Scania Interim Report January-September 2008
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STOCKHOLM, Sweden, October 24, 2008: Operating margin rose to 15.8 (14.1) percent and net margin increased to 11.1 (9.8) percent
Comments by Leif Östling, President and CEO “Scania’s earnings were strong during the first nine months of 2008, primarily driven by higher vehicle volume and increased prices.
Sales of service-related products continued at a high level, with revenue increasing by 8 per cent. Due to uncertainty about future business conditions as well as liquidity shortages, customers in Europe have become increasingly cautious about placing new orders.
Order bookings decreased in Europe including Russia but remained strong in Latin America and Asia. In light of lower overall order bookings and higher inventories, Scania will now adjust its production rate accordingly. Scania will use the flexibility it has with employees on temporary contracts, today close to 20 percent of the workforce in the manufacturing organisation.
The restructuring of Scania’s European axle and gearbox production is now in its final phase, and together with the earlier transfer of the central parts warehouse, Scania will achieve annual savings of SEK 300 m. with full effect from 2009. Since early this year, Scania has had one common global product range, which provides increased flexibility in production of vehicles for the approximately 100 markets where Scania operates. The long-term outlook remains good, with an increasing need for transport services. Our forecast of higher earnings in 2008 than in 2007 remains unchanged.
In view of the currently unclear situation about future business conditions, Scania is providing no forecast for 2009.”