SODERTALJE, Sweden, April 23, 2003 (PRIMEZONE) -- Scania (Other OTC:SCVAY): "In Europe, demand softened in March, due to the war in Iraq. In Latin America, the market is stabilising. In other markets, demand was largely unchanged. Due to macroeconomic developments, the risk for subdued demand for trucks and buses is increasing, and consequently, we remain cautious regarding our earnings for the rest of the year," said Leif Ostling, President and CEO.
FIRST QUARTER IN BRIEF
First quarter
2003 2002 Change
in %
Units
Trucks and buses
- Order bookings 13,575 12,735 7
- Deliveries 11,739 10,040 17
Revenue and earnings SEK m. (unless otherwise stated)
Revenue, Scania products 12,176 11,341 7
Revenue in divested car operations - 1,146
Revenue, Scania Group 12,176 12,487 -2
Operating income, Vehicles and Service 1,221 648 88
Operating income, Customer Finance 82 81 1
Operating income, Scania products 1,303 729 79
Operating income in divested
car operations - 41
Operating income, Scania Group 1,303 770 69
Income before taxes 1,149 564 104
Net income 780 383 104
Operating margin, 10.7 6.4
Scania products, percent
Return on equity, percent(a) 19.5 5.2
Return on capital employed, Vehicles
and 20.2
Service, percent(a) 8.4
Earnings per share, SEK 3.90 1.92
Cash flow excluding Customer Finance and 174
divestments/acquisitions of companies 130
Number of employees, 31 March 28,503 28,819
Number of shares: 200 million
(a) Calculations are based on rolling 12-month income.
Note: During 2003, Scania will apply recommendation RR 25 of
the Swedish Financial Accounting Standards Council
concerning the reporting of business segments. This means
that Scania's primary division into segments consists of
Vehicles and Service as well as Customer Finance. Unless
otherwise stated, all comparisons in brackets refer to the
same period of last year. This report is also available at
www.scania.com
Comments By The President And CEO
"During the first quarter of 2003, the operating income of the Scania Group rose by almost 70 percent to SEK 1,303 m. (770). The operating margin improved to 10.7 percent. Deliveries of trucks rose by 16 percent, while sales of service-related products rose by 6 percent," noted Leif Ostling, President and CEO of Scania.
"Macroeconomic forecasts have recently worsened. However, Scania's total order bookings for the first quarter were somewhat better than last year. When the war broke out in Iraq, customers became more restrictive and order bookings fell during the latter part of March.
"In western Europe, demand was relatively stable until early March, but slowing tendencies were noticeable mainly in Germany and southern Europe.
"In central and eastern Europe, economic growth continued. Scania's order bookings in the region rose, compared to the first quarter of 2002. The good trend in Russia continued. Poland, Slovakia and Hungary accounted for the largest increases.
"In Asia, order bookings remained satisfactory, especially in the Far East. In South Korea, Scania's order bookings continued to increase.
"In Latin America, Scania's order bookings improved, compared to the equivalent period of last year. At that time, Scania implemented major price hikes, which are continuing as planned. Our volume is increasing, which has a positive impact on our profitability.
"Order bookings and demand for Scania's bus and coaches increased, especially in the Nordic countries, Great Britain and France. The restructuring of European bus operations is proceeding as planned.
"Our alliance with Hino is continuing, and the first Scania tractor units are now being delivered to Japanese customers. These trucks are being delivered through Hino's sales network. Yanmar, which will sell Scania engines in the pleasure boat market under its own brand, has presented these engines at trade shows worldwide, encountering a very positive reception.
"The pace of growth in the Customer Finance portfolio slowed during last year. Earnings remain good and are, in principle, unchanged compared to last year.
"Beginning with this report, we are no longer separately reporting the earnings of Latin American operations. Latin American production is an integral part of Scania. Between 30 and 40 percent of the vehicles that Scania manufactures in Latin America are delivered to customers in Asia, Africa and Europe. The flow of components between production units in Latin America and Europe is also sizeable.
"In Europe, demand softened in March, due to the war in Iraq. In Latin America, the market is stabilising. In other markets, demand was largely unchanged. Due to macroeconomic developments, the risk for subdued demand for trucks and buses is increasing, and consequently, we remain cautious regarding our earnings for the rest of the year," Mr. Ostling concluded.
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