A MAGAZINE FOR SCANIA’S SHAREHOLDERS                                                                 quarter 3 2012       ...
FIRST NINE MONTHS IN FIGURES      Order bookings and deliveries by region, Q3 (number of vehicles)                        ...
interview                                                                                        text: göran lind photos: ...
Scania’s new President and CEO                                                                             Martin Lundsted...
Focus: ecolution by scania                                                                                        text: er...
Finance: Capital Markets Day 2012      “Increased investment      show faith in the futur       Growth in the logistics se...
text: göran lind photos: petter magnusson                                                              Magnus Mackaldener ...
in brief                                                                                             editor: erik aronsson...
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Scania Value Q3 2012

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Scania Value Q3 2012

  1. 1. A MAGAZINE FOR SCANIA’S SHAREHOLDERS quarter 3 2012 % Operating margin 20 16 12 8 4 0 -10 -10 -11 -11 -11 -11 -12 -12 -12 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Report. Report. Lower volume, Xxxx xxx xxx higher level of xxx xxx xxx xxx costs pulled xx xxx. > SID 2 margin. down > page 2 Focus. Interview. Wadman xxxxxx xxx Xxxx xxx Transport saves fuel xxxx xx xxxxxx and xxxx reduces emissions. xxx xxxxxx xxx. > SID 3 5 page Finance. Stock market. An eye for Big turnout at Xxxx xxx xxxxxx Capital Markets xxx xx xxxxxx xxxx Day. xxx xxxxxx. xxxx > pages > SID 6–76–7 opportunities FIGURES IN FOCUS: FIGURES IN FOCUS: XXX 407 Xxxxx xxxx xxxxxxxx xx x xxxxxxlooks ahead. >4–5 CEO Martin Lundstedt xxxxx. > SID pages 3–4 Xxxxxx xxx xx xxxx xxxx (SEK m) in Cash flow xxxxx xxx Vehicles and Services Q3 xxxx xxxxx xx.EN01_omslag.indd 1 2012-10-29 15:00:23
  2. 2. FIRST NINE MONTHS IN FIGURES Order bookings and deliveries by region, Q3 (number of vehicles) EURASIA Order bookings EUROPE Order bookings 1,756 -8% Deliveries 6,329 -15% 1,661 -6% Deliveries 6,215 -9% LATIN AMERICA AFRICA AND OCEANIA ASIA Order bookings Order bookings Order bookings 5,791 +2% 1,114 +10% 1,935 -31% Deliveries Deliveries Deliveries 4,262 -19% 927 0% 1,782 -55% Net sales Net sales by product segment* Operating income and margin SEK m. Other 2% % SEK m. Operating income, SEK m. 25,000 Used vehicles 6% 20 Operating margin, percent 4,000 3,500 20,000 16 Services 22% 3,000 15,000 2,500 12 2,000 Trucks 59% 10,000 8 Engines 2% 1,500 1,000 5,000 4 Buses and 500 coaches 9% 0 0 0 3 4 1 2 3 4 2 3 2 1 3 4 2 3 4 1 3 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 10 10 10 11 11 11 11 12 12 12 10 10 11 11 11 12 12 11 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 *Refers to first nine months of 2012 20 Key figures (SEK m. unless otherwise noted) 2012, 9 mo 2011, 9 mo Change in % Net sales, Scania Group Operating income, Vehicles and Services 57,261 5,702 64,795 9,294 -12 -39 First nine months Operating income, Financial Services Operating income 433 6,135 363 9,657 19 -36 in brief: Income before taxes 6,156 9,805 -37 DELIVERIES Net income for the period 4,750 7,290 -35 fell by 21 percent to 46,879 Operating margin, % 10.7 14.9 vehicles. Return on equity, % 20.2 33.7 Return on capital employed, Vehicles and Services, % 25.2 42,3 OPERATING INCOME Earnings per share, SEK 5.94 9.11 -35 fell by 36 percent to SEK Cash flow, Vehicles and Services 2,176 3,866 -44 6,135 m. Number of employees, 30 September 38,580 37,733 Order bookings (units, trucks and buses) 52,320 60,997 -14 CASH FLOW Deliveries (units, trucks and buses) 46,879 58,985 -21 amounted to SEK 2,176 m. 2 SCANIA VALUE • Q3/2012 www.scania.comEN02_rapport.indd 2 2012-10-29 15:00:27
  3. 3. interview text: göran lind photos: göran wink , petter magnusson “Growth will return” “In the short term, the market and services to achieve this, we not only need to gaining more knowledge of the logistical chal- situation offers few bright spots understand our customers but also our custom- lenges in different industries and developing and demands a high degree of flex- ers’ customers − the buyers of transport ser- new products and services, we can grow in new ibility. But economic growth will vices. By analysing flows, we can distinguish the segments. The forest product industry is one return and the need for transport factors that we can influence, thereby providing example where we see good opportunities. We equipment will thus increase. This added value to the customer. Being able to log also foresee great potential in emerging mar- is why we are investing in expand- into the logistics system of a mine requires close kets, where the structure of demand will change ing our technical production and collaboration and trust between us and the cus- and we are only in the starting phase today.” service capacity, and we are con- tomer. One example of this is that we are organ- What is Scania’s strategy in emerging tinuing our research and develop- ising into segments that are adapted to specific markets? ment efforts in order to strengthen types of industries.” “Many of these countries are developing at a our product portfolio,” says Martin Given today’s sales volumes, doesn’t rapid pace. Taking China as an example, major Lundstedt, Scania’s President and Scania have a rather long way to go before investments have been made in various types CEO since 1 September. achieving its scenario of 150,000 vehicles of production equipment, but logistics systems per year at the next economic peak? have not kept pace with developments. There will You have 20 years of experience in this in- “We will clearly need an economic upswing. also be more focus on environmental impact. dustry. How has Scania’s business model But we know that growth will return, including These trends point towards increasing demand evolved? in our main market, Europe. We will grow with for our solutions, and we can work according to “Today we work with much more of a holistic the total market in our mature markets and will the same basic concept in all markets and in all perspective. In many sectors there is a need for also capture market share in areas where we can segments − strengthening the customer’s profit- more efficient logistics. To enable our products deliver more value than our competitors. By ability during the service life of a vehicle. www.scania.com Q3/2012 • SCANIA VALUE 3EN03_interview_lundstedt.indd 3 2012-10-29 15:00:32
  4. 4. Scania’s new President and CEO Martin Lundstedt sees great growth potential for Scania’s service business. “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 “It is not a matter of stopping machinery or main shareholder, and today your compet- itor MAN is also part of the Volkswagen putting things on the back burner. But we Group. What does this mean to Scania? have to work with different scenarios and “Volkswagen has always supported our strat- be ready if the economic situation worsens.” 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 • Q3/2012 www.scania.comEN03_interview_lundstedt.indd 4 2012-10-29 15:00:34
  5. 5. Focus: ecolution by scania text: erik aronsson photos: tommy holl 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. Profitable cooperation Today’s increasing focus on redu- four 56 tonne gross weight tractor units, speci- cing carbon dioxide emissions is affecting the transport industry. fied according to Ecolution by Scania. The new specification lowered fuel consumption by 8 Ecolution by Scania: Wadman Transport on Sweden’s litres/100 km to 40.2 litres/100 km. With the Ecolution by Scania has been developed on the basis of customers’ experiences west coast has reduced both its help of driver training and coaching, in one to ensure that both passenger and goods fuel costs and carbon dioxide year the company succeeded in cutting fuel transport companies can get the most out emissions thanks to the Ecolution consumption to an average of 36 litres/100 km. of their vehicles. It serves as a toolkit, from by Scania concept. “The economic aspect is also important, of which customers can choose the complete course,” Wadman says. “The specification of package or selected portions of it. Regardless of a haulier’s size, vehicle fuel is the vehicles, combined with driver training and The vehicle and service specification is often its most important cost item. Many Scania coaching, has saved us nearly 12 litres/100 km.” tailored to each customer’s needs, primarily customers are small haulage companies. One Fuel savings at Wadman Transport total no resulting in lower fuel costs, which means example is Wadman Transport, which operates less than 63,000 litres of diesel per year. These less carbon dioxide emissions. a fleet of six trucks. Its operations mainly centre fuel savings also mean that the company’s car- The vehicle specification may include on bulk transport of fish and chemicals. bon dioxide emissions are down by 170 tonnes. engine size, alternative fuels and rear The company has always sought to lower its One important element of the Ecolution axle gearing. On the service side, driver fuel consumption, but these efforts are now by Scania concept is continuous reporting of training and maintenance agreements are being helped by a greater focus on reducing vehicle performance. important. emissions, among them carbon dioxide. When “We are immediately alerted if the fuel Scania Fleet Management provides rapid Wadman began operations in 2006, it used trac- consumption of any truck suddenly starts feedback of all parameters. Optimised tor units with traditional gearing and specifica- to diverge from normal, so that we can take cruising speed may lead to lower fuel tions. But when managing director and owner action before it begins to cost us money,” consumption without compromising Christian Wadman learned about Ecolution by says Wadman. delivery precision. Feedback enables the Scania, he decided to apply this concept to his By working closely with Scania, there is thus customer to work with Scania to achieve operations for both environmental and eco- potential for Wadman Transport to continue continuous improvements, for example nomic reasons. achieving improvements in fuel consumption through driver coaching. Early in 2011 Wadman Transport invested in and emissions. www.scania.com Q3/2012 • SCANIA VALUE 5EN05_case_wadman.indd 5 2012-10-29 15:00:38
  6. 6. Finance: Capital Markets Day 2012 “Increased investment show faith in the futur Growth in the logistics sector will While Europe’s share of Scania sales has but there is more confidence,” says Björn continue. That is the assessment decreased, the continent remains a core market Enarson, analyst at Danske Bank. of Scania’s President and CEO with over 40 percent of vehicle deliveries. The Among other things, confidence stems from Martin Lundstedt, as well as ana- euro zone crisis and the uncertainty it gener- the fact that the overall market has increased by lysts. Scania also receives praise ates among customers will thus affect Scania’s between 3-5 percent on average per year since for not being afraid to invest de- volume. Another major market, Brazil, has been the turn of the millennium and Scania believes spite a tough market climate. adversely affected by the transition to Euro 5 that this trend will continue. A gradual shift is emission standards and lower economic activ- also taking place to markets with higher under- “The weak market situation in Europe looks set ity. As a result, Scania’s deliveries of trucks and lying growth. to persist. We also foresee a slowdown in other buses fell by 21 percent during the first nine markets. Looking further ahead, the demand months of 2012. Good opportunities in new markets for transport solutions will continue since it “Scania’s assessment is very similar to our Another sign of confidence is that Scania is is closely linked to global economic growth, own view and that of its main competitors. We investing in order to boost production capac- international trade and urbanisation,” said notice that the situation does not seem as nerv- ity from 100,000 to 120,000 vehicles per year, Lundstedt at Scania’s Capital Markets Day. ous as in 2008 − we are seeing a tough market as CFO Jan Ytterberg explained. This is the first 6 SCANIA VALUE • Q3/2012 www.scania.comEN06-07_Capitalmarketday.indd 6 2012-10-29 15:00:43
  7. 7. text: göran lind photos: petter magnusson Magnus Mackaldener (pictured on the right) explaining the technology behind Scania’s Euro 6 engines. Scania’s Capital Markets Day at- tracted almost 100 participants.ents Speakers included CEO Martin Lundstedt, CFO Jan Ytterberg and Magnus Mackaldener of Engine Development.ture” Many took the opportunity to test- drive one of Scania’s trucks or buses. step towards a technical capacity of 150,000 manager at the Riksbankens Jubileumsfond. vehicles per year by the next peak in demand. Martin Lundstedt, who took over as President Scania is also investing in RD, among other and CEO in September, has declared that the things so it can grow in new segments and in change of CEO implies “business as usual”, but More from the new markets outside Europe. of course this doesn’t mean that everything will Capital Markets Day “Despite the rather weak market outlook, with be done in the same way as before. The business All presentations from the Capi- Europe expected to be at low levels during the model is evolving, among other ways through tal Markets Day are available on next few years, Scania is raising its investments greater focus on service content. Scania sees an Scania’s home page, along with a in the production network in order to achieve a increased need among customers for services webcast of President and CEO Mar- long-term goal, which must be regarded as a sign during the entire economic life cycle of a vehicle. tin Lundstedt’s address. of strength. One risk, of course, is if the market “Martin Lundstedt seems like a person who www.scania.com/ir trend weakens even further. Meanwhile, Scania will continue to lead Scania in essentially the seems to have investment needs, since its capi- same way as before, with perhaps a little extra tal spending has been relatively low in recent focus on sales channels,” says Anders Trapp, years,” says Magnus Fröblom, senior portfolio analyst at SEB Enskilda. www.scania.com Q3/2012 • SCANIA VALUE 7 EN06-07_Capitalmarketday.indd 7 2012-10-29 15:00:46
  8. 8. in brief editor: erik aronsson photos: mats t karlsson, lucas holm Broad range of Euro Gabriel Warde was the winner of 6 engines at IAA Scania’s Young European Truck Scania unveiled a number of new 9- and 13-litre Driver (YETD) Euro 6 engines for trucks and buses at the IAA competition. 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 Driver the most major contributions to reducing emissions by using today’s technology. One example is the Ecolution by Scania concept, which involves important factor Scania setting targets for fuel consumption Gabriel Warde from Ireland won the exciting final matter of human behaviour. Through YETD, together with the transport company. of the Young European Truck Driver 2012 (YETD) Scania wants to help raise the status of profession- IAA is the leading international trade fair for competition. The first prize was a completely new al drivers and emphasise their great importance commercial vehicles. Scania R-series truck, worth 100,000 euros. to the profitability of transport companies and to “I really felt the pressure releasing after the road safety, as well as to reduced environmen- competition but it is really good to be on this side tal impact. We want to help attract more young, of the finish line,” says Warde. capable drivers into the transport business,” says More than 17,000 truck drivers under age 35 Erik Ljungberg, Senior Vice President and head of from 24 European countries competed in this Scania Corporate Relations. year’s YETD. Scania’s Young European Truck In their evaluation of YETD, it turns out that Driver competition is a major part of a global eight out of ten contestants believe that the com- Sandro Grimpe, initiative for responsible, safe driving that Scania petition helps raise the status of professional driv- Service Marketing started in 2003. By highlighting the role of the ers. They also believe that the competition helps Director at Scania- driver, Scania also wants to attract more young change driver behaviour, especially when it comes Bilar Sverige AB. people into the driving profession. to road safety and reduced fuel consumption. “The driver is absolutely the most important Scania also organises similar competitions in Scania signs factor in heavy vehicle transport. Vehicles and Latin America, Africa and Asia. The 2012 competi- SEK 1.5 billion infrastructure are obviously of major significance, but fuel-efficient and safe driving is primarily a tions attracted about 70,000 drivers, which is a new record. contract with Peab Scania has entered into an agreement which will ensure safe road transportation of iron Would you like to subscribe? ore concentrate until 2021 from Northland For a free subscription, visit Scania Value is published by Scania www.scania.com/scaniavalue and targeted to Scania shareholders. Resources’ ore-mining operation at Pajala in far northern Sweden. The order is worth about SEK Publisher 1.5 billion. Scania will deliver a total of about Per Hillström, ir@scania.com Editor-in-chief 400 complete truck-trailer combinations and anneli.volden@scania.com service-related products tailored to the min- ing industry’s very strict demands in respect of UPcoming events Project Manager erik.aronsson@appelberg.com load capacity, uptime and delivery precision. Art Director karin.soderlind@appelberg.com The order was placed by the mining company’s 30 January 2013 Production general contractor Swerock, which is a subsidi- Year-end Report 2012 Appelberg Publishing Group ary of the Swedish construction and civil engi- www.appelberg.com Printing: Trosa Tryckeri neering company Peab. 23 April 2013 Cover photo: Göran Wink “This is the most comprehensive deal we have Interim Report concluded to date with the Swedish mining January-March 2013 Contact industry. We have used the overall competency Scania Investor Relations 151 87 Södertälje, Sweden of the Scania organisation to cater for the vari- 3 May 2013 Tel: 08-553 81 000 ous parameters, which aside from the trucks and trailers themselves, are crucial for our customers’ Annual General Meeting 2013 E-mail: ir@scania.com profitability,” says Sandro Grimpe, Service Mar- keting Director at Scania-Bilar Sverige AB who is responsible for the deal.EN08_news.indd 8 2012-10-29 15:00:51

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