Scania Interim report January-March 2004

SCANIA INTERIM REPORT - JANUARY - MARCH 2004 "The year has started better than expected. Scania launched the new R- series at the end of March and the reception in our sales organisation has been very good. The changeover of production will mean certain limitations in our delivery capacity during 2004," says Leif Östling, President and CEO. FIRST QUARTER IN BRIEF Q1 Change in % Units EUR m.* 2004 2003 Trucks and buses - Order bookings 15,538 13,269 17 - Deliveries 12,441 11,739 6 Revenues and earnings SEK m. (unless otherwise stated) · Revenue, Scania Group 1,412 13,083 12,176 7 Operating income, Vehicles and 141 1,309 1,221 7 Service Operating income, Customer Finance 11 103 82 26 Operating income 152 1,412 1,303 8 Income before taxes 143 1,321 1,149 15 · Net income 99 921 780 18 Operating margin, percent 10.8 10.7 Return on equity, percent 17.6 19.5 Return on capital employed, 22.9 20.2 Vehicles and Service, percent · Earnings per share, SEK 4.61 3.90 Cash flow excluding Customer 37 342 174 Finance and divestments/acquisitions of companies Number of employees, 31 March 29,472 28,503 Number of shares: 200 million Unless otherwise stated, all comparisons in brackets refer to the same period of last year. This report is also available on www.scania.com * Translated solely for the convenience of the reader at a closing exchange rate of SEK 9.2635 = EUR 1.00. SCANIA, FIRST QUARTER OF 2004 -- COMMENTS BY THE PRESIDENT AND CEO "Scania's operating income rose by 8 percent to SEK 1,412 m. (1,303) in the first quarter of 2004. The operating margin was largely unchanged and amounted to about 11 percent. Order bookings and deliveries of vehicles rose by 17 and 6 percent, respectively," notes Leif Östling, President and CEO. "During the first quarter, we launched the new Scania R-series. We have already built more than 600 trucks to be used in various sales activities, but also to train the production organisation. More than 2,500 service technicians and more than 2,000 salespeople have also been trained. The R-series is the first of several introductions during the coming years. "The demand for trucks in western Europe rose during the first quarter, mainly in Germany, Italy and Spain as well as in the Nordic countries. This increased demand is primarily due to underlying replacement needs and strong exports of used vehicles to central and eastern Europe. "Growth in demand continued in central and eastern Europe and Scania's order bookings and deliveries increased, especially in Poland and the Czech Republic. "In markets outside Europe, both order bookings and vehicle deliveries rose. Growth in Turkey continued to be strong and the outlook remains good. In South Korea, Scania's order bookings declined as a result of somewhat weakened demand and increasingly tough competition. Most markets in Africa, the Middle East and South East Asia showed good growth. In Brazil and Argentina, Scania's order bookings and deliveries rose. Scania's market position was largely unchanged. "Order bookings and deliveries of buses and coaches declined but remained at a relatively high level after the record year 2003. "Sales of service-related products continue to grow. Income in Customer Finance increased, while the size of the portfolio was stable. "The changeover of production in conjunction with the R-series will mean some extra staffing during a transition period. These are employees on temporary contracts. Production in Europe is expected to run at normal efficiency during the first half of 2005. "The relocation of city bus bodybuilding operations from Katrineholm, Sweden, to S³upsk, Poland, has now been completed. During the first quarter, the last bus was produced in Katrineholm and the facilities were divested. "The year has started better than expected. Scania launched the new R- series at the end of March and the reception in our sales organisation has been very good. The changeover of production will mean certain limitations in our delivery capacity during 2004," Mr Östling concludes.*) *) Statement in latest report, please see page 6. Annual General Meeting and proposed dividend The Annual General Meeting of Shareholders will be held on Monday, 3 May 2004 at 15:00 CET at Scania Syd in Södertälje, Sweden. The proposed dividend by the Board of Directors for the year 2003 is SEK 6.00 (5.50) per share, with 6 May 2004 as the record date. Södertälje, 27 April 2004 LEIF ÖSTLING President and CEO This Interim Report has not been subjected to special review by the company's auditors. Financial information from Scania Scania's Interim Report for January-June will be published on 26 July 2004. 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 alter 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 Stockholmsbörsen if and when circumstances arise that will lead to changes compared to the date when these statements were provided. In theYear-end Report for 2003, the following was stated by Leif Östling, President and CEO: "Market developments during the year were in line with my expectations, and Scania's earnings remained strong. The economic situation in western Europe is expected to improve somewhat during 2004, but for the time being, we are planning for largely unchanged volume. However, we expect the result to be impacted by higher amortisation of research and development costs, and reduced benefits from currency hedging." Contact persons: Johan Haeggman, Corporate Relations tel. +46-8 5538 0053 mobile tel. +46-70 383 5200 Joanna Daugaard, Investor Relations tel. +46-8 5538 3716 mobile tel. +46-70 518 3716 Torbjörn Boije, Corporate Control tel. +46-8 5538 2228 mobile tel. +46-70 591 5016 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2004/04/26/20040426BIT00910/wkr0001.doc The full report http://www.waymaker.net/bitonline/2004/04/26/20040426BIT00910/wkr0002.pdf The full report