Scania Interim Report January-June 2004

Scania Interim Report January-June 2004

“The first half of this year turned out well. The new Scania R-series has been well received by customers and the trade press. Changeovers of production will enter a more intensive stage in the second half of the year, which will mean a continued limitation in de livery capacity during the rest of 2004,” says Leif Östling, President and CEO.

SCANIA, FIRST HALF OF 2004 – COMMENTS BY THE PRESIDENT AND CEO

“Scania’s operating income rose by 7 percent to SEK 2,917 m. (2,733) in the first half of 2004. The operating margin amounted to about 11 percent. Net income increased by 17 percent and amounted to SEK 1,894 m. (1,624). Order bookings rose by 28 percent and deliveries by 8 percent,” notes Leif Östling, President and CEO.

“During the first half, Scania launched the new R-series and more than 10,000 European customers visited Scania in Södertälje to familiarise themselves with the new truck range. The introduction activities are now continuing locally in Scania’s markets. Reactions were positive and order bookings for the R-series were in line with expectations. The R-series is the first of several introductions in the new product range.

“The demand for trucks rose in practically all markets in western Europe. This higher demand is primarily due to an underlying replacement need, combined with substantial exports of used vehicles to central and eastern Europe.

“The markets in central and eastern Europe continued to grow. Both Scania’s order bookings and deliveries increased, especially in Po land, the Czech Republic and Russia.

“In markets outside Europe, both order bookings and deliveries rose. In Brazil and Argentina, demand increased and Scania maintained its position in the region. The Turkish market continued to grow, and demand for Scania products rose. In South Korea, order bookings declined as a result of somewhat slower demand and stiffening competition. Most markets in Africa, the Middle East and South East Asia showed good growth.

“After a weaker first quarter, order bookings for bus and coach chassis again turned upward. Both order bookings and deliveries increased during the first half of 2004.

“Sales of service-related products continue to grow. Income in Customer Finance increased, while the size of the portfolio was stable.

“The changeover of production for the R-series is being implemented gradually during the year. Scania’s Dutch and French plants, which account for 75 percent of assembly capacity in Europe, will enter a more intensive changeover stage during the second half of 2004. Production in Europe is expected to run at normal efficiency during the first half of 2005.

“The relocation of city bus bodybuilding operations from Katrineholm, Sweden, to Słupsk, Poland, shows positive effect. “The first half of this year turned out well. The new Scania R-series has been well received by customers and the trade press. Changeovers of production will enter a more intensive stage in the second half of the year, which will mean a continued limitation in delivery capacity during the rest of 2004,” Mr Östling concludes.*

For more information please see attached pdf.

Contact persons

Johan Haeggman
Corporate Relations
tel. +46-8 5538 0053
mobile tel. +46-70 383 5200

Joanna Daugaard
Investor Relations
tel. +46-8 5538 3716
mobile tel. +46-70 518 3716

Torbjörn Boije
Corporate Control
tel. +46-8 5538 2228
mobile tel. +46-70 591 5016