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SCANIA SIX-MONTH REPORT– JANUARY – JUNE 2005

“Scania’s operating income in the first half of 2005 rose by 16 percentto about SEK 3,500 m. The operating margin rose to 11.5 percent. Netincome increased by 16 percent to SEK 2,316 m., which resulted inearnings per share of SEK 11.58 (10.00). Despite uncertain economicdevelopment in western Europe, our main market, order bookings forvehicles were largely unchanged. Service revenue and Customer Financeshowed continued positive development”, says Leif Östling, President andCEO.FIRST HALF IN BRIEF First half Q2 Change Units EUR m.* 2005 2004 in % 2005 2004Trucks andbus chassis – Order bookings 31,536 31,241 1 16,095 15,703– Deliveries 29,023 26,552 9 15,767 14,111Revenues and earningsSEK m.(unless otherwise stated) ?Revenue,Scania Group 3,224 30,434 27,201 12 16,561 14,118Operating income,Vehicles andService 343 3,245 2,812 15 1,692 1,450Operating income, CustomerFinance 27 251 213 18 125 110Operating income 370 3,496 3,025 16 1,817 1,560Income before taxes 364 3,440 2,840 21 1,742 1,466?Net income 245 2,316 2,000 16 1,161 1,026Operating margin, percent 11.5 11.1 11.0 11.0Return on equity, percent 21.7 18.5 Return on capital employed,Vehicles and Service,percent 29.0 24.0 ?Earningsper share, SEK 11.58 10.00 5.81 5.13Cash flow,Vehicles andService 100 941 822 669 520Number of employees, 30 June 30,428 29,793 Number of shares:200 million** *Translated to EUR solely for the convenience of the reader at a balancesheet date exchange rate of SEK 9.4385 = EUR 1.00.** 26,296,508 shares owned by Scania’s subsidiary Ainax have beeneliminated.Unless otherwise stated, all comparisons in brackets refer to the sameperiod of last year.This report is also available at www.scania.comSCANIA, FIRST HALF OF 2005 – COMMENTS BY THE PRESIDENT AND CEOScania’s operating income in the first half of 2005 rose by 16 percentto about SEK 3,500 m. The operating margin rose to 11.5 percent. Netincome increased by 16 percent to SEK 2,316 m., which resulted inearnings per share of SEK 11.58 (10.00).Despite uncertain economicdevelopment in western Europe, our main market, order bookings forvehicles were largely unchanged. Service revenue and Customer Financeshowed continued positive development.In western Europe, order bookings for heavy trucks were largelyunchanged, while deliveries rose 9 percent. Demand remained strong inthe Nordic countries, while the continental European markets as a wholewere weaker. Scania increased its market share somewhat in westernEurope, to 13.5 (13.1) percent. The markets in central and easternEurope showed signs of stabilisation after a weak start.There was strong demand for trucks with Euro 4 engines, that is, enginesthat meet the emission standards that will apply to vehicles in the EUfrom 1 October 2006. To date, Scania has delivered more than 2,000trucks with Euro 4 engines. But due to future emission standards and theeconomic incentives associated with them, customers face difficultinvestment decisions. This, together with high oil prices as well as theweak performance of the continental European economies, leads touncertainty about the demand for heavy trucks in western Europe.However, given Europe’s ageing truck fleet, there is a continued largereplacement need. It thereforeremains our assessment that within a few years the market for heavytrucks in western Europe will surpass the previous peak achieved in2000, when 244,000 heavy trucks were registered. A large flow of usedvehicles to central and eastern Europe will also contribute to highdemand.In Latin America, interest rate hikes by the Brazilian central bank hascreated uncertainty about the country’s economic development. Strongorder bookings in Brazil turned to a substantial downturn towards theend of the period. This was partly offset by demand in Argentina andChile.In Asia, South Korea noted subdued demand while Indonesia and Taiwanshowed good development.For buses and coaches, both order bookings and deliveries increasedduring the first half. The Nordic market was strong, and in Finland,Scania signed its first contract for buses with Euro 4 engines. Demandin Great Britain continued to develop well, while it slowed in LatinAmerica in the latter part of the period.Increased material prices and production costs had a successivelystronger impact on earnings during the first half. Steel prices haveculminated, and we expect lower steel prices will have an impact onScania’s material costs in the first half of 2006. Scania is continuingthe task of adjusting the number of employees at its European productionunits after last year’s extra staffing in connection with the launch ofthe new truck series. Temporary employment contracts that expire duringthe second half of 2005 will not be renewed. Since year-end 2004 someemployees have left Scania’s European production units and by the end of2005, more will have left. In Latin America, however, some newrecruitment has been made.Scania has acquired a Belgian dealership, the Universal Auto group, withrevenue of about EUR 40 m. in 2004. This means that Scania owns about 80percent of the sales and service network in Belgium. Scania is rewardingsafety and fuel-efficient driving through the Young European TruckDriver competition. Interest in participating has doubled since lasttime the competition was held, and this year 13,000 European drivers arecompeting. The final takes place in Sweden this September. Similarinitiatives are under way in Latin America, Asia and South Africa.Contact persons:Cecilia Edström, Corporate Relations tel. +46 8 5538 3557mobile tel. +46 70 588 3557Stina Thorman, Investor Relations tel. +46 8 5538 3716 mobile tel. +46 70 518 3716Eric Österberg, Corporate Communications tel. +46 8 5538 5883mobile tel. +46 70 590 0599