Swedish based global truck and bus maker Scania has report healthy lifts in revenue and profits in 2019 and says it is setting Science Based Targets to fight climate change in line with limiting global warming to 1.5°C, according to the company’s annual summary and financial report released this week.

The company, which is owned by Volkswagen’s spin off commercial vehicle operation Traton, increased net sales in 2019 by 11 per cent on a revenue of $AUD 25.11 billion (SEK152,419 billion) up from $AUD22.59billion (SEK 137.12b) with profit up by 26 per cent  to $AUD2.88 billion ( SEK17.48 billion).

According to Scania’s CEO Henrik Henriksson, 2019 was a year of continued growth and many records for the company.

“Vehicle deliveries reached historically high levels as did service volume while net sales amounted to a record high, up 11 per cent from the previous year,” said Henriksson.

“Earnings were the highest ever at $AUD2.88 billion., and our operating margin was at 11.5 per cent.

Henriksson said that higher vehicle and service volume, currency effects and market mix contributed positively while service revenue increased by 9 per cent to $AUD4.76 billion (SEK 28.9 billion) and operating income for Scania Financial Services was a record high $AUD249 million (SEK 1,511 million).

All of this was against a backdrop that saw total orders for trucks, buses and coaches fell by 9 per cent globally in 2019 compared to 2018 and demand for trucks in Europe slowed in the second half of 2019 due to a weakening economic cycle.

However Scania’s total vehicle deliveries increased by 3 per cent during 2019 to a record high 99,457 units, compared to 2018.

There was also slow recovery in Latin America, particularly in Brazil while the report cited political and trade-related concerns impacting demand in  Eurasia and Asia.

Orders decreased in most regions for buses and coaches while the company managed to partly compensate a drop-in demand in the Middle East.

Henriksson said It is a necessity for Scania to continue making large-scale investments in new technologies to help drive the shift towards sustainable transport.

“To succeed in the transition to a fossil-free transport system, biofuels are crucial. In 2019, Scania increased sales of vehicles that run on alternatives to diesel by 46 per cent or 6,631 vehicles,” he said.

Scania says there is great potential for wider use of biofuels as all its vehicles can run on biodiesel-HVO and because  biofuels are available right now, it believes it is a good interim alternative while it takes time for new technology to impact the reduction of carbon emissions.

The company says that In parallel with scaling up use of biofuels, it needs to invest in new technology and infrastructure for a gradual changeover to electrification.

The report says that In the electrification of heavy vehicles, there is no silver bullet but Scania says it is developing several technologies, often with customers.

“One technology track developed with grocery wholesaler ASKO is fuel cell electric trucks powered by hydrogen gas,” the report says.

“The trucks recently entered into operation in Trondheim in Norway where ASKO opened a hydrogen gas station. In addition, Scania’s fully electric battery-powered trucks for city distribution were installed in the customer’s Oslo operations,” the report said.

Importantly to reduce greenhouse gases at the rate and extent recommended by science, Scania  says it is setting Science Based Targets in line with limiting global warming to 1.5°C  with Scania not only committing to reduce its own emissions, but also to achieving reductions where the main CO2 emissions occur when the products are used.

The company says the full impact of the outbreak of the Coronavirus is not currently possible to predict, given the uncertainty of the situation.

“We are following developments day-by-day and keep a tight dialogue with our customers, suppliers, union representatives and other partners,”  the report stated