0
Press conference
Erik Ljungberg, Corporate Relations




   1
Year-end Report 2008
Jan Ytterberg, CFO




  2
2008 – highlights


    All time high earnings
      Operating income SEK 12,512 m.
    –
    – High returns

    Cash flo...
Profitable growth
                 Vehicles & Services
                    SEK m.                                         ...
Volume development
         Total deliveries, trucks and buses
                     Units
                    24,000
Deliv...
Service business is growing
            Service revenue and rolling fleet
                     Units                      ...
Operating income
                      Vehicles & Services


EBIT growth due to:
    – Price increases
      new vehicles ...
Cash flow
                    Vehicles & Services
                       SEK m.
                        4,000
Increase of
...
Volume driven growth
         Credit portfolio, Financial Services
                     SEK m.
                      50,00...
Bad debt expenses

     Percent
        0.80
                                                         Bad debt ratio     W...
Conservative refinancing policy


Increased credit
facilities
                          +90%
Credit facilities
unutilised ...
Building shareholder value

                     SEK                                                      Percent
        ...
Conclusion


     All time high earnings

     Focus on cash flow

     Proposed dividend of SEK 2.50 per share




13
14
Outlook
Leif Östling, President and CEO




   15
Market developments
                      Trucks 2008


     Rapid fall in demand Q4 2008

     High inventory level in th...
Truck deliveries 2008


     Western Europe -4%

     Central and eastern Europe -15%

     Latin America +10%

     Asia ...
Scania production flexibility


     Concentration of axle and gearbox production
     completed

     Common global produ...
Scania production flexibility


     Time banks +/- 200 h per employee
       Flexibility of 10 weeks
     –
     – Curren...
Service business is growing


Low volatility

Increased
penetration rate

New services

Boost efficiency
and utilisation

...
Outlook


     Due to the current difficult market conditions,
     the uncertainty for the coming quarters is high

     ...
Historical volume development

       Units
     180,000

     160,000

     140,000

     120,000
                       ...
23
Mandatory bid from Porsche
     The Board recommends not accepting the offer


     Scania has a strong business with best...
25
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Scania Presentation-Q4-2008_tcm10-227202

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Transcript of "Scania Presentation-Q4-2008_tcm10-227202"

  1. 1. Press conference Erik Ljungberg, Corporate Relations 1
  2. 2. Year-end Report 2008 Jan Ytterberg, CFO 2
  3. 3. 2008 – highlights All time high earnings Operating income SEK 12,512 m. – – High returns Cash flow focus Cash conversion – 3
  4. 4. Profitable growth Vehicles & Services SEK m. Percent 100,000 55 Net sales EBIT Margin Revenue ROCE 50 90,000 growth 5% 45 80,000 40 EBIT growth 4% 70,000 35 60,000 30 ROCE 43.1% 50,000 25 40,000 20 30,000 15 20,000 10 10,000 5 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4
  5. 5. Volume development Total deliveries, trucks and buses Units 24,000 Deliveries -18% in Q4 20,000 Adjusting 16,000 production rate 12,000 Decrease in 8,000 Europe 4,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006 2007 2008 5
  6. 6. Service business is growing Service revenue and rolling fleet Units SEK m. 18,000 600,000 Capitalising Rolling fleet Service revenue on increasing 16,000 500,000 vehicle 14,000 population 400,000 12,000 10,000 300,000 Increased prices 8,000 200,000 4,000 Gradually 100,000 2,000 lower demand 0 0 in 2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 6
  7. 7. Operating income Vehicles & Services EBIT growth due to: – Price increases new vehicles and Price -New veicles services EBIT increase: - Services + SEK 466 m. Negative impact: 2008 Deliveries – Deliveries Used vehicles Raw material – R&D R&D – Used vehicles – Raw material 7
  8. 8. Cash flow Vehicles & Services SEK m. 4,000 Increase of tied up capital 3,000 Capacity 2,000 investments 1,000 Focus areas: Q4 0 – Inventory Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004 2005 2006 2007 2008 reduction - 1,000 – Postponing - 2,000 investments Note: Excluding acquisitions/divestments and Financial Services 8
  9. 9. Volume driven growth Credit portfolio, Financial Services SEK m. 50,000 Portfolio +14%, 45,000 local currencies 40,000 Increased bad debt 35,000 30,000 provisions 25,000 Collection focus 20,000 15,000 10,000 5,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 9
  10. 10. Bad debt expenses Percent 0.80 Bad debt ratio Write-off ratio 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 10
  11. 11. Conservative refinancing policy Increased credit facilities +90% Credit facilities unutilised SEK 26,800 m. SEK 14,210 m. Facilities Facilities End 2008 End 2007 11
  12. 12. Building shareholder value SEK Percent 12 45 Net income +4% EPS (SEK) ROE 40 10 Net margin 10.0% 35 8 30 Earnings per share 25 SEK 11.11 (10.69) 6 20 Return on equity 4 15 38.3% (35.0) 10 2 5 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 12
  13. 13. Conclusion All time high earnings Focus on cash flow Proposed dividend of SEK 2.50 per share 13
  14. 14. 14
  15. 15. Outlook Leif Östling, President and CEO 15
  16. 16. Market developments Trucks 2008 Rapid fall in demand Q4 2008 High inventory level in the industry Extensive supply from inventory Invoicing is a better indicator for demand than order bookings 16
  17. 17. Truck deliveries 2008 Western Europe -4% Central and eastern Europe -15% Latin America +10% Asia +11% 17
  18. 18. Scania production flexibility Concentration of axle and gearbox production completed Common global product range Cost structure with 70% sourced material 18
  19. 19. Scania production flexibility Time banks +/- 200 h per employee Flexibility of 10 weeks – – Currently a surplus of 5 weeks Temporary contracts – reduction from 12,000 to 10,000 employees in production Training to accelerate efficiency and productivity Potential improvement of 20% in one year – 19
  20. 20. Service business is growing Low volatility Increased penetration rate New services Boost efficiency and utilisation ~50% of volume in captive network 20
  21. 21. Outlook Due to the current difficult market conditions, the uncertainty for the coming quarters is high Long-term prospects for economic growth remain good and will lead to increasing need for transport equipment and services 21
  22. 22. Historical volume development Units 180,000 160,000 140,000 120,000 -20% 100,000 -30% 80,000 -35% 60,000 40,000 20,000 0 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 22
  23. 23. 23
  24. 24. Mandatory bid from Porsche The Board recommends not accepting the offer Scania has a strong business with best in class profitability and excellent long-term prospects, plan of reaching 150,000 deliveries mid of next decade remains unchanged Shareholders have been offered minimum price prescribed by applicable rules Whilst recognising current financial market volatility, the offer does not reflect the long- term value of Scania 24
  25. 25. 25
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