SODERTALJE, Sweden, April 22, 2002 (PRIMEZONE) -- Scania (NYSE:SCVA):
"In western Europe the slowdown in demand flattened out, at least temporarily. Cost adjustments in European operations and action programmes in Latin America are continuing," said Leif Ostling, President and CEO.
FIRST QUARTER IN BRIEF Change
First quarter in %
Units USD 2002 2001
m.*
Trucks and buses
- Order bookings 12,735 12,569 1
- Deliveries 10,040 11,727 -14
Sales and earnings(1)
SEK m. unless otherwise
stated
Sales 1,208 12,487 12,405 1
Operating income 74 770 952 -19
Income after financial 54 564 819 -31
items
Net income 37 383 573 -33
Operating margin,
Scania Group, percent 6.2 7.7
Operating margin,
Scania products(2), percent 6.6 8.5
Return on equity, percent 5.4 20.2
Return on capital employed,
excluding customer finance 7.9 18.6
operations, percent
Earnings per share, SEK 0.19 1.92 2.87
Cash flow excluding 13 130 571
customer finance operations
and acquisitions
Number of employees, 28,619 28,770
March 31
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 at www.scania.com
* Translated solely for the convenience of the reader at a closing exchange rate of SEK 10.3375 = USD 1.00.
(1) Excluding capital gains on the divestment of Svenska Volkswagen
AB and Din Bil AB. See page 5 for more information.
(2) Trucks, buses, engines and service-related products.
SCANIA, FIRST QUARTER OF 2002 - COMMENTS BY THE PRESIDENT AND CEO
"The operating income of the Scania Group during the first quarter of 2002 was SEK 770 m. Operating income for Scania products totalled SEK 724 m. Truck deliveries declined by 13 percent in western Europe, while sales of service-related products in European operations rose by 9 percent. Earnings in customer finance operations continued to increase," Leif Ostling noted.
"Macroeconomic forecasts for western Europe have recently become more favourable, although a number of potential threats remain. The slowdown in demand for heavy trucks in western Europe recently appears to have flattened out, at a higher level than I had anticipated. It is still too early to predict whether this is a lasting trend.
"Order bookings rose during the first quarter, and the pace of production will increase in European operations. Scania's market share rose during the quarter to 14.9 percent in western Europe.
"Productivity improvements in the European production system are continuing, following the departure of about 1,200 persons from the company since the market turned downward late in 2000. Cab production is being concentrated at Oskarshamn, Sweden as the new topcoat paintshop and investments for higher production volume are placed in service. The coordination between buses and trucks will also lead to productivity improvements. These ventures will decrease the workforce by about another 600 persons. The measures will have a gradual effect during the latter part of the year.
"Order bookings in bus operations increased. The coordination between trucks and buses in European operations is continuing as planned.
"Volume declined in Latin America. In practice, the Argentinean market disappeared as a consequence of economic and political chaos. At the same time, our volume declined in Brazil mainly as a consequence of the price hikes we are implementing in order to bring truck prices to a world market level. The improvement in prices, along with the lowering of the cost level, has begun to have an effect. At the same time, exports of components from Latin America to the European production system will increase.
"We sold our 50 percent holding in the Swedish importer operations of Svenska Volkswagen and the dealership chain Dil Bil to Volkswagen AG of Germany. On behalf of Scania's Board of Directors, ABN-Amro Bank reviewed both transactions and issued financial fairness opinions. The main reason behind these divestments is the increasingly rapid divergence in operations, with trucks as investment products and cars as consumer goods. As soon as the relevant authorities have approved these divestments, the item 'Car operations' will disappear from Scania Group financial statements. The overall capital gain on the divestments is estimated at around SEK 550 m.
"The cooperation agreement we have now entered with the Japanese truck manufacturer Hino will give us the opportunity to get a foot into the Japanese market in a cost-effective way. In the long term, there is good development potential in the agreement, since Hino and Scania complement each other both in terms of product range and geographic presence.
"In western Europe the slowdown in demand flattened out, at least temporarily. Cost adjustments in European operations and action programmes in Latin America are continued," Mr. Ostling concludes.
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