Scania Interim Report January-March 2004

Scania Interim Report January-March 2004

“The year has started better than expected. Scania launched the new R-series at the end of March and the reception in our sales organisation has been very good. The changeover of production will mean certain limitations in our delivery capacity during 2004,” says Leif Östling, President and CEO.

SCANIA, FIRST QUARTER OF 2004 – COMMENTS BY THE PRESIDENT AND CEO

“Scania’s operating income rose by 8 percent to SEK 1,412 m. (1,303) in the first quarter of 2004. The operating margin was largely unchanged and amounted to about 11 percent. Order bookings and deliveries of vehicles rose by 17 and 6 percent, respectively,” notes Leif Östling, President and CEO.

“During the first quarter, we launched the new Scania R-series. We have already built more than 600 trucks to be used in various sales activities, but also to train the production organisation. More than 2,500 service technicians and more than 2,000 salespeople have also been trained. The R-series is the first of several introductions during the coming years.

“The demand for trucks in western Europe rose during the first quarter, mainly in Germany, Italy and Spain as well as in the Nordic countries. This increased demand is primarily due to underlying replacement needs and strong exports of used vehicles to central and eastern Europe.

“Growth in demand continued in central and eastern Europe and Scania’s order bookings and deliveries increased, especially in Poland and the Czech Republic.

“In markets outside Europe, both order bookings and vehicle deliveries rose. Growth in Turkey continued to be strong and the outlook remains good. In South Korea, Scania’s order bookings declined as a result of somewhat weakened demand and increasingly tough competition. Most markets in Africa, the Middle East and South East Asia showed good growth. In Brazil and Argentina, Scania’s order bookings and deliveries rose. Scania’s market position was largely unchanged.

“Order bookings and deliveries of buses and coaches declined but remained at a relatively high level after the record year 2003.

“Sales of service-related products continue to grow. Income in Customer Finance increased, while the size of the portfolio was stable.

“The changeover of production in conjunction with the R-series will mean some extra staffing during a transition period. These are employees on temporary contracts. Production in Europe is expected to run at normal efficiency during the first half of 2005.

“The relocation of city bus bodybuilding operations from Katrineholm, Sweden, to S łupsk, Poland, has now been completed. During the first quarter, the last bus was produced in Katrineholm and the facilities were divested.

“The year has started better than expected. Scania launched the new R-series at the end of March and the reception in our sales organisation has been very good. The changeover of production will mean certain limitations in our delivery capacity during 2004,” Mr Östling concludes.*

For more information please see attached pdf.

Contact persons

Johan Haeggman
Corporate Relations
tel. +46-8 5538 0053
mobile tel. +46-70 383 5200

Joanna Daugaard
Investor Relations
tel. +46-8 5538 3716
mobile tel. +46-70 518 3716

Torbjörn Boije
Corporate Control
tel. +46-8 5538 2228
mobile tel. +46-70 591 5016