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FIGURES IN FOCUS:
XXXXxxxxx xxx xx
xxxx xxxx xxxxx xxx xxxx xxxxx xx.
Xxxxx xxxx xxxxxxxx xx x xxxxxx xxxxx. > SID 4–5
A MAGAZINE FOR SCANIA’S SHAREHOLDERSquarter 4 2012
FIGURES IN FOCUS:
4.75Dividend per share (SEK)
proposed by the Board of Directors.
Scania’s growing presence in the region. > PAGES 4–5
Focus on Southeast Asia
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
Interview. CFO Jan Ytterberg on 2012 and the future > paGE 3
Finance. Analysts: Weak euro zone affecting transport industry > paGES 6–7
Report. Price pressure in Europe and in Brazil had a negative effect. > paGE 2
0
4
8
12
16
20% Operating margin
-12 Q4
-10 Q4
-11 Q1
-11 Q2
-11 Q3
-11 Q4
-12 Q1
-12 Q2
-12 Q3
EN01_omslag.indd 1 2013-02-04 09:22:39
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
Q4
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q4
2012
Q1
2012
Q2
Trucks 61%
Other 2%Used vehicles 6%
Services 21%
Engines 2%
Buses and coaches 9%
%SEK m. SEK m.
2012
Q3
2012
Q3
Operating income, SEK m.Operating margin, percent
EUROPE
Order bookings
29,727 -10%Deliveries
29,032 -13%
EURASIA
Order bookings
6,979 +3%Deliveries
6,996 -7%
LATIN AMERICA
Order bookings
21,849 +10%Deliveries
18,129 -13%
ASIA
Order bookings
9,612 -29%Deliveries
9,393 -35%
AFRICA AND OCEANIA
Order bookings
3,778 +1%Deliveries
3,851 +2%
2012 IN BRIEF:TOTAL DELIVERIES decreased by 16 percent to 67,401 vehicles
SERVICE REVENUE was stable at SEK 17,092 m
EARNINGS PER SHAREdecreased by 29 percent to SEK 8.31
2012 IN FIGURES
Order bookings and deliveries by region, 2012 (number of vehicles)
(SEK m. unless otherwise noted) 2012 2011 Change in %
Net sales, Scania Group 79,603 87,686 -9
Operating income, Vehicles and Services 7,694 11,881 -35
Operating income, Financial Services 606 517 17
Operating income 8,300 12,398 -33
Income before taxes 8,281 12,612 -34
Net income for the period 6,640 9,422 -30
Operating margin, % 10.4 14.1
Return on equity, % 19.2 29.5
Return on capital employed, Vehicles and Services, % 22.8 38.1
Earnings per share, SEK 8.31 11.78 -29
Cash fl ow, Vehicles and Services 3,025 6, 970 -57
Number of employees, 31 December 38,597 37,496
Order bookings (units, trucks and buses) 71,945 76,843 -6
Deliveries (units, trucks and buses) 67,401 80,108 -16
2 SCANIA VALUE • Q4/2012 www.scania.com
Net sales by product segment, 2012 Net sales Operating income and margin
Key fi gures
EN02_rapport.indd 2 2013-02-04 09:25:00
interview
www.scania.com Q4/2012 • SCANIA VALUE 3
text: susanna berlin photo: dan boman
www.scania.com
Cost control and flexibility are key“For Scania, the euro zone cri-sis and lower demand in many markets dominated 2012. In 2013, we will focus on strong cost control and clearer priorities when it comes to projects and investments,” says Jan Ytterberg, Scania’s Chief Financial Officer.
How would you describe 2012?“The year was characterised by continued
great uncertainty in the global economy. There was low economic growth in many regions. This led to hesitancy among our customers. There is no interest in expanding the vehicle population in a situation of stable or lower transport vol-ume. Although a replacement need exists, some transport companies instead opted to defer their investments.
“Demand for trucks, buses and coaches and engines continued to be weak in most parts of Europe. Brazil, our largest market, began the year weakly due to lower economic activity and the transition to the Euro 5 emission standard,
but the year closed strongly, aided by exten-sive subsidies. In Russia, demand was good while the Middle East was adversely affected by unrest in the region. Service demand was weak in southern Europe, while demand grew in vari-ous non-European markets.” How was profitability affected during the year?
“Volume is the most important parameter for Scania’s profitability trend, so lower vehi-cle deliveries pulled down earnings. Our costs increased and capacity utilisation was low at the production units. Exchange rates also presented a challenge. The strengthening of the Swed-ish krona adversely affects us since a large part of our cost base is in Sweden. Prices were also depressed in our two largest markets, Europe and Brazil.” Were there any positive factors?
“Yes, Financial Services reported its best-ever earnings. Our growing service business outside Europe is positive; we are now starting to see the effects of larger vehicle populations due to increased deliveries in emerging markets in recent years.”
What steps have you taken to keep down costs?
“Late in 2012, we imposed a general hiring freeze and reviewed all consultancy ser-vices. In certain European markets, we made adjustments in the structure of the service network in order to better match changes in customer behaviour. We gradually intro-duced stronger cost discipline, which we are now working further with throughout the organisation.”What will be Scania’s focus in 2013?
“We are mainly concentrating on continued volume flexibility and adjustment of the cost level to low demand. In the short term, the situation is hard to assess but looking ahead, we expect demand to return once economic activity recovers.
“This is why we are continuing to invest in prioritised development projects and we are continuing to expand our sales and services organisation in emerging markets. Scania will have strengthened its position once demand returns, with good capacity in both the pro-duction and service networks.”
A weak 2012 and uncertain prospects in 2013.
Jan Ytterberg, Scania’s CFO
“ Looking ahead, we expect demand to return once economic activity recovers.”
EN03_interview.indd 3 2013-02-04 09:24:50
In recent years, Scania has increased its vehicle deliveries to several markets in Southeast Asia. The vehicles now on the roads in Indo-nesia and Singapore are paving the way for growth in the service business. Meanwhile, Scania is establishing new operations in Myanmar, among other places. The development of that country’s infrastructure will generate attractive long-term opportunities.
Scania’s basic strategy is the same for all markets and segments — to offer customers the best profi t-ability during the service life of vehicles. In Asia, the challenge is that many transport companies still just look at a vehicle’s price and load capacity. But even today there are sectors that work on the basis of high capacity utilisation of vehicles and thus demand services that boost uptime.
Indonesia has Asia’s fourth largest coal reserves and an extensive mining industry. This is refl ected in Scania’s business in Indonesia, which is 95 percent related to this segment. Scania’s largest global customer in the mining
FOCUS: NEW BUSINESS OPPORTUNITIES IN SOUTHEAST ASIA
Increased presence in Southeast Asia
industry, PT Pamapersada Nusantara (PAMA), is based in Indonesia. PAMA has one of the world’s largest fl eets of mining vehicles, includ-ing 640 from Scania.
“In a couple of years we managed to double
the number of Scania vehicles in the country. Today we have around 2,900 mining vehicles and between 150 and 200 buses on the roads,” says Mikael Benje, head of Scania’s representa-tive offi ce in Indonesia.
Opportunities in the service business The large Scania vehicle population and the demanding conditions in mines offer good opportunities for Scania to develop its service business.
“Here we have huge potential,” says Benje.
4 SCANIA VALUE • Q4/2012 www.scania.com
MYANMARCapital: NaypyidawPopulation: About 50 millionGDP: About USD 50 billion GDP forecast 2013*: +6.0 percent
INDONESIACapital: JakartaPopulation: About 238 millionGDP: About USD 845 billion GDP forecast 2013*: +6.3 percent
Myanmar(formerly Burma)
Scania’s President and CEO Martin Lundstedt during
a visit to mining customer PAMA in Indonesia.
Yangon is the largest city in Myanmar, a country that is now opening up to the outside world and that has a strong need to improve and renew its infrastructure.
*Source: IMF *Source: IMF
Mikael Benje, Head of Scania’s representative offi ce in Indonesia.
“ There is huge potential in the service business. Mining vehicles are worked hard and require rapid access to parts.”
EN04-05_focus.indd 4 2013-02-04 09:58:23
TEXT: ERIK ARONSSON, PER-OLA KNUTAS PHOTOS: ERIK LJUNGBERG, DAN BOMAN, ISTOCKPHOTO
Increased presence in Southeast Asia
Q4/2012 • SCANIA VALUE 5www.scania.com
“Mining vehicles are worked hard and require rapid access to parts. One of the reasons we built a new parts warehouse in Singapore is that we want to cut lead times in the region.”
In late 2012, sales of new vehicles were weak in Indonesia, partly due to a decrease in coal prices, but Benje is optimistic. In September, Scania and local distributor United Tractors (UT) opened an assembly facility for buses in Jakarta with a monthly capacity of 25 units.
“During 2013, we expect to have roughly the same volume as in 2012: 450 to 500 trucks in Indonesia. We expect growth in the coming years. Aside from this, we anticipate a volumeof about 80 buses and 50 engines annually.”
Concentration on city busesSingapore’s vehicle market is characterised by strong competition from Chinese and Japanese manufacturers. Scania, which has had a local
presence for more than 35 years, has been the most successful of the European manufactur-ers and currently has a market share of about 14 percent.
“Public transport is a key issue in Singapore. The government has allocated signifi cant funds to increase the number of city buses. Among other things, this has meant that Scania since 2007 has delivered 1,100 city buses to SBS Transit Ltd, Singapore’s largest bus operator,” says James Armstrong, head of Scania in Southeast Asia.
“With so many Scania buses out on the roads, we have great potential to provide the operator with servicing and preventive measures in order to maximise bus uptime. We also see opportuni-ties for Scania to assume operation of customer workshops.”
The construction boom in Singapore is expected to continue, generating demand for Scania’s heavy vehicles. The country’s intensive
SINGAPORECapital: SingaporePopulation: About 5 millionGDP: About USD 325 billion GDP forecast 2013*: +2.9 percent
port traffi c also offers potential business.“There is good demand for marine engines,
for example in pilot boats, but also for indus-trial engines in goods handling equipment,” says Armstrong, noting that there is good over-all potential when it comes to service-related products.
Renewing the infrastructureMyanmar, formerly known as Burma, has recently opened up to the outside world. Like various other international companies, Scania is in the process of establishing itself there. Sca-nia’s recently appointed distributor Octagon has already sold numerous buses and coaches for domestic traffi c between major cities. The dealership is now building up a service network from Yangon (formerly Rangoon) in the south to Mandalay in the north.
“The main focus in Myanmar during the next few years will probably be on improving and renewing the infrastructure. We thus expect heavy demand for vehicles from the construc-tion industry. The country also has considera-ble natural resources in the form of timber, pre-cious stones and metals. This is driving demand for products for the forestry and mining indus-tries,” says Armstrong.
There are often electricity supply problems, requiring stand-by power of various kinds.
“The power grid has problems supply-ing electricity, especially during the summer months when hydroelectric power is not so effective. There is huge demand for engines for power generation in mines, shopping centres and hospitals – anywhere that needs a stand-by power source,” says Armstrong.
In October 2012, Scania’s President and CEO Martin Lundstedt visited the company’s work-shop in the capital Naypyidaw as well as the construction site of a large new workshop in Yangon.
“If the positive trend continues, Myanmar can become one of the most important markets in the region for heavy vehicles of western Euro-pean standards and quality,” said Lundstedt during his visit.
INDONESIEN
Myanmar(formerly Burma)
Singapore
Indonesia
Scania has an extensive fl eet of city buses in Singapore.
*Source: IMF
EN04-05_focus.indd 5 2013-02-04 09:23:26
6 SCANIA VALUE • Q4/2012 www.scania.com
The European debt crisis, slower growth in China and uncertainty about US government finances. These are the three biggest prob-lems facing the world economy in early 2013, according to many financial observers. Taken together, this will result in a weak global mar-ket for the vehicle industry, especially in the first half of 2013.
“But in the third quarter of 2013, we expect that demand may recover somewhat, mainly driven by higher consumption in the US but also by renewed momentum in Chinese infra-structural investments,” says Anders Trapp, analyst at SEB Enskilda.
The euro zone crisis means that Europe has suffered its second recession since 2009, with
FINANCE: ECONOMIC OUTLOOK FOR 2013
“ Europe is not an isolated island. When European consumers spend less and exports to China and the US fall, this has a negative impact on cargo volume.”
Anders Trapp, analyst at SEB Enskilda
The European debt crisis remains the biggest threat to the global economy in 2013, according to analysts. One bright spot is Brazil, where continued government subsidies are expected to sustain growth.
falling GDP fi gures. In Asia, most economies continued to grow in 2012, but at a much lower rate than before, since exports to Europe and the US have declined, affecting the market for heavy vehicles.
“Europe is not an isolated island. When European consumers spend less and exports to China and the US fall, this has a negative impact on cargo volume. Then hauliers post-pone their investments in new vehicles,” says Trapp.
The global economic outlook for 2013 looks somewhat better, but the euro zone crisis remains in focus and is expected to play a crucial role. Household and public debt restructuring, a credit crunch and increasingly weak domestic demand in the wake of budget cuts are con-tributing to the downturn. Since the region has large imbalances, the recovery will probably take longer than normal.
Rebound expected in ChinaIn China, GDP growth slowed down in 2012. But there are now signs that the country’s new lead-
Continued focus on euro crisisership is enacting stimulus measures that may contribute to a higher growth rate.
“It looks as if the new regime has decided to stabilise the economy by pumping money into various government infrastructure pro-jects. In this way they can probably maintain a growth rate of around 8 percent,” says Michael Boström, chief analyst at Danske Bank.
Expectations in BrazilAnother bright spot in the economic gloom is the performance of the world’s sixth largest economy, Brazil, whose government has decid-ed to renew its stimulus measures. According to a Reuters survey, growth of 3.5 percent is expected in the country during 2013, compared to a modest 1.0 percent in 2012. The stimulus measures include reduced key interest rates, tax cuts, incentives for local industry through gov-ernment procurement and improved fi nancing measures for export companies.
In the aftermath of the US presidential elec-tion, the question of whether it is possible to solve the country’s fi scal problems is in on the agenda. The relatively slow recovery is con-tinuing but uncertainty about fi scal policy is expected to dampen growth, which is predicted to end up at around 2 percent in 2013. Among positive signals are that consumption is appar-ently rising somewhat and that the housing market seems to have gained momentum.
“Taken together, developments in the US and China may boost global GDP growth again during the third quarter of 2013. Europe will lag behind, but we will gradually see a positive impact here too,” says Trapp.
EN06-07_finance.indd 6 2013-02-04 09:23:50
www.scania.com • SCANIA VALUE 7Q4/2012
text: erik aronsson, per-ola knutas photos: conny hetting, istockphoto
Brazil to grow faster in 2013
Euro zone (-0.1)
OECD countries (1.4)
China: Growth is expected to acceler-ate somewhat compared to 2012, since the country’s new leadership is pumping money into infrastructure projects.
Brazil: Growth is expected to accelerate in 2013, due to the government’s renewed stimulus measures and other factors.
Europe: Budget cuts will reduce consumption and demand, leading to
weak or negative growth in 2013.
GDP forecast for 2013
-3 -2 -1 0 1 2
-2 0 2 4 6 8 10
United States (2.0)
Brazil (4.0)
China (8.5)
India (5.9)
Source: OECD Economic Outlook, 27 November 2012
EN06-07_finance.indd 7 2013-02-04 09:24:00
IN BRIEF editor: per-ola knutas photos: peggy bergman, scania
Recruiting more female managers
Engines that save aviation fuel
A TaxiBot pushback tractor equipped with a Scania engine is being tested at the Châteaur-oux-Centre Airport in France. It tows Airbus A320 type aircraft.
Humberto Delgado Rosa and Christophe Pavret de La Rochefordière, who work with climate policy at the European Commission, participated in the conference. On the right Martin Lundstedt, President and CEO of Scania.
Scania is one of ten large Swedish companies participating in the “Battle of the Numbers” project, aimed at raising the share of women in operational management positions.
“For Scania’s long-term success, we must recruit from the entire pool of available talent. We must ensure that our female employees really want to remain with the company and that more women choose Scania as an employer,” says Scania’s President and CEO Martin Lundstedt.
Other participating companies are Ericsson,
Scania has signed an agreement to deliver up to 3,000 Tier 4i emission-compliant engines engines until 2022 for use in aircraft towing vehicles.
They will be manufactured by French-based company TLD, an airport ground support equipment (GSE) specialist. TLD chose engines from Scania for their compact and modular design, which enables their adaptation to future emission standards.
The vehicles will be used to move aircraft between gate and runway. This saves jet fuel and reduces greenhouse gas and noise emissions as the aircraft will not have to start their engines until minutes before take-off.
Focus on sustainable transport Carbon dioxide emissions in Europe’s trans-port sector can be reduced – here and now as well as in the future. That was the theme of Scania’s Transport Conference in Brussels on 14 November 2012. The conference gathered 300 high-level representatives from industry, public authorities and the European Union to discuss sustainable transport development.
Scania’s President and CEO Martin Lundstedt emphasised that there is no conflict between sustainable transport and profitability for the transport sector.
“In the tough economic situation Europe is currently facing, we see a shift towards trans-port services that are more and more economi-cally, socially and environmentally sustain-able. This goes hand in hand,” he told the conference.
H&M, IKEA, SAAB, Sandvik, SEB, SPP, SSAB and Volvo. Each company has selected ten women for the project.
A number of workshops will give project partici-pants an opportunity to exchange experience.
UPCOMIng EvEnTS22 March 2013Annual 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, [email protected]@scania.comProject [email protected] Art Director [email protected] Publishing Groupwww.appelberg.comPrinting: Trosa TryckeriCover photo: Dan Boman
ContactScania Investor Relations 151 87 Södertälje, SwedenTel: 08-553 81 000E-mail: [email protected]
Several speakers stressed that there is no single solution but that a reduction in CO2 emissions can be achieved through new and improved technol-ogy, better adapta-tion of vehicles for specific transport needs, improved logistics and driver training.
At the conference, Scania emphasised the Ecolution by Scania concept, which customis-es sustainable solutions for individual trans-port companies. It enables hauliers to reduce
their CO2 emissions by 15-20 percent, and by 50 percent or more if they shift to biofuels. Read more about Scania’s Transport Conference on: www.scania.com/transportconference
EN08_news.indd 8 2013-02-04 09:24:18
