Scania annual report 2002

ties had a positive influence of SEK 500 m. (–775) on the year’s earnings.
For a currency calculation concerning Latin American operations, see Note 26.
Scania’s policy is to hedge its currency flows during a period of time equivalent
to the projected orderbook until the date of payment. This normally means a hedging
period of 3 to 4 months. However, the hedging period is allowed to vary between
0 and 12 months. Scania’s net assets abroad amounted to SEK 11,397 m. at the
end of 2002 (see Note 25). The net assets of foreign subsidiaries are not hedged
under normal circumstances. To the extent a subsidiary has significant monetary
assets in local currency, however, it may be hedged. As of 31 December 2002,
SEK 566 m. (892) was hedged at Scania Group level, which was equivalent to
5 (10) percent of net assets abroad.
In order to hedge monetary operating assets in Latin America, Scania has
taken out loans in local currencies. On December 31, 2002, these loans totalled
SEK 459 m. (1,714).
Other risks
Residual value exposure
A portion of Scania’s sales occur with guaranteed residual value or repurchase
guarantee. During 2002, the volume of such transactions was more than 4,400
vehicles. The value of all obligations at year-end was SEK 6,077 m. (7,413). In the
case of this type of obligations, revenue and profit recognition occurs successively
over the period of the obligation. Residual value and repurchase obligations are
regulated by company policies and are regularly monitored both at the subsidiary
and Group level.
Insurance
Most of Scania’s insurance coverage is obtained in the international insurance
market, at a cost of SEK 61 m. (55) in 2002.
Number of employees
The total number of employees declined to 28,230 at the close of 2002, compared
to 28,541 at year-end 2001. The net effect of divestments/acquisitions of businesses
resulted in a decrease of about 900 persons. Excluding divestments/acquisitions,
the number of employees in European industrial operations rose by about 600.
In the sales and service organisation the number of employees increased by almost
300. In Latin American operations, the number of employees declined by more
than 300.
Consolidated income statement
January–December, SEK m. Note 2002 2001 2000
Sales 1 47,285 53,065 51,398
Cost of goods sold –36,260 –42,601 –40,061
Gross income 11,025 10,464 11,337
Research and development expenses 1 –1,437 –1,955 –1,621
Selling expenses –5,206 –5,594 –4,312
Administrative expenses –857 –785 –856
Income from Customer Finance operations 2 308 278 179
Share of income of associated companies 3 23 59 357
Capital gain related to car operations 4 550 – –
Operating income 4,406 2,467 5,084
Financial income and expenses 5
Interest income 260 294 415
Interest expenses – 857 –1,142 –1,007
Other financial income and expenses –87 –78 –38
Net financial items –684 –926 –630
Income after financial items 3,722 1,541 4,454
Taxes 6 –985 –496 –1,371
Minority interests 2 3 –3
Net income 2,739 1,048 3,080
Depreciation included in operating income 7 –2,093 –2,157 –1,999
Earnings per share, SEK 2 13,70 5,24 15,40
1 Total research and development expenditure amounted to SEK 2,010 m., of which SEK 573 m. was capitalised.
2 There are no potential dilution effects.
See Note 4 for information on how the divestment of Swedish car operations
affected Scania Group earnings.
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