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Scania Interim Report January-June 2009

Scania reported an operating profit of SEK 523 m. during the first half of 2009. Practically all markets where Scania has operations are characterised by continued low economic activity, which has led to weak demand for transport equipment.

Summary

  • Operating income fell to SEK 523 m. (7,635) and earnings per share fell to SEK 0.04 (6.94)
  • Net sales decreased by 34 percent to SEK 30,288 m. (45,885)
  • Cash flow amounted to SEK 1,908 m. (2,844) in Vehicles and Services
  • Scania foresees a continued low level of demand during the third quarter

Comments by Leif Östling, President and CEO

“Scania reported an operating profit of SEK 523 m. during the first half of 2009. Practically all markets where Scania has operations are characterised by continued low economic activity, which has led to weak demand for transport equipment. Vehicle deliveries fell by some 50 percent and service volume by over 10 percent, which significantly impacted earnings. The sharp drop in deliveries together with a sizeable inventory reduction resulted in very low production capacity utilisation, which pulled down earnings even further. Currency hedgings offset the positive effect of the weaker Swedish krona. Efforts to decrease the inventory of new trucks were successful, contributing to Scania’s positive cash flow. Inventory is approaching normal levels in most markets with the exception of central and eastern Europe. The steps that the Group has undertaken to adjust its cost level and strengthen cash flow have yielded the intended results. A total of about 3,900 employees have now left the Group since September 2008. In June, Scania introduced a four-day week for about 12,000 employees in Sweden with a pay reduction of 10 percent, which will mean a saving of more than SEK 300 m. during a six-month period. In addition, there will be no wage or salary increases for the major part of 2009. Early in the year, Scania introduced reduced working hours for about 2,000 employees elsewhere in we stern Europe. Steps to reduce costs and boost operational efficiency are continuing. This is occurring on a broad basis and includes the entire Group, from research and development to the sales organisation. During the seasonally weak third quarter, Scania foresees a continued low level of demand. The successful inventory reduction in Scania ́s major markets, together with higher order bookings in the second quarter than in the first quarter, will lead to a higher daily production rate in the third quarter than in the second quarter.”

For more information please see attached pdf.

Contact persons:

Per Hillström
Investor Relations
tel. +46 8 553 50226
mobile tel. +46 70 648 30 52

Erik Ljungberg
Corporate Relations
tel. +46 8 553 835 57
mobile tel. +46 73 988 35 57

Scania is one of the world’s leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. A growing proportion of the company’s operations consists of products and services in the financial and service sectors, assuring Scania customers of cost-effective transport solutions and maximum uptime. Employing 35,000 people, Scania operates in about 100 countries. Research and development activities are concentrated in Sweden, while production takes place in Europe and South America, with facilities for global interchange of both components and complete vehicles. In 2008, invoiced sales totalled SEK 89 billion and net income amounted to SEK 8.9 billion.