Scania Year-end Report 2011

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Scania’s earnings for the full year amounted to SEK 12,398 m. Higher vehicle and service volume was offset by a significantly stronger Swedish krona, a higher cost level and a changed market mix.

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Scania Year-end Report 2011

  1. 1. Press conference Erik Ljungberg, Corporate Relations
  2. 2. Year-end Report, January–December 2011 Jan Ytterberg, CFO
  3. 3. FY 2011 – highlights <ul><li>Strong earnings </li></ul><ul><li>Record high EPS of SEK 11.78 (11.38) </li></ul><ul><li>Proposed DPS of SEK 5.00 (5.00) </li></ul>
  4. 4. Volume trend Total deliveries, trucks and buses <ul><li>Record high deliveries in 2011 </li></ul><ul><li>More vehicles to Russia and Middle East – fewer to Brazil </li></ul><ul><li>Production cuts in November 2011 and January 2012 </li></ul>2007 2008 2009 2011 2010 Units
  5. 5. Service revenue <ul><li>Volume increase ~10% in 2011 </li></ul><ul><li>All-time high revenue </li></ul><ul><li>Negative impact from currency rates </li></ul>SEK m. 2007 2008 2009 2011 2010
  6. 6. Earnings trend Operating income, Scania Group SEK m. <ul><li>Net sales +12% in FY 2011 </li></ul><ul><li>EBIT margin 14.1% (16.3) FY and 12.0% (16.6) in Q4 </li></ul>2007 2008 2009 2011 2010 Percent Operating margin Operating income
  7. 7. Earnings per share SEK
  8. 8. Operating income Vehicles and Services EBIT decrease: SEK 694 m., FY 2011 <ul><li>+ Volume </li></ul><ul><li>+ Price </li></ul><ul><li>- Currency </li></ul><ul><li>Mix </li></ul><ul><li>Cost level </li></ul><ul><li>EBIT decrease due to: </li></ul><ul><ul><li>Currency rates </li></ul></ul><ul><ul><li>Higher cost level </li></ul></ul><ul><ul><li>Market mix </li></ul></ul><ul><li>Positive effects: </li></ul><ul><ul><li>Volume </li></ul></ul><ul><ul><li>Price </li></ul></ul>
  9. 9. Cash flow Vehicles and Services <ul><li>Good cash generation in Q4 </li></ul><ul><li>High inventory level in Brazil due to Euro 3 vehicles </li></ul><ul><li>Higher level of investments in 2011 </li></ul>2007 2008 2009 2011 2010 SEK m.
  10. 10. Net debt Vehicles and Services SEK m. <ul><li>Net cash SEK 10,615 m. (Net cash 7,700 at end of 2010) </li></ul><ul><li>Dividend paid SEK 4,000 m. in Q2 </li></ul><ul><li>Board proposes DPS of SEK 5.00 for 2011 </li></ul>Net debt/equity ratio Net debt
  11. 11. Conservative refinancing policy EUR 2016 EUR 2016 SEK 2016 SEK 2017 <ul><li>Unutilised credit facilities of SEK 28 bn. </li></ul><ul><li>Financing secured for the coming years </li></ul><ul><li>High level of liquid assets </li></ul>Credit facilities per 31 December 2011 SEK m.
  12. 12. Volume trend Credit portfolio, Financial Services SEK m. <ul><li>Portfolio +20%* since end of 2010 </li></ul><ul><li>Lower level of bad debt expenses </li></ul><ul><li>Operating income SEK 517 m. (171) in 2011 </li></ul>*In local currencies
  13. 13. Summary <ul><li>Strong earnings </li></ul><ul><li>Record high EPS SEK 11.78 (11.38) </li></ul><ul><li>Strong balance sheet </li></ul>
  14. 14.
  15. 15. Outlook Leif Östling, President and CEO
  16. 16. Business overview – 2011 <ul><li>Record high deliveries </li></ul><ul><li>Decelerating order bookings for trucks in H2 2011 </li></ul><ul><li>Production rate in balance with current demand level </li></ul><ul><li>High demand for service in all regions </li></ul>
  17. 17. Europe Scania trucks, order bookings Units <ul><li>Low level in Southern Europe throughout H2 </li></ul><ul><li>Northern Europe somewhat lower in Q4 </li></ul><ul><li>Short delivery times </li></ul>2011 2010
  18. 18. Latin America Scania trucks, order bookings Units <ul><li>Brazil affected by Euro 5 transition </li></ul><ul><li>Lower order bookings in the final months </li></ul><ul><li>Short delivery times </li></ul>2011 2010
  19. 19. Eurasia Scania trucks, order bookings Units <ul><li>Lower momentum in Eurasia in Q4 </li></ul>2011 2010
  20. 20. Asia Scania trucks, order bookings Units <ul><li>Very low level in Middle East in Q4 </li></ul>2011 2010
  21. 21. Growing demand of services 2006 2008 2007 2009 2010 2011 2002 2004 2003 2005 <ul><li>Strong demand in Europe due to ageing fleet </li></ul><ul><li>Good demand outside Europe </li></ul><ul><li>Stablising Group profitability </li></ul><ul><li>Expanded capacity and offering </li></ul>SEK m.
  22. 22. Adjusting to lower demand <ul><li>Production was cut in two steps, each 15% </li></ul><ul><li>Both European and Latin American production units affected </li></ul><ul><li>Total of 1,900 employees affected </li></ul><ul><li>Deferring some investments </li></ul><ul><li>Restrictive in recruitment and spending </li></ul>
  23. 23. Well positioned <ul><li>Recent service and product launches </li></ul><ul><ul><li>Euro 6 trucks </li></ul></ul><ul><ul><li>Scania Citywide </li></ul></ul><ul><ul><li>Driver support systems </li></ul></ul><ul><ul><li>Ecolution by Scania </li></ul></ul>
  24. 24. Summary <ul><li>Adjusting to lower demand level </li></ul><ul><li>2012 outlook difficult to assess </li></ul><ul><li>Strong demand for services </li></ul><ul><li>Growing replacement need in Europe in 2013 and onwards </li></ul><ul><li>Scania well positioned </li></ul>Europe - Scania truck deliveries Units

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