Book 1.indb - Scania

A MAGAZINE FOR SCANIA’S SHAREHOLDERS
QUARTER 2 2012
%
Operating Rörelsemarginal
20 20
16
17
12
14
8
11
4
8
0
-10 -06-10
-07-10
-07-11
-07-11
-07-11
-08-11
-08-12
-08-12
-08
Q2 Kv4Q3
Kv1Q4
Kv2Q1
Kv3Q2
Kv4Q3
Kv1Q4
Kv2Q1
Kv3Q2
Kv4
Report.
Xxxx Lower xxx deliveries
xxx and xxx higher xxx
xxx
xxx
xx costs xxx. pulled
down the mar-
> SID 2
gin. > PAGE 2
interview.
Xxxx Focusing xxx on xxxxxx service xxx
xx at Scania xxxxxx in xxxx Latin xxxx
xxx America. xxxxxx xxx.
> SID PAGE 3 3
Lower emissions
Scania’s broad efforts to reduce environmental impact.
Xxxxx
>
xxxx
PAGE
xxxxxxxx
4–5
xx x xxxxxx xxxxx. > SID 4–5
Stock Finance. market.
Xxxx Incentives xxx xxxxxx and
xxx sport xx will xxxxxx get Brazil xxxx
xxxx moving xxx again. xxxxxx.
> SID PAGE 6–7 6–7
FIGURES
FIGURES IN
IN
FOCUS:
FOCUS:
XXX 4.06
Xxxxxx xxx xx
Earnings per share (SEK) in the
xxxx xxxx xxxxx xxx
first six months
xxxx xxxxx xx.

FIRST SIX MONTHS IN FIGURES
order bookings and deliveries by region, Q2 (number of vehicles)
euRoPe
Order bookings
8,150 -14%
Deliveries
7,020 -20%
euRASiA
Order bookings
2,407 -13%
Deliveries
1,736 -11%
LATin AMeRiCA
Order bookings
4,669 +6%
Deliveries
3,234 -42%
AFRiCA AnD oCeAniA
Order bookings
989 -6%
Deliveries
963 -6%
ASiA
Order bookings
3,371 -33%
Deliveries
2,841 -28%
net sales
net sales by product segment*
operating income and margin
SEK m. Other 2%
% Operating income, SEK m.
SEK m.
25,000
Used vehicles 6%
20 Operating margin, percent
4,000
20,000
Services 21%
16
3,500
3,000
15,000
12
2,500
10,000
Engines 2%
Trucks 61%
8
2,000
1,500
5,000
0
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
2011 Q4
2012 Q1
2012 Q2
Buses and
coaches 8%
*Refers to first half of 2012
4
0
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
2011 Q4
2012 Q1
2012 Q2
1,000
500
0
Key figures
(SEK m. unless otherwise noted) 2012, 6 m 2011, 6 m Change in %
Net sales, Scania Group 39,338 43,665 -10
Operating income, Vehicles and Services 3,944 6,414 -39
Operating income, Financial Services 313 238 32
Operating income 4,257 6,652 -36
Income before taxes 4,275 6,828 -37
Net income for the period 3,249 4,947 -34
Operating margin, % 10.8 15.2
Return on equity, % 23.1 35.0
Return on capital employed, Vehicles and Services, % 29.2 44.2
Earnings per share, SEK 4.06 6.18 -34
Cash flow, Vehicles and Services 1,769 3,218 -45
Number of employees, 30 June 37,802 36,941
Order bookings (units, trucks and buses) 35,395 42,103 -16
Deliveries (units, trucks and buses) 32,032 40,300 -21
First six months
in brief:
DELIVERIES
fell by 21 percent to 32,032
vehicles.
OPERATING INCOME
fell by 36 percent to SEK
4,257 m.
CASH FLOW
amounted to SEK 1,769 m.
2 SCANIA VALUE • Q2/2012 www.scania.com

interview
text: erik aronsson photo: dan boman
Service must be a major focus of
Scania’s future expansion in Latin
America, says Martin Ståhlberg.
Scania stands strong
in Latin America
Latin America is not only Scania’s
second biggest region but also
an important region of the world,
with different countries presenting
different demands and conditions.
Martin Ståhlberg, head of Scania’s
Latin American operations, is
focusing on service.
Martin Ståhlberg was appointed head of
Scania’s Latin American operations in September
2011. Prior to this, he had served as head of Scania
in France and Sweden and as Managing Director
of Scania’s dealerships in Stockholm. In his current
role, he is in charge of one of Scania’s most
important regions.
“Latin America today represents about 20 percent
of Scania’s vehicle deliveries and the region
has accounted for reasonably stable growth in
recent years, despite the economic downturn during
2008 and 2009,” says Ståhlberg.
Aside from Brazil, Scania has a strong presence
in several other countries where the company has
to meet the specific demands of each market.
“We have a strong brand in all the markets
we operate in. In Mexico, we have a 65 percent
market share for intercity buses. In Peru, there is
strong potential for mining applications but also
for intercity buses. In Venezuela, we have very
successfully launched our industrial engines. In
Colombia and Chile, we have developed our Bus
Systems by Scania concept, in which buses occupy
dedicated lanes in a system that resembles railbound
service.”
Distribution segment is important
Yet Brazil is the country to which Ståhlberg is
devoting the greatest attention.
“In Brazil, we are currently focusing on the local
distribution segment but we are also very strong
in long-haulage, in products for the agricultural
industry and in off-road solutions for the construction
and mining sectors,” he says.
One important factor that is reducing demand
in Brazil this year is the transition to the new
Euro 5 emission standard. But according to
Ståhlberg, Scania has been able to take advantage
of having been well prepared for the change-over.
“Scania has good experience of the Euro 5
technology since it is already available in Europe.
Our customers here are happy with what we can
deliver since they can enjoy the same benefits as
the previous technology in terms of fuel economy
and productivity,” he says, while pointing out
that during the first five months of 2012 Scania
captured the largest market share when it comes
to sales of Euro 5 vehicles. Overall, the heavy truck
market shrank by 32 percent during the first half of
the year. Demand was strong in both 2010 and 2011.
When it comes to future expansion in Latin
America, Ståhlberg believes that the primary
focus must be on service.
“We are focusing on continued improvement
of our service network and service offering. We
believe that knowledge of our customers’ business
and of our customers’ customers means that
not only can we understand, but also predict what
needs our customers will have. In this way we can
help improve their business.”
www.scania.com Q2/2012 • SCANIA VALUE 3

FOcUs: envirOnMent
Scania is working on a broad front and in cooperation
with customers to help reduce the environmental impact
related to carbon dioxide and other substances. Demands
for reduced emissions from the transport sector are
increasing while economic growth means that transport
volume is growing. This represents a great challenge for
vehicle manufacturers and transport companies.
Meeting environmental
challenges
For a long time, there have been regulations which
prescribe limits for discharges of particulates and
nitric oxide. Many countries have introduced the
Euro emission standards, and the Euro 5 standard
currently applies in the European Union, Brazil
and elsewhere. The next stage in Europe will
be the Euro 6 standard, which enters into force
within the EU and certain neighbouring countries
on 31 December 2013 for all new vehicles
that are sold.
Scania’s early euro 6 launch
As early as March 2011, Scania launched its first
Euro 6 engines in order to give far-sighted hauliers
the opportunity to be one step ahead before
the new emission standard go into effect.
An acknowledgement of the successful launch
came when Scania’s R 480 Euro 6 tractor model
recently received the “Green Truck 2012” award
from the respected German trade magazines
Verkehrsrundschau and Trucker. “The good results
achieved by the Scania R 480 Euro 6 in these
press tests confirm that Scania’s engineers have
done an excellent job in developing the engines,”
says Scania’s Managing Director for Germany
and Austria, Alexander Vlaskamp.
The Euro 6 standard means about one fifth
of the emissions of nitric oxide and
particulates compared to
Euro 5. Lower carbon
dioxide emissions is an
area that is in constant
focus since lower fuel
consumption is of great
importance to Scania’s customers. However,
there are still no actual regulations regarding
emissions of carbon dioxide for commercial
vehicles. There are many opportunities to reduce
climate impacting emissions aside from improving
the efficiency of the traditional diesel engine.
Alternative fuels are one method.
4 SCANIA VALUE • Q2/2012 www.scania.com

text: erik aronsson Foto: scania
For more than 20 years, Scania has worked
with bioethanol as an alternative fuel. Today
bioethanol is the most widely used biofuel in
transport services. It is also the fuel which has
the best prospect of being supplied in large and
enduring quantities in the future, and it offers
the highest cost efficiency and best operational
range of the renewable fuels available at present.
A major advantage is that bioethanol is available
in liquid form and in commercial quantities
all over the world. It is easy to produce from a
variety of different raw materials – such as sugar
cane, beets and cellulose – and it is used both as
pure fuel and as an additive to traditional fuels.
Scania is the only vehicle manufacturer to offer
a number of heavy haulage products that can
be powered by bioethanol – for example buses,
trucks and refuse collection vehicles.
Scania’s engines for bioethanol fuel have the
same energy efficiency as a standard diesel engine
and meet the Euro 5/EEV emission standards.
“Of course many people want to rely on future
technology, but there is so much we can do even
today. Bioethanol can deliver up to 90 percent
lower CO 2 emissions compared to ordinary diesel,”
says Urban Wästljung, Manager, Sustainable
Transport at Scania.
Scania is also working on solutions to reduce
CO 2 emissions which as yet are only in the
experimental stage. Some time ago, the car
industry launched electric cars of different kinds.
A major challenge in the case of commercial
vehicles is the limitation in battery technology,
which for example cannot provide enough
capacity for a truck carrying a 25 tonne payload,
driven very long distances.
electric motorways
– a future possibility
However, if a vehicle can obtain electric power
from the roadway itself, the potential will be
much greater. It may sounds a bit like science fiction,
but it is a field where Scania even today is
involved in several different projects.
A future system of electrified motorways
has a number of advantages:
there is less environmental impact
from operation of vehicles, electric
engines are more efficient
than ordinary internal combustion
engines and power can be
supplied to the vehicles without
needing to use heavy batteries.
Several interesting projects
relating to electrified roads
are underway in Sweden. One
example is Scania’s cooperation
with Siemens regarding electric truck
operation on the road between Pajala and the
iron mine at Svappavaara in far northern Sweden.
There, trucks containing iron ore will drive
“ Bioethanol can deliver up to
90 percent lower Co 2
emissions
compared to ordinary
diesel.”
round-the-clock for reloading to the Iron Ore
Line, a railway that will carry the ore to a port
on the Atlantic coast of northern Norway. In a
recent report, the Swedish Transport Administration
(Trafikverket) stated that electrically-powered
trucks are a realistic alternative. Power supplied
by overhead cables is probably also the best
solution for this service, since the road is built on
bogs and moves up and down.
“Development of our electrified vehicle has
to take place on a step-by-step basis,” explains
Johan Lindström, Expert Engineer at Hybrid
Systems Development, Scania.
“We are using electrified gearboxes developed
in hybrid projects, but then a large electrical
motor must be added to the powertrain to drive
90 tonnes of payload entirely by electricity.”
However, some problems would have to be
resolved in order to adapt such a system to
enable both heavy vehicles and ordinary cars to
obtain power from aerial lines.
Scania is therefore also examining solutions
where vehicles obtain their power supply from
the roadway through induction or some other
technique. This will deliver a more flexible solution
where all vehicles can use the system and
thus share the large investment cost to rebuild
the road network. A feasibility study from the
Svenska Elvägar (“Swedish Electric Roads”) project
shows that electrification of heavy road traffic
in Sweden would make it possible to reduce
CO 2 emissions by 4.2 million tonnes, equivalent
to 9 percent of national fossil fuel emissions.
Together with Volvo Powertrain, Bombardier,
Alstom and other companies within the transport
industry, Scania has applied for funding
from the government-backed Strategic Automotive
Research and Innovation (FFI) research programme,
for a study on electric road transport
systems, which is expected to be completed in
early 2013.
In Scania’s view, different solutions will be
required in different markets to make such
systems commercially viable in meeting future
emission challenges. This is due to varying
access to alternative fuels and also depends on
how developed the electrical infrastructure will
be in the future. Scania has a good starting position,
given its extensive experience of a modular
product range.
Today’s electric vehicles are often powered by batteries, but such vehicles have a limited driving
distance due to their low storage capacity. Scania is therefore evaluating various alternatives for
transferring electricity between roadway and vehicle, including inductive power transfer.
www.scania.com Q2/2012 • SCANIA VALUE 5

Finance: scania in brazil
Brazil
Technology shift in
Scania’s largest market
The transition to a new emission
standard and generally weaker
economic conditions have reduced
demand for heavy trucks in Brazil.
But the Brazilian government is
now making an effort to get the
economy moving again, however,
so far the measures have not had
an effect.
Demand for heavy trucks in Brazil has been at
a very high level in recent years, but the transition
to the Euro 5 emission standard during
the first half of 2012 has had a negative impact
on demand. Buyers of new trucks have been
hesitant about assuming the cost implied by an
investment in the new trucks. The shift from
the Euro 3 emission standard to Euro 5 means
that vehicles gain exhaust purification technology
which has not been used in Brazil to date.
Meanwhile the generally weaker economic
conditions have reduced demand throughout
the Brazilian economy, which has also affected
demand for vehicles. The Brazilian government
has tried to get growth moving again through
various incentives and the central bank has
reduced interest rates in several stages. In
April, Brazil’s finance minister Guido Mantega
introduced a package including tax cuts, incentives
to local industry through government
procurement and better financing measures for
export companies.
Reduced growth forecasts
“So far, this has not had a significant effect but as
decisions regarding support are moved out to a
local level we should see a greater effect. Seasonally
adjusted, I think we may start to see a sequential
recovery during the summer even though we do
not expect that registrations and production will
increase compared to last year,” says Björn Enarson,
analyst at Danske Bank.
Mantega has had to reduce the growth outlook
on several occasions and in mid-July
Reuters reported that the GDP forecast had
been cut to 2.5 percent for 2012. In 2011, growth
was 2.7 percent.
However, in the longer term, analysts believe
that there are factors that point towards a good
performance in Brazil. Infrastructure investments
connected to the football World Cup in 2014 and
the 2016 Olympic Games in Rio de Janeiro combined
with the demographic trend and the abovementioned
incentive measures imply a good outlook
for the entire automotive industry.
“We predict a strong rebound in demand and
production of heavy trucks in early 2013 in light
Brazil’s finance minister, Guido Mantega, hopes
to get the country’s economy moving again.
of the recovery within the industrial and the
agricultural sectors, acceptance of new rules for
fuels and engines, and better access to government
incentive measures,” writes the US investment
bank JP Morgan in an analysis.
High average age of truck fleet
JP Morgan also points out in its analysis that the
Brazilian truck fleet, which is estimated to number
about a million trucks, still has a high average
age, suggesting a large replacement need.
The same applies in the bus and coach market.
Transport needs in particular will be in focus
for the two gigantic sporting events that are
planned in Brazil in the next few years. Ahead
of the World Cup in 2014, there are plans for a
number of infrastructure investments and the
government is also hoping for greater economic
activity during the event in the form of tourism
and increased private consumption.
“We believe that the World Cup will have
some positive effect on the market, particularly
as regards construction equipment, thanks
to all of the planned building projects,” says
Enarson.
The 2016 Olympic Games in Rio de Janeiro
will also require extensive infrastructure investments.
In March 2012, Brazil’s President Dilma
Rouseff and Rio de Janeiro’s Mayor Eduardo
Paes announced plans for bus and light rail
transport solutions in Rio that are expected to
cost approximately USD 1 billion, the equivalent
of SEK 8 billion. However, this is a minor
factor when compared to the World Cup.
“The positive effect from the Olympics will
not be as significant since there is only one city
involved,” says Enarson.
6 SCANIA VALUE • Q2/2012 www.scania.com

text: erik aronsson photos: göran wink and vanessa carvalho/getty images
The World Cup in 2014 and the
2016 Olympics in Rio de Janeiro
will require investments in
Brazil’s infrastructure.
Facts Brazil
Area: 8,514,877 km², the world’s
fifth largest country
Population: About 192 million,
the world’s fifth most populous
country
GDP: +2.7 percent (2011)
Currency: Real (100 reais= about
50 US dollars)
Capital: Brasilia
(Sources: IMF, OECD, CIA World Factbook)
www.scania.com Q2/2012 • SCANIA VALUE 7

IN BRIEF
Weak demand for
buses and coaches
Scania Production Slupsk, in Poland, is issuing
redundancy notices to 142 employees due to
continued weak demand for buses and coaches
for public transport in the most important markets
for Scania’s fully-built buses in the Omni
range. Various support programmes have been
developed in consultations between the company
and the trade unions that for instance will
offer the affected employees the possibility of
early retirement and redundancy payment.
“The economic situation in our most important
markets is showing no sign of improvement,
which means that we expect continued
weak demand for public transport buses in the
coming year. Therefore, we have to adjust production
to significantly lower volume,” says Klas
Dahlberg, Senior Vice President, Scania Buses
& Coaches.
The facility in Słupsk, with close to 700 employees,
is the hub of Scania’s European production
of fully-built (bodied) buses for public transport.
The Scania OmniCity and OmniLink models are
bodyworked here. Chassis for the Scania OmniCity
are also assembled in Słupsk. These chassis are
also delivered to other, independent bus bodybuilders
in Europe, Africa and Asia.
editor: erik aronsson photos: scania
Martin Lundstedt named new CEO
The Board of Directors of Scania has appointed
Martin Lundstedt the new President and Chief
Executive Officer of Scania AB. He takes up his
new position on 1 September 2012 and succeeds
Leif Östling, who has been appointed a member
of the Board of Management of Volkswagen AG.
Martin Lundstedt, born in 1967, has a Master
of Science degree in Industrial Engineering and
Management and is currently Scania’s Executive
Vice President and Head of Franchise and
Factory Sales. He joined the company in 1992 and
has held various senior positions including head
of Scania’s industrial operations in France from
2001 to 2005 and Senior Vice President, Trucks
until 2007, when he assumed his current position.
Scania is well positioned, and Lundstedt sees
no reason to change the path Scania has chosen
in recent years.
Martin Lundstedt has
been appointed new
President and CEO of
Scania AB.
“We shall continue to be the Scania that our
customers appreciate, a small big company
working tightly together with them, always
keeping it simple and straightforward.”
The company’s core values remain in place
and the same goes for Scania’s strategies.
“We shall continue to be the premium choice
for all customers in the transport and engine
sectors all over the globe. And we will do that
by building on our strong portfolio of products
and services, in our modular system, and with
a strong emphasis on the sales and services
network.
“Being the premium choice means that
we are working as partners with our customers,
always providing the best return on their investments
over the life cycle of these products.”
First Euro 6
municipal vehicle
Scania exhibited the world’s first fully
equipped Euro 6 sewer cleaner vehicle at
the IFAT ENTSORGA trade show, held in
Munich, Germany in May. Scania’s modular
product system made the design possible,
also showing that Scania’s Euro 6 engines can
be specified for virtually any application on
the market.
“Assembling such a complicated superstructure
on Scania’s Euro 6 chassis was really
easy,” says Brian Stage, CEO of Danish-based
bodybuilder J Hvitved Larsen A/S. “The
superstructure is identical to the one we use
for Euro 5 vehicles, which is a major benefit
from a cost- and lead-time standpoint.”
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Scania Value Quarter 3, 2012
(on www.scania.com and as
a printed version)
Scania Value is published by Scania
and targeted to Scania shareholders.
Publisher
Per Hillström, ir@scania.com
Editor-in-chief
anneli.volden@scania.com
Project Manager
erik.aronsson@appelberg.com
Art Director
karin.soderlind@appelberg.com
Production
Appelberg Publishing Group
www.appelberg.com
Printing: Trosa Tryckeri
Cover photo: Dan Boman
Contact
Scania Investor Relations
151 87 Södertälje, Sweden
Tel: 08-553 81 000
E-mail: ir@scania.com
8 SCANIA VALUE • Q2/2012
www.scania.com