The year 2022, was dominated by major challenges globally and thus also for Scania. War in Ukraine, COVID-19, energy crisis, inflation and component shortages led to large disruptions in delivery flows.
Summary of the fourth quarter 2022
• Net sales increased by 37 percent to SEK 52,822 m. (38,552)
• Adjusted operating income amounted to SEK 5,749 m. (3,717)
• Operating income amounted to SEK 8,641 m. (-1,512). It was positively impacted by exchange rate fluctuations related to the write-down of the business activities in Russia of SEK 2,892 m.
• Cash flow amounted to SEK 7,114 m. (3,762) in Vehicles and Services
Summary of the full year 2022
• Net sales increased by 16 percent to SEK 170,004 m. (146,146)
• Adjusted operating income amounted to SEK 15,971 m. (16,523)
• Operating income amounted to SEK 12,375 m. (11,294) and was negatively impacted by SEK 3,596 m., for what essentially relates to the write-down of the business activities in Russia.
• Cash flow amounted to SEK -4,516 m. (5,538) in Vehicles and Services (adjusted for payment of the European Commission’s fine, cash flow amounted to SEK 5,141 m.)
Comments by Christian Levin, President and CEO
“The year 2022, was dominated by major challenges globally and thus also for Scania. War in Ukraine, COVID-19, energy crisis, inflation and component shortages led to large disruptions in delivery flows. Despite uncertainty about the geopolitical and macroeconomic trend, our customers’ activity remained high during the year.
Demand for our transport solutions is robust and most of our business areas performed well during the year. Our service business grew by 21 percent which confirms the high transport activity. The underlying business in Financial Services also remained strong with a positive portfolio development. The recovery in the bus and coach market is continuing, even in tourist buses, which were hit hard by the pandemic. Power Solutions reached record high deliveries with growth in new markets. Demand for our trucks also remains strong but major supply chain and production problems in Europe during the year led to a loss of volume. Scania’s sales for the full year 2022 increased by 16 percent and adjusted for the effects from the disposal of the business activities in Russia, operating margin amounted to 9.4 (11.3) percent. Towards the end of the year, it was possible to complete the disposal of our commercial business in Russia, and after year-end, in January, to close the disposal of the Russian financing business.
Operating income during the full year 2022 was negatively impacted by problems in the supply chain, which has been destabilised by both external and internal factors. The transition in the European industrial system for production of the new, highly appreciated, Scania Super powertrain was one of the biggest in Scania’s history and led to further instability in our already strained flows. With a destabilised supply chain and an intact manning in production, less than full capacity utilisation also impacted financial performance negatively. To keep flexibility and the possibility to ramp-up deliveries, we decided to keep the manning in production throughout the year.
Several actions were implemented during the year to manage the supply chain disturbances. In the fourth quarter, a dedicated cross-functional working group was appointed with full focus on ensuring stable end-to-end flows and delivery capacity. Although the situation in the global supply chain for components is still unpredictable, all the focused actions have been successful. Scania’s truck deliveries increased in the fourth quarter by 14 percent, contributing strongly to the improvement in sales of 37 percent. Adjusted operating margin in the fourth quarter amounted to 10.9 percent (9.6).
With an order book that already extends far in time, we continue to be restrictive in the placing of orders to ensure delivery precision and manage the increased costs caused by inflation. Scania’s market share in Europe recovered somewhat with the fourth quarter’s increased truck volume and came in at 13.4 percent for the full year 2022. During the year, we could see that the shift to a sustainable transport system is starting to materialise. Demand for our vehicles as fully electric, plug-in hybrids and hybrids, increased from low volumes by almost 400 percent. Aside from the order intake for our existing electrified offering, there is also strong interest in the fully electric truck for regional transport that we introduced during 2022. At the end of the year, we had already received almost 700 pre-orders, indicating interest for the trucks, which we will start producing during the second half of 2023.”