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“Scania had a strong year in 2005, setting new records for invoicedvolume of both vehicles and services. The strong trend in order bookingsfor trucks during the fourth quarter, partly due to pre-buy of vehicleswith Euro 3 engines in Europe, will have an effect on order bookings inthe second half of 2006, ” says Leif Östling, President and CEO. 2005INBRIEF Full year Change in% Q4Units 2005 2004 2005 2004Trucks andbuschassis – Orderbookings 62,588 59,981 4 17,597 15,429–Deliveries 58,383 56,082 4 17,134 16,862RevenueandearningsSEK m.(unlessotherwisestated) EUR m.* · Revenue,ScaniaGroup 6,716 63,328 56,788 12 18,286 16,264Operatingincome,VehiclesandService 671 6,330 6,149 3 2,025 2,080Operatingincome,CustomerFinance 56 529 450 18 132 115Operatingincome 727 6,859 6,599 4 2,157 2,195Incomebeforetaxes 717 6,765 6,276 8 2,170 2,133· Netincome 495 4,665 4,316 8 1,524 1,418Operatingmargin,percent 10.8 11.6 11.8 13.5Return onequity,percent** 20.8 21.8 Return oncapitalemployed,VehiclesandService,percent 27.4 29.0 · Earningsper share,SEK** 23.33 21.57 7.62 7.09· Dividend 15.00*** 15.00 Cash flow,VehiclesandService 3,865 2,685 1,733 956Number ofemployees,31December 30,765 29,993 Number ofshares:200million**** * Translated to euros solely for the convenience of the reader at abalance sheet date exchange rate of SEK 9.4300 = EUR 1.00.** Related to Scania’s shareholders.*** Proposed dividend to the Annual general meeting.**** 26,296,508 shares owned by Scania’s subsidiary Ainax have beeneliminated.Unless otherwise stated, all comparisons in brackets refer to the sameperiod of the previous year.This report is also available at www.scania.comSCANIA, FULL YEAR 2005 – COMMENTS BY THE PRESIDENT AND CEOScania had a strong year in 2005, setting new records for invoicedvolume of both vehicles and services. Order bookings and vehicledeliveries each rose by 4 percent. Scania’s operating income rose by 4percent to SEK 6,859 m. Net income increased by 8 percent to SEK 4,665m., which resulted in earnings per share of SEK 23.33 (21.57). The Boardof Directors proposes a dividend of SEK 15.00 (15.00) per share. Demand for Scania trucks improved during 2005. In western Europe, orderbookings for trucks gradually increased during the year. Scania’s marketshare strengthened to 13.2 (13.0) percent. After a period of weaknessearly in the year, order bookings increased in central and easternEurope. In Latin America, demand was unchanged for 2005 as a whole, buthowever rose during the fourth quarter. In Asia, order bookings fellduring the year, while the fourth quarter showed a recovery. In othermarkets, demand increased both during the full year and in the fourthquarter. The strong trend in order bookings for trucks during the fourth quarterwill have a positive effect on deliveries during the first half of 2006.Customers’ good experiences with Scania’s truck series and strong enginerange are contributing to a favourable trend in demand for Scaniatrucks. Order bookings are also affected by the fact that a number ofEuropean customers are accelerating investment in vehicles with Euro 3engines before the Euro 4 environmental regulations enter into force inthe autumn of 2006. This will have an effect on order bookings in thesecond half of 2006. Increasing transport needs in western Europe andgood demand for used trucks in central and eastern Europe point towardsa favourable long-term market for trucks in Europe.Bus and coach deliveries during 2005 were higher than ever before. Orderbookings were unchanged, with a stronger first half than second half. Inthe European market, demand increased somewhat. In Latin America, demandstrengthened, with an especially clear upturn in Brazil. In Africa andAsia, order bookings declined. In Industrial and Marine Engines, Scanianoted record volume in 2005. Service-related sales and Customer Finance reached new peak levelsduring 2005. Scania is in a very good starting position to enlarge itsservice business, with a leading range of vehicles and an extensiveservice network with proximity to customers in Europe and elsewhere inthe world. Scania is now attaching increased importance to expandingthis business further as well as taking advantage of synergies. Adjustment of the number of employees at European production units,after extra staffing in connection with the introduction of the newtruck range, was concluded as planned by year-end 2005. The on-goingreview of the production of axles and gearboxes in Sweden is scheduledfor completion during the first quarter of 2006. This review is one stepin Scania’s continuous efforts to boost productivity and strengthen itscompetitiveness and is expected to lead to substantial cost savings. During the fourth quarter Scania bought its distributor in Taiwan. As a result, Scania is expected to further strengthen its position as the largest non-Japanese heavy truck make in this market. During the year, Scania also acquired the Universal Auto dealership group in Belgium. As a result, Scania owns nearly 80 percent of its Belgian sales and service network. Scania is continuing to expand its Customer Finance activities and has recently started a finance company in Turkey.Scania is gaining recognition for its work to improve the environmentand road safety. In November, Scania was awarded the Premio Europa prizefor being the best at offering trucks with engines that meet tougherenvironmental standards. Scania also received a Prince MichaelInternational Road Safety Award. Scania was nominated for this award forits efforts to improve professional driver training, among other thingsthrough the Young European Truck Driver competition, and for itscontinuing work to develop vehicles that are safer on the road.For the third consecutive year, Scania has been named the most admiredtruck company in Brazil. High-quality products and services, as well ascustomer relations in general, were decisive factors.During 2005 Scania completed its offer for Ainax, which was accepted by96.3 percent of Ainax’ shareholders. This means that Ainax is asubsidiary of Scania. Scania’s intention is to carry out a liquidationof Ainax during 2006.Contact persons:Cecilia Edström, Corporate Relations tel. +46 8 5538 3557mobile tel. +46 70 588 3557Stina Thorman, Investor Relations tel. +46 8 5538 3716mobile tel. +46 70 518 3716Gunnar Boman, Corporate Communications tel. +46 8 5538 9510mobile tel. +46 70 550 8606