level, the work is coordinated by cross-functional forums and Legal & Compliance where Group Functions, Truck Divisions and
working groups assigned by one or several Group Executive Board mem- Business Areas representatives coordinate environmental manage-
bers with representatives from the relevant Truck Divisions and Business ment with the mission to secure the effective work of the Volvo
Areas. These forums and working groups prepare the material for deci- Group’s Environmental Policy and management system.
sion-making at Group Executive Board level, to be executed in the respec- • The Human Rights Board, chaired by the Executive Vice President
tive Truck Divisions, Business Areas and/or Group Functions. Group Communication and the Senior Vice President, Corporate
Responsibility with Group Executive Board members who coordinate
the implementation of the Group’s Human Rights policy and work.
President and CEO Martin Lundstedt together with the Chairman of the
Board Carl-Henric Svanberg, the Board and parts of the Group Execu-
tive Board in front of a Mack Anthem and a Volvo VNL during a visit to
the Volvo Group’s truck assembly plant in New River Valley, Virginia.
Martin Lundstedt Roger Alm Nina Aresund Bruno Blin Andrea Fuder Jens Holtinger Melker Jernberg
President and CEO Executive Vice P
resident Executive Vice P
resident Executive Vice P resident Executive Vice P
resident Executive Vice P resident
Volvo Group and Group Legal & Volvo Group and Volvo Group Trucks Group Trucks Volvo Group and
President Volvo Trucks Compliance and P resident Renault Purchasing and Operations P resident Volvo
General Counsel Trucks Chief Purchasing Construction Equipment
Officer for Volvo Group
Education
MSc, Chalmers Univer- Master of Laws. MBA. MSc and MBA. MSc in Mechanical MSc in Mechanical
sity of Technology Engineering, Chalmers Engineering.
University of
Technology.
Born
1967 1962 1974 1963 1967 1970 1968
Principal work e
xperience
President and CEO of Executive Vice Presi- Member of the Group After having worked Has worked in Quality Executive Vice Presi- Executive Vice Presi-
AB Volvo and member dent Volvo Group and Executive Board since for several companies in and Logistic and held dent Group Trucks dent Volvo Group and
of the Group Executive President Volvo Trucks January 2023. Head of the manufacturing, various senior positions Operations since 2020. President Volvo Con-
Board since October since 2018. Senior Vice Legal and Compliance quality and purchasing at Volkswagen’s Pur- Senior Vice President struction Equipment
2015. President and President Volvo Trucks at Volvo Construction areas, he joined Renault chasing organization Europe & Brazil Manu- since 2018. CEO and
CEO of Scania 2012– Europe 2016–2018. Equipment 2020– Trucks Purchasing in since 1992. Head of facturing Group Trucks President at Höganäs
2015. Prior to that, Senior Vice President 2022. Corporate Legal 1999. Has held several Purchasing at Scania Operations 2016– AB 2014–2017. Execu-
various managerial Volvo Group Trucks Counsel at AB Volvo senior positions over 2012–2016. Executive 2020. Vice President tive Vice President,
positions at Scania Northern Europe 2007–2014. the years until being Vice President Volvo Powertrain Production Business Area EMEA at
since 1992. 2015–2016. President appointed Senior Vice Group Trucks Purchas- Skövde Plant 2012– SSAB 2011–2014. Has
Co-chairman of the UN Volvo Group Trucks President of Volvo ing and Chief Purchas- 2016. Has held several held various positions at
Secretary-General’s Latin America 2012– Group Purchasing. Has ing Officer for Volvo leading positions within Scania AB since 1989,
High-Level Advisory 2014. President Volvo also served as Senior Group since 2017. the Volvo Group. Mem- most recently as Senior
Group on Sustainable Trucks Latin America Vice President, Group Member of the Group ber of the Group Execu- Vice President Buses
Transport 2015–2016. 2010–2011. Managing Truck Sales South Executive Board since tive Board since Octo- and Coaches at Scania
Previous Board Director Volvo Trucks, Europe from January 2017. With Volvo since ber 2020. With Volvo AB 2007-2011. Member
assignments include Region East 2004– 2013–2016. Executive 2017. since 1995. of the Group Executive
Board member of 2009. Member of the Vice President Volvo Board since January
Concentric AB. Group Executive Board Group and President 2018. With Volvo since
since January 2019. Renault Trucks since 2018.
With Volvo since 1989. 2016. Member of the
since March 2016. With
Volvo since 1999.
Board memberships
Board Chairman: Permo- Secretary to the AB Member of the Board of

bil AB and the European Volvo Board since Janu- the German-Swedish
Automobile Manufactur- ary 2023. Chamber of Commerce.
ers’ Association (ACEA
CV BOD).
Board Member: Autoliv
Inc. and the Confedera-
tion of Swedish Enter-
prise.
Member: European
Round Table of Industry
(ERT) and the Royal
Swedish Academy of
Engineering Sciences
(IVA).
251,681 Series B 398 Series A shares, 11,487 Series B shares. 41,094 Series B shares. 1,600 Series A shares, 23,529 Series B 42,620 Series B shares.
shares, 34,414 Series B shares. 62,211 Series B shares. shares.
300,000 call options in
Series B shares.
Diana Niu Scott Rafkin Joachim Rosenberg Lars Stenqvist Martin Weissburg Kina Wileke Jan Ytterberg
Executive Vice P
resident Executive Vice Executive Vice President Executive Vice P
resident Acting CFO
Group People & Culture President and Chief Volvo Group Strategic Group Trucks Volvo Group and Group Communication
Digital Officer for Volvo Initiatives and President Technology and Volvo President Mack Trucks
Group Volvo Energy Group Chief
Technology Officer
Education
MBA and BA in BBA (Bachelors in MSc Industrial MSc Industrial Master of Business MA in journalism. MSc in Business Admin-
Economics. Business Administra- Engineering and Engineering. Management, BSc istration and Economics.
tion), University of Mas- Management, MSc Industrial Management.
sachusetts at Amherst. Financial Economics,
MSc Business and Eco-
nomics.
Born
1966 1969 1970 1967 1962 1974 1961
Principal work e
xperience
Executive Vice Presi- Executive Vice Presi- Executive Vice Presi- Executive Vice Presi- President Mack Trucks Responsible for Group Senior Advisor Volvo
dent Group People & dent and Chief Digital dent Volvo Group Stra- dent Group Trucks since 2018. President Communications since Group since 2022.
Culture since 2019. Officer Volvo Group tegic Initiatives since Technology and Volvo Volvo Construction 2018. With the Volvo Executive Vice President
Joined Volvo Group in since 2020. President 2023. Executive Vice Group Chief Technology Equipment 2014–2017. Group since 2008, Group Finance and CFO
February 2005, with Volvo Financial Ser- President Volvo Group Officer since October President & CEO Volvo most recently as Senior AB Volvo 2018–2022.
SVP HR jobs in two vices 2014–2019. Chief and President Volvo 2016. Head of R&D and Financial Services Vice President Brand, CFO of Husqvarna
Business Areas, Trucks Financial Officer Volvo Energy since 2021. CTO at Volkswagen 2010–2014. President Communication & Group 2015–2018.
Asia Pacific and Volvo Financial Services Executive Vice Presi- Truck & Bus 2015– Volvo Financial Ser- Marketing Volvo Penta Executive Vice Presi-
Construction Equip- 2010–2014. dent Volvo Group and 2016. Senior Vice Pres- vices Americas 2005– 2016–2017, Senior dent and CFO of Scania
ment. Worked for Tele- Senior Vice President Chairman UD Trucks ident Vehicle Definition 2010. Prior to Volvo, Vice President External Group 2006–2015.
fonaktiebolaget LM Global Operations 2016–2021. Executive R&D at Scania 2007– President Woodard Corporate Communi Various positions in
Ericsson from July Volvo Financial Ser- Vice President Group 2015. Prior to that vari- LLC, President Great cation Volvo Group accounting and finance,
1993 to January 2005 vices 2003–2009. Trucks Sales 2015– ous senior positions at Dane Financial Services 2012–2016 and CEO Scania Group 1987–
in a number of leader- Senior Vice President 2016. Executive Vice Scania since 1992. and Senior Vice Presi- Communication Volvo 2006. With Volvo since
ship positions. Member Risk Volvo Financial President Group Trucks Member of the Group dent ORIX. Member of Group 2008–2012. 2018.
of the Group Executive Services 2001–2002. Sales & Marketing Executive Board since the Group Executive Has held a number of
Board since January Prior to 2001, held sev- APAC 2012–2014. October 2016. With Board since March positions in T V4 Group
2019. eral senior positions President Volvo Group Volvo since October 2016. With Volvo since 1998–2008. Member
with Volvo Car Finance Asia Truck Operations 2016. Fellow of the 2005. of the Group Executive
North America. Prior to 2007–2011. Vice Presi- Royal Swedish Acad- Board since 2018.
Volvo, Business Assur- dent Volvo Group Alli- emy of Engineering Sci-
ance and Capital Mar- ance Office 2007. Vice ences (IVA).
kets Manager Coopers President Volvo Power-
& Lybrand LLC. Mem- train 2005–2007. Con-
ber of the Group Execu- sultant with McKinsey
tive Board since Janu- & Company 1996–
ary 2020. With Volvo 2004. Member of the
since 2001. Group Executive Board
since 2012. With Volvo
since 2005.
Board memberships
Member of the Board of Board Member of

Concentric AB since International Chamber
April 2021. of Commerce (ICC),
Sweden.
65,534 Series B 50,403 Series B 87 Series A shares, 42,727 Series B shares. 140,985 Series B 344 Series A shares, 28,392 Series B shares.
shares. shares. 244,913 Series B shares. 23,875 Series B
shares. shares.
Extended Group Management
Nils Jaeger Emmanuel Levacher Heléne Mellquist Marcio Pedroso Anna Westerberg
President of Volvo Autonomous President and CEO of Arquus President of Volvo Penta President of Volvo Financial President of Volvo Buses
Solutions Services
Born
1969 1962 1964 1968 1975
Principal work e
xperience
Responsible for Volvo Autonomous During his 33 years in the automo- 2019–2020 Senior Vice President Volvo Financial Services President of Volvo Buses since
Solutions since 2020. With the bile industry (Renault Trucks, President of Volvo Trucks Europe, since 2020. From 2015–2019 2021. Senior Vice President
Volvo Group since 2014, most Renault, Volvo), Emmanuel has 2016–2019 Senior Vice President Senior Vice President Volvo Finan- Volvo Group Connected Solutions
recently as President of Volvo held multiple operational and stra- of Volvo Trucks International and cial Services Americas, Managing 2017–2021. Prior to that Presi-
Financial Services EMEA. Prior to tegic functions in contact with 2012–2016 CEO of TransAtlantic Director Brazil and Chile 2011– dent for Volvo Group Venture Cap-
joining Volvo Group, several lead- markets on the five continents. He AB. 1988–2011 Heléne has held 2014 and Vice President Latin ital 2014–2017 and Vice Presi-
ing positions within Deere & Com- has also built a solid experience several leading position within the America markets 2010–2011. dent, Product Management
pany, including the position as Vice with French and foreign govern- Volvo Group. Held other senior positions and Industrial, Volvo Penta 2010–
President International Finance, ments, state authorities and public special assignments across Ameri- 2014. With Volvo since 2009.
Europe, CIS, N&ME EAST, North- and diplomatic institutions. cas and Europe for the Volvo
ern Africa and Global Trade Group from 2001–2010. Prior to
Finance. 2001, held various leadership
positions outside of Volvo in insur-
ance and corporate finance.
12 INTERNAL CONTROL OVER FINANCIAL REPORTING
The Board is responsible for the internal controls according to the Swedish Volvo also has an internal audit function, Group Internal Audit, which
Companies Act and the Code. The purpose of this report is to provide among other things, independently monitors that companies in the Group
share-holders and other interested parties with an understanding of how follow the principles and rules that are stated in the Group’s directives,
internal control is organized at Volvo with regard to financial reporting. The policies and instructions for financial reporting. The head of the Group
description has been designed in accordance with the Swedish Annual Internal Audit function reports directly to the CEO, to the Group’s General
Accounts Act and is thus limited to internal control over financial reporting. Counsel and the Board’s Audit Committee.
Introduction Control environment

Volvo has a function for internal control with the objective to provide sup- Fundamental to Volvo’s control environment is the business culture that is
port for management, allowing them to continuously provide solid internal established within the Group and in which managers and employees
controls relating to financial reporting. Work that is conducted through operate. Volvo works actively on communication and training regarding
this function is primarily based to ensure compliance with directives and
policies, and to create effective conditions for specific control activities in
key processes related to financial reporting. The Audit Committee is reg-
s
ularly informed of the results of the work performed by the Internal Con- ncie Pla
cie
efi g na
trol function within Volvo with regard to risks, control activities and fol- d
of orti
n focnd
u
low-up on the financial reporting. ep
se are
d n
an atio
s
lec as
r
i
ty
ed
Volvo Group Internal

ear
Rem
Control Programme
ly
Volvo Group Internal Control Program FPP* VICS*

Yearly evaluation of the effectiveness of internal control
Test
over financial reporting (ICFR) within the Volvo Group.

en ol
o
* F PP – Financial Policies and Procedures;

fd
sm n tr
t
VICS – Volvo Internal Control Standard

et a
e s co
(v n
il s
ali sa s
da
tio o c e s n as
n) P r sig
de
the company’s basic values included in the Group’s Code of Conduct, to responsibility for the daily financial reporting and works to ensure a uniform
ensure that the business conducted by the organization is characterized application of the Group’s policies, principles and instructions for the financial
by good ethics, integrity and is in compliance with the law. reporting and to identify and communicate shortcomings and areas of
The foundation of the internal control process relating to the financial improvement in the processes for financial reporting.
reporting is based on the Group’s directives, policies and instructions, as
well as the organization’s responsibility and authority structure. The princi- Follow-up
ples for Volvo’s internal controls and directives and policies for the financial Ongoing responsibility for follow-up rests with the Group’s financial
reporting are contained in the Volvo Group Management System, a group reporting function. In addition, the Group Internal Audit and the Internal
wide management system comprising, among other things, instructions, Control function conduct review and follow-up activities in accordance
rules and principles. with what is described in the introduction of this report. More specifically,
the Internal Control function runs and coordinates evaluation activities
Risk assessment through the “Volvo Group Internal Control Program”, with the purpose of
Risks relating to financial reporting are evaluated and monitored by the systematically evaluating the quality of the internal control over financial
Group Executive Board and Group Management as well as the Board reporting on an annual basis. An annual evaluation plan is established and
through the Audit Committee, based on assessments by management, presented to the Audit Committee. This evaluation program comprises
inter alia through identifying risks that could be considered as material, three main areas:
and through the mitigating generic controls. The risk assessment is based 1. Group-wide controls: Self-assessment procedure carried out by man-
on a number of criteria, such as the complexity of the accounting princi- agement teams at business area, Group Function and company levels.
ples, revaluation principles of assets or liabilities, complex and/or chang- The main areas evaluated are compliance with the Group’s financial
ing business circumstances, etc. The risks together with mitigating directives and policies and the Group’s Code of Conduct.
generic controls are collected in a framework for internal control over
2. P rocess controls at transaction level: Processes related to the financial
financial reporting, Volvo Internal Control Standard (VICS).
reporting are evaluated by testing procedures/controls based on the
framework for internal control over financial reporting, Volvo Internal
Control activities
Control Standards (VICS).
In addition to the Board and its Audit Committee, the management
3.
General IT controls: Processes for maintenance, development and
groups and other decision-making bodies in the Group constitute overall
access management of financial applications are evaluated by testing
supervisory bodies. Business processes are designed to ensure that
procedures and controls.
potential errors or deviations in the financial reporting are prevented, dis-
covered and corrected by implementing control activities that correspond
to the generic controls defined in the VICS framework. Control activities The results of the evaluation activities are reported to the Group Executive
range from review of outcome results against earlier forecasts and esti- Board, the Group Management and the Audit Committee. During 2022,
mates in management group meetings to specific reconciliation of accounts the Internal Control function reported two times to the Audit Committee
and analyzes of the ongoing processes for financial reporting. regarding the annual evaluation plan, status on outstanding issues and
final assessment of the control environment.
Information and communication
Policies and instructions relating to the financial reporting are updated
and communicated on a regular basis from management to all affected Göteborg, February 27, 2023
employees. The Group’s financial reporting function has direct operating
AB Volvo (publ)
The Board of Directors
AUDITOR’S REPORT ON THE CORPORATE GOVERNANCE STATEMENT
To the general meeting of the shareholders of AB Volvo (publ) Opinions

corporate identity number 556012-5790 A corporate governance statement has been prepared. Disclosures in
accordance with chapter 6 section 6 the second paragraph points 2–6
Engagement and responsibility the Annual Accounts Act and chapter 7 section 31 the second paragraph
It is the board of directors who is responsible for the corporate gover- the same law are consistent with the annual accounts and the consoli-
nance statement for the financial year 2022-01-01–2022-12-31 on dated accounts and are in accordance with the Annual Accounts Act.
pages 186–203 and that it has been prepared in accordance with the
Annual Accounts Act.
Göteborg, February 27, 2023

The scope of the audit
Our examination has been conducted in accordance with FAR’s standard Deloitte AB
RevR 16 The auditor’s examination of the corporate governance statement.
Signature on Swedish original
This means that our examination of the corporate governance statement
is different and substantially less in scope than an audit conducted in Jan Nilsson
accordance with International Standards on Auditing and generally Authorized Public Accountant
accepted auditing standards in Sweden. We believe that the examination This is a translation of the Swedish language original. In the event of any differences
has provided us with sufficient basis for our opinions. between this translation and the Swedish language original, the latter shall prevail.
204
VOLVO GROUP 2022
OTHER INFORMATION
Proposed guidelines for remuneration

to the Volvo Group Executive Board
Following a review of the long-term incentive program and the remunera- Other benefits may include, for example, life insurance, medical and
tion structure, the Board of Directors proposes that the Annual General health insurance, and company cars. Premiums and other costs relating to
Meeting adopts the following guidelines for remuneration to senior exec- such benefits may amount to not more than 3 % of the annual base salary
utives. As compared to the current remuneration guidelines, adopted at for the President and CEO.
the Annual General Meeting 2022, the proposed guidelines are simpli- For other Executives, pension benefits shall be granted on the basis of
fied, since the details of the Board of Director’s proposal for a new long- a defined contribution plan except where law or collective agreement
term incentive program will be provided separately to the Annual General requires a defined benefit pension. The pensionable salary shall include
Meeting. base salary and, where required by law or collective agreement, incen-
tives. The total pension contributions for other Executives shall amount
The Boards’s proposal for guidelines for remuneration to the Volvo to not more than 35 % of base salary, unless a higher percentage results
Group Executive Board from the application of law or collective agreement.
These guidelines concern the remuneration and other terms of employ- Other benefits may include, for example, life insurance, medical and
ment for the members of the Volvo Group Executive Board (“Executives”). health insurance, and company car. Premiums and other costs relating to
The guidelines are forward-looking, i.e. they are applicable to remuner- such benefits may amount to not more than 10 % of the annual base sal-
ation agreed, and amendments to remuneration already agreed, after the ary for other Executives.
proposed adoption of these guidelines by the 2023 annual general meeting. Remuneration for Executives that reside outside Sweden or reside in
These guidelines do not apply to any remuneration separately decided or Sweden but having a material connection to or having been residing in a
approved by the general meeting. country other than Sweden may be duly adjusted to comply with manda-
tory rules or local practice, taking into account, to the extent possible, the
The guidelines’ promotion of the Volvo Group’s business strategy, overall purpose of these guidelines.
long-term interests and sustainability In addition to remuneration set out above, Executives who relocate for
It is a prerequisite for the successful implementation of the Volvo Group’s the purposes of the position or who work in other multiple countries may
business strategy and safeguarding of its long-term interests, including its also receive such remuneration and benefits as are reasonable to reflect
sustainability, that the Group can recruit, retain and develop senior man- the special circumstances associated with such arrangements, taking
agement. These guidelines enable AB Volvo to offer Executives a compe into account the overall purpose of these guidelines and alignment with
titive total remuneration. More information regarding the Volvo Group’s the general policies and practices within the Volvo Group applicable to
business strategy is available in the Volvo Group Annual Report. cross border work.
Types of remuneration Termination of employment

Volvo Group remuneration to Executives shall consist of the following Upon termination of an Executive’s employment, the notice period may
components: base salary, short-term and long-term variable incentives, not exceed twelve months. Base salary during the notice period and sev-
pension benefits and other benefits. erance pay may not together exceed an amount corresponding to the base
Short-term incentives may, for the President and CEO, amount to a max- salary for two years.
imum of 100 % of the base salary and, for other Executives, a maximum of Executives that reside outside Sweden or reside in Sweden but having
80 % of the base salary. a material connection to or having been residing in a country other than
Long-term incentives may, for the President and CEO, amount to a max- Sweden may be offered notice periods for termination and severance pay-
imum of 150 % of the base salary and, for other Executives, a maximum ment as are reasonable to reflect the special circumstances, taking into
of 80 % of the base salary. Current and proposed long-term incentives are account the overall purpose of these guidelines and alignment with the
described and addressed separately by the 2023 general meeting. general policies and practices within the Volvo Group.
Further cash remuneration may be awarded in extraordinary circum-
stances, provided that such extraordinary arrangements are limited in time Criteria for awarding variable remuneration, etc.
and only made on an individual basis, either for the purpose of recruiting or Plans for long-term and short-term incentives shall be linked to predeter-
retaining Executives, or as remuneration for extraordinary performance mined and measurable criteria, to be determined by the Board of Direc-
beyond the individual’s ordinary tasks. Such remuneration may not exceed tors. The criteria – which for example may relate to EBIT, cash flow, return
an amount corresponding to 100 % of the annual base salary. Any resolu- on capital employed or similar ratios, or sustainability targets – shall be
tion on such remuneration shall be made by the Board of Directors based devised to promote the Volvo Group’s strategy and long-term value cre-
on a proposal from the Remuneration Committee. ation and strengthen the link between achieved performance targets and
For the President and CEO, pension benefits shall be granted on the reward. The satisfaction of the criteria shall be measured over periods of
basis of a defined contribution plan. The pensionable salary shall include one or multiple years, depending on the type of incentive plan.
base salary only. The pension contributions for the President and CEO To which extent the criteria for awarding incentives has been satisfied
attributable to the annual base salary shall amount to not more than 35 % shall be determined when the relevant measurement period has ended.
of the base salary. The Board of Directors is responsible for the determination of the incen-
tives to be paid, if any, to all Executives.
VOLVO GROUP 2022 205 OTHER INFORMATION
Claw-back and adjustments Derogation from the guidelines

Executives participating in the Volvo Group’s short-term and long-term The Board of Directors may temporarily resolve to derogate from the guide-
incentive plans are obligated, in certain circumstances and for specified lines, in whole or in part, if in a specific case there is special cause for the
periods of time, to repay, partially or in its entirety, incentive awards derogation and a derogation is necessary to serve the Volvo Group’s long-
already paid if payments have been made by mistake or been based on term interests, including its sustainability, or to ensure the Group’s financial
intentionally falsified data or in the event of material restatement of the viability. As set out above, the Remuneration Committee’s tasks include
Volvo Group’s financial results. Furthermore, the Board of Directors may preparing the Board of Directors’ resolutions in remuneration-related mat-
decide on adjustments of pay-out under the incentive plans (before pay- ters. This includes any resolutions to derogate from the guidelines.
ment has been made) in case of extraordinary circumstances or to adjust
for unforeseen one-timers. Description of changes to the guidelines, etc.
During 2022, the company has carefully considered feedback received
Salary and employment conditions for employees from shareholders and proxy advisors in connection with the general
In the preparation of the Board of Directors’ proposal for these guidelines, meeting 2022 and otherwise during the year. As a result of this dialogue,
the Board has considered that the various benefits offered to the Execu- the Board and the Remuneration Committee have during 2022 per-
tives need to be aligned with the general structures applicable for employ- formed a review of the design of the Group’s long-term incentives. As a
ees of AB Volvo at levels that are competitive in the market. Thus, salary result of this review, the Board proposes the adoption of a new long-term
and employment conditions for other AB Volvo employees have been incentive plan with a three-year performance period, to be implemented
taken into account by including information thereon in the Remuneration starting 2023. It is proposed that the transition into a new long-term
Committee’s and the Board of Directors’ basis of decision when evaluating incentive plan with a three-year performance period will be made in paral-
whether the guidelines and the limitations set out herein are appropriate. lel with a two-year phasing out of the current long-term incentive plan.
For further information, please refer to the Board’s proposal for a new
The decision-making process to determine, long-term incentive plan.
review and implement the guidelines For further information about the dialogue with shareholders and proxy
The Board of Directors has established a Remuneration Committee. The advisors, please refer to the Remuneration Report 2022. Additional infor-
Committee’s tasks include preparing the Board of Directors’ decision to mation regarding executive remuneration in the Volvo Group is available in
propose guidelines for executive remuneration. The Board of Directors the Volvo Group Annual Report.
shall prepare a proposal for new guidelines at least every fourth year and
submit it to the general meeting. The guidelines shall be in force until new
guidelines are adopted by the general meeting. The Remuneration Com-
mittee shall also monitor and evaluate plans for variable remuneration for
Executives, the application of the guidelines for executive remuneration
as well as the current remuneration structures and compensation levels in
the Group. The members of the Remuneration Committee are indepen-
dent of AB Volvo and its executive management. The President and CEO
and other members of the executive management do not participate in the
Board of Directors’ processing of and resolutions regarding remunera-
tion-related matters in so far as they are affected by such matters.
Proposed disposition of unappropriated earnings

AB Volvo SEK According to the Board of Directors’ opinion, the proposed dividend
will not affect the Company’s or the Group’s ability to fulfill their payment
Retained earnings 34,875,417,001.06 obligations and the Company and the Group are well prepared to handle
Income for the period 2022 24,628,499,995.20 both changes in the liquidity and unexpected events.
Total retained earnings 59,503,916,996.26 The Board of Directors is of the opinion that the Company and the Group
have capacity to assume future business risks as well as to bear contingent
The Board of Directors proposes that the losses. The proposed dividend is not expected to adversely affect the
above sum be disposed of as follows: Company’s and the Group’s ability to make further commercially justified
investments in accordance with the Board of Directors’ plans.
SEK In addition to what has been stated above, the Board of Directors has
considered other known circumstances which may be of importance for
To the shareholders, an ordinary dividend
of SEK 7.00 per share and an extraordinary
the Company’s and the Group’s financial position. In doing so, no circum-
dividend of SEK 7.00 per share, for a total of 28,468,329,176.00 stance has appeared that does not justify the proposed dividend.
To be carried forward 31,035,587,820.26 If the Annual General Meeting resolves in accordance with the Board
Total 59,503,916,996.26 of Directors’ proposal, SEK 31,035,587,820.26 will remain of the C ompany’s
non-restricted equity, calculated as per year end 2022.
The record date for determining who is entitled to receive dividends is The Board of Directors has the view that the Company’s and the Group’s
proposed to be Thursday April 6, 2023. shareholders’ equity will, after the proposed dividend, be sufficient in rela-
In view of the Board of Directors’ proposal to the Annual General M eeting tion to the nature, scope and risks of the business.
to be held April 4, 2023 to decide on the distribution of an ordinary dividend The Board of Directors and the President certify that the annual finan-
of SEK 7.00 per share and an extraordinary dividend of SEK 7.00 per share, cial report has been prepared in accordance with generally accepted
the Board of Directors hereby makes the following statement in accordance accounting principles and that the consolidated accounts have been pre-
with Chapter 18, Section 4 of the Swedish Companies Act. pared in accordance with the international set of accounting standards
The Board of Directors concludes that the Company’s restricted equity is referred to in Regulation (EC) No 1606/2002 of the European Parliament
fully covered after the proposed dividend. The Board of Directors further and of the Council of 19 July 2002 on the application of international
concludes that the proposed dividend is justifiable in view of the parameters accounting standards, and give a true and fair view of the position and
set out in Chapter 17, Section 3, second and third paragraphs of the Swedish profit or loss of the Company and the Group, and that the management
Companies Act. In connection herewith, the Board of Directors wishes to report for the Company and for the Group gives a fair review of the devel-
point out the following: opment and performance of the business, position and profit or loss of the
The proposed dividend reduces the Company’s solvency from 62.9% Company and the Group, and describes the principal risks and uncertain-
to 50.0% and the Group’s solvency from 26.4% to 22.9%, calculated as ties that the Company and the companies in the Group face.
per year end 2022. The Board of Directors considers this solvency to be
satisfactory with regard to the business in which the Group is active.
Carl-Henric Svanberg
Board Chairman
Matti Alahuhta Jan Carlson Eric Elzvik

Board member Board member Board member
Martha Finn Brooks Kurt Jofs Martin Lundstedt

Board member Board member President, CEO and Board member
Kathryn V. Marinello Martina Merz Hanne de Mora

Helena Stjernholm Lars Ask Mats Henning

Our audit report was issued on February 27, 2023

Deloitte AB
Jan Nilsson
Authorized Public Accountant
Audit report for AB Volvo (publ)

To the general meeting of the shareholders of AB Volvo (publ) corporate Key Audit Matters
identity number 556012-5790 Key audit matters of the audit are those matters that, in our professional
judgment, were of most significance in our audit of the annual accounts
REPORT ON THE ANNUAL ACCOUNTS AND and consolidated accounts of the current period. These matters were
CONSOLIDATED ACCOUNTS addressed in the context of our audit of, and in forming our opinion
thereon, the annual accounts and consolidated accounts as a whole, but
Opinions we do not provide a separate opinion on these matters.
We have audited the annual accounts and consolidated accounts of AB
Volvo (publ) for the financial year 2022-01-01–2022-12-31. The annual Allowance for Expected Credit Losses for Receivables in China
accounts and consolidated accounts of the company are included on Risk description
pages 42–146, 204–206 and 212–214 in this document. The downturn in the Chinese construction equipment market is impacting
In our opinion, the annual accounts have been prepared in accordance customers’ and dealers’ profitability negatively. A substantial part of the
with the Annual Accounts Act and present fairly, in all material respects, Volvo Group’s accounts receivable is related to customers in this market,
the financial position of the parent company as of 31 December 2022 and and the determination of allowance for expected credit losses for receiv-
its financial performance and cash flow for the year then ended in accor- ables require management to make significant qualitative judgments,
dance with the Annual Accounts Act. The consolidated accounts have including assumptions regarding current and forecasted market condi-
been prepared in accordance with the Annual Accounts Act and present tions and individual assessment of the largest customers financial perfor-
fairly, in all material respects, the financial position of the group as of 31 mance. There is a high degree of uncertainty and subjectivity in determin-
December 2022 and their financial performance and cash flow for the ing the severity and duration of the decreased market activity, and the
year then ended in accordance with International Financial Reporting potential impact on the recoverability of the Group’s receivables.
Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The Volvo Group applies a simplified expected credit loss model for
The statutory administration report is consistent with the other parts of the accounts receivables, under which the loss allowance is measured at an
annual accounts and consolidated accounts. amount equal to lifetime expected credit losses. The allowance is recorded
We therefore recommend that the general meeting of shareholders at initial recognition and is reassessed during the contract period. The
adopts the income statement and balance sheet for the parent company accounting principles for expected credit losses and management’s sig-
and the group. nificant judgments applied in relation thereto are further described in
Our opinions in this report on the annual accounts and consolidated Note 16 “Receivables” to the annual report.
accounts are consistent with the content of the additional report that has
been submitted to the parent company’s audit committee in accordance Our Audit Approach
with the Audit Regulation (537/2014) Article 11. Our audit procedures included, but were not limited to:
• Evaluating the design and implementation of relevant internal controls
Basis for Opinions implemented within the process.
We conducted our audit in accordance with International Standards on • Assessing the reasonableness of the expected credit loss methodol-
Auditing (ISA) and generally accepted auditing standards in Sweden. Our ogy including reviewing management’s policies, procedures, and
responsibilities under those standards are further described in the Audi- accounting position papers.
tor’s Responsibilities section. We are independent of the parent company
• Obtaining third-party confirmations from a selection of customers
and the group in accordance with professional ethics for accountants in
validating the existence and valuation of receivables.
Sweden and have otherwise fulfilled our ethical responsibilities in accor-
dance with these requirements. This includes that, based on the best of • Performing audit procedures to test the completeness and accuracy
our knowledge and belief, no prohibited services referred to in the Audit of the underlying data and information used in management’s calcula-
Regulation (537/2014) Article 5.1 have been provided to the audited com- tion for the allowance for expected credit losses.
pany or, where applicable, its parent company or its controlled companies • Assessing the reasonableness of management’s assumptions in rela-
within the EU. tion to credit risk on a portfolio level as well as at customer-by-cus-
We believe that the audit evidence we have obtained is sufficient and tomer level through inspection of documentation supporting key
appropriate to provide a basis for our opinions. assumptions, as wells as by evaluating the financial position of a
selection of customer.
Provisions for losses from claims from customers and other third parties In connection with our audit of the annual accounts and consolidated
– EC Antitrust Settlement accounts, our responsibility is to read the information identified above and
Risk description consider whether the information is materially inconsistent with the
In July 2016, the European Commission and Volvo Group reached a settle annual accounts and consolidated accounts. In this procedure we also take
ment with regards to antitrust allegations made by the European Com- into account our knowledge otherwise obtained in the audit and assess
mission against Volvo Group and other companies in the truck manufac- whether the information otherwise appears to be materially misstated.
turing industry. Following the adoption of the European Commission’s If we, based on the work performed concerning this information, con-
settlement decision, the Company has received and may continue to clude that there is a material misstatement of this other information, we
receive a significant number of third-party damage claims from custom- are required to report that fact. We have nothing to report in this regard.
ers and other third parties alleging that they suffered loss, directly or indi-
rectly, by reason of the conduct covered in the decision. Responsibilities of the Board of Directors and the President
The accounting principles for legal disputes is further described in Note The Board of Directors and the President are responsible for the prepara-
21 “Other Provisions” and Note 24 “Contingent Liabilities” to the annual tion of the annual accounts and consolidated accounts and that they give
report. The recognition and measurement of any provisions recorded or a fair presentation in accordance with the Annual Accounts Act and, con-
quantification of contingent liabilities to be disclosed for such legal dis- cerning the consolidated accounts, in accordance with IFRS as adopted
putes is complicated, requires expert legal input, and involves consider- by the EU. The Board of Directors and the President are also responsible
ation of potential future outcomes of the claims which at this stage are for such internal control as they determine is necessary to enable the
uncertain. Due to these complexities, the valuation of any such provisions or preparation of annual accounts and consolidated accounts that are free
contingent liabilities is significantly impacted by management’s ultimate from material misstatement, whether due to fraud or error.
judgments and best estimates. On December 31, 2022, the Company has In preparing the annual accounts and consolidated accounts, The
not been able to make a reliable estimate of the amount of any provision or Board of Directors and the President are responsible for the assessment
contingent liability that could arise from these claims, save for the amount of the company’s and the group’s ability to continue as a going concern.
reflected in the provision recorded in fiscal year 2022 which is described They disclose, as applicable, matters related to going concern and using
in Note 21 “Other Provisions” and Note 24 “Contingent Liabilities”. the going concern basis of accounting. The going concern basis of
accounting is however not applied if the Board of Directors and the Pres-
Our Audit Approach ident intends to liquidate the company, to cease operations, or has no real-
Our audit procedures included, but were not limited to: istic alternative but to do so.
• Holding discussions with management and audit the relevant docu- The Audit Committee shall, without prejudice to the Board of Director’s
mentation and conclude how management and the board assessed responsibilities and tasks in general, among other things oversee the
the claims. company’s financial reporting process.
• Holding discussions with internal legal department and with Volvo
Group’s external legal advisors in order to obtain an understanding Auditor’s responsibility
of matters relevant to the claims. Our objectives are to obtain reasonable assurance about whether the
annual accounts and consolidated accounts as a whole are free from
• Reviewing internal minutes and relevant assessments prepared for
material misstatement, whether due to fraud or error, and to issue an audi-
management and Board to corroborate the consistency of information
tor’s report that includes our opinions. Reasonable assurance is a high
received.
level of assurance, but is not a guarantee that an audit conducted in accor-
• Assessing the appropriateness of the Company’s final accounting dance with ISAs and generally accepted auditing standards in Sweden will
conclusions. always detect a material misstatement when it exists. Misstatements can
• Assessing the adequacy of the disclosures around the legal proceedings. arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of these annual accounts and
Other information than the annual accounts and consolidated accounts
consolidated accounts.
This document also contains other information than the annual accounts and
A further description of our responsibilities for the audit of the annual
consolidated accounts and is found on pages 1-41, 147-203, 207-211 and
accounts and consolidated accounts is located at the Swedish Inspec-
215-223. The Board of Directors and the President are responsible for this
torate of Auditors website: www.revisorsinspektionen.se/revisornsans-
other information.
var. This description forms part of the auditor’s report.
Our opinion on the annual accounts and consolidated accounts does
not cover this other information and we do not express any form of assur-
ance conclusion regarding this other information.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Our objective concerning the audit of the proposed appropriations of the
company’s profit or loss, and thereby our opinion about this, is to assess
Opinions with reasonable degree of assurance whether the proposal is in accor-
In addition to our audit of the annual accounts and consolidated accounts, dance with the Companies Act.
we have also audited the administration of the Board of Directors and the Reasonable assurance is a high level of assurance, but is not a guarantee
President of AB Volvo (publ) for the financial year 2022-01-01–2022-12- that an audit conducted in accordance with generally accepted auditing
31 and the proposed appropriations of the company’s profit or loss. standards in Sweden will always detect actions or omissions that can give
We recommend to the general meeting of shareholders that the profit rise to liability to the company, or that the proposed appropriations of the
to be appropriated in accordance with the proposal in the statutory company’s profit or loss are not in accordance with the Companies Act.
administration report and that the members of the Board of Directors and A further description of our responsibilities for the audit of the manage-
the President be discharged from liability for the financial year. ment’s administration is located at the Swedish Inspectorate of Auditors
website: www.revisorsinspektionen.se/revisornsansvar. This description
Basis for Opinions forms part of the auditor’s report.
We conducted the audit in accordance with generally accepted auditing
standards in Sweden. Our responsibilities under those standards are fur- THE AUDITOR’S EXAMINATION OF THE ESEF REPORT
ther described in the Auditor’s Responsibilities section. We are indepen-
dent of the parent company and the group in accordance with profes- Opinion
sional ethics for accountants in Sweden and have otherwise fulfilled our In addition to our audit of the annual accounts and consolidated accounts,
ethical responsibilities in accordance with these requirements. we have also examined that the Board of Directors and the President have
We believe that the audit evidence we have obtained is sufficient and prepared the annual accounts and consolidated accounts in a format that
appropriate to provide a basis for our opinions. enables uniform electronic reporting (the Esef report) pursuant to Chapter
16, Section 4 a of the Swedish Securities Market Act (2007:528) for AB
Responsibilities of the Board of Directors and the President Volvo (publ) for the financial year 2022-01-01–2022-12-31.
The Board of Directors and President are responsible for the proposal for Our examination and our opinion relate only to the statutory require-
appropriations of the company’s profit or loss. At the proposal of a dividend, ments. In our opinion, the Esef report has been prepared in a format that,
this includes an assessment of whether the dividend is justifiable consider- in all material respects, enables uniform electronic reporting.
ing the requirements which the company’s and the group’s type of opera-
tions, size and risks place on the size of the parent company’s and the Basis for opinion
group’s equity, consolidation requirements, liquidity and position in general. We have performed the examination in accordance with FAR’s recommen-
The Board of Directors is responsible for the company’s organization dation RevR 18 Examination of the Esef report. Our responsibility under
and the administration of the company’s affairs. This includes among other this recommendation is described in more detail in the Auditors’ responsi-
things continuous assessment of the company’s and the group’s financial bility section. We are independent of AB Volvo (publ) in accordance with
situation and ensuring that the company’s organization is designed so that professional ethics for accountants in Sweden and have otherwise fulfilled
the accounting, management of assets and the company’s financial affairs our ethical responsibilities in accordance with these requirements.
otherwise are controlled in a reassuring manner. The President shall man- We believe that the evidence we have obtained is sufficient and appro-
age the ongoing administration according to the Board of Directors’ guide- priate to provide a basis for our opinion.
lines and instructions and among other matters take measures that are
necessary to fulfill the company’s accounting in accordance with law and Responsibilities of the Board of Directors and the President
handle the management of assets in a reassuring manner. The Board of Directors and the President are responsible for the prepara-
tion of the Esef report in accordance with the Chapter 16, Section 4 a of
Auditor’s responsibility the Swedish Securities Market Act (2007:528), and for such internal con-
Our objective concerning the audit of the administration, and thereby our trol that the Board of Directors and the President determine is necessary
opinion about discharge from liability, is to obtain audit evidence to assess to prepare the Esef report without material misstatements, whether due
with a reasonable degree of assurance whether any member of the Board to fraud or error.
of Directors or the President in any material respect:
• has undertaken any action or been guilty of any omission which can
give rise to liability to the company, or
• in any other way has acted in contravention of the Companies Act, the
Annual Accounts Act or the Articles of Association.
Auditor’s responsibility accounts. The procedures selected depend on the auditor’s judgment,
Our responsibility is to obtain reasonable assurance whether the Esef including the assessment of the risks of material misstatement in the
report is in all material respects prepared in a format that meets the report, whether due to fraud or error. In carrying out this risk assessment,
requirements of Chapter 16, Section 4(a) of the Swedish Securities Market and in order to design audit procedures that are appropriate in the circum-
Act (2007:528), based on the procedures performed. stances, the auditor considers those elements of internal control that are
RevR 18 requires us to plan and execute procedures to achieve reason- relevant to the preparation of the Esef report by the Board of Directors
able assurance that the Esef report is prepared in a format that meets and the President, but not for the purpose of expressing an opinion on the
these requirements. effectiveness of those internal controls. The examination also includes an
Reasonable assurance is a high level of assurance, but it is not a guar- evaluation of the appropriateness and reasonableness of assumptions
antee that an engagement carried out according to RevR 18 and generally made by the Board of Directors and the President.
accepted auditing standards in Sweden will always detect a material mis- The procedures mainly include a validation that the Esef report has
statement when it exists. Misstatements can arise from fraud or error and been prepared in a valid XHMTL format and a reconciliation of the Esef
are considered material if, individually or in aggregate, they could reason- report with the audited annual accounts and consolidated accounts.
ably be expected to influence the economic decisions of users taken on Furthermore, the procedures also include an assessment of whether
the basis of the Esef report. the consolidated statement of financial performance, financial position,
The firm applies International Standard on Quality Management 1, changes in equity, cash flow and disclosures in the Esef report have been
which requires the firm to design, implement and operate a system of marked with iXBRL in accordance with what follows from the Esef regu-
quality management including policies or procedures regarding compli- lation.
ance with ethical requirements, professional standards and applicable Deloitte AB, was appointed auditor of AB Volvo by the general meeting
legal and regulatory requirements. of the shareholders on April 6, 2022 and has been the company’s auditor
The examination involves obtaining evidence, through various proce- since April 5, 2018.
dures, that the Esef report has been prepared in a format that enables
uniform electronic reporting of the annual accounts and consolidated
Deloitte AB
Signature on Swedish original
Jan Nilsson
Authorized Public Accountant
This is a translation of the Swedish language original. In the event of any differences
between this translation and the Swedish language original, the latter shall prevail.
AUDITOR’S LIMITED ASSURANCE REPORT ON SUSTAINABILIT Y The firm applies International Standard on Quality Management 1, which
REPORT AND STATEMENT REGARDING THE STATUTORY requires the firm to design, implement and operate a system of quality
SUSTAINABILIT Y REPORT management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and reg-
To AB Volvo (publ.), corporate identity number 556012-5790 ulatory requirements. We are independent of AB Volvo in accordance with
professional ethics for accountants in Sweden and have otherwise ful-
Introduction filled our ethical responsibilities in accordance with these requirements.
We have been engaged by the Board of Directors and Executive Manage-
ment of AB Volvo to undertake a limited assurance engagement of the AB The limited assurance procedures performed and the examination accord-
Volvo Sustainability Report for the year 2022. The Company has defined ing to RevR 12 do not enable us to obtain assurance that we would
the scope of the Sustainability Report in connection to the table of content become aware of all significant matters that might be identified in an
in the Annual Report and the Statutory Sustainability Report on page 42. audit. The conclusion based on a limited assurance engagement and an
examination according to RevR 12 does not provide the same level of
Responsibilities of the Board of Directors and assurance as a conclusion based on an audit.
the Executive Management
The Board of Directors and the Executive Management are responsible for Our procedures are based on the criteria defined by the Board of Directors
the preparation of the Sustainability Report including the Statutory Sus- and the Executive Management as described above. We consider these
tainability Report in accordance with the applicable criteria and the criteria suitable for the preparation of the Sustainability Report.
Annual Accounts Act respectively. The criteria are defined on page 147 in
the sustainability report, and are part of the Sustainability Reporting Guide- We believe that the evidence we have obtained is sufficient and appropri-
lines published by GRI (Global Reporting Initiative), which are applicable to ate to provide a basis for our conclusion below.
the Sustainability Report, as well as the accounting and calculation prin-
ciples that the Company has developed. This responsibility also includes Conclusion
the internal control relevant to the preparation of a Sustainability Report Based on the limited assurance procedures we have performed, nothing
that is free from material misstatements, whether due to fraud or error. has come to our attention that causes us to believe that the Sustainability
Report, is not prepared, in all material respects, in accordance with the
Responsibilities of the auditor criteria defined by the Board of Directors and Executive Management.
Our responsibility is to express a conclusion on the Sustainability Report
based on the limited assurance procedures we have performed and to A Statutory Sustainability Report has been prepared.
express an opinion regarding the Statutory Sustainability Report. Our
engagement is limited to historical information presented and does there-
fore not cover future-oriented information.
Gothenburg, February 27, 2023
We conducted our limited assurance engagement in accordance with
ISAE 3000 (revised) Assurance Engagements Other than Audits or Deloitte AB
Reviews of Historical Financial Information. A limited assurance engage-
ment consists of making inquiries, primarily of persons responsible for the Jan Nilsson Lennart Nordqvist
preparation of the Sustainability Report, and applying analytical and other Authorized Public Accountant Expert Member of FAR
limited assurance procedures. Our examination regarding the Statutory
Sustainability Report has been conducted in accordance with FAR’s This is a translation of the Swedish language original. In the event of any differences
accounting standard RevR 12 The auditor’s opinion regarding the Statu- between this translation and the Swedish language original, the latter shall prevail.
tory Sustainability Report. A limited assurance engagement and an exam-
ination according to RevR 12 is different and substantially less in scope
than an audit conducted in accordance with International Standards on
Auditing and generally accepted auditing standards in Sweden.
Key Ratios
The Volvo Group uses key ratios with the aim to provide valuable informa- Diluted earnings per share (defined by IFRS)
tion to management, investors and analysts when analyzing trends and Definition: Income for the period attributable to the shareholders of AB
financial performance of the Group. The key ratios are not defined by Volvo divided by the average number of shares outstanding plus the aver-
IFRS, unless otherwise is stated, and may differ from similar measures age number of shares that would be issued as an effect of ongoing share-
used by other companies and are therefore not always comparable. The based incentive programs and employee stock option programs. For rec-
measures should be considered as a complement to, and not a substitute onciliation see note 19 Equity and number of shares.
for, the financial information presented in compliance with IFRS. Defini-
tions and reconciliations of significant key ratios are presented in the EBITDA and EBITDA margin
annual report. If the reconciliation is not directly reflected in the financial Definition: EBITDA is the operating income before depreciation and
statements, a separate reconciliation is presented below. amortization of tangible and intangible assets. The key figure EBITDA
margin is calculated as operating income adjusted with depreciation and
Basic earnings per share (defined by IFRS) amortization, in relation to net sales.
Definition: Income for the period attributable to shareholders of AB Volvo
divided by the weighted average number of shares o utstanding during the Industrial Operations
period. For reconciliation see note 19 Equity and number of shares. SEK M 2022 2021
Operating cash flow Net sales 459,703 361,062

Definition: The operating cash flow is a measure of the amount of cash Operating income 44,862 39,783
generated by the Volvo Group’s regular business operations. The operat- Amortization product and software development 2,799 2,622
ing cash flow also includes investments and disposals of intangible and Amortization other intangible assets 119 135
tangible assets, which are part of the investing activities. For reconcilia- Depreciation tangible assets 13,010 11,540
tion see Consolidated cash flow statement. Total depreciation and amortization 15,928 14,297
Operating income before depreciation and
amortization (EBITDA) 60,790 54,080
EBITDA margin, % 13.2 15.0
Equity ratio
Definition: Total equity divided by total assets.
Industrial Operations Volvo Group

SEK M 2022 2021 2022 2021
Total equity 147,439 129,619 166,236 144,118

Total assets 431,771 371,022 629,064 515,856
Equity ratio, % 34.1 34.9 26.4 27.9
Gross margin Net capitalization of research and development cost

Definition: Gross income divided by net sales. Definition: Capitalized research and development cost reduced by amor-
tizations.
SEK M 2022 2021 2022 2021 Volvo Group
SEK M 2022 2021
Net sales 459,703 361,062 473,479 372,216
Gross income 105,021 84,013 111,737 89,753 Capitalization 4,707 3,031
Gross margin, % 22.8 23.3 23.6 24.1 Amortization –2,635 –2,479
Net capitalization of research
and development cost 2,072 552
Net financial position

Definition: Cash and cash equivalents, marketable securities and inter-
est-bearing receivables reduced by interest-bearing liabilities, lease liabil-
ities and provisions for post-employment benefits. For reconciliation see
table Net financial position, which is presented after the balance sheet for
the Volvo Group. Net financial position is also presented excluding provi-
sions for post-employment benefits and lease liabilities, net.
Operating income, operating margin, adjusted operating Definition operating margin: Operating income divided by net sales.
income and adjusted operating margin Definition adjusted operating income: Adjusted operating income is profit
Definition operating income: Operating income is profit before interest before interest and tax as well as significant expenses or income of a one-
and tax, also known as EBIT (Earnings before interest and tax) and is a time character.
measure of profit from the ordinary business operations. For reconciliation Definition adjusted operating margin: Adjusted operating income divided
see the Income statement Volvo Group. by net sales.
Group
2022 Functions Industrial
Construction Volvo & Other Opera- Financial Elimi Volvo
SEK M Quarter Trucks Equipment Buses Penta incl. elim¹ tions Services nations Group
Net sales 310,536 100,261 18,583 18,102 12,221 459,703 17,355 –3,579 473,479
Operating income 31,976 12,907 353 2,527 –2,900 44,862 848 2 45,712
Financial impact related to Russia 1 –1,447 –106 – –3 –1 –1,557 –2,568 – –4,125
Financial impact related to Russia 3 232 –232 – – – 0 – – 0
Costs relating to claims arising from the
European Commission’s 2016 antitrust
settlement decision 4 –630 – – – – –630 – – –630
Year –1,845 –338 – –3 –1 –2,187 –2,568 – –4,755
Adjusted operating income 33,821 13,244 353 –2,530 –2,899 47,049 3,416 2 50,467
Operating margin, % 10.3 12.9 1.9 14.0 – 9.8 – – 9.7

Adjusted operating margin, % 10.9 13.2 1.9 14.0 – 10.2 – – 10.7
Group
2021 Functions Industrial
Construction Volvo & Other Opera- Financial Elimi Volvo
SEK M Quarter Trucks Equipment Buses Penta incl. elim tions Services nations Group
Net sales 230,881 92,031 13,652 14,437 10,061 361,062 13,437 –2,283 372,216
Operating income 27,349 12,228 78 2,092 –1,964 39,783 3,289 2 43,074

Depreciation of Assets held for sale 1 – – – – 246 246 – – 246
Divestment of UD Trucks 2 1,653 – – – – 1,653 – – 1,653
Restructuring charges related to
headcount reductions 4 128 0 20 0 2 150 9 0 159
Year 1,781 0 20 0 248 2,049 9 0 2,059
Adjusted operating income 25,567 12,228 59 2,092 –2,212 37,733 3,279 2 41,015
Operating margin, % 11.8 13.3 0.6 14.5 – 11.0 – – 11.6

Adjusted operating margin, % 11.1 13.3 0.4 14.5 – 10.5 – – 11.0
Penetration rate Return on operating capital

Definition: Share of unit sales financed by Financial Services in relation to Definition: Operating income divided by weighted average operating c
apital.
total number units sold by the Volvo Group in markets where financial
services are offered. Industrial Operations
SEK M 2022 2021
Financial Services
Number of units 2022 2021 Operating income 44,862 39,783
Weighted average operating capital 88,367 76,589
Number of financed units 68,658 69,556 Return on operating capital, 12 months rolling, % 50.8 51.9
Number of units sold where
financial services are offered 241,117 228,867
Penetration rate, % 28 30 Return on total equity
Definition: Income for the period divided by weighted average total equity.
Return on capital employed
Volvo Group
Definition: Operating income plus interest income and similar credits
divided by weighted average capital employed. SEK M 2022 2021
Industrial Operations Income for the period 32,969 33,243

Weighted average total equity 159,232 141,805
SEK M 2022 2021
Return on total equity, 12 months rolling, % 20.7 23.4
Operating income, 12 months rolling 44,862 39,783
Interest income and similar credits,
12 months rolling 1,315 362
Operating income and interest income and
similar credits, 12 months rolling 46,177 40,145
Weighted average capital employed 168,703 158,849
Return on capital employed, 12 months rolling, % 27.4 25.3
Sales growth adjusted for currency and acquired and divested operations
Definition: Sales growth adjusted for currency and acquired and divested operations, divided by net sales for the prior year.

SEK M 2022 2021 2022 2021
Net sales 459,703 361,062 473,479 372,216

Increase/decrease of net sales for the year 98,642 34,589 101,263 33,771
Currency rates –42,087 15,403 –44,031 16,063
Acquired and divested units 5,438 17,122 5,438 17,122
Adjusted Increase/decrease of net sales for the year 61,993 67,115 62,669 66,955
Sales growth adjusted for currency and acquired and divested units, % 17.2 20.6 16.8 19.8
Self-financing ratio
Definition: Cash flow from operating activities divided by net investments in tangible assets, intangible assets and leasing vehicles as defined in the
Consolidated cash flow statement.

SEK M 2022 2021 2022 2021
Cash flow from operating activities 51,423 41,664 33,244 33,647

Investments in in-/tangible assets and leasing vehicles, net 16,096 12,224 20,288 16,002
Self-financing ratio, % 319 341 164 210
Eleven-year Summary
The reporting in the eleven-year summary is based on IFRS. Respective year is presented in accordance with the Generally
Accepted Accounting Practice (GAAP) for that year. Earlier years are not restated when new accounting standards are applied.
Consolidated income statement

SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Net sales 473,479 372,216 338,446 431,980 390,834 334,748 301,914 312,515 282,948 272,622 303,647
Cost of sales –361,741 –282,463 –259,319 –326,895 –303,478 –254,581 –231,602 –240,653 –220,012 –212,504 –235,085
Gross income 111,737 89,753 79,127 105,085 87,357 80,167 70,312 71,862 62,937 60,118 68,562
Research and development

expenses –22,526 –18,027 –16,798 –18,539 –15,899 –16,098 –14,631 –15,368 –16,656 –15,124 –14,794
Selling expenses –29,044 –23,959 –26,510 –33,037 –30,890 –28,582 –26,867 –27,694 –27,448 –28,506 –28,248
Administrative expenses –5,880 –4,870 –4,621 –5,901 –5,798 –5,642 –5,121 –5,769 –5,408 –5,862 –5,669
Other operating income
and expenses –7,374 246 –5,459 –221 –2,273 –1,061 –3,135 –4,179 –7,697 –3,554 –2,160
Income from investments in
joint ventures and associated
companies –1,333 –54 1,749 1,859 1,948 1,407 156 –143 46 96 –23
Income from other investments 132 –15 –3 285 33 135 112 4,609 50 –30 –47
Operating income 45,712 43,074 27,484 49,531 34,478 30,327 20,826 23,318 5,824 7,138 17,622
Interest income and

similar credits 1,008 358 299 320 199 164 240 257 328 381 510
Interest expenses
and similar charges –1,205 –1,167 –1,349 –1,674 –1,658 –1,852 –1,847 –2,366 –1,994 –2,810 –2,476
Other financial income
and expenses –437 926 –518 –1,345 –870 –385 11 –792 931 11 –301
Income after financial items 45,077 43,190 25,917 46,832 32,148 28,254 19,230 20,418 5,089 4,721 15,355
Income taxes –12,108 –9,947 –5,843 –10,337 –6,785 –6,971 –6,008 –5,320 –2,854 –919 –4,097
Income for the period 32,969 33,243 20,074 36,495 25,363 21,283 13,223 15,099 2,235 3,802 11,258
Attributable to:
Owners of AB Volvo 32,722 32,787 19,318 35,861 24,897 20,981 13,147 15,058 2,099 3,583 11,039
Non-controlling interest 247 456 755 635 466 302 75 41 136 219 219
32,969 33,243 20,074 36,495 25,363 21,283 13,223 15,099 2,235 3,802 11,258
Income statement Industrial Operations

SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Net sales 459,703 361,062 326,472 418,361 378,320 323,809 291,459 303,582 275,999 265,420 296,031
Cost of sales –354,682 –277,048 –252,933 –319,055 –296,109 –248,382 –225,797 –236,311 –217,251 –209,307 –231,216
Gross income 105,021 84,013 73,539 99,306 82,210 75,428 65,662 67,271 58,748 56,113 64,815
Research and
development expenses –22,526 –18,027 –16,798 –18,539 –15,899 –16,098 –14,631 –15,368 –16,656 –15,124 –14,794
Selling expenses –26,066 –21,575 –24,284 –30,483 –28,642 –26,495 –24,946 –25,857 –25,778 –26,904 –26,582
Administrative expenses –5,867 –4,859 –4,611 –5,887 –5,756 –5,602 –5,081 –5,728 –5,367 –5,824 –5,639
Other operating income
and expenses –4,498 300 –3,673 230 –1,828 –640 –2,531 –3,473 –6,931 –2,710 –1,600
Income/loss from investments
in joint ventures and
associated companies –1,333 –54 1,749 1,859 1,948 1,407 156 –143 46 96 –23
Income from other investments 132 –15 –4 285 33 135 112 4,610 49 –31 –46
Operating income 44,862 39,783 25,919 46,771 32,067 28,135 18,740 21,312 4,111 5,616 16,130
Consolidated balance sheets

SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Intangible assets 41,544 37,070 34,577 36,668 38,104 35,893 37,916 36,416 37,115 36,588 40,373
Property, plant and equipment 63,162 54,405 49,113 53,496 55,673 53,348 55,875 53,618 55,181 52,233 55,004
Assets under operating leases 43,518 39,969 37,962 43,326 43,103 37,166 34,693 32,531 31,218 25,672 29,022
Shares and participations 22,188 21,225 13,436 13,113 11,875 11,225 12,420 12,050 9,839 6,327 2,890
Inventories 75,689 63,916 47,625 56,644 65,783 52,701 48,287 44,390 45,533 41,153 40,409
Customer-financing receivables 193,928 151,504 128,531 142,982 126,927 109,378 110,821 102,583 99,166 83,861 80,989
Interest-bearing receivables 7,466 3,702 5,880 2,743 3,393 3,501 2,393 2,938 2,555 1,389 5,635
Other receivables 97,590 81,772 73,982 81,432 82,509 72,961 70,814 61,932 68,448 59,943 55,531
Cash and cash equivalents 83,979 62,293 85,419 61,660 47,093 36,270 25,172 24,393 33,554 29,559 28,889
Assets held for sale – – 34,296 32,773 203 51 525 3,314 288 8,104 –
Assets 629,064 515,856 510,821 524,837 474,663 412,494 398,916 374,165 382,896 344,829 338,742
Total equity1 166,236 144,118 148,142 141,678 125,831 109,011 97,764 85,610 80,048 77,365 86,914
Provision for post-employment
benefits 8,745 12,177 18,430 19,988 16,482 14,476 14,669 13,673 16,683 12,322 6,697
Other provisions 30,987 28,095 27,335 30,835 32,165 25,477 26,408 27,207 28,010 19,900 21,787
Interest-bearing liabilities 210,948 153,624 153,424 157,752 135,857 127,676 141,048 132,607 147,985 135,001 131,842
Other liabilities 212,148 177,842 152,204 164,171 164,328 135,854 118,879 114,495 110,042 99,891 91,502
Liabilities held for sale – – 11,286 10,413 – – 148 573 130 350 –
Total equity and liabilities 629,064 515,856 510,821 524,837 474,663 412,494 398,916 374,165 382,896 344,829 338,742
of which non-controlling
1
interests 3,519 3,073 2,847 3,083 2,452 1,941 1,703 1,801 1,723 1,333 1,266
Assets pledged 3,582 6,742 14,960 21,220 15,988 12,791 10,592 9,428 7,680 5,078 4,099
Contingent liabilities 18,201 17,971 13,832 13,732 14,247 15,242 16,056 15,580 15,940 17,290 17,763
Balance sheets Industrial Operations

SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Intangible assets 41,471 36,971 34,423 36,467 37,889 35,716 37,768 36,314 37,010 36,479 40,267
Property, plant and equipment 63,112 54,356 49,045 53,411 55,631 53,308 55,812 53,554 55,087 52,146 54,899
Assets under operating leases 34,109 32,150 29,460 33,794 32,700 24,051 22,752 20,616 19,484 17,013 21,263
Shares and participations 22,169 21,209 13,421 13,095 11,866 11,215 12,409 12,042 9,825 6,321 2,884
Inventories 75,382 63,715 47,273 56,080 65,366 52,231 48,080 44,194 45,364 40,964 40,057
Customer-financing receivables 3,031 2,537 1,695 1,570 1,560 1,358 1,698 11 1,828 1,406 1,397
Interest-bearing receivables 12,918 3,723 6,301 4,916 3,882 4,966 4,415 3,738 2,777 2,195 11,011
Other receivables 103,481 96,758 84,413 99,082 101,347 85,822 75,759 68,223 70,413 60,679 54,324
Cash and cash equivalents 76,098 59,603 82,186 57,675 43,907 32,447 20,875 21,210 31,105 28,230 27,146
Assets held for sale – – 29,362 28,427 203 51 525 3,314 288 8,104 –
Assets 431,771 371,022 377,579 384,517 354,351 301,165 280,093 263,216 273,181 253,537 253,248
Total equity 147,439 129,619 135,127 127,150 113,144 97,790 86,579 75,151 70,105 68,467 78,321
Provision for post-employment
benefits 8,690 12,095 18,282 19,850 16,374 14,391 14,608 13,621 16,580 12,249 6,663
Other provisions 28,485 24,918 23,794 27,055 28,476 22,680 22,545 23,936 25,054 17,575 19,653
Interest-bearing liabilities 29,735 19,919 35,017 32,326 25,328 27,001 33,944 32,562 48,180 52,491 54,472
Other liabilities 217,422 184,471 158,721 172,209 171,029 139,303 122,269 117,374 113,131 102,405 94,139
Liabilities held for sale – – 6,638 5,927 – – 148 573 130 350 –
Total equity and liabilities 431,771 371,022 377,579 384,517 354,351 301,165 280,093 263,216 273,181 253,537 253,248
Consolidated cash flow statements

SEK bn 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Operating income 45.7 43.1 27.5 49.5 34.5 30.3 20.8 23.3 5.8 7.1 17.6
Depreciation and amortization 20.7 18.7 20.6 20.6 18.4 16.9 16.7 16.8 15.9 17.4 14.7
Other non-cash items 7.0 –1.0 1.2 –2.8 9.7 1.4 –0.4 –0.5 6.1 2.4 1.4
Change in working capital –28.7 –17.5 –13.7 –18.2 –23.7 –4.7 –13.9 –9.0 –14.1 –10.8 –21.9
associated companies 0.1 0.8 1.1 0.5 – – – – – – –
Financial items and income tax –11.6 –10.4 –5.0 –10.1 –7.7 –6.3 –5.7 –4.6 –5.0 –5.1 –8.0
Cash flow from operating activities 33.2 33.6 30.6 39.0 31.2 37.6 17.5 25.9 8.7 11.0 3.8
Investments in in-/tangible assets –16.7 –12.5 –8.8 –12.0 –10.7 –7.7 –9.5 –8.8 –8.6 –12.2 –14.6
Investments in leasing assets –9.2 –9.3 –8.6 –10.0 –10.1 –11.5 –10.8 –10.5 –10.1 –8.2 –10.0
Disposals of in-/tangible assets and leasing
assets 5.6 5.8 6.3 7.4 6.2 5.4 9.0 6.0 5.0 3.4 3.1
Investments and divestments of shares, net –0.9 –7.4 –0.5 0.1 1.0 2.2 0.2 –2.0 0.1 0.0 –1.2
Acquired and divested operations, net –0.1 22.0 0.4 1.3 –0.2 0.9 1.4 0.4 7.4 0.9 3.4
Interest-bearing receivables including
marketable securities –0.2 –0.1 1.1 –1.0 0.1 1.6 2.5 3.6 –4.8 0.5 3.7
Cash flow after net investments 11.8 32.2 20.7 24.9 17.4 28.5 10.4 14.5 –2.3 –4.6 –11.8
Change in loans, net 34.0 –7.0 7.3 9.3 1.9 –9.0 –2.2 –13.2 6.7 13.0 14.1
Repurchase of own shares – – – – – – – – – – –
Dividend to AB Volvo’s shareholders –26.4 –49.8 – –20.3 –8.6 –6.6 –6.1 –6.1 –6.1 –6.1 –6.1
Dividend to non-controlling interests –0.0 –0.6 –0.8 0.0 0.0 0.0 –0.2 0.0 0.0 –0.2 0.0
Other –0.0 –0.1 –0.1 0.2 0.0 0.0 0.0 0.0 –0.1 0.1 0.0
Change in cash and cash equivalents
excluding translation differences 19.2 –25.4 27.1 14.0 10.7 12.8 1.9 –4.8 –1.8 2.2 –3.8
Translation differences on cash and

cash equivalents 2.5 2.3 –3.4 0.5 0.1 –0.7 1.0 –0.4 1.1 –0.5 –0.8
Change in cash and cash equivalents 21.8 –23.1 23.7 14.5 10.8 12.1 2.9 –5.2 –0.7 1.7 –4.6
Operating cash flow Industrial Operations

SEK bn 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Operating income 44.9 39.8 25.9 46.8 32.1 28.1 18.7 21.3 4.1 5.6 16.1
Depreciation and amortization 15.9 14.3 15.9 15.8 13.8 12.6 12.6 12.6 12.7 14.5 12.0
Other non-cash items 3.4 –1.4 –0.8 –3.6 8.9 0.9 –1.1 –1.1 5.3 1.5 0.8
Change in working capital –2.5 –2.3 –11.0 –0.5 –11.0 –0.2 –14.7 –1.9 –3.3 –2.0 –9.2
associated companies 0.1 0.8 1.1 0.5 – – – – – – –
Financial items and income taxes –10.3 –9.5 –4.2 –9.5 –7.5 –5.6 –5.6 –4.0 –4.5 –4.9 –7.3
Cash flow from operating activities 51.4 41.7 25.9 49.0 36.4 35.8 9.9 26.7 14.3 14.7 12.4
Investments in in-/tangible assets –16.6 –12.5 –8.7 –11.9 –10.7 –7.7 –9.4 –8.8 –8.6 –12.2 –14.6
Investments in leasing assets –0.0 –0.0 –0.0 –0.1 –0.0 –0.1 –0.1 –0.3 –0.5 –1.5 –3.6
Disposals of in-/tangible assets
and leasing assets 0.6 0.4 1.4 1.4 0.9 0.4 3.2 0.7 1.1 0.5 0.9
Operating cash flow 35.3 29.4 18.5 38.3 26.6 28.4 3.5 18.3 6.4 1.5 –4.9
Exports from Sweden

SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Volvo Group, total 132,092 108,538 92,746 118,543 117,887 107,958 91,962 86,731 78,174 88,560 84,314
Key ratios
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Gross margin, %1 22.8 23.3 22.5 23.7 21.7 23.3 22.5 22.2 21.3 21.1 21.9
as percentage of net sales1 4.9 5.0 5.1 4.4 4.2 5.0 5.0 5.1 6.0 5.7 5.0
Selling expenses as percentage
of net sales1 5.7 6.0 7.4 7.3 7.6 8.2 8.6 8.5 9.3 10.1 9.0
Administration expenses as
percentage of net sales1 1.3 1.3 1.4 1.4 1.5 1.7 1.7 1.9 1.9 2.2 1.9
Operating income before depreciation
and amortization (EBITDA), SEK M1 60,790 54,080 41,847 62,568 45,858 40,732 31,373 33,886 16,784 20,089 28,117
EBITDA margin, %1 13.2 15.0 12.8 15.0 12.1 12.6 10.8 11.2 6.1 7.6 9.5
Net capitalization of research
and development, SEK M 2,072 552 –385 1,006 791 –876 90 –550 –1,441 787 2,264
Return on capital employed in
Industrial Operations, % 27.4 25.3 14.7 28.4 22.4 – – – – – –
Return on operating capital in
Industrial Operations, % 50.8 51.9 29.4 52.3 39.0 32.5 21.5 25.0 4.5 5.9 16.5
Return on total equity, % 20.7 23.4 13.8 27.0 21.3 20.8 14.9 18.4 2.8 5.0 12.9
Interest coverage, times1 30.5 34.3 18.5 28.1 19.5 15.3 10.3 9.1 2.2 2.1 6.7
Self-financing ratio, % 164 210 279 268 213 272 155 194 64 84 18
Self-financing ratio
Industrial Operations, % 319 341 353 458 373 483 155 316 180 112 72
Net Financial position excl.
post- employment benefits
and lease liabilities SEK M1 73,897 66,227 74,691 62,596 43,926 26,339 –1,151 349 –9,924 –19,828 –19,023
Net financial position excl. post-
employment benefits and lease
liabilities as percentage of total equity1 50.1 51.1 55.3 49.2 38.8 26.9 –1.3 0.5 –14.2 –29.0 –24.3
Net Financial position incl. post-
liabilities SEK M1 61,303 50,356 50,959 37,267 29,101 12,200 –15,679 –13,237 –26,378 –32,066 –22,978
Net financial position incl. post-
liabilities as percentage of total equity1 41.6 38.8 37.7 29.3 25.7 12.5 –18.1 –17.6 –37.6 –46.8 –29.3
Equity ratio 26.4 27.9 29.0 27.0 26.5 26.4 24.5 22.9 20.9 22.4 25.7
Equity ratio, Industrial Operations 34.1 34.9 35.8 33.1 31.9 32.5 30.9 28.6 25.7 27.0 30.9
Equity ratio excluding
non-controlling interest 25.9 27.3 28.4 26.4 26.0 26.0 24.1 22.4 20.5 22.0 25.2
1 Pertains to the Industrial Operations.
Regular employees at year-end

Number 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Sweden 22,964 21,022 20,598 21,094 20,887 19,965 19,235 20,412 21,384 22,588 23,052
Europe, excluding Sweden 28,056 27,378 27,678 29,033 28,807 27,596 26,955 27,662 29,449 29,746 30,382
North America 17,815 16,956 15,559 17,750 17,845 15,882 14,245 15,534 15,217 16,397 16,569
South America 6,665 5,860 5,448 5,466 5,228 4,774 4,762 5,380 6,353 6,275 5,977
Asia 9,990 9,305 16,121 16,863 16,888 16,526 16,469 17,046 17,793 17,953 20,222
Africa and Oceania 2,196 2,019 2,088 2,369 2,474 2,361 2,373 2,430 2,626 2,574 2,515
Volvo Group total 87,686 82,540 87,492 92,575 92,129 87,104 84,039 88,464 92,822 95,533 98,717
Business area statistics
Net sales1
SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Trucks Europe 137,177 107,798 92,127 112,125 111,237 99,642 91,468 83,767 72,757 73,640 76,365
North America 92,582 65,308 52,038 85,731 70,233 52,405 51,849 73,017 53,696 40,314 42,650
South America 38,254 23,569 15,830 23,753 16,021 12,789 10,613 11,624 19,669 23,318 21,172
Asia 23,988 21,359 35,441 37,610 36,664 36,998 33,464 31,589 29,264 26,740 36,531
Total 310,536 230,881 208,262 276,647 250,358 216,480 200,650 213,978 190,904 178,474 192,283
Construction Europe 30,194 29,524 23,191 30,300 27,291 22,977 19,739 17,732 17,215 16,356 16,518
Equipment North America 22,294 16,583 13,020 17,404 15,575 12,234 10,724 11,843 10,784 8,319 12,027
South America 6,491 3,951 2,245 2,532 2,304 1,760 1,414 2,207 3,234 3,314 3,788
Asia 34,228 36,427 39,095 33,932 33,781 25,058 15,765 16,424 18,458 21,911 27,033
Total 100,261 92,031 81,453 88,606 84,238 66,497 50,731 51,008 52,855 53,437 63,558
Buses Europe 6,034 5,886 5,765 7,369 7,036 7,753 7,861 7,284 6,139 5,429 6,200
North America 6,521 4,089 8,302 15,543 13,244 12,512 11,345 10,635 6,721 5,929 6,675
South America 3,154 882 1,793 3,281 1,393 1,148 1,363 1,425 2,559 1,836 2,794
Asia 1,372 1,371 2,397 2,617 2,094 3,135 3,067 2,557 1,892 2,055 2,853
Total 18,583 13,652 19,791 31,019 25,826 26,078 25,386 23,580 18,645 16,707 20,295
Volvo Penta Europe 9,417 7,464 6,064 6,671 7,487 5,727 4,973 4,462 3,779 3,714 3,620
North America 3,695 2,949 2,532 3,180 2,912 2,456 2,191 2,161 1,584 1,491 1,486
South America 635 474 345 319 299 289 291 365 386 297 306
Asia 3,302 2,698 2,228 2,439 2,443 2,082 1,891 1,855 1,615 1,692 1,867
Africa and Oceania 1,054 851 691 679 599 566 546 562 425 356 352
Total 18,102 14,437 11,891 13,287 13,741 11,119 9,893 9,406 7,790 7,550 7,631
Volvo Aero Europe – – – – – – – – – – 2,404

North America – – – – – – – – – – 2,657
South America – – – – – – – – – – 0
Asia – – – – – – – – – – 109
Africa and Oceania – – – – – – – – – – 49
Total – – – – – – – – – – 5,219
Other and eliminations 12,221 10,061 5,074 8,802 4,157 3,635 4,799 5,610 5,806 9,252 7,044
Net sales Industrial Operations 459,703 361,062 326,472 418,361 378,320 323,809 291,459 303,582 275,999 265,420 296,031
Financial Europe 6,705 5,929 6,116 6,279 6,063 5,431 5,116 5,278 5,120 4,686 4,703
Services North America 5,752 4,519 4,907 5,534 4,600 4,234 4,202 4,033 2,999 2,900 2,833
South America 3,338 1,618 1,380 1,555 1,276 1,368 1,235 1,116 1,122 1,009 1,195
Asia 788 843 1,022 1,010 800 543 476 548 638 707 795
Africa and Oceania 772 528 535 492 332 235 213 224 232 237 257
Total 17,355 13,437 13,960 14,870 13,070 11,812 11,242 11,199 10,111 9,539 9,783
Eliminations –3,579 –2,283 –1,987 –1,252 –555 –873 –787 –2,265 –3,162 –2,336 –2,167
Volvo Group total 473,479 372,216 338,446 431,980 390,834 334,748 301,914 312,515 282,948 272,622 303,647
Of which:
Vehicles2 367,234 282,666 247,397 332,558 299,356 252,063 223,996 237,430
Services 92,469 78,396 79,075 85,804 78,963 71,747 67,463 66,152
Financial Services 17,355 13,437 13,960 14,870 13,070 11,812 11,242 11,199
Eliminations –3,579 –2,283 –1,987 –1,252 –555 –873 –787 –2,265
1 Volvo Aero was divested on October 1, 2012.
2 Including construction equipment and Volvo Penta engines.
Operating income1
SEK M 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Trucks 31,976 27,349 15,764 31,552 19,541 20,383 15,020 19,517 4,157 6,145 10,216
Construction Equipment 12,907 12,228 9,583 11,910 12,125 7,917 2,246 2,044 652 2,592 5,773
Buses 353 78 –522 1,337 575 928 911 860 92 –190 51
Volvo Penta 2,527 2,092 1,402 1,876 2,341 1,439 1,269 1,086 724 626 541
Volvo Aero – – – – – – – – – – 767
Financial Services 848 3,289 1,564 2,766 2,411 2,192 2,086 2,006 1,712 1,522 1,492
Other –2,899 –1,962 –308 91 –2,515 –2,532 –707 –2,195 –1,514 –3,557 –1,217
Operating income
Volvo Group 45,712 43,074 27,484 49,531 34,478 30,327 20,826 23,318 5,824 7,138 17,622
1 Between 2009 and 2011, the benefits from the synergies created in the business units are transferred back to the various business areas.
Operating income in 2014 included expected credit losses of 660. See section for Key ratios regarding adjusted items.
Operating margin
% 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Trucks 10.3 11.8 7.6 11.4 7.8 9.4 7.5 9.1 2.2 3.4 5.3
Construction Equipment 12.9 13.3 11.8 13.4 14.4 11.9 4.4 4.0 1.2 4.9 9.1
Buses 1.9 0.6 –2.6 4.3 2.2 3.6 3.6 3.6 0.5 –1.1 0.3
Volvo Penta 14.0 14.5 11.8 14.1 17.0 12.9 12.8 11.5 9.3 8.3 7.1
Volvo Aero – – – – – – – – – – 14.7
Volvo Group Industrial
Operations 9.8 11.0 7.9 11.2 8.5 8.7 6.4 7.0 1.5 2.1 5.4
Financial Services 4.9 24.5 11.2 18.6 18.4 18.6 18.6 17.9 16.9 16.0 15.3
Volvo Group 9.7 11.6 8.1 11.5 8.8 9.1 6.9 7.5 2.1 2.6 5.8
Regular employees at year-end

Number 1 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Trucks 54,046 50,974 56,483 59,142 58,891 55,026 52,154 54,668 58,067 58,542 61,256
Construction Equipment 14,797 13,847 13,404 13,756 13,419 12,788 13,397 13,889 14,901 14,663 14,788
Buses 5,325 5,117 6,608 8,324 8,178 7,943 7,353 7,270 6,900 6,648 7,514
Volvo Penta 2,022 1,832 1,798 1,800 1,713 1,622 1,530 1,470 1,422 1,412 1,361
Volvo Aero – – – – – – – – – – –
Financial Services 1,596 1,546 1,511 1,538 1,401 1,363 1,328 1,340 1,339 1,355 1,362
Other 9,900 9,224 7,688 8,015 8,527 8,362 8,277 9,827 10,193 12,913 12,436
Volvo Group, total 87,686 82,540 87,492 92,575 92,129 87,104 84,039 88,464 92,822 95,533 98,717
1 As of 2012, employees in business units are not allocated to the business areas.
Environmental performance
More detailed information and management approach are further described in Sustainability Notes on page 156–158.
Absolute values and related to net sales 2022 2021 2020 2019
Energy usage (GWh; MWh/SEK M)¹ 2,367; 5.1 2,437; 6.8 2,158; 6.6 2,372; 5.7
Direct GHG emissions, CO₂e, scope 1 (1,000 tons; tons /SEK M)¹ 243; 0.5 252; 0.7 211; 0.6 250; 0.6
Indirect GHG emissions, CO₂e scope 2 (1,000 tons; tons/SEK M) 81; 0.2 115; 0.3 121; 0.4 125; 0.3
Indirect GHG emissions, CO₂e scope 3 use of sold products (Mton) 287 286 241 323
Water consumption (1,000 m3; m3/SEK M) 4,566; 9.9 4,628; 12.8 4,865; 14.9 5,389; 12,9
NO X emissions (tons; kilos/SEK M)¹ 198; 0.4 221; 0.6 190; 0.6 289; 0.7
Solvent emissions (tons; kilos/SEK M)¹ 1,398; 3.0 1,309; 3.6 1,224; 3.7 1,406; 3.4
Sulphur dioxide emissions (tons; kilos/SEK M)¹ 2.9; 0.01 5.0; 0.01 3.7; 0.01 8.5; 0.02
Hazardous waste (tons; kilos/SEK M) 36,800; 80 53,314; 148 51,712; 159 50,909; 122
Net sales, Industrial operations (SEK bn) 459.7 361.1 326.5 418.4
1 Several data points have been adjusted for 2019-2021 due to refinements in reporting methodologies
and improvements in reporting from certain smaller entities.
Delivered units
Number 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Heavy-duty trucks (>16 tons) 197,249 170,295 140,652 201,092 193,886 171,963 158,025 176,589 173,650 170,307 172,798
Medium-duty trucks (7–16 tons) 15,475 13,907 10,736 12,700 14,065 14,331 15,691 14,749 15,114 16,779 32,935
Light trucks (<7 tons) 19,834 18,256 15,453 18,977 18,539 16,108 16,708 16,137 14,360 13,188 18,284
Total trucks 232,558 202,458 166,841 232,769 226,490 202,402 190,424 207,475 203,124 200,274 224,017
Number 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Trucks Europe 113,245 98,600 79,814 104,145 110,349 105,432 97,909 86,448 72,458 82,088 84,355
North America 56,535 47,629 32,056 62,308 53,877 37,941 39,193 64,507 57,714 44,755 47,806
South America 31,958 28,718 17,684 23,729 16,146 11,073 9,442 11,069 23,741 29,137 23,443
Asia 19,066 17,842 27,009 29,435 32,276 35,476 31,502 31,979 32,399 28,692 51,514
Total 232,558 202,458 166,841 232,769 226,490 202,402 190,424 207,475 203,124 200,274 224,017
Of which fully electric 1,211 371 67 – – – – – – – –
Construction Europe 16,767 20,453 15,762 21,420 19,567 17,519 14,700 12,539 14,174 13,522 12.545
Equipment North America 7,663 6,217 5,025 7,278 7,218 5,685 5,105 5,710 7,127 5,240 6.782
South America 4,875 4,263 2,335 2,004 2,023 1,372 1,175 2,036 3,669 3,568 3.908
Asia 48,153 65,635 68,232 53,664 50,716 36,254 21,072 22,339 33,648 44,892 49.263
Africa and Oceania 3,451 3,303 2,406 2,519 3,130 3,297 2,254 2,094 2,699 3,564 2.982
Total 80,909 99,871 93,760 86,885 82,654 64,127 44,306 44,718 61,317 70,786 75.480
Of which fully electric 598 321 12 – – – – – – – –
Buses Europe 1,424 1,388 1,565 2,350 2,142 2,645 2,676 2,431 2,221 2,146 2,491
North America 1,134 1,118 1,644 3,084 2,796 2,973 2,659 2,398 1,590 1,752 1,826
South America 1,957 726 1,152 1,917 973 784 1,149 1,415 2,985 2,434 2,560
Asia 819 585 1,097 1,465 1,451 2,186 1,849 1,656 1,242 1,822 2,945
Africa and Oceania 481 705 797 915 1,064 805 1,220 925 721 756 856
Total 5,815 4,522 6,215 9,731 8,426 9,393 9,553 8,825 8,759 8,910 10,678
Of which fully electric 240 211 223 – – – – – – – –

Of which hybrids 127 232 83 – – – – – – – –
2018 2017 2016 2015 2014 2013 2012
2,196; 5.8 2,068; 6.4 2,076; 7.1 2,077; 6.8 2,168; 7.9 2,320; 8.7 2,483; 8.5
223; 0.6 207; 0.6 211; 0.7 220; 0.7 231; 0.8 255; 1.0 273; 0.9
198; 0.5 192; 0.6 196; 0.7 192; 0.6 218; 0.8 243; 0.9 260; 0.9
4,870; 12.9 4,817; 14.9 4,430; 15.2 4,919; 16.2 4,982; 18.1 5,815; 21.9 7,372; 25.2
360; 1.0 301; 0.9 333; 1.1 344; 1.3 332; 1.2 347; 1.3 413; 1.4
2,148; 5.7 1,681; 5.2 1,792; 6.1 1,885; 6.2 2,472; 9.0 2,221; 8.4 2,358; 8.1
13.6; 0.04 13.3; 0.04 12.9; 0.04 32.1; 0.1 37.9; 0.1 23.4; 0.1 26; 0.1
38,601; 102 31,941; 99 27,649; 95 27,824; 92 24,944; 90 28,395; 107 32,547; 111
378.3 323.8 291.5 303.6 276.0 265.4 292.2
Volvo share statistics
Data per share1 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Basic earnings, SEK 1

16.09 16.12 9.50 17.64 12.25 10.08 6.47 7.42 1.03 1.77 5.44
Ordinary dividend, SEK 7.008 6.50 6.00 0 5.00 4.25 3.25 3.00 3.00 3.00 3.00
Extraordinary dividend, SEK 7.008 16.009 9.00 0 5.00 0 0 0 0 0 0
Share price at year end (B share), SEK 188.48 209.65 193.80 156.90 115.95 152.70 106.40 79.10 84.70 84.45 88.80
Dividend yield (B share), %2 7.4 10.7 7.7 0 8.6 2.8 3.1 3.8 3.5 3.6 3.4
Effective return (B share), %3 1 16 24 44 –21 47 38 –3 4 –2 22
Price/earnings ratio (B share)4 11.7 13.0 20.4 8.9 9.5 14.8 16.4 10.7 82.2 47.7 16.3
EBIT multiple5 7.2 8.3 12.5 6.1 6.5 9.9 11.7 7.7 26.3 19.6 9.0
Payout ratio, %6 87 140 158 0 82 41 50 40 291 169 55
Total equity, SEK 7 80 69 72 68 61 52 47 41 39 38 43
Return on total equity, % 20.7 23.4 13.8 27.0 21.3 20.5 14.9 18.4 2.8 5.0 12.9
1 Basic earnings per share is calculated as income for the period divided 6 Cash dividend divided by basic earnings per share.
by average number of shares outstanding. 7 Total equity for shareholders in AB Volvo divided by number of shares
2 P roposed dividend in SEK per share divided by share price at year end. outs tanding at year end.
3 Share price at year end, including dividend during the year, 8 P roposed by the Board of Directors to the Annual General Meeting 2023.
divided by share price at beginning of the year. 9 O f which SEK 6.50 per share for 2021 and SEK 9.50 per share relating to the
4 Share price at year end divided by basic earnings per share. distribution of the proceeds from the sale of UD Trucks paid out in July 2021.
5 Market value at year end less net financial position and non-controlling
interests divided by operating income.
Other share data

2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Number of shareholders at year end 374,185 362,144 283,731 250,798 245,663 240,521 237,654 234,989 237,871 246,265 242,482
Number of Series A shares
outstanding at year end, million 445 445 448 456 457 459 472 485 492 499 526
Number of Series B shares
outstanding at year end, million 1,588 1,588 1,585 1,577 1,576 1,573 1,560 1,546 1,537 1,530 1,502
Average number of shares
outstanding, million 2,033 2,033 2,033 2,033 2,032 2,032 2,031 2,030 2,028 2,028 2,028
Number of Series A shares traded
in Stockholm during the year, million 41.1 88.1 65.7 43.8 51.8 46.7 67.2 51.7 86.3 53.0 45.4
Number of Series B shares traded
in Stockholm during the year, million 967.5 1,065.9 1,407.6 1,146.1 1,293.8 1,341.3 1,667.9 2,052.1 2,068.7 1,878.5 2,081.2
The largest shareholders in Number Share of Share of Distribution of shares, Number of % of Share of
AB Volvo, December 31, 2022 of shares votes, % capital, % December 31, 2022 shareholders total votes capital, %
Industrivärden 181,200,000 27.8 8.9 1–1,000 shares 317,861 2.9 3.2

Geely Holding 167,247,516 16.0 8.2 1,001–10,000 shares 51,615 6.0 7.0
AMF Insurance & Funds 70,710,358 5.4 3.5 10,001–100,000 shares 4,165 3.4 5.0
Alecta 69,961,010 4.3 3.4 100,001– 544 87.7 84.8
AFA Insurance 14,927,123 2.3 0.7 Total 374,185 100 100
BlackRock 68,041,907 2.2 3.3
AP4 Fund 60,631,322 1.9 3.0
Norges Bank Investment
Management 93,663,749 1.9 4.6
Vanguard 14,312,663 1.7 0.7
Swedbank Robur Funds 46,055,699 1.3 2.3
Total 786,751,347 64.8 38.7
Annual General Meeting, April 4, 2023 Preliminary financial calendar
The Annual General Meeting of AB Volvo will be held on Tuesday, April 4, Annual General Meeting 2023 April 4, 2023
2023. For further information about the Annual General Meeting 2023, Report on the first quarter 2023 April 20, 2023
please refer to Volvo’s website, www.volvogroup.com.
Report on the second quarter 2023 July 19, 2023
Report on the third quarter 2023 October 18, 2023
Volvo’s Election Committee The reports are available on www.volvogroup.com and www.volvogroup.se
on date of p
ublication and are also sent electronically to shareholders who
The following persons are members of Volvo’s Election Committee: have advised Volvo that they wish to receive financial information.
Pär Boman Chairman of the Election Committee (AB Historical and current time series reflecting the Volvo Group’s market
Industrivärden), appointed by the Annual information are published regularly on www.volvogroup.com and on
General Meeting. www.volvogroup.se.
Anders Oscarsson (AMF and AMF Fonder), appointed by the

Annual General Meeting.
Magnus Billing (Alecta), appointed by the Annual General
Contacts
Meeting.
Anders Algotsson (AFA Försäkring), appointed by the Annual Investor Relations:
General Meeting. Christer Johansson +46 739 02 25 22
Johan Bartler +46 739 02 21 93
Carl-Henric Svanberg Chairman of the Board, appointed by the
Anders Christensson +46 765 53 59 66
Annual General Meeting.
E-mail: [email protected]
Among other duties, the Election Committee is responsible for submitting

Corporate Responsibility:
to the Annual General Meeting proposals for candidates to serve as members
Jonas André +46 739 02 63 80
of the Board of Directors, Chairman of the Board and proposal for auditors if
E-mail: [email protected]
applicable. The Election Committee also p roposes the amount of the fees
to be paid to the Board of Directors.
Aktiebolaget Volvo (publ) 556012-5790
Investor Relations, VGHQ
SE-405 08 Göteborg
Sweden
Tel +46 31 66 00 00
www.volvogroup.com
The Volvo Group drives prosperity through transport and infrastructure solutions,
offering trucks, buses, construction equipment, power solutions for marine and
industrial applications, financing and services that increase our customers’ uptime
and productivity. Founded in 1927, the Volvo Group is committed to shaping the
future landscape of sustainable transport and infrastructure solutions. The Volvo
Group is headquartered in Gothenburg, Sweden, employs 102,000 people and
serves customers in almost 190 markets. In 2022, net sales amounted to SEK 473
billion (EUR 44.5 billion). Volvo shares are listed on Nasdaq Stockholm.
AB Volvo, Investor Relations and Group Accounting
AB Volvo (publ)
SE-40508 Göteborg, Sweden
Telephone +46 31 66 00 00
www.volvogroup.com

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Geared for Growth

100% 100% 100%

fossil-free safe more ­productive

A global Volvo Group is one of the world’s leading

Group ... equipment as well as marine and industrial

NET SALES BY ­R EVENUE TYPE NET SALES BY MARKET

Vehicles 76% Europe 40%

... with strong positions

The Volvo Group’s total market shares in heavy-duty trucks

24.6% South Africa

Volvo Group in 2022

KEY RATIOS 2022 2021

Net sales, SEK M 473,479 372,216

1 UD Trucks was divested on April 1, 2021.

Segments Net sales,

GROUP FUNCTIONS & OTHER

“I would like to thank

VOLVO GROUP 2022

Our mission Every company exists for a reason – it has a

– driving challenges are driven by our mission to drive

Seven strategic To be successful, the key is to create value for

priorities profitability. By understanding our customer’s

Creating value by supporting customer profitability

a decarbonized global population, urbanization and e-commerce,

It is our long-term ambition to offer solutions that are 100% safe,

Rapid shift in the transportation industry

TAKING ACTION WITH SCIENCE-BASED TARGETS EXPECTED TRANSFORMATION TO ELECTRIC TRUCKS

Companies taking action Electrification will happen

... creates the The shift to electric equipment drives system

opportunity part of a total solution encompassing charging

GEARED FOR GROWTH

>10% Operating margin

The Volvo The Volvo Group’s strategy is a continuation

Group’s journey last two decades.

1999–2011 2012–2015 2016–2018 2019–

ACQUISITION-DRIVEN GROWTH CLOSING IMPROVED ­ PERFORM AND

2007 Ingersoll Rand Road ­Development

2008 VECV (joint venture with Eicher)

truck operating on diesel is one of the most energy-efficient ways

DELIVERING ON OUR FINANCIAL AMBITIONS AND STRATEGIC DIRECTION

Transforming towards decarbonization In our work we focus on three main technologies:

Volvo Group’s ambition is to reach

Fossil-based energy Fossil-free energy

Our commitment to achieving

Existing In the shift to electric vehicles and autonomous

industrial architectures will continue to serve the Group well.

The Volvo Group’s Driving synergies and reducing cost.

Combustion Battery Fuel cell

Volvo Group is gradually increasing its vertical

CELL MODULE PACK ENERGY STORAGE SYSTEM

Financial targets The current financial targets were decided

OPERATING MARGIN FOR NET FINANCIAL POSITION INDUSTRIAL RETURN ON EQUITY IN

* E xcluding a negative effect from provisioning

– towards ­­­ campaign Business Ambition for 1.5°C, and we have

SBTI APPROVED TARGETS, FROM BASELINE 2019

Scope 3 Scope 3 Scope 3 Scope 3 Scope 1–2

VOLVO GROUP 2022

This illustration maps some of

We focus on three key areas where our products, services and

Read more about sustainability focus areas

fossil-free safe more productive

NET SALES BY R EVENUE TYPE NET SALES BY MARKET

“I would like to thank

ACQUISITION-DRIVEN GROWTH CLOSING IMPROVED PERFORM AND

2007 Ingersoll Rand Road Development

* E xcluding a negative effect from provisioning

– towards campaign Business Ambition for 1.5°C, and we have

20 heavy-duty electric Volvo trucks to Amazon