Scania has ability to distribute SEK 85 per share – foresees 10 per cent top-line growth and stable EBIT margin of 12-15 percent in the coming years

Scania repeats expected volume of some 65,000 units and an operating income substantially higher than SEK 8 billion for 2006.

“Strong position and market growth make capital reduction possible,” said Scania’s CFO Jan Ytterberg at the Capital Markets Day 6 December.

In July, before the MAN bid, Scania announced that it was evaluating a capital reduction with the restriction of not violating the single A- credit rating.

“Management concluded in relation to the third quarter report that it is possible to distribute SEK 7 billion before year-end 2006,” said Jan Ytterberg.

“With the same net debt to equity ratio as during the first years after the listing on the stock exchange and maintaining an investment grade credit rating, the potential distribution capacity is substantially higher. We have concluded that it would be possible to distribute an additional SEK 10 billion in 2007, including the normal yearly dividend.”

This requires a decision by shareholders. The Board has stated that it will review the timing of such distributions once the situation surrounding the MAN offer has been clarified.

“ We foresee good earnings and strong cash-flows in the coming years, 10 per cent top-line growth and a stable EBIT margin of some 12-15 per cent. We have the technology to meet future emission legislation, a strong sales and service network and, with limited investments, we will be able to increase production capacity to 100.000 vehicles.

Therefore, Scania has the ability to distribute SEK 85 per share with a maintained investment grade rating given a standalone scenario.”

For further information, please contact Stina Thorman, Head of Investor Relations,
telephone +46 70 518 37 16.