Swedish truck and bus maker and Traton subsidiary, Scania has announced its global full year result for the Covid affected 2020, reporting deliveries dipped by 28 per cent, despite orders being up across both truck and bus by five per cent for the calendar year compared with the previous year.
Scania registered 92,940 deliveries in 2020, with the Covid pandemic causing supply chain issues that resulted in that 28 per cent drop on the 2019 result.
The Scania Group’s net sales were also down 18 per cent with the organisation’s operating income almost cut in half, plunging 49 per cent while its net income was also down 56 per cent.
Scania president and CEO, Henrik Henriksson, who recently announced his resignation to take a up a role with a new green steel maker, said the 2020 result was dominated by the influence of the pandemic.
“We fought hard to support our customers with services and parts to ensure that they could keep their businesses going,” said Henriksson.
“Naturally, our priority was also to manage the operational and financial impacts on our own business as we faced fluctuations in demand and disruptions in the supply chain as a result of COVID-19. We quickly managed to hit the brakes on costs and preserve cash as the pandemic started to impact order intake and delivery capacity,” he added.
“The pandemic also accelerated the need for structural cost reductions in view of Scania’s long-term ambitions. To be able to continue making large-scale investments in new technologies that support the transformation to sustainable transport, painful but necessary decision had to be taken, resulting in the closure of production facilities and staff reductions,” said Henriksson
Despite the pandemic impact Henriksson says the company’s second half results last year showed some promising upsides.
“Towards the second half of 2020, demand for trucks started to rebound strongly, while it remained weak for buses and coaches,” he added.
“In the fourth quarter of 2020, vehicle deliveries were almost back to the previous year’s level.
“Cash flow in Vehicles and Services was strong thanks to Scania’s demand-driven output principle in production and efficient inventory management, while our structural cost transformation efforts continued in the fourth quarter”.
“In Financial Services, customers’ need of rescheduling their payments of financial contracts returned to more normal levels in the second half of 2020 and by the fourth quarter, the vast majority of our customers had returned to their previous payment plans,” Henrikkson added.
Data gathered from connected Scania vehicles show that there is continued good transport activity, particularly in the long haulage, distribution and construction segments but also for city buses.
“Order intake for trucks increased by 55 per cent in the fourth quarter compared to the year earlier period. After a tough start of last year we are now in a position of strength with a good cost structure ready to leverage the rising demand. However, the situation in the supply chain is strained in many areas, which is causing production disruptions and increased costs. The ongoing COVID-19 pandemic also adds uncertainty.”
Mr Henriksson said Scania was pushing ahead with its transformational program, as it prepares for a zero emission future as a proactive player in the shift to sustainable transport,.
“Throughout this turbulent year, we remained focused on our commitment to decarbonise our product portfolio,” he said.
“Scania’s ability to deliver in the present moment, while at the same time developing tomorrow’s fossil-free transport system, was put to the test during 2020. In September, we launched our first fully electric truck range, which will play a key role in reaching Scania’s science based climate targets.
“We have also committed to bringing our customers at least one new electric product application in the bus and truck segment every year. By 2025, Scania expects that electrified vehicles will account for around 10 per cent of its total vehicle sales volume in Europe and by 2030 that figure is expected to be 50 per cent.”