Scania interim report january- september 2000

SCANIA INTERIM REPORT JANUARY- SEPTEMBER 2000 RESULTS First nine months of 2000, compared to first nine months of 1999 *Number of trucks and buses sold: 39,416 (36,049), an increase of 9 percent. * *Sales: SEK 38,182 m. (34,066) [USD 3,944 m. (3,518)] , an increase of 12 1 percent . 1 *Sales of service-related products rose by 15 percent . *The customer finance portfolio increased by 24 percent to SEK 17,709 m. (14,240) [USD 1,829 m. (1,471)]. *Operating income: SEK 3,057 m. (3,642) [USD 316 m. (376)]. *Operating margin: 8.0 (10.7) percent. *Operating cash flows, excluding acquisitions of companies, improved to SEK 2,901 m. (1,691) [USD 300 m. (175)]. *Operating margin, Scania products: 8.8 (11.5) percent. *Operating income in customer finance operations rose to SEK 126 m. (101) [USD 13 m. (10)]. *Income after financial items: SEK 2,588 m. (3,224) [USD 269 m. (333)]. *Net income: SEK 1,791 m. (2,263) [USD 187 m. (234)]. *Earnings per share: SEK 8.95 (11.30) [USD 0.94 (1.17)]. *Earnings per share according to U.S. GAAP: SEK 8.25 (11.70) [USD 0.85 (1.21)]. *Third quarter of 2000, compared to third quarter of 1999 *Number of trucks and buses sold: 11,769 (11,180). *Sales: SEK 11,814 m. (10,647) [USD 1,220 m. (1,100)]. *Operating income: SEK 901 m. (1,139) [USD 94 m. (118)], equivalent to a margin of 7.6 (10.7) percent. *Operating cash flows: Rose to SEK 1,427 m. (984) [USD 147 m. (102)]. *Operating income in Latin America was positive: SEK 35 m. (-68) [USD 4 m. (-7)]. MARKET First nine months of 2000, compared to first nine months of 1999 *Order bookings for heavy trucks in western European markets rose by 9 percent. *Scania's market share for heavy trucks in western Europe rose to 15.7 (14.7) percent. *In Latin America, order bookings rose. Scania's market share in Brazil was 27.3 (31.6) percent. *Third quarter of 2000, compared to third quarter of 1999 *Order bookings for heavy trucks in western European markets declined by 6 percent. *Order bookings from markets in Asia and in central and eastern Europe were very strong. *In Latin America, order bookings for heavy trucks rose by 5 percent. *The demand for buses and coaches in Latin America was strong, and order bookings rose sharply from a low level. OUTLOOK "We are still aiming for double digit operating margin regarding Scania products for the full year" comments Leif Östling, Scania's President and CEO. 1 Including the acquired distributors in Finland, Norway and Latvia. * Translated solely for the convenience of the reader at an exchange rate of SEK 9.6825 = USD 1.00. Unless otherwise stated, all comparisons refer to the same period of last year. This report is also available at www.scania.com [REMOVED GRAPHICS] SCANIA INTERIM REPORT, JANUARY - SEPTEMBER 2000 Operating income for the first nine months of 2000 was SEK 3,057 m. Operating cash flows for the Group were strong, increasing to SEK 2,901 m. 2 (1,691). Operating income in European operations was SEK 2,927 m., including currency effects of more than SEK -200 m. Investments in new products boosted research and development expenses by more than SEK 200 m. During the third quarter, Latin American operations showed a positive operating income. Accumulated underlying operating income in Latin American operations improved by about SEK 400 m. In western Europe, the heavy truck market remained strong and Scania's truck order bookings rose by 9 percent during the first nine months of 2000. Compared to the third quarter of 1999, order bookings declined by 6 percent. The reduction is explained by a reluctance to invest within the European haulage industry caused by uncertainty in conjunction with the protests against rising fuel prices. In central and eastern Europe, demand continued to strengthen. Order bookings in Asia rose sharply, and the market situation in Latin America improved. Scania increased its market share for heavy trucks in western Europe to 15.7 (14.7) percent. During the first nine months of 2000, 29,300 (26,100) Scania trucks were registered. Total heavy truck registrations in the region were about 186,500 (177,100) units, an increase of about 5 percent. Recalculated to a rolling twelve-month basis, this is equivalent to an annual rate of around 240,000 trucks. Scania's truck order bookings in Latin America rose by 4 percent during the first nine months and by 5 percent during the third quarter. The total market in Brazil during the report period was 24 percent larger than last year, and projections of macroeconomic factors are favourable. Scania's market share in Brazil has gradually increased during the year, amounting to 27.3 (31.6) percent. In Argentina, market share rose to 29.6 (28.9) percent. The total number of Scania trucks sold rose by 10 percent. Scania's order bookings for buses and coaches rose by 9 percent in European operations and by 46 percent in Latin America. Total order bookings rose by 23 percent. The total number of buses sold increased by 5 percent. The sharp sales increase in Latin America offset a downturn in Europe. The number of industrial and marine engines sold was approximately unchanged, compared to the same period of 1999. During the first nine months of 2000, sales of service-related products rose by 15 percent. The customer finance portfolio increased by about SEK 2,400 m. compared to the end of 1999 and amounted to more than SEK 17,700 m. 2 European operations are the portion of Scania's operations that, in principle, supply all markets except Latin American ones with the company's products, services and financing. During the third quarter, Scania presented its new 16-litre V8 engine to a wider audience at the IAA 2000 international commercial vehicle show in Frankfurt, Germany. The first trucks featuring the new 16-litre engine have been delivered to customers. The pace of delivery is now gradually accelerating during the fourth quarter, thereby improving the value of the product mix. In Frankfurt, Scania also unveiled its new OmniLine intercity bus, which is part of the new modular bus range. The EU anti-trust authority on 1 September declared that one of the preconditions for Volvo's merger with RVI/Mack was that within three years Volvo has to divest its shareholding in Scania (30.6 percent of the votes and 45.5 percent of the capital). This should be based on the date when approval of Volvo's acquisition is obtained from the U.S. anti-trust authority. Such an approval has not yet been released. SALES AND EARNINGS During the first nine months of 2000, the Scania Group sold 39,416 (36,049) trucks and buses, an increase of 9 percent. In monetary terms, the Scania Group's sales rose by 12 percent (6 percent excluding acquired companies) to SEK 38,182 m. (34,066). Sales of Scania products rose by 10 percent. Operating income for the Scania Group amounted to SEK 3,057 m. (3,642), equivalent to an operating margin of 8.0 (10.7) percent. For Scania products, operating income was SEK 2,905 m. (3,457) and the operating margin 8.8 (11.5) percent. In European operations, unit sales of trucks and buses increased by 10 percent. In monetary terms, sales rose by 9 percent. Operating income amounted to SEK 2,927 m. (3,678). Earnings reflected more than SEK 200 m. in adverse currency effects as well as an increase of more than SEK 200 m. in research and development expenses. Earnings were also negatively effected by certain supply problems due to delivery disruptions. The continued expansion of Scania's commercial system resulted in higher costs, especially in the form of investments in growth markets and in service operations. Besides currency effects, lower specification levels reduced average revenue per vehicle. To some extent, the reduction was offset by improved productivity. In all, this had an impact on earnings of about SEK -300 m. Earnings of Buses & Coaches and Industrial & Marine Engines operations declined by around SEK 200 m. as a consequence of low order bookings and a low rate of production, due to uncertainty early in the year concerning Scania's ownership structure. The operating margin in European operations amounted to 9.7 (13.4) percent. In Latin American operations, unit sales of trucks and buses rose by 6 percent to 5,864 (5,521) vehicles. Operating income including items affecting comparability totalled SEK -148 m. (-322). During the first nine months of the year, earnings were adversely affected by SEK 80 m. in costs for implementation of staffing reductions. During the same period of 1999, operating income was boosted by about SEK 150 m. in translation effects, due to the Brazilian currency devaluation. At a comparable level, underlying earnings thus improved by about SEK 400 m., due to improved prices and a lower cost level. Operating income for the third quarter of this year was a positive SEK 35 m. (-68). The European customer finance portfolio increased to SEK 17,709 m. (14,240). Operating income rose to SEK 126 m. (101). 3 Operating income in car operations amounted to SEK 152 m. (185). Net financial items totalled SEK -469 m. (-418). In European operations, net financial items improved, compared to the first nine months of 1999. In Latin America, net financial items deteriorated due to negative cash flows and high local interest rates. The Scania Group's tax expenses were equivalent to 30.7 (29.8) percent of income after financial items. CASH FLOWS Scania's operating cash flows, excluding customer finance operations, improved during the first nine months to SEK 2,868 m. (784). Excluding acquired companies, cash flows amounted to SEK 2,901 m. (1,691). Cash flows from operating activities amounted to SEK 3,393 m. (3,998). Tied-up working capital declined by SEK 616 m. Total capital tie-up in European operations dropped despite a rise in stocks due to delivery disruptions. Tied-up working capital increased in Latin America mainly due to an increase in customer financing. Net investments reached SEK 1,141 m. (2,207). Excluding acquisitions, net investments amounted to SEK 1,108 m. (1,300). During the third quarter of 2000, operating cash flows amounted to SEK 1,414 m. (763). Lower working capital as well as lower investments contributed to the improvement. 3 Car operations include half of the importer operations of the Svenska Volkswagen Group in Sweden, the wholly-owned Swedish car dealership network Din Bil and a car dealership network in Finland which is part of the acquired Finnish distributor Oy Scan-Auto Ab. Number of employees The number of employees totalled 26,736 at the end of the report period. This represented an increase of 922 persons since the beginning of the year, of whom 469 in the expansive sales and service organisation and 491 with time-limited contracts in production operations. As a consequence of staffing reduction programmes, the number of employees in Latin American operations declined by 142. Södertälje, 30 October 2000 Leif Östling President and CEO This Interim Report has not been subject to special review by the company's auditors. The next financial report, the Year-end Report for January-December 2000, will be published on 6 February 2001. This report contains forward-looking statements that reflect management's current views with respect to certain future events and potential financial performance. Such forward-looking statements involve risks and uncertainties that could significantly affect potential results. These statements are based on certain assumptions, including assumptions related to general economic and financial conditions in the company's markets and the level of demand for the company's products. This report does not imply that the company has undertaken to revise these forward-looking statements, beyond what is required under the company's registration contract with the Stockholm Stock Exchange, if and when circumstances arise that will lead to changes compared to the date when these statements were provided. Magnus Hahn, Corporate Tel. +46-8 5538 3510, mobile Communications tel. +46-70 551 79 03 Ulf Söderström, Corporate Tel. +46-8 5538 1044, mobile Communications and Investor tel. +46-70 680 95 95 Relations ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/10/30/20001030BIT00880/bit0001.doc The full report http://www.bit.se/bitonline/2000/10/30/20001030BIT00880/bit0002.pdf The full report

About Us

Scania is a world-leading provider of transport solutions. Together with our partners and customers we are driving the shift towards a sustainable transport system. In 2019, we delivered 91,700 trucks, 7,800 buses as well as 10,200 industrial and marine engines to our customers. Net sales totalled to over SEK 152 billion, of which about 20 percent were services-related. Founded in 1891, Scania now operates in more than 100 countries and employs some 51,000 people. Research and development are concentrated in Sweden, with branches in Brazil and India. Production takes place in Europe, Latin America and Asia, with regional production centres in Africa, Asia and Eurasia. Scania is part of TRATON SE. For more information visit: www.scania.com.

Subscribe