SCANIA INTERIM REPORT JANUARY MARCH 2004

Transcription

1 27 April 2004 SCANIA INTERIM REPORT JANUARY MARCH 2004 The year has started better than expected. Scania launched the new R-series at the end of March and the reception in our sales organisation has been very good. The changeover of production will mean certain limitations in our delivery capacity during 2004, says Leif Östling, President and CEO. FIRST QUARTER IN BRIEF Q1 Units EUR m.* Trucks and buses Change in % Order bookings 15,538 13, Deliveries 12,441 11,739 6 Revenues and earnings SEK m. (unless otherwise stated) Revenue, Scania Group 1,412 13,083 12,176 7 Operating income, Vehicles and Service 141 1,309 1,221 7 Operating income, Customer Finance Operating income 152 1,412 1,303 8 Income before taxes 143 1,321 1, Net income Operating margin, percent Return on equity, percent Return on capital employed, Vehicles and Service, percent Earnings per share, SEK Cash flow excluding Customer Finance and divestments/acquisitions of companies Number of employees, 31 March 29,472 28,503 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 on * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

2 SCANIA, FIRST QUARTER OF 2004 COMMENTS BY THE PRESIDENT AND CEO Scania s operating income rose by 8 percent to SEK 1,412 m. (1,303) in the first quarter of The operating margin was largely unchanged and amounted to about 11 percent. Order bookings and deliveries of vehicles rose by 17 and 6 percent, respectively, notes Leif Östling, President and CEO. During the first quarter, we launched the new Scania R-series. We have already built more than 600 trucks to be used in various sales activities, but also to train the production organisation. More than 2,500 service technicians and more than 2,000 salespeople have also been trained. The R-series is the first of several introductions during the coming years. The demand for trucks in western Europe rose during the first quarter, mainly in Germany, Italy and Spain as well as in the Nordic countries. This increased demand is primarily due to underlying replacement needs and strong exports of used vehicles to central and eastern Europe. Growth in demand continued in central and eastern Europe and Scania s order bookings and deliveries increased, especially in Poland and the Czech Republic. In markets outside Europe, both order bookings and vehicle deliveries rose. Growth in Turkey continued to be strong and the outlook remains good. In South Korea, Scania s order bookings declined as a result of somewhat weakened demand and increasingly tough competition. Most markets in Africa, the Middle East and South East Asia showed good growth. In Brazil and Argentina, Scania s order bookings and deliveries rose. Scania s market position was largely unchanged. Order bookings and deliveries of buses and coaches declined but remained at a relatively high level after the record year Sales of service-related products continue to grow. Income in Customer Finance increased, while the size of the portfolio was stable. The changeover of production in conjunction with the R-series will mean some extra staffing during a transition period. These are employees on temporary contracts. Production in Europe is expected to run at normal efficiency during the first half of The relocation of city bus bodybuilding operations from Katrineholm, Sweden, to Słupsk, Poland, has now been completed. During the first quarter, the last bus was produced in Katrineholm and the facilities were divested. The year has started better than expected. Scania launched the new R-series at the end of March and the reception in our sales organisation has been very good. The changeover of production will mean certain limitations in our delivery capacity during 2004, Mr Östling concludes.* * Statement in latest report, please see page 6. 2

3 SCANIA INTERIM REPORT JANUARY MARCH 2004 MARKET OVERVIEW In western Europe, the number of heavy trucks registered increased compared to the first quarter of The total market for heavy trucks was 59,000 (56,000) units. Registrations of Scania trucks amounted to 7,867 (8,241) units, a market share of 13.2 (14.7) percent. Scania s total order bookings for heavy trucks rose by 17 percent. During the first quarter of 2004, Scania s order bookings in western Europe rose by 14 percent to 8,607 (7,523) heavy trucks. In central and eastern Europe, order bookings rose by 3 percent. In Asia, order bookings climbed by 59 percent. In Latin America, order bookings increased by 62 percent. In Scania s other markets order bookings advanced by 20 percent. Total order bookings for buses and coaches decreased by 18 percent during the first quarter from the record levels in the same period of 2003 and amounted to 1,416 (1,720) units. In Europe, order bookings were down by 9 percent and in Latin America by 4 percent. Order bookings also declined in other markets. Scania s deliveries of industrial and marine engines increased during the first quarter of 2004 and amounted to 1,116 (711) units. Number of Scania heavy truck registrations, Scania s 10 largest markets, January-March Change in % Great Britain 1,417 1,557-9 Brazil 1,254 1, France 1,166 1,225-5 Germany Spain 877 1, Italy The Netherlands Turkey Sweden Belgium Scania s market shares, heavy trucks, Scania s 10 largest markets, January-March, percent Great Britain Brazil France Germany Spain Italy The Netherlands Turkey Sweden Belgium

4 REVENUE During the first quarter of 2004, Scania delivered 11,399 (10,615) trucks, an increase of 7 percent. Bus and coach deliveries totalled 1,042 (1,124) units, a decrease of 7 percent. Scania s revenue rose by 7 percent to SEK 13,083 m. (12,176), mainly due to increased vehicle volume. Overall, negative currency rate effects totalled about SEK 300 m. Vehicle revenue amounted to SEK 8,509 m. (8,039) during the first quarter, an increase of 6 percent. Service revenue amounted to SEK 2,869 m. (2,806), an increase of 2 percent. In local currencies, service revenue rose by nearly 4 percent. EARNINGS Scania s operating income rose by 8 percent to SEK 1,412 m. (1,303). Operating income for Vehicles and Service increased by 7 percent to SEK 1,309 m. (1,221). Higher delivery volume for trucks and an increased result from service operations as well as buses and coaches contributed to higher earnings. Operating income was also influenced by a somewhat less favourable market mix in truck sales. Scania s research and development cost increased to SEK 392 m. (373). Capitalised development expenditures amounted to SEK 145 m. (168). 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, ,000 14,000 12,000 10,000 8,000 6,000 4,000 2, ,000 1,750 1,500 1,250 1, VEHICLES DELIVERED (units) Q 1 Q 2 Q 3 Q 4 REVENUE* (SEK m.) Q 1 Q 2 Q 3 Q 4 OPERATING INCOME* (SEK m.) Q 1 Q 2 Q 3 Q 4 * Excluding divested car operations Compared to the first quarter of 2003, currency spot rates did not affect earnings. Currency hedging income amounted to SEK -75 m. During the first quarter of 2003, currency hedging had a positive influence of SEK 160 m. on earnings. Compared to the first quarter of 2003, the total currency rate effect was thus SEK -235 m. Operating income in Customer Finance rose by 26 percent and amounted to SEK 103 m. (82). Income was favourably influenced by a higher interest margin and lower bad debt expenses. The value of the portfolio amounted to SEK 26,500 m. at the end of the first quarter, which was an increase of SEK 600 m. since year-end Currency rate effects had a positive influence of SEK 800 m. on the value of the portfolio. Scania s net financial items improved to SEK -91 m. (-154) during the first quarter due to lower net debt as well as lower interest rates in both South America and Europe. The Scania Group s tax expenses were equivalent to 30.1 (32.0) percent of income after financial items. 4

5 CASH FLOW Scania s cash flow, excluding Customer Finance and acquisitions/divestments, amounted to SEK 342 m. (174). Tied-up working capital rose by SEK 494 m. (663). At the end of 2003, inventories were unusually low. At the close of the first quarter, inventories returned to normal levels. Production of about 600 new R-series trucks to be used in sales activities, increased the tied-up inventory level. Working capital was also adversely affected by tax payments. Net investments excluding divestments/acquisitions of businesses totalled SEK 575 m. (629), including SEK 145 m. (168) in capitalisation of development expenditures. Acquisitions of businesses amounted to SEK 40 m. MISCELLANEOUS Number of employees The number of employees at the end of the first quarter totalled 29,472, compared to 29,112 at year-end The increase was attributable to production units as well as an acquired dealership. Accounting principles This report was prepared in compliance with recommendation RR 20 of the Swedish Financial Accounting Standards Council concerning Interim Reporting. During 2004, Scania is applying the same accounting principles as during 2003, with the exception of recommendation RR 29 of the Swedish Financial Accounting Standards Council concerning Employee Benefits. The change in accounting principle resulted in a positive effect of SEK 26 m. on shareholders equity. Annual General Meeting and proposed dividend The Annual General Meeting of Shareholders will be held on Monday, 3 May 2004 at 15:00 CET at Scania Syd in Södertälje, Sweden. The proposed dividend by the Board of Directors for the year 2003 is SEK 6.00 (5.50) per share, with 6 May 2004 as the record date. Södertälje, 27 April 2004 LEIF ÖSTLING President and CEO This Interim Report has not been subjected to special review by the company s auditors. 5

6 Financial information from Scania Scania s Interim Report for January-June will be published on 26 July This report contains forward-looking statements that reflect management s current views with respect to certain future events and potential financial performance. Such forward-looking statements involve risks and uncertainties that could significantly alter potential results. These statements are based on certain assumptions, including assumptions related to general economic and financial conditions in the company s markets and the level of demand for the company s products. This report does not imply that the company has undertaken to revise these forward-looking statements, beyond what is required under the company s registration contract with Stockholmsbörsen if and when circumstances arise that will lead to changes compared to the date when these statements were provided. In theyear-end Report for 2003, the following was stated by Leif Östling, President and CEO: Market developments during the year were in line with my expectations, and Scania s earnings remained strong. The economic situation in western Europe is expected to improve somewhat during 2004, but for the time being, we are planning for largely unchanged volume. However, we expect the result to be impacted by higher amortisation of research and development costs, and reduced benefits from currency hedging. Contact persons: Johan Haeggman, Corporate Relations tel mobile tel Joanna Daugaard, Investor Relations tel mobile tel Torbjörn Boije, Corporate Control tel mobile tel Scania AB (publ) SE Södertälje tel Corporate ID number Sweden fax

7 Income statement Amounts in SEK m. Q1 unless otherwise stated EUR m* Change in % 2003 Apr 03- Mar 04 Vehicles and Service Sales revenue 1,412 13,083 12, ,581 51,488 Cost of goods sold -1,070-9,917-9, ,272-39,076 Gross income 342 3,166 3, ,309 12,412 Research and development expenses ,484-1,503 Selling expenses ,297-1, ,229-5,251 Administrative expenses Share of income in associated companies Operating income, Vehicles and Service 141 1,309 1, ,759 4,847 Customer Finance Net interest income Other income and expenses Gross income Credit losses Operating expenses Operating income, Customer Finance Operating income 152 1,412 1, ,125 5,234 Financial revenues and expenses Income before taxes 143 1,321 1, ,604 4,776 Taxes ,565-1,595 Minority interests Net income ,034 3,175 Includes depreciation of ,000-1,997 Number of shares: 200 million Operating margin, Scania products, percent Return on equity, percent Earnings per share, SEK Total research and development expenditures amounted to SEK 537 (541) of which SEK 145 (168) was capitalised. 2 Calculations are based on rolling 12-month income. * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

8 Revenue and deliveries SCANIA INTERIM REPORT JANUARY MARCH 2004 Amounts in SEK m. Q1 unless otherwise stated EUR m* Change in % 2003 Apr 03- Mar 04 Revenue Trucks 801 7,420 7, ,537 29,951 Buses 118 1,089 1, ,115 5,171 Engines Service-related products 310 2,869 2, ,759 10,822 Used vehicles etc ,751 1, ,123 7,317 Revenue deferral ,406-2,261 Total 1,412 13,083 12, ,581 51,488 Revenue 4 Western Europe 1,026 9,505 9, ,970 36,273 Central and eastern Europe ,016 4,003 Latin America 120 1, ,836 4,164 Asia ,932 4,069 Other markets ,827 2,979 Total 1,412 13,083 12, ,581 51,488 Total delivery volume, units Trucks 11,399 10, ,045 45,829 Buses 1,042 1, ,910 4,828 Engines 1, ,165 3, Refers to the difference between sales recognised as revenues and sales value based on deliveries. Revenues from external customers by location of customers. * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

9 Earnings by quarter Amounts in SEK m unless otherwise stated EUR m* Q1 Full year Q4 Q3 Q2 Q1 Vehicles and Service Sales revenue 1,412 13,083 50,581 13,995 11,567 12,843 12,176 Cost of goods sold -1,070-9,917-38,272-10,560-8,986-9,613-9,113 Gross income 342 3,166 12,309 3,435 2,581 3,230 3,063 Research and development expenses , Selling expenses ,297-5,229-1,405-1,260-1,289-1,275 Administrative expenses Share of income of associated companies Operating income, Vehicles and Service 141 1,309 4,759 1, ,336 1,221 Customer Finance Net interest income Other income and expenses Gross income Credit losses Operating expenses Operating income, Customer Finance Operating income 152 1,412 5,125 1, ,430 1,303 Financial revenues and expenses Income before taxes 143 1,321 4,604 1, ,290 1,149 Taxes , Minority interests Net income , Earnings per share, SEK Operating margin, Scania products, percent * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

10 Balance sheet SCANIA INTERIM REPORT JANUARY MARCH 2004 Amounts in SEK m unless otherwise stated EUR m* 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar ASSETS Intangible fixed assets 273 2,531 2,395 2,287 2,216 2,072 Tangible fixed assets 2,611 24,185 23,892 23,171 23,144 23,045 Shares and participations Inventories 1,050 9,725 8,506 9,255 9,379 8,792 Other receivables 1,103 10,217 9,706 9,736 9,895 10,149 Interest-bearing receivables 2,141 19,844 19,298 18,931 18,956 18,226 Liquid investments 152 1,405 1,916 2,076 1,706 3,009 Total assets 7,344 68,034 65,835 65,576 65,418 65,415 SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity 2,110 19,548 18,251 17,371 17,171 17,617 Provisions for pensions 251 2,326 2,094 2,138 2,115 2,068 Other provisions 533 4,940 5,121 5,125 5,019 4,952 Other liabilities 1,632 15,118 14,161 13,748 13,439 13,155 Borrowings 2,818 26,102 26,208 27,194 27,674 27,623 Total shareholders equity and liabilities 7,344 68,034 65,835 65,576 65,418 65,415 Equity/assets ratio, percent * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

11 Statement of changes in shareholders equity Amounts in SEK m. unless otherwise stated EUR m* Shareholders equity, 1 January 1,970 18,251 16,931 Effects of changes in accounting policies Exchange rate differences Net income Dividend to shareholders Shareholders equity, 31 March 2,110 19,548 17,617 * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

12 Statement of cash flow SCANIA INTERIM REPORT JANUARY MARCH 2004 Amounts in SEK m unless otherwise stated EUR m* Q1 Q4 Q3 Q2 Q1 Cash from operating activities 152 1,411 1, ,535 1,466 Change in working capital etc , Cash flow from operating activities ,577 1,180 1, Net investments excluding acquisitions/ divestments of businesses , Cash flow before acquisitions/divestments of businesses , Net investment through acquisitions/divestments of businesses Cash flow excluding Customer Finance , Expansion in Customer Finance Change in net debt including Customer Finance Change in net debt from financing activities , ,344 Dividend to shareholders ,100 0 Net change in liquid assets and short-term investments ,272-1,295 Effect of exchange rate fluctuations on liquid assets and short-term investments Liquid assets and short-term investments at beginning of period 207 1,916 2,076 1,706 3,009 4,339 Liquid assets and short-term investments at end of period 152 1,405 1,916 2,076 1,706 3,009 * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

13 Number of employees SCANIA INTERIM REPORT JANUARY MARCH Mar 31 Dec 30 Sep 30 Jun 31 Mar Production companies etc 17,469 17,266 17,121 17,122 16,963 Sales and service companies 11,674 11,525 11,522 11,221 11,231 Vehicles and Service 29,143 28,791 28,643 28,343 28,194 Customer Finance Total number of employees 29,472 29,112 28,960 28,658 28,503 13

14 Balance sheet by business segment Amounts in SEK m unless otherwise stated EUR m* 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar Vehicles and Service ASSETS Intangible fixed assets 271 2,516 2,381 2,276 2,205 2,061 Tangible fixed assets 1,918 17,750 17,347 17,005 16,565 16,483 Shares and participations Inventories 1,044 9,673 8,460 9,208 9,308 8,726 Other receivables 1,071 9,924 9,501 9,606 9,577 9,782 Interest-bearing receivables 118 1,107 1,268 1,364 1,458 1,423 Liquid investments 134 1,239 1,779 1,911 1,569 2,861 Total assets 4,570 42,336 40,858 41,490 40,804 41,458 SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity 1,758 16,291 15,164 14,008 14,020 14,508 Provisions for pensions 250 2,317 2,088 2,132 2,109 2,063 Other provisions 452 4,190 4,360 4,267 4,188 4,128 Other liabilities 1,706 15,796 14,819 14,605 14,180 13,957 Borrowings 404 3,742 4,427 6,478 6,307 6,802 Total shareholders equity and liabilities 4,570 42,336 40,858 41,490 40,804 41,458 Net indebtedness excl. provisions for pension 270 2,503 2,648 4,567 4,738 3,941 Customer Finance ASSETS Intangible fixed assets Lease assets 838 7,767 7,900 7,546 7,985 8,013 Other tangible fixed assets Inventories Other receivables Financial receivables 2,023 18,737 18,030 17,567 17,498 16,803 Liquid investments Total assets 2,953 27,352 26,767 25,952 26,488 25,731 SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity 352 3,257 3,087 3,363 3,151 3,109 Provisions for pensions Other provisions Other liabilities ,132 1,009 1, Borrowings 2,414 22,360 21,781 20,716 21,367 20,821 Total shareholders equity and liabilities 2,953 27,352 26,767 25,952 26,488 25,731 * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

15 Balance sheet by business segment SCANIA INTERIM REPORT JANUARY MARCH 2004 Amounts in SEK m unless otherwise stated EUR m* 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar Eliminations ASSETS Tangible fixed assets ,353-1,376-1,405-1,431-1,477 Other receivables Total assets ,654-1,790-1,866-1,874-1,774 SHAREHOLDERS EQUITY AND LIABILITIES Other liabilities ,654-1,790-1,866-1,874-1,774 Total shareholders equity and liabilities ,654-1,790-1,866-1,874-1,774 Scania Group ASSETS Intangible fixed assets 273 2,531 2,395 2,287 2,216 2,072 Tangible fixed assets 2,611 24,185 23,892 23,171 23,144 23,045 Shares and participations Inventories 1,050 9,725 8,506 9,255 9,379 8,792 Other receivables 1,103 10,217 9,706 9,736 9,895 10,149 Interest-bearing receivables 2,141 19,844 19,298 18,931 18,956 18,226 Liquid investments 152 1,405 1,916 2,076 1,706 3,009 Total assets 7,344 68,034 65,835 65,576 65,418 65,415 SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity 2,110 19,548 18,251 17,371 17,171 17,617 Provisions for pensions 251 2,326 2,094 2,138 2,115 2,068 Other provisions 553 4,940 5,121 5,125 5,019 4,952 Other liabilities 1,632 15,118 14,161 13,748 13,439 13,155 Borrowings 2,818 26,102 26,208 27,194 27,674 27,623 Total shareholders equity and liabilities 7,344 68,034 65,835 65,576 65,418 65,415 * Translated solely for the convenience of the reader at a closing exchange rate of SEK = EUR

16 Units by quarter (by geographic area) SCANIA INTERIM REPORT JANUARY MARCH Q1 Full year Q4 Q3 Q2 Q1 Order bookings, trucks Western Europe 8,607 27,977 8,134 5,781 6,539 7,523 Central and eastern Europe 1,317 4,169 1, ,282 Latin America 1,705 4,915 1,670 1, ,053 Asia 1,889 5,471 1,232 1,541 1,512 1,186 Other markets 604 1, Total 14,122 44,212 12,597 9,659 10,407 11,549 Trucks delivered Western Europe 7,309 29,456 8,133 6,102 7,722 7,499 Central and eastern Europe 844 4,014 1, , Latin America 1,471 4,739 1,458 1,163 1,028 1,090 Asia 1,379 5,317 1,725 1,303 1, Other markets 396 1, Total 11,399 45,045 13,019 9,755 11,656 10,615 Order bookings, buses Western Europe 544 1, Central and eastern Europe Latin America 285 1, Asia Other markets Total 1,416 4,534 1, ,720 Buses delivered Western Europe 582 2, Central and eastern Europe Latin America 251 1, Asia Other markets Total 1,042 4,910 1,467 1,239 1,080 1,124 16