Scania Interim Report January-September 2004

Scania Interim Report January-September 2004

“The first nine months of 2004 turned out well, and volume rose in practically all markets. The new truck range has been well received by customers and the tradepress. The changeover of production has proceeded without disruptions. Thanks to new working methods and a global production system, we have been able to maintain sufficient delivery capacity,” says Leif Östling, President and CEO.

SCANIA, FIRST THREE QUARTERS OF 20 04 – COMMENTS BY THE PRESIDENT AND CEO

“Scania’s operating income rose by 17 percent to SEK 4,269 m. (3,636) in the first nine months of 2004. The operating margin amounted to 10.5 percent. Net income increased by 30 percent and amounted to SEK 2,762 m. ( 2,119). Order bookings rose by 27 percent and deliveries by 11 percent,” notes Leif Östling, President and CEO.

The introduction of the new truck range, which began in April with the launch of the R – series, has now been completed with the P – and T – series. Introduction activities have thereby largely been completed. Customer reactions to Scania’s new products are positive, and in September the R – series was awarded the ‘Truck of the Year 2005’ trophy. The statement of the jury highlights such qualities as driver comfort, handling and operating economy.

The demand for trucks continued to rise in practically all markets in western Europe. This demand is driven by a continued replacement need, combined with substantial exports of used vehicles to central and e astern Europe. In western Europe, order bookings rose by 20 percent during the first three quarters of 2004. Towards the end of the third quarter, however, we saw a somewhat calmer market.

The markets in central and eastern Europe showed good growth, which continued during the third quarter. Both Scania’s order bookings and deliveries increased, especially in Poland, the Czech Republic and Russia.

The markets outside Europe continued to grow, and Scania’s order bookings and deliveries rose in most of these markets. In Brazil and Argentina, Scania’s order bookings kept pace with the increase in the total market and Scania’s volume was at a historically high level. Order bookings in South Korea declined, while most markets in Africa, the Middle East and South East Asia showed good growth.

Bus and coach operations are performing well. Scania has substantially improved its European market position. Profitability is almost in line with the rest of the Scania Group. Order bookings rose by 35 percent during the period and accelerated during the third quarter.

Service s ales continue to show a favourable trend. During the third quarter, revenues increased by 8 percent. Income in Customer Finance increased, while the size of the portfolio was stable.

The changeover of production for the new truck range has proceeded without disruptions. Scania’s European assembly plants have completed about 70 percent of the changeover and certain specification limitations remain. Production is expected to run at normal efficiency during the first half of 2005.

“The first nine months of 2004 turned out well, and volume rose in practically all markets. The new truck range has been well received by customers and the trade press. The changeover of production has proceeded without disruptions. Thanks to new working methods and a global production system, we have been able to maintain sufficient delivery capacity,” Mr Östling concludes.*

For more information please see attached pdf.

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