Financial performance

Lower earnings

Customer Finance Operations

Total new financing volume in 2012 amounted to SEK 46.6 billion (44.8). Adjusted for changes in exchange rates, new business volume increased by 5.3% compared to 2011 as a result of increased penetration levels. In total, 50,994 new vehicles and machines (49,757) from the Volvo Group were financed during the year. In the markets where financing is offered, the average penetration rate was 27% (25).

As of December 31, 2012, the net credit portfolio amounted to 99,690 (94,275). The funding of the credit portfolio is matched in terms of maturity, interest rates and currencies in accordance with Volvo Group policy.

Read more in Note 15.

The operating income for the year amounted to 1,492 compared to 969 in the previous year. Return on shareholders’ equity amounted to 12.5% (7.3). The equity ratio at the end of the year amounted to 8.1% (9.1). The improvement in profitability is driven mainly by higher earning assets and good margins. During the year, credit provision expenses amounted to 640 (682) while write-offs of 577 (804) were recognized. The write-off ratio for 2012 amounted to 0.58% (0.93). At the end of December 31, 2012, credit reserves amounted to 1.23% (1.33) of the credit portfolio.