Scania celebrates record year

Scania’s Annual and Sustainability report, detailing its financial, social, and environmental performance in 2023, has been published. It reveals that the company had a strong finish to a record year.

As we all know, 2023 was another year in which geopolitical and macroeconomic instability had an impact on the business environment. Scania was able to navigate through this, however, proving its financial resilience and ability to deliver sustainable growth. In 2023, the company’s sales reached over 200 billion Swedish krona (about R364.3 billion): a doubling of sales revenue in just seven years.

Demand for Scania’s products and services remained high in 2023. The manufacturer managed to significantly stabilise vehicle order-to-delivery flow and increased deliveries by 13% compared to the previous year. Record earnings were positively impacted by higher vehicle and service volume, a strong price and product mix, and currency effects. Inflation, higher raw material prices, and some remaining supply chain disturbances, meanwhile, negatively impacted earnings.

The fourth quarter was especially strong, with vehicle deliveries increasing by 8% and the service business growing by 6% in local currency, compared with the same period in 2022. Vehicle order intake in the fourth quarter decreased by 5%, reflecting more normal demand levels in some of Scania’s key European markets.

“Like many other businesses, Scania is adapting to a world where the ‘new normal’ means uncertainty and constant disturbances,” says CEO Christian Levin. “While we managed to stabilise flows in 2023 and deliver a strong financial performance, we are still working hard together with partners and bodybuilders to improve delivery precision for our customers.”

There were many milestones for Scania in 2023 as it progressed towards a sustainable transport system. These included the opening of a battery assembly plant to enable large-scale production of electric trucks, investing in and expanding the electric product portfolio, and turning supply chain decarbonisation targets into formal requirements.

However, every big transformation comes with its own challenges. Scania was the first in the industry to commit to the Science Based Targets and took the bold step of setting global targets for 2025 to create accountability and make these goals actionable. Scania is well on its way to reaching the Scope 1 and 2 targets at a decrease of 42% towards the goal of 50% by 2025. However, decarbonising the rolling fleet – where the lion’s share of carbon emissions come from – is more challenging. The 2025 Scope 3 target also remains a challenge, but guides positive change.

To continue making progress with its emission reduction targets in 2024, Scania will focus efforts on driver efficiency, optimising vehicle specifications, promoting renewable fuels, and expanding electrified solutions.

“While electrification is the ultimate answer – and we do our utmost to ramp-up production of battery electric trucks to deliver to our customers – fuel-saving actions and the usage of renewable fuels are decisive to decarbonisation here and now,” Levin elaborates.

The full report can be read here.

Full year summary, 2023

• Scania Group net sales grew by 28% to SEK 204.1 billion (R372 billion)
• Adjusted operating income reached SEK 26 billion (R47.4 billion) and the adjusted operating margin was 12.7%
• Deliveries increased by 13% to 96,727 vehicles, including 246 zero-emission vehicles
• Revenue from the service business increased by 11%
• Order intake increased by 2% to 84,080 vehicles