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In the statement of the Independent Committee of the Board of Directors of
Scania, published on March 18, Scania provided a business update.
 
Total truck orders for the first two months of 2014 are at a comparable level to
the same period in 2013.
 
In Europe, stabilised economic activity, positive performance indicators in the
Financial Services segment combined with higher prices for used trucks as well
as the overall need for replacement indicate a positive outlook for Scania in
2014. In the first two months of 2014, Scania increased its European market
share to 14.9 percent compared to 14.7 percent in the corresponding period of
2013.
 
Order bookings in Latin America remain at the same levels as of the fourth
quarter of 2013, while stronger orders compared to the previous year have been
recorded in Eurasia, Africa and Oceania.
 
In 2013, Scania achieved strong volume in vehicle deliveries and services sales.
The year-to-date trend in order bookings indicates that 2014 could mark another
year of similarly high vehicle and services volume. However, at the same time,
the SEK has strengthened, primarily against several of the emerging market
currencies which adversely impacts Scania´s financial performance.
 
In the last years, Scania has made significant investments in R&D to strengthen
its product offering. Among the projects is a new truck cab that will be
introduced in the market within the coming years. The new cab will provide an
enhanced customer value, further fuel consumption savings as well as notable
expected cost savings per cab manufactured compared to the current product
range.
 
At Scania´s Capital Markets Day in 2013, the policy ensuring that any
cooperation with Volkswagen is subject to corporate benefit for Scania and is
handled according to the arm’s length principle was presented, along with the
areas of potential synergies, such as axles, gearboxes, hybrid, purchasing etc.
Scania and MAN currently have over 100 initiatives in these areas. However, the
benefits for Scania from synergies in the financial year 2014 will be limited.
 
Scania expects operating margins to improve over the coming years, supported by
GDP-growth, current investment programme and the development of Scania´s
services business, which have substantially higher gross margin compared to new
vehicles. For Return on Capital Employed related to Vehicles and Services the
objective is 40 percent and for Financial Services, the objective is in the
excess of 10 percent for Return on Equity, as stated on the Capital Markets Day
2013.

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