Scania delivered a strong underlying performance during the period though significantly impacted by the global pandemic.
Summary of the first nine months of 2020
- Net sales decreased by 22 percent to SEK 88,843 m. (113,815)
- Operating income decreased by 62 percent and amounted to SEK 5,249 m. (13,889)
- Cash flow amounted to SEK 3,358 m. (7,531) in Vehicles and Services
- In the third quarter net sales decreased by 17 percent to SEK 30,374 m. (36,544) and operating income by 45 percent to SEK 2,436 m. (4,445)
Comments by Henrik Henriksson, President and CEO
“Scania delivered a strong underlying performance during the period though significantly impacted by the global pandemic. The negative effects were mitigated by powerful cost saving measures and an increase in production rate in the third quarter. There is a resilience in the orderbook and the order intake in the third quarter was strong.
For Scania to emerge from the crisis with better conditions for continued profitability and to make large-scale investments in new technologies to drive the shift towards a sustainable transport system, a cost transformation is necessary. Extensive measures to address structural cost were initiated in the second quarter and will continue the coming quarters. The staff reductions announced in the second quarter is now being implemented and reviewing Scania’s industrial and commercial operations has led us to the decision to close down the bus and coach production in Lahti, Finland and the regional product centre in Bangkok, Thailand.
During the first nine months of 2020 vehicle deliveries decreased by 36 percent with lower volume primarily in Europe and Latin America, at which net sales and earnings significantly decreased. Our service business is stable and in the first nine months sales decreased by only 4 percent in local currency. Financial Services reported lower operating income in the first nine months. In the third quarter less number of customers were in need of rescheduling. Scania managed to reduce its risk exposure by significantly lowering the used truck inventory as sales of used trucks increased strongly during the period.
The global situation is still uncertain and the risk of severe constraints for our business activity remains in light of the recently witnessed strong rise in infection rates for Covid-19. The view of the global economic recovery is fragmented, also due to political uncertainty and strained trade relations. Though a positive development is noted both in our customers’ utilisation of vehicles and in the strong order bookings, long-term demand remains uncertain. In Europe, truck demand is strong at present and also in Latin America. The global bus and coach market has been severely affected by the pandemic. Demand for coaches and tourist buses has essentially come to a standstill, while demand is at low levels in urban traffic and public transport. In Power solutions, the business area formerly known as Engines, demand is still strong compared to the year-earlier period.
During the third quarter, Scania unveiled its range of electrified trucks, a milestone in the ambition to lead the shift towards a sustainable transport system. Electrification of the heavy commercial truck fleet is crucial to achieving the Paris Agreement target of limiting global warming to below 2°C.”