Interview. Xxxx xxx xxxxxx xxx xx xxxxxx xxxx xxxx xxx xxxxxx xxx. > SID 3

Stock market. Xxxx xxx xxxxxx xxx xx xxxxxx xxxx xxxx xxx xxxxxx.> SID 6–7

Report. Xxxx xxx xxx xxx xxx xxx xxx xx xxx.> SID 2

FIGURES IN FOCUS:

XXXXxxxxx xxx xx

xxxx xxxx xxxxx xxx xxxx xxxxx xx.

Xxxxx xxxx xxxxxxxx xx x xxxxxx xxxxx. > SID 4–5

Focus. Wadman Transport saves fuel and reduces emissions. > paGE 5

Finance. Big turnout at Capital Markets Day. > paGES 6–7

Report. Lower volume, higher level of costs pulled down margin. > paGE 2

A MAGAZINE FOR SCANIA’S SHAREHOLDERSquarter 3 2012

FIGURES IN FOCUS:

407Cash flow (SEK m) in

Vehicles and Services Q3CEO Martin Lundstedt looks ahead. > pagES 3–4

An eye for opportunities

0

4

8

12

16

20%

-12 Q3

-10 Q3

-10 Q4

-11 Q1

-11 Q2

-11 Q3

-11 Q4

-12 Q1

Operating margin

-12 Q2

“Growth will return” EN01_omslag.indd 1 2012-10-29 15:00:23

0

5,000

10,000

15,000

20,000

25,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

4

8

12

16

20

2012

Q3

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2010

Q3

2010

Q4

2011

Q1

2011

Q2

2011

Q3

2012

Q3

2011

Q4

2012

Q1

Trucks 59%

Other 2%Used vehicles 6%

Services 22%

Engines 2%

Buses and coaches 9%

%SEK m. SEK m.

2012

Q2

2012

Q2

Operating income, SEK m.Operating margin, percent

EUROPE

Order bookings

6,329 -15%Deliveries

6,215 -9%

EURASIA

Order bookings

1,756 -8%Deliveries

1,661 -6%

LATIN AMERICA

Order bookings

5,791 +2%Deliveries

4,262 -19%

ASIA

Order bookings

1,935 -31%Deliveries

1,782 -55%

AFRICA AND OCEANIA

Order bookings

1,114 +10%Deliveries

927 0%

First nine monthsin brief:DELIVERIES fell by 21 percent to 46,879 vehicles.

OPERATING INCOMEfell by 36 percent to SEK 6,135 m.

CASH FLOWamounted to SEK 2,176 m.

FIRST NINE MONTHS IN FIGURES

Order bookings and deliveries by region, Q3 (number of vehicles)

(SEK m. unless otherwise noted) 2012, 9 mo 2011, 9 mo Change in %

Net sales, Scania Group 57,261 64,795 -12

Operating income, Vehicles and Services 5,702 9,294 -39

Operating income, Financial Services 433 363 19

Operating income 6,135 9,657 -36

Income before taxes 6,156 9,805 -37

Net income for the period 4,750 7,290 -35

Operating margin, % 10.7 14.9

Return on equity, % 20.2 33.7

Return on capital employed, Vehicles and Services, % 25.2 42,3

Earnings per share, SEK 5.94 9.11 -35

Cash fl ow, Vehicles and Services 2,176 3,866 -44

Number of employees, 30 September 38,580 37,733

Order bookings (units, trucks and buses) 52,320 60,997 -14

Deliveries (units, trucks and buses) 46,879 58,985 -21

2 SCANIA VALUE • Q3/2012 www.scania.com

Net sales by product segment* Net sales Operating income and margin

Key fi gures

*Refers to fi rst nine months of 2012

EN02_rapport.indd 2 2012-10-29 15:00:27

“Growth will return”“In the short term, the market situation offers few bright spots and demands a high degree of flex-ibility. But economic growth will return and the need for transport equipment will thus increase. This is why we are investing in expand-ing our technical production and service capacity, and we are con-tinuing our research and develop-ment efforts in order to strengthen our product portfolio,” says Martin Lundstedt, Scania’s President and CEO since 1 September.

You have 20 years of experience in this in-dustry. How has Scania’s business model evolved?

“Today we work with much more of a holistic perspective. In many sectors there is a need for more efficient logistics. To enable our products

interview

www.scania.com Q3/2012 • SCANIA VALUE 3

text: göran lind photos: göran wink, petter magnusson

www.scania.com

and services to achieve this, we not only need to understand our customers but also our custom-ers’ customers − the buyers of transport ser-vices. By analysing flows, we can distinguish the factors that we can influence, thereby providing added value to the customer. Being able to log into the logistics system of a mine requires close collaboration and trust between us and the cus-tomer. One example of this is that we are organ-ising into segments that are adapted to specific types of industries.” Given today’s sales volumes, doesn’t Scania have a rather long way to go before achieving its scenario of 150,000 vehicles per year at the next economic peak?

“We will clearly need an economic upswing. But we know that growth will return, including in our main market, Europe. We will grow with the total market in our mature markets and will also capture market share in areas where we can deliver more value than our competitors. By

gaining more knowledge of the logistical chal-lenges in different industries and developing new products and services, we can grow in new segments. The forest product industry is one example where we see good opportunities. We also foresee great potential in emerging mar-kets, where the structure of demand will change and we are only in the starting phase today.” What is Scania’s strategy in emerging markets?

“Many of these countries are developing at a rapid pace. Taking China as an example, major investments have been made in various types of production equipment, but logistics systems have not kept pace with developments. There will also be more focus on environmental impact. These trends point towards increasing demand for our solutions, and we can work according to the same basic concept in all markets and in all segments − strengthening the customer’s profit-ability during the service life of a vehicle.

EN03_interview_lundstedt.indd 3 2012-10-29 15:00:32

“It is not a matter of stopping machinery or putting things on the back burner. But we have to work with different scenarios and be ready if the economic situation worsens.”

“We have seen similar developments in Tur-key, in South America and in Russia. The lesson is that if we don’t make our investments in time, it will cost us significantly more later on. That is why we are expanding our production and ser-vice capacity.”How will Scania’s service business grow?

“I believe that the strongest driving force for service growth can be found among custom-ers themselves. Because of greater competition, they have to concentrate on their core business and outsource other work − among others to Scania. Customers with this approach towards us are good for Scania. They demand com-plex solutions and a high degree of dedication on our part. We must also expand our service business to keep pace with the growth in the number of Scania vehicles on the roads in our markets, for example in Asia. This expansion occurs in many cases together with partners and employing mobile solutions.” How do you view the short-term market situation?

“It is very uncertain. We have to be prepared to reduce our costs and to be highly flexible, in all our operations. It is not a matter of stopping machinery or putting things on the back burner. But we have to work with different scenarios and be ready if the economic situation worsens.”Since 2000, Volkswagen has been Scania’s main shareholder, and today your compet-itor MAN is also part of the Volkswagen Group. What does this mean to Scania?

“Volkswagen has always supported our strat-egy and our business model. I feel confident in them as our main shareholder. Volkswagen’s strategy of strong, independent brands fits Scania well. There is potential for us to work together with MAN to strengthen our product portfolio. It is important to point out that the advantages of any cooperation projects must benefit all Scania customers and shareholders.”

4 SCANIA VALUE • www.scania.comQ3/2012

Scania’s new President and CEO Martin Lundstedt sees great growth potential for Scania’s service business.

EN03_interview_lundstedt.indd 4 2012-10-29 15:00:34

Ecolution by Scania: Ecolution by Scania has been developed on the basis of customers’ experiences to ensure that both passenger and goods transport companies can get the most out of their vehicles. It serves as a toolkit, from which customers can choose the complete package or selected portions of it.

The vehicle and service specification is tailored to each customer’s needs, primarily resulting in lower fuel costs, which means less carbon dioxide emissions.

The vehicle specification may include engine size, alternative fuels and rear axle gearing. On the service side, driver training and maintenance agreements are important.

Scania Fleet Management provides rapid feedback of all parameters. Optimised cruising speed may lead to lower fuel consumption without compromising delivery precision. Feedback enables the customer to work with Scania to achieve continuous improvements, for example through driver coaching.

Profitable cooperationToday’s increasing focus on redu-cing carbon dioxide emissions is affecting the transport industry. Wadman Transport on Sweden’s west coast has reduced both its fuel costs and carbon dioxide emissions thanks to the Ecolution by Scania concept.

text: erik aronsson photos: tommy hollFocus: ecolution by scania

Regardless of a haulier’s size, vehicle fuel is often its most important cost item. Many Scania customers are small haulage companies. One example is Wadman Transport, which operates a fleet of six trucks. Its operations mainly centre on bulk transport of fish and chemicals.

The company has always sought to lower its fuel consumption, but these efforts are now being helped by a greater focus on reducing emissions, among them carbon dioxide. When Wadman began operations in 2006, it used trac-tor units with traditional gearing and specifica-tions. But when managing director and owner Christian Wadman learned about Ecolution by Scania, he decided to apply this concept to his operations for both environmental and eco-nomic reasons.

Early in 2011 Wadman Transport invested in

four 56 tonne gross weight tractor units, speci-fied according to Ecolution by Scania. The new specification lowered fuel consumption by 8 litres/100 km to 40.2 litres/100 km. With the help of driver training and coaching, in one year the company succeeded in cutting fuel consumption to an average of 36 litres/100 km.

“The economic aspect is also important, of course,” Wadman says. “The specification of the vehicles, combined with driver training and coaching, has saved us nearly 12 litres/100 km.”

Fuel savings at Wadman Transport total no less than 63,000 litres of diesel per year. These fuel savings also mean that the company’s car-bon dioxide emissions are down by 170 tonnes.

One important element of the Ecolution by Scania concept is continuous reporting of vehicle performance.

“We are immediately alerted if the fuel consumption of any truck suddenly starts to diverge from normal, so that we can take action before it begins to cost us money,” says Wadman.

By working closely with Scania, there is thus potential for Wadman Transport to continue achieving improvements in fuel consumption and emissions.

Christian Wadman (pictured below) is Managing Director

of Wadman Transport, whose assignments include hauling

chemicals for Hoyer. Wadman Transport has saved almost

12 litres of fuel per 100 kilometres by using the

Ecolution by Scania concept.

www.scania.com • SCANIA VALUE 5Q3/2012

EN05_case_wadman.indd 5 2012-10-29 15:00:38

6 SCANIA VALUE • Q3/2012 www.scania.com

Finance: capital Markets Day 2012

“Increased investments show faith in the future”

“The weak market situation in Europe looks set to persist. We also foresee a slowdown in other markets. Looking further ahead, the demand for transport solutions will continue since it is closely linked to global economic growth, international trade and urbanisation,” said Lundstedt at Scania’s Capital Markets Day.

While Europe’s share of Scania sales has decreased, the continent remains a core market with over 40 percent of vehicle deliveries. The euro zone crisis and the uncertainty it gener-ates among customers will thus affect Scania’s volume. Another major market, Brazil, has been adversely affected by the transition to Euro 5 emission standards and lower economic activ-ity. As a result, Scania’s deliveries of trucks and buses fell by 21 percent during the first nine months of 2012.

“Scania’s assessment is very similar to our own view and that of its main competitors. We notice that the situation does not seem as nerv-ous as in 2008 − we are seeing a tough market

but there is more confidence,” says Björn Enarson, analyst at Danske Bank.

Among other things, confidence stems from the fact that the overall market has increased by between 3-5 percent on average per year since the turn of the millennium and Scania believes that this trend will continue. A gradual shift is also taking place to markets with higher under-lying growth.

Good opportunities in new marketsAnother sign of confidence is that Scania is investing in order to boost production capac-ity from 100,000 to 120,000 vehicles per year, as CFO Jan Ytterberg explained. This is the first

Growth in the logistics sector will continue. That is the assessment of Scania’s President and CEO Martin Lundstedt, as well as ana-lysts. Scania also receives praise for not being afraid to invest de-spite a tough market climate.

EN06-07_Capitalmarketday.indd 6 2012-10-29 15:00:43

www.scania.com • SCANIA VALUE 7Q3/2012

text: göran lind photos: petter magnusson

“Increased investments show faith in the future”

step towards a technical capacity of 150,000 vehicles per year by the next peak in demand. Scania is also investing in R&D, among other things so it can grow in new segments and in new markets outside Europe.

“Despite the rather weak market outlook, with Europe expected to be at low levels during the next few years, Scania is raising its investments in the production network in order to achieve a long-term goal, which must be regarded as a sign of strength. One risk, of course, is if the market trend weakens even further. Meanwhile, Scania seems to have investment needs, since its capi-tal spending has been relatively low in recent years,” says Magnus Fröblom, senior portfolio

manager at the Riksbankens Jubileumsfond. Martin Lundstedt, who took over as President

and CEO in September, has declared that the change of CEO implies “business as usual”, but of course this doesn’t mean that everything will be done in the same way as before. The business model is evolving, among other ways through greater focus on service content. Scania sees an increased need among customers for services during the entire economic life cycle of a vehicle.

“Martin Lundstedt seems like a person who will continue to lead Scania in essentially the same way as before, with perhaps a little extra focus on sales channels,” says Anders Trapp, analyst at SEB Enskilda.

More from the Capital Markets Day All presentations from the Capi-tal Markets Day are available on Scania’s home page, along with a webcast of President and CEO Mar-tin Lundstedt’s address.

www.scania.com/ir

Magnus Mackaldener (pictured on the right) explaining the technology behind Scania’s Euro 6 engines.

Many took the opportunity to test-

drive one of Scania’s trucks or buses.

Scania’s Capital Markets Day at-tracted almost 100 participants.

Speakers included CEO Martin Lundstedt, CFO Jan Ytterberg

and Magnus Mackaldener of Engine Development.

EN06-07_Capitalmarketday.indd 7 2012-10-29 15:00:46

in brief editor: erik aronsson photos: mats t karlsson, lucas holm

Scania has entered into an agreement which will ensure safe road transportation of iron ore concentrate until 2021 from Northland Resources’ ore-mining operation at Pajala in far northern Sweden. The order is worth about SEK 1.5 billion. Scania will deliver a total of about 400 complete truck-trailer combinations and service-related products tailored to the min-ing industry’s very strict demands in respect of load capacity, uptime and delivery precision. The order was placed by the mining company’s general contractor Swerock, which is a subsidi-ary of the Swedish construction and civil engi-neering company Peab.

“This is the most comprehensive deal we have concluded to date with the Swedish mining industry. We have used the overall competency of the Scania organisation to cater for the vari-ous parameters, which aside from the trucks and trailers themselves, are crucial for our customers’ profitability,” says Sandro Grimpe, Service Mar-keting Director at Scania-Bilar Sverige AB who is responsible for the deal.

Scania signs SEK 1.5 billion contract with Peab

Broad range of Euro 6 engines at IAA

Gabriel Warde was the winner of

Scania’s Young European Truck

Driver (YETD) competition.

Gabriel Warde from Ireland won the exciting final of the Young European Truck Driver 2012 (YETD) competition. The first prize was a completely new Scania R-series truck, worth 100,000 euros.

“I really felt the pressure releasing after the competition but it is really good to be on this side of the finish line,” says Warde.

More than 17,000 truck drivers under age 35 from 24 European countries competed in this year’s YETD. Scania’s Young European Truck Driver competition is a major part of a global initiative for responsible, safe driving that Scania started in 2003. By highlighting the role of the driver, Scania also wants to attract more young people into the driving profession.

“The driver is absolutely the most important factor in heavy vehicle transport. Vehicles and infrastructure are obviously of major significance, but fuel-efficient and safe driving is primarily a

matter of human behaviour. Through YETD, Scania wants to help raise the status of profession-al drivers and emphasise their great importance to the profitability of transport companies and to road safety, as well as to reduced environmen-tal impact. We want to help attract more young, capable drivers into the transport business,” says Erik Ljungberg, Senior Vice President and head of Scania Corporate Relations.

In their evaluation of YETD, it turns out that eight out of ten contestants believe that the com-petition helps raise the status of professional driv-ers. They also believe that the competition helps change driver behaviour, especially when it comes to road safety and reduced fuel consumption.

Scania also organises similar competitions in Latin America, Africa and Asia. The 2012 competi-tions attracted about 70,000 drivers, which is a new record.

Scania unveiled a number of new 9- and 13-litre Euro 6 engines for trucks and buses at the IAA commercial vehicle exhibition in Hannover, Germany, in late September. Scania also displayed new high-performance Euro 6 gas engines.

“It was a really good move on our part to launch Euro 6 vehicles as early as 18 months ago. We have sold about 1,000 units in various configurations to date,” said Henrik Henriksson, Head of Franchise and Factory Sales at Scania.

Scania’s President and CEO Martin Lundstedt emphasised that it is already possible to make major contributions to reducing emissions by using today’s technology. One example is the Ecolution by Scania concept, which involves Scania setting targets for fuel consumption together with the transport company.

IAA is the leading international trade fair for commercial vehicles.

UPcomInG EvEnTS30 January 2013Year-end Report 2012

23 April 2013Interim Report January-March 2013

3 May 2013Annual General Meeting 2013

Would you like to subscribe?For a free subscription, visit www.scania.com/scaniavalue

Scania value is published by Scaniaand targeted to Scania shareholders.

PublisherPer Hillström, ir@scania.comEditor-in-chiefanneli.volden@scania.comProject managererik.aronsson@appelberg.com Art Director karin.soderlind@appelberg.comProductionAppelberg Publishing Groupwww.appelberg.comPrinting: Trosa Tryckericover photo: Göran Wink

contactScania Investor Relations 151 87 Södertälje, SwedenTel: 08-553 81 000E-mail: ir@scania.com

Sandro Grimpe, Service marketing Director at Scania-

Bilar Sverige AB.

Driver the mostimportant factor

EN08_news.indd 8 2012-10-29 15:00:51