Scania’s earnings for the first half of 2011 amounted to SEK 6,652 m. Higher vehicle and service volume was offset by a significantly stronger Swedish krona, a higher cost level and an altered market mix.
- Operating income rose to SEK 6,652 m. (5,632), and earnings per share rose to SEK 6.18 (4.75)
- Net sales increased by 18 percent to SEK 43,665 m. (37,105)
- Cash flow amounted to SEK 3,218 m. (5,993) in Vehicles and Services
Comments by Leif Östling, President and CEO
“Scania’s earnings for the first half of 2011 amounted to SEK 6,652 m. Higher vehicle and service volume was offset by a significantly stronger Swedish krona, a higher cost level and an altered market mix. The Brazilian market, which has been very strong due to high economic activity and subsidies for vehicle investments, is still at a high level but is lower compar ed to the exceptionally strong first half of 2010. Order bookings in Russia are at a high level and demand is good in Middle Eastern markets and elsewhere in Asia. Demand has improved in Europe, particularly in t he northern parts, while the recovery in the southern parts is occurring at a slower rate. The market trend, where the importance of Brazil is decreasing while other emerging markets are growin g strongly, means a negative impact on vehicle margins and also a weakened currency mix. In general, order bookings gr ew at a healthy pace and to support further growth Scania is increasing investments, both in R&D to str engthen the product portfolio and also to expand sales and service capacity. During the seco nd half of 2011, Scania will begin to raise its annual technical production capacity to 120,000 vehicles. This capac ity expansion will occur at existing production units, mainly in Sweden, and the investments will amount to ab out SEK 1.5 billion in the next few years. Scania is working with short delivery times and swiftly adapts its production rate to order bookings. Since demand was lower during the first quarter of 2011, this resulted in a lower production rate at the beginning of the second quarter. In order to boost flexibility in its production network, Scania has signed a new agreement regulating flexible working time and flexible staffi ng. During the first half of 2011, Scania experienced disruptions in the supply chain, which impacted the ma nufacturing and resulted in higher costs in order to ensure quality and delivery precision. T here is a continued risk of bottlenecks.
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