Scania annual report 2004

2004 

A N N U A L R E P O R T

Contents 2004 

Scania in brief 4 

Important events in 2004 6 

Statement of the President and CEO 8 

Management structure 10 

The work of the Board 11 

Goals and strategies 12 

Brand and values 13 

Employees 14 

Scania’s role in society 16 

The environment 18 

Customers 20 

Trends and industry developments 22 

Products 26 

Research and development 30 

Production 34 

Scania share data 38 

Facts about Scania 40 

– The truck market 

– The bus and coach market 

– The market for industrial and marine engines 

– Employees 

– Environmental economics 

Financial review 46 

Income statement 49 

Balance sheet 50 

Statement of changes in 

shareholders’ equity 51 

Cash flow statement 51 

Parent Company financial 

statements 52 

Accounting principles 53 

Notes, Scania Group 57 

Subsidiaries 76 

Notes 78 

Proposed distribution of earnings 79 

Auditors’ report 80 

Quarterly data 82 

Key financial ratios and definitions 83 

Multi-year statistical review 84 

Board of Directors 86 

Group Management 88 

Annual General Meeting and 

information 90 

The English version of the Annual Report is a translation of the Swedish-language original, which is the 

binding version and shall prevail in case of any discrepancies. Translation: Victor Kayfetz, Scan Edit. 

The Report of the Directors encompasses pages 4–79. 

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. 

SCANIA ANNUAL REPORT 2004

VEHICLES AND SERVICE 

Key figures 2004 2003 2002 

Trucks 

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 

30,000 

20,000 

10,000 

27,184 

29,537 

33,407 

Deliveries, units 

Trucks 50,563 45,045 39,895 

Buses 5,519 4,910 3,774 

Total 56,082 49,955 43,669 

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. 

Industrial & marine engines 

Scania’s industrial and marine engines are 

used in a variety of applications at sea and 

on land. 

Service 

By continuously expanding its range of 

service-related products, Scania guarantees 

its customers cost-effective solutions and 

high availability. 

0 

Sales revenue 

SEK m. 

6,000 

4,000 

2,000 

0 

2002 2003 2004 

3,991 

Sales revenue 

SEK m. 

800 

600 

400 

200 

0 

5,115 

2002 2003 2004 

464 453 

5,504 

658 

2002 2003 2004 

Sales revenue 

SEK m. 

12,000 

11,418 

10,603 10,759 

8,000 

4,000 

Sales revenue, SEK m. 

Vehicles and service 56,788 50,581 47,285 

Operating income, SEK m. 

Vehicles and Service 5,887 4,759 3,548 

Customer Finance 450 366 308 

Divested car operations 1 – – 550 

Total 6,337 5,125 4,406 

Operating margin, percent 11.2 10.1 9.3 

Income before taxes, SEK m. 6,014 4,604 3,722 

Net income, SEK m. 4,077 3,034 2,739 

Earnings per share, SEK m. 20.39 15.17 13.70 

Cash flow, Vehicles and Service, SEK m. 2,685 2,450 3,583 

Return, percent 

on shareholders’ equity 20.8 17.4 17.2 

on capital employed, Vehicles and Service 28.1 22.0 17.4 

Net debt/equity ratio, 

Vehicles and Service 0.05 0.17 0.31 

0 

2002 2003 2004 

Equity/assets ratio, percent 30.0 27.7 25.6 

CUSTOMER FINANCE 

Capital expenditures for fixed assets, SEK m. 2,737 3,196 3,025 

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. 

Size of portfolio 

SEK m. 

30,000 

Operating income 

20,000 

10,000 

SEK m. 

500 

400 

300 

200 

100 

0 

0 

00 01 02 03 04 

Research and development 

expenditures, SEK m. 2 2,219 2,151 2,010 

Number of employees, 31 December 29,993 29,112 28,230 

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

2 From 2002 onward including net capitalised development expenditures, amounting to SEK 232 m. in 

2004, SEK 667 m. in 2003 and SEK 573 m. in 2002. 

SCANIA IN BRIEF • SCANIA ANNUAL REPORT 2004 4

THE WORLD OF SCANIA 

Deliveries 

by market area, 2004 

Africa, Asia, 

Oceania 16% 

South 

America 16% 

Western 

Europe 58% 

Central and 

eastern Europe 

10% 

Sales revenue 

by product area, 2004 

Buses and coaches 9% 

Industrial and 

marine engines 1% 

Used vehicles 

and other 

products 12% 

Service-related 

products 20% 

Trucks 58% 

HEAD OFFICE 

Revenue in Scania’s ten largest markets, 

Vehicles and Service 

Jan–Dec, 

Change 

Sweden (number of employees) 

Södertälje 

• Corporate units (554) 

• Research and development (1,924) 

PRODUCTION UNITS 

SALES AND SERVICE 

SEK m. 2004 2003 in % 

Great Britain 7,744 7,255 7 

Germany 3,816 3,449 11 

Brazil 3,815 2,537 50 

France 3,545 3,226 10 

Sweden 3,499 3,349 4 

Italy 3,276 2,979 10 

Spain 3,205 3,017 6 

The Netherlands 2,448 2,047 20 

Norway 2,220 1,957 13 

Denmark 1,641 1,211 36 

Sweden 

Södertälje (2,712) 

Production of components, 

engines, trucks and bus chassis. 

Falun (687) 

Production of axles. 

Luleå (713) 

Production of frame members and 

rear axle housings. 

Oskarshamn (2,172) 

Production of cabs. 

Sibbhult (508) 

Production of gearboxes. 

Argentina 

Tucumán (649) 

Production of gearboxes 

and rear axle gears. 

Brazil 

São Paulo (2,299) 

Production of engines, 

axles, cabs, trucks and 

bus chassis. 

France 

Angers (548) 

Assembly of trucks. 

The Netherlands 

Zwolle (1,437) 

Assembly of trucks. 

Poland 

Slupsk (328) 

Assembly of bus bodies. 

Russia 

St. Petersburg (204) 

Assembly of bus bodies 

Altogether, Scania is represented in about 100 countries 

through 1,000 local distributors and 1,500 service points. 

FINANCE COMPANIES 

Scania has its own finance companies in 15 markets. Even 

in markets where Scania has no finance company of its 

own, sales companies and customers are supported by 

various financial services from Scania Credit AB. 

SCANIA’S GLOBAL PURCHASING 

In addition to its corporate purchasing department, Scania 

has local procurement offices in Russia, Poland, the Czech 

Republic and the United States and is building up another 

in Shanghai, China. 

5 SCANIA IN BRIEF • SCANIA ANNUAL REPORT 2004

Important events in 


At 

the IAA commercial 

vehicle exhibition, Scania’s 

President and CEO Leif 

Östling accepted the 

”International Truck of 

the Year 2005” trophy 

from Jury Chairman 

Andy Salter. 

■ World premiere for the R-series 

On 31 March, Scania held the world premiere 

of its new R-series trucks, intended 

for long-haulage. During the spring and 

until mid-July, various launch activities 

took place in Södertälje for over 10,000 

specially invited customers and more than 

200 journalists. At the same time, the 

launch was something of a celebration for 

all the Scania employees who had worked 

to develop and design the new truck range, 

as well as prepare its production and marketing. 

At Scania’s European production 

units, the transition from the 4-series to 

the new truck range went so smoothly that 

it will go down in history as Scania’s most 

successful product changeover to date. 

■ Truck of the Year 2005 

The new R-series was well received by 

customers and the transport industry. The 

series was awarded the International Truck 

of the Year 2005 trophy, a prestigious 

distinction presented by a jury consisting 

of 18 of Europe’s leading truck journalists. 

The statement of the jury included the 

following passage: “The R-series impressed 

the jury with its particular attention 

to driver comfort through a wholesale 

revision of the cab interior. Improved ergonomics, 

better cab comfort and a more 

refined driving environment all combine to 

give the R-series enhanced driver appeal. 

In addition, Scania’s attention to the driveline, 

new electronic architecture and cleaner 

more efficient engines was worthy of 

particular note.” 

■ New products 

At the IAA commercial vehicle exhibition 

in Hanover, Germany, Scania showed the 

new truck range in its full breadth to an 

international audience for the first time. 

It was also the premiere for a new tourist 

coach with a more streamlined body, an 

updated interior, better passenger comfort 

and a new driver’s area. 

■ Upswing in South America 

The South American economies strengthened 

during 2004, and so did Scania’s 

sales in the region. Utilisation of production 

capacity improved by means of increased 

exports to other continents. This 

had a sizeable positive effect on Scania’s 

operations and earnings. Scania’s strong 

position in the region was also manifested 

in other ways. In Brazil, Scania regained 

its role as market leader. The strength of 

the brand was confirmed when Scania 

was named the most admired commercial 

vehicle company in a survey conducted by 

the renowned business periodical Carta 

Capital. In Argentina, Scania was named as 

having the strongest quality image of any 

brand in the country in a survey carried 

out by the business magazine Mercado. 

■ Scania the first to meet new 

emission standards 

In September, Scania became the first 

manufacturer to begin deliveries of trucks 

equipped with an engine that meets Euro 

4 emission standards, which become 

compulsory from October 2006. The new 

12-litre engine is delivered mainly to 

customers that drive on German motorways, 

which in January 2005 introduced 

user tolls that vary depending on a vehicle’s 

environmental impact. 

IMPORTANT EVENTS • SCANIA ANNUAL REPORT 2004 6

More than 10,000 invited guests 

from all over the world experienced 

the premiere of the new R-series. 

At the R-series world premiere, guests 

had a chance to acquaint themselves 

with the various cab alternatives. 

■ Presentation of the new 9-litre engine 

In October, Scania gathered South 

American customers and journalists in 

São Paulo to present a new 9-litre engine. 

With this five-cylinder engine, which is 

available in outputs of between 230 and 

310 hp, Scania has completed its global 

changeover to a modular engine range. 

■ New marine engine 

In June, Scania unveiled a new 12-litre 

marine engine. It is based on Scania’s 

modular engine range and is equipped 

with Scania’s electronic engine management 

system (EMS). Applications include 

fishing and pilot boats as well as ferries. 

In September, Scania unveiled an 

expanded output range for its 12-litre 

engine that meets the requirements of 

current and future emission legislation. 

■ New competition for young 

professional drivers 

During 2004, Scania began planning the 

implementation of a second round of the 

world’s largest road safety competition for 

professional drivers, Young European 

Truck Driver 2005. The competition, which 

was a success when it was organised in 

2003, is aimed at strengthening the role 

of the driver in improved road safety and 

economical driving. It has grown to 

encompass 28 European countries this 

year. About 20,000 drivers born in 1970 

or later are expected to participate. The 

finals take place in Sweden during September 

2005. 

■ Seminar on engine development 

and alternative fuels 

During the autumn, Scania gathered 

members of the newly elected European 

Parliament, leading European Commission 

officials as well as industry experts and 

representatives of public authorities at a 

seminar on engine development and alternative 

fuels. Compared to other alternatives, 

the diesel engine offers the best 

efficiency. It is also not limited to fossil 

fuel. Read more about emissions and 

performance on Scania’s website, 

www.scania.com. 

■ Increased trading in Scania shares 

Since 1 July, Scania has been back on 

Stockholmsbörsen’s Most Traded share list. 

This came after trading in Scania shares 

rose sharply once Volvo had divested its 

holding in Scania, in compliance with the 

European Commission’s ruling. 

■ Extraordinary General Meeting 

At an Extraordinary General Meeting on 

19 November, a clear majority of Scania’s 

shareholders approved a resolution stating 

that the company would make a public 

offer to the shareholders of Ainax AB 

(publ). At that time, shares of Ainax AB 

(publ) were traded on the Swedish “Nya 

Marknaden”. Since 24 November, Ainax 

shares have been quoted on the O-list of 

Stockholmsbörsen. Through Scania AB’s 

acquisition of more than 96 percent of the 

voting power and share capital of Ainax AB 

(publ), the offer was carried out and Ainax 

became a subsidiary of Scania AB on 22 

February 2005. The public offer was one 

step in a transaction aimed at dissolving 

Ainax AB (publ) and making its shareholders 

direct shareholders in Scania. The complete 

offer is described in the prospectus that 

was published on 21 December. The legality 

of the offer was supported by the customary 

statements from legal experts. 

7 IMPORTANT EVENTS • SCANIA ANNUAL REPORT 2004

Scania is stronger 

than ever 

Scania evolves as the needs of customers change. Since we delivered our first truck 

early in the 20th century, we have systematically worked our way forward in the value 

chain in order to move closer to customers and be a competent, reliable partner in 

growing their businesses. 

Scania is both a vehicle manufacturer and 

an advanced supplier of services. The 

vehicle is the basis of a product offering 

that also includes maintenance, repairs, 

customer financing and insurance, driver 

training and roadside assistance. 

To customers, this means operational 

security. To Scania, it means an involvement 

in a growing fleet of vehicles and a stable 

source of revenue. On average, Scania is 

growing by 5–6 percent annually. The new 

truck range that was launched during 

2004 will play a vital role in our growth. 

Scania’s core values – putting the 

customer first, respect for the individual 

and quality – govern our day-to-day 

work. How we treat our customers is 

very important. This, in turn, implies that 

leadership is crucial. It is the people behind 

the products who will determine 

Scania’s future competitiveness. 

Looking back at 2004, it is clear that 

the demand for heavy vehicles rebounded 

after a few weak years. 

The markets in western Europe were 

significantly stronger than during the preceding 

few years. Western European demand 

for trucks is driven by strong replacement 

needs, combined with large exports of 

used vehicles to central and eastern Europe. 

As the western European manufacturing 

sector moves more and more of its production 

eastward, the need for transport 

also increases. Infrastructure is rapidly 

expanding in many parts of these regions. 

For many years to come, the EU membership 

of the Baltic states, Poland, the Czech 

Republic, Slovakia and Hungary will be an 

essential driving force in the modernisation 

of the former Comecon block. Another 

example is the road network that is now being 

built from the Baltic Sea to Vladivostok. 

As a consequence of these developments, 

Scania’s operations in central and 

eastern Europe also showed good growth, 

with higher order bookings and deliveries. 

Over the past decade, we have built up 

a sizeable sales and service organisation 

in the region. Today Scania has a good 

position, and in a number of countries we 

are the market leader. 

The increasing flow of used vehicles from 

western European markets to central and 

eastern European ones means that Europe 

is becoming an ever more integrated market, 

and this is reinforced by the enlarged EU. 

Economic growth, especially in Europe, 

is of great importance to Scania, since 

transport needs – which create a demand 

for trucks and transport services – are 

directly connected to GDP growth. 

The economies in South America have 

stabilised politically and economically after 

the difficult years at the beginning of the 

21st century. Growth is now robust. In 

Brazil and Argentina, Scania’s order bookings 

rose at about the pace of the total 

market. 

Exports of both whole vehicles and 

components to countries outside South 

America continued to increase. In October, 

a new 9-litre engine was launched in South 

America. With this, Scania has a complete 

global engine family based on the same 

platform, from the 9-litre engine upward. 

Scania also had a good year in most 

markets outside Europe and South America. 

A number of markets in the Middle East 

and Africa showed good volume growth. 

South East Asia as a whole performed 

well during 2004. 

We are now building up our own sales 

and service organisation in China. The demand 

for advanced heavy trucks, Scania’s 

STATEMENT OF THE PRESIDENT AND CEO • SCANIA ANNUAL REPORT 2004 8

speciality, is nevertheless limited due to 

less-developed logistics and infrastructure. 

Bus and coach operations continued 

to perform well. Bus sales during 2004 

exceeded the previous year’s record level 

by a wide margin. Our European market 

position improved, and order bookings 

accelerated in the second half of 2004. 

During the year we completed the task of 

commercially integrating our bus and truck 

operations. Scania’s specialised bus and 

coach companies have now been integrated 

into its sales and service companies in 

Europe. Moving bus body production from 

Sweden to Poland has yielded good results, 

and the task of increasing the shared 

utilisation of components between trucks 

and bus chassis is continuing. Over the 

next few years, Scania will introduce new 

bus ranges. 

Our sales of industrial and marine 

engines rose sharply in 2004. The increase 

applied mainly to engines used for electricity 

supply, but our engines are also used 

in container lifters, agricultural machinery, 

boats and elsewhere. 

Through coordinated development of 

engines for different applications, we utilise 

Scania’s overall resources in an effective way. 

We have continued to expand our 

global production system. In Europe, we 

added an assembly line at our plant in 

Zwolle, the Netherlands. We are systematically 

eliminating bottlenecks at our production 

units in order to gradually increase 

capacity. We stand well equipped for 

growth. We are introducing product modifications 

continuously in the production 

system. To our customers, this means that 

every new Scania is a little better than the 

previous one. 

Despite the positive developments we 

saw during 2004, there are some question 

marks about 2005. Among other things, 

higher raw material and oil prices as well 

as weak economic growth in continental 

Europe may adversely affect the world 

economy. 

Late in 2004, our shareholders decided 

at an Extraordinary General Meeting to 

present an offer for all shares in Ainax, a 

company whose only purpose is to manage 

the Scania shares that were previously 

owned by Volvo. The proposal was approved 

at an Extraordinary General Meeting and 

an offer was presented in November. The 

purpose of the offer was to eliminate the 

prevailing uncertainty concerning Scania’s 

ownership picture and at the same time 

increase the liquidity of Scania shares. 

At the end of the acceptance period, 

more than 96 percent had accepted the 

offer. Ainax is now a subsidiary of Scania. 

To summarise, 2004 was a year of many 

big events. The launch of the new truck 

range and the International Truck of the 

Year 2005 award were two of them. We 

are proud of Scania’s results and of our 

leading position within heavy vehicles and 

services. We now look forward to a new 

year when our big challenge is to take full 

advantage of the strength of our overall 

product offering. 

Finally, I would like to thank all Scania 

employees for their great dedication, good 

work contributions during a challenging year 

and very fine results. Together we will do 

everything to ensure that 2005 will be at 

least as successful as 2004. 

Leif Östling 

President and CEO 

9 STATEMENT OF THE PRESIDENT AND CEO • SCANIA ANNUAL REPORT 2004

Leadership 

for profitable growth 

In order to meet the challenges of the coming years, it is necessary to safeguard the supply 

of talent in all units and at all levels. This demands a high standard of leadership. Scania’s 

leadership principles are the foundation for all work throughout the global organisation. 

Leading 30,000 employees worldwide requires 

a clear strategy. At Scania, leadership 

must transform a common way of 

thinking into a common way of working. 

In a number of respects, Scania has a 

leading position in its industry. To strengthen 

this position, the company’s operating 

objectives must be integrated with its 

vision and mission. The same guidelines 

and targets should apply to Scania as a 

whole and to its various operating units. 

Management structure 

Below the Board of Directors, Scania’s 

top decision-making body is the Executive 

Board. It decides on issues of a long-term, 

strategic nature. 

Group Management consists of the 

Executive Board and the heads of each 

Corporate Unit (see page 89). The Corporate 

Units have operating responsibility 

for carrying out the established strategies. 

Decision meetings 

Scania’s decision-making structure includes 

a number of fixed meetings in the 

company’s 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 ensuring that Scania’s strategy is communicated 

and that work takes place in 

compliance with it. The company’s strategic 

direction is summarised once a year in 

the Scania Strategic Update. This document 

is an important tool when establishing 

operating plans. 

Global Management Summit 

Scania’s top managers gather once a 

year for a strategic review, the Global 

Management Summit. Yearly meetings 

are also held with board members from 

Scania’s subsidiaries around the world. 

Corporate governance 

All companies in the Scania Group work in 

accordance with the principles established 

in Scania’s Corporate Governance Manual. 

The President and CEO of Scania appoints 

the representatives on the boards of local 

subsidiaries, among them a number of 

external members whose expertise and 

local contact networks contribute to 

Scania’s development. These company 

boards monitor operations and establish 

strategy and objectives. 

In keeping with the established strategy, 

the local company management directs 

and develops day-to-day operations and 

is responsible for achieving growth and 

earnings targets. 

The Scania Councils 

To further improve sales and service companies, 

a number of regional councils have 

been established. A council is headed by 

an independent chairman and consists of 

company managing directors in a region. 

Their task is to improve the business by 

benchmarking, exchanges of experience 

and common projects. 

MANAGEMENT STRUCTURE • SCANIA ANNUAL REPORT 2004 10

Strong Board 

strengthens Scania 

Scania’s Board of Directors is elected by the Annual General Meeting and is the ultimate link between 

the company’s shareholders and the operative management that runs its day-to-day work. The Board 

plays an important role in the continuous effort to improve Scania’s strategy and business. 

The 2004 Global 

Management Summit 

focused on leadership 

at Scania. 

According to its Rules of Procedure, Scania’s 

Board of Directors shall hold at least five 

regular meetings per year. Beyond this, the 

Board may meet when there are special 

needs. During 2004, the Board held a total 

of seven meetings. The meetings held in 

January/February, April, July/August and 

October/November are devoted primarily to 

financial reporting from the company. The 

meeting held in October/November deals 

with long-term plans and in December with 

the financial forecast for the following year. 

At its regular meetings, the Board deals 

with matters of a current nature and capital 

expenditure issues. The various committees 

report their work to the Board on a 

continuous basis. The Board also regularly 

discusses various aspects of the company’s 

operations, for example management 

recruitment, financing, product development 

and market issues. This occurs at indepth 

briefings where affected managers 

from the company participate. 

The statutory Board meeting held 

directly after the Annual General Meeting 

approves Rules of Procedure and a standing 

agenda for the Board meetings. It also 

appoints the Chairman, Vice Chairman 

and Board committee members. It adopts 

instructions and decides certain compensation 

issues. 

Preparatory to the nomination of Board 

members, Bernd Pischetsrieder, Chairman 

of the Board of Scania, and Board member 

Peggy Bruzelius hold discussions well before 

the Annual General Meeting with representatives 

of the five largest shareholders 

in order to reach a consensus with them 

on persons to be nominated to the Board. 

The Audit Committee – consisting of 

Marcus Wallenberg (Chairman), Vito H 

Baumgartner and Lothar Sander – had 

three meetings during 2004. 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 and Sune 

Carlsson. During 2004 the Remuneration 

Committee held two meetings. 

A committee was also established 

earlier that is to consist of external Board 

members independent of the largest shareholders. 

The Employee Representatives 

are not included here. This committee is 

intended to prepare any issues for the 

Board concerning the ownership structure 

of Scania AB. 

The instructions of the Board to Scania’s 

President and CEO specify his duties and 

powers. These instructions include guidelines 

on capital expenditures, financing, financial 

reporting and external communications. 

A Swedish code of corporate governance 

was proposed on 16 December 

2004 by a Government-appointed commission 

of inquiry. In the opinion of Scania’s 

Board of Directors, the company essentially 

fulfils the requirements of this 

code, but since it has not yet been implemented, 

Scania has not taken the code 

into special consideration in the Annual 

Report for 2004. 

11 THE WORK OF THE BOARD • SCANIA ANNUAL REPORT 2004

Growing with 

sustained profitability 

If Scania continues to grow at the same pace as it has to date, in the next decade we will 

reach sales of 100,000 vehicles per year and be involved in the service and maintenance 

of 800,000 vehicles in operation around the world. 

Concentration on heavy transport 

vehicles 

Scania’s operations focus on heavy transport 

vehicles, the segment where the 

demands – along with the margins and 

profitability – are the highest. A customer 

pays more for a highly specified vehicle 

than for a standard product. Vehicles in 

the heavy segment are also driven long 

distances and have a high degree of 

utilisation, which provides substantial 

service business. 

Modular product system 

With Scania’s modular product system, 

the customer can specify the vehicle he or 

she wants. The more closely vehicles and 

services can be adapted to a transport 

task, the better the customer’s operating 

economy will be. 

The modular system is important to 

Scania’s development, production and 

product quality. It also simplifies parts 

management, contributes to a higher 

degree of service and makes it easier to 

train service technicians. 

The modular system provides a carefully 

balanced number of main components 

with great flexibility. This allows 

considerably longer production runs than 

is possible in a conventional product 

system. 

Integrated business – vehicles, 

services and financing 

Scania offers its customers combinations 

of vehicles, services and financing that 

contribute to their business operations. 

Scania’s customers often use their vehicles 

round-the-clock and require rapid 

access to maintenance and repairs at all 

hours of the day from our service organisation. 

Customer financing is another important 

element of Scania’s complete product 

range. 

Focus on growth markets 

Scania has a presence in markets with 

potential for profitable growth. Scania’s 

main markets – Europe, South America 

and Asia – have good potential for longterm 

growth. An increasingly borderless 

Europe, with growing economies and an 

enlarged EU, offers major opportunities. 

In South America, there is an increasing 

demand for vehicles and service as 

an ever larger share of both goods and 

passenger traffic utilises heavy vehicles. 

Asia is a long-term growth market. The 

infrastructure is improving and logistics 

systems are developing. 

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. 

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 

environmental characteristics. 

GOALS AND STRATEGIES • SCANIA ANNUAL REPORT 2004 12

Values build a 

strong brand 

Behind the Scania brand is a strong corporate culture. The customer is the focus of the 

company’s operations. Respect for the individual employee and aiming for high quality are 

key values at Scania. 

Scania’s products are designed to give its 

customers high profitability. The Scania 

brand represents high quality and costeffectiveness. 

Pride and trust 

A customer should feel proud to own and 

drive a Scania vehicle. It should strengthen 

the professional respect accorded him 

by colleagues, competitors and his own 

customers. He has made a large, sound 

investment. It is not only a matter of investing 

in a physical product, but also of 

being able to rely on always having access 

to the collective knowledge and experience 

of Scania’s global organisation. 

Scania’s three core values 

Scania’s identity is shaped by the values 

and working methods of the people in the 

company. Three core values tie together 

the company and form the basis of Scania’s 

corporate culture and its business success. 

Customer first 

Scania focuses all its efforts on the needs 

and business operations of its customers. 

The customer is at the centre of the entire 

value chain: from research and development 

via production and procurement, to 

sales, financing 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 creates a partnership 

with the customer. 

Respect for 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 a number of principles 

to achieve good working results. 

New ideas and inspiration are born out of 

day-to-day operations, where Scania’s 

employees hone their skills. 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 quickly dealing 

with deviations in established processes 

and promptly remedying them, Scania’s 

employees can continuously improve the 

quality of their products and services. 

13 BRAND AND VALUES • SCANIA ANNUAL REPORT 2004

The people 

behind the products 

If Scania is to surpass customer expectations, the whole organisation must be staffed by 

highly competent and motivated employees. 

Scania’s human resources policy 

Scania shall 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. 

Human resource development is a cornerstone 

of Scania’s activities. The company 

works systematically and continuously 

to safeguard and retain a high level of 

skills throughout the organisation. 

Sales and service growing 

At year-end, the number of employees in 

Scania’s global organisation was 29,993, 

an increase of 3 percent compared to one 

year earlier. The increase was mainly attributable 

to production units in Europe and 

South America, and partly due to expansion 

of the service network, including 

acquisitions. 

Today the sales and service organisation 

accounts for about 35 percent of all 

employees compared to 10 percent in 

1990. About 15 percent of the workforce 

consists of women. 

Focus on leadership 

Scania had an exciting year in 2004, with 

the launch of its new truck range. Developing 

the trucks from concept to finished 

product required a dedicated organisation, 

whose strength is competent employees 

combined with good leadership. 

Dedication and dialogue 

Being an attractive employer requires leadership 

of the same high quality as the company’s 

products and services. The foundation 

is a structured dialogue between 

manager and employees. Its purpose is to 

create a consensus about behaviour and 

working methods that supports Scania’s 

core values. The strength of these structured 

dialogues is that all employees participate. 

When everyone is pulling in the same direction, 

through a common way of thinking 

and working, the results are very positive. 

This leadership philosophy is now being 

established throughout the Scania organisation. 

The good workplace 

Scania’s ambition is to be a highly regarded 

workplace for its current and future 

employees. All employees must feel that 

they are contributing to the success of the 

company and that they are participating 

and undergoing professional growth at 

Scania. To obtain a picture of how Scania 

employees perceive their working situation 

and enable them to influence it and make 

improvements, the company conducts 

annual employee surveys and individual 

human resource development discussions. 

The people behind the products are, 

and will remain, the key to Scania’s future 

success. Human resource development 

programmes for our employees have always 

been vital for Scania, especially in 

their day-to-day work. The Scania Production 

System is based on continuous learning. 

This approach is now also being 

applied to Scania’s administrative departments 

as well as its service business. 

Freedom of contract and 

co-determination 

A majority of our employees belong to 

unions. Everywhere that Scania does business, 

employees have access to company 

information and the right to co-determination, 

as provided by national legislation. 

Good relations between the company 

and employees are highly important to 

Scania’s success. Such relation-building 

occurs through consultation and dialogue 

between representatives of the company 

and the employees. One example of such a 

consultative forum is the Scania European 

Committee, which represents Scania 

employees in 19 European countries. The 

Scania European Committee was formed 

in 1998 on the basis of EU legislation on 

works councils within international corporate 

groups. 

Workplace health and safety 

All employees at Scania are entitled to a 

creative and healthy working environment. 

At the same time, each employee is 

expected to take responsibility for his or 

her own situation and health. 

This is why for many years, Scania has 

invested in raising employees’ awareness 

of a well-balanced existence. When health 

awareness increases, the company together 

with its employees can work in a positive, 

preventive way by promoting health and 

countering risks of ill health and poor 

working environment. 

During 2004, absences due to illness 

(sick leaves) in the Scania Group totalled 

3.5 percent. A detailed account of such 

absences, in accordance with Swedish 

legislation, can be found in the Annual 

Report of Scania CV AB, which is the 

employer of everyone working for Scania 

in Sweden. 

EMPLOYEES • SCANIA ANNUAL REPORT 2004 14

Continuous 

improvements 

in the workshop 

To Tommy Warren, Andy Hamann and 

Gary Power, continuous improvement 

efforts are a natural element of their 

service workshop jobs. 

With their close and frequent customer 

contacts, service technicians play a key 

role in the Scania organisation. This is why 

the task of recruiting, retaining and improving 

their skills enjoys high priority. 

Nine of Scania’s 8,000 service technicians 

are employed at a workshop in 

the village of Waterlip in Somerset, southwestern 

England. 

The workshop is among the most 

successful in terms of employee development. 

Scania’s core values – putting the 

customer first, respect for the individual 

and quality – guide its work. 

The nine-strong team is continuously 

honing its knowledge. If one member has 

been on a training course, or has learned 

something new through experience, they 

gather afterward and go through it together. 

“It has become second nature for us to 

share new knowledge. Imagine if the only 

person who can handle a task gets sick,” 

says Andy Hamann, one of the service 

technicians. 

Continuous improvement efforts are 

a much-appreciated element of the job 

that stimulates and motivates employees, 

boosting workshop quality without requiring 

expensive investments. 

“We have a great working environment. 

But the most important thing is 

that customers are satisfied, and there 

are very few complaints,” says workshop 

manager Gary Power. 

15 EMPLOYEES • SCANIA ANNUAL REPORT 2004

Long-term relationships 

contribute to positive change 

Scania is a global company that economically, socially and environmentally both influences and 

is influenced by the communities where it operates. Its local presence creates long-term 

relationships that will contribute to positive change for both the company and the community. 

Scania contributes to sustainable global 

development and supports the OECD 

Guidelines for Multinational Enterprises. 

These guidelines form the starting point of 

Scania’s sustainable development efforts. 

Scania’s relationships with society at 

large focus mainly on improved road safety 

and reduced environmental impact – 

issues closely associated with Scania’s 

business operations. 

After the tsunami disaster in the Indian 

Ocean during the 2004 Christmas holidays, 

Scania concentrated its relief efforts via 

the International Red Cross. 

Greater transparency 

During 2004, Scania continued to aim 

for greater transparency so that all stakeholders 

can more easily gain access to 

the information they are seeking. 

Scania has clarified its ethical and 

environmental positions, among other 

things by imposing high social and environmental 

standards on its suppliers. 

Scania regards such standards as necessary 

in order to achieve long-term sustainable 

development. 

Backing up drivers in all situations 

The driver is the most important contributor 

to improved road safety. Scania’s vision 

is that drivers of heavy vehicles should 

serve as role models for other road users. 

Scania’s aim is to give drivers the best 

possible back-up to ensure safe driving. 

To promote road safety, driver skills 

and a positive attitude in society at large 

towards transport professionals, during 

2005 Scania is organising its second 

competition for young truck drivers. In 

September, a new winner of this driver 

competition, Europe’s largest, will be 

proclaimed. Nearly 20,000 drivers from 

the EU member countries plus Switzerland, 

Turkey and Norway are expected to 

participate in the competition, which will 

reward safe, environmentally oriented and 

economical driving techniques. 

Scania is implementing the competition 

with support from the European Commission 

and the International Road Transport 

Union (IRU), and with Michelin and Shell as 

co-sponsors. 

The environment 

Combining the growing need for transport 

services with reduced environmental 

impact is a prerequisite for long-term 

sustainable development in the world, 

and a challenge for Scania as a company. 

Environmental impacts occur both at 

production facilities and when our products 

– vehicles and engines – are used by 

customers. Scania works systematically 

to reduce the environmental impact at all 

stages of a product’s life cycle. Its environmental 

work emphasises doing the 

right thing from the beginning and in all 

subsequent stages, conserving raw materials 

and energy as well as offering its 

customers vehicles and engines with 

better fuel economy and low exhaust gas 

emissions. Scania’s environmental policy 

and overall environmental targets apply 

to all parts of the company and are found 

on the following pages and posted on its 

website, www.scania.com. 

SCANIA’S ROLE IN SOCIETY • SCANIA ANNUAL REPORT 2004 16

Urban Johansson, head of 

powertrain development at 

Scania, being interviewed by 

Vyacheslav Mamedov, editor in 

chief of the Russian magazine 

Gruzovikpress. 

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. 

■ 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. 

Dialogue for sustainable road transport 

Road transport is of great significance 

for economic, social and environmental 

progress in society. An active dialogue 

with various stakeholders in society 

is therefore an important element of 

Scania’s social responsibility. 

Since highway tolls and fuel prices 

were topics of passionate debate during 

2004, while new emission rules will become 

a reality during 2005/2006, there 

has been great interest in discussing the 

development of sustainable transport. 

Seminars with politicians and meetings 

with public authorities play a key 

role, but to convey knowledge about the 

characteristics and development potential 

of the diesel engine to customers and the 

general public, the media are of great 

importance. Urban Johansson, head of 

powertrain development at Scania, thus 

spent an intensive week in Koblenz, 

Germany, discussing Scania’s future 

engine strategy with journalists. 

“Over the next few decades, the diesel 

engine will remain the most efficient way 

of transforming fuel into useful heavy 

transport work. To meet the increasingly 

stringent legal standards for nitrogen 

oxide and particulate levels in exhaust 

gases, new emission technology is 

required”, Mr Johansson says. 

Scania’s main strategy is exhaust gas 

recirculation (EGR), a technique that allows 

cleaner combustion without affecting fuel 

economy. Selective catalytic reduction 

(SCR) is an alternative way of reducing 

nitrogen oxide emissions, via aftertreatment 

of exhaust gases with a urea 

solution. 

17 SCANIA’S ROLE IN SOCIETY • SCANIA ANNUAL REPORT 2004

Attacking environmental 

impact at the source 

Scania’s guiding principle is to reduce the environmental impact in all stages of a 

product’s life cycle. Clean technology is the key to good environmental performance, 

both for the company’s products and at its production and service facilities. 

New Environmental Policy 

Scania’s Environmental Policy and overall 

environmental objectives state the positions 

that are shared by the entire company. 

During 2004, the Environmental Policy 

was revised to better support Scania’s 

operations. The new Environmental Policy 

makes it clear that the environment is an 

integral part of Scania’s business priorities. 

The relationship between environmental 

work and the principle of precaution has 

been clarified, which is a natural consequence 

of Scania’s support of the OECD 

Guidelines for Multinational Enterprises. 

According to the principle of precaution, 

precautionary measures shall be undertaken 

when there is reason to assume that 

an action may harm human health or the 

environment. 

A shared concern 

Environmental work is integrated into 

Scania’s operations. A survey conducted 

during 2004 shows that most Scania 

employees feel they are involved in this 

environmental work. 

The highest decision-making body for 

environmental issues is the Scania Executive 

Board, which makes strategic decisions. 

Common day-to-day environmental items 

of business are prepared by the Scania 

Environmental Committee, where environmental 

coordinators from various fields of 

operations meet under the leadership of 

the Quality and Environment department. 

Operational decisions are made in the 

line organisation, where all managers have 

environmental responsibility for their respective 

areas. Local management teams 

are responsible for targets and follow-up 

at the local level. 

The environmental management system 

All production units are certified according 

to the ISO 14001 environmental management 

system. 

Corporate departments, such as Group 

Management, procurement and product 

development units, are certified. Environmental 

management procedures are 

integrated into Scania’s management 

system. 

Emission allowances 

Now that the Kyoto Protocol has entered 

into force, the EU countries must jointly 

reduce carbon dioxide emissions by eight 

percent during the period 2008 to 2012, 

with 1990 as the base year. Trading in 

emission allowances, which begins in 

2005, is one means of achieving this 

reduction. Transport services are not 

included in the scheme. 

Scania’s energy supply units in Oskarshamn 

and Södertälje, Sweden are included 

in the trading scheme. One effect of the 

recently completed expansion of operations 

in Oskarshamn is that Scania needs 

to buy emission allowances, estimated at 

4,000, beginning in 2005. 

Environmental adaptation of products 

Taking environmental aspects into account 

at an early stage of product development 

makes it possible to minimise the environmental 

impact of a product throughout its 

life cycle. Scania attaches great importance 

to designing a vehicle to reduce the environmental 

load that arises while the vehicle 

is in use. Aside from Scania’s internal 

development targets, future legal requirements 

weigh heavily in development work. 

Among strategic fields for the environmental 

performance of a product are 

emissions of fossil carbon dioxide and 

other exhaust gas components, chemical 

content and the end-of-life treatment of 

worn-out vehicles. 

Scania as a customer 

Scania buys materials and components 

from suppliers. It is important that the 

actions of suppliers are consistent with 

Scania’s environmental approach. 

Regardless of where a supplier is 

located, Scania requires ISO 14001 certification. 

Scania surveys suppliers’ environmental 

work by using an Environmental 

Self Assessment and recurring follow-ups. 

Collaboration on environmental issues 

leads to continuous improvements and 

helps improve expertise and enhance 

environmental awareness among suppliers. 

THE ENVIRONMENT • SCANIA ANNUAL REPORT 2004 18

Scania’s Environmental Policy 

Scania continuously improves the environmental 

performance of its products, 

processes and services. Business 

demands and other requirements 

form the basis for improvement, 

where fulfilment of legislation is 

fundamental. Scania’s environmental 

work is proactive, based on a life 

cycle perspective and the principle of 

precaution. (issued in 2004) 

Read more about Scania’s environmental 

work at www.scania.com. 

Scania was the only manufacturer that 

could offer vehicles with new cleaner Euro 

4 engines when Germany introduced its 

highway tolls for hauliers. So Thorsten 

Pahmeier did not hesitate when Ronge 

Logistik was going to buy new vehicles. 

Environmental work at service points 

In Scania’s sales and service organisation, 

the implementation of internal environmental 

standards has begun. It is expected to 

be completed during 2006. It means, 

among other things, that internally certified 

Scania workshops will have an environmental 

manager and that there will be a 

local activity plan including environmental 

targets related to the handling of chemicals, 

for example. 

Within the framework of the internal 

standards, Scania recommends certification 

according to the ISO 14001 environmental 

management system or the equivalent. 

At year-end 2004, 22 local distributors had 

taken the final step and introduced thirdparty 

certified environmental management 

systems. 

Euro 4 engines are big money savers 

The European market, which is important 

to Scania, is greatly affected by legislation 

in the EU. Tougher emission standards 

together with financial incentives such as 

highway tolls and taxes are motivating 

factors behind Scania’s engine development. 

With some of the world’s first Euro 4 

engines in its truck fleet, the German 

transport and logistics company Ronge 

Logistik can save big money. On 1 January 

2005, Germany introduced highway tolls 

for hauliers, with discounts for new, 

cleaner engines. 

“Scania is the only manufacturer that 

can offer Euro 4 engines from the start, 

so the choice was easy,” says Thorsten 

Pahmeier, vehicle purchasing manager at 

this forward-looking company. 

The Euro 4 engines that Ronge Logistik 

now has in its fleet are based on 

exhaust gas recirculation (EGR), a technology 

that attacks exhausts at the source 

without any aftertreatment or additives. 

Emissions of nitrogen oxides are 30 percent 

lower and particulates 80 percent 

lower than with Euro 3 engines. Since fuel 

consumption is unchanged, this environmental 

improvement does not occur at 

the expense of higher carbon dioxide 

emissions. 

Because of Germany’s strategic 

position in the heart of Europe, about a 

third of EU heavy haulage traffic is affected 

by the new highway tolls. Hauliers with 

Euro 4 and Euro 5 engines will receive 

discounts of up to 20 percent on the 

highway tolls. 

“With six Euro 4 trucks each driving 

200,000 kilometres per year, 90 percent 

of it on motorways, we will save tens of 

thousands of euro,” Mr Pahmeier notes. 

19 THE ENVIRONMENT • SCANIA ANNUAL REPORT 2004

Closer to customers 

and their demands 

Today major transport companies compete by means of advanced logistics systems. Their customers 

demand that goods be delivered quickly and punctually – just-in-time, every time. That is why transport 

companies are investing in vehicles and in service that provide high quality and maximum uptime. 

Internationalisation, structural changes 

and increasingly active customers and 

consumers have transformed the transport 

industry. Demands for faster, more reliable 

and cheaper deliveries are forcing transport 

companies to improve the efficiency 

of the flow of goods, services and information. 

More and more hauliers are evolving 

into logistics companies with total responsibility 

for their customers’ transport 

needs. Meanwhile many smaller haulage 

firms are specialising or becoming subcontractors 

to large logistics companies. 

Such services as financing, insurance, 

short-term rentals and maintenance are 

in ever greater demand. 

New legislation 

The operations of transport and logistics 

companies are also affected by political 

decisions and new legislation. The European 

Commission recently adopted a 

proposal for changes in the Working Time 

Directive for commercial vehicle drivers. 

For the transport industry, one effect of 

this will be shorter working hours. The purpose 

is to reduce the number of accidents 

caused by exhausted drivers. Another EU 

directive will increase the requirements for 

in-service training of professional drivers. 

The aim is to improve road safety and reduce 

fuel efficiency. 

In order to satisfy new customer demands, 

in recent years Scania has made 

major investments, not least in its sales 

and service network. Today most of this 

network is owned by Scania. The integration 

process has created greater proximity 

to customers, who can choose the 

best combination of transport solutions 

from a large array of vehicles, services 

and financing. 

Truck customers 

A customer’s decision to choose a Scania 

truck is rarely just about the price of the 

vehicle itself. More important are the total 

costs and revenues that the vehicle generates 

during its entire service life. Large 

transport and logistics companies prioritise 

vehicles with high operating reliability and 

good fuel economy. A well-developed service 

and road assistance network is 

important when every delivery must arrive 

on time. For small hauliers, a vehicle’s 

dependability and reliability are often vital. 

It is not unusual for the driver himself to 

own the truck. A cab with a good driver 

environment both for work and rest is 

often a weighty purchasing argument for 

an owner-operator haulier. Image means a 

lot too, since the truck becomes a small 

company’s most important calling card. 

In many European countries today, 

there is a shortage of well-trained professional 

drivers. Having the best truck makes 

it easier for a haulage company to recruit 

good drivers. And good drivers who drive 

good vehicles mean higher profitability. 

In South American markets, especially 

Brazil, there is a continued trend towards 

larger and larger combinations for heavy 

haulage in the agricultural sector, but also for 

tanker haulage. So-called “BiTrem” – tractors 

with two semitrailers – are increasingly being 

used to improve total transport economy. 

The gross weight of the rig can be increased 

to a maximum of 57 tonnes, compared to 

45 tonnes previously. The trend has favoured 

Scania, which dominates this segment. 

The use of such rigs reinforces the need 

for high engine power, which coincides 

with Scania’s strategy and its famously 

robust, powerful engines. 

Bus and coach customers 

Scania’s customers in city bus services 

are often private operators, in many cases 

active in more than one country. To a 

growing extent, they are demanding total 

transport solutions. 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 complete buses from one 

supplier. Scania solves this with the help of 

partnerships with a number of selected 

bodybuilding companies. 

In South American markets, a number 

CUSTOMERS • SCANIA ANNUAL REPORT 2004 20

of countries are showing a greater ambition 

to restructure and streamline city traffic. 

The “TransMilenio” project in Bogotá, 

Colombia – the most advanced urban 

traffic system in South America – is now 

on its way to being replicated in several 

South American countries. 

Industrial and marine engine customers 

Scania’s industrial and marine engine 

customers are found in many sectors. 

The engines have become increasingly 

complex, requiring a high level of expertise 

from the customer both at the time of 

purchase and during day-to-day operation. 

Electronics are used to an ever 

greater extent, among other things in 

order to optimise fuel economy and keep 

down emissions. 

Since many of Scania’s industrial and 

marine engine customers are found far 

from service workshops, dependability is 

high on the customer’s list of demands. 

The overall operating economy during 

the entire service life of the product is 

another important factor. 

Long vehicles save the environment 

Transport and logistics company Rotra 

once delivered cargo to the Port of Rotterdam 

and Schiphol Airport in two longhaul 

rigs. Today Jan Rietman can deliver 

it all in one 25.25 metre long Ecocombi. 

Rotra cuts its fuel costs and its environmentally 

aware customers are pleased at 

the reduced emissions. 

Since the autumn of 2004, the Netherlands 

Ministry of Transport and Communications 

has been testing long vehicle 

combinations. Today EU legislation allows 

rigs 18.75 metres long. Sweden and 

Finland, with their less intense traffic and 

long distances, have been the only 

exceptions to date. 

The Netherlands experiment means 

that for the first time, Europe’s transport 

industry is gaining experience of longer 

trucks in more densely built-up regions. 

For several years, Scania has worked 

actively to bring about harmonisation of 

national laws in the EU that permit long 

vehicle combinations on certain routes. 

Fully developed, the system could reduce 

heavy vehicle traffic on the European road 

network by up to 30 percent. This would 

also improve road safety. Greater transport 

efficiency would also reduce the 

environmental impact of road transport. 

“If you just plan your trip carefully, 

there is no big difference in driving an 

Jan Rietman is among the drivers 

participating in an experiment with long 

vehicle combinations in the Netherlands. 

Ecocombi, as we call these long rigs in 

the Netherlands,” explains driver Jan 

Rietman. 

Harm Roelofsen, Managing Director of 

Rotra, notes that the company saves 

20,000 litres of diesel per year for each 

Ecocombi it uses. 

“All our experience to date tells us 

that long vehicle combinations should 

be permanently allowed all over Europe,” 

Mr Roelofsen says. 

21 CUSTOMERS • SCANIA ANNUAL REPORT 2004

New trade routes 

increase transport needs 

The need for transport services follows economic developments. Economic growth leads to higher 

consumption, which increases the need for transport services. 

The broad upturn in the world economy 

during 2004 led to an increase in the demand 

for heavy vehicles in most markets, 

although high oil prices had a certain 

dampening effect. 

In most markets today, only trucks can 

offer the flexibility and delivery assurance 

necessary to ensure that supply chains 

and logistics systems will work. 

EUROPE 

Western Europe accounts for nearly 70 

percent of Scania’s sales. Here vehicle 

standards are very high and the mostly 

highly specified vehicles are sold. 

The transport industry and distribution 

systems are advanced, which makes 

operating reliability and service important 

competitive factors and increases the 

potential for selling services. 

In these markets, Scania owns most 

of its sales and service organisation. This 

provides direct contact with customers, 

who not only buy vehicles today but also 

maintenance, financing and other services. 

Such close customer contact is invaluable 

for Scania’s product development, both 

when it comes to vehicles and various 

service-related products. 

As Europe has become more integrated, 

trade flows across the continent have 

intensified. The largest consumer markets 

lie in the west, while more and more 

goods are being produced in central and 

eastern Europe. This creates very large 

transport needs. In order to be close to 

customers, Scania’s investments in its 

sales and service network are following 

the same pattern. 

Used trucks go east 

Scania’s new truck range is being marketed 

initially in the major markets of western 

Europe, where a natural renewal of existing 

fleets is underway. Meanwhile western 

European transport companies need to 

replace used vehicles that are being sold 

onward to customers in the countries of 

central and eastern Europe. 

These countries have a different cost 

structure, and there is a large demand 

for used quality vehicles because of the 

massive economic build-up effort that is 

underway. Since used vehicles require 

more maintenance, service business is 

rapidly growing in these countries. Meanwhile 

there will be a structural effect on 

demand in western Europe for the next 

10–15 years. 

The total transport market in Europe is 

worth an estimated 180 billion euro* per 

year and will grow by an average of 5–6 

percent every year, with faster growth in 

the new EU countries. 

An equally high growth percentage is 

expected in trade between Europe and 

Asia, which today amounts to 360 billion 

euro* per year. Given newly constructed 

transit routes to the Middle East and East 

Asia, the transport flows to and from the 

Asian continent will change. It will be possible 

to move cargo by land from Bangkok 

to Berlin in 7–10 days, compared to a 

shipping time of several weeks by sea. 

In western Europe, new registrations 

totalled about 230,000 heavy trucks, compared 

to 213,000 during 2003. Scania’s 

share of the western European market 

was about 30,000 units (13 percent). 

Record year for bus sales 

Scania’s bus and coach sales developed 

favourably and reached 5,519, the best 

to date. After several years of low demand, 

sales in South America reached 

earlier levels. Brazil was Scania’s largest 

single bus market. In a shrinking total 

market in Europe, Scania consolidated 

its position. 

The integration of bus and truck operations 

continued during the year. From 

January 2005, all of Scania’s free-standing 

bus and coach companies in Europe have 

been integrated into the existing distribution 

companies in their respective markets. 

Integration with the truck business has 

enabled Scania’s bus business to streamline 

its organisation. This was reflected in 

ever-larger contributions to Scania Group 

earnings and strengthen its competitiveness. 

TRENDS AND INDUSTRY DEVELOPMENTS • SCANIA ANNUAL REPORT 2004 22

TRENDS AND INDUSTRY DEVELOPMENTS • SCANIA ANNUAL REPORT 2004

Bus project gives Colombia’s 

capital a breath of fresh air 

With its fast, safe, comfortable new 

buses, TransMilenio has changed the 

lives of hundreds of thousands of public 

transport passengers in Bogotá, capital 

of Colombia. The transport system has 

also set the standard for other major 

cities in South America. 

Bogotá, a city of seven million people, 

was long known for its chaotic traffic 

situation, air pollution and slow, bewildering 

public transport. 

Using a traffic planning model designed 

for the city of Curitiba, Brazil, five 

years ago the TransMilenio system was 

developed. In several dozen kilometres 

of dedicated bus lanes, thousands of 

modern buses now transport nearly a 

million passengers every day. Scania 

is delivering 130 of these new buses. 

To contribute further to cleaner air 

and safer, faster public transport in 

Bogotá, the companies that have won 

contracts must scrap some of their 

old buses. A total of more than 4,000 

old buses are being replaced by new 

ones. 

During the spring, Scania concentrated 

the bodybuilding operations for its own 

city buses at the plants in Poland and 

Russia. This was a step towards achieving 

profitability and safeguarding the longterm 

competitiveness of the subsidiary 

Scania Omni. The cost of building a bus 

body, which is a labour-intensive task, is 

significantly lower in these countries than 

in Sweden. 

During the second half of 2005, Scania 

Omni will move the rest of its operations, 

mainly the development of bus bodies and 

prototype assembly, from Katrineholm, 

Sweden to Södertälje. This move will 

enable Scania Omni to benefit from proximity 

to bus chassis development activities. 

Stable market for industrial and 

marine engines 

Scania’s deliveries of industrial and marine 

engines totalled 5,014 (3,165) units. The 

increase mainly consisted of engines for 

electricity supply, with the largest customers 

located in Spain and Great Britain. 

The industrial and marine engine market 

is relatively stable but is affected by tightened 

emission rules, among other things. 

Service 

Service sales continued to develop favourably 

during the year. Scania’s increasing 

focus on the service market is related to 

how the transport industry is changing, 

which is especially apparent in Europe 

where previously simple transport services 

today are part of sophisticated logistics 

structures. 

This, in turn, has led to completely new 

customer demands. There are several 

reasons: Capital costs and the costs of 

not being able to deliver on time can often 

be higher than a company’s direct costs 

for the actual transport task, such as fuel 

and wages. 

New and stricter exhaust standards are 

other challenges that Scania customers 

face. This, in turn, increases the demands 

for modern products and first-class workshop 

support. 

OTHER MARKETS 

Scania’s order bookings in markets outside 

Europe broke all earlier records. 

Behind the upturn was strong economic 

growth in a number of regions. 

Most markets in Africa, the Middle East 

and South East Asia showed good growth. 

The economies of South East Asia 

grew rapidly during the year, largely because 

of a surge in domestic demand, both 

because of household consumption and 

company capital spending. Meanwhile 

trade and transport between the countries 

of the region rose. 

In South Korea, however, growth 

cooled after several years of rapid 

expansion. 

In Taiwan, deliveries rose sharply, and 

today Scania is the leading European 

make on the island both when it comes 

to trucks and buses. Scania took over its 

TRENDS AND INDUSTRY DEVELOPMENTS • SCANIA ANNUAL REPORT 2004 24

distributor in Singapore and appointed a 

new distributor in Indonesia. 

Closer to customers in China 

At the beginning of 2004, Scania took 

over sales operations in China from the 

previous privately owned distributor. A 

new head office opened in Beijing, with 

sales offices in Shanghai, Xiamen and 

Guangzhou. 

Through this new Scania-owned 

organisation and an expanded service 

network, the company is moving closer 

to its customers and laying the groundwork 

for a long-term commitment to the 

Chinese market. 

Trucks 

Due to the sharply increasing need for 

transport services, especially for agriculture 

in Brazil and Argentina, sales of heavy 

trucks in South America reached very high 

levels. Scania became the market leader 

in Brazil, which was also Scania’s largest 

national market for heavy trucks and 

buses in the world. 

Increased export revenues and a general 

improvement in the South American 

economies have generated the resources 

for a significant renewal and expansion of 

the vehicle fleet that is on the road. In 

addition, the upgrading of older vehicles 

provides increased potential for service 

sales. The average age of national vehicle 

fleets is still relatively high, in Brazil around 

11 years with a total active fleet of about 

300,000 heavy trucks, about 40 percent 

of them Scania vehicles. 

Buses and coaches 

Scania traditionally has a strong presence 

in the Middle East, very much due to its 

dedicated distributors, which have taken 

good advantage of business opportunities. 

In Iran, Scania sharply increased its bus 

sales and became the largest European 

make. In Damascus, Syria, the largest 

Scania facility in the region was inaugurated 

during the year. 

In Mar del Plata, Argentina, Astillero Naval Federico Contessi y Cia builds various kinds of 

boats. With a Scania engine on board, a fisherman feels safe out on the Atlantic. 

In southern Africa, Scania has built up 

a strong presence, with South Africa as its 

base. During 2004 Scania boosted its 

market share in a growing market. 

Markets outside Europe and South 

America accounted for one fourth of 

Scania’s bus and coach deliveries. 

Industrial and marine engines 

Brazil is traditionally Scania’s largest 

market for industrial and marine engines. 

During 2004, Scania sharply increased 

its sales of these engines. For example 

John Deere, one of the world’s largest 

manufacturers of agricultural machinery 

and tractors, decided to use Scania engines 

in its sugar cane combine harvesters. 

The demand for industrial and marine 

engines generating electricity was high 

all year in Asia, especially in China, which 

received deliveries from Scania’s partner 

Scangen. 

25 TRENDS AND INDUSTRY DEVELOPMENTS • SCANIA ANNUAL REPORT 2004

Customer-tailored 

vehicles and engines 

Scania’s business is based on trucks, 

buses and industrial and marine engines. 

Here Scania’s sophisticated modular 

system provides unique opportunities to 

tailor vehicles to the specific wishes of 

customers. The basic concept is a toolbox 

in which components can be used in 

many different combinations. 

Scania trucks have gross vehicle weights of 16 tonnes and upward (Class 8) and are built for heavy long-distance, construction and distribution 

haulage. During 2004, Scania introduced a new truck range with further improved performance, not least in the environmental field. 

The new vehicles also have improved fuel economy, compared to previous ranges. 

Scania manufactures buses with high passenger capacity for intercity and urban traffic and for use as tourist 

coaches. Production focuses on chassis – more than 90 percent of production went on to independent bodybuilding 

companies. Scania’s own bus bodybuilding company, Scania Omni, works with city and intercity 

buses. 

Scania’s industrial and marine engines are sold throughout 

the world, and 2004 was an especially strong year, with a 

new volume record of 5,014 units. 

PRODUCTS • SCANIA ANNUAL REPORT 2004 26

From vehicle manufacturer 

to integrated service provider 

During 2004, Scania continued to successfully move its operations closer and closer to the customer’s 

own daily reality, with the aim of being a reliable partner in growing the customer’s business. 

Aside from trucks, buses and industrial 

and marine engines, Scania sells numerous 

service-related products. Customers 

can also choose among various forms of 

financing and insurance. 

Scania focuses on providing expert 

support throughout the commercial life 

of a vehicle. To customers, this means 

greater dependability in their business. 

They are guaranteed the highest possible 

operating reliability. 

Service a stabilising factor 

Just as Scania has refined its modular 

system over the decades in research, 

development and production, today it is 

developing a similar system for the important 

service market. From an array of 

service-related products, customers can 

select those that best contribute to improving 

their own business operations. 

For Scania, servicing today’s active 

fleet is a significant source of income. It is 

also a stabilising factor in the company’s 

overall business: whereas sales of new 

vehicles fluctuate with the ups and downs 

of the economy, the service market represents 

greater stability. The number 

of Scania vehicles in active operation is 

steadily growing. 

In Scania’s growth scenario, which is 

based on a historical average volume increase 

of 5–6 percent, in the next decade 

this will mean annual sales of 100,000 

new vehicles and about 800,000 Scania 

vehicles on the roads. Today there are 

already 500,000 active vehicles that need 

servicing. 

This scenario also implies increased 

technician time and parts sales at Scania’s 

repair and preventive maintenance workshops. 

In 2004, service-related products 

accounted for 20 percent of Scania’s total 

sales revenue. 

The service market is thus one of 

Scania’s most important competitive factors, 

aside from the vehicles themselves. 

Scania’s service offerings vary, depending 

on how local markets develop. 

In Europe, the service network is well 

established today. On other continents, it 

is still expanding. Globally, Scania customers 

have access to about 1,500 service points, 

about 1,000 of them in Europe. Scania’s 

service network is quality assured, and 

not only in Europe. Workshops in South 

America, Africa, Asia and the Middle East 

also undergo quality certification. 

Round-the-clock service 

Scania’s core values, which regulate the 

company’s approach to customers, society 

at large and its own employees – the customer 

first, respect for the individual and 

quality – are especially clear in the service 

sector, with its close customer contacts. 

Here all these standards are put to the 

test. From a customer perspective, getting 

the highest level of quality in the service 

network is as important as vehicle quality. 

The customer depends on his Scania 

vehicles to perform and requires maximum 

vehicle availability. Scania must respect 

and fulfil these demands, delivering optimal 

service round-the-clock in principle. 

In response to this customer need for 

back-up at all hours of the day and night, 

Scania Assistance provides 24-hour help 

in the customer’s own language and various 

forms of maintenance and repair contracts. 

Today Scania Assistance is available all 

over Europe, as well as in a number of 

Scania’s important markets on other 

27 PRODUCTS • SCANIA ANNUAL REPORT 2004

PRODUCTS • SCANIA ANNUAL REPORT 2004 

Scania’s dealer in Izmir, Turkey 

provides its customers with 

24-hour roadside assistance. 

Serdar Canpolal is often the 

man who comes to their rescue.

Financial services are an important element of Scania’s total product range. 

continents. Altogether 21 Scania Assistance 

centres cover customers in 35 countries. 

In Europe, the average time between 

a service call to Scania Assistance until 

a truck is back on the road has fallen to 

4 hours and 20 minutes – day or night, 

weekday or weekend. 

In 2004 Scania continued to upgrade 

workshops as part of its Dealer Operating 

Standards (DOS) quality assurance system. 

In the EU, 69 percent of all 1,000 or 

so Scania workshops are certified to DOS 

standards. This represents a twelve percentage 

point increase since 2003. 

During the year, Scania thus continued 

to invest in training for service technicians 

and sales representatives – but also for 

drivers. Today driver training is increasing 

in demand among Scania customers. This 

is a reflection of escalating fuel prices, but 

it is also due to generally higher awareness 

of the importance of road safety. 

Every year, 50,000 people die in traffic on 

the European road network, and many 

times more are injured. 

Customer financing 

Scania offers its customers various forms of 

individually tailored financing solutions for 

new and used vehicles bought via Scania 

dealers. Financing can also be combined 

with various service and maintenance 

contracts, as well as insurance solutions. 

In many countries of western and 

central Europe, Scania offers financing 

through its own finance companies. In 

other important markets elsewhere in the 

world, Scania offers financing opportunities 

– in some countries under agreements 

with local banks. 

Important events related to Scania’s 

financial services during 2004 were intensified 

efforts to introduce insurance solutions, 

which can now be offered in combination 

with financing in most European 

markets. During the year, Scania also 

established a new finance company in 

Austria. In Scania’s newer markets, such 

as Russia and Poland, the company saw 

continued good financing-related growth. 

Scania decided to establish a new wholly 

owned finance company in Turkey. 

29 PRODUCTS • SCANIA ANNUAL REPORT 2004

World-class resources 

under one roof 

Customer needs are at the core of Scania’s research and development work. Today the 

company’s R&D resources in all product areas are gathered at the Scania Technical Centre 

in Södertälje. 

Scania’s research and development expenditures 

in 2004 totalled SEK 2,219 m. 

(2,151). Among other things, the 1,700 

engineers at the Scania Technical Centre 

have access to 29 engine test cells and 

nearly 20 km of test tracks. They also have 

chassis test rigs, shake rigs, cold and heat 

chambers, noise chambers and a wellequipped 

chemical analysis laboratory. 

Gathering all research and development 

at one site is advantageous in terms of 

staff utilisation and technical resources, as 

well as expertise and dissemination of 

knowledge. Testing and analysis are jointly 

planned for trucks and buses, as well as 

for industrial and marine engines. Staff and 

expertise are utilised cross-functionally in 

order to smooth out variations in the workload. 

Controlled by customer needs 

To find out about customer needs, Scania 

uses a number of channels: customer 

clinics, interviews, field tests, monitoring 

of competitors and industry developments 

and reporting systems from its markets. 

Impulses for research and development 

work also emerge from Scania’s intensive 

quality monitoring at production units and 

in the field. R&D projects may also result 

from requirements imposed by public 

authorities or from future trends and 

development opportunities that Scania 

identifies. 

Emissions the biggest challenge 

The biggest challenge – in terms of technology 

and resources – is to develop the 

engines of tomorrow. Scania’s solid reputation 

as a supplier of highly efficient, easyto-use 

engines is an important success 

factor, which has built up the Scania brand 

over the years. 

Here Scania has successfully defended 

and strengthened its leading position during 

the past decade, not least because of 

its transition to a completely modularised 

engine range. Today this range includes 

straight five- and six-cylinder engines with 

swept volumes of 9–12-litres, as well as a 

powerful 16-litre V8 engine with outputs of 

up to 580 hp. 

By developing a number of systems 

inhouse – among them fuel injection, engine 

management, turbocompounding and 

exhaust gas recirculation – Scania has 

created flexibility to meet the increasingly 

stringent environmental standards demanded 

by society and imposed by public 

authorities. These systems are utilised in 

different combinations, so that each engine 

is tailored for its application. 

Legislation mainly specifies threshold 

limits for two substances in heavy vehicle 

exhausts: nitrogen oxides and particulates. 

There is also an increasing focus on emissions 

of so-called greenhouse gases. Carbon 

dioxide emissions are directly proportional 

to a vehicle’s fuel consumption, and 

this leads to greater interest in fuel-efficient 

engines. 

The EU sets “Euro” emission standards. 

Euro 1 was introduced in the early 1990s, 

and Euro 4 standards will take effect soon 

– in 2005 for newly designed engines and 

in 2006 for all engines. The next step will 

be Euro 5 in 2008/2009. There are currently 

no global emission or testing standards. 

This leads to extra development work for 

global market players. However, both the 

heavy vehicle industry and public authorities 

are endeavouring to achieve coordination 

at a global level for the next step, 

which is projected to be due around 2012. 

The challenge for an engine developer 

is that decreasing nitrogen oxide emissions 

traditionally leads to higher fuel consumption. 

However, technological advances over 

the years have made it possible to gradually 

reduce emissions without adversely affecting 

fuel economy. 

RESEARCH AND DEVELOPMENT • SCANIA ANNUAL REPORT 2004 30

Lage Dahlgren and 

Anders Lundgren of 

Scania’s styling department 

discussing the 

lines of a conceivable 

future truck model. 

RESEARCH AND DEVELOPMENT • SCANIA ANNUAL REPORT 2004

Choices of technology 

Scania’s choices of technology are governed 

by concern for the situation of customers. 

Exhaust gas recirculation (EGR) is the 

solution that Scania prefers for reducing 

emissions. EGR is easiest for the driver, 

who only needs to fill up with standard fuel, 

not additives. A combination of unique 

Scania technologies yields an efficient Euro 4 

engine that has the same fuel economy as 

a Euro 3 engine. 

An EGR system utilises part of a vehicle’s 

cooling capacity. Scania thus also uses 

another technology – selective catalytic reduction 

(SCR) – in which a so-called urea 

solution known as AdBlue is continuously 

added to the exhaust gases in a catalyst 

in order to reduce the amount of nitrogen 

oxides in the exhaust. This technology is 

employed in Scania’s most powerful Euro 4 

engines to safeguard their cooling capacity. 

The vehicle must have an extra tank holding 

about 100 litres, as well as a separate 

AdBlue injection system. 

In its Euro 5 engine, Scania will introduce 

a new injection system developed in-house 

and a more advanced engine platform that 

will enable the use of EGR technology in all 

engines. 

Truck and bus driving pleasure 

For many years, Scania has been well 

known for creating a good driver environment. 

This has contributed to its prestigious 

brand image. 

Many man-years of experience, customer 

contacts and development work 

are behind the new driver’s workplace in 

Scania’s new range of trucks. 

One of the reasons cited by the jury 

that selected the new R-series for the 

International Truck of the Year award 

was Scania’s particular attention to 

driver comfort. 

The purpose of Scania’s ergonomic 

refinements is to enable drivers to feel at 

home quickly and do the best possible 

job. Functions and controls should be 

intuitively easy for drivers to understand. 

A vehicle should continuously communicate 

how effectively it is working. This is 

important to enable the driver to take 

optimal advantage of its performance. 

The driver of a Scania vehicle must 

always control the situation and be in full 

command. This makes it easier to drive 

safely, avoid accidents and save fuel, 

thereby causing as little environmental 

impact as possible. 

RESEARCH AND DEVELOPMENT • SCANIA ANNUAL REPORT 2004 32

The role of the customer 

in product development 

Scania views its business over a vehicle’s 

entire life cycle and wants close contact and 

a partnership with the customer. This is why 

customer participation throughout the task 

of product development is highly valuable. 

Customer wishes and demands become 

part of the development task at an early 

stage through market surveys and field tests. 

For several years before the launch of 

Scania’s new truck range, hundreds of 

selected professional drivers took part in 

an extensive field testing programme. Trucks 

were field-tested in thirteen countries, often 

in tough and challenging environments. 

Lessons learned and opinions gathered 

from the field tests were, in principle, reported 

on a daily basis to the Field & Reliability 

Testing department and to the project managers 

at the Scania Technical Centre in 

Södertälje. 

Another important element of customer 

contacts during development work was 

customer clinics, where new solutions were 

demonstrated. At such clinics, drivers and 

customers have an opportunity to evaluate 

prototypes. 

One example of customer participation 

in product development: 

For several years, Scania has had a cooperation 

agreement with Japanese-based 

Yanmar on marine engines for pleasure craft. 

The owners of such boats often have specific 

requirements for their engines. Through 

continuous dialogue between Yanmar and 

Scania, every customer can get an individually 

tailored engine. 

The opinions of field test drivers are vital 

information to Scania. Here Scania’s Anna 

Wallin and Mats Köpsén engage in discussion 

with French professional drivers 

at an evaluation meeting. 

33 RESEARCH AND DEVELOPMENT •SCANIA ANNUAL REPORT 2004

Effective working methods 

and global production 

Because of shared working methods at all Scania production units, good ideas can quickly have an impact 

in the global production network. The changeover to the new truck range at European production units – 

from the 4-series to the new P-, R- and T-series – began during the first half of 2004. 

During 2004, Scania’s European production 

units successively switched to manufacturing 

the new truck range. By February 2005, 

this changeover had been completed at 

all component workshops and assembly 

plants. 

Well prepared organisation 

The changeover was based on extensive 

collaboration between different functions 

at Scania – production, product development, 

procurement, sales and service – 

and Scania’s suppliers. This collaboration 

worked very well. Also making it easier 

was that Scania and its suppliers had 

made a successful effort to identify and 

prevent possible disruptions before series 

production began. One essential success 

factor was the special development lines 

for test assembly that were built for chassis 

and engines in Södertälje and for cabs in 

Oskarshamn. On these development lines, 

all new structures were evaluated and 

tested. Processes were continuously 

improved. 

In this way, both the product and the 

assembly task could be adapted and 

thoroughly verified. This made quality 

assurance possible at an early stage. Even 

before the first truck was delivered to a 

customer, a preliminary series of more 

than 600 trucks had been manufactured 

on the development lines. These vehicles 

were used as test trucks and by Scania’s 

marketing companies. 

When Scania began series production 

of the first product in the new truck range, 

the R-series, its quality level was on a par 

with the outgoing 4-series. Because 

Scania’s suppliers had been involved in 

the development task at an early stage, 

component quality was also at a high level. 

South America 

In South America, Scania will continue to 

build the 4-series for a few more years. 

The choice of models has been broadened 

to satisfy the needs of all Scania 

markets. Improvements are being introduced 

continuously. Among other things, 

production of the new 9-litre engine began 

late in 2004. 

Scania’s production units in South 

America have assumed a new, global role 

in the production system, thereby enabling 

Scania to take maximum advantage of its 

total technical production capacity of 

70,000 vehicles per year. South America 

accounts for 20,000 of this total. During 

2004, South American production totalled 

nearly 15,000 units, the highest level to 

date. 

Dedicated employees 

The Scania Production System (SPS), 

which is the basis of all improvement 

work, was developed by the company’s 

own employees. The values, principles 

and priorities that guide its working 

methods are the same, regardless of 

where production occurs. New solutions 

introduced by an improvement team are 

systematically introduced at Scania’s 

other production units. 

This systematic approach has also 

provided the basis for the work of the 

development lines, where all new 

structures have been evaluated and 

tested. 

Because the same working methods 

are shared by all Scania production units, 

employees from plants in France, the 

Netherlands and Sweden were able to 

work together at the development line in 

PRODUCTION • SCANIA ANNUAL REPORT 2004 34

By February 2005, all Scania 

component workshops and 

assembly plants in Europe 

had switched to production 

of the new truck range. 

PRODUCTION • SCANIA ANNUAL REPORT 2004

Södertälje to devise the working methods 

for the new truck range. 

This preparatory work is one important 

reason why it proved possible to implement 

the changeover to the new truck range very 

efficiently at all European production units. 

Long-term collaboration with suppliers 

Long-term collaboration with suppliers, 

plus clear demands, have been Scania’s 

strategy for ensuring deliveries to the new 

truck range. 

Key suppliers were involved in the 

development process at an early stage. As 

a result of clear collaboration mechanisms 

respected by both parties, the flow of 

materials into the production system has 

been almost without disruptions. One 

important parameter in this work has been 

the use of the QS 9000 standard, which 

mainly defines what is required of suppliers, 

but also what Scania must contribute. QS 

9000 means that suppliers quality-assure 

their products and processes, which results 

in deliveries with improved quality 

and precision. This is necessary if Scania 

is to have a high direct flow into its production 

system. 

Taken together, the improvements at 

Scania and in its interface with suppliers 

have contributed to an efficient changeover, 

with few quality deviations. 

Changed supplier structure 

In its purchasing work, Scania is moving 

towards a more international supplier 

structure. This means that to a growing 

extent, Scania will use more than one 

supplier for the same part. The globally 

coordinated production network also 

affects where Scania buys its production 

materials. 

The trend towards a changed supplier 

base has accelerated as new products 

have been phased in. Scania is establishing 

procurement offices in more countries and 

is developing a special infrastructure to 

enable the company to import more components 

and parts into Europe from South 

America and elsewhere. 

Continued production changeovers 

During 2005, Scania will begin the changeover 

to a new range of buses and coaches. 

As with the truck range, this transition will 

occur as customers and markets demand 

the latest available technology and will 

take advantage of Scania’s production 

resources on a global basis. 

New solutions and improvements 

are continuously introduced at 

production units. 

PRODUCTION • SCANIA ANNUAL REPORT 2004 36

Side by side in an 

international setting 

One reason behind the very successful 

launch of Scania’s new truck range is the 

development line at the Södertälje chassis 

workshop. Here the goal is to improve the 

process and solve problems that could 

otherwise have arisen on one of the 

regular production lines. On the development 

line, all new structures are tested 

and evaluated. 

The international atmosphere has been 

obvious in the course of working with the 

new truck range. Fitters and production 

engineers from Sweden, the Netherlands 

and France have worked closely with 

Scania’s development engineers. The 

purpose has been to allow them to share 

their local experience, while preparing 

themselves for the production start-up 

of the new vehicles at home in Angers, 

France and Zwolle, the Netherlands. 

Mark Leegte from Zwolle; Yves Mace 

and Stephane Gasnier, Angers; and 

Jonas Gustafsson, Södertälje, have 

worked, trained and honed their skills 

together on the development line. 

PRODUCTION • SCANIA ANNUAL REPORT 2004

Improved trading volume 

The climate on world stock exchanges improved during 

2004. Both the Stockholm All Share Index and the Industrials 

Index showed a positive trend during the year. 

SEK 

400 

350 

Share price performance, Stockholmsbörsen, Scania B shares 

On Stockholmsbörsen, the All Share 

Index, which measures the overall trend 

on the exchange, rose by 18 percent 

during 2004. The Industrials Index, which 

measures the trend in the industrial goods 

and services sector and includes Scania 

shares, rose by 19 percent. Trading volume 

on Stockholmsbörsen remained high, and 

since 1 July Scania shares have been 

back on Stockholmsbörsen’s Most 

Traded list. 

Scania’s B shares rose by 30 percent 

during the year, closing at SEK 263.00 

on 30 December. This was equivalent to 

a market capitalisation of SEK 52,600 m., 

which made Scania the 14th largest 

company on the exchange. 

Volume and trading 

Scania B share trading volume rose sharply 

compared to the previous year, amounting 

to an average of 977,000 shares changing 

hands each trading day. One reason for this 

was that Volvo sold its holding of Scania B 

shares to Deutsche Bank, which in turn 

sold the shares to various market players. 

The turnover rate for Scania B shares was 

247 (28) percent. For Stockholmsbörsen as 

a whole, it was 124 (113) percent. 

Ownership structure 

On 31 January, 2005, the number of shareholders 

in Scania was 46,407. The three 

largest owners were Volkswagen AG, 

Ainax AB and Investor AB. On 31 January, 

Ainax AB owned 25 percent of the votes 

and 14 percent of the capital in Scania. In 

November 2004, an Extraordinary General 

Meeting of Scania decided to present a 

public offer for all shares in Ainax, the 

company that manages the Scania A 

shares previously owned by Volvo. The 

purpose of the offer is to restore a normal 

ownership structure and eliminate the 

uncertainty that has prevailed for nearly 

six years concerning Scania’s ownership 

picture. The shareholders of Ainax were 

offered one Scania A share in exchange 

for each Ainax share, which means that 

those who accept will have direct voting 

power at Scania’s Annual General Meeting 

in April 2005. Through Scania AB’s acquisition 

of more than 96 percent of the 

voting power and share capital of Ainax AB 

(publ), the offer was carried out and Ainax 

became a subsidiary of Scania AB on 

22 February 2005. Scania intends to take 

steps towards the liquidation of Ainax AB, 

which is expected to occur during 2006. 

300 

250 

200 

150 

SX All Share Index 

1000’s of shares traded 

(incl. off-floor trading) 

100 

00 01 02 03 04 05 

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. 

Non-Swedish ownership, including 

Volkswagen AG, amounted to 38 percent 

of votes and 34 percent of capital in Scania 

on 31 January 2005. 

Dividend 

The Board of Directors proposes that the 

Annual General Meeting approve a dividend 

of SEK 15.00 per share for the financial 

year 2004. Since Scania joined Stockholmsbörsen 

in 1996, the dividend has 

averaged 53 percent of net income. 

B share 

(c) SIX 

125,000 

100,000 

75,000 

50,000 

25,000 

Market listing 

Since 1 April 1996, both types of Scania shares 

– Series A and B – have been quoted on the A 

list of Stockholmsbörsen (previously called the 

OM Stockholm Stock Exchange). 

Beta coefficient 

According to calculations by Delphi 

Economics, the beta coefficient of 

Scania’s B shares was 0.96 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 is 0.64. This means 

that 64 percent of the changes in Scania 

shares could be explained by overall 

changes on the exchange. 

SCANIA SHARE DATA • SCANIA ANNUAL REPORT 2004 38

Per share data 

SEK (unless otherwise stated) 2004 2003 2002 

Earnings 20.39 15.17 13.70 

Shareholders’ equity 105.25 91.26 84.66 

Dividend 

(2004: proposed) 15.00 6.00 5.50 

Market prices, B shares 

Highest for the year 280.00 227.00 215.00 

Lowest for the year 204.00 148.50 125.50 

Year-end (at closing) 263.00 203.00 168.50 

Price/earnings ratio, B shares 13 13 12 

Dividend payout ratio, % 74 40 40 

Dividend yield, % 1 5.7 3.0 3.3 

Annual turnover rate, 

B shares, % 247 28 23 

Number of shareholders 2 46,400 39,000 39,000 

Average daily number of shares 

traded, by series, Stockholmsbörsen A 39,000 

B 977,000 

Total 1,016,000 

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

2 On 31 January 2005. 

The ten largest shareholders, 28 February 2005 

% of capital % of votes 

based on based on 

% of % of outstanding outstanding 

Owner A-shares B-shares capital 1 votes 2 shares shares 

Volkswagen AG 37,400,000 0 18.70 34.32 16.53 27.44 

Investor AB 21,186,757 308,693 10.75 19.47 9.50 15.57 

Knut and Alice Wallenberg Foundation 10,642,440 0 5.32 9.77 4.70 7.81 

Renault S.A.S. 5,697,042 0 2.85 5.23 2.52 4.18 

Alecta 2,294,345 1,223,700 1.76 2.22 1.55 1.77 

AMF Pensionsförsäkrings AB 1,306,650 8,736,000 5.02 2.00 4.44 1.60 

Enskilda Securities AB 1,814,105 31,208 0.92 1.67 0.82 1.33 

Fjärde AP-fonden 1,247,284 4,136,600 2.69 1.52 2.38 1.22 

Robur Mutual Funds 892,161 7,339,600 4.12 1.49 3.64 1.19 

SEB Mutual Funds 1,004,214 4,413,410 2.71 1.33 2.39 1.06 

10 largest owners 83,484,998 26,189,211 54.84 79.01 48.46 63.17 

Other 15,490,672 73,810,789 44.65 20.99 39.46 16.78 

Excluding Ainax 98,975,670 100,000,000 99.49 100.00 87.93 79.95 

Ainax 2 27,320,838 13.66 0.00 12.07 20.05 

Outstanding shares 3 126,296,508 100,000,000 100.00 100.00 

Ownership structure, 28 February 2005 

% of % of 

Number of shares holdings votes 

1– 500 3.23 2.62 

501– 2,000 2.08 1.07 

2,001– 10,000 2.34 0.97 

10,001– 50,000 3.17 1.10 

50,001–100,000 2.47 0.86 

> 100,001 86.71 93.38 

Total 100.0 100.0 

Elimination of Scania’s share of Ainax 4 – 26,296,508 – 13.15 0.00 

Total 100,000,000 100,000,000 100.00 100.00 

1 Calculation based on 200,000,000 shares. Legally, there are 226,296,508 outstanding shares in Scania but indirectly Scania owns shares through Ainax 

corresponding to 26,296,508 Series A shares. Calculating share of capital based on 200,000,000 shares takes into account that only dividend to minority 

shareholders in Ainax is external to the Scania group. 

2 Calculated on 108,975,670 votes, whereof 98,975,670 votes are for Scania A shares and 10,000,000 votes are for Scania B shares. As Ainax is a subsidiary 

of Scania, it has no voting rights at shareholders’ meetings in Scania. Therefore the 27,320,838 Series A shares owned by Ainax have been excluded. 

3 The number of outstanding Series A shares in Scania, following the acquisition of Ainax amounts to 126,296,508. Of these Series A shares 27,320,838 are 

owned by the subsidiary Ainax. 

4 26,296,508 Series A shares corresponds to Scania’s share (96.3%) of Ainax’s Series A shares in Scania. In calculating earnings per share in Scania and other 

key financial ratios the intra-group holding should be eliminated. It is therefore important to note that, for the purpose of such analysis, the number of shares in 

Scania, remain at 100,000,000 Series A shares and 100,000,000 Series B shares. 

39 SCANIA SHARE DATA • SCANIA ANNUAL REPORT 2004

Facts about Scania 

THE TRUCK MARKET 

Scania’s ten largest truck markets, 

vehicles delivered to customers 

Change 

Rank Country 2004 2003 in % 

1 (2) Brazil 6,047 4,107 47 

2 (1) Great Britain 5,863 6,307 – 7 

3 (3) France 3,650 3,787 – 4 

4 (5) Germany 3,455 3,254 6 

5 (4) Spain 3,187 3,345 – 5 

6 (6) Italy 3,149 2,782 13 

7 (7) The Netherlands 2,287 2,231 3 

8 (10) Turkey 1,969 1,543 28 

9 (9) Sweden 1,966 1,861 6 

10 (14) Poland 1,357 897 51 

Scania’s total deliveries to customers reached more than 

50,500 trucks during 2004, an increase of twelve percent 

compared to 2003. 

Registrations of trucks above 16 tonnes 

Units 2004 2003 2002 

WESTERN EUROPE 

Total 230,933 213,032 211,687 

of which Scania 30,006 29,930 28,524 

Great Britain 34,005 34,303 31,055 


Germany 53,988 46,278 43,528 


France 38,341 36,683 40,483 


Spain 28,890 26,757 25,512 


Italy 23,915 22,954 25,813 


The Netherlands 11,458 10,535 11,488 


Sweden 4,376 4,214 4,054 


CENTRAL AND 

EASTERN EUROPE 

Poland 8,449 5,361 3,736 

of which Scania 1,412 893 514 

Russia 1 3,160 2,157 1,863 

of which Scania 1,126 837 716 

Czech Republic 4,908 3,341 3,773 

of which Scania 807 566 588 

Hungary 3,432 2,436 2,004 



SOUTH AMERICA 

Brazil 25,194 17,856 13,916 


Argentina 9,149 3,471 813 


Chile 3,549 1,983 1,479 


Mexico 15,610 13,517 14,028 


ASIA, AFRICA 

AND OCEANIA 

Turkey 28,830 17,751 8,430 

of which Scania 1,837 1,515 226 

South Korea 13,580 15,699 13,833 


South Africa 6,438 4,567 3,335 


Taiwan 2,634 1,660 1,841 


Australia 10,320 8,688 6,592 


1 Estimated number of imported new trucks from Europe, Japan 

and the US. 

FACTS ABOUT SCANIA • SCANIA ANNUAL REPORT 2004 40

Total registrations of trucks above 

16 tonnes in western Europe 

Units 

250,000 

Deliveries of Scania trucks 

in western Europe 

Units 

40,000 

Deliveries of Scania trucks 

in South America 

Units 

10,000 

200,000 

150,000 

100,000 

50,000 

30,000 

20,000 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

95 96 97 98 99 00 01 02 03 04 

0 

95 96 97 98 99 00 01 02 03 04 

0 

95 96 97 98 99 00 01 02 03 04 

Market shares, trucks above 16 tonnes in western Europe 

% 

30 

25 

Mercedes-Benz 

20 

Volvo 

MAN 

Scania 

Renault 

15 

10 

5 

89 

90 

DAF 

91 

92 

93 

94 

95 

96 

97 

98 

99 

00 

Iveco 

01 02 

03 

04 

Mercedes-Benz 

Scania 

Volvo 

DAF 

MAN 

Renault 

Iveco 

41 FACTS ABOUT SCANIA • SCANIA ANNUAL REPORT 2004

THE BUS AND COACH MARKET 

THE MARKET FOR INDUSTRIAL AND MARINE ENGINES 

Scania’s ten largest bus markets, 

vehicles delivered to customers 

Deliveries of Scania buses 


Scania’s ten largest markets for industrial and 

marine engines delivered to customers 

Deliveries of Scania engines 


Change 


Units 

3,000 

Change 


Units 

3,000 

1 (1) Brazil 623 505 23 

2 (2) Spain 592 479 24 

3 (3) Great Britain 444 473 – 6 

4 (6) Mexico 381 287 33 

5 (4) Italy 325 399 – 19 

6 (14) Iran 300 104 189 

7 (11) Russia 270 149 81 

8 (7) Taiwan 256 223 15 

9 (9) Australia 205 187 10 

10 (29) Malaysia 160 41 290 

Scania’s total deliveries to customers reached more than 

5,500 units during 2004, an increase of twelve percent 

compared to 2003. 

2,500 

2,000 

1,500 

1,000 

500 

0 

95 96 97 98 99 00 01 02 03 04 

1 (1) Brazil 1,392 614 127 

2 (4) Spain 734 264 178 

3 (2) Sweden 505 500 1 

4 (3) Great Britain 355 278 28 

5 (6) The Netherlands 313 196 60 

6 (11) Singapore 272 88 209 

7 (13) Norway 217 81 168 

8 (7) Argentina 211 145 46 

9 (5) Italy 202 200 1 

10 (14) Finland 174 61 185 

Total Scania deliveries to customers reached more than 

5,000 units, an increase of 58 percent compared to 2003. 

2,500 

2,000 

1,500 

1,000 

500 

0 

95 96 97 98 99 00 01 02 03 04 

Registrations of buses above 12 tonnes 


Deliveries of Scania buses 


Deliveries of Scania engines 


WESTERN EUROPE 

Total 22,380 21,735 22,522 


Units 

3,000 

Units 

3,000 

Spain 2,603 2,383 2,247 


Great Britain 3,137 3,268 2,600 


Italy 3,247 2,558 2,969 


Finland 257 268 269 


Sweden 913 884 896 


2,500 

2,000 

1,500 

1,000 

500 

0 

95 96 97 98 99 00 01 02 03 04 

2,500 

2,000 

1,500 

1,000 

500 

0 

95 96 97 98 99 00 01 02 03 04 


EMPLOYEES 

% 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

>20 

20–24 

Age distribution 

25–29 

30–34 

35–39 

40–44 

45–49 

50–54 

55–59 

ENVIRONMENTAL ECONOMICS 

Efforts to improve conservation of resources and reduce emissions and discharges 

are cost-effective and benefit the environment. Every year, Scania 

follows up its raw material and chemical consumption use, as well as energy 

and water use, measured against Group-wide environmental targets. 

Environment and economics 

During 2004, Scania’s costs for raw materials, 

chemicals, energy and water totalled 

about SEK 2,048 m., equivalent to 3.6 

percent of Scania’s sales. 

Emissions of carbon dioxide from 

Scania’s production plants totalled 74,000 

tonnes. In relation to Scania’s sales, this 

represented 1.3 g/SEK. Emissions per 

vehicle produced declined compared to 

the year before. Efforts to reduce climateaffecting 

emissions occur with the support 

of Scania’s position on the climate issue. 

This position and a detailed account of 

environmental performance in the production 

organisation can be found on Scania’s 

website, 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 directly into 

account when making investments, instead 

of subsequently working with filters 

and separate purification units. 

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 

2004, Scania’s investments in production 

facilities totalled SEK 2,372 m. Of this, 

SEK 14.4 m. was classified as environmental 

investments. 

Soil inventories and clean-up 

Orientation studies and risk assessments 

of soil and groundwater contamination 

have been completed at all production 

facilities. 

In Meppel, the Netherlands, most 

groundwater pollution that has been detected 

has been cleaned up. The task is 

expected to continue for at least another 

year. In Falun, Sweden, 30 tonnes of soil 

were removed and decontaminated due to 

an emulsion leakage. Preventive measures 

were also undertaken. In Slupsk, Poland, 

200 tonnes of oil-polluted soil were removed 

and decontaminated; this task is 

continuing. 

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. 

Operating 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. In addition to legal requirements 

and the conditions included in the permits, 

there are also internal requirements and 

rules for these operations. 

Production volume at the Falun, Sweden 

plant is within the framework of the 

existing permit. The authorities are examining 

an application for expanded operations 

and are expected to complete this 

task during 2005. 

Since 2004, operations in Katrineholm, 

Sweden, have no longer required a permit, 

since they have mainly been moved elsewhere. 

After soil inventories that showed 

no significant disruptions, the property 

was sold. 

Scania has applied for a permit for the 

new paintshop in Meppel, the Netherlands, 

which is scheduled to go into service 

in 2007/2008. 

The Scania production unit in São 

Paulo, Brazil is in the process of renewing 

its permit. The new permit is expected to 

be ready in 2005. 

During 2004 there were no violations 

of the existing permit conditions. No incidents 

occurred that caused significant 

environmental impact or led to major 

clean-up expenses. 

Environmentally related costs as a 

proportion of Scania’s sales 

Transport services, SEK 1,660 m. 

Raw material, SEK 1,690 m. 

Energy, SEK 207 m. 

Chemicals, SEK 144 m. 

Water, SEK 7 m. 

Achieving environmental targets 

in production 

Most of Scania’s environmental performance 

targets for its production units were 

set for 2004. The efforts of the past five years 

have yielded good results, even though 

the targets have not been entirely fulfilled. 

As Scania’s environmental work has 

reached a greater degree of maturity, it has 

proved increasingly difficult to improve conservation 

of resources and reduce emissions 

and discharges. Continuous improvements 

are an important part of environmental 

work. Meanwhile, it is in conjunction 

with new investments and renovations 

that major improvements are achieved. 

Future efforts will focus more clearly on 

individual issues. This will allow resources 

to be localised where they can be expected 

to yield the greatest results. Continued 

improvement work will focus primarily on 

energy. The target is to reduce energy use 

per vehicle, given comparable production 

volume and the existing production 

structure. This shall be achieved through 

continuous improvements and local 

energy surveys, followed up by efficiencyimproving 

projects. 


Summary of environmental performance, 

Scania production organisation 

Year 2004 2003 2002 

ENVIRONMENTAL PERFORMANCE IN THE PRODUCTION ORGANISATION 

Number of vehicles produced 58,672 51,276 45,145 

Sales, SEK m. 

Energy use 

Water use 

Chemical use 

Scania products 56,788 50,581 47,285 

Raw material consumption 

Per vehicle, kg 3,400 3,500 3,600 

Total, tonnes 199,000 179,000 164,000 

Total, SEK m. 1,690 1,400 1,220 

Chemical consumption 

Per vehicle, cubic metres 0.083 0.085 0.087 

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

Total, SEK m. 144 118 116 

Energy use 

Per vehicles, MWh 11 12 13 

Total, GWh 640 620 590 

Total, SEK m. 207 180 157 

Carbon dioxide emissions 

Per vehicle, kg 1,300 1,400 1,600 

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

Water use 

Per vehicle, cubic metres 10 11 13 

Total, 1,000 cubic metres 580 550 580 

Total cost, SEK m. 7 7 7 

Solvent emissions 1 

Per vehicle, kg 5.2 5.5 6.7 

Total, tonnes 300 280 300 

Recycling of residual 

products and waste 

Per vehicle, kg 1,000 1,050 1,050 

Total, tonnes 59,000 54,000 47,000 

Revenue, SEK m. 54 24 19 

Sent to landfills 2 and other 

off-site disposal: 

Per vehicle, kg 190 210 200 

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

Total cost, SEK m. 21 20 14 

1 From painting/rust-proofing. 

2 Excluding foundry sand, about 21,500 tonnes of construction material sent 

to landfills. 

MWh per 

vehicle 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

96 

98 

Target 

for 2004 

00 

02 

04 

Total 

GWh 

700 

600 

500 

400 

300 

200 

100 

During 2004, energy consumption 

totalled about 640 GWh, equivalent 

to about 11,000 kWh per vehicle. 

Carbon dioxide emissions 

related to energy use 

Energy use, 

GWh 

0 

Carbon dioxide 

emissions, ktonnes 

2004 1996 2004 1996 

Electricity 394 360 22 23 

District heat 51 130 4 9 

Fossil fuels 191 200 48 51 

Total 636 3 690 3 74 83 

Per vehicle 11 000 kWh 1,3 tonnes 

In 2003, carbon dioxide emissions from Scania’s 

production amounted to about 1.3 tonnes per 

vehicle, or a total of 74,000 tonnes. 

3 Sub-totals and totals have been rounded off. 

m3 per 

vehicle 

24 

22 

20 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

225 

200 

175 

150 

125 

100 

kg per 

vehicle 

75 

50 

25 

0 

96 

96 

98 

98 

Target 


00 

Target 


00 

02 

02 

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 2004, water consumption was 

about 580,000 cubic metres, equivalent 

to 10 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 2004 totalled about 2,800 

tonnes, equivalent to 48 kg per vehicle, 

excluding foundry sand. 

0 

Oil/lubricants 

Degreasing agents 

Water-based paint 

Solvent-based paint 

Powder paint 

Rust-proofing agents 

Solvents 

Foundry chemicals 

Other chemicals 

kg per 

vehicle 

14 

12 

10 

8 

6 

4 

2 

0 

Process oils/ 

emulsions 

96 

m3 0 100 200 300 400 500 600 700 800 

The consumption of chemicals in 2004 

was about 4,900 cubic metres, equivalent 

to 83 litres per vehicle. 

Solvent emissions 

98 

Target 


00 

02 

04 

Total 

tonnes 

600 

500 

400 

300 

200 

100 

During 2004, organic solvent emissions 

from painting/rust-proofing totalled 

some 300 tonnes, equivalent to 5.2 kg 

per vehicle. 

0 

45 FACTS ABOUT SCANIA • SCANIA ANNUAL REPORT 2004

Financial review 

REVENUE 

The sales revenue of the Scania Group 

in the Vehicles and Service segment totalled 

SEK 56,788 m., compared to SEK 50,581 

in 2003. This was equivalent to an increase 

of 12 percent. Revenue was favourably 

affected primarily by higher volume. 

Negative currency rate effects lowered 

revenues by about SEK 1,100 m. 

Revenue from new vehicle sales increased 

by 12 percent, amounting to SEK 38,911 

m. (34,652). Service revenue amounted to 

SEK 11,418 m. (10,759), an increase of 

6 percent. In local currencies, service 

revenue rose by about 7 percent. 

Sales revenue by product 

SEK m. 2004 2003 

Trucks 33,407 29,537 

Buses 5,504 5,115 

Engines 658 453 

Service-related products 11,418 10,759 

Used vehicles etc 6,792 7,123 

Revenue deferral, vehicle 1 – 991 – 2,406 

Total Vehicles and Service 56,788 50,581 

Customer Finance 3,427 3,479 

Elimination – 1,748 – 1,822 

Scania Group total 58,467 52,238 

1 Refers to the difference between sales recognised as 

revenue and sales value based on delivery. 

Interest and leasing income in the 

Customer Finance segment fell by 2 percent 

to SEK 3,427 m. (3,479). The decrease 

was attributable to a lower share of 

operating leases in the portfolio. 

NUMBER OF VEHICLES 

During the year, the Scania Group 

delivered 50,563 (45,045) new trucks, an 

increase of 12 percent. Bus and coach 

deliveries totalled 5,519 (4,910) new units, 

an increase of 12 percent. 

Vehicles delivered and financed 

Units 2004 2003 


Trucks 50,563 45,045 

Buses 5,519 4,910 

Total new vehicles 56,082 49,955 

Used vehicles 15,897 15,010 

Customer Finance 

Number of contracts (new during the year) 

Trucks 12,876 13,468 

Buses 302 326 

Total new vehicles 13,178 13,794 

Used vehicles 4,693 3,673 

Total number of contracts 

in the portfolio 67,254 64,233 

EARNINGS 

Operating income of the Scania Group 

rose by 24 percent to SEK 6,337 m. 

(5,125). The operating margin amounted 

to 11.2 (10.1) percent. 

Operating income of Vehicles and 

Service rose by 24 percent to SEK 5,887 m. 

(4,759). Higher vehicle volume and increased 

capacity utilisation were the main contributors 

to the earnings improvement. 

Increased service-related sales made a 

positive contribution. The positive effects 

above were partly offset by higher costs 

for the introduction of the new truck range. 

Scania’s research and development 

expenditures totalled SEK 2,219 m. 

(2,151). After adjusting for SEK 316 m. 

(669) in capitalised expenditures and SEK 

84 m. (2) in depreciation of earlier capitalisation, 

reported expenditure rose to SEK 

1,987 m. (1,484). The operating margin 

rose to 10.4 percent, compared to 9.4 

percent the preceding year. Compared to 

2003, currency spot rate effects totalled 

about SEK –135 m. Currency hedging 

income amounted to SEK 65 m. During 

2003, currency hedging income had a 

positive impact of SEK 620 m. on earnings. 

Compared to 2003, the total negative 

currency rate effect was thus SEK 690 m. 

Operating income in Customer 

Finance rose by 23 percent and amounted 

to SEK 450 m. (366). This was equivalent 

to an operating income of 1.71 (1.43) 

percent, expressed as a percentage of the 

average portfolio during the year. Earnings 

were favourably affected by increased 

volume in markets with higher interest 

margins. This was offset somewhat by 

increased operating expenses. Earnings 

also improved due to lower costs for both 

possible and actual credit losses. At the 

end of December, the value of the portfolio 

was about SEK 26,600 m., which represented 

an increase of about SEK 700 m. 

since year-end 2003. 

In local currencies, the portfolio 

increased by 3 percent. 

Earnings 

2004 2003 

Operating income by segment, 

SEK m. (operating margin in %) 

Vehicles and Service 5,887 4,759 

Vehicles and Service 10.4 9.4 

Customer Finance 450 366 

Customer Finance 1 1.7 1.4 

Total operating income 6,337 5,125 

Scania Group 11.2 10.1 

Income after financial items 6,014 4,604 

Taxes – 1,935 – 1,565 

Net income 4,077 3,034 

Earnings per share, SEK 20.39 15.17 

Return on equity, % 20.8 17.4 

1 The operating margin of Customer Finance is calculated by 

taking operating income as a percentage of the average 

portfolio. 

The net financial items of the 

Scania Group improved to SEK – 323 m. 

(– 521). The improvement was attributable 

to lower net debt as well as lower interest 

rates in South America. 

Income after financial items amounted 

to SEK 6,014 m. (4,604). 

Tax expenses for the year amounted 

to SEK 1,935 m. (1,565), equivalent to 32.2 

(34.0) percent of income after financial 

items. The lower tax rate compared to the 

previous year was mainly due to higher 

tax expenses in South America during 

2003. 

Net income for the year amounted 

to SEK 4,077 m. (3,034), equivalent to 

earnings per share of SEK 20.39 (15.17). 

FINANCIAL REVIEW • SCANIA ANNUAL REPORT 2004 46

CASH FLOW 

Cash flow in Vehicles and Service 

amounted to SEK 2,685 m. (2,450). Tiedup 

working capital rose by SEK 1,153 m. 

(236) during 2004, mainly due to increased 

inventory and receivables related to higher 

volume. Net investments totalled SEK 

2,847 m. (3,311), including SEK 316 m. 

(669) in capitalisation of development 

expenditures. The effects of acquisitions 

of businesses totalled SEK 49 m. (26). 

Cash flow in Customer Finance 

amounted to SEK – 285 m. (–1,456). Net 

investments in customer finance contracts 

amounted to SEK 478 m. (1,868). 

FINANCIAL POSITION 

Financial ratios related to 

the balance sheet 


Equity/assets ratio 30.0% 27.7% 

Equity/assets ratio, 

Vehicles and Service 40.3% 37.1% 

Equity/assets ratio, 

Customer Finance 11.2% 11.5% 

Equity per share, SEK 105.25 91.26 

Net debt, excluding provisions 

for pensions, SEK m. 23,115 24,291 

Net debt, Vehicles and 

Service, excluding provision 

for pensions, SEK m. 854 2,647 

Return on capital employed, 

Vehicles and Service 28.1% 22.0% 

Net debt/equity ratio, 

Vehicles and Service 0.05 0.17 

During 2004, the shareholders’ equity of 

the Scania Group rose by SEK 2,799 m. 

and totalled SEK 21,050 m. (18,251) at 

year-end. Net income for the year added 

SEK 4,077 m. (3,034), while the dividend 

to the shareholders decreased shareholders’ 

equity with SEK 1,200 (1,100). 

Besides this, shareholders’ equity declined 

by SEK 104 m. (614) because of exchange 

rate differences that arose when translating 

net assets outside Sweden and rose 

by SEK 26 m. (0) due to changes in 

accounting principles. 

The dividend for the financial year 

2004 proposed by the Board of Directors 

is SEK 15.00 (6.00) per share. 

NUMBER OF EMPLOYEES 

The number of employees in the Scania 

Group at year-end was 29,993 (29,112), 

an increase of 881. 

In Vehicles and Service the number 

of employees was 29,639 (28,791) at 

year-end 2004, of which the sales and 

service organisation totalled 11,747 

(11,460). The latter increase of 287 was 

attributable to expansion in eastern 

Europe, Asia and Africa in order to meet 

increased service volume, as well as to 

acquired businesses in western Europe. 

In Scania’s global industrial operations, 

the number of employees rose by 561, 

with increases in both Europe and South 

America. In Europe, the increase was 

attributable to the introduction of the new 

truck range and higher production volume. 

The increase in South America was 

attributable to higher production volume. 

In Customer Finance the number of 

employees rose by 33 to 354 (321). This 

was mainly due to expansion in eastern 

and western Europe. 

FINANCIAL RISKS 

Borrowing and refinancing risk 

Scania’s borrowing consists of two committed 

credit facilities in the international 

borrowing market, bonds issued in the 

capital market plus certain other borrowing. 

At year-end 2004, borrowing amounted 

to SEK 25.6 billion. In addition to utilised 

borrowing, Scania has two unutilised 

committed credit facilities equivalent to 

SEK 11.1 billion plus unutilised capital 

market programmes equivalent to SEK 

21.8 billion. 

Of utilised borrowing, about SEK 5.8 

billion falls due for repayment during 

2005, SEK 6.0 billion during 2006, SEK 

7.2 billion during 2007 and SEK 6.5 billion 

during 2008 or later. 

Interest rate risk 

Scania’s policy concerning interest rate 

risks is that the interest rate refixing period 

of its borrowing portfolio should normally 

be 6 months, but 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 risk 

Currency transaction exposure during 2004 

totalled about SEK 19 billion. The largest 

currency flows were in euro and British 

pounds. Based on the 2004 geographic 

distribution of revenue and expenses, a 

one percentage point change in the 

Swedish krona against other currencies 

would affect operating income by about 

SEK 190 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 2004, Scania’s net 

assets in foreign currencies amounted to 

SEK 8,761 m. Net assets outside Sweden 

of Scania’s subsidiaries are not hedged 

under normal circumstances. To the 

extent a foreign 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. In Customer 

Finance, the year’s expense for credit losses 

47 FINANCIAL REVIEW • SCANIA ANNUAL REPORT 2004

totalled SEK 89 m. (166), equivalent to 

0.34 (0.66) percent of the average portfolio, 

of which SEK 44 m. (100) consisted 

of actual credit losses. 

At year-end, the total reserve for 

probable but not actual credit losses in 

Customer Finance totalled SEK 500 m. 

(458), equivalent to 1.9 (1.8) percent of 

the portfolio at the close of 2004. 

Per year-end the portfolio amounted 

to SEK 26,596 m. (25,926), divided 

among about 20,500 customers, of whom 

99.0 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 in 

Scania’s financial policy document. 

Transactions occur only within established 

limits and with selected creditworthy 

counterparties. 

OTHER CONTRACTUAL RISKS 

Residual value exposure 

Some of Scania’s sales occur with repurchase 

obligations or guaranteed 

residual value. The value of all obligations 

at year-end was SEK 5,615 m. (5,925). 

Obligations outstanding declined somewhat, 

mainly due to the stronger Swedish 

krona. During 2004, the volume of such 

transactions was about 4,600 (6,500) new 

contracts. 

Service contracts 

A large portion of Scania’s sales of parts 

and workshop hours occur through repair 

and maintenance contracts. Under such 

contract, customers pay a fixed charge 

for a given period of time during which 

they receive, among other things, maintenance 

and repairs of their Scania vehicles. 

A fixed charge sets a ceiling on the cost 

of maintenance and repairs. 

Through the service network, Scania 

signs multi-year repair and service contracts 

with customers. In 2004 the number 

of contracted vehicles totalled 40,148 

(38,719). 

THE PARENT COMPANY 

The Parent Company, Scania AB, owns 

the shares in Scania CV AB and sold its 

shares in other Group companies to 

Scania CV AB at book value during 2004. 

After that, Scania AB owns only the 

shares in Scania CV AB and otherwise 

runs no operations. 

Scania CV AB is a public company 

and parent company of the Scania CV 

Group, which includes all production, 

sales and service and finance companies 

in the Scania AB Group. The company is 

a subsidiary of Scania AB, whose shares 

are listed on Stockholmsbörsen. 

FINANCIAL REVIEW • SCANIA ANNUAL REPORT 2004 48

Consolidated income statement 

January–December, SEK m. Note 2004 2003 2002 


Sales revenue 2 56,788 50,581 47,285 

Cost of goods sold – 42,570 – 38,272 – 36,260 

Gross income 14,218 12,309 11,025 

Research and development expenses 1 –1,987 – 1,484 – 1,437 

Selling expenses – 5,550 – 5,229 – 5,206 

Administrative expenses – 806 – 853 – 857 

Share of income in associated companies 12 16 23 

Operating income, Vehicles and Service 5,887 4,759 3,548 

Customer Finance 3 

Interest and lease income 3,427 3,479 3,763 

Interest and depreciation expenses – 2,572 – 2,666 – 3,033 

Net interest income 855 813 730 

Other income and expenses 2 15 17 

Gross income 857 828 747 

Credit losses – 89 – 166 – 175 

Selling and administrative expenses – 318 – 296 – 264 

Operating income, Customer Finance 450 366 308 

Capital gain related to car operations – – 550 

Operating income 6,337 5,125 4,406 

Interest income 326 286 260 

Interest expenses – 618 – 761 – 857 

Other financial income and expenses – 31 – 46 – 87 

Net financial items 4 – 323 – 521 – 684 

Income after financial items 6,014 4,604 3,722 

Taxes 5 – 1,935 – 1,565 – 985 

Minority interests – 2 – 5 2 

Net income 4,077 3,034 2,739 

Depreciation/amortisation included in operating income 2 6 – 2,184 – 2 000 – 2 093 

Earnings per share, SEK 3 20.39 15.17 13.70 

Proposed dividend per share, SEK 15.00 6.00 5.50 

1 See Note 7, “Intangible fixed assets”, for a specification of total research and development figures. 

2 Refers to Vehicles and Service. 

3 There are no potential dilution effects. 

49 INCOME STATEMENT • SCANIA ANNUAL REPORT 2004

Consolidated balance sheet 

31 December, SEK m Note 2004 2003 2002 

ASSETS 

Fixed assets 

Intangible fixed assets 7 2,460 2,395 1,938 

Tangible fixed assets 8 23,598 23,892 23,640 

Financial fixed assets 

Holdings in associated companies etc 9 92 122 126 

Long-term receivables 

Long-term interest-bearing receivables 10 12,756 11,796 11,354 

Deferred tax assets 5 383 381 466 

Other long-term receivables 174 134 224 

Total long-term receivables 13,313 12,311 12,044 

Total fixed assets 39,463 38,720 37,748 

Current assets 

Inventories 11 9,487 8,506 7,862 

Current receivables 

Tax receivables 733 352 224 

Interest-bearing trade receivables 12 7,875 7,502 7,136 

Non-interest-bearing trade receivables 12 7,641 6,345 6,497 

Other current receivables 12 2,528 2,494 2,281 

Total current receivables 18,777 16,693 16,138 

Short-term investments 13 1,379 704 1,669 

Cash and bank balances 1,119 1,212 2,670 

Total current assets 30,762 27,115 28,339 

Total assets 70,225 65,835 66,087 

31 December, SEK m. Note 2004 2003 2002 

SHAREHOLDERS’ EQUITY AND LIABILITIES 

Shareholders’ equity 14 

Share capital 2,000 2,000 2,000 

Restricted reserves 2,905 3,277 4,608 

Total restricted equity 4,905 5,277 6,608 

Unrestricted reserves 12,068 9,940 7,584 

Net income 4,077 3,034 2,739 

Total unrestricted equity 16,145 12,974 10,323 

Total shareholders’ equity 21,050 18,251 16,931 

Minority interests 5 4 58 

Provisions 

Provisions for pensions 15 2,499 2,274 2,225 

Provisions for deferred tax liabilities 5 2,202 2,180 2,060 

Other provisions 16 2,602 2,762 2,129 

Total provisions 7,303 7,216 6,414 

Liabilities 

Long-term interest-bearing liabilities 17 19,809 20,827 22,514 

Current liabilities 

Current interest-bearing liabilities 17 5,804 5,380 6,933 

Advance payments from customers 611 570 826 

Trade creditors 4,167 3,253 3,297 

Tax liabilities 1,564 1,027 241 

Other current liabilities 1,997 2,059 2,103 

Accrued expenses and prepaid income 18 7,915 7,248 6,770 

Total current liabilities 22,058 19,537 20,170 

Total shareholders’ equity and liabilities 70,225 65,835 66,087 

Assets pledged and contingent liabilities 

Assets pledged 19 67 175 191 

Contingent liabilities 20 326 483 413 

Net debt, excluding 

provisions for pensions, SEK m. 23,115 24,291 25,108 

Net debt/equity ratio 1.10 1.33 1.48 

For definitions of key financial ratios, see page 83. 

Equity/assets ratio, % 30.0 27.7 25.6 

Equity per share, SEK 105.25 91.26 84.66 

Capital employed, SEK m. 49,167 46,736 48,661 

BALANCE SHEET • SCANIA ANNUAL REPORT 2004 50

Consolidated statement of changes in shareholders’ equity 

January–December, SEK m. 2004 2003 2002 

Shareholders’ equity, 1 January 18,251 16,931 15,995 

Change in accounting principle 26 – – 

Adjusted opening balance 18,277 16,931 15,995 

Exchange rate differences – 104 – 614 – 1,103 

Net income 4,077 3,034 2,739 

Dividend to shareholders – 1,200 – 1,100 – 700 

Shareholders’ equity, 31 December 21,050 18,251 16,931 

Consolidated cash flow statement 


Operating activities 

Income after financial items 23 a 6,014 4,604 3,722 

Items not affecting cash flow 23 b 2,648 2,611 1,827 

Taxes paid – 1,784 – 806 – 573 

Cash flow from operating activities 

before change in working capital 1 6,878 6,409 4,976 

Cash flow from change in working capital 

Inventories – 959 – 864 – 918 

Receivables – 1,664 – 257 343 

Provisions for pensions 250 54 171 

Liabilities and provisions 1,220 831 1,239 

Total change in working capital 1 23 c – 1,153 – 236 835 

Cash flow from operating activities 1 5,725 6,173 5,811 

Investing activities 

Net investments through acquisitions/divestments 

of businesses 23 d – 49 – 26 1,165 

Net investments in fixed assets 23 e – 2,798 – 3,285 – 2,921 

Net investments in credit portfolio etc, 

Customer Finance – 478 – 1,868 – 1,024 

Cash flow from investing activities 1 – 3,325 – 5,179 – 2,780 


Financing activities 

Change in net debt from 

financing activities 23 f – 1,264 – 1,435 – 1,840 


Cash flow from financing activities – 2,464 – 2,535 – 2,540 

Cash flow for the year – 64 – 1,541 491 

Liquid assets, 1 January 1,663 3,253 2,870 

Exchange rate differences in liquid assets – 10 – 49 – 108 

Liquid assets, 31 December 23 g 1,589 1,663 3,253 

1 Of which, Vehicles and Service 


before change in working capital 6,685 5,997 4,504 

Total change in working capital – 1,153 – 236 835 

Cash flow from operating activities 5,532 5,761 5,339 

Cash flow from investing activities – 2,847 – 3,311 – 1,756 

Total cash flow 2,685 2,450 3,583 

Cash flow per share, Vehicles and Service, 

excluding acquisitions/divestments 13.67 12.38 12.09 

See also Note 1, segment reporting 

Total cash flow before 

financing activities 1 2,400 994 3,031 

51 • SCANIA ANNUAL REPORT 2004

Parent Company financial statements 

Scania AB 

Income statement 


Operating income 0 0 0 

Financial income and expenses 1 90 93 182 

Group contributions/dividends received 1 4,830 1,500 1,000 

Withdrawal from tax allocation reserve 637 284 250 

Provision to tax allocation reserve – 814 – – 

Taxes – 684 – 105 – 121 

Net income 4,059 1,772 1,311 

Balance sheet 

31 December, SEK m. Note 2004 2003 2002 

ASSETS 

Financial fixed assets 

Shares in Group companies 2 8,401 11,035 10,971 

Current assets 

Due from Group companies 9,182 2,828 2,775 

Other receivables 13 13 13 

Accrued income – – 2 

Total assets 17,596 13,876 13,761 


Shareholders’ equity 3 14,433 11,574 11,174 

Untaxed reserves 4 2,479 2,302 2,586 

Current liabilities 

Accrued expenses and prepaid income 0 0 1 

Tax liabilities 684 0 0 

Total current liabilities 684 0 1 

Total shareholders’ equity and liabilities 17,596 13,876 13,761 

Assets pledged – – – 

Contingent liabilities 5 22,688 23,639 26,685 

Statement of changes in shareholders’ equity 


Shareholders’ equity, 1 January 11,574 11,174 10,873 

Net income 4,059 1,772 1,311 

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


Shareholders’ equity, 31 December 14,433 11,574 11,174 

Cash flow statement 



Income after financial items 4,920 1,593 1,182 

Items not affecting cash flow – 4,830 – 1,500 – 1,000 

Taxes paid – – – 


before change in working capital 90 93 182 

Cash flow from change in working capital 

Due from/liabilities to subsidiaries – 1,524 1,070 804 

Other receivables – – 1 – 284 

Liabilities – 2 – 2 

Total change in working capital – 1,524 1,071 518 

Cash flow from operating activities – 1,434 1,164 700 


Divestments/acquisitions of shares in subsidiaries 2,634 – 64 – 

Cash flow from investing activities 2,634 – 64 – 

Total cash flow before financing activities 1,200 1,100 700 

Financing activities 


Cash flow from financing activities – 1,200 – 1,100 – 700 

Cash flow for the year – – – 

Liquid assets, 1 January – – – 

Liquid assets, 31 December – – – 

PARENT COMPANY FINANCIAL STATEMENTS • SCANIA ANNUAL REPORT 2004 52

Accounting principles 

The Annual Report of the Scania Group has 

cial reports resulting from these new and amended 

evaluated at the present value of expected 

Acquisitions of companies are reported 

been prepared in compliance with the Annual 

recommendations are described below. 

disbursements, taking into account inflation, 

according to the purchase method of accounting. 

Accounts Act, the current recommendations of 

the Swedish Financial Accounting Standards 

Council and the statements of its Emerging 

RR 29 Employee Benefits 

Through the implementation of RR 29, defined 

expected future pay increases and using a discount 

interest rate equivalent to the interest rate 

on top-rated corporate or government bonds 

This means that the assets and liabilities in the 

acquired company are accounted for at acquisition 

values assigned by the purchaser according 

Issues Task Force. The recommendations of the 

benefit plans in all of the Group’s subsidiaries are 

with a remaining maturity corresponding to the 

to an acquisition analysis. If the acquisition value 

Council are based on the international accounting 

being reported according to common principles. 

obligations in question. For plans that are fun- 

of the shares exceeds the value of the company’s 

principles adopted by the International 

Until the end of 2003, such plans had been 

ded, the fair value of the plan assets is subtrac- 

net assets according to the acquisition analysis, 

Accounting Standards Board. 

reported according to each country’s local 

ted from the estimated present value 

the difference is reported as goodwill on consoli- 

New accounting recommendations 

in 2004 

Beginning in 2004, Scania is applying the 

regulations. 

The difference that arose due to the restatement 

of liabilities as per 1 January 2004 was 

reported as a reduction in the provision for defined 

of the obligation. Actuarial gains and losses on 

obligations and plan assets are credited or charged 

directly to earnings when they arise. 

In the case of some plans in the Group that 

dation. 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 

Swedish Financial Accounting Standards 

benefit plans and an equivalent increase in 

are classified as defined benefit and which are 

until and including the divestment date. 

Council’s Recommendation RR 29 Employee 

shareholders’ equity. 

multi-employer plans, sufficient information can- 

Minority interests in net income and share- 

Benefits as well as the Emerging Issues Task 

Within the Scania Group, there are a number 

not be obtained to calculate Scania’s share of the 

holders’ equity are reported separately. 

Force’s Statement URA 43 Reporting of Special 

Payroll Tax and Pension Fund Profit Tax. Certain 

changes in existing regulations occurred, which 

of both defined contribution and defined benefit 

pension and similar plans, some of which have 

assets that are managed by special foundations, 

plans. For this reason, these plans are reported 

as defined contribution, in accordance with point 

30 of RR 29. This applies to the portion of the 

Associated companies 

“Associated companies” refers to companies in 

shall be applied beginning in 2004. These changes 

funds or the equivalent. The plans are financed by 

Swedish ITP occupational pension plan that is 

which Scania has a long-term ownership interest 

occurred as a consequence of the efforts to 

payments from Group companies and to some 

administered via the retirement insurance com- 

and possesses a significant influence. Associated 

harmonise Swedish accounting rules and the 

extent by employees. 

pany Alecta as well as the Dutch Pensioenfonds 

companies are accounted for using the equity 

international accounting standards adopted by 

Plans in which Scania only pays fixed contri- 

Metaal en Techniek administered via MN Services 

method. This means that in the consolidated 

the International Accounting Standards Board 

butions and has no obligation to pay additional 

and Bedrijfstakpensioenfonds Metalektro 

financial statements, holdings in associated 

(IASB). As a consequence of these harmonisa- 

contributions if the assets of the plan are insuffi- 

administered via PVF Achmea. See also Note 15 

companies are valued at the Group’s share of the 

tion efforts, beginning with 2004 the Annual 

cient to pay all compensation to the employee 

for further information on the reporting of pensions. 

shareholders’ equity of the associated company 

Accounts Act allows financial instruments to be 

are classified as defined contribution plans. The 

Other long-term compensation to employees 

after adjusting for the Group’s share of surplus 

reported at fair value in compliance with IAS 39 

Group’s expenditures for defined contribution 

consists of the present value of the obligation 

and deficit values, respectively. In this way, 

Financial Instruments: Recognition and Measure- 

plans are reported as an expense during the 

calculated according to the projected unit cre- 

Scania’s share of the earnings in an associated 

ment, which has also influenced the rules in RR 

period when the employees render the services 

dit method less the fair value of any plan 

company is included in consolidated earnings. 

27 Financial Instruments: Disclosure and 

Classification as well as RR 8 Reporting of 

Effects of Changes in Foreign Exchange Rates. 

In RR 1:00 Consolidated Financial Statements, 

in question. 

Defined benefit plans are all plans that are 

not classified as defined contribution. These are 

calculated according to the “projected unit credit 

assets. 

Consolidated financial statements 

The consolidated financial statements encompass 

Foreign currencies 

When preparing the consolidated financial statements, 

all items in the income statements of 

rules on reporting reverse acquisitions have been 

method”, for the purpose of fixing the present 

Scania AB and all subsidiaries. “Subsidiaries” 

foreign subsidiaries are translated to Swedish 

incorporated, in accordance with the International 

value of the obligations for each plan. Actuarial 

refers to companies in which Scania directly or 

kronor using the average exchange rates during 

Financial Reporting Standard IFRS 3 Business 

calculations are performed each year and are 

indirectly owns more than 50 percent of the 

the year. All balance sheet items except net 

Combinations. The changes in Scania’s account- 

based on actuarial assumptions that 

voting rights of the shares or otherwise has a 

income are translated using the exchange rates 

ing principles and in the presentation in its finan- 

are set on the closing day. The obligations are 

controlling influence. 

on the respective balance sheet date (closing day 

53 ACCOUNTING PRINCIPLES • SCANIA ANNUAL REPORT 2004

ate). This method is usually called the current 

Exchange rate differences on loans and 

Depreciation occurs mainly on a straight-line 

Scania’s research and development activities are 

method. The changes in the shareholders’ equity 

other financial instruments in foreign currencies 

basis over the estimated useful life of an asset, 

classified into a research phase and a develop- 

of the Group that arise due to different exchange 

that are intended for hedging of foreign net 

and in those cases where a residual value exists, 

ment phase. Expenditures that arise during the 

rates on the closing day compared to the 

assets are reported directly against shareholders’ 

the asset is depreciated down to this value. 

research phase are charged to earnings as they 

exchange rate on the preceding closing day are 

equity. 

Useful life and depreciation methods are exami- 

arise. Expenditures during the development 

reported directly against shareholders’ equity. 

All subsidiaries use the local currency as their 

functional currency, aside from some markets 

Classification in the balance sheet 

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

ned regularly and adjusted in case of changed 

circumstances. 

phase are capitalised as an intangible fixed asset, 

beginning on the date when the expenditures are 

highly likely to lead to future economic benefits. 

in eastern Europe for which the euro is the 

elapses from the purchase of materials until pay- 

The following useful life is applied: 

The amortisation of capitalised development 

functional currency. The justifications for this 

ment for goods delivered is received, is less than 

Machinery and equipment 

5 –15 years 

expenditures begins when the asset is placed 

have been that cost and price levels for the 

twelve months. This means that a current liability 

Buildings 

25 years 

in service and continues during its estimated 

companies have had a high correlation to the 

is a liability that falls due for payment within twelve 

Land 

No depreciation 

useful life. For capitalised product development 

euro. Items (transactions) in local currencies have 

months, counting from the balance sheet date. 

expenditures, the average useful life is currently 

been translated into the functional currency using 

Other liabilities are classified as long-term. 

Depreciation is charged to earnings for the 

estimated at five years. For capitalised software 

the monetary/non-monetary method, after which 

Current assets are assets that are expected to 

period. If there is any indication on the balance 

development expenditures, the useful life is 

a translation from the functional currency to 

be realised within twelve months, counting from 

sheet date that a tangible asset has diminished 

estimated at between three and five years. 

Swedish kronor has occurred using the current 

the balance sheet date, or that consist of liquid 

in value, the recoverable amount of the asset is 

If there is any indication on the balance sheet 

method. Beginning in 2004, for industrial opera- 

assets. Other assets are classified as fixed 

estimated. If the recoverable amount is less than 

date that an intangible asset has diminished in 

tions in Brazil and Argentina the previous func- 

assets. 

the carrying amount, the asset is written down 

value, the recoverable amount of the asset is 

tional currency, the American dollar (USD), has 

been replaced with local currencies. The justification 

is that in recent years, there has been an 

increasingly large disengagement of local price 

and cost trends from the former functional 

currency, USD. 

Receivables and liabilities in foreign currencies 

are valued at the closing day rate. In applic- 

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 

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 fixed assets consist of goodwill 

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 

able cases, receivables and liabilities are valued 

leases and are reported among tangible fixed 

on consolidation plus fixed capitalised expenditures 

portion of indirect expenses is included in the 

at the underlying hedging rate. 

assets. If a sale is combined with a repurchase 

for development of new products as well as soft- 

value of the inventories. 

Currency forward contracts entered into in 

order to hedge future commercial flows are 

reported among earnings on the same date as 

the commercial flow. Premiums received or paid 

for currency options that are intended for hedging 

of currency flows in business transactions are 

obligation or a residual value guarantee, the 

transaction is reported as an operating lease provided 

that important risks remain with Scania. 

Valuation principles 

Assets, liabilities, provisions and derivatives have 

ware. 

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 in the consolidated financial 

Liquid assets and short-term 

investments 

Liquid assets consist of cash and bank balances 

as well as short-term investments. In certain 

cases, short-term investments consist of invest- 

reported as income or expenses over the con- 

been valued at acquisition value unless otherwise 

statements is established on the basis of indi- 

ments with maturities that are formally longer 

tract period. Currency forward contracts that do 

stated. 

vidual examination. In deciding the amortisation 

than 90 days, but which can easily be turned 

not meet the criteria for hedge accounting are 

valued according to the lower of cost or net realisable 

value. 

Tangible fixed assets 

Tangible fixed assets are reported at acquisition 

period, the main principles used are as follows: 

• Small acquisitions that are a supplement to 

existing operations and that are integrated 

into liquid assets. 

Short-term investments are valued at the 

lower of accrued acquisition value and fair value. 

When valuing financial assets and liabilities 

where the original type of currency was changed 

through a currency swap, the loan amount and the 

value less accumulated depreciation and any 

impairment losses. If a tangible fixed asset includes 

major components with a divergent useful life 

with them are amortised in five years. 

• Larger acquisitions that involve establishment 

of operations in new markets are amortised in 

Financial instruments 

Financial assets, including interest-bearing 

swap agreement are translated to Swedish kronor 

(depreciation period), these are reported as 

ten years if they are established operations 

receivables in Customer Finance, are reported 

while taking into account the closing day rate. 

separate assets. 

with a strong market position. 

at accrued acquisition value minus probable 

ACCOUNTING PRINCIPLES • SCANIA ANNUAL REPORT 2004 54

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 

accrued over the maturity of the loan. 

Financial assets and liabilities in foreign 

currencies, as well as derivatives, are valued 

according to the principles stated under “Foreign 

currencies”. 

Provisions 

Provisions are reported if an obligation (legal or 

informal) exists as a consequence of events that 

occur. 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 for 

vehicles sold during the year are based on factory 

warranty conditions and the estimated quality 

situation. Provisions on service contracts are 

related to expected future expenses that exceed 

contractual future revenue. Provisions for residual 

value obligations arise as a consequence either 

of an operating lease or a sale with a repurchase 

obligation. The provision must cover the risk of a 

negative future price trend. If the expected future 

market value is below the price agreed in the 

leasing contract or repurchase contract, a provision 

for the difference between these amounts is 

to be reported. Assessment of future residual 

value risk occurs continuously over the contract 

period. For provisions for pensions, see the 

above description of RR 29 as well as Note 15. 

For deferred tax liabilities, see below under 

“Taxes”. 

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. 

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 contracts 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 and the portion of the development phase 

that does not fulfil the requirements for capitalisation, 

plus amortisation and writedowns 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. In the 

Customer Finance segment, selling and administrative 

expenses are reported as a combined 

item, since these predominantly consist of selling 

expenses. 

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 fixed assets. 

Changes in accounting principles in 

2005 

In accordance with the IAS regulation adopted 

by the European Union in 2002, listed companies 

throughout the EU shall apply International 

Financial Reporting Standards (IFRS) in their 

consolidated financial statements as from 2005. 

The standards become mandatory for listed 

companies in the EU as the European 

Commission approves them. Scania has carried 

out a project for implementing and safeguarding 

the transition to IFRS. 

Standard IFRS 1 sets out the procedures 

that companies must follow when they adopt 

IFRS for the first time. The standard stipulates 

that when transitioning from national Generally 

Accepted Accounting Principles (GAAP) to IFRS, 

a company shall present at least one year of 

comparative figures in accordance with IFRS. 

As for the accounting standards for financial 

instruments – IAS 32 and IAS 39 – IFRS 1 allows 

a company not to show comparative figures for 

2004. This means that for financial instruments, 

the actual transition to IFRS occurs on 1 January 

2005. 

The following is a presentation of the IFRS 

standards that have had an influence on Scania’s 

accounts during the transition to IFRS rules, 

as well as those that are otherwise deemed to 

be of interest to an external reader of Scania’s 

Annual Report. The information below is based 

on information available as per March 7, 2005. 

IFRS 3 Business Combinations 

The new rules prohibit the previously allowed 

pooling method in accounting for acquisitions 

of companies. The only method allowed is the 

purchase method. IFRS 3 also prohibits amortisation 

of goodwill. Instead, goodwill must be 

tested annually for impairment or when there 

are indications of a possible need to report an 

impairment loss. Historically, Scania has only 

used the purchase method when reporting 

acquisitions of companies. 

IFRS 4 Insurance Contracts 

The transition to IFRS 4 does not result in any 

effects on the amounts of Scania’s reported 

assets, liabilities or earnings. The change, 

compared to previously applicable rules, is 

that more detailed disclosures about insurance 

contracts are required. 

IAS 7 Cash Flow Statements 

IAS 7 stipulates a three-month limit for shortterm 

investments. This affects the classification 

of liquid assets in the cash flow statements. The 

transition does not result in any effect on Scania, 

since the cash flow statements in this year’s 

Annual Report have been prepared in accordance 

with IAS 7 in this respect. 

IAS 16 Property, Plant and Equipment 

IAS 16 states that the capitalised cost of an 

asset shall be allocated among the various significant 

constituent parts of the asset. As a result, 

different depreciation periods may apply to components 

compared to the main asset. Scania 

has analysed its buildings and implemented an 

allocation of components, which has affected 

the size of depreciation. IAS 16 also prohibits 

upward revaluation in the value of property, plant 

55 ACCOUNTING PRINCIPLES • SCANIA ANNUAL REPORT 2004

and equipment. However, the recommendation 

allows two alternative methods for appraising 

these assets. Either the revaluation model, which 

means that assets can be carried at regularly 

revalued amounts, or the cost model, which states 

that the assets shall be carried at acquisition 

value. Scania has chosen to use the cost model 

in appraising its fixed assets. 

IAS 17 Leases 

Scania applied IAS 17 during earlier financial 

years and reports, and discloses all lease obligations 

in accordance with the requirements of 

IFRS rules. 

IAS 19 Employee Benefits 

Scania applied IAS 19 during the financial year 

2004, since Swedish accounting rules have coincided 

with IFRS via RR 29 since January 2004. 

As a consequence of the changes in accounting 

rules, Note 15 has been changed compared to 

prior years. 

IAS 27 Consolidated and Separate Financial 

Statements 

According to IAS 27, minority interests shall be 

reported in the consolidated balance sheet separately 

from the parent company’s shareholders’ 

equity. A separate disclosure shall be provided of 

the minority’s share of earnings. Scania has 

implemented these changes in presentation in 

the quantified information on the IFRS transition 

in Note 33. 

IAS 32 Financial Instruments: Disclosure and 

Presentation 

IAS 32 enters into force on 1 January 2005 and 

requires no retroactive application. In all essential 

respects, the disclosure requirements in IAS 32 

coincide with RR 27. The requirements for reporting 

financial assets and liabilities on a net basis 

(offsetting) are changing. As a result, Scania will 

apply reporting on a gross basis of certain financial 

assets and liabilities that were previously 

reported on a net basis. 

IAS 36 Impairment of Assets 

The recommendation concerns all tangible and 

intangible fixed assets. Goodwill as well as 

intangible assets with an indefinite useful life 

shall be tested annually for any need to report 

an impairment loss. When there are indications 

that an impairment may exist, impairment testing 

shall occur. This applies to all tangible and 

intangible fixed assets. Scania performed impairment 

testing during 2004 for all goodwill items. 

No impairment loss was identified as a consequence 

of the impairment tests that was performed. 

There were no indications leading Scania 

to carry out any impairment testing of tangible 

fixed assets. 

IAS 39 Financial Instruments: 

Recognition and Measurement: 

IAS 39 enters into force on 1 January 2005 and 

requires no retroactive application. IAS 39 is 

resulting in changes in the reporting and valuation 

of financial assets and liabilities, of which 

reporting of derivatives has the largest effect on 

Scania. According to the standard, all derivatives 

shall be recognised in the balance sheet at fair 

value and any changes in their fair value shall, as 

a main rule, be reported in the income statement. 

If the derivative is part of a hedging transaction, 

the rules for hedge accounting may be 

applied, provided that the strict conditions for 

applying hedge accounting have been met. 

Hedging of cash flows 

Derivatives carried for the purpose of hedging 

expected future commercial payments in foreign 

currencies against currency risks will be recognised 

according to the rules for hedge accounting of 

cash flow hedges. As a result, all derivatives are 

carried in the balance sheet at fair value and 

changes in their value are recognised as part 

of fair value reserve in shareholders’ equity. When 

the hedged item is recognised in the balance 

sheet, a change in value related to the derivative 

is recognised to the income statement. If a derivative 

does not meet the conditions for hedge 

accounting, the change in fair value is reported 

directly in the income statement. 

Currency derivatives carried in order to 

convert the borrowing that occurs in Scania’s 

subsidiaries through the corporate treasury unit 

into the appropriate currency are recognised at 

fair value and as changes in fair value in the 

income statement. Foreign currency borrowing 

is revalued at the closing day exchange rate, 

and exchange rate differences are recognised in 

earnings and thereby meet the change in value 

of the derivative. 

Hedging of fair value 

Scania’s external borrowing mainly occurs at 

the corporate level in large sums. They are then 

transferred to subsidiaries in the form of internal 

loans. To convert this borrowing to the desired 

interest rate refixing structure, interest rate 

derivatives are used. Due to the strict requirements 

that are imposed in order to apply hedge 

accounting, for administrative reasons Scania 

has chosen not to apply hedge accounting to 

a number of small derivatives. As a result, the 

derivatives are valued at fair value and the 

change in value is recognised via the income 

statement, while borrowing is valued at accrued 

cost. Due to differences in the recognition of the 

hedging instrument and the hedged item, the 

accounts are subject to volatility. Financially, 

however, Scania is hedged and risk management 

complies with the Finance Policy approved by 

the Board of Directors. 

ACCOUNTING PRINCIPLES • SCANIA ANNUAL REPORT 2004 56

Notes 

THE SCANIA GROUP 

PARENT COMPANY 

Note 1 Segment reporting 57 

Note 2 Sales revenue 60 

Note 3 Customer Finance 60 

Note 4 Financial income 

and expenses 60 

Note 5 Taxes 60 

Note 6 Depreciation/amortisation 61 

Note 7 Intangible fixed assets 61 

Note 8 Tangible fixed assets 62 

Note 9 Holdings in associated 

companies etc 63 

Note 10 Long-term interest-bearing 

receivables 63 

Note 11 Inventories 64 

Note 12 Current receivables 64 

Note 13 Short-term investments 64 

Note 14 Shareholders’ equity 64 

Note 15 Provisions for pensions and 

similar commitments 64 

Note 16 Other provisions 66 

Note 17 Interest-bearing liabilities 66 

Note 18 Accrued expenses and 

prepaid income 66 

Note 19 Assets pledged 66 

Note 20 Contingent liabilities 67 

Note 21 Lease obligations 67 

Note 22 Government grants 67 

Note 23 Consolidated cash flow statement 67 

Note 24 Companies acquired/divested 68 

Note 25 Wages, salaries and other 

remuneration and number 

of employees 68 

Note 26 Related party transactions 69 

Note 27 Information regarding 

compensation to 

executive officers 70 

Note 28 Fees and other remuneration 

to auditors 70 

Note 29 Financial instruments and 

financial risk management 71 

Note 30 Net assets in foreign currencies 73 

Note 31 Currency exposure in 

operating income 73 

Note 32 Effect of exchange rate 

differences on net income 73 

Note 33 Impact of IFRS 74 

List of subsidiaries 76 

Note 1 Financial income and expenses 78 

Note 2 Shares in Group companies 78 

Note 3 Shareholders’ equity 78 

Note 4 Untaxed reserves 78 

Note 5 Contingent liabilities 78 

Note 6 Information regarding 

compensation to 

executive officers 78 

NOTE 1 Segment reporting 

The operations of the Scania Group are managed 

and reported primarily by line of business and 

secondarily by geographic market. Scania’s primary 

segments are Vehicles and Service and 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 the equivalents in 

Vehicles and Service. Internal reporting at Scania is 

designed in accordance with this division into segments. 

Only overall analyses are conducted at the 

geographic level. The corporate departments that 

are common to both lines of businesses are the 

treasury and tax departments. In the consolidated 

financial statements, these are included as part of 

the Vehicles and Service line of business. Financial 

expenses and taxes are reported at the segment level, 

since the Customer Finance line of business carries 

out financial service operations for which it is interesting 

to show net financial cost after taxes. For reasons 

of comparability, the equivalent information for 

Vehicles and Service has been included in this note. 

Lines of business: Vehicles and Service consists 

mainly of two parts. The first is industrial operations 

that encompass all manufacturing of trucks, buses 

and industrial and marine engines. The second is 

sales operations encompassing the sales and service 

companies that handle sales of the manufactured 

products. 

The Customer Finance line of business provides 

individually tailored financial solutions to Scania 

customers, such as loan financing, lease contracts 

and insurance solutions, all of which can be combined 

with service contracts. Customer Finance 

operates in all of Scania’s geographic markets, in 

Europe primarily via wholly owned finance companies, 

in other geographic markets primarily via collaboration 

with external creditors. The assets of each line 

of business include assets that are directly used in 

its operations. Correspondingly, its liabilities and 

provisions refer to those that are directly attributable 

to its operations. 

Geographic areas: Scania is geographically divided 

into five parts: Western Europe, central and eastern 

Europe, Asia, America and other markets. The final 

table in this note shows what countries are included 

in each of these areas. Sales of Scania’s products 

occur in all five geographic areas. Customer financing 

is found mainly in the European markets and 

to a lesser extent in the others. Most of Scania’s 

research and development occurs in Sweden. 

Manufacturing of buses, trucks and marine and 

industrial engines occurs in a number of locations in 

Sweden, the Netherlands, France, Brazil, Argentina 

and Mexico. 

Continued 

57 NOTES • SCANIA ANNUAL REPORT 2004

Note 1 continued 

PRIMARY SEGMENTS 

(lines of business) Vehicles and Service Customer Finance Eliminations and other Scania Group 

January– December, SEK m. 2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002 

Revenue from external customers 56,788 50,581 47,285 3,427 3,479 3,763 – 1,748 – 1,822 – 2,027 58,467 52,238 49,021 

Operating income 5,875 4,743 3,525 450 366 308 – – – 6,325 5,109 3,833 

Income from holdings in associated companies 12 16 23 – – – – – – 12 16 23 

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

Financial income and expenses 1 – 323 – 521 – 684 – – – – – – – 323 – 521 – 684 

Income after financial items 5,564 4,238 2,864 450 366 308 – – 550 6,014 4,604 3,722 

Taxes 1 – 1,796 – 1,432 – 890 – 139 – 133 – 95 – – – – 1,935 – 1,565 – 985 

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

Net income 3,766 2,801 1,976 311 233 213 0 0 550 4,077 3,034 2,739 

Depreciation/amortisation included 

in operating income 2 – 2,184 – 2,000 – 2,093 – 15 – 16 – 13 – – – – 2,199 – 2,016 – 2,106 

1 Financial income and expenses are reported for both lines of business, because Customer Finance carries out financial operations and the cost of this is based on net financing expense after taxes. 

For reasons of comparability, the corresponding information is also shown for the Vehicles and Service line of business. 

2 Depreciation on operating leases is not included. 

BALANCE SHEET 

31 December, SEK m. 

ASSETS 

Intangible fixed assets 2,447 2,381 1,926 13 14 12 – – – 2,460 2,395 1,938 

Tangible fixed assets 3, 6 17,861 17,347 16,792 7,065 7,921 8,366 – 1,328 – 1,376 – 1,518 23,598 23,892 23,640 

Shares and participations 92 122 126 – – – – – – 92 122 126 

Inventories 9,446 8,460 7,831 41 46 31 – – – 9,487 8,506 7,862 

Interest-bearing receivables 4 1,074 1,268 1,524 19,558 18,030 16,966 – – – 20,632 19,298 18,490 

Other receivables 5 11,456 9,501 9,452 658 619 630 – 656 – 414 – 390 11,458 9,706 9,692 

Liquid investments 2,196 1,779 4,187 302 137 152 – – – 2,498 1,916 4,339 

Total assets 44,572 40,858 41,838 27,637 26,767 26,157 – 1,984 – 1,790 – 1,908 70,225 65,835 66,087 


Shareholders’ equity 17,953 15,164 13,828 3,097 3,087 3,103 – – – 21,050 18,251 16,931 

Provisions for pensions 2,490 2,268 2,220 9 6 5 – – – 2,499 2,274 2,225 

Other provisions 4,205 4,181 3,315 599 761 874 – – – 4,804 4,942 4,189 

Interest-bearing liabilities 3,050 4,426 8,495 22,563 21,781 20,952 – – – 25,613 26,207 29,447 

Other liabilities 5, 6 16,874 14,819 13,980 1,369 1,132 1,223 – 1,984 – 1,790 – 1,908 16,259 14,161 13,295 

Total shareholders’ equity and liabilities 44,572 40,858 41,838 27,637 26,767 26,157 – 1,984 – 1,790 – 1,908 70,225 65,835 66,087 

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. 

5 Elimination refers to internal receivables and liabilities between the two segments. 

6 Elimination refers to deferred gains on operating leases. 

Gross investments during the period in 

– intangible fixed assets 361 710 619 4 8 10 365 718 629 

– tangible fixed assets 2,360 2,466 2,377 12 12 19 2,372 2,478 2,396 

– short-term rentals, operating leases 1,617 2,103 1,323 2,572 3,239 2,972 4,189 5,342 4,295 

NOTES • SCANIA ANNUAL REPORT 2004 58

SECONDARY SEGMENTS 

Central 

(geographic areas) Western Europe and eastern Europe Asia America Other markets Eliminations Scania Group 

SEK m. 2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002 


Revenue, January–December 1 38,729 35,970 34,992 4,941 4,016 3,113 3,994 3,932 3,122 5,654 3,836 3,542 3,470 2,827 2,516 – – – 56,788 50,581 47,285 

Assets, 31 December 2 33,433 31,674 31,931 2,763 2,127 1,788 1,095 1,036 800 6,705 5,143 7,324 2,049 2,427 1,519 – 1,473 –1,549 –1,524 44,572 40,858 41,838 

Investments, 31 December 2 2,269 2,736 2,700 171 191 107 37 84 58 180 120 85 64 45 46 – – – 2,721 3,176 2,996 


Revenue, January–December 1 2,884 2,995 3,310 356 345 346 128 98 82 – – – 59 41 25 – – – 3,427 3,479 3,763 

Assets, 31 December 2 21,082 21,508 21,961 4,717 3,451 3,125 1,326 1,446 776 – – – 512 362 295 – – – 27,637 26,767 26,157 

Investments, 31 December 2 9 14 16 4 4 5 3 1 8 – – – – 1 – – – – 16 20 29 

1 Revenue from external customers, by location of customers. 

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

Cash flow statement by segment 

Amounts in SEK m. unless otherwise stated 2004 2003 2002 




Change in working capital etc – 1,153 – 236 835 



Net investments – 2,847 – 3,311 – 1,756 

Cash flow from investing activities – 2,847 – 3,311 – 1,756 

Cash flow from Vehicles and Service 2,685 2,450 3,583 



Cash flow from operating activities 193 412 472 

Cash flow from operating activities 193 412 472 


Net investments in the credit portfolio etc – 478 – 1,868 – 1,024 

Cash flow from investing activities – 478 – 1,868 – 1,024 

Cash flow from Customer Finance – 285 – 1,456 – 552 

See also Note 23, “Consolidated cash flow statement”. 

Composition of geographic segments 

Western Europe Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, 

Great Britain, Greece, Iceland, Ireland, Italy, Liechtenstein, Malta, the Netherlands, 

Norway, Portugal, Spain, Sweden and Switzerland. 

Central and eastern Europe Albania, Belarus, Bosnia-Herzegovina, Bulgaria, 

Croatia, the Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Latvia, 

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

Turkmenistan, Ukraine and Yugoslavia. 

Asia Afghanistan, Bahrain, Bangladesh, Brunei, China, Hong Kong, India, 

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

Malaysia, the Maldives, 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 Argentina, Barbados, Bermuda, Bolivia, Brazil, Canada, 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, Surinam, Trinidad, Uruguay, the United 

States, Venezuela and the Virgin Islands. 

Other markets Algeria, Angola, Australia, Benin, Botswana, Burundi, Cameroon, 

the Canary Islands, Chad, Congo, Egypt, Eritrea, Ethiopia, French Polynesia, 

Gabon, Gambia, Ghana, Guadeloupe, Guinea-Bissau, Guinea Conakry, Ivory Coast, 

Kenya, Liberia, Libya, Madagascar, Mali, Malawi, Mauritania, Mauritius, Micronesia, 

Morocco, Mozambique, Namibia, New Caledonia, New Guinea, New Zealand, 

Niger, Reunion, Rwanda, São Tomé, Senegal, the Seychelles, Sierra Leone, 

Somalia, South Africa, Sudan, Tanzania, Togo, Tunisia, Uganda, Zambia and 

Zimbabwe. 


NOTE 2 Sales revenue 

2004 2003 2002 

Trucks 33,407 29,537 27,184 

Buses 5,504 5,115 3,991 

Engines 658 453 464 

Service-related products 11,418 10,759 10,603 

Used vehicles etc 6,792 7,123 6,218 

Revenue deferral, vehicles 1 – 991 – 2,406 – 1,175 

Total 56,788 50,581 47,285 

1 Refers to the difference between revenue recognised as income and sales value 

based on deliveries. 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. 

NOTE 3 Customer Finance 

Interest income 2004 2003 2002 

Interest income 1,253 1,183 1,151 

Lease income 2,174 2,296 2,612 

Depreciation – 1,731 – 1,776 – 1,977 

Interest expenses – 841 – 890 – 1,056 

Net interest income 855 813 730 

Other income and expenses 2 15 17 

Net operating income 857 828 747 

Credit losses 1 – 89 – 166 – 175 

Selling and administrative expenses – 318 – 296 – 264 

Operating income 450 366 308 

1 This was equivalent to 0.34 (0.66 and 0.69 respectively) 

percent of the average credit portfolio. 

Lease assets 

(operating leases) 2004 2003 2002 

1 January 7,900 8,341 9,894 

New contracts 2,572 3,239 2,972 

Depreciation – 1,731 – 1,776 – 1,977 

Terminated contracts – 1,669 – 1,582 – 2,105 

Change in value adjustment 21 – 14 2 

Currency rate effects – 50 – 308 – 445 

Carrying amount, 31 December 2 7,043 7,900 8,341 

2 Included in the consolidated financial statements under “Machinery and 

equipment” after subtracting deferred profit recognition. 

Financial receivables 

(Hire purchase contracts 

and financial leases) 2004 2003 2002 

1 January 18,026 16,962 15,197 

New receivables 9,458 9,916 10,318 

Loan principal payments/terminated 

contracts – 7,950 – 8,307 – 8,079 

Change in value adjustment – 86 – 93 – 9 

Currency rate effects 105 – 452 – 465 

Carrying amount, 31 December 19,553 18,026 16,962 

Total receivables 

and lease assets 3 26,596 25,926 25,303 

3 The number of contracts in the portfolio on 31 December 

totalled about 67,000 (64,000 and 59,000, respectively). 

Net investments 

in financial leases 2004 2003 2002 

Receivables related to future 

minimum lease payments 5 16,421 14,696 13,244 

Less: 

Executory costs and reserve 

for bad debts – 311 – 227 – 294 

Imputed interest – 1,345 – 1,143 – 1,145 

Net investment 4 14,765 13,326 11,805 

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 

2005 2,782 6,576 

2006 1,848 4,407 

2007 1,352 3,012 

2008 805 1,634 

2009 392 616 

2010 and thereafter 145 176 

Total 7,324 16,421 

5 Minimum lease payments refer to the future flows of incoming payments to 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 4 Financial income and expenses 

2004 2003 2002 

Interest income 

Bank balances and 

short-term investments 239 184 181 

Interest-bearing receivables 42 55 48 

Other 45 47 31 

Total interest income 326 286 260 

Interest expenses 

Borrowings – 513 – 676 – 760 

Pension liability – 105 – 85 – 97 

Total interest expenses – 618 – 761 – 857 

Other financial income and expenses – 31 – 46 – 87 

Net financial items – 323 – 521 – 684 

NOTE 5 Taxes 

Tax expense/income 

for the year 2004 2003 2002 

Current tax 1 – 1,943 – 1,351 – 990 

Deferred tax 12 – 209 14 

Share of tax of associated companies – 4 – 5 – 9 

Total – 1,935 – 1,565 – 985 

1 Of which, taxes paid: – 1,784 – 806 – 573 

Deferred tax is attributable 

to the following: 2004 2003 2002 

Deferred tax related to 

temporary differences 358 – 111 – 83 

Deferred tax related to 

changes in tax rates 2 3 9 0 

Deferred tax income due to 

tax value of loss carry-forwards 

capitalised during the year 18 147 350 

Deferred tax expense due to 

utilisation of previously capitalised 

tax value of tax loss carry-forwards – 375 – 204 – 253 

Other changes in deferred tax 

liabilities/assets 8 – 50 – 

Total 12 – 209 14 

2 During 2004, the tax rate changed in the Netherlands, Austria, Chile and Mexico. 


Reconciliation of 2004 2003 2002 

effective tax Amount % Amount % Amount % 

Income after 

financial items 6 014 4 604 3 722 

Swedish statutory tax – 1,684 – 28 – 1,289 – 28 – 1,042 – 28 

Tax effect and 

percentage influence: 

Difference between Swedish 

and foreign tax rates – 86 – 1 26 1 32 1 

Tax-exempt income 36 1 12 0 31 1 

Non-deductible expenses 

including goodwill 

amortisation – 169 – 3 – 158 – 3 – 112 – 3 

Valuation of tax loss 

carry-forwards – 30 – 1 – 25 – 1 35 1 

Adjustment for taxes 

pertaining to previous years 11 0 – 59 – 1 – 1 0 

Capital gain on divestment 

of businesses – – 154 4 

Other – 13 – – 72 – 2 – 82 – 2 

Effective tax – 1,935 – 32 – 1,565 – 34 – 985 – 26 

Deferred tax assets and 

tax liabilities are attributable 

to the following: 2004 2003 2002 

Deferred tax assets 

Provisions 580 423 293 

Fixed assets 291 261 213 

Inventories 416 346 367 

Unutilised tax loss carry-forwards 3 300 661 801 

Other 451 412 518 

Offset within tax units – 1,655 – 1,722 – 1,726 

Total 383 381 466 

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

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

carry-forwards, SEK 212 m. may be utilised without time constraints. 

2004 2003 2002 

Deferred tax liabilities 

Fixed assets 2,638 2,729 2,766 

Tax allocation reserve 4 884 838 749 

Other 335 335 271 

Offset within tax units – 1,655 – 1,722 – 1,726 

Total 2,202 2,180 2,060 

Net deferred tax liabilities 1,819 1,799 1,594 

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. 

Reconciliation of net 

deferred tax liabilities 2004 2003 2002 

1 January 1,799 1,594 1,428 

Deferred taxes reported 

in the year’s income – 12 209 – 14 

Tax assets/tax liabilities 

in acquired businesses 16 12 24 

Tax assets/tax liabilities in 

divested businesses – – – 26 

Change in accounting principle 3 – – 

Exchange rate differences etc. 13 – 16 182 

Net deferred tax liabilities, 

31 December 1,819 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 future earnings 

capacity makes a valuation possible. In the Scania Group, deferred tax 

assets related to tax loss carry-forwards of SEK 243 m. (255 and 459, 

respectively) 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 

2005 28 

2006 18 

2007 4 

2008 4 

2009 2 

2010 and thereafter 70 

No expiration date 117 

Total 243 

NOTE 6 Depreciation/amortisation 

Distribution of depreciation or amortisation by function, excluding 

depreciation in Customer Finance, which is found in Note 3. 

2004 2003 2002 

Intangible fixed assets 

Research and development expenses – 84 – 2 – 

Selling expenses 1 – 211 – 214 – 237 

Total – 295 – 216 – 237 

Tangible fixed assets 

Costs of goods sold – 1,522 – 1,419 – 1,469 

Research and development expenses – 106 – 95 – 91 

Selling expenses – 245 – 238 – 255 

Administrative expenses – 16 – 32 – 41 

Total – 1,889 – 1,784 – 1,856 

Total depreciation/amortisation – 2,184 – 2,000 – 2,093 

1 Goodwill amortisation related to acquisitions of sales and service companies is 

recognised as a selling expense. 

NOTE 7 Intangible fixed assets 

Research 

and 

develop- Soft- 

Goodwill ment 1 ware 

Carrying amount, 1 January 2002 1,364 – – 

Change in accumulated 

acquisition value, 2002 78 573 165 


amortisation, 2002 – 194 – – 48 

Carrying amount, 31 December 2002 1,248 573 117 


acquisition value, 2003 – 114 660 90 


amortisation, 2003 – 128 – 2 – 49 

Carrying amount, 31 December 2003 1,006 1,231 158 

Continued 



Research 

and 

develop- Soft- 

Goodwill ment 1 ware 


Accumulated acquisition value 

1 January 1,746 1,233 255 

Acquisitions/divestments 

of businesses 15 – – 

New acquisitions 6 316 48 

Divestments and disposals – – 3 – 33 

Reclassifications – – 7 

Exchange rate differences – 20 – 3 

Total 1,747 1,546 280 

Accumulated amortisation 

1 January 740 2 97 

Amortisation for the year 

– Vehicles and Service 166 84 45 

– Customer Finance – – 5 

Divestments and disposals – – 1 – 22 

Reclassifications – – 1 

Exchange rate differences – 5 – 1 

Total 901 85 127 

Carrying amount, 31 December 846 1 461 153 

1 The portion of the Scania Group’s research and development expenditures that 

arises during the development phase is capitalised on a continuous basis as the 

requirements for capitalisation are fulfilled. See the table below for a specification 

of Scania’s research and development expenditures. Amortisation occurs only 

when the asset is placed in service. 

2004 2003 2002 

Specification of research and 

development expenses 

Expenditures – 2,219 – 2,151 – 2,010 

Capitalisation 316 669 573 

Amortisation – 84 – 2 – 

Research and development 

expenses – 1,987 – 1,484 – 1,437 

NOTE 8 Tangible fixed assets 

Construction 

Assets in 

Buildings Machinery and in progress and operating 

and land equipment advance payments leases 1 

Carrying amount, 1 January 2002 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 

Change in accumulated acquisition value, 2003 348 69 70 118 

Change in accumulated depreciation, 2003 – 252 – 223 – 122 

Carrying amount, 31 December 2003 6,956 5,797 1,428 9,711 


Accumulated acquisition value 

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

Acquisitions/divestments of businesses 93 10 – – 

New acquisitions 191 893 1,289 4,189 

Divestments and disposals – 151 – 1,056 – – 4,673 

Reclassifications 420 1,133 – 1,572 – 78 

Exchange rate differences for the year – 47 – 96 – 4 – 96 

Total 11,296 20,216 1,141 13,794 

Accumulated depreciation 

1 January 3,865 13,535 – 4,583 

Depreciation for the year 

– Vehicles and Service 377 1,512 – 814 

– Customer Finance – 10 – 1,730 

Divestments and disposals – 31 – 947 – – 2,552 

Reclassifications 118 – 117 – – 28 

Exchange rate difference for the year – 19 – 73 – – 35 

Total 4,310 13,920 – 4,512 

Accumulated revaluations 

1 January 31 – – – 

Total 31 – 0 0 

Accumulated write-downs 2 

1 January – – – 158 

Reversals of write-downs – – – – 20 

Total 0 – – 138 

Carrying amount, 31 December 7,017 6,296 1,141 9,144 


– of which “Machinery” 5,520 (4,882) 

– of which “Equipment” 776 (915) 

– of which “Buildings” 5,312 (5,290) 

– of which “Land” 1,705 (1,666) 

Tax assessment value, buildings in Sweden 939 (996) 

equivalent carrying amount 2,186 (2,356) 

Tax assessment value, land in Sweden 325 (314) 

equivalent carrying amount 422 (426) 

1 Including assets for short-term leasing as well as assets capitalised due to repurchase obligations. 

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

Construction 

Assets in 

Buildings Machinery and in progress and operating 

and land equipment advance payments leases 1 

NOTE 9 Holdings in associated companies etc 

Holdings in associated companies 2004 2003 2002 

Accumulated acquisition value 28 28 29 

Accumulated share of income 38 38 38 

Write-down – – – 2 

Carrying amount 66 66 65 

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. 2004 2003 2002 

Cummins-Scania high 

pressure injection L.L.C, 

043650113, USA 30 26 31 33 39 

Swed Bus Pakistan Pvt Ltd, 

K-07897, Pakistan 1 – – – 0 0 

ScaMadrid S.A., 

ES A80433519, Spain 49 1 19 16 13 

ScaValencia S.A., 

ES A46332995, Spain 2 38 17 16 17 13 

Holdings in associated companies 66 66 65 

Other shares and participations 26 56 61 

Total 92 122 126 

1 During 2004, Scania sold its 10 percent shareholding in Swed Bus Pakistan Pvt 

Ltd, K-07897, Pakistan. 

2 During 2004 Scania sold 12 participations from its holding in ScaValencia S.A., 

ES A46332995, Spain. Its shareholding is now equivalent to 38 percent (50). 

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. (66 and 65, 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 38, respectively). 

NOTE 10 Long-term interest-bearing receivables 

2004 2003 2002 

Receivables, Customer Finance 1 12,174 11,120 10,646 

Receivables, Vehicles and Service 582 676 708 

Total 12,756 11,796 11,354 

1 Note 3 shows how the financial receivables of Customer Finance 

(including the short-term portion) changed during 2004. 


NOTE 11 Inventories 

2004 2003 2002 

Raw materials 937 847 822 

Work in progress 1,109 1,028 925 

Finished goods 7,441 6,631 6,115 

Total 9,487 8,506 7,862 

Of the total value of inventories in 2004, SEK 287 m. (278) is expected 

to be consumed after more than 12 months, which is mainly attributable 

to parts. In 2004, SEK 629 m. (541) worth of inventories were 

valued at net realisable value; this was mainly related to used vehicles. 

NOTE 12 Current receivables 

2004 2003 2002 

Interest-bearing trade receivables, 

Vehicles and Service 492 592 816 

Interest-bearing trade receivables, 

Customer Finance 7,383 6,910 6,320 

Total interest-bearing trade receivables 7,875 7,502 7,136 

Non-interest-bearing trade receivables 7 641 6 345 6 497 

Prepaid expenses and 

accrued income 907 864 752 

Other receivables 1 621 1 630 1 529 

Total 18,044 16,341 15,914 

NOTE 13 Short-term investments 

2004 2003 2002 

Liquid investments 

(maturities of less than 90 days) 470 451 583 

Investments (maturities 91–365 days) 909 253 1,086 

Total 1,379 704 1,669 

Investments totalling SEK 123 m. (167 and 613, respectively) in value 

were restricted by agreement with third parties. 

NOTE 14 Shareholders’ equity 

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

Unre- Accustricted 

mulated 

share- exchange 

2003 

Share Restricted holders’ rate 

capital reserves equity differences Total 

1 January 2,000 4,608 10,005 318 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 2,000 3,277 13,270 – 296 18,251 


1 January, 

according to adopted 

balance sheet 2,000 3,277 13,270 – 296 18,251 

Change in 

accounting principle – – 26 – 26 

Adjusted shareholders’ 

equity, 1 January 2,000 3,277 13,296 – 296 18,277 

Dividend to shareholders – – –1,200 – –1,200 

Net income for 2004 – – 4,077 – 4,077 

Exchange rate differences 

for the year – – – –104 –104 

Transfer between restricted 

and unrestricted equity – – 372 372 – 0 

Balance, 

31 December 2004 2,000 2,905 16,545 – 400 21,050 

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. 

The change in accounting principle is attributable to the Swedish 

Financial Accounting Standards Board’s Recommendation RR 29, 

Employee Benefits. This change in accounting principle had a positive 

effect of SEK 26 m. on shareholders’ equity. 

Restricted equity consists of share capital plus non-distributable 

funds. The Parent Company 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 income statements and balance sheets are adopted at the 

Annual General 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 104 m. during 2004 

arose as a consequence of the appreciation of the Swedish krona 

against South American currencies (mainly the real and peso), which 

resulted in an effect of about SEK – 50 m., and from appreciation 

against European currencies, primarily GBP and EUR, which resulted 

in an effect of about SEK – 50 m. 

NOTE 15 Provisions for pensions 

NOTE 15 and similar commitments 

The Group’s employees, former employees and their survivors may be 

included in both defined contribution and defined benefit plans related 

to post-employment plans. The plans include retirement pensions, 

survivor pensions, health care and severance pay. 

The obligation that is reported in the balance sheet stems from the 

defined benefit plans. The largest plans are found in Sweden, Great 

Britain and Brazil. The plans are safeguarded via re-insured provisions in 

the balance sheet, via foundations and funds. Calculations are performed 

according to the “projected unit credit method”, using the assumptions 

presented in the table on the next page, also taking into account any 

revocability. 

In the case of some of the Group’s defined benefit multi-employer 

plans, the Group has not been able to obtain sufficient information from 

the plan manager to be able to perform a calculation according to the 

projected unit credit method. These plans have thus been reported as 

defined contribution in keeping with point 30 of RR 29. This applies to 

Dutch Pensioenfonds Metaal en Techniek, which is administered via MN 

Services, and Bedrijfstakpensioenfonds Metalektro, which is administered 

via PVF Achmea, as well as the portion of the Swedish ITP plan which 

is administered via Alecta. Most of the Swedish plan for salaried 

employees (the collectively agreed ITP plan) is administered by a 

Swedish multi-employer institution, the Pension Registration Institute 

(PRI). The obligation according to the ITP plan is safeguarded via credit 

insurance from the mutual insurance company Försäkringsbolaget 

Pensionsgaranti (FPG). 

Premiums to Alecta amounted to SEK 22 m. (21 and 14, respectively). 

A surplus or deficit at Alecta may mean a refund to the Group or lower 

or higher future premiums. At year-end 2004, Alecta’s surplus, in the 

form of a collective consolidation level, amounted to 128 (120 and 113, 

respectively) percent. The collective consolidation level consists of the 

market value of Alecta’s assets as a percentage of its insurance obligations 

calculated according to Alecta’s actuarial assumptions, which do 

not coincide with RR 29. 

In the Dutch plans, both companies and employees contribute to the 

plans. The companies’ premiums to MN Services amounted to SEK 19 

m. (18 and 14, respectively) and to PVF Achmea SEK 49 m. (43 and 

36, respectively). The consolidation level amounted to 114 (107 and 

104, respectively) percent for MN Services and 115 (109 and 102, 

respectively) percent for PVF Achmea. 


January–December 2004 

Expenses for pensions and other Defined benefit Post-employment Other postdefined 

benefit obligations pension plans medical benefits employment benefits 

Current service cost – 186 – 2 – 4 

Interest on obligation – 125 – 14 – 2 

Expected return on plan assets 20 – 1 

Net actuarial gains (+) and losses (–) recognised in year – 65 – 7 0 

Past service cost – 3 – – 

Net gains (–) and losses (+) due to curtailments and settlements 0 – – 

Total expense for defined benefit obligations – 359 – 23 – 5 

Actual return on plan assets 23 – 11 

For defined-contribution plans, Scania makes continuous payments to public authorities and independent organisations, which thus take over obligations 

towards employees. The Group’s expenses for defined-contribution plans amounted to SEK 452 m. during 2004. 

31 December 2004 

Defined benefit Post-employment Other postpension 

plans medical benefits employment benefits 

Present value of wholly or partly funded obligations 593 – 28 

Present value of unfunded obligations 2,091 167 36 

Present value of obligations 2,684 167 64 

Fair value of plan assets – 395 – – 21 

Reported as “Provisions for pensions” in the balance sheet 2,289 167 43 

The reported net liability for defined benefit plans changed 

as follows during the year: 

SEK m. 2004 

Net liability, 1 January 1 2,274 

Change in net liability due to 

change in accounting principle – 29 

Net expense recognised in the income statement 387 

Contributions – 44 

Benefits paid out – 87 

Exchange rate differences – 2 

Net liability, 31 December 2 2,499 

1 A reclassification of SEK 180 m. was made from “Other provisions” to “Pension 

commitments”. 

2 In December 2003, the net liability amounted to SEK 2,274 m. and in December 

2002 it was SEK 2,225 m. The net liability in December 2002 was reported 

according to earlier accounting principles. 

Plan assets consist mainly of shares and interest-bearing securities with 

the following market values on the balance sheet date: 

SEK m. 2004 

Shares and participations 127 

Other interest-bearing securities 248 

Real estate 15 

Bank balances etc 26 

Total 416 

Sweden Great Britain Brazil Other countries 

(pensions) (pensions) (medical services) (pensions etc) 

Actuarial assumptions 2004 2003 2004 2003 2004 2003 2004 2003 

Discount rate (%) 5.5 5.5 5.5 5.6 10.3 10.3 4.5–5.5 4.7–5.5 

Expected return on plan assets (%) – – 6.0 7.0 10.3 10.3 5.0–6.0 5.0 

Expected wage and salary increase (%) 3.0 3.0 – – – – 2.0–4.3 3.0–3.5 

Change in medical costs (%) – – – – 7.8 8.8 – – 

Employee turnover (%) 5.0 5.0 – – – – 1.0–6.0 1.0–5.0 

Expected remaining years of service 21.5 22.0 11.0 12.0 19.0 18.7 15.0–33.0 15.9–34.0 

Expected increase in pension (%) 2.0 2.0 3.0 3.0 – – 1.8–2.5 2.0 

Expenses for pension and other defined benefit plans are reported in the income statement under the headings “Cost of goods sold”, “Research and 

development expenditures”, “Selling expenses”, and “Administrative expenses”. The interest portion of pension expenses is reported as “Financial 

expenses and income”. 


NOT 16 Other provisions 

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

Miscel- 

Legal laneous 

2003 

Product Restruc- and tax proviobligations 

turing disputes sions 1 Total 

1 January 1,317 60 234 518 2,129 

Provisions during the year 1,930 118 89 561 2,698 

Provisions used during 

the year – 1,411 – 80 – 59 – 335 –1,885 

Provisions reversed during 

the year – 54 – 2 – 9 – 21 – 86 

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

31 December 1,712 94 249 707 2,762 


1 January 1,712 94 249 707 2,762 

Provisions during the year 1,147 23 76 494 1,740 

Provisions used during 

the year – 1,217 – 41 – 53 – 373 – 1,684 

Provisions reversed during 

the year – 120 – 10 – 8 – 68 – 206 

Exchange rate differences – 9 0 0 – 1 – 10 

31 December 1,513 66 264 759 2,602 

“Miscellaneous provisions” include provisions for asset appraisal in 

South America. They also include provisions for possible loss on service 

contracts and residual value obligations. 

Of the above provisions, about SEK 1,100 m. (1,700) are expected 

to be utilised within twelve months. 

1 A reclassification amounting to SEK 180 m. was made from ”Miscellaneous 

provisions” to ”Provisions for pension”. See Note 15. 

NOTE 17 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 currency. 

Short- and long-term borrowing, 

distributed by currency 1 2004 2003 2002 

SEK 7,295 9,012 9,159 

EUR 15,195 14,859 17,268 

GBP 336 549 670 

USD 71 308 609 

Other currencies 2,716 1,479 1,741 

Total 25,613 26,207 29,447 

Of which, attributable to 

Customer Finance 22,563 21,781 20,952 

Borrowings, Vehicles and Service 3,050 4,426 8,495 

1 Does not take into account derivative instruments, which have been used to 

match borrowings by currency to funding requirements by currency. 

The above loans fall due for 

repayment as follows 2004 

2005 5,804 

2006 6,033 

2007 7,244 

2008 5,490 

2009 652 

2010 and thereafter 390 

Total 25,613 

For further information on Scania’s borrowing programme and financial 

risk management, see Note 29. 

NOTE 18 Accrued expenses 

NOTE 18 and prepaid income 

2004 2003 2002 

Employee-related accrued expenses 1,731 1,798 1,599 

Customary accrued expenses and 

prepaid income 1 2,836 2,247 2,298 

Prepaid income related to vehicles 

sold with repurchase obligations 2,993 2,893 2,306 

Accrued financial items 355 310 567 

Total 7,915 7,248 6,770 

Of the above prepaid income related to vehicles sold with repurchase 

obligations, SEK 950 m. is expected to be recognised as revenue within 

12 months and SEK 70 m. later than after five years. 

1 In 2004, SEK 1,060 m. (965) of customary prepaid income was related to repair 

and maintenance contracts. 

NOTE 19 Assets pledged 

2004 2003 2002 

Real estate mortgages 42 142 191 

Other 25 33 – 

Total 67 175 191 

In 2004, all collateral was pledged to credit institutions and was divided 

between SEK 20 m. (30 and 10, respectively) in short-term borrowings, 

SEK 41 m. (133 and 181, respectively) in long-term borrowings and 

SEK 6 m. (12 and 0, respectively) as collateral for the liabilities of others. 

Net debt 2004 2003 2002 

Liquid assets and 

short-term investments 2,498 1,916 4,339 

Short-term borrowings – 5,804 – 5,380 – 6,933 

Long-term borrowings – 19,809 – 20,827 – 22,514 

Total – 23,115 – 24,291 – 25,108 

Of which, attributable to 

Customer Finance – 22,261 – 21,644 – 20,800 

Net debt, Vehicles 

and Service – 854 – 2,647 – 4,308 


NOTE 20 Contingent liabilities 

2004 2003 2002 

Contingent liability related to 

FPG credit insurance 31 29 27 

Loan guarantees 46 97 43 

Discounted bills and contracts 13 42 72 

Other guarantees 236 315 271 

Total 326 483 413 

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

vehicle repurchase guarantees worth SEK 236 m. (418 and 493, 

respectively) to customers’ creditors. 

Legal and tax disputes 

In 2003, the Swedish local tax authority denied a request for deduction 

of a loss of SEK 2.9 billion. This decision has been appealed. The 

aggregate effect on earnings may total a maximum of SEK 575 m. if the 

deduction is disallowed in its entirety. 

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 21 Lease obligations 

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

other lease contracts. 

Operating Future minimum Of which, related to 

leases lease payment leases on premises 1 

2005 167 106 

2006 122 94 

2007 100 86 

2008 74 72 

2009 63 61 


Total 2 1,059 951 

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

SEK 85 m. (109) during 2004. 

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

The Scania Group’s operating lease obligations mainly comprise premises 

and real properties. 

Present value 

Financial Future minimum of future 

leases lease payment lease payments 

2005 63 58 

2006 54 48 

2007 33 28 

2008 7 5 

2009 28 21 


Total 220 185 

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

balance sheet totalled SEK 200 m. 

NOTE 22 Government grants 

During 2004, the Scania Group received government grants amounting 

to SEK 26 m. (24) attributable to operating expenses of SEK 100 m. 

(100). It also received government grants of SEK 22 m. (34) attributable 

to investments with a gross acquisition value of SEK 456 m. (535). 

NOTE 23 Consolidated cash flow statement 

2004 2003 2002 

a. Interest and dividends received/paid 

Dividends received from 

associated companies 1 3 25 

Interest received 374 425 260 

Interest paid – 574 – 1,024 – 721 

Net interest received/paid – 199 – 596 – 436 

b. Items not affecting cash flow 

Depreciation/amortisation 2,199 2,016 2,106 

Value adjustment, short-term leasing 168 161 152 

Unrealised exchange rate differences 4 21 53 

Bad debts 294 424 382 

Associated companies – 11 – 13 2 

Deferred profit recognition, 

operating leases – 42 – 56 – 364 

Reported capital loss/gain on 

divestment of businesses 12 0 – 534 

Other 24 58 30 

Total 2,648 2,611 1,827 

c. Change in working capital 

Long-term interest-bearing receivables 93 – 91 – 58 

Other receivables – 1,757 – 166 401 

Inventories – 959 – 864 – 918 

Provisions for pensions 250 54 171 

Advance payments from customers 60 – 182 152 

Trade creditors 864 97 162 

Other liabilities and provisions 296 916 925 

Total – 1,153 – 236 835 

Effect of interest on working capital 97 – 116 – 63 

d. Net investment through acquisitions/ 

divestments of businesses 1 

Proceeds from sale of shares 

(after subtracting liquid assets 

in divested businesses) – – 1,350 

Acquisitions of businesses – 49 – 26 – 185 

Total – 49 – 26 1,165 

1 See Note 24, “Companies acquired/divested”. 

Continued 



2004 2003 2002 

e. Acquisitions of fixed assets 

Investments in fixed assets 2 – 3,314 – 3,735 – 3,363 

Divestments of fixed assets 516 450 442 

Investments in credit portfolio – 3,824 – 5,241 – 5,142 

Divestments from credit portfolio 3,346 3,373 4,118 

Total – 3,276 – 5,153 – 3,945 

2 Of which, SEK 316 m. (669) in capitalised development expenditures. 

f. Change in net debt through 

financing activities 

Net change in short-term borrowings 

and short-term investments – 207 357 – 5,841 

Repayment of long-term 

borrowings – 4,446 – 6,504 – 4,983 

Increase in long-term borrowings 3,389 4,712 8,984 

Net change in restricted deposits 0 0 0 

Total – 1,264 – 1,435 – 1,840 

g. Liquid assets 

The following sub-components are included in liquid assets: 

Cash and bank balances 1,119 1,212 2,670 

Short-term investments 

equivalent to liquid assets 470 451 583 

Total 1,589 1,663 3,253 

The above items have been classified as liquid assets assuming that: 

– They have an insignificant risk of fluctuations in value 

– They can easily be transformed into cash assets. 

Because Scania has changed its definition of liquid assets, liquid assets 

decreased by an amount of SEK 909 m. (253 and 1,086, respectively). 

2004 2003 2002 

Relationship between cash flow 

statement and change in net debt 

in the balance sheet 

Total cash flow before 

financing activities 2,400 994 3,031 

Exchange rate effects on 

interest-bearing liabilities 27 1,120 1,819 

Businesses acquired – 40 – 81 49 

Businesses divested – – 284 

Exchange rate effects on 

short-term investments 0 – 68 – 178 

Exchange rate effects on liquid assets – 10 – 49 – 108 


Change in net debt according 

to the balance sheet 1,177 816 4,197 

NOTE 24 Companies acquired/divested 

As per 1 March 2004, Scania acquired Scanva Diesel A/S, a dealership 

operating in Copenhagen, Denmark. As per 1 July 2004, Scania acquired 

Stockholms Industriassistans AB. The purchase price for these 

acquisitions was paid in cash. As per 31 October 2004, Scania divested 

Ferruform Components AB, a subsidiary of Ferruform AB. 

Assets and liabilities 

acquired and divested 

Acquisitions Divestments 

Tangible and intangible 

fixed assets 125 – 5 

Inventories 40 – 20 

Receivables 40 0 

Liquid assets 0 0 

Borrowings – 40 – 

Other liabilities and provisions – 116 13 

Gain on sale of companies – 12 

Purchase/sale price 49 0 

Liquid assets in business acquired/divested 0 0 

Impact on consolidated liquid assets and 

short-term investments 49 0 

NOTE 25 Wages, salaries and other remuneration 

NOTE 25 and number of employees 

Wages, salaries and 

other remuneration 2004 2003 2002 

Operations in Sweden: 

Boards of Directors, Presidents and 

Executive Vice Presidents 38 35 44 

– Of which bonuses 16 11 11 

Other employees 3,862 3,588 3,229 

Operations outside Sweden: 

Boards of Directors, Presidents and 

Executive Vice Presidents 175 140 144 

– Of which bonuses 16 13 12 

Other employees 4,173 3,927 3,816 

Total 8,248 7,690 7,233 

Pension costs and other 

mandatory payroll fees 3,057 2,686 2,473 

– Of which pension costs 1, 2 834 647 602 

Total wages, salaries and other 

remuneration, pension costs and 

other mandatory payroll fees 11,305 10,376 9,706 

1 Beginning in 2004 (with 2003 and 2002 as adjusted comparative years), medical 

care is included in mandatory payroll fees and pension expenses. 

2 Of the pension expense in the Group, SEK 39 m. (25 and 35, respectively) was 

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

pension commitment was SEK 90 m. (74 and 82, respectively) for this category. 

Gender distribution among executive officers 2004 2003 

Board members in subsidiaries and 

the Parent Company 421 443 

– Of whom men 411 435 

– Of whom women 10 8 

Presidents of subsidiaries and the Parent Company, 

plus management team in the Parent Company 3 121 124 

– Of whom men 119 122 

– Of whom women 2 2 

3 The management team of the Parent Company refers to the Executive Board of 

the Scania Group. 

Number of employees, 31 December 2004 2003 2002 


Production and corporate units 17,892 17,331 16,748 

Sales and service companies 11,747 11,460 11,173 

Total 29,639 28,791 27,921 

Customer Finance 354 321 309 

Total 29,993 29,112 28,230 

– Of whom, employed on 

temporary contracts 2,069 1,974 1,986 


Wages, salaries and other 

2004 2003 2002 

remuneration, pension costs Wages, salaries Wages, salaries Wages, salaries 

and other mandatory payroll and other Mandatory (of which and other Mandatory (of which and other Mandatory (of which 

fees by country remuneration payroll fees pensions) remuneration payroll fees pensions) remuneration payroll fees pensions) 

Operations in Sweden: 3,900 2,006 (536) 3,623 1,705 (368) 3,273 1,659 (440) 


The Netherlands 714 151 (61) 695 143 (60) 721 138 (52) 

Great Britain 589 110 (45) 566 96 (30) 613 89 (31) 

Brazil 449 193 (24) 387 205 (54) 316 65 (– 41) 

Norway 322 57 (14) 325 55 (0) 326 55 (0) 

Germany 305 64 (6) 305 68 (5) 308 67 (11) 

France 272 168 (49) 257 149 (44) 260 139 (41) 

Denmark 201 21 (12) 118 10 (8) 91 7 (6) 

Finland 198 64 (37) 205 70 (38) 193 64 (35) 

Austria 175 6 (0) 158 1 (1) 156 1 (1) 

Belgium 161 57 (3) 144 49 (0) 145 47 (0) 

Switzerland 130 22 (0) 123 21 (1) 122 27 (0) 

37 countries with < SEK 100 m. 3 832 138 (47) 784 114 (38) 709 115 (26) 

Total operations outside Sweden 4,348 1,051 (298) 4,067 981 (279) 3,960 814 (162) 

Total 8,248 3,057 (834) 7,690 2,686 (647) 7,233 2,473 (602) 

3 In 2003 and 2002, 40 countries had less than SEK 100 m. in wages, salaries and other remuneration. 

NOTE 26 Related party transactions 

Transactions 2004 

Sales Purchases Receivables Liabilities 

to from from to 

Associated companies 

ScaValencia S.A. 177 29 21 1 

ScaMadrid S.A. 143 33 17 1 

Cummins-Scania HPI L.L.C – 207 – 29 

Related party transactions occur on market terms, see also “Accounting 

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 as well as Note 27, “Information regarding compensation to 

executive officers”. Information about pension plans is provided in Note 

15, “Provisions for pensions and similar commitments” and Note 25, 

“Wages, salaries and other remuneration and number of employees”. 

Average number of employees 2004 2003 2002 

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

Operations in Sweden: 12,192 10,140 2,052 11,731 9,785 1,946 10,798 9,054 1,744 


Brazil 2,812 2,514 298 2,525 2,248 277 2,071 1,882 189 

The Netherlands 2,040 1,903 137 2,107 1,962 145 2,272 2,112 160 

Great Britain 1,630 1,401 229 1,677 1,418 259 1,685 1,413 272 

Argentina 1,015 969 46 787 730 57 747 703 44 

France 984 838 146 964 820 144 945 800 145 

Germany 894 779 115 928 798 130 949 823 126 

Norway 767 705 62 817 748 69 810 738 72 

Finland 653 572 81 693 610 83 683 601 82 

Belgium 650 557 93 622 490 132 614 491 123 

Poland 563 511 52 513 463 50 434 387 47 

Russia 512 419 93 398 337 61 275 234 41 

Denmark 506 456 50 291 255 36 217 183 34 

Austria 422 368 54 418 367 51 430 379 51 

South Africa 393 327 66 344 289 55 272 235 37 

Switzerland 303 274 29 303 275 28 296 271 25 

South Korea 300 264 36 285 248 37 253 219 34 

Australia 272 236 36 271 237 34 277 244 33 

Czech Republic 223 194 29 202 170 32 180 148 32 

Italy 192 159 33 187 157 30 183 153 30 

Mexico 157 147 10 190 166 24 296 265 31 

Spain 155 122 33 146 114 32 134 107 27 

Hungary 140 113 27 125 99 26 99 81 18 

Slovakia 119 97 22 98 82 16 48 37 11 

Latvia 115 106 9 94 84 10 91 79 12 

Chile 115 100 15 91 79 12 95 84 11 

Thailand 115 82 33 94 64 30 68 43 25 

Malaysia 111 93 18 104 89 15 107 90 17 

Morocco 102 94 8 99 91 8 103 92 11 

Estonia 102 95 7 100 93 7 91 84 7 

19 countries with < 100 employees 4 510 401 109 463 352 111 445 354 91 

Total outside Sweden 16,872 14,896 1,976 15,936 13,935 2,001 15,170 13,332 1,838 

Total, average number of employees 29,064 25,036 4,028 27,667 23,720 3,947 25,968 22,386 3,582 

4 In 2003, 26 countries had fewer than 100 employees. In 2002, the number was 27 countries. 


NOTE 27 Information regarding compensation to executive officers 

According to the decision of the Annual Meeting, remuneration during 

2004 to the external members of the Board of Directors elected by the 

Annual Meeting amounted to SEK 3,750,000. The remuneration to the 

Chairman is SEK 800,000, of which SEK 50,000 is the compensation 

for the chairmanship of the Remuneration Committee. 

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 one portion which is related to Scania’s 

ability to increase its operating return as defined according to the 

preceding paragraph (maximum 75 percent of fixed salary) from one 

year to another. The outcome of this component will be disbursed by 

1/3 each year during 2005–2007 assuming employment at the end of 

each previous year. 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). The outcome 

of this component will be disbursed during 2005. 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 upper limit has never been reached. 

The outcome of the incentive programme for the period 1997–2003 

for the members of the Executive Board, among them the President, 

has fluctuated from zero to 132 percent of fixed salary. The outcome for 

the period has, on average, amounted to 67 percent of fixed salary. 

The incentive programme generated a positive outcome for 2004, of 

which one part will be settled during 2005 and the remaining part will 

be settled during 2005 – 2007 as earlier stipulated. For the President 

the programme resulted in SEK 10,306,600. The corresponding total for 

other Group Management executive officers amounts to SEK 

53,793,089. 

The fixed salary for the President 2003 and 2004 amounted to SEK 

5,800,000 per year. The salary paid out to the President during 2004 

totalled SEK 5,007,759 (including taxable benefits and after subtracting 

the President’s pension co-payments). As from 2005, the fixed annual 

salary is adjusted to SEK 6,500,000. 

Group Management executive officers, including the President, are 

covered by a defined contribution pension system in addition to the 

public pension and the ITP occupational pension. 

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 2004 – 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 and 33 

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

Outcome, Pension costs, Pension costs, 

Salary/Board incentive defined contribution defined benefit Other 

SEK remuneration 2004 system system (ITP) remuneration Summary 

Chairman 

of the Board 750 000 750 000 

President 

and CEO 5 007 759 10 306 600 7 433 348 509 514 10 817 23 268 038 

Executive officers 

in the Group 33 182 540 53 793 089 8 870 471 10 732 501 2 373 790 108 952 391 

Management 

including the Executive 

Board (22 persons) 

Salary/Board remuneration: corresponds to legal information to tax authorities. 

Pension cost, defined contribution system: annual company paid premium and individual employee co-payment according to the DC Pension 

System for Executives and ITPK (defined contribution portion of the ITP occupational pension). 

Pension cost, defined benefit system (ITP): risk insurance premium and the increase of book reserved old age pension according to the ITP 

occupational pension. 

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

Retirement: the retirement age according to agreements is 60 for the Executive Board including the President and 62 for executives in the Group 

Management. The stipulated retirement age for the ITP occupational pension is 65. 

Management varies between 11 and 23 percent of annual fixed salary. 

Since 1999 the President holds a non-transferable employee stock 

option without market value, entitling him, as from 1 January 2004 but 

no later than 31 December 2005, 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 Series 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 notice period. 

In light of the then complex ownership structure of Scania AB the 

Board’s committee for remuneration issues during 2001 approved a 

five-year 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 2004. 

The employment agreement with the President will end automatically 

twelve months after Volkswagen AG has reduced its holding in Scania 

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

the above-stated benefits shall be provided. 

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

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

of two years’ salary, in addition to their salary during the six-month 

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 the Remuneration 

Committee, which consists of Dr. Bernd Pischetsrieder, Chairman; 

Peggy Bruzelius and Sune Carlsson. During 2004 this committee had 

two meetings. 

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

President and Group Management executive officers are shown in the 

table (excluding employer’s contribution according to law) above. 

NOTE 28 Fees and other remuneration to auditors 

Fees for audit assignments and other assignments reported as 

expenses during the year, in those cases where the same audit 

company has the audit assignment in that particular company. 


Audit Audit Other Audit Other 

firm assignments assignments assignments assignments 

KPMG 23 4 22 6 

Ernst & Young 7 2 7 2 

Other auditors 10 4 10 7 

Total 40 10 39 15 


NOTE 29 Financial instruments and financial risk management 

Financial assets in the Scania Group consist primarily of financial leases 

and hire purchase receivables that have arisen in the Customer Finance 

segment as a consequence of financing of customers’ vehicle purchases. 

Other financial assets of significance are trade receivables from independent 

dealerships and end customers in the Vehicles and Service 

segment plus liquid assets. Scania’s financial liabilities consist largely 

of loans, mainly taken out 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. 

Financial assets and liabilities give rise to various kinds of risks, which 

are primarily managed by means of various derivative instruments. 

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, 

• converting expected future commercial payments in foreign currencies 

to SEK 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, which are all 

regulated by a financial policy adopted by Scania’s Board of Directors. 

Credit risk related to customer commitments is managed, within established 

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

Decisions on major credit commitments are made in corporate 

Hedging of currency flows 31 December 2004 

credit committees. Other risks are managed primarily at corporate level 

by Scania’s treasury unit. For the purpose of promoting long-term 

profitability, Scania’s financial policy states that financial risks shall be 

minimised and access to liquidity 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. 

During 2004, 94 percent of Scania’s sales occurred in countries outside 

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

costs denominated in Swedish kronor, this means that Scania has large 

net inflows of foreign currencies. During 2004, total net revenue in foreign 

currencies amounted to about SEK 19 billion (18). The largest currencies 

in this flow were EUR and GBP. Note 31 shows Scania’s net flows in 

the most commonly occurring currencies. 

Based on the geographic distribution of revenues and expenses 

during 2004, a one percentage point change in the Swedish krona 

against other currencies, excluding currency hedging, has an impact on 

operating income of about SEK 190 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. 

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

Quarter Volume 1 Rate 2 Volume 1 Rate 2 Volume 1 Rate 2 Volume 1 Rate 2 Volume 1 Rate 2 Volume 1 Rate 2 

Q 1 3 2005 15 13.04 100 9.22 5 000 0.0063 10 5.99 70 1.10 30 1.16 

Q 2 2005 5 13.02 150 9.17 14 6.01 30 1.11 

Q 3 2005 140 9.08 15 5.97 

Q 4 2005 80 9.05 8 5.96 

Total (in millions) 20 13.04 470 9.13 5 000 0.0063 47 5.98 100 1.11 30 1.16 

Closing day rate 12.71 9.01 0.0064 5.83 1.09 1.16 

31 Dec 2004 

Unrealised gain/loss 8.1 59.6 – 0.4 5.4 1.7 0.4 

31 Dec 2004 

1 Volume is expressed in millions of local currency units. 

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

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

The effect of currency derivatives on operating income totalled SEK 

65 m. (620), of which SEK 31 m. (54) was related to still unexpired 

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

the balance sheet. The value of outstanding contracts not reported in 

earnings which will affect 2005 earnings can be seen in the table 

“Hedging of currency flows” below. 

To ensure efficiency and risk control, borrowings in Scania's subsidiaries 

largely occur through the corporate treasury unit in local currencies, 

and are then transferred to the subsidiaries in the form of internal 

loans. By means of currency swap agreements, the loans are converted 

at corporate level to adequate currencies. Scania's borrowings in various 

currencies excluding and including currency derivatives can be seen 

in the table on page 72 on borrowings and effective interest rates. 

At the end of 2004, Scania’s net assets in foreign currencies amounted 

to SEK 8,761 m. (10,140). See Note 30. The net foreign assets of 

subsidiaries are normally not hedged. To the extent subsidiaries have 

significant net monetary assets in local currencies, however, they may 

be hedged. At year-end 2004, no foreign net assets were hedged 

(SEK 346 m. in such assets were hedged at the end of 2003). 

Interest rate risk 

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

adversely affect cash flow or the fair value of financial assets and liabilities. 

For Scania’s assets 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. At year-end 2004, Scania’s interest-bearing assets 

consisted primarily of assets in the Customer Finance segment and to 

a certain extent of liquid assets. Interest-bearing liabilities consisted 

mainly of loans, to a great extent intended to fund lending in Customer 

Finance operations and to a lesser extent to fund working capital in 

Vehicles and Service. To manage interest rate risks, the Group mainly 

uses interest rate derivatives in the form of interest rate swap agreements. 

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 

3,050 m. (4,427) and the average interest rate refixing period was about 

3 (3) months. 

Given the same loan liabilities and interest rate refixing period as at 

year-end 2004, 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 25 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 in related to the credit 

portfolio and borrowing in Customer Finance had the following structure 

as of 31 December 2004: 

Continued 



Interest-bearing 

Interest-bearing 

Interest rate refixing Customer Finance liabilities (including 

in Customer Finance portfolio 1 interest rate derivatives) 2 

2005 14,767 14,102 

2006 5,160 4,816 

2007 3,533 2,439 

2008 1,911 668 

2009 1,008 520 

2010 and later 217 18 

Totalt 26,596 22,563 

1 Including operating leases. 

2 Other funding consists mainly of shareholders’ equity. 

Scania’s total borrowing portfolio, related to borrowing for Customer 

Finance operations and for Vehicles and Service, amounted to SEK 

25,613 m. (26,208) at year-end 2004. The effective interest rate on 

borrowings was 3.5 (3.6) percent. 

Borrowings and Borrowings Borrowings Effective 

effective excluding swap including swap interest rate 

interest rate agreements agreements in percent 1 

SEK 7,295 3 2.1 

EUR 15,195 18,089 2.7 

GBP 336 1,608 5.3 

USD 71 414 3.8 

KRW 491 1,157 4.0 

Other 2,225 4,342 5.8 

Total 25,613 25,613 3.5 

1 Including currency and interest rate derivatives. 

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. Scania sales are distributed among a large 

number of end customers with a large geographic dispersion, which 

limits the concentration of credit risk. 

The credit portfolio including operating leases in Customer Finance 

operations amounted to SEK 26,596 m. (25,926). 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. Collateral in 

Customer Finance operations mainly exists in the form of the products 

being financed. Provisions for bad debts from customers are based on 

an individual assessment of each customer, based on the customer’s 

payment capacity, expected future risk and the value of the underlying 

collateral. Provisions for credit losses amounted to 1.9 (1.8) percent of 

the total Customer Finance portfolio. 

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

Concentration of 

Percentage of 

credit risk in Number of total number Percentage of 

Customer Finance customers of customers portfolio 

Exposure < SEK 15 m. 20,345 99.0 68.4 

Exposure SEK 15 – 50 m. 177 0.8 17.2 

Exposure > SEK 50 m. 33 0.2 14.4 

Total 20,555 100 100 

In the Vehicles and Service segment, receivables from customers totalled 

SEK 8,648 m. (7,499), most of which consisted of receivables from 

independent dealerships and end customers. 

The administration of the financial credit risks that arise primarily 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 reduce credit risk, the volume of exposure 

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

credit rating. To further limit credit risk, Scania has entered into netting 

contracts (ISDA) with most of its counterparties. Overall counterparty 

exposure related to derivatives trading, calculated as a net receivable 

per counterparty, amounted to SEK 855 m. as per 31 December 2004. 

Estimated gross exposure to counterparty risks related to derivatives 

trading totalled SEK 1,246 m. At the end of 2004, gross exposure to 

liquid investments amounted to SEK 2,498 m. (1,916). 

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 2004, Scania had committed revolving credit 

facilities totalling USD 1,850 m. from the international banking market, 

with USD 1,000 m. expiring in May 2008 and the remaining USD 850 

m. expiring in November 2004. In July 2004, the USD 850 m. facility 

was replaced by a new facility totalling EUR 500 m. with an expiration 

date of July 2009. At year-end 2004, Scania had committed revolving 

credit facilities totalling USD 1,000 m. and EUR 500 m. in the international 

banking market, equivalent to SEK 11,116 m. translated at the 

closing day rate. 

In addition to its committed revolving credit facilities, Scania has 

capital market programmes of more than SEK 41 billion (36) translated 

at the closing day rate. Of this, more than SEK 19 billion (18) was being 

utilised at year-end. 

Under Scania’s Medium Term Note programme, borrowing may 

occur in maturities of between 1 and 10 years. At year-end 2004, the 

ceiling was SEK 13,000 m. 

During 2004, Scania issued a bond equivalent to SEK 180 m. At 

year-end, the total amount outstanding was SEK 7,354 m. Under its 

European Medium Term Note Programme, Scania can borrow in the 

international financial market, with maturities between 1 and 10 years. 

The ceiling at year-end was EUR 2,000 m., which was equivalent to 

SEK 18,014 m. translated at the closing day rate. 

During 2004, Scania issued a bond equivalent to SEK 1,351 m. At 

year-end, the total amount outstanding was equivalent to SEK 11,504 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, neither of these 

programmes was being utilised. 

In addition to the above programmes, Scania has issued other 

bonds totalling SEK 1,813 m. The company also has bank loans with 

varying maturities, totalling SEK 4,942 m. 

Total 

Borrowing, SEK m. borrowing Ceiling 

Medium Term Note Programme 7,354 13,000 

European Medium Term Note Programme 11,504 18,014 

Other bonds 1,813 – 

Credit facility (USD/EUR) – 11,116 

Commercial paper, Sweden – 6,000 

Commercial paper, Belgium – 3,603 

Bank loans 4,942 – 

Total 1 25,613 51,733 

1 Of the total ceiling, SEK 11,116 m. consisted of a committed revolving credit 

facility. 

Scania’s liquidity reserve at the close of 2004, consisting of unutilised 

credit facilities and liquid assets, amounted to SEK 13,614 m. (15,375). 

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. 

2005 5,804 

2006 6,033 

2007 7,244 

2008 5,490 

2009 652 

2010 and later 390 

Total 25,613 

Fair value of financial instruments 

The carrying amounts 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 reported 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. 


Book Fair Book Fair 

Fair value value value value value 

Assets 

Long-term holdings 

of securities 1 25 25 56 69 

Long-term interestbearing 

receivables 2 12,756 12,630 11,796 11,917 

Interest-bearing current 

receivables 2 7,875 8,090 7,502 7,887 

Short-term investments 1,379 1,384 704 703 

Cash and bank balances 1,119 1,119 1,212 1,212 

Currency forward contract 

for hedging of net foreign 

investments 3 0 0 – 1 – 1 

Currency derivatives for 

hedging of commercial 

exposure 3, 4 31 110 54 113 

Currency derivatives 

for hedging of financial 

exposure 3 109 110 58 58 

Currency interest rate 

swap agreements 3 – 108 – 117 – 62 – 64 

Interest rate-related 

derivatives 3 186 752 223 641 

Total assets 23,372 24,103 21,542 22,535 

Liabilities 

Short-term borrowing 5,804 5,962 5,380 5,369 

Long-term borrowing 19,809 21,093 20,827 22,370 

Total liabilities 25,613 27,055 26,207 27,739 

1 Reported in the balance sheet under “Holdings in associated companies etc”. 

2 Operating leases amounting to SEK 5,809 m. (6,604) are not included in the table. 

3 Reported in the balance sheet under “Other current receivables”. 

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

the closing date totalled SEK 79 (76) m. 

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

exceeded the book value is that general interest rates were lower at 

year-end than when the contracts were entered into. 

In some cases, the carrying amounts 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. 

As a result of the transition to IAS 39 as per 1 January 2005, certain 

financial assets and liabilities will be valued at fair value while others are 

valued at accrued acquisition value. Valuation according to IAS 39 is 

determined by how the asset or liability is classified and whether hedge 

accounting is applied or not. The above table discloses the fair value of 

financial assets and liabilities, regardless of valuation according to IAS 39. 

Reporting and valuation 

Financial assets are reported 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 

reported 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 swap agreements to achieve the desired 

interest rate refixing period. Interest income and expenses related to 

interest rate swap agreements are accrued continuously according to 

the contract terms. To adapt borrowing to the desired funding currency, 

currency swap agreements 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 accounting are not 

deemed as being fulfilled are valued in the balance sheet at the lower of 

acquisition value and fair value. 

NOTE 30 Net assets in foreign currencies 

Net assets outside Sweden consist of net Group-external assets in 

foreign subsidiaries, as well as net Group-external receivables and 

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

corresponding currency. 

2004 2003 2002 

Euro (EUR) 3,236 5,361 5,675 

British pound (GBP) 936 846 863 

Other European currencies 1,161 966 1,051 

US dollar (USD) 191 – 285 103 

South American local currencies 2,094 2,050 2,659 


Total 8,761 10,140 11,397 

For information on accumulated exchange rate differences that are 

reported directly against shareholders’ equity, see Note 14. 

NOTE 31 Currency exposure in operating income 

The table below shows the net amount of operating revenue and 

operating expenses exposed to foreign currencies, by currency. 

2004 2003 2002 

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

British pound (GBP) 4,900 4,600 3,400 

Other European currencies 2,300 2,100 2,100 

Korean won (KRW) 800 1,500 1,300 

US dollar (USD) 600 300 500 

South American local currencies 1 300 0 – 


Total 19,100 18,300 16,400 

1 During 2002, local South American currencies fluctuated sharply, with significant 

price and cost changes as a consequence. This means that a description of the 

currency effect/exposure alone for that year is not meaningful. 

In 2004, currency spot rate effects totalled about SEK –135 m., compared 

to 2003. This was offset by positive currency hedging income of SEK 

65 m., resulting in a negative net effect of SEK 70 m. During 2003, 

currency hedging had a positive impact of SEK 620 m. Compared to 

2002, the total currency rate effect was thus SEK – 690 m. 

NOTE 32 Effect of exchange rate differences 

NOTE 32 on net income 

Net income was affected by exchange rate differences (excluding 

flow-related forward contracts) as shown in the following table: 

2004 2003 2002 

Sales revenue – 85 – 80 45 

Cost of goods sold 8 137 2 

Selling expenses 0 – 16 26 

Income from Customer Finance – 5 – 1 3 

Operating income – 82 40 76 

Financial income and expenses 18 – 58 – 160 

Taxes 1 5 – 14 

Effect on net income – 63 – 13 – 98 

For information on accumulated exchange rate differences that are 

reported directly against shareholders’ equity, see Note 14. 


NOTE 33 Impact of IFRS 

Beginning in 2005, all listed companies in the EU shall report their consolidated 

financial statements in accordance with International Financial 

Reporting Standards (IFRS). Below is an overall description of what 

impact, expressed in amounts, the transition to IFRS will have on 

Scania. IAS 32 and IAS 39, which deal with reporting and measurement 

of financial instruments, enter into force on 1 January 2005, but no 

comparative figures are required, according to IFRS 1. What is required 

according to IFRS 1 is a disclosure of the major adjustments that would 

have had to be made if the 2004 information were to agree with IAS 32 

and IAS 39. As a consequence of this, information about the estimated 

impact, in amounts, of these two standards as per 1 January 2005 has 

been included below. 

The figures below will be the object of additional review and updating 

during 2005. The reason for this is that changes in the rule system, 

especially related to financial instruments, cannot be ruled out. In addition, 

there are international divergences in the application of various standards. 

Reconciliation of shareholders’ equity 

Opening 

Closing 

balance, Swedish Effect of balance, Swedish Effect of Effect of Adjusted 

accounting transition to Opening accounting transition to Closing transition to opening 

SEK m. rules IFRS rules balance, IFRS rules IFRS rules balance, IFRS IAS 32 and 39 balance, 2005 

Note January 1, 2004 December 31, 2004 January 1, 2005 

ASSETS 

Fixed assets 

Intangible fixed assets a 2,395 – 2,395 2,460 166 2,626 – 2,626 

Tangible fixed assets b 23,892 282 24,174 23,598 312 23,910 – 23,910 

Financial fixed assets f 122 – 122 92 – 92 701 793 

Long-term receivables 12,311 – 12,311 13,313 – 13,313 – 13,313 

Current assets f 27,115 – 27,115 30,762 – 30,762 488 31,250 

Total assets 65,835 282 66,117 70,225 478 70,703 1,189 71,892 


Shareholders’ equity 

Total restricted equity 5,277 – 5,277 4,905 0 4,905 0 4,905 

Unrestricted reserves b, f 9,940 190 10,130 12,068 190 12,258 22 12,280 

Net income e 3,034 – 3,034 4,077 188 4,265 – 4,265 

Total unrestricted equity 12,974 190 13,164 16,145 378 16,523 22 16,545 

Total shareholders’ equity 

attributable to shareholders of Scania AB 18,251 190 18,441 21,050 378 21,428 22 21,450 

Minority portion of shareholders’ equity c – 4 4 – 5 5 0 5 

Total shareholders’ equity 18,251 194 18,445 21,050 383 21,433 22 21,455 

Minority portion c 4 – 4 0 5 – 5 0 0 0 

Provisions 

Provisions for pensions 2,274 – 2,274 2,499 – 2,499 – 2,499 

Provisions for deferred tax liabilities d, f 2,180 95 2,275 2,202 103 2,305 9 2,314 

Other provisions 2,762 – 2,762 2,602 – 2,602 – 2,602 

Total provisions 7,216 95 7,311 7,303 103 7,406 9 7,415 

Liabilities 

Long-term liabilities f 20,827 0 20,827 19,809 – 19,809 835 20,644 

Current liabilities f 19,537 – 3 19,534 22,058 – 3 22,055 323 22,378 

Total shareholders’ equity and liabilities 65,835 282 66,117 70,225 478 70,703 1,189 71,892 


Reconciliation of income statement for 2004 

Income statement items 


for the year, Swedish 

items for the 

SEK m. accounting rules IFRS effect year, IFRS 


Sales revenue 56,788 – 56,788 

Cost of goods sold – 42,570 16 – 42,554 

Gross income 14,218 16 14,234 

Research and development expenses – 1,987 – – 1,987 

Selling expenses – 5,550 178 – 5,372 

Administrative expenses – 806 – – 806 

Share of income in associated companies 12 – 12 

Operating income, Vehicles and Service 5,887 194 6,081 


Operating income, Customer Finance 450 – 450 

Operating income 6,337 194 6,531 

Net financial items – 323 – – 323 

Income after financial items 6,014 194 6,208 

Taxes – 1,935 – 8 – 1,943 

Minority interests – 2 2 0 

Net income 4,077 188 4,265 

Change in key financial figures, 2004 

IFRS 

Key figures, Swedish 

Scania Group key figures accounting rules 

Operating margin, % 11.5 11.2 

Earnings per share, SEK 21.3 20.4 

Net debt/equity ratio 1.08 1.10 

Return on shareholders’ equity, % 21.4 20.8 

Equity/assets ratio, % 30.3 30.0 

Equity per share, SEK 107 105 

Capital employed, SEK m. 49,545 49,167 


Operating margin, % 10.7 10.4 

Net debt/equity ratio 0.05 0.05 

Interest coverage, times 8.6 8.4 

Return on capital employed, % 29.0 28.1 

Profit margin, % 11.5 11.1 

Capital turnover rate, times 2.53 2.53 

Impact on cash flow, 2004 

The transition to IFRS does not result in any impact on Scania’s reported cash flow in 2004. 

Notes 

a) In accordance with IFRS 3, no goodwill amortisation shall be carried out; the amortisation carried out in 2004, totalling 

SEK 166 m., was thus reversed. As a consequence of this, the carrying amount of goodwill increased correspondingly. 

b) Scania’s tangible fixed assets, primarily buildings, were examined with respect to component depreciation, which is 

prescribed according to IAS 16. As a consequence of this examination, as of 31 December 2004 the carrying amount 

of tangible fixed assets was raised by SEK 312 m., since the depreciation periods on these assets were changed. 

Depreciation for 2004 in the income statement decreased by about SEK 30 m. The opening carrying amount of tangible 

fixed assets as per 1 January 2004 rose by SEK 282 m., which also affected shareholders’ equity for the same period by 

about SEK 190 m. 

c) In accordance with IAS 27, the minority portion of equity has been reclassified and, after the adjustment, is included as 

an item in shareholders’ equity. As per 1 January 2004, this has an effect of SEK 4 m. on shareholders’ equity. As per 

31 December 2004, the reclassified amount totals SEK 5 m. 

d) As a consequence of decreased depreciation on tangible fixed assets, deferred tax was affected by the change in asset 

values. Both the historical change and the 2004 change affected deferred tax, which increased by SEK 95 m. as per 

1 January 2004 and by SEK 103 m. as per 31 December 2004. 

e) Income for the year was favourably affected by the decreased depreciation on fixed assets, the reversal of goodwill 

amortisation carried out during 2004 and the tax effect of the lower depreciation on tangible fixed assets. 

f) According to IAS 39, all derivatives must be stated at fair value and reported in the balance sheet. As a result, 

derivatives that were previously not reported in the balance sheet are now included in the balance sheet at fair value. 

Due to the rules in IAS 32 on reporting on a net basis, certain financial instruments that were previously reported as net 

amounts are reported on a gross basis. Hedge accounting has been applied to derivatives that hedge expected future 

commercial payments in foreign currencies and to certain derivatives that are used to convert borrowing to the desired 

interest rate refixing structure. As a result of the change in principles, total assets increase by SEK 1,189 m. and long-term 

and current liabilities increase by SEK 835 m. and SEK 323 m., respectively. Unrestricted reserves are affected in the amount 

of SEK 22 m. and deferred tax liabilities by SEK 9 m. 


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 Netherlands 100.00 

Buenos Aires Camiones 33-70791031-9 Buenos Aires Argentina 100.00 

Codema Coml Import LTDA 60849197/001-60 Guarulhos Brazil 99.99 

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 

GB&M Garage et Carrosserie SA 218 687 Geneva Switzerland 100.00 

Grandes Camiones S.A. 30-56236684-5 Cordoba Argentina 99.99 

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 100.00 

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 region 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.A.S. Scania Holding France 40309278600017 Angers France 100.00 

Scanexpo S.A. 21.173422.0012 Montevideo Uruguay 100.00 

Scania (Malyasia) SDN BHD 518606-D Kuala Lumpur Malaysia 100.00 

Scania Administradora 

de Consórcios Ltda 96.479.258/0001-91 Cotia Brazil 99.99 

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 Bulgaria EOOD 2 220 100 629 Sofia Bulgaria 100.00 

Scania Bus & Coach UK Ltd 1609770 Milton Keynes Great Britain 100.00 


Scania Bus Belgium N.V.-S.A. BE460.870.259 Diegem Belgium 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 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. CZ61251186 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 del Peru S.A. 101-36300 Lima Peru 100.00 

Scania Deutschland GmbH DE148787117 Koblenz Germany 96.00 

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 Europe Holding B.V. NL800564364B01 Zwolle 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. CZ25657496 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 AB 556548-4697 Södertälje Sweden 100.00 

Scania Finance Holding 

Great Britain Ltd 4031225 London 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 

Scania Leasing Österreich ATU57921547 Brunn am Gebirge Austria 100.00 

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 

SUBSIDIARIES • SCANIA ANNUAL REPORT 2004 76


Scania Group Treasury B.V. 27269640 Den Haag Netherlands 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 Int. Fleet Development 4006517 Milton Keynes Great Britain 100.00 

Scania IT AB 556084-1206 Södertälje Sweden 100.00 

Scania Italy Holding SRL 01668350224 Trento Italy 100.00 

Scania Korea Ltd 136-81-15441 Seoul South Korea 100.00 

Scania Latin America Ltda 635 010 727 112 Saõ Bernardo Brazil 100.00 

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 Marocco 100.00 

Scania Nederland B.V. NL800564364B04 Zwolle Netherlands 100.00 

Scania Nederland Holding B.V. NL800564364B03 Zwolle Netherlands 100.00 

Scania Networks B.V. NL802638429B01 Den Haag 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 80.00 

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 Romania SRL J40/10908/1999 Bucharest Romania 100.00 

Scania Service S.A. 33-70784693-9 Buenos Aires Argentina 100.00 

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 Srbia d.o.o. SR100014375 Belgrade Yugoslavia 100.00 

Scania Sverige AB 556051-4621 Södertälje Sweden 100.00 

Scania Sverige Bussar AB 556060-0586 Katrineholm Sweden 100.00 

Scania Switzerland Holding Ltd CH_170.3024.547-0 Zug Switzerland 99.99 

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 Netherland B.V. 27269639 Den Haag Netherlands 100.00 

Scania Truck AG 218687 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, TX USA 100.00 

Scania Vastgoed B.V. NL800564364B05 Zwolle 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 99.99 

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 

Vestfold Elektrodiesel AS 83344182 Tönsberg Norway 100.00 

WM Data Zwolle B.V 8073.08.432.B01 Zwolle Netherlands 100.00 

WM Data Angers FR17412 282 626 Angers France 99.00 

77 SUBSIDIARIES • SCANIA ANNUAL REPORT 2004

Notes – Parent Company 

Note 1 Financial income and expenses 

Note 3 Shareholders’ equity 

26,296,508 new A shares related to the acquisition of Ainax AB. The total 

number of shares eligible for dividends thus amounts to 226,296,508. 

2004 2003 2002 

Interest income 

From subsidiaries 90 63 102 

Other – 1 12 

Sub-total 90 64 114 

Interest expenses 0 0 0 

Exchange rate differences on 

forward contracts for hedging 

net assets of foreign subsidiaries 0 29 68 

Group contributions/dividends 4,830 1,500 1,000 

Net financial items 4,920 1,593 1,182 

Note 2 Shares in Group companies 

Unrestricted 

Share Statutory shareholders’ 

2003 capital reserve equity Total 

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 2,000 1,120 8,454 11,574 


Balance, 1 January 2,000 1,120 8,454 11,574 

Dividend to shareholders – – – 1,200 – 1,200 

Net income for 2004 – – 4,059 4,059 

Balance, 31 December 2,000 1,120 11,313 14,433 

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. After the balance sheet date, Scania AB issued 

% Carrying amount 

Subsidiary/Corporate ID number/country of registration ownership 2004 2003 2002 

Scania CV AB, 556084-0976, Sweden 100.0 1 8,401 8,401 8,401 

Scania Latin America Ltda, 635,010,727,112, Brazil 100.0 2, 3 – 2,257 2,257 

Scania Argentina S.A, 30-51742430-3, Argentina 99.9 2, 3 – 358 298 

Scania Chile S.A., 96.538.460-K, Chile 99.9 2, 3 – 4 – 

Scania del Peru S.A, 101,36300, Peru 5.2 2, 3 – 15 15 

Total 8,401 11,035 10,971 

1 Scania CV AB is a public company and parent company of the Scania CV Group, which includes all production, sales and service and finance companies in the Scania AB 

Group. The company is a subsidiary of Scania AB, whose shares are listed on Stockholmsbörsen. 

2 Due to a restructuring of the Group as per 1 January 2004, all shares in the South American companies owned by Scania AB were transferred to Scania CV AB. 

3 The Group’s ownership interest is 100 percent. 

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. 

Note 4 Untaxed reserves 

Tax allocation reserve 2004 2003 2002 

1998 assessment – – 284 

1999 assessment – 637 637 

2000 assessment 705 705 705 

2001 assessment 634 634 634 

2002 assessment 326 326 326 

2005 assessment 814 – – 

Total 2,479 2,302 2,586 

SEK 694 m. (645 and 724, respectively) of “Untaxed reserves” consists 

of a deferred tax liability, which is part of the Scania Group’s deferred 

tax liabilities. 

Note 5 Contingent liabilities 

2004 2003 2002 

Contingent liability related to FPG 

credit insurance (Group companies) 2,010 1,588 1,457 

Loan guarantees on behalf of 

Group companies 1 20,678 22,051 25,228 

22,688 23,639 26,685 

1 Most of this item is related to loan guarantees on behalf of borrowings by 

Scania CV AB. 

Note 6 Information regarding compensation 

Note 6 to executive officers and auditors 

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 25 and 27. Compensation of SEK 10,000 (13,000 

and 18,000, respectively) was paid to auditors in 2004 with respect to 

the Parent Company. 

PARENT COMPANY NOTES • SCANIA ANNUAL REPORT 2004 78

Proposed distribution of earnings 

The Scania Group’s unrestricted shareholders’ equity according 

to the consolidated balance sheet amounts to SEK 16,145 

m., of which the net income for the year is SEK 4,077 m. 

The decision on the dividend should take into account the 

development in February 2005 in the Ainax transaction that 

will affect the unrestricted shareholders’ equity. In conjunction 

with the acquisition of Ainax with newly issued shares, share 

capital rose by SEK 263 m. and the share premium reserve by 

SEK 7,560 m., together increasing restricted equity by SEK 

7,823 m. This corresponds to the market value of the newly 

issued Scania shares on the acquisition date. The assets of 

Ainax mainly consist of shares in Scania, and it follows from 

Chapter 4 Paragraph 14 Section 2 of the Annual Accounts Act 

that Ainax’s shares in Scania shall not be regarded as having 

any value in Scania’s financial statements. Taking this into consideration, 

the shares in Ainax received as capital contributed 

in kind were reported at a value of SEK 82 m. in Scania’s balance 

sheet. After the acquisition of Ainax in February 2005 the 

difference, SEK 7,741 m., thus reduced the unrestricted equity 

in both the Parent Company and the Group. This fact has been 

taken into consideration in the following proposed distribution 

of earnings. 

The Board of Directors and the President propose that the 

following amounts at the disposal of the Annual Meeting as per 

31 December 2004: 

Amounts in SEK m. 

Retained earnings 7,254 

Net income for the year 4,059 

Total 11,313 

be distributed as follows: 

To the shareholders, a dividend of SEK 15.00 

per share 3,394 

To be carried forward 7,919 

Total 11,313 

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 7,919 

Total 11,039 

Later in February 2005, retained earnings were decreased by 

SEK 7,741 m. A proposal on a reduction of the share premium 

reserve for transfer to retained earnings is being submitted to 

the Annual General Meeting on 29 April 2005. If this proposal 

is implemented, the available retained earnings at the end of 

2005 are expected to have been restored to the same level as 

at the end of 2004. 

Södertälje, 7 March 2005 

Bernd Pischetsrieder 

Chairman 

Vito H Baumgartner Peggy Bruzelius Sune Carlsson 

Andreas Deumeland Lothar Sander Rolf Stomberg 

Marcus Wallenberg Kjell Wallin Jan Westberg 

Leif Östling 


Our auditors’ report was submitted on 7 March 2005 

Caj Nackstad 

Jan Birgerson 

Authorised Public Accountant 

Authorised Public Accountant 

79 PROPOSED DISTRIBUTION OF EARNINGS • SCANIA ANNUAL REPORT 2004

Auditors’ report 

Audit Report 

To the Annual General Meeting of the shareholders of Scania AB (publ) 

Corporate identity 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 year 2004. These accounts and the administration 

of the company and the application of the 

Annual Accounts Act when preparing the annual 

accounts and the consolidated accounts 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 and significant estimates made by the 

Board of Directors and the President when preparing the 

annual accounts and the consolidated accounts 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. The statutory 

administration report is consistent with the other parts 

of the annual accounts and the consolidated accounts. 

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 of the Parent Company be 

dealt with in accordance with the proposal in the 

administration report and that the members of the 

Board of Directors and the President be discharged 

from liability for the financial year. 

Södertälje, 7 March 2005 

Caj Nackstad 

Authorized Public Accountant 

KPMG Bohlins AB 

Jan Birgerson 

Authorized Public Accountant 

Ernst & Young AB 

AUDITORS’ REPORT • SCANIA ANNUAL REPORT 2004 80

Income and deliveries by quarter 

SEK m. unless October – December July – September April– June January– March 

otherwise stated 2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002 

Number of vehicles delivered 

Trucks 15,236 13,019 12,130 11,267 9,755 8,435 12,661 11,656 10,198 11,399 10,615 9,132 

Buses 1,626 1,467 1,278 1,401 1,239 730 1,450 1,080 858 1,042 1,124 908 

Total 16,862 14,486 13,408 12,668 10,994 9,165 14,111 12,736 11,056 12,441 11,739 10,040 


Sales revenue, Scania products 16,264 13,995 13,448 13,323 11,567 10,381 14,118 12,843 12,115 13,083 12,176 11,341 

Cost of goods sold – 12,006 – 10,560 – 10,059 – 10,102 – 8,986 – 8,014 – 10,545 – 9,613 – 9,384 – 9,917 – 9,113 – 8,803 

Gross income 4,258 3,435 3,389 3,221 2,581 2,367 3,573 3,230 2,731 3,166 3,063 2,538 

Research and development expenses – 563 – 406 – 360 – 471 – 339 – 339 – 561 – 366 – 346 – 392 – 373 – 392 

Selling expenses – 1,491 – 1,405 – 1,441 – 1,338 – 1,260 – 1,223 – 1,424 – 1,289 – 1,257 – 1,297 – 1,275 – 1,285 

Administrative expenses – 252 – 232 – 229 – 189 – 181 – 181 – 195 – 245 – 218 – 170 – 195 – 229 

Customer Finance 115 90 60 122 100 82 110 94 85 103 82 81 

Share of income in associated companies 1 7 0 7 2 4 2 6 3 2 1 16 

Operating income, Scania products 2,068 1,489 1,419 1,352 903 710 1,505 1,430 998 1,412 1,303 729 

Divested car operations – – – – – – – – 509 – – 41 

Operating income 2,068 1,489 1,419 1,352 903 710 1,505 1,430 1,507 1,412 1,303 770 

Financial income and expenses – 62 – 89 – 159 – 76 – 138 – 178 – 94 – 140 – 141 – 91 – 154 – 206 

Income after financial items 2,006 1,400 1,260 1,276 765 532 1,411 1,290 1,366 1,321 1,149 564 

Taxes – 692 – 482 – 351 – 407 – 270 – 162 – 438 – 445 – 292 – 398 – 368 – 180 

Minority interests 1 – 3 – 1 – 1 0 2 0 – 1 2 – 2 – 1 – 1 

Net income 1,315 915 908 868 495 372 973 844 1,076 921 780 383 

Earnings per share 6.58 4.57 4.54 4.34 2.48 1.86 4.87 4.22 5.38 4.61 3.90 1.92 

Operating margin, Scania products 12.7% 10.6% 10.6% 10.1% 7.8% 6.8% 10.7% 11.1% 8.2% 10.8% 10.7% 6.4% 

QUARTERLY DATA • SCANIA ANNUAL REPORT 2004 82

Key financial ratios and definitions 

2004 2003 2002 

Scania Group 

Operating margin, % 11.2 10.1 9.3 

Earnings per share, SEK 20.4 15.2 13.7 

Return on shareholders’ equity, % 20.8 17.4 17.2 



Operating margin, % 10.4 9.4 7.5 

Profit margin, % 11.1 10.0 9.2 

Capital turnover rate, times 2.53 2.21 1.89 

Return on capital employed, % 28.1 22.0 17.4 

Net debt/equity ratio 0.05 0.17 0.31 

Interest coverage, times 8.4 6.2 4.6 


Operating margin 1.7 1.4 1.2 


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 

Operating income plus financial income 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 

Operating income plus financial income 

divided by financial expenses. 

Equity/assets ratio 

Shareholders’ equity as a percentage of 

total assets. 

83 KEY FINANCIAL RATIOS AND DEFINITIONS • SCANIA ANNUAL REPORT 2004

Multi-year statistical review 

SEK m. unless otherwise stated 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 

Sales revenue by market area 

Western Europe 39,697 38,252 36,127 36,732 36,489 33,249 28,962 23,102 21,009 21,715 14,880 

Central and eastern Europe 5,026 4,067 3,139 2,624 1,826 1,330 1,814 1,398 827 732 266 

America 5,655 3,836 3,542 5,576 5,529 4,247 5,974 6,798 4,800 5,742 6,109 

Asia 3,997 3,936 3,123 2,898 2,390 1,118 1,018 1,932 1,740 1,904 1,504 

Other markets 3,404 2,896 2,529 2,364 2,050 1,784 1,907 1,857 1,578 1,623 1,329 

Revenue deferral 1 – 991 – 2,406 – 1,175 – 1,884 – 2,425 – 3,066 – 2,166 – 1,783 – 1,160 – 568 – 

Total, Scania products 56,788 50,581 47,285 48,310 45,859 38,662 37,509 33,304 28,794 31,148 24,088 

Divested car operations 2 – – – 4,755 5,539 5,382 5,637 4,632 3,776 3,124 2,560 

Total 56,788 50,581 47,285 53,065 51,398 44,044 43,146 37,936 32,570 34,272 26,648 

Operating income 

Vehicles and Service 5,887 4,759 3,548 2,089 4,623 4,655 3,251 2,716 2,787 5,011 3,731 

Customer Finance 450 366 308 278 179 140 91 73 55 98 5 

Divested car operations 2 – – 550 100 277 250 250 258 215 243 173 

Total 6,337 5,125 4,406 2,467 5,079 5,045 3,592 3,047 3,057 5,352 3,909 

Operating margin, percent 

Vehicles and Service 10.4 9.4 7.5 4.3 10.1 12.0 8.7 8.2 9.7 16.1 15.5 

Divested car operations 2 – – – 2.1 5.0 4.6 4.4 5.6 5.7 7.8 6.8 

Total 11.2 10.1 9.3 4.6 9.9 11.5 8.3 8.0 9.4 15.6 14.7 

Net financial items – 323 – 521 – 684 – 926 – 630 – 545 – 378 – 296 – 351 – 505 – 223 

Net income 4,077 3,034 2,739 1,048 3,080 3,146 2,250 1,943 1,981 3,280 2,556 

Research and development expenditures 3 – 2,219 – 2,151 – 2,010 – 1,955 – 1,621 – 1,267 – 1,168 – 1,248 – 1,084 – 923 – 805 

Gross capital expenditure for fixed assets 

excluding lease assets 2,736 3,196 3,025 1,980 1,825 1,876 2,026 2,566 2,579 2,182 2,149 

Inventory turnover rate, times 4 6.0 5.8 6.1 6.0 6.2 5.6 5.3 5.3 5.7 6.6 6.5 

1 Refers to the difference between sales recognised as revenue and sales value based on delivery. 

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

3 Beginning in 2002, includes capitalised development expenditures: SEK 316 m. in 2004, SEK 669 m. in 2003 and SEK 573 m. in 2002, as well as amortisation carried out on capitalisation, amounting to SEK 84 m. in 2004 and SEK 2 m. in 2003. 

4 Calculated as sales revenue divided by average inventory (adjusted for divested car operations). 

MULTI-YEAR STATISTICAL REVIEW • SCANIA ANNUAL REPORT 2004 84

2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 

Number of vehicles produced 

Trucks 53,249 45,985 41,433 43,487 51,409 45,779 45,546 43,555 38,455 41,974 31,937 

Buses 5,712 5,291 3,712 4,664 4,172 3,703 4,515 4,586 3,901 4,464 2,845 

Total 58,961 51,276 45,145 48,151 55,581 49,482 50,061 48,141 42,356 46,438 34,782 

Number of trucks delivered by market area 

Western Europe 30,412 29,456 28,335 30,416 38,476 36,106 32,686 26,756 26,249 26,596 17,814 

Central and eastern Europe 5,172 4,014 3,099 2,579 2,287 1,551 2,237 1,833 1,030 951 312 

America 7,604 4,739 3,633 6,181 6,777 6,253 7,621 9,649 7,377 7,964 8,713 

Asia 5,464 5,317 3,486 2,994 3,438 1,481 1,410 3,096 2,997 3,329 2,818 

Other markets 1,911 1,519 1,342 1,489 1,340 1,260 1,599 1,058 1,375 1,627 1,178 

Total 50,563 45,045 39,895 43,659 52,318 46,651 45,553 42,392 39,028 40,467 30,835 

Number of buses and coaches delivered by market area 

Western Europe 2,226 2,345 1,618 1,701 1,618 1,935 1,731 1,595 1,655 1,642 983 

Central and eastern Europe 355 228 126 127 84 67 106 95 83 45 40 

America 1,472 1,072 958 1,595 1,843 1,237 1,697 1,829 1,641 1,878 1,287 

Asia 947 631 440 666 278 160 78 308 309 304 140 

Other markets 519 634 632 583 351 364 505 757 275 301 237 

Total 5,519 4,910 3,774 4,672 4,174 3,763 4,117 4,584 3,963 4,170 2,687 

Total number of vehicles delivered 56,082 49,955 43,669 48,331 56,492 50,414 49,670 46,976 42,991 44,637 33,522 

Total market for heavy trucks and buses, number 

Western Europe: 

Trucks 231,000 213,000 211,700 235,000 243,700 235,900 207,300 170,300 172,000 173,300 133,300 

Buses 22,000 21,100 21,800 23,500 23,500 22,400 21,000 18,000 17,500 15,600 13,400 

Number of employees 5 

Production and corporate units 17,892 17,331 16,748 16,422 17,143 16,762 16,834 17,145 16,948 18,559 16,350 

Sales and service companies 11,747 11,460 11,173 11,868 10,029 9,431 6,559 6,511 5,183 4,375 4,003 

Total Vehicles and Service 29,639 28,791 27,921 28,290 27,172 26,193 23,393 23,656 22,131 22,934 20,353 

Customer Finance 354 321 309 251 194 166 144 107 75 90 72 

Total 29,993 29,112 28,230 28,541 27,366 26,359 23,537 23,763 22,206 23,024 20,425 

5 Including employees with temporary contracts. 

85 MULTI-YEAR STATISTICAL REVIEW • SCANIA ANNUAL REPORT 2004

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 

Leif Östling 

Born 1945. 

Member since 1994. 


of Scania AB. 


BT Industries and ADR 

Haanpää. 

Shares in Scania: 113,025 

Peggy Bruzelius 

Born 1949. 


Chairman of Grand Hotel 

Holdings AB and Lancelot 

Asset Management AB. 

Vice Chairman of the 

Royal Swedish Academy 

of Engineering Sciences. 

Deputy Chairman of 

Electrolux AB. 

Other directorships in the 

Industry and Commerce 

Stock Exchange Committee, 

Axel Johnson AB, AB Ratos, 

Axfood AB, Syngenta AG 

and the Stockholm School 

of Economics Association. 


Andreas Deumeland 

Born 1956. 


Corporate secretary and 

Head of Group Product 

Planning at Volkswagen AG. 


SEAT S.A, Spain. 


Lothar Sander 

Born 1950. 


Member of the 

Board of Management 

of the Volkswagen Brand. 


Flughafen Braunschweig 

GmbH and TAS Tvornica 

Automobilia Sarajevo, as well 

as a number of directorships 

in subsidiaries of the Volkswagen 

Group. 


Rolf Stomberg 

Born 1940. 


Chairman of Management 

Consulting Group PLC, 

Great Britain. 


Biesterfeld AG, Hamburg, 

Reed Elsevier PLC, Great 

Britain, Smith & Nephew PLC, 

Great Britain, TPG Group, the 

Netherlands, Deutsche BP 

Aktiengesellschaft and 

Hoyer GmbH, Hamburg. 


Sune Carlsson 

Born 1941. 

Vice Chairman since 2004. 

Chairman of Atlas Copco AB. 


Investor AB, Autoliv Inc. and 

Picanol NV. 


BOARD OF DIRECTORS • SCANIA ANNUAL REPORT 2004 86

Vito H Baumgartner 

Born 1940. 

Member since 2004. 


AB SKF, PartnerRE Ltd. and 

Northern Trust Global 

Services. 


Marcus Wallenberg 

Born 1956. 


President and CEO of 

Investor AB. 

Vice Chairman of 

Telefon AB L M Ericsson, 

Saab AB and SEB. 


AstraZeneca PLC, 

Stora Enso Oy and 

the Knut and Alice 

Wallenberg Foundation. 


Kjell Wallin 

Born 1943. 


Representative of 

the Swedish Metal Workers’ 

Union at Scania. 


Niclas Wilhelmsson 

Born 1965. 

Deputy member since 2003. 


the Swedish Metal Workers’ 

Union at Scania. 


Kathrin Rosenquist 

Born 1960. 

Deputy member since 2001. 


the Federation of Salaried 

Employees in Industry and 

Services at Scania. 


Jan Westberg 

Born 1944. 



the Federation of Salaried 

Employees in Industry and 

Services at Scania. 


AUDITORS 

Caj Nackstad 

Authorised Public Accountant, 


Jan Birgerson 



Deputy Auditors 

Thomas Thiel 



Björn Fernström 



87 BOARD OF DIRECTORS • SCANIA ANNUAL REPORT 2004

EXECUTIVE BOARD 

Jan Gurander 

Born 1961. 

Joined Scania in 1995, employed until 

1999. Rejoined Scania in 2001. 

Group Vice President, 

Chief Financial Officer (CFO), 

Head of Finance and Business Control. 


Reporting to Jan Gurander: 

Corporate Control, Customer Finance, 

Corporate Legal Affairs and 

Risk Management. 

Per Hallberg 

Born 1952. 

Joined Scania in 1977. 

Group Vice President, Head of 

Production and Procurement. 


Reporting to Per Hallberg: 

Chassis and Cab Production, 

Powertrain Production, 

Global Purchasing, 

Human Resources Support. 

Leif Östling 

Born 1945. 


President and CEO. 


Reporting to Leif Östling: 

Industrial and Marine Engines, 

Latin American Operations, 

Corporate Relations. 

Gunnar Rustad 

Born 1949. 



Head of Sales and Services. 


Reporting to Gunnar Rustad: 

Sales Trucks, Buses and Coaches, 

Global Services. 

Hasse Johansson 

Born 1949. 



Head of Research and Development. 


Reporting to Hasse Johansson: 

Truck, Cab and Bus Chassis 

Development, Powertrain 

Development, Corporate IT. 

GROUP MANAGEMENT • SCANIA ANNUAL REPORT 2004 88

CORPORATE UNITS 

1. Magnus Hahn 

Born 1955. 


Senior Vice President 

Human Resources Support. 


2. Claes Jacobsson 

Born 1958. 



Customer Finance. 


3. Cecilia Edström 

Born 1966. 



Corporate Relations. 


4. Christoffer Ljungner 

Born 1950. 



Sales and Services Overseas. 


5. Hans Narfström 

Born 1951. 



Corporate IT. 


6. Per-Erik Lindquist 

Born 1960. 

Joined Scania in 1984, 

employed until 2000. 

Rejoined Scania in 2004. 


Sales and Services Europe. 


7. P O Svedlund 

Born 1955. 



Global Purchasing. 


8. Jan Ytterberg 

Born 1961. 



Corporate Control. 


9. Urban Johansson 

Born 1945. 



Rejoined Scania in 1999. 


Powertrain Development. 


10. Hans-Christer 

Holgersson 

Born 1953. 



Latin American Operations. 


11. Lennart Hjelte 

Born 1945. 



Industrial and 

Marine Engines. 


12. Lars Orehall 

Born 1947. 



Truck, Cab and Bus Chassis 

Development. 


13. Mikael Sundström 

Born 1957. 

Joined Scania in 2004. 


Corporate Legal Affairs 

and Risk Management. 


14. Peter Härnwall 

Born 1955. 



Administration and Control. 


15. Håkan Ericsson 

Born 1947. 



Global Services. 


16. Thomas Karlsson 

Born 1953. 



Powertrain Production. 


17. Robert Sobocki 

Born 1952. 



Rejoined Scania in 2002. 


Sales and Services Buses 

and Coaches. 


18. Lars Wrebo 

Born 1961. 



Chassis and Cab Production. 


1 2 3 4 5 

6 7 8 9 

10 11 12 13 14 

15 16 17 18 

89 GROUP MANAGEMENT • SCANIA ANNUAL REPORT 2004

Annual General Meeting 

and information 

Annual General Meeting 

The Annual General Meeting of Shareholders 

will be held at 14:00 CET on 

Friday, 29 April 2005 at the Victoria Hall, 

Stockholm International Fairs and 

Congress Centre (Stockholmsmässan), 

Älvsjö, Stockholm, 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) on Tuesday, 

19 April 2005. 

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, 25 April 2005. 

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 inform their 

nominees accordingly in sufficient time 

before Tuesday, 19 April 2005. 

Dividend 

The Board of Directors proposes 

Wednesday, 4 May 2005 as the record 

date for the 2004 dividend. The last day 

for trading shares that include the dividend 

is Friday, 29 April 2005. Provided that the 

AGM approves this proposal, the dividend 

can be expected to be sent on Tuesday, 

10 May 2005. 

Information from Scania 

Interim Report, January–March, 

on 27 April 2005 

Interim Report, January–June, 

on 27 July 2005 

Interim Report, January–September, 

on 1 November 2005 

The Annual Report is posted on the company’s 

website, 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 

Addresses and updated facts can be 

found at www.scania.com. 

ANNUAL GENERAL MEETING AND INFORMATION • SCANIA ANNUAL REPORT 2004 90

Printed by Trosa Tryckeri AB, Trosa, Sweden – 2005. Certified according to ISO 9001 and ISO 14001.

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: 

www.scania.com 

1596012/15/KREAB/ Trosa Tryckeri, 2005

Scania annual report 2004

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