Scania Year-end Report January-December 2017

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Mar 20, 2018, 08:16 ET

SÖDERTÄLJE, Sweden, March 20, 2018 /PRNewswire/ --

Scania's net sales rose to a record high SEK 119.7 billion, an increase of 15 percent compared to the previous year. Truck deliveries reached an all-time-high and demand for our new truck range was good. Higher vehicle and service volume impacted earnings positively, offsetting higher production costs for running double product ranges, constraints in the supply chain and an unfavourable market mix.

Summary of the full year 2017

Operating income, excluding items affecting comparability, amounted to SEK 12,434 m. (10,124)

Operating income, amounted to SEK 12,434 m. (6,324)

Net sales increased by 15 percent to SEK 119,713 m. (103,927)

Cash flow amounted to SEK 5,701 m. (3,427) in Vehicles and Services

Comments by Henrik Henriksson, President and CEO

"Scania's net sales in the first nine months of 2017 rose to a record high SEK 86.4 billion, an increase of 15 percent compared to the previous year. Demand for the new truck range was good and the service trend remains positive. The period was affected by a high investment level, higher production costs for running double product ranges and a less favourable market mix. In spite of this, the company managed to present strong earnings for the first nine months of 2017 of SEK 9,080 m., giving an operating margin of 10.5 percent. In the third quarter, in addition to continued high cost levels, currency started to impact negatively on earnings. Order bookings for trucks rose by 27 percent in the first nine months compared to the year-earlier period. The strong demand for trucks continued in Europe. The trend in Latin America is positive and we see increased demand in Brazil from very low levels. In Eurasia, the trend in demand is positive, mainly due to Russia's continued recovery. In Asia, demand increased thanks to strong sales efforts, particularly in China and Iran. Order bookings in Buses and Coaches were strong overall and increased by 2 percent compared to the same period in 2016. In the business area Engines, the demand trend is positive in all segments. Service revenue amounted to a record high SEK 17.5 billion, an increase of 11 percent. Financial Services reported operating income of SEK 862 million and credit losses remain at low levels. In September the second stage in Scania's introduction of the new generation trucks was launched – the Scania XT range with trucks tailor-made for the construction and forestry industries. In October Scania received the decision from the European Commission concerning alleged inappropriate exchange of information. Scania contests its findings and will appeal against it. Scania also emphasises that it has co-operated fully with the European Commission during the investigation period."