Scania Interim Report January–June 2016

Scania Interim Report January–June 2016

Scania’s sales reached an all-time high at SEK 50.1 billion and the company showed a strong operational performance in the first half of 2016.

Summary of the first six months of 2016

  • Operating income amounted to SEK 1,348 m. (4,737), negatively impacted by a provision of SEK 3.8 billion related to the European Commission’s competition investigation
  • Operating income excluding items affecting comparability rose by 9 percent to SEK 5,148 m. (4,737), resulting in an operating margin of 10.3 (10.1) percent
  • Net sales rose by 7 percent to SEK 50,110 m. (46,798)
  • Cash flow amounted to SEK -492 m. (1,106) in Vehicles and Services

Comments by Henrik Henriksson, President and CEO

“Scania’s sales reached an all-time high at SEK 50.1 billion and the company showed a strong operational performance in the first half of 2016. Higher vehicle volume in Europe and increased service revenue had a positive impact on earnings while currency rate effects and lower deliveries in Latin America impacted negatively. The high investment level related to Scania’s investment in a new truck generation also had an impact on earnings. Scania’s market share in Europe continued on a high level and amounted to 17.1 percent during the first half of 2016, compared to 17.2 percent in 2015. The replacement need and economic situation in Europe continues to have a positive impact on demand for trucks. The weak performance continued in Latin America, primarily related to Brazil. In Eurasia, Russia now appears to have bottomed out at a low level. However, the outlook for Brazil and Russia is still uncertain. In Buses and coaches, the demand trend is positive, mainly due to strong order bookings in Mexico and Iran. In Engines, demand fell in all regions. Service revenue amounted to SEK 10.5 billion during the first half of 2016, an increase of 9 percent in local currency. Financial Services reported operating income of SEK 506 million and credit losses remain at low levels. In August Scania will initiate the launch of its largest ever investment − the new truck generation. It constitutes an important part of Scania’s ambition to become a leader in sustainable transport, where partnerships and continued digitalisation will play an increasingly important role. In light of the European Commission’s Statement of Objections and recent developments in the competition investigation, Scania is now, in accordance with relevant accounting principles and a prudent approach, making a provision of SEK 3.8 billion. Scania has fully cooperated with the European Commission during the investigation but contests the Commission’s view. The company will fully exercise its rights of defence in the ongoing investigation.”