SODERTALJE, Sweden, Oct. 31, 2002 (PRIMEZONE) -- Scania (NYSE:SCVa) (NYSE:SCVb):
"In Europe, demand has developed somewhat better than expected, while uncertainty has increased with regard to the outlook for 2003. In Latin America, demand is weak and the effects of a new administration after the presidential election in Brazil are impossible to foresee. Scania's service-related business has developed well, and together with action programmes in the form of a stricter price policy and more efficient production, the trend of earnings is expected to remain good for the rest of the year," said Leif Ostling, President and CEO.
First three quarters in brief Change
First nine months in %
Units USD m.(a) 2002 2001
Trucks and buses
- Order bookings 35,166 35,884 -2
- Deliveries 30,261 35,165 -14
Sales and earnings
SEK m. unless otherwise stated
Sales, Scania products(1) 3,550 32,953 33,579 -2
Operating income, Scania products 261 2,425 1,924 26
Operating income, Scania Group 322 2,987 2,004 49
Income after financial items 265 2,462 1,524 62
Net income 197 1,831 1,037 77
Operating margin, 7.4 5.7
Scania products, percent
Return on equity, percent (2) 11.7 14.8
Return on capital employed, excluding 12.5 14.4
Customer Finance operations, percent (2)
Earnings per share, SEK USD 9.16 5.19
0.99
Earnings per share excluding USD 6.40 5.19
capital gain, SEK 0.69
Cash flow excluding Customer Finance 230 2,137 2,376
operations and
divestments/acquisitions of companies
Cash flow excluding Customer Finance 356 3,302 1,479
operations and including
divestments/acquisitions of companies
Number of employees, 30 September 28,212 28,812
Number of shares: 200 million
1) Trucks, buses, engines and service-related products.
2) Calculations are based on rolling 12-month income.
a) Translated solely for the convenience of the reader at a closing
exchange rate of SEK 9.2825 = USD 1.00.
Unless otherwise stated, all comparisons in brackets refer to the same
period of last year.
This report is also available at www.scania.com
SCANIA, FIRST THREE QUARTERS OF 2002 - COMMENTS BY THE PRESIDENT AND CEO
"The operating income of the Scania Group was largely unchanged compared to the corresponding period of 2001, when the effects of new accounting principles and the capital gain from the divestment of Svenska Volkswagen AB and Din Bil AB have been excluded. The operating margin for Scania products amounted to 7.4 percent during the first nine months of 2002 and 7.0 percent during the third quarter," noted Leif Ostling, President and CEO of Scania.
"Operating income was mainly affected by the fact that about 5,000 fewer trucks and buses were delivered. Sales of service-related products -- parts and workshop services -- rose by 6 percent. Customer Financing continued to show good performance.
"In Europe, demand is divided. Order bookings increased in Great Britain, Italy and Spain while they declined in Germany. During the first nine months, order bookings in Europe were somewhat higher than during the corresponding period of 2001.
"The number of trucks delivered in western Europe was 11 percent lower than during the first nine months of 2001, and Scania's market share was 13.5 percent. Demand for heavy trucks in western Europe now seems to have stabilised at a rolling annual rate of around 190,000 units.
"In central and eastern Europe, the positive trend continued. Future EU membership for a number of countries should contribute to continued favourable economic growth, and an increasing demand for transport equipment. Scania's performance in the region was favourable, especially in Russia.
"Many newer used Scania trucks from western Europe are sold in central and eastern Europe. Scania's share of this used truck market is higher than the 15 percent share we have in the region for new trucks. The flow of newer used trucks has kept up the sales volume of new trucks in western Europe.
"In the Middle East, demand remained good despite the unrest in the region. In the Far East, the positive volume trend continued, especially in South Korea.
"In European operations, order bookings for trucks rose by 8 percent, and to shorten delivery times, we increased the pace in our production workshops, while deliveries of components and vehicles from Latin America greatly increased.
"In Latin America, demand remained weak. The Argentine market was nearly non-existent. In Brazil, activity was low while waiting for the political strategy to become clear after the presidential election. During the third quarter, the currency weakened further by more than 25 percent, and the real now stands at about 4 per U.S. dollar. Scania's programme for increasing prices in Brazil to world market level remains in place, even though this has meant a significant decline in market share. Deliveries of components and complete vehicles to markets outside Latin America increased and had a positive effect on earnings in Latin America.
"In bus and coach operations, markets performed well in Europe, while order bookings in Latin America declined by around 30 percent. The restructuring of Scania's European bus production is progressing largely as planned.
"Scania is currently displaying its trucks for the first time at the Tokyo Motor Show, the leading commercial vehicle exhibition in Asia. Together with our local sales partner Hino, we are displaying products intended for launching in the Japanese market. The task of defining other potential areas of cooperation between Hino and Scania continued.
"In Europe, demand has developed somewhat better than expected, while uncertainty has increased with regard to the outlook for 2003. In Latin America, demand is weak and the effects of a new administration after the presidential election in Brazil are impossible to foresee. Scania's service-related business has developed well, and together with action programmes in the form of a stricter price policy and more efficient production, the trend of earnings is expected to remain good for the rest of the year," Mr. Ostling concluded.
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