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SCANIA INTERIM REPORT – JANUARY – MARCH 1998

Summary

First quarter of 1998, compared to first quarter of 1997

  • Number of trucks and buses sold: 11,669 (10,159).
  • Sales: SEK 10,423 m. (8,804) [USD 1,306 m. (1,103)]*.
  • Operating income: SEK 629 m. (642) [USD 79 m. (80)], equivalent to a margin of 6.0 (7.3) percent.
  • Latin American operations reduced operating income by more than SEK 200 m.
  • Income after financial items: SEK 552 m. (577) [USD 69 m. (72)].
  • Net income: SEK 390 m. (420) [USD 49 m. (53)].
  • Earnings per share: SEK 1.95 (2.10) [USD 0.24 (0.26)].
  • Earnings per share according to U.S. GAAP: SEK 2.05 (3.40) [USD 0.26 (0.43)].

THE MARKET IN BRIEF

First quarter of 1998, compared to first quarter of 1997

  • Order bookings for heavy trucks in western European markets rose by 22 percent.
  • Order bookings for heavy trucks in central and eastern European markets rose by 88 percent.
  • Scania’s market share for heavy trucks in western Europe was 16.1 (16.1) percent.
  • In Latin America, truck deliveries declined by 18 percent.
  • Scania’s market share in Brazil fell to 32.3 (43.2) percent, mainly due to the production changeover.
SUMMARY Jan-Mar
1998 Jan-Mar Jan-Mar
Units USD m.* 1998 1997 Change
Trucks and buses
– Order bookings 12,998 12,382 5%
– Sales 11,669 10,159 15%
Amounts in SEK m. unless otherwise stated
Sales 1,306 10,423 8,804 18%
Operating income 79 629 642 -2%
Income after financial

items

69 552 577 -4%
Net income 49 390 420 -7%
Operating cash flows -14 -113 -376 263
Net capital expenditures 67 536 576 -7%
Number of employees 31 Mar1998 31 Dec1997
Total number of

employees

23,593 23,763

* Translated solely for the convenience of the reader at an exchange rate of SEK 7.98 = USD 1.00.

Operating income was largely unchanged, compared to the first quarter of 1997. Earnings in European operations improved, while Latin American operations reduced earnings by more than SEK 200 m. related to the 4-series changeover. Somewhat more than SEK 100 m. of these expenses were related to employee cutbacks and the remainder to the production changeover and product launch. The second quarter will also be affected by the changeover in Latin America, but to a lesser extent.

In our European production units, truck volumes were higher than in the first quarter of 1997 and productivity is improving. The changeover in bus production is continuing, and reduced earnings to a lesser extent than during the fourth quarter of 1997.

During the period March-April, the 4-series trucks are introduced in Latin American markets. The production system was reconfigured during January-February, and the rate of production has gradually been increased since then. The 4-series buses will be introduced in these markets from May onwards.

Order bookings in the western European market remain strong, but prices are still depressed. Our market share developed favourably during the first three months of 1998 and amounted to 16.1 (16.1) percent, compared to 15.1 percent at year end 1997. The number of trucks sold was higher than during the first quarter of 1997, but lower than during the fourth quarter, which follows the seasonal pattern. During the first quarter, the total western European market expanded by more than 30 percent compared to the first quarter of 1997, to approximately 50,000 heavy trucks, which indicates an annual rate of 190,000-200,000.

Both order bookings and deliveries in central and eastern European markets developed favourably.

We continue our offensive to expand the marketing organsation throughout Europe.

In South East Asia, market activity remains low. This was partially offset by higher order bookings in the markets of Africa and Oceania.

In Latin America, our order bookings remained subdued. This was mainly due to the changeover to the 4-series, but also to seasonal factors such as the holiday and carnival period.

Lars Christiansson, Communications and Public

Contact persons

Lars Christiansson, Communications and Public Affairs Tel +46 8 5538 1212, mobile tel +46 70 590 50 80

Thomas Skoglund, Communications and Public Affairs Tel +46 8 5538 1258, mobile tel +46 70 556 07 97

Magnus Hahn, Communications and Public Affairs Tel +46 8 5538 3510, mobile tel +46 70 551 79 03

Cecilia Edström, Investor Relations Tel +46 8 5538 3557, mobile tel +46 70 588 35 57