Scania has reported its full year earnings for 2018 in what was the “biggest industrial transition in the company’s history”, boss Henrik Henriksson says.
The company saw operating income increase to 13.8 billion Swedish Krona (SEK) for the 12 months to December 31. This compares to SEK 12.4bn in the previous year.
Net sale increased by 11% to an all-time high SEK 137.1bn compared to SEK 123.3bn in the year prior.
Vehicle and services cash flow was down to SEK 3.6bn compared to SEK 5.6bn the previous year.
Total vehicle deliveries increased by 6% during 2018 to a record high 96,477 (90,777) units, compared to 2017.
Order bookings for trucks and buses fell by 11% in 2018 to 97,446 (109,415) vehicles, compared to 2017.
During the fourth quarter, Scania’s total order bookings for vehicles fell by 21% compared to the previous year.
Demand for trucks in Europe remains strong due to the positive economic situation combined with an expansion need and attractive financing levels.
Transport growth is continuing, driven by basic industries such as forestry, agriculture and industrial goods.
The shortage of drivers is currently hampering even stronger growth with European customers.
In South America, demand is driven by the recovery in Brazil which is continuing.
However, there is a long way to get back to the previous top levels, the company says.
In Russia, there is a modernisation need and demand is still high, although political instability is affecting it somewhat negatively.
Demand in the Middle East fell “drastically”. In China, the European truck segment is growing in line with the development of the logistics systems, along with stricter emission legislation levels.
Scania’s order bookings fell during the fourth quarter of 2018 and totalled 22,736 (29,402) trucks.
Order bookings in Europe fell by 13% to 16,413 (18,920) units, compared to the fourth quarter of 2017.
Demand decreased in France, the Netherlands, Belgium and Denmark, which was partly offset by an increase in Great Britain.
Order bookings in South America fell during the fourth quarter of 2018 by 53% to 1,866 (3,994) trucks, mainly related to lower order bookings in Brazil and Argentina, which was partly offset by an increase in Chile.
In Eurasia, total order bookings fell during the fourth quarter and amounted to 896 (2,415) trucks, a decrease that was primarily related to Russia.
In Asia, total order bookings fell during the fourth quarter and amounted to 1,969 (2,837) trucks. The decrease was mainly related to Turkey, Iran, Indonesia, South Korea and Malaysia, which was partly offset by an upturn in China.
In Africa and Oceania, order bookings were higher compared to the fourth quarter of 2017, mainly related to South Africa, but this was offset somewhat by a decrease in Kenya and Tanzania. Order bookings amounted to 1,592 (1,200) units.
“2018 was a year of continued growth and of records in many areas, while we carried out the biggest industrial transition in the company’s history,” Scania president and chief executive Henrik Henriksson says.
“With the changeover of production in Latin America during the first quarter of 2019, we will have completed the global transition to Scania’s new truck generation.
“This final stage of the changeover will lead to some limitations in the flexibility and capacity of our global production system. There is still a higher than normal cost situation in general for products and production related to the new truck generation. Measures to normalise cost levels have been introduced,” Henriksson says.
