Scania interim report

4/23/2003 5:29 AM EST

SCANIA INTERIM REPORT - JANUARY - MARCH 2003
[REMOVED GRAPHICS]
"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," says Leif Östling,
President and CEO.

FIRST QUARTER IN BRIEF First quarter Change
in %
Units 2003 2002
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, percent1 19.5 5.2
Return on capital employed, Vehicles and 20.2
Service, percent1 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
1 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

SCANIA, FIRST QUARTER OF 2003 - 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,"
notes Leif Östling, 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 Östling
concludes.

For further information, please contact:
Magnus Hahn, Business Communicationstel. +46-8 5538 3510,
mobile tel. +46-70 551 7903

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