Financial targets

• The annual organic sales growth for the truck, bus and construction equipment operations, as well as Volvo Penta, shall be equal to or exceed a weighted-average for comparable competitors.

• Each year, the operating margin for the truck, bus and construction equipment operations, as well as Volvo Penta, shall be ranked among the top two companies when benchmarked against relevant competitors.

• Volvo Aero has an ROE target of 15-25%. When calculating the ROE, Volvo Aero will be assigned the same equity/assets ratio as that for the Group’s Industrial Operations.

• The capital structure target is set to a net financial debt, excluding provisions for post-employment benefits, for the Industrial Operations of a maximum of 35% of shareholders’ equity under normal conditions.

• The Customer Finance Operations, has a target of 12-15% return of equity (ROE) and an equity/assets ratio exceeding 8%. 

The Board of Directors has decided which competitors the benchmarking during 2012 will be performed against. To facilitate comparisons, the truck operations will be measured jointly with the bus operations and the construction equipment operations will be measured jointly with Volvo Penta. The comparisons will be made in accordance with the table below: