scana presentation-q4-2008_tcm10-227202
TRANSCRIPT
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Press conferenceErik Ljungberg, Corporate Relations
2
Year-end Report 2008Jan Ytterberg, CFO
3
2008 – highlights
All time high earnings– Operating income SEK 12,512 m.– High returns
Cash flow focus– Cash conversion
4
Net sales growth 5%
EBIT growth 4%
ROCE 43.1%
Profitable growthVehicles & Services
20,000
10,000
30,000
40,000
60,000
100,000SEK m.
0
70,000
50,000
1998 20071999 2000 2001 2002 2003 2004 2005 2006
15
5
20
25
35
55Percent
0
45
30
RevenueEBIT MarginROCE
10
80,000
2008
90,000 50
40
5
Volume developmentTotal deliveries, trucks and buses
4,000
8,000
16,000
24,000Units
2004Q1 Q2 Q3Q4
2005 2006 2007 2008
0
20,000
12,000
Deliveries -18% in Q4
Adjustingproduction rate
Decrease in Europe
Q1 Q2Q3 Q4 Q1 Q2Q3 Q4 Q1Q2 Q3Q4 Q1Q2Q3 Q4
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Service business is growingService revenue and rolling fleet
200,000
300,000
500,000
600,000
0
Capitalisingon increasingvehicle population
Increasedprices
Graduallylower demandin 2008
400,000
Units
1998 20071999 2000 2001 2002 2003 2004 2005 2006 20081997
100,000
4,000
8,000
12,000
18,000
0
10,000
2,000
14,000
16,000
SEK m.
Rolling fleetService revenue
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Operating incomeVehicles & Services
EBIT increase:
+ SEK 466 m. 2008
PricePrice
--New New veiclesveicles
- Services
DeliveriesDeliveries
Used vehicles
Raw materialRaw material
R&DR&D
EBIT growth due to:– Price increases
new vehicles and services
Negative impact:– Deliveries– R&D– Used vehicles– Raw material
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Cash flowVehicles & Services
- 2,000
- 1,000
0
1,000
4,000SEK m.
Increase of tied up capital
Capacityinvestments
Focus areas:– Inventory
reduction– Postponing
investments
2,000
3,000
2004Q1 Q2 Q3 Q4
2005 2006 2007 2008Q1 Q2Q3Q4 Q1 Q2 Q3 Q4 Q1Q2Q3Q4 Q1Q2 Q3
Note: Excluding acquisitions/divestments and Financial Services
Q4
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Volume driven growthCredit portfolio, Financial Services
10,000
5,000
15,000
20,000
30,000
50,000SEK m.
0
35,000
25,000
Portfolio +14%,local currencies
Increased bad debtprovisions
Collection focus
1998 20071999 2000 2001 2002 2003 2004 2005 2006 20081996 1997
40,000
45,000
10
Bad debt expenses
1998 1999 20082000 2001 2002 2003 2004 2005 2006 2007
Bad debt ratio Write-off ratio
0.40
0.30
0.80Percent
0.50
0.60
0.70
0.00
0.20
0.10
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Conservative refinancing policy
SEK SEK 14,210 m. 14,210 m.
SEK SEK 26,800 m.26,800 m.
+90%+90%
End 2007 End 2008
Increased creditfacilities
Credit facilitiesunutilised
FacilitiesFacilities FacilitiesFacilities
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Net income +4%
Net margin 10.0%
Earnings per shareSEK 11.11 (10.69)
Return on equity38.3% (35.0)
Building shareholder value
4
6
8
12SEK
0
10
10
5
15
20
30
35
Percent
0
25
EPS (SEK)ROE
2
45
1998 1999 20082000 2001 2002 2003 2004 2005 2006 2007
40
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Conclusion
All time high earnings
Focus on cash flow
Proposed dividend of SEK 2.50 per share
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OutlookLeif Östling, President and CEO
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Market developmentsTrucks 2008
Rapid fall in demand Q4 2008
High inventory level in the industry
Extensive supply from inventory
Invoicing is a better indicatorfor demand than order bookings
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Truck deliveries 2008
Western Europe -4%
Central and eastern Europe -15%
Latin America +10%
Asia +11%
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Scania production flexibility
Concentration of axle and gearbox productioncompleted
Common global product range
Cost structure with 70% sourced material
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Scania production flexibility
Time banks +/- 200 h per employee– Flexibility of 10 weeks– Currently a surplus of 5 weeks
Temporary contracts – reduction from 12,000 to 10,000 employees in production
Training to accelerate efficiency and productivity– Potential improvement of 20% in one year
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Service business is growing
Low volatility
Increasedpenetration rate
New services
Boost efficiencyand utilisation
~50% of volume in captive network
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Outlook
Due to the current difficult market conditions, the uncertainty for the coming quarters is high
Long-term prospects for economic growthremain good and will lead to increasing needfor transport equipment and services
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140,000
180,000Units
120,000
80,000
100,000
60,000
20,000
40,000
01946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006
160,000
Historical volume development
-35%
-30%
-20%
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Mandatory bid from PorscheThe Board recommends not accepting the offer
Scania has a strong business with best in class profitability and excellent long-termprospects, plan of reaching 150,000 deliveriesmid of next decade remains unchanged
Shareholders have been offered minimum price prescribed by applicable rules
Whilst recognising current financial market volatility, the offer does not reflect the long-term value of Scania
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