Scania Interim Report January – June 2010

Scania Interim Report January – June 2010

Scania’s operating income during the first half of 2010 rose to SEK 5,632 m. Operating margin in the second quarter reached a record-high 17 percent.

Summary

  • Operating income rose to SEK 5,632 m. (523) and earnings per share rose to SEK 4.75 (0.04)
  • Net sales increased by 23 percent to SEK 37,105 m. (30,288)
  • Cash flow amounted to SEK 5,993 m. (1,908) in Vehicles and Service

Comments by Leif Östling, President and CEO

“Scania’s operating income during the first half of 2010 rose to SEK 5,632 m. Operating margin in the second quarter reached a record-high 17 percent. Higher vehicle volume, significantly increased capacity utilisation and cost reduction s that were implemented last year mainly explain the improvements. The first half of 2009 was characterised by very low capacity utilisation and by negative effects from currency hedging. Demand in markets outside Europe is generally at a good level. The Brazilian truck market is strong as an effect of high economic activity, and demand is also benefiting from tax breaks and interest rate subsidies. Scania has taken advantage of the Group’s global product range and production structure, which has enabled us to swiftly meet the strong demand in Latin America. Demand in the European truck market improved during the period from a very low level last year. The recovery was limited by overcapacity among hauliers and low freight prices. Demand for buses and coaches increased outside Europe. The market for engines improved in most markets. Activity in the transport business has increased, contributing to higher demand for service. This increase was mainly related to Latin America and Asia, but during the second quarter service volume gradually increased in Europe as well. Cash flow in Vehicles and Services totalled SEK 5,993 m. In April, Scania launched a new range of V8 engines, including a completely new top-of-the-line model with an output of 730 hp, making it the most powerful engine to date in the truck market. This means that Scania has all the technical solutions and the engine platform needed to fulfil the Euro 6 emission standards that go into effect at the end of 2013. During the third quarter, vehicle deliveries are expected to be close to the level from the second quarter of 2010, in spite of the summer holiday period in Europe.”

For more information please see attached pdf.