Scania annual report 2003

The Scania Group’s net financial items
amounted to SEK –521 m. (–684). The improvement
was attributable to lower net
debt as well as lower borrowing in Latin
American currencies.
Income after financial items amounted
to SEK 4,604 m. (3,722).
Earnings, Scania Group
SEK m. 2003 2002
Operating income 5,125 4,406
Income after
financial items 4,604 3,722
Net income 3,034 2,739
Earnings per share, SEK 15.17 13.70
Return on equity 17.4% 17.2%
Tax expenses for the year amounted to
SEK 1,565 m. (985), equivalent to 34.0
(26.5) percent of income after financial
items. The higher tax rate compared to
the previous year was mainly due the taxexempt
capital gain related to Swedish car
operations reported in 2002. Excluding
this capital gain, the tax rate in 2002
amounted to 31.1 percent. During 2003,
tax expenses rose due to higher taxes
outside Sweden.
The Swedish local tax authority has
denied Scania’s claim for a deduction due
to a loss of SEK 2.9 billion. Scania will appeal
this decision. The overall effect on
Scania’s income can reach a maximum of
SEK 575 m. if the deduction is not
approved in its entirety. No provision has
been made.
Net income for the year amounted to
SEK 3,034 m. (2,739), equivalent to earnings
per share of SEK 15.17 (13.70).
CASH FLOW
The Scania Group’s cash flow, excluding
Customer Finance as well as divestments
and acquisitions of businesses, amounted
to SEK 2,476 m. (2,418). Cash flow
including divestments and acquisitions
totalled SEK 2,450 m. (3,583).
Tied-up working capital declined by
SEK 270 m. (772). Positive cash flow from
increased non-interest-bearing liabilities
and provisions were partly offset by higher
tied-up inventories and increased receivables.
Net investments excluding divestments
and acquisitions of businesses had an adverse
effect on cash flow and amounted to
SEK 3,285 m. (2,921), including capitalised
development expenditures totalling
SEK 669 m. (573). The effects of divestments
and acquisitions of businesses totalled
SEK –26 m. (1,165).
FINANCIAL POSITION
During the year, gross investments
totalled SEK 3,196 m. (3,025), including
capitalised development expenditures of
SEK 669 m. (573).
Financial ratios related to the
balance sheet
SEK m. 2003 2002
Equity/assets ratio, % 27.7% 25.6%
Equity per share, SEK 91.26 84.66
Net debt, excluding provisions
for pensions, SEK m. 24,291 25,108
Net debt, Vehicles and
Service, excluding provisions
for pensions, SEK m. 2,647 4,308
Return on capital employed,
Vehicles and Service, % 22.0% 17.4%
During 2003, the shareholders’ equity
of the Scania Group increased by
SEK 1,320 m. and totalled SEK 18,251 m.
(16,931) at year-end. Net income for the
year added SEK 3,034 m. (2,739), while
the dividend to the shareholders
decreased shareholders’ equity by SEK
1,100 m. (700). Beyond this, shareholders’
equity declined by SEK 614 m. (1,103) because
of exchange rate differences that
arose when translating net assets outside
Sweden, due to the appreciation of the
krona mainly against the American dollar
and the British pound.
The dividend for the financial year
2003 proposed by the Board of Directors
is SEK 6.00 (5.50).
The net debt of Vehicles and Service,
excluding provisions for pensions, amounted
to SEK 2,647 m. (4,308), which was
equivalent to a net debt/equity ratio of
0.17 (0.31). Including Customer Finance,
net debt was SEK 24,291 m. (25,108).
NUMBER OF EMPLOYEES
The number of employees at year-end
was 29,112 (28,230), an increase of 882.
In the sales and service organisation, the
number of employees rose by more than
350. Of these, about 180 employees were
attributable to acquired businesses in
western Europe and about 200 were attributable
to expansion in eastern Europe,
Asia and Africa. In Latin America, however,
the number of employees in the sales and
service organisation declined by about
140. In European industrial operations, the
number of employees rose by 570, while
the number fell by 60 in Latin American
industrial operations.
FINANCIAL RISKS
Borrowing and refinancing risk
Scania’s borrowing consists of a committed
credit facility in the international market,
capital market programmes, private
bond issues and public bonds, plus certain
other borrowing.
At year-end 2003, borrowing amounted
to SEK 26 billion. In addition to utilised
borrowing, Scania has an unutilised committed
credit facility equivalent to SEK 13
billion plus unutilised capital market programmes
equivalent to SEK 18 billion.
Of utilised borrowing, about SEK 5
billion falls due during 2004, SEK 4 billion
during 2005, SEK 4 billion during 2006
and SEK 13 billion during 2007 or later.
51 ANNUAL REPORT 2003