SCANIA YEAR-END REPORT– JANUARY – DECEMBER 2005
2/6/2006 7:45 AM EST
“Scania had a strong year in 2005, setting new records for invoiced
volume of both vehicles and services. The strong trend in order bookings
for trucks during the fourth quarter, partly due to pre-buy of vehicles
with Euro 3 engines in Europe, will have an effect on order bookings in
the second half of 2006, ” says Leif Östling, President and CEO.
2005
INBRIEF Full year Change in% Q4
Units 2005 2004 2005 2004
Trucks and
bus
chassis
– Order
bookings 62,588 59,981 4 17,597 15,429
–
Deliveries 58,383 56,082 4 17,134 16,862
Revenue
and
earnings
SEK m.
(unless
otherwise
stated) EUR m.*
·
Revenue,
Scania
Group 6,716 63,328 56,788 12 18,286 16,264
Operating
income,
Vehicles
and
Service 671 6,330 6,149 3 2,025 2,080
Operating
income,
Customer
Finance 56 529 450 18 132 115
Operating
income 727 6,859 6,599 4 2,157 2,195
Income
before
taxes 717 6,765 6,276 8 2,170 2,133
· Net
income 495 4,665 4,316 8 1,524 1,418
Operating
margin,
percent 10.8 11.6 11.8 13.5
Return on
equity,
percent** 20.8 21.8
Return on
capital
employed,
Vehicles
and
Service,
percent 27.4 29.0
·
Earnings
per share,
SEK** 23.33 21.57 7.62 7.09
·
Dividend 15.00*** 15.00
Cash flow,
Vehicles
and
Service 3,865 2,685 1,733 956
Number of
employees,
31
December 30,765 29,993
Number of
shares:
200
million
****
* Translated to euros solely for the convenience of the reader at a
balance sheet date exchange rate of SEK 9.4300 = EUR 1.00.
** Related to Scania’s shareholders.
*** Proposed dividend to the Annual general meeting.
**** 26,296,508 shares owned by Scania’s subsidiary Ainax have been
eliminated.
Unless otherwise stated, all comparisons in brackets refer to the same
period of the previous year.
This report is also available at
www.scania.comSCANIA, FULL YEAR 2005 – COMMENTS BY THE PRESIDENT AND CEO
Scania had a strong year in 2005, setting new records for invoiced
volume of both vehicles and services. Order bookings and vehicle
deliveries each rose by 4 percent. Scania’s operating income rose by 4
percent to SEK 6,859 m. Net income increased by 8 percent to SEK 4,665
m., which resulted in earnings per share of SEK 23.33 (21.57). The Board
of Directors proposes a dividend of SEK 15.00 (15.00) per share.
Demand for Scania trucks improved during 2005. In western Europe, order
bookings for trucks gradually increased during the year. Scania’s market
share strengthened to 13.2 (13.0) percent. After a period of weakness
early in the year, order bookings increased in central and eastern
Europe. In Latin America, demand was unchanged for 2005 as a whole, but
however rose during the fourth quarter. In Asia, order bookings fell
during the year, while the fourth quarter showed a recovery. In other
markets, demand increased both during the full year and in the fourth
quarter.
The strong trend in order bookings for trucks during the fourth quarter
will have a positive effect on deliveries during the first half of 2006.
Customers’ good experiences with Scania’s truck series and strong engine
range are contributing to a favourable trend in demand for Scania
trucks. Order bookings are also affected by the fact that a number of
European customers are accelerating investment in vehicles with Euro 3
engines before the Euro 4 environmental regulations enter into force in
the autumn of 2006. This will have an effect on order bookings in the
second half of 2006. Increasing transport needs in western Europe and
good demand for used trucks in central and eastern Europe point towards
a favourable long-term market for trucks in Europe.
Bus and coach deliveries during 2005 were higher than ever before. Order
bookings were unchanged, with a stronger first half than second half. In
the European market, demand increased somewhat. In Latin America, demand
strengthened, with an especially clear upturn in Brazil. In Africa and
Asia, order bookings declined. In Industrial and Marine Engines, Scania
noted record volume in 2005.
Service-related sales and Customer Finance reached new peak levels
during 2005. Scania is in a very good starting position to enlarge its
service business, with a leading range of vehicles and an extensive
service network with proximity to customers in Europe and elsewhere in
the world. Scania is now attaching increased importance to expanding
this business further as well as taking advantage of synergies.
Adjustment of the number of employees at European production units,
after extra staffing in connection with the introduction of the new
truck range, was concluded as planned by year-end 2005. The on-going
review of the production of axles and gearboxes in Sweden is scheduled
for completion during the first quarter of 2006. This review is one step
in Scania’s continuous efforts to boost productivity and strengthen its
competitiveness and is expected to lead to substantial cost savings.
During the fourth quarter Scania bought its distributor in Taiwan. As
a result, Scania is expected to further strengthen its position as the
largest non-Japanese heavy truck make in this market. During the year,
Scania also acquired the Universal Auto dealership group in Belgium.
As a result, Scania owns nearly 80 percent of its Belgian sales and
service network. Scania is continuing to expand its Customer Finance
activities and has recently started a finance company in Turkey.
Scania is gaining recognition for its work to improve the environment
and road safety. In November, Scania was awarded the Premio Europa prize
for being the best at offering trucks with engines that meet tougher
environmental standards. Scania also received a Prince Michael
International Road Safety Award. Scania was nominated for this award for
its efforts to improve professional driver training, among other things
through the Young European Truck Driver competition, and for its
continuing work to develop vehicles that are safer on the road.
For the third consecutive year, Scania has been named the most admired
truck company in Brazil. High-quality products and services, as well as
customer relations in general, were decisive factors.
During 2005 Scania completed its offer for Ainax, which was accepted by
96.3 percent of Ainax’ shareholders. This means that Ainax is a
subsidiary of Scania. Scania’s intention is to carry out a liquidation
of Ainax during 2006.
Contact persons:
Cecilia Edström, Corporate Relations tel. +46 8 5538 3557
mobile tel. +46 70 588 3557
Stina Thorman, Investor Relations tel. +46 8 5538 3716
mobile tel. +46 70 518 3716
Gunnar Boman, Corporate Communications tel. +46 8 5538 9510
mobile tel. +46 70 550 8606