Scania Year-end Report January-December 2004

Scania Year-end Report January-December 2004

“Scania had a successful year in 2004 and strengthened the company as supplier of heavy vehicles and services. Truck deliveries were high, and sales of buses as well as industrial and marine engines reached record levels. Net income rose by 34 percent to SEK 4,077 m. (3,034), equivalent to earnings per share of SEK 20.39 (15.17). The operating margin was 11.2 percent,” says Leif Östling, President and CEO.

SCANIA, FULL YEAR 2004 – COMMENTS BY THE PRESIDENT AND CEO

Scania had a successful year in 2004 and strengthened the company as supplier of heavy vehicles and services. Truck deliveries were high, and sales of buses as well as industrial and marine engines reached record levels. Order bookings rose by 23 percent and deliveries by 12 percent. Service revenues showed continued good development, as did our customer finance business. Net income rose by 34 percent to SEK 4,077 m. (3,034), equivalent to earnings per share of SEK 20.39 (15.17). The operating margin was 11.2 percent, says Leif Östling, President and CEO

During the fourth quarter of 2004, order bookings rose by 12 percent and deliveries by 16 percent. Net income for the quarter increased by 44 percent to SEK 1,315 m.

The new truck range − with vehicles for long-haulage, construction haulage and distribution − which was launched during the year, was well re ceived by customers and the trade press. The R-series, which is intended for long-haulage, wa s awarded the “Truck of the Year 2005” award by an international trade press jury. Driver comfort, operating economy and handling were the main arguments behind the award.

The changeover to the new truck range at production units went without disruptions. Thanks to new working methods and a global production system, delivery capacity was maintained. As earlier announced, the changeover will lead to staffing reductions at plants that have been affected by parallel truck ranges. This primarily affects cab production in Oskarshamn, Sweden.

During 2004, demand for heavy trucks continued to rise throughout western Europe. The increase is due in part to replacement needs, and in part to continued exports of used vehicles to central and eastern Europe. In western Europe, order bookings rose by 17 percent. Good economic development in Europe is important since the need for transport services is directly linked to GDP growth.

During 2004, growth outside Europe was also good, in South America, the Middle East and South East Asia as well as Africa.

The demand for heavy vehicles in 2005 looks stable, with continued good development in eastern Europe and elsewhere, but a weak economic development in Europe may affect the positive trend. There is also uncertainty regarding the development of raw material prices.

In November 2004, an Extraordinary General Meeting of Scania’s shareholders voted to approve a public offer for all shares in Ainax, the company that manages the Scania Series A shares previously owned by Volvo.

The purpose of the offer is to restore a normal ownership structure and eliminate the uncertainty concerning Scania’s ownership picture that has prevailed for nearly six years. Ainax shareholders are being offered one Scania A s hare in exchange for each Ainax share, which means that those who accept the offer will receive direct voting rights at Scania’s Annual General Meeting in April 2005. The Ainax Board of Directors and the Swedish Shareholders’ Association have recommended that Ainax shareholders accept Scania’s offer, for which the acceptance period runs until 15 February 2005.

Reflecting the good earnings, as well as the strong balance sheet of the company, Scania’s Board of Directors proposes a dividend of SEK 15 per share.

For more information please see attached pdf.

Contact persons

Cecilia Edström, Corporate Relations
tel. +46 8 5538 3557
mobile tel. +46 70 588 3557

Eric Österberg, Corporate Communications
tel. +46 8 5538 5883
mobile tel. +46 70 590 0599

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