Scania annual report 2003

ANNUAL REPORT 2003

SCANIA 2 

Scania in brief 2 

Important events 2003 4 

Important events 2004 6 

Statement of the President and CEO 8 

The work of the Board 10 

Management structure 11 

Goals and strategies 12 

Brand 13 

Employees 14 

Scania’s role in society 16 

CUSTOMERS AND PRODUCTS 18 

Customers 18 

Customers and products 20 

Customers and service 22 

Customers and financing 23 

R&D AND PRODUCTION 24 

Research and development 24 

Development of testing methods 26 

Development of a new truck 28 

Production 30 

The production system 32 

MARKETS 34 

Trends and industry developments 34 

Europe 36 

Other markets 40 

ENVIRONMENT 44 

Environmental work 44 

Environment and economics 46 

SCANIA SHARE DATA 48 

FINANCIAL REPORT 50 

Financial review 50 

Income statement 53 

Balance sheet 54 

Statement of changes in 

shareholders’ equity 55 

Cash flow statement 55 

Parent Company financial 

statements 56 

Accounting principles 57 

Notes 59 

Notes Parent Company 76 

Proposed distribution of earnings 77 

Auditors’ report 78 

Quarterly data 80 

Key financial ratios and definitions 81 

Multi-year statistical review 82 

BOARD AND MANAGEMENT 84 

Board of Directors 84 

Group Management 86 

ADDRESSES 88 

ANNUAL GENERAL MEETING 

The Annual General Meeting of Shareholders (AGM) 

will be held at 15:00 CET on Monday, 3 May 2004, at 

Scania Syd (formerly Festival Park), Södertälje, Sweden. 

PARTICIPATION 

Shareholders who wish to participate in the AGM 

must be recorded in the shareholder list maintained by 

VPC AB (the Swedish Central Securities Depository and 

Clearing Organisation) Friday, 23 April. 

They must also register with the company by post 

at Scania AB, SE-151 87 Södertälje, Sweden, or by 

telephone at +46 8 55 35 11 03 no later than 16:00 CET 

on Monday, 26 April 2004. 

The Report of the Directors encompasses pages 2–77. 

Swedish corporate identity number: Scania AB (publ) 556184-8564 

Unless otherwise stated, all comparisons in this Annual Report refer to the same period of the preceding year. 

The Annual Report contains forward-looking statements that reflect management’s current views with respect to certain 

future events and potential financial performance. Such forward-looking statements involve risks and uncertainties that 

could significantly alter potential results. The statements are based on certain assumptions, including assumptions 

related to general economic and financial conditions in the company’s markets and the level of demand for the company’s 

products. 

This report does not imply that the company has undertaken to revise these forward-looking statements, beyond 

what is required under the company’s registration contract with Stockholmsbörsen if and when circumstances arise that 

will lead to changes compared to the date when these statements were provided.

NOMINEE SHARES 

To be entitled to participate in the AGM, shareholders 

whose shares have been registered in the name of a 

nominee through the trust department of a bank or 

brokerage house must temporarily reregister their shares 

in their own name with VPC. Shareholders who wish to 

reregister their shares in this way must request their 

nominees accordingly in sufficient time before Friday, 

23 April 2004. 

DIVIDEND 

The Board of Directors proposes Thursday, 

6 May 2004 as the record date for the 2003 

dividend. The last day for trading shares that 

include the dividend is Monday, 3 May 2004. 

Provided that the AGM approves this proposal, 

the dividend can be expected to be sent 

Tuesday, 11 May 2004. 

INFORMATION FROM SCANIA 

Interim Report, January–March, on 3 May 2004. 

Interim Report, January–June, on 26 July 2004. 

Interim Report, January–September, on 1 November 2004. 

The Annual Report is posted on the company’s web site, 

www.scania.com, where Scania’s Interim Reports are 

also found. 

The material may also be ordered from: 

Scania AB, SE- 151 87 Södertälje, Sweden. 

Phone: +46 8 55 38 10 00 

Fax: +46 8 55 38 55 59 

The English version of the Annual Report is a translation of the 

Swedish language original. Translation: Victor Kayfetz, Scan Edit.

SCANIA IN BRIEF 

TRUCKS 

Key figures 2003 2002 2001 

Scania develops, manufactures and 

markets trucks with a gross vehicle weight 

of more than 16 tonnes (Class 8), intended 

for long-distance, construction and distribution 

haulage. 

Sales revenue 

SEK m. 

40,000 

29,139 29,537 

30,000 

27,184 

20,000 

10,000 

Deliveries, units 

Trucks 45,045 39,895 43,659 

Buses 4,910 3,774 4,672 

Total 49,955 43,669 48,331 

Sales revenue, SEK m. 

Scania products 50,581 47,285 48,310 

0 

2001 2002 2003 

Divested car operations – – 4,755 

BUSES 

Scania’s bus and coach operations focus 

on heavy buses with high passenger 

capacity for use as tourist coaches and in 

intercity and urban traffic. Most of 

Scania’s bus production consists of chassis 

on which bodies are built by independent 

specialist bodybuilding companies. 

Sales revenue 

SEK m. 

6,000 

5,115 

4,701 

3,991 

4,000 

2,000 

0 

2001 2002 2003 

Total 50,581 47,285 53,065 

Operating income, SEK m. 


Divested car operations – 550 – 

Total 5,125 4,406 2,467 

Operating margin, % 

Scania products 10.1 8.2 5.1 

Income before taxes, SEK m. 4,604 3,722 1,541 

Net income, SEK m. 3,034 2,739 1,048 

SERVICE 

Earnings per share, SEK 15.17 13.70 5.24 

Sales revenue 

Cash flow excluding Customer 

Finance operations, SEK m. 1 2,450 3,583 2,066 

By continuously increasing the range of 

service-related products, Scania helps its 

customers achieve increasingly costeffective 

solutions. 

SEK m. 

12,000 

10,603 10,759 

10,151 

8,000 

Return, % 

on shareholders’ equity 17.4 17.2 6.5 

on capital employed 2 22.0 17.4 9.1 

Net debt/equity ratio 2 0.17 0.31 0.58 

4,000 

Equity/assets ratio, % 27.7 25.6 23.4 

0 

2001 2002 2003 

Capital expenditures 

for fixed assets, SEK m. 3,196 3,025 1,980 

INDUSTRIAL AND MARINE ENGINES 

Scania’s industrial and marine 

engines are used in a variety of 

applications at sea and on land. 

CUSTOMER FINANCE 

Financial services are an important part 

of Scania’s complete product range. 

For customers, financing is often one 

element of cost-effective total solutions 

for their transport business. Customers 

can choose between loan financing, 

various forms of leases and insurance 

solutions. 

Research and development 

expenditures, SEK m. 3 2,153 2,010 1,955 

Number of employees, 

31 December 29,112 28,230 28,541 

1 Including acquisitions/divestments of businesses. 

2 Vehicles and Service. 

3 From 2002 onward, including capitalised development expenditures, 

amounting to SEK 669 m. in 2003 and SEK 573 m. in 2002. 

ANNUAL REPORT 2003 

2

Deliveries by market area, 2003 

THE WORLD OF SCANIA 

Other markets 4% 

Asia 12% 

Latin 

America 12% 

Central and 

eastern Europe 

8% 

Western 

Europe 64% 

Sales revenue by product area, 2003 

Buses and coaches 10% 

Industrial- and 

marine engines 1% 

Used vehicles 

and other 

products 13% 

Service-related 

products 20% 

Trucks 56% 

SCANIA’S TEN LARGEST TRUCK MARKETS 

Change 

Units 2003 2002 in % 

Great Britain 6,570 5,050 30 

Brazil 4,106 3,205 28 

France 3,720 3,871 –4 

Spain 3,448 3,171 9 

Germany 3,436 3,628 –5 

Italy 2,826 3,358 –16 

The Netherlands 2,102 1,958 7 

South Korea 1,985 1,736 14 

Sweden 1,870 1,907 –2 

Turkey 1,515 226 570 

SCANIA’S FIVE LARGEST BUS MARKETS 

Change 

Units 2003 2002 in % 

Brazil 503 327 54 

Great Britain 459 188 144 

Spain 458 394 16 

Italy 310 347 –11 

Mexico 287 424 –32 

PRODUCTION UNITS 

Sweden (number of employees) 

Södertälje (4,540) 

Production of components, engines, 

trucks and bus chassis. 

Falun (650) 

Production of axles. 

Luleå (850) 

Production of frame members and 

rear axle housings. 

Oskarshamn (2,100) 

Production of cabs. 

Sibbhult (505) 

Production of gearboxes. 

Argentina 

Tucumán (575) 

Production of gearboxes and 

rear axle gears. 

Brazil 

São Paulo (1,910) 

Production of engines, axles, 

cabs, trucks and bus chassis. 

Mexico 

San Luís Potosí (50) 

Production of bus chassis. 

France 

Angers (525) 

Assembly of trucks. 

The Netherlands 

Zwolle (1,375) 

Assembly of trucks. 

Poland 

S upsk (330) 

Assembly of bus bodies. 

Russia 

St. Petersburg (130) 

Assembly of bus bodies. 

SALES AND SERVICE UNITS 

Altogether, Scania is represented in about 100 

countries through 1,000 local distributors and 

1,500 service points. 

3 ANNUAL REPORT 2003

IMPORTANT EVENTS 

Scania receives the Coach of the Year 2004 award. 

New crash-zone concept. 

2003 

• 

On 15 January, Scania was de-listed 

from the New York Stock Exchange at its 

own request. The reason was the low 

number of shares outstanding and very 

limited trading volume in the US. Trading 

in Scania shares on Stockholmsbörsen 

(the Stockholm Stock Exchange) was not 

affected. 

• In February, Scania’s subsidiary Scania 

South Africa Pty Ltd inaugurated a new 

office for coordination of operations 

throughout the southern Africa region. 

At the same time, assembly of trucks and 

buses for these markets was moved to a 

new common facility. 

• During the year, Scania began an 

alliance for common development and 

supply of components with Germany’s 

MAN Nutzfahrzeuge. The alliance is 

related to certain types of axles and gearboxes. 

• In May, Scania inaugurated its largest 

facility to date in Asia. The Scania Korea 

Jinsa Complex in Sacheon is the hub of 

Scania’s growing South Korean operations. 

Equipped with a service workshop, customer 

centre, parts warehouse and bodybuilding 

factory, the facility is prepared for 

various expansion alternatives as Scania’s 

South Korean business continues to grow. 

• In September, a Scania heavy truck 

model was the first foreign make to 

receive type approval for the Japanese 

market. Type approval means that Scania 

tractor units meet the same legal standards 

that apply to domestic manufacturers 

and can compete on equal terms. 

• In September, Scania decided to 

concentrate its European city bus bodybuilding 

in Poland. During the spring of 

2004, the wholly-owned bodybuilding 

company Omni will cease bodybuilding in 

Katrineholm, Sweden. The move is being 

carried out to achieve profitability and 

safeguard Omni’s long-term competitiveness. 

• In October, Scania inaugurated its expanded 

truck assembly plant in Zwolle, 

the Netherlands. After capital expenditures 

of about EUR 35 m., technical assembly 

capacity rose 50 percent. Truck assembly 

in Zwolle is strategically important to enable 

Scania to respond to a future increase in 

demand. 


4

Road safety conference in Brussels. Scania in Japan. Young European Truck Driver final in Södertälje. 

• On 8 October, for the third time since 

1999, Scania organised a road safety 

conference in Brussels. Among the 400 

participants were politicians and officials 

of the European Parliament and the European 

Commission, as well as researchers, 

road safety experts, representatives of the 

vehicle and haulage industries and journalists. 

• At the same time, Scania unveiled a new 

crash zone-concept for trucks. The 600 

mm long deformation zone is specially 

designed to absorb crash energy in case 

of a head-on collision with a car. The 

crash-zone has the potential to save many 

lives per year. 

• In October, the new Scania Irizar PB 

tourist coach was named “Coach of the 

Year 2004”. Good fuel consumption, excellent 

handling and first-rate passenger 

comfort and design are qualities that contributed 

to the prestigious award, according 

to the jury. 

Europe’s biggest competition for young drivers 

On Saturday, 20 September, 20 finalists from as many countries met at the 

finals of Scania’s safety competition, Young European Truck Driver. The 

competition, implemented in partnership with the European Commission and 

other organisations, attracted 6,000 participants, making it Europe’s largest 

competition for young professional drivers. The goal is to increase road safety 

awareness and thereby reduce the number of accidents involving heavy 

vehicles. 

Scania has a long tradition when it comes to developing safe vehicles, the 

company and occupies a leading position in its industry. But a safe vehicle is 

not enough to prevent accidents. The most important factor is a well-trained 

driver, who drives safely and who instinctively acts properly in unforeseen 

situations. With Young European Truck Driver, Scania has reached out to 

young drivers and encouraged them to improve their safety and enhance 

their driving skills – and has also demonstrated the commitment to road 

safety issues that exists in the transport industry. The competition focuses 

on road safety and fuel economy, as well as various types of 

precision driving, and is a combination of theoretical and practical 

tests. The winner of the finals was 27-year-old Michele Sandri 

from Trento, Italy. 

When Scania organises its next competition in 2005, 

Michele Sandri will already have a place in the finals, in his 

capacity as defending champion. 

5 


A new truck hits 

the road 

2004 

On 31 March 2004, Scania’s new 

truck range has its world premiere. 

The R-series, which is optimised for 

long-haulage, will be followed by 

other models during the coming year. 

The R-series features many innovations 

that make it Scania’s best truck ever, both 

to own and to drive. Concealed inside its 

shell are exciting solutions that are crucial 

to vehicle reliability, safety and overall performance. 

The most important improvements 

are related to availability, fuel economy, 

greater cargo capacity and driver environment. 

The new truck is designed with 

a focus on the driver. 

Better fuel consumption 

To maximise profitability, Scania’s customers 

want vehicles that give them the lowest 

possible operating cost. Given the stiff 

competition that today’s hauliers face, even 

marginal improvements are of great importance 

to their business. With its 4-series 

cab, in 1995 Scania introduced a whole 

new truck design, featuring exceptionally 

low air resistance. Extensive wind tunnel 

tests have revealed further potential 

improvements, which have now been introduced. 

The R-series has better fuel consumption, 

which in turn decreases the 

vehicle’s operating cost and environmental 

impact. 

More time on the road 

Vehicle availability is a factor that strongly 

influences a customer’s economic situation. 

An unplanned workshop visit means 

that a truck cannot generate any revenues. 

A large percentage of the new parts, components 

and systems introduced in the 

new truck provide even higher availability, 

and thus better total economy. 

Lower weight 

Scania has greatly reduced vehicle weight 

in the R-series – up to 270 kg, depending 

on specification. Lower vehicle weight 

means higher cargo capacity. This makes 

customers with weight-sensitive shipments 

more competitive. 

New solutions for greater safety 

Scania has always accorded top priority to 

safety when designing new cabs. Safety 

for the driver – but also for other road 

users. The dashboard, steering column 

and steering wheel of the R-series feature 

new systems that make driving easier and 

give the driver better protection in case of 

a collision. A new generation of electrical 

brakes provide better braking power and 

responsiveness. The Electronic Stability 

Program (ESP) intervenes to prevent skidding 

and rolling. Front underrun protection 

is integrated in the bumper. 

The driver’s favourite cab 

Driver comfort is one of Scania’s main hallmarks. 

With the R-series, Scania is taking 

a major new step to give drivers more of 

the comfort they need to do a really good 

job. More space, many new functions, 

greater comfort and more efficient working 

tools increase the chances that the driver 

will feel at home in his workplace and thus 

drive more safely. 

Euro 4 

In addition to six Euro 3 engines, Scania is 

also offering a 420 hp Euro 4 engine in the 

R-series. This lowers emissions of nitrogen 

oxides by 30 percent and emissions of particulates 

by 80 percent. The flexibility of the 

new electrical system creates a platform for 

additional emission reductions in the future. 

A Scania customer can thus choose a truck 

as early as this year that offers extra good 

environmental performance, which in some 

countries qualifies for lower taxes and fees. 

The Euro 4 rules go into effect in the European 

Union late in 2005 for new engine 

types and one year later for new trucks. 

More information about Scania’s new truck 

range can be found at our webb site. 

7 


STATEMENT OF THE PRESIDENT AND CEO 

Prioritising better earnings paid off 

Despite weak economic growth in 

our main markets in 2003, Scania’s 

operating income rose by more than 

30 percent and operating margin improved 

to 10 percent. After several 

years of weak economic growth in 

western Europe, the economic situation 

is expected to improve somewhat 

during 2004. The economies in 

central and eastern Europe as well 

as Latin America are also expected 

to develop favourably. Meanwhile 

Scania is carrying out an extensive 

renewal of its product range. 

Price ceremony, Young European Truck Driver. 

Meeting with Tadaaki Jagawa, President of Hino. 

The American economy, which has a 

major impact on economies around the 

world, recovered during 2003. However, 

the outbreak of war in Iraq made customers 

more cautious and temporarily slowed 

order bookings. Meanwhile the economic 

outlook in several of Scania’s main 

markets in western Europe cooled as a 

consequence of large government budget 

deficits. Towards the end of the year, the 

picture became brighter, and there are 

many signs that economic growth may be 

somewhat better during 2004. Economic 

growth is important to Scania, since the 

need for transport services, which generates 

demand for trucks, is directly 

connected to the GDP trend. 

The somewhat lower order bookings in 

major western European markets were offset 

by rising order bookings in central and 

eastern Europe, as well as in Asia. Also 

very positive was the turnaround we saw 

in Latin America during 2003. The big 

economies of Brazil and Argentina have 

again begun to show good growth. 

The bus business also developed well 

during 2003, bus and coach sales were 

the highest in Scania’s history. 

Integrated market 

The overall market in western Europe was 

largely unchanged compared to 2002, 

which means a level about 13 percent 

lower than in the record year 2000. In 

recent years, exports of 4-6 year old 

trucks to central and eastern Europe have 

risen. These exports are expected to rise 

further, as the large volume of trucks sold 

in western Europe during the late 1990s 

begins to be replaced in the next few 

years. The outflow of used trucks, together 

with low interest rates, has contributed 

significantly to the fact that demand for 

new trucks has not fallen as sharply as 

during earlier economic slumps in western 

Europe. The greater flow of used vehicles 

from traditional markets in western Europe 

to new markets in eastern Europe means 

that Europe as a whole is becoming an 

increasingly integrated market. 

In central and eastern Europe, 

economic growth in most countries was 

strong, and both order bookings and deliveries 

rose. The manufacturing sector is 

moving production at an ever faster pace 

from western to central and eastern 

Europe. This generates a rising demand 

for fast, flexible transport services. With a 

growing number of central European 

countries as members of the European 

Union, this trend will accelerate. 

Recovery in Latin America 

In both Brazil and Argentina, the economic 

and political situation stabilised. The total 

market increased, and Scania’s order 

bookings and deliveries improved. 

Scania is continuing to assign higher 

priority to profitability than to volume. 

In recent years, we have streamlined production, 

adjusted price levels and boosted 

exports of both components and whole 

vehicles to countries outside Latin America. 

Meanwhile competitors with considerably 

simpler products have gained market 

share in the lighter heavy vehicle segment. 

Strong growth in Asia 

Scania had a good year in many of its markets 

outside Europe and Latin America. 

Turkey evolved into an important market 

and many countries in the Middle East 

showed strong volume growth. In east 

Asia, Scania’s growth continued in South 

Korea and Taiwan. 

During the year, we reinforced our 

presence in the Chinese market and we 

see that developments in China are important 

to economic growth in the region. 

ANNUAL REPORT 2003 8

Inauguration of the expanded assembly unit 

in Zwolle, the Netherlands. 

Presentation of the Interim Report for January–June. 

Scania signs “Fome Zero”, the anti-poverty 

programme initiated by Brazilian President Luiz 

Inácio Lula da Silva. 

A visit to the axle production unit in Falun, Sweden. 

However, there is still limited demand for 

the type of technologically advanced heavy 

trucks that Scania sells. In general the logistics 

and distribution structure is undeveloped, 

so demand for our products 

remains low. Naturally this will change, and 

Scania is increasing its focus on the 

Chinese market. 

In the Japanese market, Scania was 

the first non-Japanese make to receive 

type approval from the authorities for a 

heavy truck model, which means that in 

partnership with Hino we can intensify our 

efforts in Japan. 

tions that Scania has implemented in recent 

years. Since a large proportion of a 

bus chassis consists of truck components, 

today we are taking advantage of the 

synergies that exist with development and 

production of trucks. 

During 2003, restructuring of bus and 

coach operations continued. A decision 

was made to move the labour-intensive 

bodybuilding of Scania’s Omni buses from 

Sweden to Poland. 

Global and expanded production 

We are continuing to take advantage of 

our global production system. It makes 

no difference today where a vehicle is produced. 

A Scania always maintains the 

same high quality, regardless of where it 

is built. 

We have invested in expanded technical 

capacity. The enlarged and modernised 

assembly unit in Zwolle, the Netherlands is 

located in the middle of Scania’s major 

markets in western Europe. The expansion 

Record year for buses and coaches 

In 2003, sales of bus chassis were the 

highest in Scania’s history. Even though 

the total market for heavy buses in Europe 

declined by 5.4 percent, Scania increased 

its sales in several of the largest markets. 

In Latin America, too, bus and coach deliveries 

rose. A gratifying trend, considering 

the restructuring of bus and coach operaof 

the Zwolle unit is an important step enabling 

us to respond to the higher volume 

that we believe will materialise in the next 

economic upturn, thereby ensuring continued 

profitable volume growth for Scania. 

Steady flow of new products 

Right now we are in the launch phase of a 

new truck range. During the coming year, 

we will successively replace Scania’s entire 

current range with a new truck and bus 

range. The new products are based on 

both the experience we have gathered 

through the 4-series and all the opinions 

we have received from our customers. In 

addition, we have innovatively renewed 

other components to create the best truck 

Scania has ever built. 

With the new truck range, from as early 

as this year our customers can choose 

engines that meet legal requirements that 

go into force in the autumn of 2006. Meanwhile 

Scania is refining its working methods 

with continuous improvements in 

product development. This means that 

new and improved components can continue 

to be introduced when they are 

ready, instead of waiting, as earlier, for major 

changes of model. For customers, this 

means that every new Scania will be a 

better Scania. 

An exciting year ahead 

In closing, I would like to thank all our employees 

for great dedication, outstanding 

work contributions and very fine results. 

Ahead of us awaits a year that has the 

potential to be one of the most exciting 

in Scania’s history. 

Leif Östling 

President and CEO 


THE WORK OF THE BOARD 

The Board and its committees 

According to the Rules of Procedure it has 

adopted, the Board of Directors shall hold 

at least six regular meetings per year. 

Beyond this, the Board may meet when 

circumstances demands. During 2003 the 

Board held nine meetings. 

The Board’s January/February, April, 

July/August and October/November 

meetings are devoted primarily to financial 

reporting. 

In August the Board deals with longterm 

plans and in December the financial 

plan (budget) for the following year. 

At all regular meetings, the Board 

deals with matters of a current nature as 

well as capital expenditures. Reporting to 

the Board from its committees occurs 

on a continuous basis. 

At its meetings, the Board also recurrently 

deals with various aspects of the 

company’s operations: for example management 

recruitment, financing, product 

development and market issues. This 

occurs at in-depth briefings where affected 

managers participate. 

The statutory Board meeting following 

the Annual General Meeting approves 

Rules of Procedure and a standing agenda 

for the Board meetings, appoints the 

Chairman, Vice Chairman and Board committee 

members, adopts instructions and 

decides certain compensation issues. 

Nomination of Board members takes 

place as follows: Well before the Annual 

General Meeting Bernd Pischetsrieder, the 

Chairman, and Clas Åke Hedström, the 

Vice Chairman, hold discussions with representatives 

of the four largest shareholders 

in the company (excluding AB Volvo) 

to reach a consensus on persons to be 

nominated. 

The Audit Committee – consisting of 

Marcus Wallenberg, Chairman, Clas Åke 

Hedström and Lothar Sander – had three 

meetings during 2003. In accordance with 

the rules of procedure that have been 

adopted, the Audit Committee prepared 

items of business related to internal controls, 

financial reporting, accounting principles 

and external auditing. 

Compensation issues for the President 

and certain other senior executives are 

handled by the Remuneration Committee, 

which consists of Bernd Pischetsrieder, 

Chairman, Peggy Bruzelius, Rolf Stomberg 

and Clas Åke Hedström. During 2003 the 

Remuneration Committee held three meetings. 

A committee was also established 

earlier that is to consist of external Board 

members independent of Investor and 

Volkswagen. The Employee Representatives 

are not included. This committee is 

intended to prepare any possible issues 

for the Board concerning the ownership 

structure of Scania AB. 

The instructions to the President 

specify his duties and powers. These instructions 

include guidelines on capital 

expenditures, financing, financial reporting 

and external communications. 


MANAGEMENT STRUCTURE 

Continuous strategic work 

Scania needs long-term profitable 

growth in order to maintain and 

strengthen its position. In a world of 

constant change, with competition 

becoming tougher every day, Scania’s 

management structure must continuously 

be improved and refined. 

Scania today is a global, integrated 

organisation of about 29,000 employees. 

Leading a large, complex organisation 

requires clear strategy and governance, 

as well as understanding that transcends 

all functional and regional boundaries. 

In a number of respects, Scania is the 

leading company in its industry. To maintain 

this leadership, the company’s operating 

objectives must be integrated with its 

vision and mission. They should be transformed 

into concrete guidelines and targets, 

both for Scania as a whole and for 

its various operating units. 

The Executive Board 

Below the Board of Directors, Scania’s top 

decision-making body is the Executive 

Board, which decides on issues of a longterm 

strategic nature. 

Decision meetings 

Scania’s decision-making structure is 

based on a fixed number of meetings in 

the various branches of operations. Decisions 

on such matters as marketing, product 

development, brand issues and production 

planning are made at cross-functional 

meetings in which the 

Executive Board participates. 

Strategic Update 

All managers at Scania are responsible for 

communicating and working in accordance 

with Scania’s strategies. The company’s 

strategic direction is summarised in 

the Scania Strategic Update once a year. 

This document is an important tool when 

establishing business and operating plans. 

Global Management Summit 

Once a year, the company’s top managers 

meet for a strategic review, the Global 

Management Summit. Similar summits are 

also held with board members from the 

various Scania companies as well as the 

chief executives of these companies. 

works and outside perspective further 

contributes to Scania’s development. 

In keeping with the established strategy, 

the local company management directs 

and develops day-to-day operations and is 

responsible for achieving earnings targets. 

The Scania Councils 

To further improve sales and service companies, 

a number of regional councils have 

been established. Each such council is 

headed by an independent chairman and 

consists of managing directors in a region. 

Their task is to improve the business by 

benchmarking and exchanges of experience 

to achieve the best solutions in the 

form of Best Practice. This work is often 

pursued in project form. 

Group Management 

Group Management consists of the 

Executive Board and Corporate Units. 

The Corporate Units have operating 

responsibility for implementing and 

carrying out the established strategies. 

Corporate governance 

Scania’s companies work in accordance 

with the principles established in Scania’s 

Corporate Governance Manual. The local 

company board monitors operations and 

establishes a strategy and objectives. The 

President and CEO of Scania appoints the 

representatives on the local boards, 

among them a number of external members 

whose expertise, local contact net- 

11 


GOALS AND STRATEGIES 

Strategy for profitable growth 

Scania’s strategy can be summarised in two words: profitable 

growth. Historically, this profitability is based on organic growth. 

Scania focuses on customers, products, markets and activities 

with the potential to generate future profitability. This also remains 

Scania’s strategy. 

Strategy 

Concentration on heavy transport 

vehicles 

Scania’s operations focus on heavy transport 

vehicles. In mature markets, demand 

for heavy trucks and buses increases at 

the pace of economic growth. In emerging 

markets, demand increases faster or at 

the same pace as infrastructure expands 

and logistic demands increase in the 

transport industry. 

Modular product system 

With Scania’s modular product system, 

the customer gets the exact vehicle specification 

he or she wants, regardless of the 

part of the world where the vehicle is manufactured. 

The more closely a vehicle and 

related services are adapted to a transport 

task, the better the customer’s operating 

economy will be. The modular system is 

the basis for product quality. It simplifies 

parts management and contributes to a 

higher degree of service. The modular system 

optimises the total number of main 

components that are included in Scania’s 

product range. It thereby allows considerably 

longer production runs for these components 

than is possible in a conventional 

product system. 

Integrated range of vehicles, services 

and financing 

Scania grows by offering customers combinations 

of vehicles, service and financing 

for the best total solutions in the market. 

Scania’s customers increasingly use their 

vehicles round-the-clock. This presupposes 

rapid, continuous access to service and repairs. 

In addition, Scania is continuously 

improving its sales and service network. 

Customer financing is an important element 

of Scania’s complete product range. 

Focus on growth markets 

Scania’s main markets – Europe, Latin 

America and Asia – have good potential 

for long-term growth. An increasingly borderless 

Europe, with growing economies 

and an expanded number of EU member 

Vision 

Scania’s vision is to be the leading 

company in its industry by creating 

lasting value for its customers, employees, 

shareholders and other 

stakeholders. 

states, offers major opportunities to manufacturers 

with a well-developed sales and 

service network. 

In Latin America, there is an increasing 

demand for vehicles, services and financing 

as an ever larger share of both goods 

and passenger traffic utilises heavy vehicles. 

Asia is a long-term growth market. 

Infrastructure improvements will open the 

way for a more efficient transport sector. 

Mission statement 

Scania’s mission is to supply its customers with high-quality 

heavy vehicles and services related to the transport of goods and 

passengers by road. By focusing on customer needs, high-quality 

products and services, as well as respect for the individual, 

Scania shall create value-added for the customer and grow 

with sustained profitability. 

Scania’s operations specialise in developing and manufacturing 

vehicles, which shall lead the market in terms of performance and 

life-cycle cost, as well as quality and environmental characteristics. 

Scania’s sales and service organisation shall supply customers 

with vehicles and services that provide maximum operating time 

at minimum cost over the service life of their vehicles, while preserving 

their environmental characteristics. 


BRAND 

Strong corporate culture builds the brand 

Scania has a strong corporate culture 

that always puts the customer 

first. Respecting the knowledge, 

experience and aspiration of all individual 

employees to continuously 

improve their performance is fundamental 

to Scania’s culture. 

Historically speaking, Scania has competed 

on the basis of well tried and tested 

technical solutions. Its ambition has 

always been to outperform its competitors. 

Scania’s products are the customer’s 

tool to achieve high profitability. 

This is based on long experience, high 

quality and cost-effectiveness – values 

summed up in the Scania brand name. 

The strength and value of the brand has 

helped make Scania one of the most profitable 

companies in its industry. Strong 

customer loyalty is the cornerstone of this 

profitability. 

Pride and trust 

A customer should feel proud to own and 

drive a Scania, a professional tool that 

strengthens the respect accorded him by 

colleagues, competitors and his own customers. 

But he also feels trust, because 

he has made a sound investment. This 

trust is not only about physical products, 

but also about being able to rely on all the 

collective knowledge and experience of 

Scania’s global service network. 

Values 

Scania’s identity is shaped by its internal 

values and working methods. Three fundamental 

values – core values – are shared 

throughout the company and form the 

basis of both Scania’s corporate culture 

and its business success. 

Putting the customer first 

Scania focuses all its efforts on the needs 

and activities of its customers. It does this 

by optimising the value chain from research 

and development via production and purchasing, 

to sales and servicing of vehicles 

while they are in operation. Through knowledge 

of the customer’s needs, and by 

viewing its business over a vehicle’s entire 

life cycle, Scania also creates a close contact 

and a partnership with the customer. 

Respecting the individual 

Respect for the individual is a cornerstone 

of leadership at Scania. On the basis of 

this value, it is the task of a Scania manager 

to teach and apply the principles that 

govern the company’s work. 

New ideas and inspiration are born out 

of day-to-day operations. When given increased 

responsibility, Scania’s employees 

always develop better solutions in their 

work. Their knowledge, experience and 

attitude of continuously aspiring to improve 

their work help ensure higher quality, 

efficiency and greater job satisfaction. 

Quality 

All employees in the global Scania organisation 

know that the customer’s profitability 

is dependent on the delivery of high quality 

from Scania. By immediately dealing with 

deviations in well-established processes, 

and promptly remedying them, Scania’s 

employees can continuously improve the 

quality of their products and services. 

13 


EMPLOYEES 

Scania grows with its employees 

One of the basic values shared by 

everyone who works at Scania is respect 

for the individual – always treating 

others as we ourselves wish to be 

treated. Respect for the individual is 

also the basis of all leadership at 

Scania and is one of the company’s 

three core values. 

If Scania is to be a first-class workplace, 

it requires good leadership. 

Leadership 

Leadership must be clear, supportive and 

with straightforward allocation of responsibility. 

This establishes a secure environment 

that encourages initiative and that 

rewards concrete, lasting results. This is 

fundamental to Scania’s development 

efforts. At Scania, leadership is based on 

shared values, principles and attitudes. 

Such leadership creates the preconditions 

for change and learning. 

Among other things, this implies an 

open, clear dialogue that reflects Scania’s 

values. 

Scania’s human resources policy 

Scania should be a highly regarded employer 

with competent and dedicated 

employees who work in a creative and 

healthy environment where diversity 

and an ethical approach are cherished. 

But above all, leadership at Scania means 

a talent for transforming a common way of 

thinking into a common way of working. 

Managers should be role models for their 

fellow employees. It is necessary to lead 

through other employees and to set a 

good example. 

Good leadership means having a holistic 

view, while also taking into account the 

individual capabilities of employees. 

Workplace health and safety 

A creative, healthy environment with a 

positive working climate is fundamental to 

all employees at Scania. At the same time, 

each employee is expected to take responsibility 

for his or her own situation and 

health, as well as live up to the company’s 

core values and contribute to continuous 

improvements. Employees regularly fill in a 

questionnaire expressing what they think 

about their work situation and cooperation 

with their immediate supervisor and organisation. 

For many years, Scania has invested in 

fitness programmes in order to improve 

the well-being of its employees. This 

includes taking advantage of activities that 

have a positive impact on job satisfaction, 

relationships and motivation. 

To help employees who have 

nevertheless ended up in the risk zone for 

ill health, Scania also has access to other 

health-promotion resources, whose purpose 

is to enable the employee to regain a 

well-balanced existence. The results of the 

company’s actions can be measured, 

Scania devotes a lot of effort to fitness programmes. “Scaniamilen”, a 10-km run in Södertälje, Sweden, 

attracts thousands of Scania employees. 

among other things, in reduced absenteeism 

due to illness. In Sweden, absenteeism 

by Scania employees totalled 5 percent 

during 2003. 

Human resource development 

Of Scania’s approximately 29,000 employees 

around the world, nearly 60 percent 

are blue-collar employees and slightly more 

than 40 percent are white-collar employees. 

About 15 percent of the overall Scania 

workforce consists of women. More than 

60 percent of employees are 26–44 years 

old. Scania thus has a favourable demographic 

age distribution in its workforce. 

Developing the skills of employees and 

their ability to work according to common 

principles and methods on a global basis 

is a prerequisite for Scania’s success. 

Once a year, each individual employee’s 

human resource development plan is 

summarised in a review with his or her 

manager. 

At Scania, human resource development 

is connected to the short- and longterm 

objectives and needs of the company’s 

operations. Scania thus offers a broad 

range of specially tailored training and human 

resource development. One example 

is Scania Network Training, which gives 

employees in the sales and service organisation 

goal-oriented training based on 

identified needs. In the Scania Training 

Management System, each employee has 


a human resource development plan, 

which is a practical tool for ensuring the 

requisite level of training and quality of the 

global marketing organisation. 

Freedom of contract and 

co-determination 

All Scania employees are entitled to participate 

in trade union work. A majority of 

employees belong to unions, but the level 

of union affiliation varies in response to 

local conditions. 

In all countries where Scania does business, 

employees have access to company 

information and the right to co-determination, 

as provided by national legislation. 

The Scania European Committee is a 

forum for consultation and information 

where employee representatives from EU 

countries meet. 

% 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

60 

Educational level 

Compulsory 

school 

The Scania Marketing Academy 

The Scania Marketing Academy provides academically 

accredited training that develops and 

reinforces the business skills of Scania’s marketing 

organisation. The Academy is run 

in collaboration with the Stockholm School 

of Economics. 

“Two weeks here convey much of Scania’s 

soul, which has been important to me as a 

relatively new employee,” explains Natalia Tutova, 

Deputy Credit Risk Manager at Scania 

Leasing Russia. To date, about 330 managers 

and specialists from Scania’s international organisation 

have earned a certificate from the 

programme. 

“Team-building is an important element of my 

job. There are no heroes here,” maintains Abel 

Gustavo Cordoba, Business Intelligence 

& Development. 

During their weeks at Scania’s Hedenlunda 

conference centre, programme participants are 

also able to gain an in-depth view of the company’s 

vision and strategy, something that Ilmar 

Kukk, Sales Manager of Scania in Estonia, appreciated. 

“I am basically an engineer, and to me 

strategic thinking and financial issues have been 

extremely valuable.” 

Performance-based bonuses 

Good leadership in a healthy working environment 

characterised by personal 

responsibility and teamwork provides motivation. 

Combined with performancebased 

compensation systems, this motivation 

increases employee participation 

and dedication. In Sweden, bonuses are 

based on the year’s delivery assurance, 

productivity growth and quality. Funds are 

transferred to a foundation in which each 

employee owns shares. At year-end 2003, 

the foundation owned 0.61 percent of 

Scania’s shares (1,219,000 Series B 

shares). In France, bonuses is determined 

by productivity, quality and delivery precision, 

and in the Netherlands by productivity 

and low absenteeism. In Latin America, 

bonuses are based on production, low absenteeism, 

market leadership, teamwork 

and improvement efforts. 

Secondary school 

More than 80 percent of employees 

have an education equivalent to a 

secondary school diploma or higher. 

Gender distribution, blue collar 

and white collar employees 

Blue collar 

Men 

Women 

White collar 

Women and men have the same 

opportunities at Scania. Gender 

distribution is still uneven, however. 

15 


SCANIA’S ROLE IN SOCIETY 

Long-term community relationships 

A global company like Scania both 

influences and is influenced by the 

communities where it operates. 

At Scania there is a tradition of 

establishing long-term local relationships 

to be able to work in a sustainable 

way. 

Scania’s operations contribute to the 

economic and social development of host 

countries. Our operations and the use of 

our products also affect the environment, 

while we endeavour to improve conservation 

of resources and reduce emissions. 

Scania’s relationships with society at 

large are of great importance to its brand 

and long-term profitability. From a global 

perspective the company’s relationships, 

both internal and external, are based on a 

set of common values, known as Scania’s 

core values: 

■ Putting the customer first 

■ Respect for the individual 

■ Quality 

Scania’s social responsibility efforts derive 

from this common base. The issues we 

become involved in are related to our business. 

Our focus is thus on road safety and 

on the creation of more environmentally 

acceptable vehicles and transport systems. 

Scania must be a leader in active 

safety and develop products in such a way 

as to minimise both the number of 

accidents and the damage they cause. 

Good environmental performance and 

management at Scania’s own facilities are 

an obvious goal. 

Global corporate culture 

Scania has consistently aimed at longterm 

development work. 

The three core values apply to everyone, 

regardless of where in the organisation 

a job is performed. This also means that 

on ethical issues, everyone has to become 

involved and work in accordance with 

Scania’s existing practices. Scania supports 

the OECD Guidelines for Multinational 

Enterprises. 

Environmental standards apply 

throughout Scania 

There is an environmental impact both at 

our own facilities and when our products – 

vehicles and engines – are being used by 

customers. Scania’s Environmental Policy 

and overall environmental targets apply to 

all parts of the company and are posted at 

www.scania.com 

Scania’s guiding principle is to reduce 

the environmental impact at all stages, 

throughout the product life cycle. The 

company’s environmental work thus 

strongly emphasises doing the right thing 

from the beginning, conserving raw materials 

and energy and focusing on the 

needs of customers, by manufacturing 

vehicles and engines with better fuel consumption 

and low exhaust gas emissions. 

2003 – year of the driver 

Scania believes that the driver is the most 

important contributor to improved road 

safety and works to make his or her job 

easier. Our vision is that drivers of heavy 

vehicles should serve as role models for 

other road users. 

To promote road safety, driver skills 

and a positive attitude in society at large 

towards transport professionals, during 

2003 Scania organised a competition for 

young truck drivers. Some 6,000 drivers 

from 20 European countries competed in 

safe, environmentally oriented and economical 

driving techniques. Scania implemented 

the competition in partnership with the 

European Commission and with Michelin, 

Shell and the International Road Transport 

Union (IRU) as co-sponsors. 

How others rate Scania 

Scania is evaluated by others on the basis 

of what we do and how we do it. Our ambition 

is to increase transparency to meet the 

needs of all stakeholders. 

In order to improve informational work, 

Scania is working with the United Nations 

Environmental Programme as well as other 

vehicle manufacturers in partnership with 

the Global Reporting Initiative (GRI) to prepare 

a guide for voluntary reporting by the 

vehicle industry. 

During 2003, Scania’s shares were included 

in the Dow Jones STOXX Sustainability 

Index (DJSI Stoxx) and FTSE4Good. 

The company is also evaluated regularly by 

international sustainability analysts. 

The OECD Guidelines in brief 

• Generally: Respect human rights. 

• Information: Disclose relevant 

information to all stakeholders. 

• Employees: Respect the union rights 

of employees and help eliminate child 

labour. 

• The environment: Strive for continuous 

improvement. 

• Corruption: Never offer bribes or anything 

else that may be perceived 

as bribes. 

• Interest to customer: Disclose 

product information to customers and 

establish improvement procedures. 

• Science and technology: Work towards 

transferring knowledge to host 

countries. 

• Competition: Refrain from anticompetitive 

agreements among competitors. 


Erik Dahlberg describes Scania’s ”crash-zone” concept. Hasse Johansson, Scania’s Head of Research and Development. Jan Gustavsson demonstrates Scania’s fleet management products. 

Scania hosts European gathering 

In October, for the third time since 1999, 

Scania organised a road safety conference 

in Brussels. Among the 400 participants 

were politicians and officials from the European 

Parliament and the European Commission, 

as well as researchers, road safety 

experts, representatives of the vehicle industry 

and haulage business, as well as 

journalists. 

“Human-machine interaction is an important 

factor if we are to improve safety 

on our roads, but technology must not 

gain the upper hand and become a mental 

burden for the driver,” noted European 

Commissioner Erkki Liikanen. 

Every year about 40,000 people are 

killed and 1.7 million are injured on the 

roads of the EU. During 2003 the 

European Commission adopted an 

action programme aimed at halving the 

number of traffic fatalities by 2010. 

At the conference, the European Commission 

presented its guidelines and directives 

concerning commercial vehicles. Driverrelated 

issues received close attention and 

were discussed in various workshops. 

Dimitrios Theologitis of the EU Directorate- 

General for Energy and Transport spoke 

on measures that will enable the EU to 

halve the number of fatalities on its roads. 

“We must enhance the professional 

transport industry to the highest possible 

level of safety, quality and working conditions. 

We can do this by eliminating barriers 

and facilitating easier movement of 

people and goods across the boundaries 

of member countries.” 

One issue that received special attention 

was improved safety in case of collisions 

between cars and trucks. Scania 

presented a concept truck that could save 

many lives, thanks to a deformation structure 

or crash-zone at its front. 

Crash-zone will save lives 

Together with front underrun protection, 

which has been required by EU law since 

August 2003, the concept boosts the survivable 

head-on collision speed from 56 

km/h to 90 km/h. This is achieved by 

lengthening the front of the truck by 600 

mm. What may appear like a bonnet is instead 

a structure that is purpose-built to 

absorb energy in a controlled way. 

“Changing the laws to allow extra 

length and weight for trucks with such a 

deformation zone will encourage hauliers 

to invest in better protection for other road 

users,” Hasse Johansson, Scania’s Group 

Vice President for R&D, told the assembled 

experts. 

17 


CUSTOMERS 

Customer demands shape new products 

Scania’s customers are found all over the world. Their operations may 

differ, but they all have in common that in their businesses they make 

heavy demands on Scania’s products and services. All work at Scania is 

focused on understanding and meeting the demands, needs and wishes 

of these customers. 

Scania pursues a continual dialogue with 

customers during the development of new 

products, to ensure that these products 

live up to all the demands that are made. 

In the task of developing the new truck 

range, this included conducting product 

clinics, to which drivers and other customers 

were invited early in the development 

process to test various design solutions, 

especially related to the cab interior. 

These clinics were then repeated at 

regular intervals until the final stage of development 

work. Since the needs of customers 

vary in many respects, depending 

on where they are in the world, the product 

clinics were conducted on several 

continents. In addition, a number of preseries 

trucks were operated by various 

hauliers to find out what customers 

thought about them under real-life 

conditions. 

New customer demands 

Internationalisation, structural changes and 

increasingly active customers and consumers 

have changed the transport industry 

in recent years. Demands for faster, 

more reliable and cheaper deliveries are 

forcing transport companies to improve the 

efficiency of the flow of goods, services and 

information. Large hauliers are evolving into 

logistics companies, which assume total 

responsibility for their customers’ transport 

needs. Meanwhile many smaller haulage 

firms are specialising or becoming subcontractors 

to larger transport companies. 

Such services as financing, insurance, 

short-term vehicle rentals and maintenance 

are in ever greater demand. 

Scania’s product 

development 

work occurs in 

close cooperation 

with drivers. 

Truck customers 

Scania’s truck customers are using their 

vehicles during more and more of the day 

and night. This presupposes access to 

routine maintenance and repairs. For 

Scania, it means 24-hour service workshops, 

comprehensive parts management, 

complete maintenance and many other 

services generated in close contact with 

the customer. 

A large proportion of Scania’s truck 

customers work in the long-haulage segment, 

where Scania’s international service 

network is highly valued. 

Drivers, who live with the products, are 

an important target group to Scania. They 

have a major influence on the purchasing 

and investment decisions of transport 

companies and are key individuals when it 

comes to operating cost, environmental 

impact and safe vehicle handling. 

Bus and coach customers 

Scania’s customers in city bus services 

today are often private operators, in many 

cases active in more than one country. 

To a growing extent, they are demanding 

a total transport solution. Service and repair 

contracts, financing and traffic planning 

are examples of the elements that 

may be included in Scania’s bus business. 

Customers in the tourist coach segment 

previously composed their own 

coach, by ordering the chassis from one 

manufacturer and the body from another. 

Today more and more customers, especially 

in Europe, want to buy whole buses 

from one supplier. This means that to a 

greater extent, Scania is selling a complete 

vehicle, where the chassis comes from 

Scania and the body is purchased from 

an independent bodybuilder. 

Industrial and marine engine customers 

Scania’s industrial and marine engine customers 

are found in many different sectors. 

But whether it is a machinery manufacturer, 

a lone fisherman or a defence 

materiel procurement officer, their demands 

are similar. They all want a reliable 

engine with a long service life and the best 

possible operating economy. Since most 

of Scania’s industrial and marine engines 

are operated far from service workshops, 

dependability is high on the customer’s list 

of demands. 

In recent years there has been increased 

demand for engines that meet a 

variety of emission standards. 


Colourful cargoes delivered in style 

When Dick Misdorp transports tulips, it has to be 

quick and reliable. That is why Scania’s most powerful 

truck is a self-evident element of his business. 

Every day 19 million flowers and plants are 

sold at the Aalsmeer flower auction. A large proportion 

of these are transported by air from nearby 

Amsterdam Schiphol Airport, and only 24 hours 

later they may be on display in flower shops anywhere 

in the world. 

Every day, 2,000 trucks also leave the 800 metre 

long, 600 metre wide building for destinations 

around Europe. One of these trucks belongs to Dick 

Misdorp. 

He bought his first Scania back in 1969. Three 

years later he got his first V8. Today he carries tulips 

to other parts of Europe in his latest power pack, 

a 580 hp vehicle that helps burnish his image among 

customers: 

“It’s a reliable truck that is also very economical, 

thanks to its optimal trade-off between engine power 

and overall gearing.” 

Even though tulips may not weigh very much – the 

maximum weight of a colourful cargo is about 

25 tonnes – it requires fast shipment. But despite 

high average speeds on European motorways, Dick 

Misdorp’s average fuel consumption is a reasonable 

23.8 litres per 100 km. 

“This truck also has the Scania Retarder, which I 

am very pleased with. It increases the service life of 

the brakes on both the tractor unit and trailer, which 

also contributes to lower kilometre costs.” 

19 


CUTOMERS AND PRODUCTS 

Tailor-made vehicles and engines 

Scania has an integrated product 

concept that combines vehicles, 

service-related products and financing. 

Through its collective 

knowledge in these fields, Scania 

continuously contributes to the 

profitability of its customers. 

The competitive, logistic and market situation 

of customers constantly changes. 

This poses new challenges for their 

vehicles. 

A modular product range 

The better Scania vehicles and servicerelated 

products are adapted to the customer’s 

transport tasks, the higher the 

customer’s profitability will be. Scania’s 

modular system is basically a “toolbox” in 

which most components can be used in 

many different combinations. This gives 

customers almost unlimited possibilities 

to tailor their vehicles to a specific task. 

Scania’s challenge is to supply the customer 

with an optimally configured vehicle. 

A global product range 

The unique “toolbox” also makes it possible 

for Scania to meet the widely varying 

needs of customers with a global product 

range, while preserving economies of 

scale in development and production. 

Unlike many other vehicle manufacturers, 

Scania has a single product range for all 

markets in the world. Furthermore, the 

work at all of Scania’s production units 

around the world is governed by common 

methods from the Scania Production System. 

The same global quality and environmental 

standards apply throughout 

Scania. 

Quality at every level 

Scania has a cohesive quality monitoring 

system – from product development 

through production and servicing of the 

product operated by customers. This work 

is based on identifying deviations before 

they create problems for customers. Such 

a working method requires knowledge and 

foresight. For procurement units, it is a 

matter of choosing good, reliable suppliers. 

In production units, the quality of working 

methods is refined through the continuous 

efforts of improvement teams. The challenge 

to the sales and service organisation 

is to understand the customer’s business to 

be able to tailor vehicles for optimal transport 

work. For the service market, preventive 

maintenance is the best way to keep 

malfunctions from happening and help the 

customer avoid expensive downtime. 

Environmental adaptation of products 

Most of the environmental impact of a 

vehicle, 95 percent, occurs during its 

service life. Continuous development work 

enables Scania to constantly improve 

the environmental impact of its products. 

Strategic areas of the products’ environmental 

performance include emissions of 

exhaust components, chemical content 

and residual processing. Aside from 

Scania’s internal development targets, 

future legal requirements on products 

weigh heavily in the development task. 

If Scania’s customers are to continue 

investing in the company’s products both 

vehicles and service solutions must undergo 

constant development. Important objectives 

are lower weight, lower operating 

cost and longer service life. 


Scania’s product 

system is basically 

a “toolbox” in which 

most components 

can be used in many 

different combinations. 

Trucks 

Scania develops, manufactures and markets 

trucks with a gross vehicle weight of 

more than 16 tonnes (Class 8) for longhaulage, 

construction haulage and distribution 

of goods. During the spring of 

2004, Scania is introducing a new extended 

range of trucks. 

Scania’s long-haulage trucks are characterised 

by high availability, excellent fuel 

economy and low maintenance costs. The 

new R-series is optimised for long-haul 

service, with higher capacity, better performance, 

fuel economy and reliability. 

Scania’s construction trucks are developed 

and built with off-road mobility 

and cargo capacity as their most important 

characteristics. 

Scania’s distribution trucks are developed 

to operate in city environments 

and other settings where they must meet 

high standards in terms of environmental 

performance, driver environment and 

manoeuvrability. 

Buses and coaches 

Scania’s bus and coach operations focus 

on heavy buses with high passenger capacity 

for use as tourist coaches or in 

intercity or urban traffic. Most of Scania’s 

bus production consists of chassis. In 

2003, more than 90 percent of production 

then went to independent bodybuilding 

companies. 

For intercity and city traffic, Scania 

manufactures its own bus bodies under 

the Scania Omni brand. 

Scania’s bus and coach chassis range 

is largely based on standardised components, 

most of which are shared with 

trucks. This yields major benefits to customers 

in the form of good access to service 

and parts. 

Scania’s bus chassis are modular and 

give the customer a good opportunity to 

specify a tailor-made vehicle. 

Industrial and marine engines 

Scania’s engines are used in a variety 

of applications – not only in buses and 

trucks. The starting point is always 

Scania’s basic engines, which are then 

adapted to fit the requirements of the customer. 

Dependability, durability and efficiency 

are qualities that make Scania’s engines 

highly appreciated among customers in 

many different fields of application. Examples 

of applications for Scania industrial 

and marine engines may be container handling 

equipment, pilot boats, irrigation 

units and construction equipment. In principle, 

a Scania engine can be placed in 

any kind of application that requires a 

powerful engine. 

The trend is towards increasingly complex 

products, driven among other things 

by new, stricter emission rules. 


CUSTOMERS AND SERVICE 

Maximum uptime requires optimal service 

To many of today’s transport companies, 

high vehicle availability is 

a prerequisite for profitability. The 

quality of the service network is 

as important as the quality of their 

vehicles. 

Demands for faster, more reliable and 

cheaper deliveries are forcing transport 

companies to improve the efficiency of their 

operations. By updating, customising and 

constantly expanding its range of servicerelated 

products, Scania is offering these 

customers increasingly cost-effective 

solutions. 

Many customers prefer repair and maintenance 

contracts, where they pay a fixed 

per-kilometre price so they can focus on 

their core business – transport and logistics. 

Other customers want a fixed per-repair 

price for both parts and labour. 

With 1,500 authorised Scania workshops 

around the world, more than 1,000 

of them in Europe, the service market is a 

key competitive factor for Scania. Its importance 

to Scania’s profitability is continuously 

increasing. The EU’s modified block exemption 

system for the motor vehicle sector has 

intensified the competition in this market. 

Customers now have an even broader 

range of choices when they want service or 

repairs performed. 

Scania is responding to this competition 

with expanded availability, where speed, 

quality and expertise are key concepts. 

Quality 

The customer pays to ensure that his vehicle 

will always work. An unplanned stoppage 

always represents a cost, and in the 

worst case it means lost business. Through 

high quality and availability in its service network, 

Scania helps the customer to limit 

these costs. 

To make sure that all Scania customers 

will receive the same high level 

of service and quality wherever they are 

located, Scania has expanded its Dealer 

Operating Standards (DOS) internal certification 

programme. This sets standards for 

availability, sales and delivery, access to 

parts as well as maintenance and repairs, 

among other things. Environmental standards 

in the sales and service organisation 

have also been tightened. Compliance 

with the DOS standards is monitored 

regularly. 

Expertise 

There is a steadily growing need for training 

in the service sector. The advanced 

technology built into coming vehicles will 

demand a high level of employee skills. 

Right from the start, reference people 

from Scania’s service workshops participated 

in the task of developing the new R- 

series. The result has been a truck with 

faster and easier maintenance, enabling 

customers to use their vehicles even more 

efficiently. 

Instructors are trained regularly at the 

company’s own training centres, for example 

in Germany, Great Britain, Sweden, 

Brazil, Dubai and South Korea. These instructors, 

in turn, train service technicians 

at local centres. 

During 2003 Scania Network Training 

organised the fourth Top Team final, in 

which service technicians from 17 countries 

participated. This recurring competition 

is a much-appreciated way of raising 

the level of expertise in the service organisation. 

Scania Assistance 

Today’s customers expect maximum 

vehicle availability, with a minimum of unplanned 

stoppages. Scania Assistance is 

there to help get the vehicle back to work 

again as quickly as possible in case of 

unplanned stoppages. 

Aside from Europe, Scania Assistance 

is found in South Korea, Israel, Morocco, 

Tanzania, South Africa, Brazil, Argentina 

and Mexico. 

The investment of recent years in the 

Scania Assistance organisation have 

helped lower the average time between a 

service call from the driver until the vehicle 

is back on the road. In four years, this time 

has fallen from 10 hours and 28 minutes 

to 4 hours and 26 minutes. 

Personal contact with the customer 

Customer financing is all about building close 

relationships. Zuzana Tomackova, head of 

Scania’s customer financing in the Czech 

Republic and Slovakia, and Katerina Svancerova, 

Credit Manager, conclude multi-year contracts 

with Scania’s customers, so creating long-term 

trust is important. 

In the Czech Republic, and perhaps even 

more so in Slovakia, business is often based on 

personal contacts. It is vital that customers feel 

just as important as they are, Ms Tomackova 

says. 

She was among those who started up the 

company in 1998, when the Czech market was 

large enough for its own finance company. 

The first few years were devoted to building 

up a customer portfolio. During 2002 a branch 

office opened in neighbouring Slovakia. Today 

Ms Tomackova has a team of 13 people who 

handle customer financing operations in the 

two countries. 

As head of customer financing, Zuzana 

Tomackova is often on the road, meeting her 

customers. 

“I enjoy talking with them and learning 

about their everyday lives. This is part of building 

relationships – exactly what customer financing 

is about.” 

Today Ms Tomackova and her team finance 

about half of all Scania trucks sold in the Czech 

Republic. The market has grown sharply, and 

competition for customers is very tough. 

“Our major advantage is that we are flexible 

and fast. This is often the reason why customers 

choose us for their financing. We work out of 

the same building as Scania’s Czech sales company, 

and that proximity is important. Here 

customers can get everything in one place.” 


Operating income and 

operating margin 

SEK m. 

400 

% 

2.0 

Size of portfolio 

SEK m. 

30,000 

CUSTOMERS AND FINANCING 

Customer financing with a local touch 

300 

200 

100 

0 

00 01 02 03 

1.5 

1.0 

0.5 

0 

Operating income 

Net margin as a 

percentage of 

average portfolio 

25,000 

20,000 

15,000 

10,000 

5,000 

0 

00 01 02 03 

Financial services are an important 

element of Scania’s product range. 

These activities help strengthen the 

competitiveness of customers by 

creating a sound, secure long-term 

financial platform for their businesses. 

Scania’s customer financing enable customers 

to tailor financial solutions to their 

needs. Hire purchase financing, leases 

and insurance solutions can be combined 

with service contracts, based on customer 

wishes. 

Scania endeavours to work locally in 

its Customer Finance operations. Proximity 

to customers and local know-how 

makes the processing of applications efficient 

and improves the quality of credit 

evaluation. 

Europe 

Scania’s Customer Finance operations in 

Europe encompass thirteen finance companies. 

In most western European countries, 

portfolio growth stabilised, since 

sales volume was relatively stable. The 

Spanish finance company, which was established 

late in 2001, showed continued 

good growth during 2003. Operations in 

central and eastern Europe take place 

through local Scania-owned companies in 

Russia, Poland and the Czech Republic, 

while most other eastern European markets 

receive cross-border support with 

their financial solutions from the subsidiary 

Scania Credit. 

Asia and Africa 

Since the beginning of 2003, financing operations 

in South Korea have taken place 

through a Scania-owned finance company. 

Volume growth remained strong during 

2003. 

During 2003 financing operations in 

South Africa developed favourably. 

Latin America 

In the Latin American market, Scania offers 

customer financing mainly in collaboration 

with outside lenders. 

Future outlook 

In recent years, growth in customer financing 

has slowed. Operations have entered a 

consolidation phase, with the primary focus 

on further refining the services that the organisation 

offers to Scania’s customers. In 

the growth that occurs, Customer Finance 

will assign priority to retaining a balanced 

portfolio in terms of geographic distribution, 

customer size and allocation among risk 

categories. 

23 


RESEARCH AND DEVELOPMENT 

The art of peering into the future 

Scania’s research and development 

work begins and ends with the customer. 

But customer demand is not 

the only thing that drives this work. 

So does our ability to embrace new 

technology in order to meet future, 

probable and real needs. In order 

to “see around corners” and understand 

the businesses and the needs 

of customers, Scania works with selected 

reference customers. Technical 

studies and research projects are 

other methods for trying to peer into 

the future. 

Scania’s research and development expenditures 

in 2003 totalled SEK 2,200 m. 

(SEK 2,000 m.). R&D work is mainly concentrated 

at the Scania Technical Centre 

in Södertälje, where 1,600 engineers and 

workshop employees have, among other 

things, more than 20 engine test cells and 

chassis test rigs as well as a 13 km test 

track to help them in their work. 

Product development takes place in 

five main areas: chassis, engine, cab and 

transmission development as well as complete 

vehicles. Truck, bus and engine development 

work is integrated and is run on 

a cross-functional basis. Scania’s modular 

toolbox makes it possible, in principle, to 

build a bus chassis out of the components 

used in a truck chassis. This provides 

economies of scale that are unique among 

today’s bus and coach manufacturers. 

The industrial research programme 

Scania continuously participates in a number 

of cutting-edge technological research 

projects in collaboration with institutes of 

technology, universities and other research 

institutions. One example is Scania’s 

industrial research programme, which 

was launched in May 1996 and by now 

has proven to be a highly successful 

investment. 

The industrial research programme 

contributes greatly to Scania’s strategic 

recruitment of expertise. Of the approximately 

25 doctoral students who are participating 

in or have completed their postgraduate 

studies, nearly all have continued 

working at Scania after having received 

their degree. 

The industrial research programme has 

served as a mutual and fruitful exchange 

of knowledge and ideas between Scania 

and the academic world. Scania has 

already been able to apply some of the research 

findings from the programme, while 

others will have their breakthrough in the 

years ahead. Some of the fields in which 

Scania has initiated and participated in research 

projects are related to future combustion 

concepts such as Homogenous 

Charge Compression Ignition (HCCI), cargo 

and driver comfort as well as lateral 

stability of buses and trucks. 

Life-cycle thinking is 

the foundation of 

Scania’s research and 

development work. 

Environmental priorities 

Life-cycle thinking is the foundation of 

Scania’s research and development work. 

By weighing in the environmental aspects 

at an early stage of product development 

work, the environmental impact of the 

product can be reduced throughout its 

life cycle. Better fuel consumption and reduced 

exhaust emissions are always in 

the spotlight. Avoiding and phasing out 

hazardous chemicals are other important 

areas. Product development work also 

offers opportunities to plan for environmentally 

acceptable dismantling and recycling 

of vehicles at the end of their service 

life. 

Development of new or improved 

products usually leads to better environmental 

performance. Future legal requirements 

for products play a major role in development 

work. These legal requirements 

are often imposed for environmental or 

road safety reasons. 

Patent protection and design 

registration 

More intensive competition has made it 

necessary to obtain patent protection for 

the knowledge that underlies the development 

of new products. Design registration 

is also important to ensure that no one 

can copy Scania’s designs. 


The driver’s new world 

It has more room, better ergonomics 

and improved crash safety. 

A large proportion of the most important 

innovations in Scania’s new 

truck range have to do with the 

driver environment. 

Scania enlisted the help of numerous 

drivers, who use various 

truck makes, in order to design and 

test the driver’s favourite cab. The 

result is a new, ergonomic driver environment 

featuring a curved dashboard 

where everything is located 

within arm’s length. Sleeping comfort 

has also been improved. The 

most striking innovation, however, 

is the almost completely flat floor. 

No gear lever, no engine tunnel, 

but plenty of room. 

In other words, the focus has 

been on the driver, from the first 

sketch to the final design solution 

for the R-series cab. By increasing 

the driver’s satisfaction, dedication 

and ability to do as good and safe 

a job as possible, Scania helps improve 

its customers’ profitability. 

The placement of electrical 

switches, controls and other equipment 

on the dashboard is logical 

and strategically conceived on the 

basis of customer needs. A robust 

cup holder, a large drawer for an A4 

binder, spaces specially intended for 

fuel, credit or highway toll cards, as 

well as large flat work surfaces are 

details that add up to a more functional 

workplace. 

“We have not only focused on 

the driver environment, but also on 

the ‘mobile office’ and the ‘mobile 

café’. This is reflected in ample space 

as well as smart storage lockers below 

the dashboard,” explains Mats 

Holmstrand, who headed the task of 

developing the new instruments. 

The safety of the driver and any 

passenger has also been an important 

aspect throughout the development 

process. The steering wheel is 

designed to allow maximum visibility 

at all times and not to obscure the 

driver’s view of the dashboard. 

“The shape of the steering wheel 

and other components in front of 

the driver, such as the steering column 

and dashboard, work together 

to absorb a maximum of crash energy 

and minimise driver injuries in 

case of an accident.” 

25 


DEVELOPMENT OF TESTING METHODS 

Increasingly advanced testing methods 

The development of Scania’s new 

trucks was based on the 4-series, 

the Scania product that has generated 

the lowest customer operating 

costs of all time. Advanced new testing 

methods have helped make the 

R-series the best truck Scania has 

ever built. 

To carry out new vehicle projects successfully, 

Scania has greatly improved its testing 

methods and resources in recent 

years. It has made large investments in 

analysis, simulation and physical testing of 

fatigue strength, vehicle dynamics, 

acoustics and fuel efficiency. Many tests 

are conducted nowadays in simulation 

programmes, in less time and with greater 

precision than before. For example, in the 

field of fatigue strength testing, investments 

in testing resources have led to a 

70 percent capacity increase. Complete 

vehicle configurations have been analysed 

and tested before final verification tests by 

customers have begun. 

Thousands of improvements 

During the testing of the R-series, new 

testing technology enabled Scania to identify 

and remedy a number of deviations 

before production began. These improvements 

will now benefit customers in the 

form of increased availability and lower fuel 

costs, as well as easier service and maintenance. 

Another benefit is a better environment 

for the driver, in the form of a new 

cab interior and new driver interface. 

Many of these improvements were 

made possible by the new platform for the 

truck’s electrical and electronic systems. In 

this area, new product development methods 

and extensive field testing have given 

customers greater value-added and made 

Scania’s production system more efficient. 

Testing in heat and cold 

Scania’s products are used by customers 

all over the world. This means that testing 

work must take into account the whole 

range of driving and climatic conditions 

trucks may face. Having studied how 

trucks are used and what stresses they 

face, Scania’s development engineers can 

avoid unpleasant surprises with the aid of 

analyses and testing. Climate testing and 

measurements of operating conditions 

play a key role in this work. Climate testing, 

which ranges from the extreme winter 

climate of Siberia to the heat and humidity 

of the tropics, covers the full array of conditions 

that the Scania “toolbox” must 

cope with, to ensure that the right truck 

is specified and sold to each customer. 


The same truck at +50 or -50 degrees C 

The temperature conditions that Scania customers 

work in may differ by as much as 100 degrees Celsius. 

But in principle, they use the same vehicles. 

Scania’s modular product range makes maximum 

customisation possible. 

In northern Africa and the Middle East, vehicles 

must be able to tolerate extreme heat, desert sand 

and dust. 

Matimex, one of Morocco’s leading construction 

haulage firms, uses Scania trucks exclusively in its 

gravel hauling work. Its trucks are equipped with a 

unique tipper body with high cargo capacity. In temperatures 

of up to 50 degrees C, trucks must meet 

high standards of dependability. 

A few thousand kilometres north, basically identical 

Scania vehicles ply the roads. But in the interior of 

Siberia, the challenge facing the Mostostroy-12 

haulage firm is that its Scania trucks are exposed 

to extreme cold and bad roads resting on permafrost. 

The vehicles are driven for 20-day tours 

of duty, hauling gravel for the construction of 

new roads. One driver takes over from another, 

but for safety reasons, the engines of the vehicles 

are never shut off. At minus 50 degrees C, 

the reliability of a vehicle may make the difference 

between life and death. Then come 10 days 

of thawing and maintenance indoors, before it is 

time for the next 20-day tour of duty in the 

Arctic cold. 

All these vehicles – used under the most extreme 

conditions – were delivered to Scania’s 

customers specified entirely on the basis of the 

Scania modular “toolbox”. Fundamentally, they 

are the same truck, but with a number of modules 

replaced by others to fit local conditions. 

A vehicle’s systems and components 

must work together under the toughest 

conceivable conditions. 

A steady development process 

Development of Scania’s products occurs 

through standardised methods. A welldefined 

product development process 

gathers all the product ideas that originate 

in marketing and development departments. 

These ideas are evaluated and 

prioritised in light of Scania’s product strategy. 

Product development then occurs in 

project form, with clear objectives and end 

dates. One direct consequence of modularisation 

is that product improvements can 

be implemented in a steady flow, without 

major changes in the form of yearly models 

or the like. Standardised interfaces mean 

that new performance steps can be introduced 

without extensive changes in the 

composition of the vehicle. This, in turn, 

makes it possible to introduce new, improved 

components immediately, instead 

of waiting for major model changes. For 

the customer, every new Scania is a better 


A shaky operation 

Today Scania’s Strength Testing Laboratory 

in Södertälje has at its disposal three shake 

rigs, in which complete vehicles or portions 

of a vehicle can be shake-tested. The testing 

simulates the punishment that a vehicle is 

subjected to when driving on Scania’s test 

track. A test that takes about two years on 

the track can be completed on the rig in 

three months. 

Each shake rig consists of four hydraulic 

cylinders attached to the vehicle frame that 

apply vertical force, two cylinders that apply 

lateral force and one that applies longitudinal 

force. All the cylinders stand on a vibrationinsulated 

floor. The rigs can operate without 

manual surveillance and will automatically 

stop when any component breaks. When 

that happens, the component undergoes a 

fatigue strength analysis, whose results provide 

the basis for redesign. Each component 

or system must meet Scania’s internal quality 

standards before being approved for production. 

The laboratory also has a rig for testing 

truck frames that are equipped with axles 

and axle suspensions, in other words all 

weight-carrying components of a truck. The 

test rig consists of 20 hydraulic cylinders that 

simulate the loads on each wheel of a threeaxle 

vehicle in the vertical, lateral and longitudinal 

direction, but also simulate braking 

forces. In addition, the rig simulates the 

effect of the cab and engine on the frame 

while driving. 

27 


DEVELOPMENT OF A NEW TRUCK 

A truck with lower operating cost and 

environmental impact 

Scania’s customers want reliable vehicles 

that give them the lowest possible 

operating cost. The tough competition 

that today’s hauliers face 

means that even marginal improvements 

are very important to a 

customer’s business. Scania’s new 

truck range was developed with 

precisely this in mind. 

Scania’s first Euro 4 engines are available 

with the R-series. These engines deliver a 

30 percent reduction in nitrogen oxide 

emissions and an 80 percent reduction in 

particulate matter. The new R-series provides 

fuel savings of several percent, 

which is important to the customer when 

vehicle fuel accounts for one-third of his 

total costs. 

This saving was achieved primarily 

through improved aerodynamics and electronic 

auxiliary systems. 

Lower air resistance 

In 1995 Scania introduced a radically altered 

cab design, offering exceptionally 

low air resistance. Since then, continued 

careful wind tunnel research has revealed 

further improvement potential. This 

applies, for example, to the shape, size 

and placement of parts that affect air flow 

around the vehicle. The front of the R- 

series, with new air deflectors and a more 

rounded bumper that reduces turbulence 

under the vehicle and creates better air 

flow around the wheels, is one result of 

this research work. 

Lower weight and higher 

cargo capacity 

Scania’s new truck range also features a 

significant reduction in weight. Lower vehicle 

weight means higher cargo capacity. 

A new frame, rear suspension and fifth 

wheel plus weight reductions in the steering 

gear and cab increase cargo capacity 

by up to 270 kg. 

Scania’s new truck range also allows 

a larger number of potential specifications, 

which means customers can tailor their 

vehicles especially for weight- or volumesensitive 

haulage work. 

Vehicles with increased availability 

While developing the new truck, Scania 

accorded top priority to safety, quality, 

reliability and high availability. Availability is 

a factor that greatly affects the economic 

situation of customers. Many of the 

new parts, components and systems 

introduced in the new truck give drivers 

improved vehicle availability and lower 

operating cost. 

Lower emission Euro 4 engine 

The engine management potential provided 

by the new electrical system of the R- 

series creates a platform for future emission 

reductions. But as early as during 

2004, Scania can offer Euro 4 engines 

with 30 percent lower nitrogen oxide and 

80 percent lower particulate emissions. 

Engine development work at Scania 

has always been motivated by the desire 

to reduce emissions without boosting 

the level of fuel consumption. For the researchers 

who perform this work, new 

emission regulations for the years ahead 

serve as an extra challenge. 

As a consequence, refinements of fuel 

injection systems and other advanced 

technology will reduce the exhaust emissions 

of the diesel engine within the near 

future. 

The development of future engines 

using entirely new combustion concepts, 

such as Homogeneous Charge Compression 

Ignition (HCCI), is still at an early 

stage. Renewable fuels are still not economically 

feasible for running heavy trucks. 

However, they may be highly suitable as 

raw materials for a future synthetic diesel 

fuel. 


Answers blowing in the wind 

Aerodynamics has a very large impact on fuel 

economy. This is why all exterior changes to 

Scania’s trucks are tested in a wind tunnel 

before vehicles are put into production. Testing 

of various prototypes occurs early in the 

development process. The first wind tunnel 

tests during the development of the new R- 

series occurred a full four years ago. 

The bulk of this testing occurs using 1:2 

scale models, which makes configurational 

changes easier. For example, if various shapes 

on the roof are to be tested, it saves a lot of 

time and trouble to work with a scale model 

instead of a real cab. 

Using scale models, it is also possible to 

conduct such tests in a wind tunnel designed 

for cars. If the item being tested is too large 

in relation to the cross-section of the tunnel, 

the air flow is blocked so much that measurements 

become impossible. It thus requires 

very large wind tunnels to test full-scale 

trucks. The only wind tunnel in Europe that 

is large enough is DNW in the Netherlands. 

Final testing always occurs there to verify 

the findings of earlier model testing. 

To minimise friction, the tractor unit and 

trailer are placed on air cushions. The rig is 

connected to a “scale” placed under the test 

section, which measures the forces the wind 

causes. While driving on real roads, a truck is 

usually exposed to some form of side winds, 

and to simulate this the vehicle is rotated in 

the wind tunnel. The tests are usually conducted 

with up to 10-15 degree side winds. 

In addition to air resistance, engineers also 

measure the pressure at various points to be 

able to analyse air flow around the truck. 

They also frequently measure air flow through 

various air intakes. 

29 


PRODUCTION 

Investments for increased capacity 

Scania develops and manufactures 

major heavy vehicle components – 

engines, cabs, gearboxes, axles and 

frames – under its own auspices. 

This gives Scania control of quality 

and cost levels in development and 

production. 

Scania has a global production system in 

which all its production units in the world 

are integrated. As a result, customers 

enjoy faster, more reliable deliveries, while 

Scania gains flexibility and greater 

efficiency. 

This is possible because today Scania 

manufactures identical parts and components 

at all production units. Due to 

Scania’s global quality and environmental 

standards, as well as its shared production 

system, it is of no significance to the customer 

where Scania vehicles and components 

are manufactured. A Scania is 

always a Scania. 

During 2003 Scania’s production volume 

in Latin America rose, since local 

markets continued to recover as deliveries 

to other parts of the world rose. Today 

nearly half the company’s production of 

vehicles and components in Brazil and 

Argentina is exported to markets outside 

Latin America. 

Capacity increase in Zwolle 

At the same time, it is important to have 

enough assembly capacity near customers 

to be capable of responding quickly 

to increased demand. Scania’s investment 

at its assembly in Zwolle, the Netherlands 

increased the technical capacity of 

truck assembly lines there by more than 

50 percent. Together with concentration of 

component production to fewer locations, 

this will enable Scania to respond quickly 

to a rapid, strong growth in volume. 

Coordination of trucks and buses 

The restructuring of the bus and coach 

operations means that Scania is using the 

similarities between bus and truck chassis 

and benefits from existing synergies. 

Shared components is the basis for this 

coordination. 

To take advantage of these synergies 

between buses and trucks, during 2002 

Scania initiated closer coordination of development, 

procurement, manufacturing 

and marketing in Södertälje. This helped 

cut costs and improved competitiveness 

of Scania’s bus and coach operations. The 

restructuring of these operations will continue 

during 2004, when the wholly-owned 

bus bodybuilding company Omni will concentrate 

its bodybuilding operations in 

S upsk, Poland. 

Preparations for new products 

During 2003 Scania prepared its production 

units for the new truck range. Development 

lines for training and assembly 

verification were built in chassis assembly, 

where employees from Södertälje, Zwolle 

and Angers were trained alongside regular 

production. Similar development and training 

lines were built for engine, 

transmission and cab production. 

Flexibility 

Since the heavy truck market varies both 

seasonally and over longer economic 

cycles, flexibility is of great importance in 

production. The flexibility of the Scania 

Production System (SPS), as well as the 

global production system, also makes it 

possible to respond more smoothly to 

both short- and long-term changes in 

volume. 

More efficient suppliers with the 

Scania Production System 

By sharing its experience, Scania helps suppliers 

to become more efficient in such fields as logistics, 

elimination of waste and quality improvements. 

This collaboration, which uses the working 

methods of the Scania Production System as 

a model, improves the competitiveness of both 

Scania and its suppliers. 

The Swedish-based company Swenox AB develops 

and manufactures complete exhaust and 

aftertreatment systems for the heavy vehicle industry 

in Europe. Competition is keen, and to 

increase its production, Swenox initiated an organised 

partnership with Scania in order to use 

Scania’s working methods and tools. 

Over the past year, the company has conducted 

training courses and formed pilot teams for 

improvement efforts. 

“During the spring of 2003, we began the 

task of building up a new production line for 

Scania silencers. We received very valuable help 

from Scania in doing so,” explains Sten 

Fredholm, Managing Director of Swenox. 

To date, improvement efforts have provided a 

complete analysis of “losses” in the affected production 

segments. Changeover times in the company’s 

pilot areas have been reduced by half, and 

productivity has climbed on those production 

lines that work on the basis of the Scania Production 

System. 

“We are also seeing very good quality and 

delivery trends. In our most important product 

for Scania, the main silencer, we now have 

zero faults and 100 percent delivery precision,” 

Mr Fredholm continues. 

The target of continued improvement work 

at Swenox is that during 2004, all employees 

should belong to an improvement team. 


Procurement 

Scania’s procurement operations are 

based on long-term, open relationships 

with suppliers. Key suppliers join the development 

and production process at an 

early stage and participate in operations 

in the same way as Scania’s own units. 

Many of these belong to a network 

that supplies all of Scania’s production 

units with components. This is possible 

because Scania has a global quality, environmental 

and production standard. 

In recent years, automotive industry 

suppliers have increasingly evolved into 

large systems suppliers with a global presence. 

Scania primarily wishes to work with 

small and medium-sized suppliers who 

focus on their core competency and 

develop specialized knowledge in delivering 

to the heavy vehicle industry. Smaller 

suppliers also have the advantage of being 

able to react faster and more flexibly to 

customer wishes. 

At the end of 2003, Scania had more 

than 600 suppliers of direct material. 

The task of expanding and integrating 

the supplier network is continuing. New 

procurement offices opened in Poland, 

the Czech Republic and Russia to further 

penetrate these markets. 

By also integrating Scania’s sales and 

service organisation into the procurement 

system, purchases can be coordinated 

using common agreements, which yields 

additional economies of scale. 

Production in figures 

During 2003 Scania produced a total of 

51,276 (45,145) vehicles, of which 45,985 

(41,433) were trucks and 5,291 (3,712) 

were buses. Productivity, measured as the 

number of trucks manufactured divided by 

the number of production employees, rose 

to 4.6 (4.3) units. 

The percentage of employees on shortterm 

contracts decreased during the year. 

The pay level rose by 4.3 percent in Sweden, 

compared to 4.9 percent in the Netherlands, 

3.6 percent in France, 34 percent in Brazil 

and 12 percent in Argentina, calculated in 

local currency. 

Quality and business ethics 

Quality and delivery assurance are fundamental 

factors in choosing suppliers. 

During 2003 Scania trained a large number 

of suppliers in the QS 9000 quality 

programme. 

Scania’s procurement rules also specify 

standards of business ethics and social 

commitment. Ethical behaviour is a requirement 

in all relationships with Scania’s suppliers. 

Scania must always aim at the highest 

quality and integrity. If business activities 

are not covered by specific laws and 

rules, fairness, honesty and respect for 

others must permeate Scania’s behaviour. 

31 


THE PRODUCTION SYSTEM 

The same working methods everywhere 

The Scania Production System (SPS) is the basis of all production improvement 

work. The values, principles and priorities that govern its working 

methods are identical, regardless of whether production occurs in Europe, 

Latin America or somewhere else in the world. New solutions developed by 

an improvement team on the assembly line in São Paulo are introduced 

systematically by colleagues at the production units in Zwolle, Angers and 

Södertälje. 

The Scania Production System has been 

developed among the company’s own 

employees at production units. Other 

Scania operating units besides pure production 

also apply the concepts behind 

SPS. Scania’s research and development 

departments are being streamlined 

according to the same principles, and 

next in line will be the global service network. 

A growing number of Scania’s suppliers 

are also applying this methodical 

way of working. 

SPS has contributed to the sharp improvement 

in productivity at Scania in recent 

years. In 1985, the company manufactured 

1.6 trucks per production 

employee yearly. During 2003, that figure 

had climbed to 4.6. 

The Scania Production System is based 

on four main principles: 

Standardised working method 

To ensure that Scania’s products maintain 

high and uniform quality, work processes 

have been standardised and documented. 

Tasks are performed in a specific way, at a 

specific pace and with an even, balanced 

flow throughout the production chain. In 

SPS, this is called the “normal situation”. 

Doing it right the first time 

Since work takes place visually, with visible 

buffers and process follow-up posted on 

bulletin boards, what is normal and abnormal 

becomes obvious. Direct feedback to 

a person who caused a deviation allows it 

to be remedied directly, helping to create a 

quality-assured work process. 

Consumption-controlled production 

Scania’s customers decide how many 

trucks, buses or engines will be manufactured. 

It is also the customer’s order that 

determines when production will begin. 

This principle permeates the entire Scania 

production chain, from the customer’s 

order to the local sales company through 

production and assembly through the final 

product that is ready for delivery. 

Continuous improvements 

The overall objective of the Scania 

Production System is to create continuous 

improvements, where different production 

units around the world can learn from 

each other. By continuously discovering 

and eliminating waste, the resulting liberated 

resources can be applied to other productive 

tasks. 

More than 1,000 improvement teams 

The most important success factor in the 

Scania Production System is the work of 

the various improvement teams. In 

Scania’s global production system, there 

are now more than 1,000 teams, in which 

fitters and equipment operators implement 

continuous improvements by contributing 

their knowledge, professional skills and 

capabilities to solving problems. Challenging 

and improving the existing processes 

is part of the daily work of these teams. 

The goal is to find the easiest flow and the 

easiest method for each situation in their 

daily work. This has greatly increased 

employee motivation and job dedication. 

SPS Office has key coordinating 

function 

During 2003, Scania established an SPS Office 

to back up and coordinate the continued introduction 

of the Scania Production System 

throughout the Group. 

The SPS Office works from the Group’s 

head office in Södertälje with the worldwide 

Scania organisation. The office’s task is to help 

bring about a uniform interpretation of the 

system’s values and principles throughout 

Scania. The SPS Office is also responsible for 

disseminating knowledge and helping continuously 

improve methods and tools, as well as 

establishing a standardised SPS working 

method. One important task is to transfer 

knowledge and best practice between different 

units. 

Aside from Scania’s production units, the 

office’s working area includes outside suppliers 

and other departments at Scania. 

The employees of the SPS Office have long 

experience and wide-ranging expertise in 

such areas as machining, assembly, production 

engineering and procurement. This enables 

them to deal with a variety of needs at Scania. 

The back-up role of the SPS Office includes 

everything from helping the organisation to 

teach production principles to supporting the 

introduction of these principles in concrete 

improvement projects. 


33 


TRENDS AND INDUSTRY DEVELOPMENTS 

Economic growth fuels demand for truck transport 

World production of heavy trucks 

rose by 10 percent to 590,000 

(540,000). Scania was the world’s 

fourth largest heavy truck make, with 

a market share of 7.8 (7.7) percent. 

Macroeconomic expansion and transport 

needs go hand in hand. Economic growth 

leads to higher consumption, which 

increases the need for transport services. 

In most markets today, only trucks can offer 

the flexibility and delivery assurance 

necessary to manage supply chains in the 

complex logistics systems that form the 

basis of our consumer societies. 

Operating cost and reliability 

In mature markets, large logistics companies 

compete on the basis of expertise 

and geographic reach. An overwhelming 

share of their transport services are contracted 

out, often to small haulage firms. 

To this large customer category, operating 

cost and reliability are decisive when 

choosing vehicles. 

A well-developed service and roadside 

assistance network are also important factors 

when every delivery must arrive on 

time. 

Because of the international structure 

of Scania’s sales, long before many competitors 

the company expanded and integrated 

its international sales and service 

network. 

About 40 percent of the world market for 

heavy trucks is found in Scania’s main 

market, Europe. During the past three 

decades, transport services in Europe 

have grown by an average of 12 percent 

each year. In the past decade, truck transport 

services have accounted for all of this 

increase. The European Union predicts 

that road transport volume will rise by 50 

percent between 1998 and 2010, but 

would like to limit this increase somewhat 

by stimulating rail and water transport. 

A number of EU countries are also 

planning to introduce kilometre-based 

road charges for heavy vehicles. The need 

for trucks will thus increase in Europe, 

while stricter road safety and environment 

performance standards are being imposed 

on vehicles. 

In emerging markets, demand for 

heavy trucks is determined both by GDP 

growth and infrastructure expansion. 

During the next decade, the total world 

market for heavy trucks is expected to 

grow to between 800,000 and 850,000 

vehicles. 

Intensive bus and coach competition 

World production of buses in Scania’s 

segment – city and intercity buses and 

tourist coaches – totalled 67,000 (63,000) 

units. One-third of these buses were sold 

in Europe. Latin America and Asia each 

accounted for about 20 percent of the 

world market. 

Public transport is being deregulated 

in a growing number of markets around 

the world. This opens the way for private 

operators. Competition is often very keen. 

The lowest possible operating cost and 

high bus availability often top the wish list 

of operators. This poses heavy demands 

on manufacturers’ service networks. 

Industrial and marine engines 

Scania’s deliveries of engines totalled 

3,165 (3,191) units. The trend in industrial 

and marine engines is towards increasingly 

complex products, driven among other 

things by new, tighter emission rules. 

Agreement paves the way for 

improved safety 

During 2003, Scania signed an agreement with 

ExxonMobil making it the primary supplier of 

tanker trucks for the oil company’s markets in 

Europe, the Middle East, South East Asia, the 

Pacific region including Australia and New 

Zealand and Africa. Scania’s vehicles meet 

ExxonMobil’s high safety standards and will be 

used by transport companies that provide services 

to ExxonMobil in the above-mentioned 

regions. 

“This is an exceptionally prestigious contract. 

The fact that ExxonMobil has chosen 

Scania as a global partner demonstrates that 

Scania’s tanker truck concept meets the 

strictest safety standards worldwide,” 

comments Group Vice President Gunnar 

Rustad, Head of Sales and Services. 

Scania has earlier experience of working 

with ExxonMobil in various key markets in 

Europe. In Africa, the two companies also 

successfully implemented a project to provide 

tanker vehicles that meet European safety 

standards for transporting hazardous goods. 

This project was implemented in some of 

Africa’s most demanding and challenging environments 

in terms of terrain and road quality. 

The new agreement will enable Scania to 

further collaborate with ExxonMobil to continually 

improve tanker transport safety standards 

around the world. 


World production of heavy trucks 

The ten largest makes 

Make 2003 2002 2001 

Volvo 75,400 68,200 63,800 

Mercedes-Benz 68,900 58,600 65,000 

Freightliner 57,900 62,000 39,300 

Scania 46,000 41,400 43,500 

MAN 42,100 40,100 42,100 

Iveco 31,000 31,900 31,500 

DAF 30,800 28,700 30,400 

RVI 29,800 31,700 32,900 

International 27,400 30,900 23,900 

Kenworth 23,800 25,800 14,200 

World production of trucks 

above 16 tonnes 

Units 

700,000 

600,000 

500,000 

400,000 

300,000 

200,000 

100,000 

0 

94 95 96 97 98 99 00 01 02 03 

REGISTRATIONS OF TRUCKS 

above 16 tonnes 2003 2002 2001 

Western Europe 

total 213,032 211,687 234,855 

of which Scania 29,930 28,524 31,787 

Great Britain 34,303 31,055 33,079 


France 36,683 40,483 46,158 


Spain 26,757 25,512 26,218 


Germany 46,278 43,528 50,926 


Italy 22,954 25,813 24,481 


The Netherlands 10,535 11,488 13,655 


Sweden 4,214 4,054 4,261 


World production of buses 

above 12 tonnes 

Units 

80,000 

70,000 

60,000 

50,000 

40,000 

30,000 

20,000 

10,000 

94 95 96 97 98 99 00 01 02 03 

REGISTRATIONS OF BUSES 


Western Europe 

total 21,128 22,326 23,497 


Great Britain 3,268 2,600 2,826 

of which Scania 459 188 178 

Spain 2,383 2,247 2,544 


Italy 2,558 2,969 3,843 


Sweden 884 896 816 


Finland 268 269 213 


35 


EUROPE 

Strong sales in several markets 

During 2003, the demand for heavy 

trucks in western Europe was 

unchanged but maintained a higher 

level than during earlier economic 

slumps. 

Trucks in western Europe 

Western Europe accounts for nearly 70 

percent of Scania’s sales. Here vehicle 

standards are very strict and the most 

highly specified vehicles are sold. The 

transport industry and distribution systems 

are advanced, making reliability and maintenance 

key competitive factors and increasing 

the potential for sales of servicerelated 

products. 

Registrations in western Europe 

amounted to 213,000 heavy trucks, compared 

to 212,000 during 2002. Scania’s 

share of the western European market was 

14.0 (13.5) percent. 

In Great Britain, more heavy trucks 

were sold than in any previous year. A total 

of 34,303 new trucks were registered, 

which was 10 percent higher than in 2002. 

Several major orders from large transport 

companies helped Scania boost its market 

share, with continued profitability. For 

example, Scania sold 300 tractor units to 

the British convenience goods chain Safeway 

Stores plc. Scania is the price leader 

in Great Britain. Due to the weakening of 

the pound, Scania implemented price hikes 

that slowed order bookings late in the year. 

The German heavy truck market rose during 

2003, even though economic growth 

was negative. Many transport companies 

needed to update their fleets, while many 

used German trucks were exported to 

eastern Europe. The depressed German 

economy and uncertainty concerning 

German highway tolls created uncertainty 

among hauliers. Tough competition among 

truck manufacturers, mainly domestic 

ones, intensified. 

In Spain, the heavy truck market ended 

up at an all-time high, 26,757 units, 

and exceeded 25,000 heavy trucks for the 

fourth consecutive year. Behind these figures 

is the strong Spanish economy and 

Spanish transport companies that have 

become increasingly competitive internationally. 

Scania’s registrations increased by 

9 percent during the year. 

In the Netherlands, Scania signed 

agreements to deliver 533 four-axle allwheel-drive 

trucks to the Dutch armed 

forces. It is the largest-ever heavy truck 

order from the Dutch armed forces. The 

vehicles will be assembled at Scania’s production 

unit in Zwolle in the Netherlands 

and will be delivered during 2004 and 

2005. 

Full-coverage service network 

Sales of service-related products remained 

good during 2003. In earlier years, acquisitions 

of sales and service facilities affected 

the growth rate. Today Scania, under 

its own auspices, has a service network 

that provides full coverage in western 

Europe. Future growth in service operations 

will mainly depend on the population 

of vehicles and their degree of utilisation. 

24-hour Scania Assistance 

All roadside assistance operations in 

Europe are now staffed exclusively by 

Scania employees. The 13 assistance 

centres each serve their region. Employees 

speak all the languages needed to 

connect Europe’s drivers with one of 

Scania’s more than 1,000 service workshops. 

Round the clock, every day of the 

year, Scania’s customers are the push 

of a button away from help in their own 

language, wherever in Europe they may 

be located. 

Trucks in central and eastern Europe 

Central and eastern Europe witnessed positive 

economic growth in 2003. Scania’s 

truck order bookings in the region were at 

a high level. The enlargement of the European 

Union, as well as the transfer of 

manufacturing operations to the region 

from elsewhere, will probably contribute 

to continued economic growth and thus 

investments in infrastructure. The need for 

new heavy trucks is also increasing as 

western European logistics concepts are 

taking hold in central and eastern Europe. 

Transport companies in central European 

countries provide international 

haulage services to a higher degree than 

their counterparts in the EU. In countries 

like the Czech Republic, Slovakia, Slovenia 

and Bulgaria, more than half of cargo 

deliveries are to or from other countries. 

One clear trend in recent years is the 

sale of used heavy vehicles from western 

Europe to central and eastern Europe. An 

estimated 50,000 used heavy trucks and 

20,000 new ones were sold to central and 

eastern Europe during 2003. In Russia, 

five to seven used trucks are sold for every 

new truck. At the same time, the market 

for new heavy trucks is growing. Scania is 

thus investing extensively in its service 

network in these countries. 

The increased flow of used vehicles 

from traditional markets in western Europe 

to new markets in eastern Europe signifies 

that Europe is becoming an increasingly 

integrated market. 

Scania strengthened its position in 

Russia as the leader in the imported truck 

segment, and volumes continue to climb. 

During the year, Scania expanded into the 

market east of the Urals, among other 

things by delivering 100 all-wheel-drive 

trucks to the Siberian oil company 

Surgutneftegaz. 


Full tank in 15 minutes 

When Petrolot delivers fuel at Poland’s airports, 

it has to do the job quickly. It may take 

15 minutes from the moment an order is 

placed by radio until an aircraft’s fuel tanks 

are full and it is taxiing towards the runway 

for take-off. 

At one time, Petrolot exclusively used less 

expensive tanker vehicles for its operations at 

the Warsaw, Kraków, Gdansk, Katowice and 

Poznan airports. But like so many other transport 

companies in central and eastern Europe, 

a few years ago Petrolot began to invest in 

western European vehicles that provide higher 

quality and reliability. 

“We compared various makes, and not 

only the vehicle itself. We looked at service, 

financing and everything else that is important 

to total cost. Scania was the most expensive, 

but also the only manufacturer that could offer 

a genuine comprehensive solution. So the 

choice was not so difficult,” explains Marek 

Zagubieniak, aircraft fuel service manager. 

The international airport in Warsaw serves 

three million passengers per year. Every day, 

Petrolot hauls 10,000-12,000 litres of aircraft 

fuel there from its own depot just outside the 

airport area. 

“We have other tanker trucks too, but 

always wheel out our Scania trucks in case of 

VIP flights, like when the emperor of Japan 

was here on a visit. The Scania trucks are our 

flagships.” 

37 


Deliveries of Scania trucks 

in western Europe 

Units 

40,000 

30,000 

20,000 

10,000 

0 

94 95 96 97 98 99 00 01 02 03 

Total registrations of trucks above 

16 tonnes in western Europe 

Units 

250,000 

200,000 

150,000 

100,000 

50,000 

0 

94 95 96 97 98 99 00 01 02 03 

Market shares, trucks above 16 tonnes in western Europe 

% 

30 

25 

20 

15 

10 

Volvo 

MAN 

Mercedes-Benz 

Scania 

Renault 



Central and eastern Europe 1 

total 21,403 18,202 16,763 


Russia 2 2,157 1,863 1,415 


Poland 5,361 3,736 3,327 


Czech Republic 3,341 3,773 3,363 


Hungary 2,436 2,004 1,551 


1 Estimate. 

2 Imported new trucks from Europe, Japan and the US, 

estimate. 

Buses in Europe 

At the Bus World international trade fair in 

Belgium, Scania received the bus industry’s 

most prestigious award, Coach of the 

Year 2004. 

Excellent fuel consumption and handling, 

good passenger comfort and attractive 

design were characteristics that 

helped the Scania Irizar PB tourist coach 

win this award. 

The total market for heavy buses in 

Europe declined by 5.4 percent during 

2003. However, Scania’s bus and coach 

sales showed positive growth in several 

important markets, and total sales were 

the best ever in western Europe. Scania’s 

market share rose to 9.6 percent. 

The largest single market in Europe 

was Great Britain, closely followed by 

Spain. Great Britain’s sales more than 

doubled and Scania’s market share rose 

to above 14 percent. The greatest 

successes were achieved in the city bus 

segment, where a new double-decker 

concept was unveiled during the year. 

Scania’s bus sales in Italy, one of 

Europe’s largest bus markets, remained 

strong during the year and market share 

rose. Scania’s marketing efforts in Italy 

over the past few years have resulted in 

higher sales. 

DAF 

Iveco 

5 

89 

90 

91 

Mercedes 

MAN 

92 

93 

94 


Renault 

95 

96 

97 98 

Volvo 

Iveco 

99 

00 

DAF 

01 

02 

03 


In a slightly increasing Nordic bus market, 

Scania was the market leader in Finland 

for the third straight year. 

Scania’s marketing efforts in the Russian 

market, where there is a great need to replace 

older buses with new ones that have 

better total operating economy, turned out 

well and Scania’s sales rose significantly 

during 2003. 

An EU directive issued in 2002 permits 

non-articulated buses to be longer than 

12 metres. Two-axle buses may be up to 

13.5 metres and three-axle buses up to 

15 metres long. These buses are now also 

allowed in international services in Europe. 

Industrial and marine engines in Europe 

The market for industrial and marine engines 

in Europe is relatively stable. However, 

Scania’s deliveries fell slightly to 

1,900 (1,919) units. 

During the year, Scania signed contracts 

with several large generator set 

builders. One prestigious delivery went 

to the Swedish Parliament. Given the 

building’s special setting in the heart of 

Stockholm and its role as a historical 

monument, the installation had to meet 

very high standards in terms of air, cooling 

water and, especially, noise and 

emissions. 

Behind the wheel of 

the Coach of the Year 

Not even in the Madrid morning rush hour 

does Juan Lozano have any problems manoeuvring 

the Coach of the Year. Thanks to 

Scania Opticruise, he only has to use the 

clutch when starting and stopping and can 

instead focus on steering his 15 metre long 

Scania Irizar PB between lanes. 

Its panoramic windows, large rear-view 

mirrors, hydraulically steered tag axle and 

extremely precise steering make the bus easy 

to drive, regardless of whether Mr Lozano is 

picking up tourists in central Madrid or sailing 

along on the motorway towards Ciudad Real. 

The AISA bus company’s Scania Irizar PB 

accommodates 63 passengers and was specially 

built so it can be used both for tourists 

and for intercity traffic. Air conditioning, 

cooling, video and audio systems and air 

suspension make even the longest trip comfortable. 

And Juan Lozano feels just as comfortable 

behind the wheel in his electrically adjustable 

driver’s seat. Separate heating and ventilation 

and an ergonomically designed driver’s seat 

make his work day both comfortable and 

safe. 

39 


OTHER MARKETS 

Record sales in several markets 

Sugar cane harvesters with Scania engines in Brazil can harvest one tonne of cane per minute. 

Scania’s sales in markets outside Latin America 

The total market for heavy trucks rose in 

Europe and Latin America broke 

most countries of the region. Scania’s 

a new record in 2003 and have 

deliveries in Latin America rose by 30 percent 

to 4,717 (3,566) trucks. Brazil was 

climbed by 7.7 percent in the past 

two years. Demand is being met Scania’s second-largest truck market 

worldwide. 

primarily by deliveries from Latin 

In Brazil and Argentina, the markets 

American production units. 

developed favourably, influenced by the 

stabilisation of the economic and political 

situation. Scania’s customers took advantage 

of this and ordered more trucks. 

Meanwhile competitors with considerably 

simpler products gained market share in 

the lighter portion of the heavy truck segment. 

In Brazil, the truck fleet is relatively old 

and there is a pent-up need for renewal. 

During 2003, the Brazilian total market 

showed a clear upturn. During the year, 

Scania received its largest-ever single order 

in Brazil. The Binotto transport company 

renewed its vehicle fleet by ordering 

200 highly specified tractor units. The contract 

includes repair and maintenance 

contracts based on a fixed per-kilometre 

cost. 

In Argentina, the total heavy truck market 

rose during the year from a record-low 

level to 3,471 (813) trucks. Vehicle manufacturers 

with simpler products accounted 

for most of this increase. 

Scania’s deliveries of buses in Latin 

America rose by 12 percent. The increase 

occurred mainly in Brazil and in Scania’s 

traditional strong segment, long-distance 

buses. Brazil was Scania’s largest bus 

market in the world during 2003. In 

Mexico, the total market and Scania’s 

deliveries declined due to the continued 

weak economy. 

In Argentina, demand for buses 

remained very weak. During the year, 

Scania began to deliver buses to the 

TransMilenio transport project in Bogotá, 

the capital of Colombia. The buses, with 

a capacity of 160 passengers, are environmentally 

optimised and equipped with engines 

that meet Euro 3 standards. Today 

TransMilenio is the most modern, ad- 

vanced city transport system in Latin 

America, serving as a model for other 

major cities in the world. 

The system is based on special bus 

lanes with large boarding terminals, raised 

platforms and automated ticket processing. 



Latin America 

total 37,343 31,049 32,079 


Brazil 17,856 13,916 14,840 


Argentina 3,471 813 1,307 


Chile 1,983 1,479 1,607 


Mexico 13,517 14,028 13,198 




Latin America 

total 19,566 19,985 24,044 

of which Scania 945 911 1,461 

Brazil 9,040 9,301 10,833 


Mexico 9,047 9,409 12,009 



40

The market for industrial and marine engines 

grew somewhat in Brazil, while sales 

in Argentina rose due to the economic recovery. 

During the year, Scania delivered 

881 (631) industrial and marine engines, 

mainly to builders of generator sets. 

For many years, Brazil has been 

Scania’s largest single market for industrial 

and marine engines. 

Deliveries of Scania trucks 

in Latin America 

Units 

10,000 

8,000 

6,000 

When drivers can decide 

4,000 

2,000 

0 

Deliveries of Scania buses 

in Latin America 

Units 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

94 95 96 97 98 99 00 01 02 03 

When Binotto bought 200 Scania trucks, it was 

very much a matter of what the Brazilian logistics 

and transport company’s drivers want. 

“Our drivers’ opinions are invaluable. They 

are the vehicle experts. And they are the ones 

who show Binotto’s image to our customers,” 

says Edilson Binotto, Operational Director of the 

company’s fleet of 380 heavy, 700 medium-sized 

and more than 1,000 light vehicles. 

The order is Scania’s largest single sale to 

date in Brazil. 

Binotto is one of Brazil’s largest logistics and 

transport companies, with 30 years of experience 

in long-distance haulage, local distribution 

and heavy timber transport services. 

The firm’s philosophy is to work in close partnership 

with other market leaders, both suppliers 

and its own customers. One example of this 

is the renewal and expansion of its vehicle fleet, 

where a long relationship with Scania contributed 

to its order for 200 tractor units. 

“Before we decided on Scania for this large 

investment, we carried out a thorough comparison 

of vehicles in the Brazilian market. The results 

showed that Scania provided the best value 

for money. When we introduced a new fleet follow-up 

system, we noted that Scania trucks deliver 

higher productivity than the competition, 

due to factors like engine power and cargo capacity. 

Faster haulage at lower costs,” Mr Binotto 

explains. 

Scania’s image and strong brand also played 

a part in the choice of vehicles. 

“Our customers associate Scania’s quality 

products with Binotto’s superb service – an 

unbeatable combination.” 

Over the past year, Binotto has received extensive 

publicity in Brazilian business media, including 

being named Entrepreneur of the Year. 

Much of this interest has focused on Binotto’s 

efforts to improve the logistic systems in the 

Brazilian transport industry. 

But ultimately it was the views of drivers that 

decided the choice of trucks. 

“Driving a Scania truck provides them with 

comfort, safety and reliability and – as a bonus – 

the highest status among the country’s professional 

drivers.” 

All trucks are being delivered with repair and 

maintenance contracts based on a fixed per-kilometre 

cost. Servicing and maintenance will be 

performed by Scania’s service workshops. 

“We want state-of-the-art technology when 

it comes to vehicle maintenance, too. With the 

help of Scania’s service organisation, we can 

boost the productivity of the fleet while reducing 

costs,” Mr Binotto concludes. 

0 

94 95 96 97 98 99 00 01 02 03 

41 




Asia, Africa and Oceania 1 

total 107,260 73,540 64,981 

Asia 

Deliveries to Asia rose sharply during 2003. 

In several markets, Scania sold more heavy 

trucks than ever before. 

In Turkey, Scania sharply increased its 

volume. The Turkish market is now one of 

Scania’s ten largest truck markets. 

In South Korea, during 2003 Scania inaugurated 

its largest facility to date in Asia, 

the Scania Korea Jinsa Complex in Sacheon. 

The new facility forms the hub of Scania’s 

growing South Korean operations, with a 

parts warehouse, bodybuilding factory and 

service workshop. 

Through its long presence, Scania has 

established itself as the leading European 

make in the expansive South Korean market. 

Customers have especially appreciated 

Scania’s large-scale investments in its own 

sales and service network. Today Scania has 

the country’s leading service network. 

In Taiwan today, Scania is the second 

largest brand in the market, which is otherwise 

dominated by Japanese makes. 

In Japan, Scania was the first non- 

Japanese make to receive type approval 

from the authorities for a heavy truck model. 

Scania’s vehicles thus meet the same legal 

requirements as those of domestic manufacturers 

and can compete on equal terms. 

The Japanese tractor unit market in Scania’s 

segment totals about 5,000 vehicles per 

year and is dominated by Japanese makes. 

Hino, Scania’s co-operation partner in 

Japan, markets Scania trucks in Japan in 

competition with both domestic and foreign 

makes. 

Scania also co-operates with Japanesebased 

Yanmar when it comes to worldwide 

sales of engines for pleasure boats. 

The demand for buses in Asia was 

mixed during 2003. In Hong Kong, Malaysia 

and Taiwan, demand shrank, partly due to 

the SARS threat. Toward year-end, bus sales 

rebounded to their earlier levels. 

Africa and other markets 

Scania’s sales in Africa are concentrated in 

the Maghreb region in the north-western 

portion of the continent and in the countries 

of southern Africa. 

With its strongest year to date behind it, 

Scania’s subsidiary in South Africa inaugurated 

a new office in Aeroton, just west of 

Johannesburg. The new office also serves 

as a hub around which Scania is developing 

its business in the neighbouring countries of 

Namibia, Botswana, Zimbabwe, Zambia, 

Malawi and Mozambique. 

At the same time, Scania moved its truck 

and bus assembly operations to a new 

shared facility, which will be the centre for 

southern Africa. Scania’s strong growth in 

the region is the result of increasingly integrated 

cooperation between Scania sales 

companies in the region. 

Scania’s bus sales in Australia remained 

good during 2003. Scania’s buses have enjoyed 

a strong position in Australia for many 

years, and today their market share is about 

25 percent. Australia is also by far the largest 

market for Scania’s gas-powered buses. 


South Korea 15,705 13,833 7,939 


Turkey 17,748 8,430 5,107 

of which Scania 1,515 226 199 

Australia 8,688 6,592 5,510 


South Africa 4,567 3,335 2,986 


Taiwan 1,660 1,841 1,440 


1 Estimate. 



Asia, Africa och Oceania 1 

total 9,240 9,113 8,038 


South Africa 822 1,045 837 


Australia 751 836 742 


Taiwan 600 965 1035 


1 Estimate. 


A newcomer in Japan 

Shito Hoshiyama was Scania’s first customer in Japan. When he saw the new green 

truck being unveiled at the Tokyo Motor Show, he knew that it was just the tractor unit 

he wanted. 

His company transports groceries in central Japan. From Nagano in the north to the 

holy Mount Fuji in the south, the company delivers such domestic favourites as tofu, soy 

beans, noodles, beer as well as vegetables and other groceries. 

Shito Hoshiyama started his haulage business 30 years ago with a truck from Hino, 

and he has driven Hinos exclusively ever since. Scania represents something new and interesting 

in Japan that also fits into the philosophy and strategy of his family business. 

“Scania trucks have a powerful engine, good fuel consumption and nice handling. 

This, together with attractive styling that’s different from other brands, convinced me 

that it was the right truck for us.” 

43 


ENVIRONMENTAL WORK 

Integrated environmental work 

Scania’s Environmental Policy 

As a global manufacturer and distributor 

of heavy commercial vehicles, engines 

and related services, Scania is committed 

to develop products that pollute less and 

consume less energy, raw materials and 

chemicals during their life-cycle. 

In order to achieve this: 

■ we strive to maintain a lead in 

commercially applicable technologies 

■ we work well within legal demands and 

promote internationally harmonised, 

effective environmental requirements 

■ we prevent and continuously reduce 

the environmental impact through 

development of products, services and 

production processes 

■ we take the environmental aspects and 

objectives into account in our daily 

work 

■ we have an open and regular communication 

with our interest groups 

regarding our environmental work 

By this we contribute to economical and 

ecological advantages for our customers 

and society. Proactive environmental 

work is therefore of vital importance to 


(Issued in 1999) 

Scania has a network of employees 

who coordinate its environmental 

work. This network is found throughout 

the Scania value chain. Environmental 

work is entirely integrated into 

line operations, along with quality, 

training and economic issues. All 

managers have environmental 

responsibility for their operating area. 

Operational decisions are made in 

the line organisation. 

The highest decision making body for environmental 

issues is the Scania Executive 

Board, which makes strategic decisions. 

Day-to-day common environmental items 

of business are prepared by the Scania 

Environmental Committee, where environmental 

coordinators from various operations 

meet under the leadership of the 

Quality and Environment department. 

Local management teams are responsible 

for targets and follow-up at the local level. 

Scania’s guiding principle is to reduce 

the environmental impact in all stages 

of a product’s life cycle. The company’s 

product concept and production system 

are permeated with conservation and 

efficiency principles. Scania’s Environmental 

Policy and overall environmental 

targets apply to all units of the company 

and can be found at our webb site 

(www.scania.com). 

ISO 14001 environmental management 

system 

Environmental management procedures are 

integrated into Scania’s management system. 

All production units except for the recently 

acquired plant in St. Petersburg, 

Russia, are certified according to ISO 

14001 international standards. Scania 

plans to have the plant in St. Petersburg 

certified during the autum 2004. In addition, 

development resources and corporate staff 

units are certified. 

Supplier standards 

Suppliers are part of Scania’s process. 

It is thus important that their actions are 

consistent with Scania’s environmental 

approach and that they meet Scania 

standards, regardless of where they are 

located. 

The environmental work of suppliers 

is documented by requiring ISO 14001 

certification and using an updated Environmental 

Self Assessment. 

This environmental documentation and 

recurring follow-ups lead to continuous 

improvements, while strengthening 

Scania’s cooperation with its suppliers. 

Scania thereby helps improve expertise 

and enhance environmental awareness 

among its suppliers. 

Environmental work in sales operations 

During 2003, the updated version of the 

Scania Dealer Operating Standards (DOS) 

called for reductions in the environmental 

impact of the sales and service organisation. 

The new standard goes into effect 

during 2004 and will mean, among other 

things, that the environmental work of the 

service network will be assessed regularly. 

The environmental standards include requiring 

certified Scania workshops to have 

a responsible person and requiring all employees 

to undergo environmental training. 

In addition, a local activity plan will be established, 

including environmental targets 

related to energy use and handling of 

chemicals, for example. The introduction 

of the updated standard will occur gradually, 

and internal certification of the European 

service network is expected to be 

implemented during 2006. 

Within the framework of DOS, Scania 

recommends third-party certification 

according to the ISO 14001 environmental 

management system or the equivalent. At 

year-end 2003, 14 local sales distributors 

had taken the final step and introduced 

ISO-certified environmental management 

systems. 

Environmental permits 

The operations at Scania’s production facilities 

around the world have permits that 

comply with national legislation. The environmental 

impact from these facilities consists 

mainly of emissions to air, discharges 

to water, waste products and noise. A set 

of tables on environmental performance 

broken down by production unit can be 

found on Scania’s web site. In addition to 

legal requirements and the conditions included 

in permits, there are also internal 

requirements and rules for these 

operations. 


During 2003 Scania received a permit for 

expanded production and a new paintshop 

at the cab factory in Oskarshamn, 

Sweden. The new permit, granted under 

the provisions of the Swedish Environmental 

Code, allows the production of 

75,000 cabs per year. An application for 

expanded operations at the assembly in 

Falun, Sweden is being examined by the 

authorities. In conjunction with the capacity 

expansion at Zwolle, the Netherlands, 

Scania received a new permit in October 

2003. The Scania facility in São Paulo, 

Brazil will renew its permit during 2004. 

During 2003 there were no violations 

of the existing threshold limit values. No 

incidents occurred that caused significant 

environmental impact or led to major 

clean-up expenses. 

Environmental risk management 

Scania’s risk management focuses on preventive 

measures to protect employees 

and the company’s overall assets. Procedures 

for managing the risks of environmental 

hazards are integrated in the company’s 

other risk management work. 

Soil inventories and ongoing clean-up 

Orientation studies and risk assessments 

of soil and groundwater contamination 

have been completed at most Scania facilities 

and have started at San Luís Potosí, 

Mexico. In St. Petersburg, Russia, such an 

inventory will be completed in conjunction 

with the process of obtaining ISO certification. 

Steps were taken to decontaminate 

polluted soil in Meppel, the Netherlands, 

where Scania ceased operations in 2002. 

There 2,700 tonnes of boron-polluted soil 

were removed and underwent decontamination. 

Clean-up of polluted groundwater 

has started and is expected to continue 

for at least another year. 

Development work includes phasing out hazardous substances 

The driver’s needs and good ergonomics guided the task of designing 

and styling the new R-series cab. During the development 

process, each design engineer also took environmental aspects into 

account. With back-up from an environmental coordinator, the material 

and chemical contents of all cab components were checked 

against Scania’s list of hazardous chemicals, in order to prevent the 

use of substances with unhealthy or environmentally hazardous 

properties. Scania’s environmental objectives mandate phase-out 

plans for all listed substances, with the worst substances to be discontinued 

or replaced during 2004. 

While developing the new driver’s station, which includes the 

steering column, steering wheel, levers and pedals, high standards of 

functionality, ergonomics and road safety were observed. For example, 

the high- and low-beam switch, direction indicator, and windscreen 

wiper and washer functions are now gathered in one component 

– the driver now finds all these visibility-improving functions on 

the same steering wheel lever. It thus also became possible to design 

the Scania Opticruise and Retarder controls as a single lever and 

move all driving functions close to the steering wheel. “Hands on the 

steering wheel” improves the driver’s working environment and improves 

road safety. 

During the review of chemical substances, design engineer Sara 

Westermark and the supplier discovered that an electrical switch in 

one of the steering wheel levers contained polybrominated diphenyl 

ether (PBDE) flame retardant. PBDEs are on Scania’s hazardous chemical 

list, because they are absorbed by humans and animals, do not 

degrade easily and move up the food chain. Since these substances 

have harmful effects even in small doses, PBDEs will be entirely 

banned in the EU countries starting in 2006. 

After contacts with the supplier and thorough testing and 

function verification, Ms Westermark and the project’s environmental 

managers managed to eliminate the black-listed substance.Development 

work thus resulted in a detail that will contribute to optimisation 

of ergonomics and road safety while improving the environmental 

characteristics of the product. 

45 


ENVIRONMENT AND ECONOMICS 

Scania’s sustainable development 

Scania’s operations affect the surrounding 

society not only economically, 

but also environmentally. In 

addition to its regular financial 

reporting, Scania performs yearly 

follow-ups of operations that affect 

the environment. 

The aim of Scania’s global production 

strategy is to move closer to customers, 

while at the same time utilising all the 

elements of its production system in the 

most efficient possible way. The company’s 

production base is found in the 

European Union and Latin America. Most 

sales occur in Europe, but the marketing 

organisation operates all over the world 

except in North America. By having a 

local presence, Scania establishes longterm 

relationships between company 

and society, which benefits mutual 

development. 

Environment and economics 

Scania performs yearly follow-ups of such 

data as its own raw material and chemical 

The reporting in this section was inspired 

by recommendations from the Global 

Reporting Initiative (GRI). The section 

presents certain financial and environmental 

data. 

use, as well as energy and water use. 

Follow-up and reporting of Group-wide 

environmental targets also occur each 

year. An in-depth account of activities and 

their results can be found on Scania’s web 

site (www.scania.com). 

During 2003, Scania’s costs for raw 

materials, chemicals, energy and water totalled 

about SEK 1,705 m., equivalent to 

3.4 percent of Scania’s sales. Transport 

expenses amounted to SEK 1,500 m. 

Costs of soil and groundwater clean-up 

work in Meppel amounted to SEK 2.5 m. 

Emissions of carbon dioxide from 

Scania’s production plants totalled 74 

ktonnes. In relation to Scania’s sales, this 

represented 1.5 g/SEK. Emissions per 

vehicle produced declined compared to 

the year before. This was due to reduced 

idling losses when production increased 

during the year. 

Efforts to reduce climate-affecting emissions 

take place as provided by the guidelines 

adopted in 1998, which can be found 

at Scania’s web site (www.scania.com). 

Environmental investments 

The conventional definition of an environmental 

investment is an investment carried 

out only for environmental reasons and 

aimed at reducing external environmental 

impact. This definition follows, among 

other things, the European Commission’s 

recommendations on voluntary environmental 

reporting. 

An investment is usually motivated by 

several different reasons, of which environmental 

impact may be one. Scania prefers 

to take the environment into account when 

making investments, instead of making 

corrections afterward with filters and separate 

cleaning equipment. 

With the investment strategy that 

Scania has chosen, the effect in terms of 

environmental improvement per krona of 

spending is good. This means that Scania 

does not regard large environmental 

investments according to the conventional 

definition as goals in themselves. 

During 2003, Scania’s investments in 

property, plant and equipment totalled 

SEK 2,478 m. Of this, SEK 20.5 m. was 

classified as environmental investments. 

Improvement of environmental work 

Cross-functional cooperation must be 

continuously improved. As part of Scania’s 

global environmental conference in 2003, 

environmental coordinators and representatives 

of the human resources staff unit 

gathered for a conference whose content 

was expanded to cover the full impact of 

the company on society. 

Environmentally related costs as a 

proportion of Scania's sales 

Non-OECD 

countries 16% 

Other 

OECD 

countries 

18% 

Non-OECD 

countries 16% 

Other 

OECD 

countries 

8% 

Transport services, SEK 1,500 m. 

Raw material, SEK 1,400 m. 

Energy, SEK 180 m. 

Chemicals, SEK 118 m. 

Water, SEK 7 m. 

Sales by region 

EU 

countries 

66% 

Wages, salaries and payroll fees 

by region 

EU 

countries 

76% 


Environment and economics 

Summary of environmental performance, 

Scania production organisation 

Year 2003 2002 2001 

Number of vehicles 

produced 51,276 45,145 48,151 

Sales, SEK m. 


Raw material consumption 

Per vehicle, kg 3,500 3,600 3,200 

Total, tonnes 179,000 164,000 156,000 

Total cost, SEK m. 1,400 1,220 1,230 

Chemical consumption 

Per vehicle, cubic metres 0.085 0.087 0.088 

Total, cubic metres 4,400 3,900 4,200 

Total cost, SEK m. 118 116 110 

Energy use 

Per vehicle, MWh 12 13 12 

Total, GWh 620 590 570 


Carbon dioxide emissions 

Per vehicle, kg 1,400 1,600 1,400 

Total, tonnes 74,000 72,000 69,000 

Water use 

Per vehicle, cubic metres 11 13 12 

Total, 1,000 cubic metres 550 580 570 


Solvent emissions* 

Per vehicle, kg 5.5 6.7 8.0 

Total, tonnes 280 300 390 

Recycling of residual products and waste 

Per vehicle, kg 1,050 1,050 960 

Total, tonnes 54,000 47,000 46,000 

Revenues, SEK m. 24 19 16 

Sent to landfills** and 

other off-site disposal: 

Per vehicle, kg 210 200 180 

Total, tonnes 11,000 9,000 9,000 


Environmental performance in the production organisation 

Many of Scania’s environmental performance targets for its production plants have been set for 2004. In recent 

years, it has become increasingly difficult to reduce the use of energy and certain raw materials per 

unit produced. In many cases, efficient use of raw materials and energy depends on production volume. The 

difficulties are thus mainly related to lower vehicle production in recent years. This trend turned around during 

2003. 

Energy use 

MWh per 

vehicle 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

99 

00 

01 

Target 

for 2004 

02 

03 

04 

Total 

GWh 

700 

600 

500 

400 

300 

200 

100 

During 2003, energy consumption totalled 

about 620 GWh, equivalent to 

about 12,000 kWh per vehicle. 

Carbon dioxide emissions related 

to energy use 

0 

Energy use, 

GWh 

Carbon dioxide 

emissions, 

ktonnes 

2003 1996 2003 1996 

Electricity 370 360 21 23 

District heat 60 130 4 9 

Fossil fuels 190 200 49 51 

Total 620* 690* 74 83 

Per vehicle 12,000 kWh 1.4 tonnes 

In 2003, carbon dioxide emissions from Scania’s 

production amounted to about 1.4 tonnes per 

vehicle, or a total of 74,000 tonnes. 

* Subtotals and totals are rounded to multiples of ten. 

Water use 

m3 per 

Target 

vehicle 

for 2004 

24 

22 

20 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

99 00 01 02 03 

225 

200 

175 

150 

125 

100 

kg per 

vehicle 

75 

50 

25 

0 

99 

00 

01 

Target 

for 2004 

02 

03 

04 

04 

Total m3 

1,000,000 

900,000 

800,000 

700,000 

600,000 

500,000 

400,000 

300,000 

200,000 

100,000 

During 2003, water consumption was 

about 550,000 cubic metres, equivalent 

to 11 cubic metres per vehicle. 

Residual products sent 

to landfills 

0 

Total 

tonnes 

9,000 

8,000 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

The quantity of residual products sent to 

landfills during 2003 totalled about 3,300 

tonnes, or 64 kg per vehicle, excluding 

foundry sand. 

0 

Chemical use 

kg per 

vehicles 

14 

12 

10 

8 

6 

4 

2 

0 

Oils/lubricants 

Degreasing agents 

Water-based paint 

Solvent-based paint 

Powder paint 

Rust-proofing agents 

Solvents 

Foundry chemicals 

Other chemicals 

99 

Process oils/ 

emulsions 

00 

m3 0 100 200 300 400 500 600 700 800 

The consumption of chemicals in 2003 was 

about 4,400 cubic metres, equivalent to 85 

litres per vehicle. 

Solvent emissions 

01 

Target 

for 2004 

02 

03 

04 

Total 

tonnes 

500 

400 

300 

200 

100 

During 2003, organic solvent emissions 

from painting/rust-proofing totalled 

some 280 tonnes, equivalent to 5.5 kg 

per vehicle. 

0 

* From painting/rust-proofing. 

** Excluding foundry sand, about 25,000 tonnes for landfill cover. 

47 


SCANIA SHARE DATA 

Continued low trading volume 

The climate on world stock exchanges 

improved somewhat during 2003, despite 

continued uncertainty. Both the 

Stockholm All Share Index and the Industrials 

Index showed a positive 

trend during the year. 

On Stockholmsbörsen, the All Share 

Index, which measures the overall trend 

on the exchange, rose by 30 percent 

during 2003. The Industrials Index, which 

measures the trend in the industrial goods 

and services sector and includes Scania 

shares, rose by 24 percent. Trading 

volume on Stockholmsbörsen remained 

high. 

Scania’s B shares rose by 20 percent 

during the year, closing at SEK 203.00 on 

30 December. This was equivalent to a 

market capitalisation of SEK 40,500 m., 

which made Scania the 16th largest company 

on the exchange. 

Volume and trading 

Scania share trading volume remained 

low, averaging 112,000 shares changing 

hands each trading day. The turnover rate 

for B shares was 28 (23) percent. For 

Stockholmsbörsen as a whole, it was 113 

(118) percent. 

Scania applied for de-listing from the 

New York Stock Exchange (NYSE) early in 

December 2002 and was de-listed on 15 

350 

300 

250 

200 

150 

Share price performance, Stockholmsbörsen, Scania B shares 

(c) SIX 

100 

99 00 01 02 03 04 

About Scania shares 

Scania’s share capital is divided into 100 million 

Series A shares and 100 million B shares. Each 

Series A share represents one vote and each B 

share one tenth of a vote. Otherwise there are 

no differences between these types of shares. 

The nominal value per share is SEK 10. 

January 2003. The background was that 

trading in Scania shares on the NYSE was 

very low, which meant that the costs of 

being listed on the NYSE were no longer 

reasonable. The opportunities for investors 

to trade globally in equities have also increased 

significantly in recent years. 

Ownership structure 

On 30 January, the number of shareholders 

in Scania was 39,020. The three 

largest owners were Volksvagen AG, AB 

All Share Index (SAX) 

Scania B shares 

80 000 

60 000 

40 000 

20 000 

Market listing 

Since 1 April 1996, both types of Scania shares 

– Series A and B – have been quoted on the 

A list of Stockholmsbörsen. 

Volvo and Investor AB. On 30 January, AB 

Volvo owned 30.6 percent of the votes in 

Scania and 45.5 percent of the capital. 

Volvo has stated that in compliance with 

the European Commission’s decision, it 

must divest its holding in Scania before 

the end of April 2004. On 4 March, Volvo 

sold its stake of 63.7 million B shares to 

institutional investors. Volvo also holds 

27.3 million Scania A-shares, which they 

state that they will divest. Volvo is not represented 

on Scania’s Board of Directors. 

Non-Swedish ownership, including 

Volkswagen AG, amounted to 35 percent 

of votes and 22 percent of capital in 


Dividend 

The Board of Directors proposes that the 

Annual General Meeting approve a dividend 

of SEK 6.00 per share for the 

financial year 2003. Since Scania joined 

Stockholmsbörsen in 1996, the dividend 

has averaged 48 percent of net income. 

Beta coefficient 

According to calculations by Delphi Economics, 

the beta coefficient of Scania’s B 

shares was 0.86 at year-end. This means 

that on average, Scania shares fluctuated 

less than the average for the exchange. 

The explanatory value for Scania’s 

B shares was 0.51. This means that 51 

percent of the changes in Scania shares 

could be explained by overall changes on 

the exchange. 

Ownership structure, 30 January 2004 

Number % % 

of shares of holdings of votes 

1– 500 89.7 1.58 

501– 2,000 7.7 0.87 

2 ,000– 10,000 1.9 0.73 

10 ,000– 50,000 0.5 1.01 

50 ,000– 100,000 0.1 0.71 

> 100,000 0.1 95.10 

Total 100.0 100.0 


48

The ten largest shareholders, 30 January 2004 

% of voting % of voting 

power capital 

Volkswagen 34.0 18.7 

Volvo 30.6 45.5 

Investor 15.3 9.1 

Wallenberg foundations 5.7 3.6 

Alecta 3.1 1.8 

Industrivärden 1.9 1.5 

Nordea mutual funds 1.1 1.9 

AMF Pension 0.5 0.9 

Svenska Handelsbanken 0.5 0.6 

Pensionsgaranti insurance company 0.4 0.3 

Total 93.1 83.9 

Gun Wiklander and Bengt Blomberg. 

Per share data 

SEK (unless otherwise stated) 2003 2002 2001 

Earnings 15.17 13.70 5.24 

Shareholders’ equity 91.26 84.66 79.98 

Dividend 

(2003: proposed) 6.00 5.50 3.50 

Market prices, B shares 

Highest for the year 227.00 215.00 243.00 

Lowest for the year 148.50 125.50 132.00 

Year-end (at closing) 203.00 168.50 192.00 

Price/earnings ratio, B shares 13 12 37 

Dividend payout ratio, % 40 40 67 

Dividend yield, % 1 3.0 3.3 1.8 

Annual turnover rate, 

B shares 28 23 29 

Number of shareholders 39,000 2 39,000 39,000 

Average daily number of shares traded, 

Stockholmsbörsen Series A 13,000 

B 112,000 

Total 125,000 

1 Dividend divided by the market price of a B share at year-end. 

2 On 30 January 2004. 

Shareholders large and small 

Scania shall grow with sustained profitability, 

thereby generating value for shareholders, 

among others. The ambition is to 

provide investors and other stakeholders 

with correct information for a valuation of 

Scania as a company. Scania regards it as 

important to hold an open and continuous 

dialogue with both major players in the 

financial market and with smaller shareholders. 

Once or more per year, Scania holds 

Capital Market Days for analysts, major 

investors and financial journalists. At a 

meeting in November, Charlie Dove-Edwin, 

an analyst from Danske Equities’ London 

office, listened to presentations that focused 

on markets and marketing strategies. 

“I perceive Scania as a very well-managed 

company with good future prospects. 

There are few question marks. Scania has 

positioned itself well with regard to growth 

markets,” Mr Dove-Edwin says. 

Gun Wiklander and Bengt Blomberg 

from Stockholm have been Scania shareholders 

since the company joined 

Stockholmsbörsen in 1996. At an evening 

meeting with the Swedish Shareholders’ 

Association in December, they commented 

that information from Scania is good. 

“Above all, Scania’s own magazines are 

an important source of information. There 

we see how business looks out in the markets 

around the world; we can meet 

Scania’s customers and see how Scania 

thinks commercially. Sometimes that says 

more than all the figures.” 

Charlie Dove-Edwin. 


FINANCIAL REPORT 

Financial review 

REVENUE 

The sales revenue of the Scania Group 

in the Vehicles and Service segment 

totalled SEK 50,581 m., compared to 

SEK 47,285 m. in 2002. This was equivalent 

to an increase of 7 percent. Revenue 

was favourably affected by higher volume 

and adversely affected by currency rate 

changes. Overall, negative currency rate 

effects totalled about SEK 2,200 m. 

Revenue from vehicle sales increased 

by 11 percent in all, amounting to SEK 

34,652 m. (31,175). Sales of service-related 

products amounted to SEK 10,759 m. 

(10,603), an increase of 1 percent. In local 

currencies, service-related sales rose by 

5 percent. 

Net interest income in the Customer 

Finance segment rose by 11 percent, 

amounting to SEK 813 m. (730). 

Sales revenue by product 

SEK m. 2003 2002 

Trucks 29,537 27,184 

Buses 5,115 3,991 

Engines 453 464 

Service-related products 10,759 10,603 

Used vehicles etc 7,123 6,218 

Revenue deferral, vehicles 1 –2,406 –1,175 

Total 50,581 47,285 

1 Refers to the difference between sales recognised 

as revenue and sales value based on delivery. 

NUMBER OF VEHICLES 

During the year, the Scania Group’s deliveries 

of trucks totalled 45,045 (39,895) 

units, which represented an increase of 13 

percent. Bus and coach deliveries totalled 

4,910 (3,774) units, an increase of 30 percent. 

Vehicles delivered and financed 

2003 2002 

Number delivered 

Trucks 45,045 39,895 

Buses 4,910 3,774 

Total 49,955 43,669 

Number financed 

(during the year) 

Trucks 13,468 11,742 

Buses 326 407 

Total 13,794 12,149 

EARNINGS 

Operating income for Vehicles and Service 

amounted to SEK 4,759 m. (3,548), 

which represented an increase of 34 percent. 

Higher delivery volumes for both 

trucks and buses and higher general capacity 

utilisation in the production system 

contributed to higher earnings. Earnings 

were also positively affected by increased 

exports from production plants in Brazil 

and Argentina with a favourable cost situation. 

Scania’s restructured bus chassis 

production demonstrated clearly higher 

productivity. During 2002, earnings were 

adversely affected by production restructuring 

costs of about SEK 100 m. During 

2003, capitalised development expenditures 

amounted to SEK 669 m. (573). During 

the latter part of the year, operating income 

was affected by a somewhat less 

favourable market mix. The operating margin 

rose to 9.4 percent, compared to 7.5 

percent the previous year. 

Currency spot rate effects were about 

SEK –770 m. compared to 2002. This was 

offset by positive currency hedging income 

of SEK 620 m., resulting in a negative net 

effect of SEK 150 m. During 2002, currency 

hedging had a positive influence of SEK 

500 m. on earnings. Compared to 2002, 

the total currency rate effect was thus SEK 

–650 m. 

Operating income in Customer 

Finance rose by 19 percent and amounted 

to SEK 366 m. (308). This was equivalent 

to an operating income of 1.43 (1.22) 

percent, expressed as a percentage of the 

average portfolio during the year. Overhead, 

expressed in relation to the average 

portfolio, rose from 1.05 to 1.17 percent. 

Actual losses written off during the year 

totalled SEK 100 m. (143). Actual credit 

losses were equivalent to 0.39 (0.55) percent 

of the average portfolio. 

At year-end, the reserve for probable 

but not actual credit losses was SEK 458 

m. (409), equivalent to 1.8 (1.6) percent of 

the portfolio. At year-end, the portfolio 

amounted to SEK 25,926 m. (25,303), an 

increase of 6 (5) percent adjusted for currency 

rate effects. During 2003, 

SEK 13,095 m. (11,789) worth of new 

items was financed. 

Operating income for Scania products 

amounted to SEK 5,125 m. (3,856), 

which was equivalent to an operating margin 

of 10.1 (8.2) percent. 

Earnings 


Operating income by segment, 

SEK m. 

Vehicles and Service 4,759 3,548 

Customer Finance 366 308 

Total Scania products 5,125 3,856 

Car operations – 550 

Total operating income 5,125 4,406 

Operating margin, % 

Vehicles and Service 9.4 7.5 

Scania products 10.1 8.2 

Scania Group 10.1 9.3 

Customer Finance 1 1.4 1.2 

1 The operating margin of Customer Finance is calculated as 

operating income as a percentage of the average portfolio. 

The operating income of the Scania 

Group was SEK 5,125 m. (4,406), which 

represented an increase of 16 percent. 

Operating margin amounted to 10.1 (9.3) 

percent. 

In 2002, operating income included 

SEK 550 m. in capital gain on the divestment 

of Swedish car operations. 


50

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 


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 


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. 


Interest rate risk 

Scania’s policy concerning interest rate 

risks is that the interest rate refixing 

period of its borrowing should normally 

be 6 months, but that deviations may be 

allowed within the 0–24 month range. 

One exception is Scania’s Customer 

Finance companies, in which the interest 

rate refixing period on borrowing is 

matched with the interest rate refixing 

period on assets. To manage interest 

rate risks in the Scania Group, derivative 

instruments are used. 

Currency 

Currency transaction exposure during 

2003 was about SEK 18 billion. The 

largest currency flows were in EUR and 

GBP. Based on the 2003 geographic 

distribution of revenue and expenses, 

a one percentage point change in the 

Swedish krona against other currencies 

would have affect operating income by 

about SEK 180 m. on an annual basis. 

Scania’s policy is to hedge 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. 

At the end of 2003, Scania’s net 

assets in foreign currencies amounted to 

SEK 10,140 m. 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, they may be hedged. 

Credit risk 

To maintain a controlled level of credit risk 

in Customer Finance, the process of issuing 

credit is supported by a credit policy 

as well as credit instructions. 

At year-end, the total reserve for likely 

but not actual credit losses in Customer 

Finance totalled SEK 458 m. (409), equivalent 

to 1.8 (1.6) percent of the portfolio. 

The year-end portfolio totalled SEK 

25,926 m. (25,303), divided among about 

20,000 customers, of whom 97 percent 

were small customers with lower credit exposure 

per customer than SEK 15 m. 

The management of the credit risks 

that arise in Scania’s treasury operations, 

among other things in liquidity investment 

and derivatives trading, is regulated by 

Scania’s financial policy document. Transactions 

occur only within established limits 

and with selected creditworthy counterparties. 

OTHER RISKS 

Residual value exposure 

A portion of Scania’s sales occur with 

repurchase obligations or guaranteed 

residual value. During 2003, the volume 

of such transactions was 6,500 (4,456) 

vehicles. The value of all obligations at 

year-end was SEK 5,925 m. (6,077). 

Obligations outstanding declined somewhat, 

mainly due to the stronger krona. 


52

Consolidated income statement 

January–December, SEK m. Note 2003 2002 2001 

Vehicles and Service 

Sales revenue 2 50,581 47,285 53,065 

Cost of goods sold –38,272 –36,260 –42,601 

Gross income 12,309 11,025 10,464 

Research and development expenses 1 –1,484 –1,437 –1,955 

Selling expenses –5,229 –5,206 –5,594 

Administrative expenses –853 –857 –785 

Share of income in associated companies 3 16 23 59 

Operating income, Vehicles and Service 4,759 3,548 2,189 

Customer Finance 

Net interest income 4 813 730 657 

Other income and expenses 15 17 –16 

Gross income 828 747 641 

Credit losses –166 –175 –137 

Operating expenses –296 –264 –226 

Operating income, Customer Finance 366 308 278 

Capital gain related to car operations – 550 – 

Operating income 5,125 4,406 2,467 

Interest income 286 260 294 

Interest expenses –761 –857 –1,142 

Other financial income and expenses –46 –87 –78 

Net financial items 5 –521 –684 –926 

Income after financial items 4,604 3,722 1,541 

Taxes 6 –1,565 –985 –496 

Minority interests –5 2 3 

Net income 3,034 2,739 1,048 

Depreciation/amortisation included in operating income 2 7 –2,000 –2,093 –2,157 

Earnings per share, SEK 3 15.17 13.70 5.24 

Proposed dividend per share, SEK 6.00 5.50 3.50 

1 Total research and development expenditures amounted to SEK 2,153 m. (2,010), of which SEK 669 m. (573) was capitalised (capitalisation was not allowed in 2001). 

2 Refers to Vehicles and Service. 

3 There are no potential dilution effects. 


Consolidated balance sheet 

31 December, SEK m. Note 2003 2002 2001 

ASSETS 

Fixed assets 

Intangible fixed assets 8 2,395 1,938 1,364 

Tangible fixed assets 9 23,892 23,640 25,714 

Financial fixed assets 

Holdings in associated companies etc 10 122 126 795 

Long-term receivables 

Long-term interest-bearing receivables 11 11,796 11,354 10,178 

Deferred tax assets 6 381 466 963 

Other long-term receivables 134 224 351 

Total long-term receivables 12,311 12,044 11,492 

Total fixed assets 38,720 37,748 39,365 

Current assets 

Inventories 12 8,506 7,862 7,946 

Current receivables 

Tax receivables 352 224 145 

Interest-bearing trade receivables 13 7,502 7,136 6,791 

Non-interest-bearing trade receivables 13 6,345 6,497 7,731 

Other current receivables 13 2,494 2,281 2,354 

Total current receivables 16,693 16,138 17,021 

Short-term investments 14 704 1,669 2,133 

Cash and bank balances 1,212 2,670 1,974 

Total current assets 27,115 28,339 29,074 

Total assets 65,835 66,087 68,439 


SHAREHOLDERS’ EQUITY AND LIABILITIES 

Shareholders’ equity 15 

Share capital 2,000 2,000 2,000 

Restricted reserves 3,277 4,608 5,665 

Total restricted equity 5,277 6,608 7,665 

Unrestricted reserves 9,940 7,584 7,282 

Net income 3,034 2,739 1,048 

Total unrestricted equity 12,974 10,323 8,330 

Total shareholders’ equity 18,251 16,931 15,995 

Minority interests 4 58 21 

Provisions 

Provisions for pensions 16 2,094 2,045 2,092 

Provisions for deferred tax liabilities 6 2,180 2,060 2,391 

Other provisions 17 2,942 2,309 2,184 

Total provisions 7,216 6,414 6,667 

Liabilities 

Long-term interest-bearing liabilities 18 20,827 22,514 18,908 

Current liabilities 

Current interest-bearing liabilities 18 5,380 6,933 14,504 

Advance payments from customers 570 826 764 

Trade creditors 3,253 3,297 3,253 

Tax liabilities 1,027 241 182 

Other current liabilities 2,059 2,103 2,003 

Accrued expenses and prepaid income 19 7,248 6,770 6,142 

Total current liabilities 19,537 20,170 26,848 

Total shareholders’ equity and liabilities 65,835 66,087 68,439 

Assets pledged 20 175 191 233 

Contingent liabilities 21 595 522 855 

Net debt, excluding provisions 

for pensions, SEK m. 24,291 25,108 29,305 

Net debt/equity ratio 1.33 1.48 1.83 

For definitions of key ratios, see page 81. 

Equity/assets ratio 27.7 25.6 23.4 

Equity per share, SEK 91.26 84.66 79.98 

Capital employed, SEK m. 46,556 48,481 51,520 


54

Consolidated statement of changes in shareholders’ equity 


Shareholders’ equity, 1 January 16,931 15,995 15,698 

Exchange rate differences –614 –1,103 649 

Net income 3,034 2,739 1,048 

Dividend to shareholders –1,100 –700 –1,400 

Shareholders’ equity, 31 December 15 18,251 16,931 15,995 

Consolidated cash flow statement 


Cash flow from operating activities 

Net income excluding Customer Finance 2,801 2,526 854 

Items not affecting cash flow 24 a 2,690 2,041 2,124 

Cash from operating activities 5,491 4,567 2,978 

Change in working capital etc 

Inventories –864 –918 475 

Receivables –388 223 1,973 

Provisions for pensions 54 171 153 

Non-interest-bearing liabilities and provisions 1,468 1,296 –706 

Total change in working capital etc 24 b 270 772 1,895 

Total cash flow from operating activities 5,761 5,339 4,873 

Net investments excluding acquisitions/divestments of businesses 24 c –3,285 –2,921 –1,878 

Cash flow before acquisitions/divestments of businesses 2,476 2,418 2,995 

Net investments through acquisitions/divestments of businesses 24 d –26 1,165 –929 

Cash flow excluding Customer Finance 2,450 3,583 2,066 

Cash flow, Customer Finance 24 e –1,456 –552 –2,428 

Change in net debt including Customer Finance 994 3,031 –362 

Change in net debt from financing activities 24 f –2,200 –1,813 2,119 


Net change in liquid assets and short-term investments –2,306 518 357 

Effect of exchange rate changes on liquid assets and short-term investments –117 –286 169 

Cash, bank balances and short-term investments, 1 January 4,339 4,107 3,581 

Cash, bank balances and short-term investments, 31 December 1,916 4,339 4,107 

Cash flow per share, excluding Customer Finance and acquisitions/divestments 12.38 12.09 14.98 


Parent Company financial statements 

Scania AB 

Income statement 


Operating income 0 0 0 

Financial income and expenses 1 93 182 51 

Dividends received, Group contributions etc 1 1,500 1,000 650 

Withdrawal from tax allocation reserve 284 250 600 

Provision to tax allocation reserve – – –325 

Taxes 2 –105 –121 –273 

Net income 1,772 1,311 703 

Group contributions in 2002 and 2003 have been reported in compliance with a statement 

(URA 7) of the Urgent Issues Task Force of the Swedish Financial Accounting Standards 

Council. Figures for 2001 have not been adjusted. 

Balance sheet 


ASSETS 

Financial fixed assets 

Shares in Group companies 3 11,035 10,971 10,971 

Current assets 

Due from subsidiairies 2,828 2,775 3,010 

Other receivables 13 13 13 

Accrued income – 2 – 

Total assets 13,876 13,761 13,994 


Shareholders’ equity 4 11,574 11,174 10,873 

Untaxed reserves 5 2,302 2,586 2,836 

Current liabilities 

Accrued expenses and prepaid income 0 1 12 

Tax liabilities 0 0 273 

Total current liabilities 0 1 285 

Total shareholders’ equity and liabilities 13,876 13,761 13,994 

Assets pledged – – – 

Contingent liabilities 6 23,639 26,685 26,872 

Statement of changes in shareholders’ equity 

January–December, SEK m. 2003 2002 2001 

Shareholders’ equity, 1 January 11,174 10,873 11,570 

Net income 1,772 1,311 703 

Group contributions (net after tax) –272 –310 – 

Dividends to shareholders –1,100 –700 –1,400 

Shareholders’ equity, 31 December 11,574 11,174 10,873 

Cash flow statement 

January–December, SEK m. 2003 2002 2001 

Cash flow from operating activities 

Net income 1,772 1,311 703 

Items not affecting cash flow 

Anticipated dividend –1,500 –1,000 – 

Group contributions received – – –650 

Taxes 105 121 – 

Provision to/withdrawn from untaxed reserves –284 –250 –275 

Cash from operating activities 93 182 –222 

Change in working capital 

Current liabilities –1 –284 –427 

Receivables 2 –2 – 

Total cash flow from operating activities 94 –104 –649 

Investments 

Acquisitions of shares –64 – – 

Change in net debt provided from 

financing activities 

Change in due from/liabilities to subsidiaries 1,070 804 2,049 


Net cash provided by financing activities –30 104 649 

Liquid assets and short-term investments, 31 December 0 0 0 


56

Accounting principles 

The Annual Report of the Scania Group has 

been prepared in compliance with the Annual 

Accounts Act, the current recommendations of 

the Swedish Financial Accounting Standards 

Council and the statements of its Urgent Issues 

Task Force. The recommendations of the Council 

are based on the international accounting 

principles adopted by the International Accounting 

Standards Board. 

New accounting recommendations 

in 2003 

Beginning with 2003, Scania is applying the following 

new recommendations issued by the 

Swedish Financial Accounting Standards Council: 

RR 2:02 Inventories, RR 22 Presentation of 

financial statements, RR 24 Investment property, 

RR 25 Segment reporting – lines of business 

and geographic areas, RR 26 Events after the 

balance sheet date, RR 27 Financial instruments: 

Disclosure and classification and RR 28 Government 

grants. The changes in Scania’s accounting 

principles and in the presentation in the 

financial statements resulting from these 

recommendations are described below. 

RR 25 Segment reporting – lines of 

business and geographic areas 

The operations of the Scania Group are managed 

and reported primarily by line of business 

and secondarily by geographical segments. 

Scania’s primary segments are Vehicles and 

Service plus Customer Finance. These two segments 

have distinct products and differentiated 

risk situations. The tied-up capital and accompanying 

financing structure in Customer Finance 

differs substantially from Vehicles and Service. 

RR 27 Financial instruments: 

Disclosure and classification 

Aside from business risks in its operations, 

Scania is also exposed to financial risks. Information 

about these risks as well as Scania’s risk 

management, including information about the 

extent to which derivative instruments are used 

for hedging and information about fair value, interest 

rate refixing periods and maturity structures 

are provided in Note 33. 

Consolidated financial statements 

The consolidated financial statements encompass 

Scania AB and all subsidiaries. “Subsidiaries” 

refers to companies in which Scania 

directly or indirectly owns more than 50 percent 

of the voting rights of the shares or otherwise 

has a controlling influence. 

Acquisitions of companies are reported 

according to the purchase method of accounting. 

This means that the assets and liabilities in 

the acquired company are accounted at acquisition 

values assigned by the purchaser according 

to the acquisition analysis. If the acquisition 

value of the shares exceeds the value of the 

company’s net assets according to the acquisition 

analysis, the difference is reported as goodwill 

on consolidation. Only earnings arising after 

the date of acquisition are included in the shareholders’ 

equity of the Group. Divested companies 

are included in the consolidated financial 

statements until and including the divestment 

date. 

Minority interests in net income and shareholders’ 

equity are reported separately. 

Associated companies 

“Associated companies” refers to companies 

in which Scania has a long-term ownership interest 

and possesses a significant influence. 

Associated companies are accounted for using 

the equity method. This means that in the consolidated 

financial statements, holdings in associated 

companies are valued at the Group’s 

share of the shareholders’ equity in the associated 

company after adjusting for the Group’s 

share of surplus and deficit values, respectively. 

In this way, Scania’s share of the earnings in an 

associated company is included in consolidated 

earnings. 

Foreign currencies 

When preparing the consolidated financial statements, 

all items in the income statements of 

foreign subsidiaries are translated to Swedish 

kronor using the average exchange rates during 

the year. All balance sheet items, except net income, 

are translated using the exchange rates 

on the respective balance sheet date (closing 

day rate). This method is usually called the current 

method. The changes in the shareholders’ 

equity of the Group that arise due to different 

exchange rates on the closing day compared 

to the exchange rate on the preceding closing 

day are reported directly against shareholders’ 

equity. Aside from industrial operations in South 

America and some markets in eastern Europe, 

the functional currency of all subsidiaries is the 

same as the local currency. For the abovementioned 

businesses, the American dollar and 

the euro, respectively, have been used as the 

functional currency. The reasons for this have 

been that cost and price levels have had a high 

correlation to the dollar and euro, respectively. 

Items (transactions) in local currencies have been 

translated into the functional currency using the 

monetary/non-monetary method, after which a 

translation from the functional currency to Swedish 

kronor occurred using the current method. 

Receivables and liabilities in foreign currencies 

are valued at the closing day rate. In applicable 

cases, receivables and liabilities are valued 

at the underlying hedging rate. 

Currency forward contracts entered into 

in order to hedge future commercial currency 

flows are reported among earnings on the same 

date that the commercial flow was realised. Premiums 

received or paid for currency options that 

are intended for hedging of currency flows in 

business transactions are reported as income 

or expenses over the contract period. Currency 

forward contracts that do not meet the criteria 

for hedge accounting are valued according to 

the lower of cost or net realisable value. 

When valuing financial assets and liabilities 

where the original type of currency was changed 

through a currency swap, the loan amount is 

translated to Swedish kronor taking into account 

the swap agreement. 

Exchange rate differences on loans and other 

financial instruments in foreign currencies that 

are intended for hedging of foreign net assets 

are reported directly against shareholders’ equity. 

Classification in the balance sheet 

Scania’s operating cycle, that is, the time that 

elapses from the purchase of materials until 

payment for goods delivered is received, is less 

than twelve months. This means that a current 

liability is a liability that falls due for payment within 

twelve months, counting from the balance 

sheet date. Other liabilities are classified as longterm. 

Current assets are assets that are expected 

to be realised within twelve months, counting 

from the balance sheet date, or that consist of 

liquid assets. Other assets are classified as fixed 

assets. 

Classification of financial and operating 

leases (Scania as lessor) 

Leasing contracts with customers are reported 

as financial leases in cases where substantially all 

risks and rewards associated with ownership of 

the asset have been transferred to the lessee. 

Other leasing contracts are classified as operating 

leases and are reported among tangible fixed 

assets. 

Valuation principles 

Assets, liabilities, provisions and derivatives have 

been valued at acquisition value unless otherwise 

stated. 

Tangible fixed assets 

Tangible fixed assets are reported at acquisition 

value minus accumulated depreciation and any 

impairment losses. If a tangible fixed asset includes 

major components with a divergent useful 

life (depreciation period), these are reported as 

separate assets. 

Depreciation is mainly carried out on a 

straight-line basis over the estimated useful life 

of an asset. In those cases where a residual 

value exists, the asset is depreciated down to this 

value. Useful life and depreciation methods are 

taken into consideration regularly and adjusted in 

case of changed circumstances. The following 

useful life is applied: 

Machinery and equipment 5–15 years 

Industrial buildings 

25 years 

Land assets 

No depreciation 

Depreciation is charged to earnings for the 

period. If there is any indication on the balance 

sheet date that a tangible asset has diminished in 


value, the recoverable amount of the asset is 

estimated. If the recoverable amount is less than 

the carrying amount, the asset is written down 

to its recoverable amount. 

In case of a financial lease, where Scania is 

the lessee, the leased asset is reported as a 

tangible asset and the future commitment as a 

liability. 

Intangible fixed assets 

Scania’s intangible assets consist of goodwill on 

consolidation plus capitalised expenditures for 

development of new products as well as software. 

Goodwill on consolidation arises when the 

acquisition value of shares in a subsidiary 

exceeds the value of that company’s net assets 

according to the acquisition analysis. The amortisation 

period for goodwill on consolidation is 

established on the basis of individual examination. 

In deciding the amortisation period, the 

main principles used are as follows: 

– Small acquisitions that are a supplement to 

existing operations and that are integrated with 

them are amortised in five years. 

– Larger acquisitions that involve establishment 

of operations in new markets are amortised in 

ten years if they are established operations with 

a strong market position. 

Scania’s research and development activities 

are classified into a research phase and a development 

phase. Those expenditures that arise 

during the research phase are charged to earnings 

as they arise. Expenditures during the development 

phase are capitalised as an intangible 

fixed asset, beginning on the date when the 

expenditures are highly likely to lead to future 

economic benefits. The amortisation of capitalised 

development expenditures begins when the 

asset is placed in service and continues during 

its estimated useful life. For capitalised product 

development expenditures, the average useful 

life is currently estimated at five years. For capitalised 

software development expenditures, the 

useful life is estimated at between three and five 

years. 

If there is any indication on the balance sheet 

date that an intangible asset has diminished in 

value, the recoverable amount of the asset is 

estimated. If the recoverable amount is less than 

the carrying amount, the asset is written down 

to its recoverable amount. 

Inventories 

Inventories are valued at the lower of acquisition 

value and net realisable value according to the 

first in, first out (FIFO) principle. An allocable 

portion of indirect expenses is included in the 

value of the inventories. 

Short-term investments 

Short-term investments are valued at the lower of 

accrued acquisition value and fair value. 

Liquid assets 

Liquid assets consist of cash and bank balances 

as well as short-term investments. In some 

cases, short-term investments consist of investments 

with maturities that are formally longer 

than 90 days, but which can easily be turned 

into liquid assets. 

Financial instruments 

Financial assets, including interest-bearing 

receivables in Customer Finance, are reported 

at accrued acquisition value minus probable 

credit losses. Provisions for bad debts are made 

individually, based on the customer’s payment 

capacity and the value of the collateral. 

Financial liabilities are reported at accrued 

acquisition value. Premiums or discounts as well 

as transaction costs when issuing securities are 

allocated over the maturity of the loan. 

Financial assets and liabilities in foreign 

currencies are valued according to the principles 

stated under “Foreign currencies”. For a description 

of the reporting of derivatives, see also 

Note 33. 

Provisions 

Provisions are recognised if an obligation 

(legal or informal) exists as a result of a past 

event. It must also be deemed likely that an outflow 

of resources will be required to settle the 

obligation and that the amount can be reliably 

estimated. Provisions for factory warranties on 

vehicles sold during the year are based on the 

applicable warranty terms and conditions and 

the estimated quality situation. 

Provisions for pensions 

Provisions for pensions are equivalent to the 

actuarial value of the collectively agreed ITP 

occupational pension plan and all voluntary 

pension obligations. The item “Provisions for 

pensions” includes foreign subsidiaries, with 

pension commitments reported in compliance 

with the principles applicable in each respective 

country, provided that these signify that earned 

pension rights are reported as expenses. 

Revenue recognition 

Revenue from the sale of goods and services is 

reported when substantially all risks and rewards 

are transferred to the buyer. Sales revenue is 

reduced, where applicable, by discounts provided. 

If the sale is combined with a repurchase 

obligation or a residual value guarantee the transaction 

is reported as, in accordance with normal 

industry practice, an operating lease provided 

that substantial risks remain with Scania. Leasing 

income, as well as interest income in the 

case of hire purchase financing, is recognised 

over the underlying contract period in compliance 

with the terms of the contract. Invoicing for 

both repair and maintenance agreements and 

for vehicles that could not yet be recognised as 

revenue, as provided above, is reported as prepaid 

income. 

Research and development expenses 

Consists of the research and development expenditures 

that arise during the research phase 

plus amortisation during the period of capitalised 

development expenditures (see “Intangible 

assets”). 

Selling expenses 

Selling expenses are defined as operating expenses 

in sales and service companies plus 

goodwill amortisations related to acquisitions 

of sales and service companies and costs of 

corporate-level commercial resources. 

Administrative expenses 

Administrative expenses are defined as costs of 

corporate management as well as staff units 

and corporate service departments. 

Borrowing costs 

Borrowing costs in the form of interest are 

charged to earnings when they arise. 

Taxes 

The Group’s total tax consists of current and 

deferred tax. Deferred tax is recognised in case 

of a difference between the carrying amount of 

assets and liabilities and their fiscal value (“temporary 

difference”). Full provision is made for 

deferred tax liabilities. Deferred tax assets are 

recognised only to the extent that it is likely that 

they can be utilised. 

Related party transactions 

Related party transactions occur on market 

terms. The Scania Group’s related parties consist 

of the companies in which Scania can exercise 

a controlling or significant influence in terms 

of the financial and operating decisions that are 

made. The circle of related parties also includes 

those companies and physical persons that are 

able to exercise a controlling or significant influence 

over the financial and operating decisions 

of the Scania Group. 

Government grants 

Government grants received that are attributable 

to operating expenses reduce these expenses. 

Government grants related to investments reduce 

the gross acquisition value of the fixed 

assets. 


58

Changes in accounting principles 

in 2004 

The Swedish Financial Accounting Standards 

Council’s Recommendation RR 29, Employee 

benefits, comes into force in 2004 and is being 

applied from 1 January 2004. The biggest 

change compared to the previous accounting 

principle is that the calculation of the liability for 

defined-benefit pension plans is based on estimated 

final salary instead of current salary. 

However, this change in calculation method will 

not have any material impact on the Group’s 

earnings and shareholders’ equity. The higher 

liability on the few foreign-based plans will be 

offset by the somewhat lower liability in the 

dominant Swedish ITP occupational pension 

plan. To date, the reporting of health care benefits 

in Brazil has been calculated using American 

accounting principle which differ insignificantly 

from the new principles. 

Beginning in 2004, for industrial operations 

in Brazil and Argentina, Scania will replace the 

previous functional currency, the American dollar 

(USD), with local currencies. The justification is 

that in recent years, there has been an increasingly 

large desengagement of local price and 

cost trends from the former functional currency. 

Changes in accounting principles 

in 2005 

Beginning in 2005, all European listed companies 

will apply the International Financial Reporting 

Standard (IFRS) adopted in the EU. Scania 

is carrying out a project for implementing and 

safeguarding the transition to IFRS. Of the recommendations 

not yet implemented in Sweden, 

only IAS 39, which regulates the valuation 

of financial instruments, is deemed likely to have 

a material effect. 

Notes 

THE SCANIA GROUP 

Note 1 Segment reporting 60 

Note 2 Sales 61 

Note 3 Share of income in 

associated companies 61 

Note 4 Customer Finance 61 

Note 5 Financial income and expenses 62 

Note 6 Taxes 62 

Note 7 Depreciation/amortisation 63 

Note 8 Intangible fixed assets 63 

Note 9 Tangible fixed assets 64 

Note 10 Holdings in associated 

companies etc 64 

Note 11 Long-term interest-bearing 

receivables 65 

Note 12 Inventories 65 

Note 13 Current receivables 65 

Note 14 Short-term investments 65 

Note 15 Shareholders’ equity 65 

Note 16 Provisions for pensions 

and similar commitments 65 

Note 17 Other provisions 66 

Note 18 Interest-bearing liabilities 66 

Note 19 Accrued expenses 

and prepaid income 66 

Note 20 Assets pledged 66 

Note 21 Contingent liabilities 66 

Note 22 Lease obligations 66 

Note 23 Government grants 67 

Note 24 Consolidated cash flow statement 67 

Note 25 Companies acquired/divested 67 

Note 26 Wages, salaries and other 

remuneration and number 

of employees 68 

Note 27 Related party transactions 69 

Note 28 Information regarding compensation 

to executive officers 69 

Note 29 Fees and other remuneration 

to auditors 70 

Note 30 Net assets in foreign currencies 70 

Note 31 Currency exposure in 

operating income 70 

Note 32 Effect of exchange rate 

differences on net income 70 

Note 33 Financial instruments and 

financial risk management 71 

List of subsidiaries 74 

PARENT COMPANY 

Note 1 Financial income and expenses 76 

Note 2 Taxes 76 

Note 3 Shares in Group companies 76 

Note 4 Shareholders’ equity 76 

Note 5 Untaxed reserves 76 

Note 6 Contingent liabilities 76 

Note 7 Information regarding compensation 

to executive officers 76 


NOTE 1 Segment reporting 

BUSINESS SEGMENTS (PRIMARY) 

REVENUE AND INCOME 

Vehicles and Service Customer Finance 1 Eliminations and other Scania Group 

January–December, SEK m. 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 

Revenue from external customers 50,581 47,285 53,065 813 730 657 – – – 51,394 48,015 53,722 

Operating income 4,759 3,548 2,189 366 308 278 – – – 5,125 3,856 2,467 

Capital gain related to car operations – – – – – – – 550 – – 550 – 

Financial income and expenses –521 –684 –926 – – – – – – –521 –684 –926 

Income after financial items 4,238 2,864 1,263 366 308 278 – 550 – 4,604 3,722 1,541 

Taxes –1,432 –890 –412 –133 –95 –84 – – – –1,565 –985 –496 

Minority interests –5 2 3 – – – – – – –5 2 3 

Net income 2,801 1,976 854 233 213 194 – 550 – 3,034 2,739 1,048 

Depreciation/amortisation included in 

operating income 2 –2,000 –2,093 –2,157 –16 –13 –11 – – – –2,016 –2,106 –2,168 

1 For the Customer Finance segment, net interest income is presented as revenue. 2 Depreciation on operating leases is not included. 

BALANCE SHEET 

31 December, SEK m. 

ASSETS 

Intangible fixed assets 2,381 1,926 1,364 14 12 0 – – – 2,395 1,938 1,364 

Tangible fixed assets 3 17,347 16,792 17,710 7,921 8,366 9,917 –1,376 –1,518 –1,913 23,892 23,640 25,714 

Shares and participations 122 126 795 – – – – – – 122 126 795 

Inventories 8,460 7,831 7,880 46 31 66 – – – 8,506 7,862 7,946 

Interest-bearing receivables 4 1,268 1,524 1,773 18,030 16,966 15,196 – – – 19,298 18,490 16,969 

Other receivables 9,501 9,452 11,016 619 630 898 –414 –390 –370 9,706 9,692 11,544 

Liquid investments 1,779 4,187 3,931 137 152 176 – – – 1,916 4,339 4,107 

Total assets 40,858 41,838 44,469 26,767 26,157 26,253 –1,790 –1,908 –2,283 65,835 66,087 68,439 


Shareholders’ equity 15,164 13,828 13,503 3,087 3,103 2,492 – – – 18,251 16,931 15,995 

Provisions for pensions 2,088 2,040 2,087 6 5 5 – – – 2,094 2,045 2,092 

Other provisions 4,361 3,495 3,670 761 874 905 – – – 5,122 4,369 4,575 

Interest-bearing liabilities 4,426 8,495 11,721 21,781 20,952 21,691 – – – 26,207 29,447 33,412 

Other liabilities 14,819 13,980 13,488 1,132 1,223 1,160 –1,790 –1,908 –2,283 14,161 13,295 12,365 

Total shareholders’ equity and liabilities 40,858 41,838 44,469 26,767 26,157 26,253 –1,790 –1,908 –2,283 65,835 66,087 68,439 

3 Tangible assets in the Customer Finance segment mainly consist of leasing assets (operating leases). 4 Interest-bearing receivables in the Customer Finance segment mainly consist of financial leases and hire purchase contracts. 

Investments in intangible 

fixed assets during the period 710 619 – 8 10 – – – – 718 629 – 

Investments in tangible 

fixed assets during the period 2,466 2,377 1,962 12 19 18 – – – 2,478 2,396 1,980 


60

NOTE 1 Segment reporting, continued 

GEOGRAPHIC SEGMENTS 

Central and 

(SECONDARY) Western Europe eastern Europe Asia America Other markets Eliminations 

SEK m. 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 


Revenue, January–December 1 35,970 34,992 39,603 4,016 3,113 2,624 3,932 3,122 2,898 3,836 3,542 5,576 2,827 2,516 2,364 – – – 50,581 47,285 53,065 

Assets, 31 December 2 31,674 31,931 31,602 2,127 1,788 1,369 1,036 800 561 5,143 7,324 11,059 2,427 1,519 1,148 –1,549 –1,524 –1,270 40,858 41,838 44,469 

Investments, 31 December 2 2,736 2,700 1,539 191 107 149 84 58 37 120 85 208 45 46 29 – – – 3,176 2,996 1,962 


Revenue, January–December 1 559 521 491 185 154 134 60 49 31 – – – 9 6 1 – – – 813 730 657 

Assets, 31 December 2 21,508 21,961 22,795 3,451 3,125 2,632 1,446 776 632 – – – 362 295 194 – – – 26,767 26,157 26,253 

Investments, 31 December 2 14 16 14 4 5 4 1 8 0 – – – 1 0 0 – – – 20 29 18 

1 Revenue from external customers by location of customers. 

2 Assets and investments in fixed assets are reported by the geographic location of the assets. 

The composition of the geographic segments 

Western Europe refers to Austria, Belgium, Cyprus, Denmark, Finland, 

France, Germany, Great Britain, Greece, Iceland, Ireland, Italy, Liechtenstein, 

the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland. 

Central and eastern Europe refers to Albania, Belarus, Bosnia-Herzegovina, 

Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Kazakhstan, 

Latvia, Lithuania, Macedonia, Moldavia, Poland, Romania, Russia, Slovakia, 

Slovenia, Ukraine, Turkmenistan and Yugoslavia. 

Asia refers to Afghanistan, Bahrain, Bangladesh, Brunei, China, Hong Kong, 

India, Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kuwait, Laos, Lebanon, 

Macao, the Maldives, Malaysia, Mongolia, Myanmar, Nepal, North Korea, 

Oman, Pakistan, the Philippines, Qatar, Saudi Arabia, Singapore, South 

Korea, Sri Lanka, Syria, Taiwan, Thailand, Turkey, the United Arab Emirates, 

Vietnam and Yemen. 

America refers to Argentina, Barbados, Bermuda, Bolivia, Brazil, Chile, 

Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, 

Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique, 

Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Trinidad, the 

United States, Uruguay, Venezuela and the Virgin Islands. 

Other markets refers to Algeria, Angola, Australia, Benin, Botswana, 

Burundi, Cameroon, the Canary Islands, Chad, Congo, Egypt, Eritrea, 

Ethiopia, French Polynesia, Gabon, Gambia, Guadeloupe, Guinea-Bissau, 

Guinea Conakry, Ivory Coast, Kenya, Libya, Madagascar, Mali, Malawi, 

Mauritania, Mauritius, Micronesia, Morocco, Mozambique, New Caledonia, 

New Guinea, New Zealand, Niger, Reunion, Rwanda, São Tomé, Senegal, 

the Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Tanzania, 

Tunisia, Uganda, Zambia and Zimbabwe. 

NOTE 2 Sales revenue 

2003 2002 2001 

Trucks 29,537 27,184 29,139 

Buses 5,115 3,991 4,701 

Engines 453 464 608 

Service-related products 10,759 10,603 10,151 

Used vehicles etc 7,123 6,218 5,595 

Revenue deferral, vehicles 1 –2,406 –1,175 –1,884 

Total Scania products 50,581 47,285 48,310 

Car operations 2 – – 4,755 

Total 50,581 47,285 53,065 

1 This difference arises when a lease or sale, combined with a residual value guarantee 

or a repurchase obligation, is reported as an operating lease, provided that 

significant risks remain. 

2 During 2001, sales included sales revenue of SEK 4,755 m. from Swedish car 

operations. Swedish car operations were divested as per 1 January 2002. 

NOTE 3 Share of income in associated companies 

The Scania Group’s share of the income before taxes of associated 

companies consists of the following: 

2003 2002 2001 

Scania products 16 23 29 

Car operations 1 – – 30 

Total 16 23 59 

1 In 2001, share of income in associated companies under car operations 

referred to Scania’s share of the income of Svenska Volkswagen AB. 

Svenska Volkswagen AB was divested as per 1 January 2002. 

NOTE 4 Customer Finance 

Income statement 2003 2002 2001 

Interest income 1,183 1,151 1,041 

Lease income 2,296 2,612 2,656 

Depreciation –1,776 –1,977 –1,939 

Interest expenses –890 –1,056 –1,101 

Net interest income 813 730 657 

Other income and expenses 15 17 –16 

Net operating income 828 747 641 

Credit losses 1 –166 –175 –137 

Operating expenses –296 –264 –226 


1 This was equivalent to 0.66 (0.69 and 0.63 respectively) percent of the average 

credit portfolio. 

Lease assets 

(operating leases) 2003 2002 2001 

1 January 8,341 9,894 7,208 

New contracts 3,239 2,972 5,248 

Depreciation –1,776 –1,977 –1,939 

Redemptions –1,582 –2,105 –1,478 

Change in value adjustment –14 2 –19 

Exchange rate differences –308 –445 874 

Carrying amount, 31 December 2 7,900 8,341 9,894 

2 Included in the consolidated financial statements under “Machinery and equipment” 

after subtracting deferred profit recognition. 


Note 4, continued 

Financial receivables 

(Hire purchase contracts 

and financial leases) 2003 2002 

1 January 16,962 15,197 

New receivables 9,916 10,318 

Loan principal 

payments/redemptions etc –8,307 –8,079 

Change in value adjustment –93 –9 

Exchange rate differences –452 –465 

Carrying amount, 31 December 18,026 16,962 

Total receivables 

and lease assets 3 25,926 25,303 

3 The number of contracts on 31 December totalled about 64,000 (59,000). 

Net investments 

in financial leases 2003 2002 2001 

Receivables related to future 

minimum lease payments 14,696 13,244 10,988 

Less: 

Executory costs and reserve 

for bad debts –227 –294 –342 

Imputed interest –1,143 –1,145 –1,093 

Net investment 4 13,326 11,805 9,553 

4 Included in the consolidated financial statements under “Interest-bearing 

trade receivables” and “Long-term interest-bearing receivables”. 

Operating Financial 

Future minimum lease payments 5 leases leases 

2004 2,015 5,782 

2005 1,342 4,100 

2006 1,018 2,732 

2007 652 1,478 

2008 337 538 

2009 and thereafter 175 66 

Total 5,539 14,696 

5 Minimum lease payments refer to future flow of incoming payments of the 

contract portfolio, including interest. For operating leases, the residual value is 

not included since this is not a minimum payment for these contracts. 

NOTE 5 Financial income and expenses 

2003 2002 2001 

Interest income 

Bank balances and 

short-term investments 184 181 89 

Interest-bearing receivables 55 48 157 

Other 47 31 48 

Total interest income 286 260 294 

Interest expenses 

Borrowings –676 –760 –1,086 

Pension liability (PRI) –85 –97 –56 

Total interest expenses –761 –857 –1,142 

Other financial income 

and expenses –46 –87 –78 

Net financial items –521 –684 –926 

NOTE 6 Taxes 

Tax expense/income 

for the year 2003 2002 2001 

Current tax –1,351 –990 –642 

Deferred tax –209 14 163 

Share of tax of associated 

companies –5 –9 –17 

Total –1,565 –985 –496 

Deferred tax is attributable 

to the following 2003 2002 

Deferred tax related 

to temporary differences –136 –83 

Deferred tax related 

to changes in tax rates 1 9 0 

Deferred tax due to tax value 

of loss carry-forwards capitalised 

during the year 114 350 

Deferred tax due to utilisation 

of previously capitalised tax value 

of loss carry-forwards –146 –253 

Other changes in deferred 

tax liabilities/assets –50 – 

Total –209 14 

1 During 2003, the tax rate changed in the following countries: Belgium, 

Chile, the Czech Republic, Italy and Poland. 

2003 2002 2001 

Reconciliation of effective tax Amount % Amount % Amount % 

Income after financial items 4,604 3,722 1,541 

Swedish statutory tax –1,289 –28 –1,042 –28 –431 –28 

Tax effect and percentage influence: 

Difference between Swedish 

and foreign tax rates 26 1 32 1 71 5 

Tax-exempt income 12 0 31 1 32 2 

Non-deductible expenses 

including goodwill amortisation –158 –3 –112 –3 –143 –9 

Valuation of tax loss carry-forwards –25 –1 35 1 –106 –7 

Adjustment for taxes 

pertaining to previous years –59 –1 –1 0 30 2 

Capital gain on 

divestment of businesses 2 – 154 4 – 

Other –72 –2 –82 –2 51 3 

Effective tax –1,565 –34 –985 –26 –496 –32 

2 During 2002, Swedish car operations were divested. The capital gain of 

SEK 550 m. was tax-exempt. 

Deferred tax assets and 

tax liabilities are attributable 

to the following 2003 2002 2001 

Deferred tax assets 

Provisions 423 293 212 

Fixed assets 261 213 171 

Inventories 346 367 363 

Unutilised tax loss carry-forwards 3 661 801 801 

Other 412 518 349 

Offset within tax units –1,722 –1,726 –933 

Total 381 466 963 

Deferred tax liabilities 

Fixed assets 2,729 2,766 2,190 

Tax allocation reserve 4 838 749 807 

Other 335 271 327 

Offset within tax units –1,722 –1,726 –933 

Total 2,180 2,060 2,391 

Net deferred tax liabilities 1,799 1,594 1,428 

3 Unutilised tax loss carry-forwards stem mainly from Latin America, Sweden, 

France and Germany. Of the deferred tax assets attributable to unutilised loss 

carry-forwards, SEK 566 m. may be utilised without time constraints. 

4 In Sweden, tax laws permit provisions to an untaxed reserve called a tax 

allocation reserve. Deductions for provisions to this reserve are allowed up to 

a maximum of 25 percent of taxable profits. Each provision to this reserve may 

be freely withdrawn and face taxation, and must be withdrawn no later than 

the sixth year after the provision was made. 


62

Reconciliation of net 

deferred tax liabilities 2003 2002 

1 January 1,594 1,428 

Deferred taxes reported 

in the year’s income 209 –14 

Tax assets/tax liabilities 

in acquired businesses 12 24 

Tax assets/tax liabilities 

in divested businesses – –26 

Exchange rate differences etc –16 182 

Net deferred tax liabilities, 

31 December 1,799 1,594 

Deferred tax assets related to subsidiaries that reported a loss during 

the year were valued on the basis of an assessment that the future 

earnings capacity makes a valuation possible. In the Scania Group, 

deferred tax assets related to tax loss carry-forwards of SEK 255 m. 

were not included after assessment of the potential for utilising the tax 

loss carry-forwards. 

Expiration structure of deferred tax assets related 

to tax loss carry-forwards not recognised: 

2004 29 

2005 14 

2006 1 

2007 1 

2008 13 

2009 and thereafter 79 

No expiration date 118 

255 NOT 7 

Avskrivningar 

NOTE 7 Depreciation/amortisation 

Distribution of depreciation or amortisation by function, excluding 

depreciation in Customer Finance, which is found in Note 4. 

2003 2002 2001 

Intangible fixed assets 

Research and development expenses –2 – – 

Selling expenses 1 –214 –237 –188 

Total –216 –237 –188 

Tangible fixed assets 

Costs of goods sold –1,419 –1,469 –1,504 

Research and development expenses –95 –91 –106 

Selling expenses –238 –255 –314 

Administrative expenses –32 –41 –45 

Total –1,784 –1,856 –1,969 

NOTE 8 Intangible fixed assets 

Product 

Goodwill development Software 

Carrying amount, 1 January 2001 545 

Change in accumulated acquisition value, 2001 1,022 

Change in accumulated amortisation, 2001 –203 

Carrying amount, 31 December 2001 1,364 

Change in accumulated acquisition value, 2002 78 573 165 

Change in accumulated amortisation, 2002 –194 – –48 

Carrying amount, 31 December 2002 1,248 573 117 


Accumulated acquisition value 

1 January 1,860 573 165 

Acquisitions/divestments of businesses –5 – – 

New acquisitions – 669 49 

Divestments and disposals – –9 –1 

Reclassifications –2 – 55 

Exchange rate differences –107 – –13 

Total 1,746 1,233 255 

Accumulated amortisation 

1 January 612 – 48 

Divestments of businesses –8 – – 

Amortisation for the year 

– Vehicles and Service 169 2 45 

– Customer Finance – – 7 

Reclassifications –1 – 3 

Exchange rate differences –32 – –6 

Total 740 2 97 

Carrying amount, 31 December 1,006 1,231 158 

The portion of the Scania Group’s research and development expenditures that arises during the development phase is capitalised on a continuous 

basis. Research and development expenditures during the year amounted to SEK 2,153 m. (2,010). Of this, SEK 1,484 m. (1,437) was expensed 

during the year and SEK 669 m. (573) was capitalised. Amortisation occurs only when the asset is placed in service. 

The carrying amount related to software includes no software developed in-house. 

Total depreciation/amortisation –2,000 –2,093 –2,157 

In addition, reduction in value related to operating leases, including 

short-term rentals in Vehicles and Service, was charged to “Cost of 

goods sold” in the amount of SEK –725 m. (–549 and –583). 

1 Goodwill amortisation related to acquisitions of sales and service 

companies is recognised as a selling expense. 


NOTE 9 Tangible fixed assets 

Machinery Construction in Assets in 

Buildings and progress and operating 

and land equipment advance payments lease 1 

Carrying amount, 1 January 2001 6,262 6,951 732 8,022 

Change in accumulated acquisition value, 2001 1,715 1,238 362 4,870 

Change in accumulated depreciation, 2001 –614 –1,611 – –2,213 

Carrying amount, 31 December 2001 7,363 6,578 1,094 10,679 

Change in accumulated acquisition value, 2002 –511 –276 264 –1,243 

Change in accumulated depreciation, 2002 8 –351 – 35 

Carrying amount, 31 December 2002 6,860 5,951 1,358 9,471 


Accumulated acquisition value 

1 January 10,442 19,263 1,358 14,323 

Acquisitions/divestments of businesses 86 15 – 16 

New acquisitions 406 1,148 924 5,342 

Divestments and disposals –136 –669 – –4,664 

Reclassifications 245 530 –830 33 

Exchange rate differences for the year –253 –955 –24 –598 

Total 10,790 19,332 1,428 14,452 

Accumulated depreciation 

1 January 3,613 13,312 4,705 

Depreciation for the year 

– Vehicles and Service 361 1,423 725 

– Customer Finance 0 9 1,776 

Divestments and disposals –35 –554 –2,473 

Reclassifications 7 –9 28 

Exchange rate differences for the year –81 –646 –178 

Total 3,865 13,535 4,583 

Accumulated revaluations 

1 January 31 – – 

Total 31 – – 

Accumulated write-downs 2 

1 January – – 147 

Write-downs for the year – – 25 

Reversals of write-downs – – –14 

Total – – 158 

Carrying amount, 31 December 6,956 5,797 1,428 9,711 

– of which “Machinery” 4,882 (5,951) 

– of which “Equipment” 915 (952) 

– of which “Buildings” 5,290 (5,143) 

– of which “Land” 1,666 (1,717) 

NOTE 10 Holdings in associated companies 

Holdings in associated companies 2003 2002 2001 

Accumulated acquisition value 28 29 332 

Accumulated share of income 38 38 387 

Write-down – –2 – 

Carrying amount 66 65 719 

Specification of the Group’s holdings of shares 

and participations in associated companies etc. 

Carrying 

Associated amount Value of Scania’s 

company/corporate in Parent share in consolidated 

ID number/country Ownership Company financial statements 

of registration % fin. statem. 2003 2002 2001 

Svenska Volkswagen AB, 

556084-0968, Sweden 1 – – 624 

WM-Data Scania AB, 

556084-1206, Sweden 2 – – 45 

Cummins-Scania high 

pressure injection L.L.C, 

043650113, USA 30 25 33 39 48 

Swed Bus Pakistan Pvt Ltd, 

K-07897, Pakistan 10 0 0 0 2 

ScaMadrid S.A., 

ES A80433519, Spain 49 1 16 13 – 

ScaValencia S.A., 

ES A46332995, Spain 50 0 17 13 – 

Holdings in associated 

companies 66 65 719 

Other shares and 

participations 56 61 76 

Total 122 126 795 

1 During 2002, Scania sold its 50 percent shareholding in 

Svenska Volkswagen AB. 

2 By agreement, in 2002 Scania gained a controlling influence in 

WM-Data Scania AB, which was then consolidated as a subsidiary. 

The value of Scania’s share in the consolidated financial statements 

calculated using the equity method of accounting and its ownership 

stake in the shareholders’ equity of associated companies totalled 

the same amount, SEK 66 m. (65 and 719 respectively). 

The Group’s share of undistributed accumulated profit in associated 

companies comprised part of restricted reserves in the consolidated 

financial statements. It amounted to SEK 38 m. (38 and 387, respectively). 

Tax assessment value buildings, in Sweden 996 (920) 

equivalent carrying amount 2,356 (2,243) 

Tax assessment value land, in Sweden 314 (305) 

equivalent carrying amount 426 (401) 

1 Including assets for short-term leasing. 

2 Write-downs of assets in operating leases refer to value adjustment for possible credit losses. 


64

NOTE 11 Long-term interest-bearing receivables 

2003 2002 2001 

Receivables, Customer Finance 1 11,120 10,646 9,394 

Receivables, Vehicles and Service 676 708 784 

Total 11,796 11,354 10,178 

1 Note 4 shows how the financial receivables of Customer Finance 

(including the short-term portion) changed during 2003. 

NOTE 12 Inventories 

2003 2002 2001 

Raw materials 847 822 858 

Work in progress 1,028 925 880 

Finished goods 6,631 6,115 6,208 

Total 8,506 7,862 7,946 

Of the total value of inventories in 2003, SEK 278 m. is expected to be 

consumed after more than twelve months, which is mainly attributable 

to parts. In 2003, SEK 541 m. worth of inventories was valued at net 

realisable value; this was mainly related to used vehicles. 

NOTE 13 Current receivables 

2003 2002 2001 

Interest-bearing trade receivables, 

Vehicles and Service 592 816 988 

Interest-bearing trade receivables, 

Customer Finance 6,910 6,320 5,803 

Total interest-bearing 

trade receivables 7,502 7,136 6,791 

Non-interest-bearing 

trade receivables 6,345 6,497 7,731 

Prepaid expenses 

and accrued income 864 752 675 

Other receivables 1,630 1,529 1,679 

Total 16,341 15,914 16,876 

NOTE 14 Short-term investments 

2003 2002 2001 

Liquid investments 

(maturities of less than 90 days) 451 583 895 

Investments (maturities 91–365 days) 253 1,086 1,238 

Total 704 1,669 2,133 

Investments totalling SEK 167 m. (613 and 692, respectively) in value 

were restricted by agreement with third parties. 

NOTE 15 Shareholders’ equity 

The shareholders’ equity of the Scania Group has changed as follows: 

Unre- Accustricted 

mulated 

share- exchange 

2002 

Share Restricted holders’ rate 

capital reserves equity differences Total 

1 January 2,000 5,665 6,759 1,571 15,995 

Dividend to shareholders – – –700 – –700 

Net income for 2002 – – 2,739 – 2,739 

Exchange rate 

differences for the year – – – –1,103 –1,103 

Transfer between restricted 

and unrestricted equity – –1,057 1,057 – 0 

Balance, 

31 December 2002 2,000 4,608 9,855 468 16,931 


1 January 2,000 4,608 9,855 468 16,931 

Dividend to shareholders – – –1,100 – –1,100 

Net income for 2003 – – 3,034 – 3,034 

Exchange rate 

differences for the year – – – –614 –614 

Transfer between restricted 

and unrestricted equity – –1,331 1,331 – 0 

Balance, 

31 December 2003 2,000 3,277 13,120 –146 18,251 

Under Swedish law, shareholders’ equity shall be allocated between 

non-distributable (restricted) and distributable (unrestricted) funds. In a 

Group, only the lower of Parent Company or consolidated unrestricted 

equity may be distributed. 

Restricted equity consists of share capital plus non-distributable 

funds. Scania AB has 100,000,000 A shares outstanding with voting 

rights of one vote per share and 100,000,000 B shares outstanding with 

voting rights of 1/10 vote per share. The shares have a nominal value of 

SEK 10 apiece. All shares are fully paid and no shares are reserved for 

transfer of ownership. No shares are held by the company itself or its 

subsidiaries. 

Unrestricted equity consists of distributable funds and includes net 

income for the year. In the consolidated financial statements, consolidated 

unrestricted equity includes only the portion of unrestricted equity 

in the financial statements of a subsidiary that can be distributed to the 

Parent Company without having to write down the shares in the subsidiary. 

The proposed, not yet approved dividend to the shareholders for 

the financial year 2003 amounts to SEK 6.00 per share, equivalent to 

SEK 1,200 m. The income statements and balance sheets are adopted 

at the Annual Meeting. 

Accumulated exchange rate differences arise when translating net 

assets outside Sweden according to the current method of accounting. 

The negative exchange rate difference of SEK 614 m. during 2003 

arose as a consequence of the appreciation of the Swedish krona 

against currencies important to Scania. Of the exchange rate 

differences, about SEK –400 m. is related to the effect of appreciation 

against USD and about SEK –200 m. from appreciation against European 

currencies, mainly GBP and EUR. 

The year’s transfer between restricted and unrestricted equity was 

mainly explained by exchange rate differences, since portions of the 

restricted equity of the Group include amounts denominated in currencies 

that weakened against the Swedish krona during 2003. 

NOTE 16 Provisions for pensions 

and similar commitments 

2003 2002 2001 

Provisions for FPG/PRI 

guaranteed pensions 1,557 1,447 1,427 

Provisions to other pensions 375 454 446 

Provisions for health care benefits 162 144 219 

Total 2,094 2,045 2,092 

The amount under “Provisions for pensions” corresponds to the 

actuarial projection of the value of the collectively agreed ITP occupational 

pension plan and all voluntary pension obligations. 

The Swedish plan for salaried employees is administered by a 

Swedish multi-employer institution, the Pension Registration Institute 

(PRI). The actuarial assumptions are established by PRI. Scania’s pension 

liability consists of the sum of the discounted present value of 

the company’s estimated future pension payments, based on current 

salaries. Pensions are guaranteed through credit insurance from the 

mutual insurance company Försäkringsbolaget Pensionsgaranti (FPG). 

“Provisions for pensions” include foreign subsidiaries, whose pension 

commitments are reported in accordance with the principles that apply 

in each country, provided that they permit earned pension benefits to 

be reported as an expense. 

For obligations related to health care benefits, which are attributable 

to its operations in Brazil, Scania applies SFAS 106, “Employers’ 

Accounting for Postretirement Benefits”. This means that health care 

benefits etc. that are earned by the employees but not utilised until 

after retirement are expensed as they arise. 

In 2004, Recommendation RR 29, Employee benefits, of the 

Swedish Financial Accounting Standards Council comes into force. 

The introduction of this recommendation is not expected to have 

any material impact on the shareholders’ equity and earnings of 

the Scania Group. 


NOTE 17 Other provisions 

During 2003, the Scania Group’s provisions changed as follows: 

Miscel- 

Legal laneous 

Product Restruc- and tax proviobligations 

turing disputes sions Total 

1 January 1,317 60 234 698 2,309 

Provisions during the year 1,053 118 89 561 1,821 

Provisions used 

during the year –534 –80 –59 –335 –1,008 

Provisions reversed 

during the year –54 –2 –9 –21 –86 

Exchange rate differences –70 –2 –6 –16 –94 

31 December 1,712 94 249 887 2,942 

Provisions for factory warranties on vehicles sold during the year are based 

on the terms of factory warranties and the projected quality situation. For 

other product obligations, the provisions reflected the net amount of funds 

set aside and provisions used. 

Provisions for restructuring were largely related to the reorganisation 

of production at Ferruform AB, Sweden. 

“Miscellaneous provisions” include provisions for asset appraisal in 

South America. They also include provisions for possible losses on 

service agreements and residual value obligations. 

Of the above provisions, about SEK 1,700 m. are expected to be 

utilised within twelve months. 

NOTE 18 Interest-bearing liabilities 

Borrowings for Customer Finance are effectively matched against 

contracted payment flows with regard to currencies and interest rate 

refixing periods. Other borrowings mainly occur in each respective 

local currency. 

Short- and long-term borrowing, 

distributed by currency 1 2003 2002 2001 

SEK 9,012 9,159 12,593 

EUR 14,859 17,268 14,549 

GBP 549 670 1,698 

USD 308 609 1,806 

Other currencies 1,479 1,741 2,766 

Total 26,207 29,447 33,412 

Of which, attributable to 


Borrowings excluding 


1 Does not take into account currency hedging, which has been used to match 

borrowings by currency to funding requirements by currency. 

The above loans fall due 

for repayment as follows 2003 

2004 5,380 

2005 3,605 

2006 4,015 

2007 6,759 

2008 5,608 

2009 and thereafter 840 

Total 26,207 

For further information on Scania’s borrowing programme and financial 

risk management, see Note 33. 

Net debt 2003 2002 2001 

Cash, bank balances and 

short-term investments 1,916 4,339 4,107 

Short-term borrowings –5,380 –6,933 –14,504 

Long-term borrowings –20,827 –22,514 –18,908 

Total –24,291 –25,108 –29,305 

Of which, attributable to 

Customer Finance –21,644 –20,800 –21,515 

Net debt Vehicles and Service –2,647 –4,308 –7,790 

NOTE 19 Accrued expenses and prepaid income 

2003 2002 2001 

Customary accrued expenses 

and prepaid income 1 4,045 3,897 3,440 

Prepaid income in operating leases 2,893 2,306 2,271 

Accrued financial items 310 567 431 

Total 7,248 6,770 6,142 

Of the above prepaid income in operating leases, approximately 

SEK 900 m. is expected to be recognised as revenue within twelve 

months and approximately SEK 50 m. later than after five years. 

1 In 2003, SEK 1,798 m. was attributable to employee-related accrued 

expenses. SEK 965 m. to prepaid income for repair and service agreements 

and SEK 1,282 m. to miscellaneous accrued expenses and prepaid income. 

NOTE 20 Assets pledged 

2003 2002 2001 

Real estate mortgages 142 191 231 

Other 33 – 2 

Total 175 191 233 

In 2003, all collateral was pledged to credit institutions and was divided 

between SEK 30 m. (10) in short-term borrowings, SEK 133 m. (181) 

in long-term borrowings and SEK 12 m. (0) as collateral for the liabilities 

of others. 

NOTE 21 Contingent liabilities 

2003 2002 2001 

Contingent liability related 

to FPG credit insurance 29 27 27 

Contingent liability related to FPG credit 

insurance (associated companies) – – 159 

Loan guarantees 97 43 92 

Discounted bills and contracts 42 72 140 

Other guarantees 427 380 437 

Total 595 522 855 

In addition to the above contingent liabilities, the Group has issued 

vehicle repurchase guarantees worth SEK 418 m. (493 and 804, 

respectively) to customers’ creditors. 

Repurchase obligations related to guaranteed residual values 

in operating leases amounted to SEK 5,925 m. (6,077 and 7,413, 

respectively). 

Legal and tax disputes 

The Swedish local tax authority has denied a request for deduction of 

a loss of SEK 2.9 billion. This decision will be appealed. The total effect 

on earnings may total a maximum of SEK 575 m. if the deduction is 

disallowed in its entirety. No provision has been made. 

The Group is party to legal proceedings and related claims that 

are normal in its operations. However, Scania management has made 

the assessment that the ultimate resolution of these proceedings will 

not have any material impact on the financial position of the Group. 

NOTE 22 Lease obligations 

As a lessee, Scania has entered into financial and operating leases. 

Operating Future minimum Of which, related to 

leases lease payment leases on premises 1 

2004 178 108 

2005 136 103 

2006 116 99 

2007 106 94 

2008 89 85 


Total 2 1,164 1,028 

1 Firm obligations related to leases on premises were expensed in the 

amount of SEK 109 m. during 2003. 

2 Refers to operating leases where the commitment exceeds one year. 


66

The Scania Group’s operating lease obligations mainly include 

premises and real properties. 

Future minimum Present value of 

Financial leases lease payment future lease payments 

2004 45 42 

2005 51 46 

2006 16 13 

2007 13 11 

2008 6 5 


Total 190 162 

On 31 December 2003, the carrying amount related to financial leasing 

in the balance sheet totalled SEK 162 m. 

NOTE 23 Government grants 

During 2003, the Scania Group received government grants amounting 

to SEK 24 m. attributable to operating expenses of SEK 100 m. It also 

received government grants amounting to SEK 34 m. attributable to 

investments with a gross acquisition value of SEK 535 m. 

NOTE 24 Consolidated cash flow statement 

2003 2002 2001 

a. Items not affecting cash flow 

Depreciation/amortisation 2,000 2,093 2,157 

Value adjustment, short-term leasing 161 152 161 

Unrealised exchange rate differences 21 53 –58 

Bad debts 258 207 263 

Associated companies –8 11 28 

Taxes 286 423 –306 

Deferred profit recognition, 

operating leases –56 –364 –120 

Reported capital gain/loss 

on divestment of businesses 0 –534 5 

Other 28 0 –6 

Total 2,690 2,041 2,124 

b. Change in working capital 

Long-term interest-bearing receivables –91 –58 97 

Other receivables –297 281 1,876 

Inventories –864 –918 475 

Provisions for pensions 54 171 153 

Advance payments from customers –182 152 185 

Trade creditors 97 162 –519 

Other liabilities and provisions 1,553 982 –372 

Total 270 772 1,895 

c. Net investments excluding acquisitions/divestments 

of businesses 

Investments in fixed assets 1 –3,735 –3,363 –2,405 

Divestments of fixed assets 450 442 527 

Total –3,285 –2,921 –1,878 

1 Of which, SEK 669 m. (573) for development expenditures capitalised in 2003. 

d. Net investment through acquisitions/divestments 

of businesses 2 

Proceeds from sale of shares 

(after subtracting liquid assets 

in divested businesses) – 1,350 –42 

Acquisitions of businesses –26 –185 –887 

Total –26 1,165 –929 

2 See Note 25, “Companies acquired/divested”. 

e. Cash flow, Customer Finance 

Net income 233 213 194 

Items not affecting cash flow 141 207 312 

Cash from operating activities 374 420 506 

Change in lease assets 115 1,118 –143 

Increase in financial receivables –1,856 –2,481 –2,435 

Change in other assets and liabilities –90 391 –79 

Acquisitions of businesses 2 1 – –277 

Total –1,456 –552 –2,428 

f. Change in net debt through financing activities 

Net change in short-term borrowings –408 –5,814 –782 

Repayment of long-term borrowings –6,504 –4,983 –1,248 

Increase in long-term borrowings 4,712 8,984 4,032 

Net change in restricted deposits 0 0 117 

Total –2,200 –1,813 2,119 

Interest, taxes and dividends received/paid 

Interest received 425 260 294 

Interest paid –1,024 –721 –1,035 

Taxes paid –845 –573 –1,049 

Dividends received from 

associated companies 3 25 70 

Relationship between cash flow statement 

and change in net debt in the balance sheet 

Change in net debt, 

including Customer Finance 994 3,031 –362 

Change in interest-bearing liabilities: 

Exchange rate effects 1,120 1,819 –1,897 

Businesses acquired –81 49 –2,211 

Businesses divested – 284 56 

Change in restricted funds – – 117 

Change in liquid assets –117 –286 169 


Change in net debt according 

to the balance sheet 816 4,197 –5,528 

NOTE 25 Companies acquired/divested 

As per 30 September 2003, Scania acquired Topsted A/S, a dealership 

operating in Århus, Denmark, in its entirety. As per 31 December 2003, 

Scania acquired 51 percent of the shares in Scania Multi Service S A S, 

which means that the company is now a wholly-owned subsidiary. 

Scania Multi Service is a service company operating in Angers, France. 

The purchase price for these acquisitions was paid in cash. 

Assets and liabilities acquired: 

Tangible and intangible fixed assets 123 

Inventories 33 

Receivables –6 

Liquid assets 4 

Borrowings –81 

Other liabilities and provisions –41 

Holdings in associated companies 

and other companies –2 

Carrying amount of previously owned 

holdings in new Group company –1 

Purchase price paid 29 

Liquid assets in acquired businesses –4 

Impact on consolidated liquid assets 

and short-term investments 25 


NOTE 26 Wages, salaries and other remuneration 

and number of employees 

Wages, salaries and 

other remuneration 2003 2002 2001 

Operations in Sweden: 

Boards of Directors, Presidents 

and Executive Vice Presidents 35 44 41 

– Of which bonuses 11 11 14 

Other employees 3,588 3,229 3,139 

Operations outside Sweden: 

Boards of Directors, Presidents 

and Executive Vice Presidents 140 144 164 

– Of which bonuses 13 12 20 

Other employees 3,927 3,816 3,949 

Total 7,690 7,233 7,293 

Pension costs and other 

mandatory payroll fees 2,632 2,514 2,866 

– Of which pension costs 1 593 643 717 

Total wages, salaries and other 

remuneration, pension costs 

and other mandatory payroll fees 10,322 9,747 10,159 

1 Of the pension cost in the Group, SEK 25 m. (35 and 25, respectively) was for 

Boards of Directors and Presidents in the Scania group. At year-end, the total 

pension commitment was SEK 74 m. (82 and 81, respectively) for this category. 

Gender distribution 2003 

Board members in subsidiaries 

and the Parent Company 443 

– Of whom men 435 

– Of whom women 8 

Presidents of subsidiaries and the 

Parent Company, plus management 

teams of subsidiaries 124 

– Of whom men 122 

– Of whom women 2 

Number of employees, 31 December 2003 2002 2001 

Production and corporate units 17,400 16,891 16,422 

Sales and service companies 11,391 11,030 11,868 

Total Vehicles and Service 28,791 27,921 28,290 

Customer Finance 321 309 251 

Total 29,112 28,230 28,541 

– Of whom, employees on 

temporary contracts 651 672 766 

Wages, salaries and other 

remuneration, pension costs 

and other mandatory payroll 

fees by country 

2003 2002 2001 

Wages, Wages, Wages, 

salaries Mandatory salaries Mandatory salaries Mandatory 

and other payroll (of which and other payroll (of which and other payroll (of which 

remuneration fees pensions) remuneration fees pensions) remuneration fees pensions) 

Operations in Sweden: 3,623 1,705 (368) 3,273 1,659 (440) 3,180 1,878 (538) 


The Netherlands 695 143 (60) 721 138 (52) 689 138 (36) 

Great Britain 566 96 (30) 613 89 (31) 578 92 (33) 

Brazil 387 151 (0) 316 106 (0) 441 171 (0) 

Norway 325 55 (0) 326 55 (0) 303 49 (0) 

Germany 305 68 (5) 308 67 (11) 309 66 (7) 

France 257 149 (44) 260 139 (41) 242 140 (41) 

Finland 205 70 (38) 193 64 (35) 186 62 (33) 

Austria 158 1 (1) 156 1 (1) 156 1 (1) 

Belgium 144 49 (0) 145 47 (0) 142 53 (0) 

Switzerland 123 21 (1) 122 27 (0) 122 26 (0) 

Denmark 118 10 (8) 91 7 (6) 27 2 (2) 

40 countries with < SEK 100 m 2 784 114 (38) 709 115 (26) 918 188 (26) 

Total operations outside Sweden 4,067 927 (225) 3,960 855 (203) 4,113 988 (179) 

Total 7,690 2,632 (593) 7,233 2,514 (643) 7,293 2,866 (717) 

2 In 2002, 40 countries had less than SEK 100 m. in wages, salaries and other remuneration. In 2001, the figure was 37 countries. 

Average number of employees 2003 2002 2001 

(excluding employees on temporary contracts) Men Women Total Men Women Total Men Women Total 

Operations in Sweden: 9,785 1,946 11,731 9,054 1,744 10,798 10,182 1,742 11,924 


Brazil 2,248 277 2,525 1,882 189 2,071 1,905 145 2,050 

The Netherlands 1,962 145 2,107 2,112 160 2,272 2,236 148 2,384 

Great Britain 1,418 259 1,677 1,413 272 1,685 1,379 253 1,632 

France 820 144 964 800 145 945 769 138 907 

Germany 798 130 928 823 126 949 812 115 927 

Norway 748 69 817 738 72 810 753 86 839 

Argentina 730 57 787 703 44 747 708 52 760 

Finland 610 83 693 601 82 683 612 82 694 

Belgium 490 132 622 491 123 614 497 117 614 

Poland 463 50 513 387 47 434 374 42 416 

Austria 367 51 418 379 51 430 374 54 428 

Russia 337 61 398 234 41 275 132 28 160 

South Africa 289 55 344 235 37 272 221 40 261 

Switzerland 275 28 303 271 25 296 246 29 275 

Denmark 255 36 291 183 34 217 432 54 486 

South Korea 248 37 285 219 34 253 142 21 163 

Australia 237 34 271 244 33 277 256 34 290 

Czech Republic 170 32 202 148 32 180 104 23 127 

Mexico 166 24 190 265 31 296 284 25 309 

Italy 157 30 187 153 30 183 157 24 181 

Spain 114 32 146 107 27 134 104 26 130 

Hungary 99 26 125 81 18 99 84 11 95 

Malaysia 89 15 104 90 17 107 82 16 98 

Estonia 93 7 100 84 7 91 72 7 79 

26 countries with < 100 employees 3 752 187 939 689 161 850 597 155 752 

Total outside Sweden 13,935 2,001 15,936 13,332 1,838 15,170 13,332 1,725 15,057 

Total, average number of employees 23,720 3,947 27,667 22,386 3,582 25,968 23,514 3,467 26,981 

3 In 2002 and 2001, 27 countries had fewer than 100 employees. 


68

NOTE 27 Related party transactions 

Transactions, 2003 

Sales Purchases Receivables Liabilities 

to from from to 

Associated companies 

ScaValencia S.A. 131 20 18 1 

ScaMadrid S.A. 136 40 22 1 

Cummins- 

Scania HPI L.L.C – 42 – – 

Owners 

Volkswagen AG 44 48 23 2 

Related party transactions occur on market terms. See also “Acountning 

principles.” 

Information about relationships with related parties that include a 

controlling influence is provided in the list of subsidiaries. See also the 

presentation of Scania’s Board of Directors and Executive Board on 

pages 84–86, as well as Note 28, “Information regarding compensation 

to executive officers.” 

NOTE 28 Information regarding compensation 

to executive officers 

average, the outcome of the programme for the period has amounted 

to 62 percent of fixed salary. 

The incentive programme resulted in a positive outcome for 2003, 

which will be settled during 2004. The outcome for the President is 

SEK 5,866,410. The corresponding total for other Group Management 

executive officers amounts to SEK 30,330,111. 

The salary paid to the President during 2003 (including taxable 

benefits) totalled SEK 5,919,363, of which his fixed basic salary totalled 

SEK 5,800,000. 

Group Management executive officers, including the President, are 

covered by a defined-contribution pension system that is in addition to 

the public pension and the ITP occupational pension, with a retirement 

age of 65. 

According to this defined-contribution system, benefits accrue by 

means of annual payment of premiums by the company. Added to this 

is the value of annual individual employee co-payments, amounting 

to 5 percent of fixed salary. 

The annual company-paid premium for the President according 

to his pension agreement amounts to 35 percent of fixed salary – 

SEK 2,030,000 for 2003 – for as long as the President remains an 

employee of the company. 

The annual company-paid premium for other members of the Executive 

Board – excluding the President – varies between 28–32 percent of 

fixed salary. The premium for other members of the Group Management 

varies between 12–21 percent of fixed salary. 

Since 1999, the President has held a non-transferable employee stock 

option without market value, enabling him, after five years but no later 

than after seven years, to purchase a maximum of 220,000 shares in 

Scania AB at a price of SEK 196 per share. Scania’s costs for this programme 

are known and were charged to earnings earlier. The option 

carries an entitlement to purchase existing B shares from Investor AB 

and thus will not lead to any risk or dilution for Scania’s shareholders. 

If the President resigns of his own volition, he is entitled to his salary 

for a six month period. 

In light of the complex ownership structure of Scania AB, during 

2001 the Board’s committee for remuneration issues approved a fiveyear 

employment agreement with the President. The new agreement, 

which stipulates the conditions of the President’s employment until 30 

March 2006, prescribes that an annual extra pension provision of SEK 

4,410,000 will be made during each of the five years even if employment 

should cease due to termination by the company. In such a case, 

the other agreed salary and incentive benefits will also be provided for 

the period. As a consequence of this agreement, a pension provision 

of SEK 4,410,000 was made during 2003. 

The employment agreement with the President will end automatically 

twelve months after Volkswagen AG has reduced its holding in Scania 

AB – directly or indirectly – so that it is below 5 percent. In such a case, 

the above-stated benefits shall be provided. 

Note 28 continues on page 70 

According to the decision of the Annual Meeting, remuneration during 

2003 to the external members of the Board of Directors elected by the 

Annual Meeting amounted to SEK 2,850,000. The Chairman received 

remuneration of SEK 700,000. 

Beyond the customary remuneration to the Board, no compensation 

from Scania was paid to the members of the Board who are not employees 

of the Company. 

Scania’s incentive programme for executive officers, among them 

the President and CEO, which was approved by the Board in 1997, is 

based on operating return, defined as Scania Group net income after 

subtracting the cost of shareholders’ equity. 

The programme consists of a portion that is related to Scania’s ability 

to increase its operating return as defined according to the preceding 

paragraph (maximum 67.5 percent of fixed salary) from one year to 

another. The second component in the incentive programme is related 

to actual ability to generate a return during the year in question, all provided 

that the return calculated according to the preceding paragraph is 

positive (maximum 150 percent of fixed salary). As indicated, both components 

are designed in such a way that they contain an upper limit for 

the compensation that is payable according to the programme. This 

situation has never occurred. A component of the 2004 programme, 

with settlement in 2005, will be conditional on deferred disbursement. 

During the period 1997–2002, the outcome of the incentive 

programme for the members of the Executive Board, including the 

President, has varied from zero to 132 percent of fixed salary. On 

Outcome, incentive Pension costs, Pension costs, 

Salary/Board programme defined-contribution defined-benefit Other 

SEK remuneration 2003 system system (ITP) remuneration Total 

Chairman 

of the Board 700,000 700,000 

President 

and CEO 5,919,363 5,866,410 6,472,762 463,221 13,574 18,735,330 

Executive officers 

in the Group 

Management 

including the 

Executive Board 

(21 persons) 32,449,232 30,330,111 11,404,594 9,208,992 2,310,339 85,703,268 

Salary/Board remuneration: amount according to income statement to tax authority. 

Pension costs, defined-contribution system: annual company-paid premiums and individual employee co-payments according to the 

defined-contribution pension system and ITPK (defined-contribution portion of the ITP occupational pension plan). 

Pension costs, defined-benefit system (ITP): risk insurance premiums and the increase in reported old-age pension liability according 

to the ITP occupational pension plan. 

Other remuneration: taxable portion of car allowance, newspaper subscriptions etc. 

Retirement age: the contractual retirement age is 60 for the Executive Board including the President and 62 for executive officers in the 

Group Management. 


Note 28 continued 

The other members of the Executive Board, if the company terminates 

their employment, are entitled to severance pay equivalent to a maximum 

of two years’ salary, in addition to their salary during six months’ 

notice period. If they obtain new employment within 18 months, counting 

from their termination date, their severance pay ceases. In case of 

a substantial change in the ownership structure of Scania, the members 

of the Executive Board are entitled to resign of their own volition with 

severance pay amounting to two years’ salary. 

Compensation issues for the President and the Executive Board 

are decided by the Board after preparation by a committee that was 

established earlier, the Remuneration Committee, which now consists 

of Bernd Pischetsrieder, Chairman; Peggy Bruzelius; Rolf Stomberg; 

and Clas Åke Hedström. During 2003, the Committee met on three 

occasions. 

Salaries and other remuneration to the Chairman of the Board, the 

President and Group Management executive officers are shown in the 

table on page 69 (excluding employers’ contribution according to law). 

NOTE 29 Fees and other remuneration to auditors 

Fees and other remuneration to independent auditors, reported as 

expenses during the year: 


Auditing Other Auditing Other 

Auditing firm assignments assignments assignments assignments 

KPMG Bohlins AB 22 6 20 10 

Ernst & Young 7 2 5 2 

Other auditors 10 7 13 9 

Total 39 15 38 21 

NOTE 30 Net assets in foreign currencies 

Net assets in foreign currencies consist of net Group-external assets in 

foreign subsidiaries and net Group-external receivables and liabilities 

of Swedish companies that are not hedged by funding in the corresponding 

currency. 

2003 2002 2001 

Euro (EUR) 5,361 5,675 5,154 

British pound (GBP) 846 863 717 

Other European currencies 966 1,051 1,091 

US dollar (USD) –285 103 –614 

Latin American currencies 2,050 2,659 3,512 

Other currencies 1,202 1,046 690 

Total 10,140 11,397 10,550 

Of these net assets, SEK 2,825 m. consisted of tangible fixed assets 

translated at historical exchange rates. About SEK 350 m. of net foreign 

assets were hedged by forward contracts related to EUR. 

For information on accumulated exchange rate differences that are 

reported directly against shareholders’ equity, see Note 15. 

NOTE 31 Currency exposure in operating income 

The net amount of operating revenues and operating expenses exposed 

to foreign currencies, by currency. 

2003 2002 2001 

Euro (EUR) 8,400 7,900 7,300 

British pound (GBP) 4,600 3,400 2,700 

Other European currencies 2,100 2,100 2,100 

Korean won (KRW) 1,500 1,300 1,000 

US dollar (USD) 300 500 1,800 

Latin American currencies 1) 0 – – 

Other currencies 1,400 1,200 2,000 

Total 18,300 16,400 16,900 

1) The year’s calculation shows a balance in the flow of local Latin American 

currencies. In prior years, these currencies have fluctuated sharply, with sizeable 

price and cost changes as a result. For this reason, a description of currency 

rate effect/exposure in earlier years is not meaningful. 

Currency spot rate effects were about SEK –770 m. compared to 2002. 

This was offset by positive currency hedging income of SEK 620 m., 

resulting in a negative net effect of SEK 150 m. During 2002, currency 

hedging had a positive influence of SEK 500 m. on earnings. Compared 

to 2002, the total currency rate effect was thus SEK –650 m. 

NOTE 32 Effect of exchange rate differences 

on net income 

Net income was affected by exchange rate differences (excluding flowrelated 

forward contracts) as shown in the following table: 

2003 2002 2001 

Sales revenue –80 45 243 

Cost of goods sold 137 2 –132 

Selling expenses –16 26 53 

Income from Customer Finance –1 3 2 


Financial income and expenses –58 –160 –25 

Taxes 5 –14 –83 

Effect on net income –13 –98 58 

The amounts above refer to exchange rate gains minus exchange 

rate losses on the difference between the invoicing exchange rate and 

the exchange rate on the payment date, on receivables and liabilities 

and exchange rate differences that arise when using the monetary/nonmonetary 

translation method. For information on accumulated exchange 

rate differences that are reported directly against shareholders’ equity, 

see Note 15. 


70

NOTE 33 Financial instruments and financial risk management 

Assets and liabilities of a financial nature occur mainly in the Customer 

Finance segment, and to a lesser extent in Vehicles and Service. 

Financial assets occur mostly as a consequence of long- and shortterm 

financing of customers’ vehicle purchases and of the Group’s 

projected liquidity requirements. Financial liabilities have been incurred 

mainly in order to fund the Customer Finance segment’s lending and 

leasing to customers and, to a lesser extent, to fund capital employed 

in Vehicles and Service. 

Scania uses derivative instruments, mainly for the purpose of: 

• transforming corporate-level borrowings in a limited number of 

currencies to those currencies in which the respectively funded 

assets are denominated, 

• transforming the interest rate refixing period for funding to the interest 

rate refixing period in the Customer Finance loan and lease portfolio, 

as well as the desired interest rate refixing period for funding of other 

assets, 

• hedging future cash flow for Vehicles and Service from undesired 

currency risk and 

• to a lesser extent, converting projected surplus liquidity in foreign 

currencies to SEK. 

Financial risk management in the Scania Group 

In addition to business risks, Scania is exposed to various financial 

risks in its operations. The financial risks that are of the greatest importance 

are currency-, interest rate-, refinancing- and credit risks. Credit 

risk related to customer commitments is managed, within established 

limits, on a decentralised basis by means of local credit assessments. 

Other risks are managed at corporate level by Scania’s treasury unit, in 

compliance with the financial policy adopted by Scania’s Board of Directors. 

For the purpose of promoting long-term profitability, this financial 

policy states that financial risks shall be minimised and access to liqui- 

Hedging of currency flows 

dity shall be safeguarded. On a daily basis, the corporate treasury unit 

measures the risks of outstanding positions, which are managed within 

established limits in compliance with the financial policy. 

Currency risk 

Currency risk is the risk that changes in currency exchange rates 

will adversely affect cash flow. Changes in exchange rates also affect 

Scania’s income statement and balance sheet as follows: 

– Earnings are affected when income and expenses in foreign currencies 

are translated to Swedish kronor. 

– The balance sheet is affected when assets and liabilities in foreign 

currencies are translated to Swedish kronor. 

More than 90 percent of Scania’s sales occur in countries outside Sweden. 

Since a large proportion of production occurs in Sweden, at costs 

denominated in Swedish kronor, the Scania has large net inflows of foreign 

currencies. During 2003, total net revenue in foreign currencies 

amounted to about SEK 18 billion. The largest currencies were EUR and 

GBP. Note 31 shows Scania’s net revenue in the most commonly occurring 

currencies. 

Based on the geographic distribution of revenues and expenses 

during 2003, a one percentage point change in the Swedish krona 

against other currencies, excluding currency hedging, has an impact 

on operating income of about SEK 180 m. on an annual basis. 

Scania’s policy is to hedge its currency flows during a period of 

time equivalent to the projected orderbook until the date of payment. 

However, the hedging period is allowed to vary between 0 and 12 

months. Hedging of currency risks mainly occurs by selling currencies 

on forward contracts, but also by means of currency options. 

The effect of currency derivatives on operating income totalled 

SEK 620 m. (500), of which SEK 54 m. (39) was related to still unexpired 

GBP/SEK EUR/SEK KRW/SEK CHF/SEK NOK/SEK ZAR/SEK AUD/SEK 

Quarter Volume Rate* Volume Rate* Volume Rate* Volume Rate* Volume Rate* Volume Rate* Volume Rate* 

Q 1** 2004 25 13.318 95 9.306 10,000 0.0067 10 6.105 80 1.109 80 1.1604 13 5.375 

Q 2 2004 155 9.182 17 6.035 26 1.092 

Q 3 2004 125 9.220 18 6.000 

Q 4 2004 165 9.105 

Total (in millions) 25 13.318 540 9.189 10,000 0.0067 45 6.037 106 1.105 80 1.1604 13 5.375 

Closing day rate 

031231 12.913 9.094 0.006 5.828 1.081 1.09 5.432 

Unrealised gain/loss 

031231 11.3 22.4 6.2 3.9 2.5 6.9 –0.4 

* Average forward price and lowest redemption price for currency options. 

** January volumes are not included, since the unrealised gain/loss effect was reported in December. 

contracts that were offset on the balance sheet date by net assets in 

the balance sheet. The value of outstanding contracts not recognised 

in earnings which will affect 2004 earnings can be seen in the table 

“Hedging of currency flows.” 

At the end of 2003, Scania’s net assets abroad amounted to 

SEK 10,140 m. (11,397), see Note 30. The net assets of foreign subsidiaries 

are normally not hedged. To the extent subsidiaries have significant 

net monetary assets in local currency, however, they may be 

hedged. At year-end 2003, SEK 346 m. (566), equivalent to 3 (5) 

percent, mainly attributable to Europe, were hedged. 

Interest rate risk 

Interest rate risk is the risk that changes in market interest rates will 

adversely affect cash flow. Changes in market interest rates may also 

affect the fair value of the loan portfolio. Scania is exposed to interest 

rate risk on the asset side, as a consequence of financing of customers, 

which mostly occurs in Customer Finance. Net debt, i.e. borrowings 

less liquid assets, also exposes the Scania Group to interest rate risk. 

For Scania’s asset and liabilities that carry variable interest rates, a 

change in market interest rates has a direct effect on cash flow, while for 

fixed-interest assets and liabilities, the fair value of the portfolio is instead 

affected when market rates change. To manage interest rate risks, the 

Group mainly uses interest rate swaps and interest rate options. 

Borrowing in Vehicles and Service is mainly used for funding of 

working capital, which means that a short interest rate refixing period 

matches the turnover rate of working capital. Scania’s policy concerning 

interest rate risks in the Vehicles and Service segment is that the interest 

rate refixing period on its loan portfolio should normally be 6 months, 

but that deviations are allowed in the range between 0 and 24 months. 

At year-end, the loan portfolio in Vehicles and Service amounted to 

SEK 4,427 m. and the average interest rate refixing period was about 

3 (2) months. 

Given the same loan liabilities and interest rate refixing period as 

at year-end 2003, a change in market interest rates of 100 basis points 

(1 percentage point) would change the interest expenses in Vehicles 

and Service by about SEK 35 m. on an annual basis. Due to the short 

interest rate refixing period, the fair value of the loan portfolio would 

not be significantly affected. 

Scania’s policy regarding interest rate risks in the Customer Finance 

segment is that lending and borrowing should match in terms of 

interest rates and maturity periods. Interest rate refixing related to the 

credit portfolio and borrowing had the following structure as per 

31 December 2003: 


Note 33 continued 

Interest rate refixing in Customer Finance 

Interest-bearing 


liabilities 

Customer (including interest 

Finance portfolio 1 rate derivatives) 2 

2004 14,118 13,893 

2005 5,125 4,025 

2006 3,719 2,262 

2007 2,084 942 

2008 679 457 

2009 and later 201 202 

Total 25,926 21,781 

1 Including operating leases. 

2 Other funding consists mainly of shareholders’ equity. 

On 31 December 2003, the effective interest rate on outstanding 

borrowings was 3.6 percent. Borrowing occurs largely at the corporate 

level in a small number of currencies. By means of currency swaps, 

these loans are then converted to the desired currencies. 

Effective interest 

rate in percent 

Borrowings Borrowings (including currency 

excluding including and interest 

currency swaps currency swaps rate derivatives) 

EUR 14,859 16,735 3.2 

SEK 9,012 53 3.4 

GBP 549 3,112 5.0 

USD 308 2,442 2.6 

Other 1,480 3,866 5.0 

Total 26,208 26,208 3.6 

Credit risk 

Credit risk is defined as the risk that the counterparty in a transaction 

will not fulfil its contractual commitments and that any collateral will not 

cover the company’s claim. An overwhelming share of the credit risk 

for Scania is related to receivables from customers and is distributed 

among a large number of end customers. 

Trade receivables outstanding 1 

31 December, SEK m. 2003 2002 2001 



customer finance portfolio 2 25,926 25,303 25,091 

Other receivables 51 74 169 


Trade receivables 6,297 6,428 7,562 

Interest-bearing receivables 2 1,347 1,592 1,874 

Total 33,621 33,397 34,696 

1 Including provisions for bad debt. 

2 Including operating leases before subtracting deferred profit recognition. 

To maintain a controlled level of credit risk in the Customer Finance 

segment, the process of issuing credit is supported by a credit policy 

as well as credit instructions. Credit risks are managed by active credit 

monitoring and administration of customers who do not follow the 

agreed payment plan. 

Provisions for bad debt losses are based on an individual assessment 

of each customer, based on the customer’s payment capacity and expected 

future risk. 

Provisions in relation to the credit portfolio 

in Customer Finance 

31 December, SEK m. 2003 2002 2001 

Total receivables 25,926 25,303 25,091 

Provisions for bad debts 458 408 413 

Provisions as a percentage 

of receivables 1.77 1.62 1.65 

The table below shows the credit risk exposure in Customer Finance. 

Percentage 

of total 

Number of number of Percentage 

Concentration customers customers of portfolio 

Exposure < SEK 15 m. 19,722 97.3 60.1 

Exposure SEK 15–50 m. 510 2.5 20.5 

Exposure > SEK 50 m. 37 0.2 19.4 

Total 20,269 100 100 

The administration of the credit risks that mainly arise in corporate treasury 

operations, among other things when investing liquidity and in 

derivatives trading, is regulated in Scania’s financial policy. Transactions 

occur only within established limits and with selected, creditworthy 

counterparties. “Creditworthy counterparty” means that the counterparty 

has received an approved credit rating from Standard and Poor’s 

and/or Moody’s. To further limit credit risk, the volume of exposure 

allowed per counterparty is limited, depending on the counterparty’s 

credit rating. Overall counterparty exposure related to investments of 

liquidity and derivatives trading, calculated as a net receivable per 

counterparty, amounted to SEK 2,663 m. as per 31 December 2003. 

Refinancing risk 

Refinancing risk is the risk of not being able to meet the need for future 

funding. To ensure access to funding, Scania applies a conservative 

policy which prescribes that there should be a liquidity reserve consisting 

of available liquid assets and unutilised credit facilities that exceeds 

its funding needs for the next 1–2 years. 

At the beginning of 2003, Scania had a committed revolving credit 

facility of USD 1,850 m. from an international banking syndicate, expiring 

in November 2004. In May 2003, Scania renegotiated USD 1,000 m., 

with a new expiration date in May 2008. At year-end 2003 the credit 

facility, which was unutilised at that time, thus totalled USD 1,850 m., 

equivalent to SEK 13,459 m., translated at the closing day rate. Scania 

intends to replace the USD 850 m. that expires in 2004 with similar 

funding. 

In addition to its committed revolving credit facility, Scania has a 

capital market programme of more than SEK 36 billion (30), of which 

more than SEK 18 billion (17) was being utilised at year-end. 

Under Scania’s Medium Term Note (MTN) programme, borrowing 

may occur in maturities of between 1 and 10 years. The ceiling was 

raised during 2003 from SEK 7,000 m. to SEK 13,000 m. During 2003, 

Scania issued SEK 3,201 m. worth of borrowing. At year-end, the total 

amount outstanding was equivalent to SEK 7,892 m. 

Under its European Medium Term Note Programme (EMTN), Scania 

can borrow at the international financial market. The ceiling at year-end 

was EUR 1,500 m., which was equivalent to SEK 13,641 m. when 

translated at the closing day rate. During 2003, Scania issued a bond 

equivalent to SEK 469 m. The total amount outstanding at year-end was 

equivalent to SEK 10,290 m. 

Scania also has short-term borrowing facilities in the form of commercial 

paper programmes in Sweden and Belgium, totalling SEK 6,000 m. 

and EUR 400 m., respectively. At year-end, Scania had only utilised the 

Swedish programme in the amount of SEK 200 m. 

In addition to the above programmes, Scania has taken out bilateral 

loans of SEK 3,578 m. The company also has other borrowing with 

varying maturities, totalling SEK 4,247 m. 

Total borrowing and 

Total 

ceiling, SEK m. borrowing Ceiling 

EMTN 10,290 13,641 

MTN 7,892 13,000 

Bilateral loans 3,578 – 

Credit facility (USD) – 13,459 

Commercial paper, Sweden 200 6,000 

Commercial paper, Belgium – 3,638 

Bank loans 4,247 – 

Total 26,207 49,738 1 

1 Of the total ceiling, SEK 13,459 m. consisted of a committed 

revolving credit facility. 

Scania’s liquidity reserve at the close of 2003, consisting of unutilised 

credit facilities and liquid assets, amounted to SEK 15,375 m. (18,044). 

Aside from safeguarding access to credit facilities, Scania controls 

its refinancing risk by diversifying the maturity structure of its borrowing 

portfolio. At year-end, Scania’s total borrowing had the following maturity 

structure: 

Maturity structure of borrowing, SEK m. 

2004 5,380 

2005 3,605 

2006 4,015 

2007 6,759 

2008 5,608 

2009 and later 840 

Total 26,207 


72

Fair value of financial instruments 

The carrying amount of interest-bearing assets and liabilities in the 

balance sheet may deviate from their fair value, among other things as 

a consequence of changes in market interest rates. 

There is also a fair value for items that are not recognised in the balance 

sheet, such as hedging instruments that do not correspond to net 

assets in the balance sheet and that meet the requirements for hedge 

accounting. To establish the fair value of financial assets and liabilities, 

official market quotations have been used for those assets and liabilities 

that are traded in an active market. 

In those cases where market quotations do not exist, fair value has 

been established by discounting future payment flows at current market 

interest rates and exchange rates for similar instruments. Fair value of 

financial instruments such as accounts receivable, accounts payable 

and other non-interest-bearing financial assets and liabilities that are 

recognised at acquisition value, minus any write-downs, is regarded as 

coinciding with the carrying amount, and these instruments are therefore 

not included in the table below. 


Carrying 

Fair 

amount value 1 

Assets 

Long-term holdings of securities 2 56 69 

Long-term interest-bearing receivables 3 11,796 11,917 

Interest-bearing current receivables 3 7,502 7,887 

Short-term investments 704 703 

Cash and bank balances 1,212 1,212 

Currency forward contract for hedging 

of net foreign investments 4 –1 –1 

Currency derivatives for hedging of 

future cash flows related to operating 

activities 4, 5 54 113 

Currency derivatives for hedging 

of loans etc 4 58 58 

Currency interest rate swaps 4 –62 –64 

Interest rate-related derivatives 4 223 641 

Total assets 21,542 22,535 

Liabilities 

Short-term borrowing 5,380 5,369 

Long-term borrowing 20,827 22,370 

Total liabilities 26,207 27,739 

1 Interest-bearing financial assets and liabilities have been discounted to market 

interest rates, without taking credit margins into account. 

2 In the balance sheet under “Holdings in associated companies etc”. 

3 Operating leases amounting to SEK 6,604 m. are not included in the table. 

4 In the balance sheet under “Other current receivables”. 

5 Fair value of hedging instruments that were not included in the balance sheet 

on the closing date totalled SEK 76 m. 

In some cases, carrying amount of assets with fixed interest rates exceeded 

fair value as a consequence of changes in market interest rates. 

Write-downs of these assets occur only when there is reason to believe 

that the counterparty will not fulfil its contractual commitments, not as a 

consequence of changes in market interest rates. 

Accounting and valuation 

Financial assets are recognised in the balance sheet on the sales or 

transaction date at their acquisition value, which is equivalent to fair 

value on that date. After the acquisition date, financial fixed assets are 

valued at accrued acquisition value after subtracting probable credit 

losses. Financial current assets are valued at the lower of accrued 

acquisition value and market value. 

Financial liabilities are recognised in the balance sheet at accrued 

acquisition value. Premiums or deficits, including transaction costs, are 

accrued over the life of the loan. Financial assets and liabilities in foreign 

currencies are reported at the closing day rate. 

Scania uses derivative instruments to control changes in exchange 

rates and interest rates. Expected future payments in foreign currencies 

are hedged mainly by selling currencies in forward contracts. Unrealised 

gains or losses on contracts intended for hedging purposes are not 

recognised continuously in the income statement, but only on the same 

date as the result of the hedged flow. In currency hedging of receivables 

and liabilities with forward contracts, Scania uses the exchange rate on 

the date the currency hedging occurs at the valuation of the underlying 

receivable or liability. The difference between the spot market rate and 

the forward rate when the contract is entered into is accrued over the 

life of the contract. Option premiums received and paid are accrued in a 

corresponding way. 

Scania uses interest rate swaps to achieve the desired interest rate 

refixing period. Interest income and expenses related to interest rate 

swaps are accrued continuously according to the contract terms. To 

adapt borrowing to the desired funding currency, currency swaps are 

used. When a loan in one currency has been converted to another currency 

by means of swap agreements, the loan and the swap agreement 

are valued at the exchange rate prevailing on the closing day for the new 

currency. 

Hedging of net assets in foreign subsidiaries occurs only to the extent 

that a subsidiary has significant monetary assets in local currency. The 

exchange rate difference in the forward contract is reported directly 

against shareholders’ equity. The interest rate portion of the forward 

contract is accrued over the life of the contract and is reported among 

financial income and expenses. 

Derivatives for which the requirements for hedge acounting are not 

fulfilled are valued in the balance sheet at the lower of acquisition value 

and fair value. 

The main reason why the fair value of interest-bearing assets and liabilities 

exceeded the carrying amount is that general interest rates were 

lower at year-end than when the contracts were entered into. 


LIST OF SUBSIDIARIES 

Corporate ID number Registered office % ownership 

Aconcagua Vehiculos Com. S.A. 30-70737179-6 Mendoza Argentina 100,00 

Automotores del Atlantico S.A. 30-70709795-3 Mar del Plata Argentina 100,00 

Automotores Pesados S.A. 30-55137605-9 Tucuman Argentina 99,38 

Beers N.V. NL003779439B01 Den Haag The Netherlands 100,00 

Buenos Aires Camiones 33-70791031-9 Buenos Aires Argentina 99,99 

Codema Coml Import LTDA 60849197/001-60 Guarulhos Brazil 99,98 

DABCOM SP.ZD.Q 28202 Warsaw Poland 100,00 

Dynamate AB 556070-4818 Södertälje Sweden 100,00 

Fastighets AB Katalysatorn 556070-4826 Södertälje Sweden 100,00 

Ferruform AB 556528-9120 Luleå Sweden 100,00 

Ferruform Components AB 556593-3016 Växjö Sweden 100,00 

GB&M Garage et Carrosserie SA 218 687 Geneva Switzerland 100,00 

Hedenlunda Konferenscenter AB 556147-5871 Flen Sweden 100,00 

Italscania SPA IT 01632920227 Trento Italy 100,00 

Lauken S.A. 21.150044.0016 Montevideo Uruguay 99,99 

Metropol Re Ltd 190572 Dublin Ireland 100,00 

Norsk Lastebilutleie AS 875346822 Drammen Norway 100,00 

Norsk Scania AS 879 263 662 Oslo Norway 100,00 

Omni Katrineholm AB 556060-5809 Katrineholm Sweden 100,00 

OOO Scania Leasing 7705392920 Moscow Russia 100,00 

OOO Scania Russia 5 032 073 106 Moscow Russia 100,00 

Oy Autokuvio Ab 1505472-2 Hämeenlinna Finland 100,00 

Oy Autolinna Ab 1568949-6 Jyväskylä Finland 100,00 

Oy Maakunnan Auto Ab 1568951-7 Seinäjoki Finland 100,00 

Oy Scan-Auto Ab FI0202014-4 Helsinki Finland 100,00 

S C I Mittelfeld 382 744 241 Angers France 98,00 

S C I Occitane du Val d'Oise 344 962 105 Angers France 100,00 

S.A.R.L Carrosseries d'lle de France 378 060 289 Goussainville France 100,00 

S.A.S. Scania Holding France 40309278600017 Angers France 100,00 

Scanexpo S.A. 21.173422.0012 Montevideo Uruguay 99,99 

Scania (Malyasia) SDN BHD 518606-D Kuala Lumpur Malaysia 100,00 

Scania Administradora de 

Consórcios Ltda 96.479.258/0001-91 Cotia Brazil 99,98 

Scania Alsace S.A.S. 678 502 279 Strasbourg France 100,00 

Scania Aquitaine 465 201 093 Bordeaux France 100,00 

Scania Argentina S.A. 30-51742430-3 Buenos Aires Argentina 100,00 

Scania Asset Management AB 556528-9088 Södertälje Sweden 100,00 

Scania Australia Pty Ltd 000537333 Melbourne Australia 100,00 

Scania Belgium SA-NV BE402607507 Diegem Belgium 100,00 

Scania BH d.o.o. 1-23174 Sarajevo Bosnia- 100,00 

Herzegovina 

Scania Botswana (Pty) Ltd CO.2000/6045 Gaborone Botswana 100,00 


Scania Bourgogne S.A. 384 957 353 Dijon France 100,00 

Scania Bulgaria EOOD 2 220 100 629 Sofia Bulgaria 100,00 

Scania Bus & Coach UK Ltd 1609770 Milton Keynes Great Britain 100,00 

Scania Bus Europe N.V.-S.A. BE460.870.259 Diegem Belgium 100,00 

Scania Bus France 341 533 099 Anger France 100,00 

Scania Bus France 341 533 099 Anger France 100,00 

Scania Bus Germany GmbH DE813579772 Kerpen Germany 100,00 

Scania Bus Italy S.r.L IT 01732680226 Trento Italy 100,00 

Scania Bus Nordic AB 556060-0586 Katrineholm Sweden 100,00 

Scania Chile S.A. 96.538.460-K Santiago Chile 100,00 

Scania Commercial Vehicles 

Renting S.L. ESA82853995 Madrid Spain 100,00 

Scania Credit AB 556062-7373 Södertälje Sweden 100,00 

Scania CV AB 556084-0976 Södertälje Sweden 100,00 

Scania Czech Republic s.r.o. 060-61251186 Prague Czech Republic 100,00 

Scania DAB A/S DK 13925542 Herlev Denmark 100,00 

Scania Danmark A/S DK 17045210 Herlev Denmark 100,00 

Scania Danmark Holding A/S DK 17886843 Copenhagen Denmark 100,00 

Scania de Mexico S.A. de CV SME-930629-JT3 Ciudad Mexico Mexico 99,99 

Scania de Venezuela S.A. J-30532829-3 Valencia Venezuela 99,99 

Scania del Peru S.A. 101-36300 Lima Peru 99,99 

Scania Deutschland GmbH DE148787117 Koblenz Germany 100,00 

Scania Deutschland Holding GmbH DE812893584 Frankfurt/Main Germany 100,00 

Scania East Adriatic Region d.o.o. 1 605 810 Ljubliana Slovenia 100,00 

Scania Eesti AS 10 238 872 Tallinn Estonia 100,00 

Scania Empr. Part. 01.612.789/0001-02 Saõ Bernardo Brazil 99,99 

do Campo 

Scania Europe Holding B.V. NL800564364B01 Zwolle The Netherlands 100,00 

Scania Finance Belgium N.V. S.A. BE 413 545 048 Diegem Belgium 99,90 

Scania Finance Czech Republic s.r.o. 060-25657496 Prague Czech Republic 100,00 

Scania Finance Deutschland GmbH DE811292425 Koblenz Germany 100,00 

Scania Finance France S.A. 350 890 661 Angers France 100,00 

Scania Finance Great Britain Ltd 581 016 364 Milton Keynes Great Britain 100,00 

Scania Finance Hispania EFC S.A. ESA82853987 Madrid Spain 100,00 

Scania Finance Holding 

Great Britain Ltd 4031225 Milton Keynes Great Britain 100,00 

Scania Finance Italy S.p.A 01204290223 Trento Italy 100,00 

Scania Finance Korea 613 812 7196 Kyoung Sang South Korea 100,00 

Nam-Do 

Scania Finance Luxembourg S.A. 2001 2217 359 Luxembourg Luxembourg 100,00 

Scania Finance Polska Sp.z.o.o. 521 15 79 028 Warsaw Poland 100,00 

Scania Finance Pty Ltd 52006002428 Melbourne Australia 100,00 


74


Scania Finans AB 556049-2570 Södertälje Sweden 100,00 

Scania France S.A.S. 30716693400033 Angers France 100,00 

Scania Great Britain Ltd 831017 Milton Keynes Great Britain 100,00 

Scania Hainaut S.A. BE439.418.908 Mons Belgium 99,90 

Scania Hispania Holding B82853938 Madrid Spain 100,00 

Scania Hispania S.A. ESA59596734 Madrid Spain 100,00 

Scania Hrvatska d.o.o. 1 351 923 Zagreb Croatia 100,00 

Scania Hungaria KFT 10415577 Biatorbagy Hungary 100,00 

Scania Ile de France S.A. 648 204 139 Goussainville France 100,00 

Scania Imports Pty Ltd 53000971102 Melbourne Australia 100,00 

Scania Infotronics AB 556548-4739 Södertälje Sweden 100,00 

Scania Int. Fleet Development 4006517 Milton Keynes Great Britain 100,00 

Scania Italy Holding SRL 01668350224 Trento Italy 100,00 

Scania Jugoslavija d.o.o. 173 333 Belgrad Yugoslavia 100,00 

Scania Korea Ltd 136-81-15441 Seoul South Korea 100,00 

Scania Latin America Ltda 635 010 727 112 Saõ Bernardo Brazil 99,99 

do Campo 

Scania Locations S.A.S. 402 496 442 Angers France 100,00 

Scania Luxembourg S.A. LU165291-18 Münsbach Luxembourg 99,90 

Scania Maroc S.A. 06100472 Casablanca Morocco 100,00 

Scania Méditerranée S.A.S. 311 798 110 Marseille France 100,00 

Scania Nederland B.V. NL800564364B04 Zwolle The Netherlands 100,00 

Scania Nederland Holding B.V. NL800564364B03 Zwolle The Netherlands 100,00 

Scania Parts Logistics AB 556528-9104 Södertälje Sweden 100,00 

Scania Peter OOO 78:111158:25 St Petersburg Russia 100,00 

Scania Plan S.A. 30-61086492-5 Buenos Aires Argentina 79,98 

Scania Polska S.A. 521-10-14-579 Warsaw Poland 100,00 

Scania Production Angers S.A.S. 378 442 982 Angers France 100,00 

Scania Production Slupsk S.A. 839-000-53-10 Slupsk Poland 100,00 

Scania Properties Ltd 895484 Milton Keynes Great Britain 100,00 

Scania Real Estate AB 556084-1180 Katrineholm Sweden 100,00 

Scania Rhône Alpes S.A.S. 397 588 906 Lyon France 100,00 

Scania Risk Management AG 010062J73643/6 Kloten Switzerland 100,00 

Scania Romania SRL J40/10908/1999 Bukarest Romania 100,00 

Scania Service S.A. 33-70784693-9 Buenos Aires Argentina 99,99 

Scania Siam Co Ltd 865/2543 Bangkok Thailand 80,00 

Scania Slovakia 0035826649/801 Bratislava Slovakia 100,00 

Scania Slovenija d.o.o. 1 124 773 Ljubliana Slovenia 100,00 

Scania South Africa Pty Ltd 95/0 1275/07 Sandton South Africa 100,00 

Scania Sverige AB 556051-4621 Södertälje Sweden 100,00 

Scania Switzerland Holding Ltd CH_170.3024.547-0 Zug Switzerland 100,00 


Scania Tanzania Ltd 39320 Dar Es Salaam Tanzania 100,00 

Scania Thailand Co Ltd 9802/2534 Bangkok Thailand 99,99 

Scania Trade Development 556013-2002 Södertälje Sweden 100,00 

Scania Treasury AB 556528-9351 Södertälje Sweden 100,00 

Scania Treasury Ireland 31 78 76 Dublin Ireland 100,00 

Scania Treasury S.A 2208031 Luxembourg Luxembourg 100,00 

Scania Truck AG CH-020.3.926.624 Kloten Switzerland 100,00 

Scania Truck Financing AB 556020-4231 Södertälje Sweden 100,00 

Scania Ukraine LLC 30 107 866 Kiev Ukraine 100,00 

Scania USA Inc 06-1288161 San Antonio United States 100,00 

Scania Vastgoed B.V. NL800564364B05 Zwolle The Netherlands 100,00 

Scania Österreich GmbH AT 43324602 Brunn am Gebirge Austria 100,00 

Scania-Bilar Stockholm AB 556084-1198 Stockholm Sweden 100,00 

Scania-Bilar Syd AB 556528-9112 Malmö Sweden 100,00 

Scania-Bilar Väst AB 556040-0938 Göteborg Sweden 100,00 

SIA Scania Latvia LV000311840 Riga Latvia 100,00 

Suvesa Super Veics Pesados LTDA 88301668/0001-10 Canoas Brazil 99,98 

Svenska Mektek AB 556616-7747 Södertälje Sweden 100,00 

UAB Scania Lietuva 2 387 302 Vilnius Lithuania 100,00 

UAB Skanvita 4 170 814 Klaipeda Lithuania 100,00 

Vabis Försäkrings AB 516401-7856 Södertälje Sweden 100,00 

Véhicules Industriels Paris EST S.A. 320 102 999 Goussainville France 100,00 

Vestfold Elektrodiesel AS 83344182 Tönsberg Norway 100,00 

WM Data Zwolle B.V NL807308432B01 Zwolle The Netherlands 100,00 

WM Data Angers FR17412 282 626 Angers France 99,00 

WM-Data Scania AB 556084-1206 Södertälje Sweden 100,00 


Notes – Parent Company 

All amounts are stated in millions of Swedish kronor (SEK m.) unless otherwise stated. 

NOTE 1 Financial income and expenses 

2003 2002 2001 

Interest income 

From subsidiaries 63 102 107 

Other 1 12 0 

Sub-total 64 114 107 

Interest expenses 0 0 –2 

Exchange rate differences on forward 

contracts for hedging net assets 

of foreign subsidiaries 29 68 –54 

Dividends 1,500 1,000 650 

Net financial items 1,593 1,182 701 

NOTE 2 Taxes 

2003 2002 2001 

Current tax –105 –121 –273 

Tax effect due to Group contribution provided, SEK 105 m. (121) 

has been reported directly against shareholders’ equity. The tax 

payable amounts to zero. 

NOTE 4 Shareholders’ equity 

Unrestricted 

share- 

Share Statutory holders’ 

2002 capital reserve equity Total 

Balance, 1 January 2,000 1,120 7,753 10,873 

Dividend to shareholders –700 –700 

Group contributions –310 –310 

Net income for 2002 1,311 1,311 

Balance, 

31 December 2002 2,000 1,120 8,054 11,174 


Balance, 1 January 2,000 1,120 8,054 11,174 

Dividend to shareholders –1,100 –1,100 

Group contributions –272 –272 

Net income for 2003 1,772 1,772 

Balance, 

31 December 2003 2,000 1,120 8,454 11,574 

NOTE 5 Untaxed reserves 

Tax allocation reserve 2003 2002 2001 

1997 assessment – – 250 

1998 assessment – 284 284 

1999 assessment 637 637 637 

2000 assessment 705 705 705 

2001 assessment 634 634 634 

2002 assessment 326 326 326 

Total 2,302 2,586 2,836 

SEK 645 m. (724 and 794, respectively) of “Untaxed reserves” consists 

of a deferred tax liability, which is part of the Scania Group’s deferred tax 

liabilities. 

NOTE 6 Contingent liabilities 

2003 2002 2001 


insurance (Group companies) 1,588 1,457 1,456 


insurance (associated companies) – – 159 

Loan guarantees on behalf 

of Group companies 1 22,051 25,228 25,257 

Total 23,639 26,685 26,872 

1 Most of this item is related to loan guarantees on behalf of borrowings by 

Scania CV AB. 

NOTE 7 Information regarding compensation 

to executive officers and auditors 

NOTE 3 Shares in Group companies 

Carrying amount 

Subsidiary/Corporate ID number/country of registration % ownership 2003 2002 2001 

Scania CV AB, 556084-0976, Sweden 100.0 8,401 8,401 8,401 

Scania Latin America Ltda, 635,010,727,112, Brazil 100.0 2,257 2,257 2,257 

Scania Argentina S.A, 30-51742430-3, Argentina 99.9 1 358 298 298 

Scania Chile S.A., 96.538.460-K, Chile 99.9 1 4 – – 

Scania del Peru S.A, 101, 36300, Peru 5.2 1 15 15 15 

Total 11,035 10,971 10,971 

1 The Group’s ownership interest is 100 percent. 

The President of Scania AB and the other members of the executive 

management hold identical positions in Scania CV AB. Wages, salaries 

and other remuneration are paid by Scania CV AB. The reader is 

therefore referred to Notes 26 and 28 of the Scania Group. Compensation 

of SEK 13,000 (18,000 and 11,000, respectively) was paid to auditors 

in 2003 with respect to the Parent Company. 


76

Proposed distribution of earnings 

The Scania Group’s unrestricted shareholders’ equity according 

to the consolidated balance sheet amounts to SEK 12,974 

m., of which the net income for the year is SEK 3,034 m. 

Södertälje, 6 February 2004 

The Board of Directors and the President propose that the following 

amounts at the disposal of the Annual Meeting: 

Amounts in SEK m. 

Retained earnings 6,682 

Net income for the year 1,772 

Total 8,454 

be distributed as follows: 

To the shareholders, a dividend of SEK 6.00 per share 1,200 

To be carried forward 7,254 

Total 8,454 

After implementing the proposed distribution of earnings, 

the shareholders’ equity of the Parent Company is as follows: 

Amounts in SEK m. 

Share capital 2,000 

Statutory reserve 1,120 

Retained earnings 7,254 

Total 10,374 

Dr. Bernd Pischetsrieder 

Chairman 

Peggy Bruzelius Andreas Deumeland Clas Åke Hedström 

Cees J.A. van Lede Lothar Sander Rolf Stomberg 

Marcus Wallenberg Kjell Wallin Jan Westberg 

Leif Östling 

President and CEO 

Our auditors’ report was submitted on 1 March 2004 

Caj Nackstad 

Jan Birgerson 

Authorised Public Accountant 



Auditors’ report 

To the Annual General Meeting of the shareholders of 

Scania AB (publ), corporate ID number: 556184-8564. 

We have audited the annual accounts, the consolidated 

accounts, the accounting records and the administration 

of the Board of Directors and the President of Scania AB 

(publ) for the financial year 2003. These accounts and 

the administration of the company are the responsibility 

of the Board of Directors and the President. Our responsibility 

is to express an opinion on the annual accounts, 

the consolidated accounts and the administration based 

on our audit. 

We conducted our audit in accordance with generally 

accepted auditing standards in Sweden. Those 

standards require that we plan and perform the audit to 

obtain reasonable assurance that the annual accounts 

and the consolidated accounts are free of material misstatement. 

An audit includes examining, on a test basis, 

evidence supporting the amounts and disclosures in the 

accounts. An audit also includes assessing the accounting 

principles used and their application by the Board of 

Directors and the President, as well as evaluating the 

overall presentation of information in the annual accounts 

and the consolidated accounts. As a basis for our opinion 

concerning discharge from liability, we examined significant 

decisions, actions taken and circumstances of 

the company in order to be able to determine the liability, 

if any, to the company of any Board member or the President. 

We also examined whether any Board member or 

the President has, in any other way, acted in contravention 

of the Companies Act, the Annual Accounts Act or 

the Articles of Association. We believe that our audit provides 

a reasonable basis for our opinion set out below. 

The annual accounts and the consolidated accounts 

have been prepared in accordance with the Annual 

Accounts Act and, thereby, give a true and fair view 

of the company’s and the Group’s financial position 

and results of operations in accordance with generally 

accepted accounting principles in Sweden. 

We recommend to the Annual General Meeting of 

shareholders that the income statements and balance 

sheets of the Parent Company and the Group be 

adopted, that the profit for the Parent Company be 

dealt with in accordance with the proposal in the 

administration report of the Directors and that the 

members of the Board of Directors and the President 

be discharged from liability for the financial year. 

Södertälje, 1 March 2004 

Caj Nackstad 


KPMG Bohlins AB 

Jan Birgerson 


Ernst & Young AB 


78

Income and deliveries by quarter 

SEK m. unless October–December July–September April–June January–March 

otherwise stated 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 

Number of vehicles delivered 

Trucks 13,019 12,130 11,767 9,755 8,435 9,166 11,656 10,198 11,833 10,615 9,132 10,893 

Buses 1,467 1,278 1,399 1,239 730 1,178 1,080 858 1,261 1,124 908 834 

Total 14,486 13,408 13,166 10,994 9,165 10,344 12,736 11,056 13,094 11,739 10,040 11,727 

Income statement 

Sales revenue, Scania products 13,995 13,448 15,165 11,567 10,381 11,707 12,843 12,115 13,788 12,176 11,341 12,405 

Cost of goods sold –10,560 –10,059 –12,400 –8,986 –8,014 –9,506 –9,613 –9,384 –11,107 –9,113 –8,803 –9,588 

Gross income 3,435 3,389 2,765 2,581 2,367 2,201 3,230 2,731 2,681 3,063 2,538 2,817 

Research and 

development expenses –406 –360 –548 –339 –339 –401 –366 –346 –521 –373 –392 –485 

Selling expenses –1,405 –1,441 –1,655 –1,260 –1,223 –1,299 –1,289 –1,257 –1,384 –1,275 –1,285 –1,256 

Administrative expenses –232 –229 –171 –181 –181 –183 –245 –218 –231 –195 –229 –200 

Customer Finance 90 60 55 100 82 81 94 85 72 82 81 70 

Share of income in 

associated companies 7 0 17 2 4 3 6 3 33 1 16 6 

Operating income, 

Scania products 1,489 1,419 433 903 710 386 1,430 998 615 1,303 729 929 

Divested car operations – – 30 – – 16 – 509 35 – 41 23 

Operating income 1,489 1,419 463 903 710 402 1,430 1,507 650 1,303 770 952 

Financial income and expenses –89 –159 –446 –138 –178 –104 –140 –141 –243 –154 –206 –133 

Income after financial items 1,400 1,260 17 765 532 298 1,290 1,366 407 1,149 564 819 

Taxes –482 –351 –9 –270 –162 –101 –445 –292 –140 –368 –180 –246 

Minority interests –3 –1 3 0 2 2 –1 2 –2 –1 –1 0 

Net income 915 908 11 495 372 199 844 1,076 265 780 383 573 

Earnings per share, SEK 4.57 4.54 0.05 2.48 1.86 0.99 4.22 5.38 1.33 3.90 1.92 2.87 

Operating margin, 

Scania products 10.6% 10.6% 3.1% 7.8% 6.8% 3.7% 11.1% 8.2% 4.9% 10.7% 6.4% 8.2% 


80

Key financial ratios 1 

and definitions 

2003 2002 2001 

Scania Group 

Operating margin, % 10.1 9.3 4.6 

Earnings per share, SEK 15.2 13.7 5.2 

Return on shareholders’ equity, % 17.4 17.2 6.5 




Profit margin, % 10.0 9.2 4.7 

Capital turnover rate, times 2.21 1.89 1.93 

Return on capital employed, % 22.0 17.4 9.1 

Net debt/equity ratio 0.17 0.31 0.58 

Interest coverage, times 6.2 4.6 2.0 




Operating margin 

Operating income as a percentage of sales 

revenue. 

Operating margin, Customer Finance 

Operating income as a percentage of the 

average portfolio. 

Earnings per share 

Net income divided by the number of shares. 

Return on shareholders’ equity 

Net income as a percentage of shareholders’ 

equity. 

Profit margin 

Operating income plus financial income 

as a percentage of sales revenue. 

Capital turnover 

Sales revenue divided by capital employed 

(total assets minus non-interest-bearing 

liabilities). 

Return on capital employed 


as a percentage of capital employed. 

Net debt/equity ratio 

Short- and long-term borrowings (excluding 

pension liabilities) minus liquid assets, divided 

by shareholders’ equity. 

Interest coverage 


divided by financial expenses. 

1 Unless otherwise stated, calculations are based on an average for five measuring points (quarters). 

Equity/assets ratio 

Shareholders’ equity as a percentage 

of total assets on each respective balance 

sheet date. 


Multi-year statistical review 

SEK m. unless otherwise stated 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 

Sales revenue by market area 

Western Europe 38,252 36,127 36,732 36,489 33,249 28,962 23,102 21,009 21,715 14,880 10,920 

Central and eastern Europe 4,067 3,139 2,624 1,826 1,330 1,814 1,398 827 732 266 195 

America 3,836 3,542 5,576 5,529 4,247 5,974 6,798 4,800 5,742 6,109 4,619 

Asia 3,936 3,123 2,898 2,390 1,118 1,018 1,932 1,740 1,904 1,504 1,171 

Other markets 2,896 2,529 2,364 2,050 1,784 1,907 1,857 1,578 1,623 1,329 1,062 

Revenue deferral 1 –2,406 –1,175 –1,884 –2,425 –3,066 –2,166 –1,783 –1,160 –568 

Total, Scania products 50,581 47,285 48,310 45,859 38,662 37,509 33,304 28,794 31,148 24,088 17,967 

Divested car operations 2 – – 4,755 5,539 5,382 5,637 4,632 3,776 3,124 2,560 2,222 

Total 50,581 47,285 53,065 51,398 44,044 43,146 37,936 32,570 34,272 26,648 20,189 

Operating income 

Vehicles and Service 4,759 3,548 2,089 4,623 4,655 3,251 2,716 2,787 5,011 3,731 971 

Customer Finance 366 308 278 179 140 91 73 55 98 5 –91 

Divested car operations 2 – 550 100 277 250 250 258 215 243 173 121 

Total 5,125 4,406 2,467 5,079 5,045 3,592 3,047 3,057 5,352 3,909 1,001 

Operating margin, percent 

Vehicles and Service 9.4 7.5 4.3 10.1 12.0 8.7 8.2 9.7 16.1 15.5 5.4 

Divested car operations 2 – – 2.1 5.0 4.6 4.4 5.6 5.7 7.8 6.8 5.4 

Total 10.1 9.3 4.6 9.9 11.5 8.3 8.0 9.4 15.6 14.7 5.0 

Net financial items 3 –521 –684 –926 –630 –545 –378 –296 –351 –505 –223 –537 

Net income 3 3,034 2,739 1,048 3,080 3,146 2,250 1,943 1,981 3,280 2,556 404 

Research and development expenditures 4 –2,153 –2,010 –1,955 –1,621 –1,267 –1,168 –1,248 –1,084 –923 –805 –783 

Gross capital expenditure for fixed 

assets excluding lease assets and renting 3,196 3,025 1,980 1,825 1,876 2,026 2,566 2,579 2,182 2,149 1,485 

Inventory turnover rate, times 5 5.8 6.1 6.0 6.2 5.6 5.3 5.3 5.7 6.6 6.5 4.9 

1 Refers to the difference between sales recognised as revenues and sales value based on delivery. 

2 Swedish car operations were divested as per 1 January 2002. 

3 1993 pro forma. 

4 Beginning in 2002, includes capitalised development expenditures: SEK 669 m. in 2003 and SEK 573 m. in 2002. 

5 Calculated as sales revenue divided by average inventory (adjusted for divested car operations). 


82

2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 

Number of vehicles produced 

Trucks 45,985 41,433 43,487 51,409 45,779 45,546 43,555 38,455 41,974 31,937 22,624 

Buses 5,291 3,712 4,664 4,172 3,703 4,515 4,586 3,901 4,464 2,845 2,569 

Total 51,276 45,145 48,151 55,581 49,482 50,061 48,141 42,356 46,438 34,782 25,193 

Number of trucks delivered by market area 

Western Europe 29,456 28,335 30,416 38,476 36,106 32,686 26,756 26,249 26,596 17,814 13,052 

Central and eastern Europe 4,014 3,099 2,579 2,287 1,551 2,237 1,833 1,030 951 312 248 

America 4,739 3,633 6,181 6,777 6,253 7,621 9,649 7,377 7,964 8,713 6,678 

Asia 5,317 3,486 2,994 3,438 1,481 1,410 3,096 2,997 3,329 2,818 2,256 

Other markets 1,519 1,342 1,489 1,340 1,260 1,599 1,058 1,375 1,627 1,178 851 

Total 45,045 39,895 43,659 52,318 46,651 45,553 42,392 39,028 40,467 30,835 23,085 

Number of buses and coaches delivered by market area 

Western Europe 2,345 1,618 1,701 1,618 1,935 1,731 1,595 1,655 1,642 983 835 

Central and eastern Europe 228 126 127 84 67 106 95 83 45 40 35 

America 1,072 958 1,595 1,843 1,237 1,697 1,829 1,641 1,878 1,287 1,459 

Asia 631 440 666 278 160 78 308 309 304 140 133 

Other markets 634 632 583 351 364 505 757 275 301 237 215 

Total 4,910 3,774 4,672 4,174 3,763 4,117 4,584 3,963 4,170 2,687 2,677 

Total number of vehicles delivered 49,955 43,669 48,331 56,492 50,414 49,670 46,976 42,991 44,637 33,522 25,762 

Total market for heavy trucks and buses, number 

Western Europe: 

Trucks 213,000 211,700 235,000 243,700 235,900 207,300 170,300 172,000 173,300 133,300 114,100 

Buses 21,100 21,800 23,500 23,500 22,400 21,000 18,000 17,500 15,600 13,400 15,300 

Number of employees 6 

Production and corporate units 17,400 16,891 16,422 17,143 16,762 16,834 17,145 16,948 18,559 16,350 14,406 

Sales and service companies 11,391 11,030 11,868 10,029 9,431 6,559 6,511 5,183 4,375 4,003 4,127 

Total Vehicles and Service 28,791 27,921 28,290 27,172 26,193 23,393 23,656 22,131 22,934 20,353 18,533 

Customer Finance 321 309 251 194 166 144 107 75 90 72 60 

Total 29,112 28,230 28,541 27,366 26,359 23,537 23,763 22,206 23,024 20,425 18,593 

6 Including employees with temporary contracts. 


BOARD OF DIRECTORS 

Bernd Pischetsrieder 

Born 1948. 

Chairman since 2002. 

Chairman of the Board of 

Management of Volkswagen AG. 

Other directorships in Audi AG, 

SEAT, S. A., Dresdner Bank AG, 

Frankfurt, Metro AG, Münchener 

Rückversicherungs-Gesellschaft AG 

and Tetra-Laval Group. 

Shares in Scania: 0 

Clas Åke Hedström 

Born 1939. 

Vice Chairman since 2002. 

Member since 1995. 

Chairman of Sandvik AB. 

Other directorships in AB SKF 

and Association of Swedish 

Engineering Industries. 

Shares in Scania: 1,000 

Bernd Pischetsrieder 

Clas Åke Hedström 

Leif Östling 

Peggy Bruzelius 

Peggy Bruzelius 

Born 1949. 


Chairman of Grand Hotel Holdings AB 

and Lancelot Asset Management AB. 

Vice Chairman of the Royal Academy 

of Engineering Sciences. 

Other directorships in Electrolux AB, 

Industry and Commerce Stock Exchange 

Committee, Axel Johnson AB, AB Ratos, 

Drott AB, Axfood AB, Syngenta AG 

and Stockholm School of Economics 

Association. 


Andreas Deumeland 

Andreas Deumeland 

Born 1956. 

Member since 2003. 

Corporate secretary and 

Head of Group Product 

Planning at Volkswagen AG. 

Other directorships in 

SEAT, S. A., Spain. 


Cees J. A. van Lede 


Cees J. A. van Lede 

Born 1942. 


Other directorships in Dutch 

Central Bank, Heineken, 

International Council JP Morgan, 

Sara Lee Corporation, USA, 

Akzo Nobel, Reed Elsevier, KLM, 

Philips Electronics and L’Air Liquide. 


Lothar Sander 

Lothar Sander 

84 

Lothar Sander 

Born 1950. 


Member of the Board of 

Management of the Volkswagen 

Brand. 

Other directorships in Flughafen 

Braunschweig GmbH and TAS Tvornica 

Automobilia Sarajevo, as well as a 

number of directorships in subsidiaries 

of the Volkswagen Group. 


Rolf Stomberg

Leif Östling 

Born 1945. 


President and CEO of 

Scania AB. Other directorships 

in BT Industries, 

Eldon Thule and ADR 

Haanpää. 


Marcus Wallenberg 

Born 1956. 


President and CEO of Investor AB. 

Vice Chairman of Telefon AB L M 

Ericsson, Saab AB and SEB. Other 

directorships in AstraZeneca PLC, 

Stora Enso Oy and Knut and Alice 

Wallenberg Foundation. 


Kjell Wallin 

Born 1943. 


Representative of the Metal 

Workers’ Union at Scania. 


Marcus Wallenberg 

Kjell Wallin 

Jan Westberg 

Born 1944. 


Representative of the Federation 

of Salaried Employees in Industry 

and Services at Scania. 


Niclas Wilhelmsson 

Born 1965. 

Deputy Member since 2003. 

Representative of the Metal 

Workers’ Union at Scania. 


Jan Westberg 

Niclas Wilhelmsson 

AUDITORS 

Rolf Stomberg 

Born 1940. 


Chairman of Management 

Consulting Group PLC, 

Great Britain. Other directorships 

in Reed Elsevier PLC, 

Great Britain, Smith & 

Nephew PLC, Great Britain, 

TPG Group, The Netherlands, 

Deutsche BP Aktiengesellschaft 

and Hoyer GmbH, Hamburg. 


Katrin Rosenqvist 

Katrin Rosenqvist 

Born 1960. 

Deputy Member since 2001. 

Representative of the Federation of 

Salaried Employees in Industry and 

Services at Scania. 


Caj Nackstad 

Authorised Public Accountant, 


Jan Birgerson 



Deputy Auditors 

Thomas Thiel 



Björn Fernström 




GROUP MANAGEMENT 

Executive Board 

4 

3 

1. Leif Östling 

Born 1945. 

Joined Scania in 1972. 

President and CEO. 


Reporting to Leif Östling: 

Industrial and Marine Engines, 

Latin American Operations, 

Corporate Relations, Corporate 

Human Resources. 

4. Per Hallberg 

Born 1952. 


Group Vice President, Head of 

Production and Procurement. 


Reporting to Per Hallberg: 

Chassis and Cabs production, 

Powertrain Production, 

Purchasing. 

2 

1 

5 

6 

2. Kaj Lindgren 

Born 1945. 

Joined Scania in 1977, 

employed until 1984. 

Rejoined Scania in 1989. 


Group Vice President, Chief of 

Staff, CoS, Head of Corporate 

Development. 

From 1 February 2004 

Chief Executive Advisor. 

5. Hasse Johansson 

Born 1949. 


Group Vice President, Head of 

Research and Development. 


Reporting to Hasse Johansson: 

Truck, Cab and Bus Chassis 

Development, Powertrain 

Development, CIO. 

3. Jan Gurander 

Born 1961. 




Group Vice President, Chief 

Financial Officer, CFO, Head of 

Finance and Business Control. 


Reporting to Jan Gurander: 

Corporate Control, Customer 

Finance, Finance, General 

Counsel and certain corporate 

staff units. 

6. Gunnar Rustad 

Born 1949. 


Group Vice President, 

Head of Sales and Services. 


Reporting to Gunnar Rustad: 

Sales Trucks, Buses and Coaches, 

Global Services. 


86

Corporate Units 

7. Håkan Ericsson 

Born 1947. 


Senior Vice President 

Global Services. 


13. Claes Jacobsson 

Born 1958. 



Customer Finance. 


19. Carl Riben 

Born 1950. 



General Counsel. 


9 

13 

8. Johan Haeggman 

Born 1960. 



Rejoined Scania in 2003. 


Corporate Relations. 


14. Urban Johansson 

Born 1945. 





Powertrain Development. 


20. Robert Sobocki 

Born 1952. 





Sales Buses and Coaches. 


15 

20 

10 

12 

9. Magnus Hahn 

Born 1955. 



Business Communications. 

From January 2004 

Human Resources Sweden. 


10. Lennart Hjelte 

Born 1945. 



Industrial and Marine Engines. 


11. Hans-Christer 

Holgersson 

Born 1953. 



Scania Latin America. 


12. Peter Härnwall 

Born 1955. 



Corporate Control. 


15. Thomas Karlsson 

Born 1953. 



Powertrain Production. 


16. Christoffer Ljungner 

Born 1950. 



Sales Overseas. 


17. Hans Narfström 

Born 1951. 



Corporate Human Resources. 


18. Lars Orehall 

Born 1947. 



Truck, Cab and Bus Chassis 

Development. 


21. Mikael Sundström 

(not in picture) 

Born 1957. 

Joined Scania on 1 March 2004. 


General Counsel. 


22. P O Svedlund 

Born 1955. 



Purchasing and CIO. 


23. Lars Wrebo 

Born 1961. 



Chassis and Cabs Production. 


23 

8 

22 

7 

19 

17 

11 

14 

18 

16 


ADDRESSES 

Head Office and 

Technical Centre 

Scania AB 

SE-151 87 SÖDERTÄLJE 

Sweden 

Tel: +46 8 553 810 00 

Fax: +46 8 553 810 37 


■ PRODUCTION UNITS 


Chassis Assembly 

Jan Hillerström 


Sweden 

Tel: +46 8 553 810 00 

Fax: +46 8 553 810 37 


Transmission 

Robert Dubois 


Sweden 

Tel: +46 8 553 810 00 

Fax: +46 8 553 810 37 


Engine Assembly 

Melker Jernberg 


Sweden 

Tel: +46 8 553 810 00 

Fax: +46 8 553 810 37 

Scania Engines 

Staffan Garås 


Sweden 

Tel: +46 8 553 810 00 

Fax: +46 8 553 810 37 

Scania Axles 

Anders Williamsson 

Box 1906 

SE-791 19 FALUN 

Sweden 

Tel: +46 23 477 00 

Fax: +46 23 71 13 79 

Scania Cabs 

Stefan Palmgren 

Box 903 

SE-572 29 OSKARSHAMN 

Sweden 

Tel: +46 491 76 50 00 

Fax: +46 491 76 54 30 

Scania Transmission 

Anders Holmberg 

Lars Dahl (May 2004) 

SE-280 63 SIBBHULT 

Sweden 

Tel: +46 44 495 00 

Fax: +46 44 481 08 

Ferruform AB 

Peter Björk 

Box 815 

SE-971 25 LULEÅ 

Sweden 

Tel: +46 920 766 00 

Fax: +46 920 896 10 

Scania Nederland B.V. 

Lars Stenqvist 

P.O. Box 618 

NL-8000 AP ZWOLLE 


Tel: +31 38 497 76 11 

Fax: +31 38 497 79 11 

Scania Production 

Angers S.A.S. 

Martin Lundstedt 

B.P. 846 

FR-49008 ANGERS Cedex 01 

France 

Tel: +33 2 41 41 20 00 

Fax: +33 2 41 41 20 48 

Scania São Bernardo 

Sidney Basso 

Av. José Odorizzi, 151-Vila Euro 

09810-902 SÃO BERNARDO DO 

CAMPO-SP 

Brazil 

Tel: +55 11 4344 9333 

Fax: +55 11 4344 2659 

Scania Tucumán 

Bengt Klingberg 

Casilla de Correo No. 3 

Correo Central 

4000 SAN MIGUEL DE TUCUMÁN 

Argentina 

Tel: +54 3 814 509 000 

Fax: +54 3 814 509 001 

Scania San Luis 

Roger Johansson 

Prol Av Industrias 4640 

Esq Eje 134 

C P 78395 Zona Industrial 

SAN LUÍS DE POTOSÍ 

Mexico 

Tel: +52 4448 269 000 

Fax: +52 4448 240 504 

■ DEVELOPMENT, 

PRODUCTION 

BUS BODIES 

Omni Katrineholm AB 

Hans Hansson 

Vingåkersvägen 71 

SE-641 81 KATRINEHOLM 

Sweden 

Tel: +46 150 585 00 

Fax: +46 150 532 30 

Scania Production Sfiupsk S.A. 

Lars-Erik Nerback 

ul Grunwaldzka 12 

PL-76-200 SĹUPSK 

Poland 

Tel: +48 59 844 06 87 

Fax: +48 59 843 66 01 

Scania Peter LLC 

Urban Eriksson 

8, Ljubotinsky pr. 

RU-196084 ST. PETERSBURG 

Russia 

Tel: +7 812 346 68 70 

Fax: +7 812 346 68 79 

■ SALES AND 

SERVICE COMPANIES 

Scania Argentina S.A. 

Sven Antonsson 

Ruta Panamericana – Km 34 

(1615) Malvinas Argentinas 

BUENOS AIRES 

Argentina 

Tel: +54 3 327 451 000 

Fax: +54 3 327 451 075 

Scania Australia Pty Ltd. 

Kaj Färm 

Private Bag No. 11 

Vic 3061, CAMPBELLFIELD 

Australia 

Tel: +61 392 173 300 

Fax: +61 393 053 898 

Scania Österreich Ges.m.b.H. 

Ulf Ekström 

Johann-Steinböck-Strasse 4 

AT-2345 BRUNN AM GEBIRGE 

Austria 

Tel: +43 223 639 020 

Fax: +43 223 639 0286 

Scania Belgium sa-nv 

Peter Janssens 

J.F. Kennedylaan 4 

BE-1831 DIEGEM 

Belgium 

Tel: +32 2 722 8411 

Fax: +32 2 722 8400 

Scania Brasil 

Christopher Podgorski 

Av. José Odorizzi, 151-Vila Euro 

09810-902 SÃO BERNARDO DO 

CAMPO-SP 

Brazil 

Tel: +55 11 4344 9333 

Fax: +55 11 4344 2659 

Scania Chile S.A. 

Emilio Müller 

Panamericana Norte, no 9850 

Quilicura, SANTIAGO 

Chile 

Tel: +56 2 394 04 00 

Fax: +56 2 738 60 60 

Scania Czech Republic s.r.o. 

Bengt Thorsson 

Chrástany 186 

CZ-252 19 Posta Rudná u Prahy 

PRAHA 

Czech Republic 

Tel: +420 2 510 951 11 

Fax: +420 2 579 512 23 

Scania Danmark A/S 

Jørgen Damkjær 

Postboks 580 

DK-2730 HERLEV (Copenhagen) 

Denmark 

Tel: +45 4454 2200 

Fax: +45 4454 2209 

Scania Eesti AS 

Janno Karu 

Peterburi tee 72 

EE-11415 TALLINN 

Estonia 

Tel: +372 6 651 200 

Fax: +372 6 651 208 

Oy Scan-Auto Ab 

Raimo Lehtiö 

PB 59 

FI-00391 HELSINKI 

Finland 

Tel: +358 10 555 010 

Fax: +358 10 555 5361 

Scania France S.A.S. 

Marc Haezenberghe 

B.P. 30106 


France 

Tel: +33 2 414 133 33 

Fax: +33 2 413 476 25 

Scania Deutschland GmbH 

Johan P Schlyter 

Postfach 10 04 26 

DE-56034 KOBLENZ 

Germany 

Tel: +49 261 8970 

Fax: +49 261 897203 

Scania (Great Britain) Ltd. 

Dan Hoij 

Delaware Drive 

MILTON KEYNES MK15 8HB 

Great Britain 

Tel: +44 1908 210 210 

Fax: +44 1908 215 040 

Scania Hungária Kft. 

Thomas Bertilsson 

Rozália park 1 

HU-2051 BIATORBÁGY 

Hungary 

Tel: +36 23 531 000 

Fax: +36 23 531 009 

Italscania S.p.A. 

Giancarlo Codazzi 

Z.I. Spini di Gardolo, 125/E 

IT-38104 TRENTO 

Italy 

Tel: +39 046 199 6111 

Fax: +39 046 199 6198 

Scania Latvia SIA 

Ervins Arents 

Tiraines iela 13 

LV-1058 RIGA 

Latvia 

Tel: +371 7 066 600 

Fax: +371 7 066 649 

UAB Scania Lietuva 

Bo Hallberg 

Lentvario 14b 

LT-2053 VILNIUS 

Lithuania 

Tel: +370 5 268 5505 

Fax: +370 5 268 5504 

Scania (Malaysia) Sdn. Bhd 

Åke Månsson 

No 1, Jalan Tiang U8/93 

40150 Shah Alam SELANGOR 

Malaysia 

Tel: +603 7845 1000 

Fax: +603 7845 2000 

Scania de México S.A. de C.V. 

Silvio Bracesco 

Calzada Vallejo, no. 1044, 1er Piso 

Delegación Azcapotzalco 

C.P. 02300 MEXICO-D.F. 

Mexico 

Tel: +52 555 078 03 00 

Fax: +52 555 87 05 33 

Scania Maroc S.A. 

Serge Habib 

Georgij Smirnov (July 2004) 

Rue Capitaine Vuillainier Km 7, R.P.1. 

AIN SEBAÂ – CASABLANCA 

Morocco 

Tel: +212 22 34 33 23 

Fax: +212 22 34 33 24 

Beers Bedrijfsauto BV 

Anders Grundströmer 

Postbus 24012 

NL-2490 AA DEN HAAG 


Tel: +31 704 182 418 

Fax: +31 704 182 510 

Norsk Scania AS 

Erik Hansen 

Postbox 143, Skøyen 

NO-0212 OSLO 2 

Norway 

Tel: +47 220 645 00 

Fax: +47 220 645 99 

Scania del Perú S.A. 

Horácio Gramajo 

Av Republica de Panamá, 

no 4679 

Apartado 3190 – Surquillo 

LIMA 

Peru 

Tel: +51 1 241 3016 

Fax: +51 1 241 6391 

Scania Polska S.A. 

Tommy Sjöö 

Aleja Katowicka 316 

PL-05-830 Stara Wies/ 

NADARZYN 

Poland 

Tel: +48 22 356 01 00 

Fax: +48 22 356 01 01 


88

Scania Romania S.R.L. 

Alfred Bussmann 

Nicolae Caramfil Nr. 77 

Sector 1, BUCHAREST 

Rumania 

Tel: +40 21 233 0830 

Fax: +40 21 233 1077 

Scania Russia 

P G Nilsson 

43 km Minskoe shosse 

Golitsyno 

143040 MOSCOW 

Russia 

Tel: +7 095 787 5000 

Fax: +7 095 787 5002 

Scania Singapore 

Private Limited 

Norman Koh 

14, Joo Koon Crescent 

Singapore 629014 

Tel: +65 686 11918 

Fax: +65 686 15808 

Scania East Adriatic 

Region d.o.o. 

Kjell Örtengren 

Cesta v Gorice 28 

SI-1000 LJUBLJANA 

Slovenia 

Tel: +386 1 242 76 42 

Fax: +386 1 242 76 69 

Scania South Africa (Pty) Ltd. 

Ulf Grevesmühl 

P O Box 587 

2110 MONDEOR 

South Africa 

Tel: +27 11 661 9600 

Fax: +27 11 661 9651 

Scania Korea Ltd. 

Staffan Sjögren 

18th Floor, Construction Building 

71-2, Nonhyun-dong, 

Kangnam-Gu 

135-010 SEOUL 

South Korea 

Tel: +82 2 321 808 00 

Fax: +82 2 511 74 39 

Scania Hispania S.A. 

José Badía 

Apartado de correos 1.066 – Parque 

Empresarial 

ES-28830 S. FERNANDO DE HERNARES 

(MADRID) 

Spain 

Tel: +34 91 678 80 00 

Fax: +34 91 675 74 50 

Scania Sverige AB 

Martin Ståhlberg 

Verkstadsvägen 11 


Sweden 

Tel: +46 8 553 864 00 

Fax: +46 8 553 864 35 

Scania Truck AG 

Dieter Merz 

Steinackerstrasse 55 

CH-8302 KLOTEN 

Switzerland 

Tel: +41 1 800 13 00 

Fax: +41 1 800 13 01 

Scania Tanzania Ltd. 

Henrik Orrling 

Nyerere Road 

P O Box 9324 

DAR ES SALAAM 

Tanzania 

Tel: +255 22 286 0290 

Fax: +255 22 286 5033 

Scania Siam Co. Ltd. 

Vichai Jirathiyut 

23/21 Vibhavadi Rangsit Road 

Ladyao, Chatucnad 

10900 BANGKOK 

Thailand 

Tel: +66 2 515 9600 

Fax: +66 2 537 8261 

Scania Ukraine Ltd. 

Håkan Sundström 

100, Stolichnoye Shosse 

UA-03045 KIEV 

Ukraine 

Tel: +380 44 490 74 90 

Fax: +380 44 490 77 71 

Scania USA, Inc 

Claes Sundberg 

121 Interpark Blvd, Suite 601 

SAN ANTONIO, Texas 78216 

USA 

Tel: +1 210 403 00 07 

Fax: +1 210 403 02 11 

Scania de Venezuela S.A. 

Bernt Lindstedt 

Urb. Parque Ind. Castillito – 

Distribiudor Divenca 

Prolongacion Av. Branger – Parcela L-4 

VALENCIA – ESTADO CARABOBO 

Venezuela 

Tel: +58 241 871 80 90 

Fax: +58 241 871 59 95 

■ BUSES 

SALES COMPANIES 

Scania Bus Belgium sa-nv 

Fredrik Morsing 

J.F. Kennedylaan 4 

BE-1831 DIEGEM 

Belgium 

Tel: +32 2 704 4000 

Fax: +32 3 704 4010 

Scania Bus France S.A.S. 

Philippe Oberman 

19, rue Gaston Monmousseau Z.A.B. 

FR-95190 GOUSSAINVILLE 

France 

Tel: +33 1 48 26 41 50 

Fax: +33 607 38 97 94 

Scania Bus Deutschland GmbH 

Waltraud Matzenberger 

Dieselstrasse 1 

DE- 50170 KERPEN-SINDORF 

Germany 

Tel: +49 227 398 9910 

Fax: +49 227 398 9920 

Scania Bus & Coach Ltd. 

Geoff Bell 

Claylands Avenue, Worksop 

NOTTINGHAMSHIRE S81 7DJ 

Great Britain 

Tel: +44 1909 5008 22 

Fax: +44 1909 5001 65 

Scania Bus Italy S.R.L. 

Henry Jonsson 

Z.I. Spini di Gardolo, 125/E 

IT-38104 TRENTO 

Italy 

Tel: +39 0461 996 111 

Fax: +39 0461 996 198 

Scania Sverige Bussar AB 

Christer Fridell 

Verkstadsvägen 11 

SE- 151 87 SÖDERTÄLJE 

Sweden 

Tel: +46 8 553 864 00 

Fax: +46 8 553 511 50 

■ FINANCE COMPANIES 

Scania Finance Belgium nv 

Bert Peeters 

Minervastraat 8 

BE-1930 ZAVENTEM 

Belgium 

Tel: +32 2 714 2424 

Fax: +32 2 721 9442 

Scania Finance Czech Republic 

Zuzana Tomeckova 

Chrástany 186 

CZ-25219 Posta Rudná u Prahy 

PRAHA 

Czech Republic 

Tel: +420 2 579 507 00 

Fax: +420 2 579 507 31 

Scania Finance France S.A.S. 

Koen Knoops 

2 Boulevard de l’Industrie Z.I. 

d’Ecouflant 


France 

Tel: +33 241 41 33 95 

Fax: +33 241 34 70 46 

Scania Finance 

Deutschland GmbH 

Ulf Egestrand 

Postfach 100427 

DE-56034 KOBLENZ 

Germany 

Tel: +49 261 807 8392 

Fax: +49 261 807 8313 

Scania Finance Italy s.p.a. 

Pierre de Bantel 

Via Lombardini, no 13 

IT-20143 MILANO 

Italy 

Tel: +39 02 581 161 

Fax: +39 02 581 166 66 

Scania Finance Nederland BV 

Gerard van Keulen 

Postbus 24012 

NL-2490 AA DEN HAAG 


Tel: +31 704 18 24 18 

Fax: +31 704 18 25 20 

Scania Finance Polska Sp.z.o.o. 

Janusz Laskowski 

Aleja Katowicka 316 

PL-05-830 Stara Wies/ 

NADARZYN 

Poland 

Tel: +48 22 356 02 30 

Fax: +48 22 356 02 31 

Scania Leasing OOO 

Alexander d’Huc 

Office C200 113/1 Leninsky 

Prospekt 

117 198 MOSCOW 

Russia 

Tel: +7 095 956 57 65 

Fax: +7 095 956 57 66 

Scania Finance Hispania 

Eddi Mues 

Parque Empresarial San Fernando 

Edifico Europa 

San Fernando Henares 

ES-288 30 MADRID 

Spain 

Tel +34 91 678 18 61 

Fax +34 91 678 18 63 

Scania Credit AB 

Per Spjut 


Sweden 

Tel: +46 8 553 836 60 

Fax: +46 8 553 837 24 

Scania Finans AB 

Scania Finance Great Britain Ltd. 

Leif Christensson 


Peter Taylor 

Sweden 

Regus House, Fairbourne Drive 

Tel: +46 8 553 837 50 

Atterbury 

Fax: +46 8 553 837 66 

MILTON KEYNES MK10 9RG 

Great Britain 

Scania Finance Korea Ltd. 

Tel: +44 1 908 48 7530 

Sangwon Lee 

Fax: +44 1 908 48 7730 

18th Floor, Construction Building 

71-2, Nonhyun-dong, 

KangNam-Ku 

135-010 SEOUL 

South Korea 

Tel: +82 232 183 700 

Fax: +82 232 183 737 

■ SUPPORT COMPANIES 

DynaMate AB 

Stefan Palskog 


Sweden 

Tel: +46 8 553 830 00 

Fax: +46 8 553 816 84 

Scania Parts Logistics AB 

Kjell Nilsson 


Sweden 

Tel: +46 8 553 828 45 

Fax: +46 8 553 861 90 


Scania AB (publ), SE-151 87 Södertälje, Sweden, Tel: +46 8 55 38 10 00, Fax: +46 8 55 38 10 37 

For more information, see: 


1595363/13/KREAB/ Trosa Tryckeri, 2004

Scania annual report 2003

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