Scania delivers record figures but has Q4 orders slowdown

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President admits outlook for 2012 is “difficult to assess” due to Eurozone economic policy problems

Scania president Leif Ostling has announced the firm’s year end financial report, which shows a record number of deliveries overall and in its coach and bus division, with a slowdown in Q4.

Scania’s order bookings for buses and coaches rose by 12% to 7,707 (from 6,874) units during 2011. In Europe, order bookings increased by 3% compared to the full year 2010, largely due to major orders in the Netherlands and Denmark. In Latin America, order bookings rose by 33% during the full year, with a general increase in demand. The introduction of Euro 5 vehicles to the area is expected to impact demand, since Euro 5 vehicles are more technologically advanced and command a higher sales price than Euro 3 vehicles. Production of Euro 3 ceased at the end of 2011, with sales allowed during the first quarter of 2012.

In Asia, Scania’s order bookings decreased by 5%, compared to the year-earlier period. Order bookings in Africa and Oceania increased by 11%. During Q4, total order bookings decreased by 20%.

Scania’s bus and coach deliveries totalled a record high 7,988 (6,875) units during the full year 2011. In Europe, deliveries increased by 9% compared to 2010, mainly attributable to an upturn in the Netherlands and Spain. The upturn of 56% in Latin America was related to Brazil, Mexico and Chile.

In Asia, deliveries decreased by 3% while bus and coach deliveries in Africa and Oceania fell by 20%. During the fourth quarter, total deliveries increased by 33% to 2,383 units.

Net sales of buses and coaches rose by 6% to SEK 8,206m (7,713) during the full year 2011.

During the fourth quarter, net sales increased by 29% to SEK 2,529m (1,959).

Reporting on the financial state of Scania overall, Mr Ostling said: “Scania’s earnings for the full year amounted to SEK 12,398m. Higher vehicle and service volume was offset by a significantly stronger Swedish krona, a higher cost level and a changed market mix.”

Across all divisions, Scania’s deliveries amounted to a record of 80,108 vehicles. Order bookings for trucks decelerated during the second half of 2011. Southern Europe had a lower level throughout the second half while sales in northern Europe were somewhat weaker in the fourth quarter. In the Middle East, order bookings decelerated significantly during the second half to a very low level in the fourth quarter. Eurasia lost some momentum in the fourth quarter.

Order bookings in Latin America decreased in the final months of 2011 due to the transition to Euro 5 vehicles in Brazil.

Scania claims there is also good service demand outside Europe. It has adjusted production of vehicles, both at the European and the Latin American units, to meet the current level of demand. As part of this adjustment, Scania is not extending fixed term temporary contracts for about 1,900 employees. Scania is also deferring some investments and being more restrictive in recruitment and spending.

Leif Ostling said: “The outlook for 2012 is difficult to assess, especially in Europe in light of the economic policy problems in the euro zone. Scania’s good earnings and cash flow during the past two years have strengthened the Group’s balance sheet while financing has been secured for several years ahead. Scania is well-positioned following recent service and product launches.”