Scania: High Growth in Scania’s Service Revenue

Scania’s (STO:SCVA)(STO:SCVB) service revenue increased by 11 percent to SEK 4.8 billion during the third quarter of 2014. Europe and Asia displayed the highest growth rate. The sharp increase in connected vehicles is paving the way for new service concepts that can reduce customer costs.

Customers are increasingly demanding Scania’s services and revenue rose by 11 percent during the third quarter of 2014 to the highest level in the company’s history - SEK 4,832 million.

"Volume has increased and we are also getting some support from the weaker Krona, which meant that currency rate effects contributed positively. Calculated in local currency, revenue rose by 6 percent,” says Scania’s President and CEO Martin Lundstedt.

In Europe, service revenue rose by 11 percent to SEK 3,241 million compared to the third quarter of 2013. In Latin America, revenue rose by 8 percent to SEK 724 million and revenue in Asia was 17 percent higher than the previous year, SEK 383 million. In Africa and Oceania, service revenue rose by 6 percent to SEK 301 million, while in Eurasia it increased by 10 percent to SEK 183 million compared to the third quarter of 2013.

"We are continuing to invest in increased capacity in the service network, especially in emerging markets, in order to support our customers when they expand their operations. One example is the Russian market where the network has grown to include about 60 service points. Our ambition is that services should grow faster than vehicle sales over a business cycle,” comments Lundstedt.

By combining vehicles and services, it is easier to differentiate the company's offering from the competitors. One example is Ecolution by Scania, which was launched at the start of the decade, where volume amounts to almost 4,000 contracts sold with an average fuel saving for customers of 10 percent.

Connected vehicles offer potential for the advancement of service concepts, which can help customers save costs and boost earnings. Today Scania is a leader in this field and by year-end about 100,000 Scania vehicles will be connected.

Scania is one of the world’s leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. Service-related products account for a growing proportion of the company’s operations, assuring Scania customers of cost-effective transport solutions and maximum uptime Scania also offers financial services. Employing some 41,000 people, the company operates in about 100 countries. Research and development activities are concentrated in Sweden, while production takes place in Europe and South America, with facilities for global interchange of both components and complete vehicles. In 2013, net sales totalled SEK 86.8 billion and net income amounted to SEK 6.2 billion. Scania press releases are available on www.scania.com (http://www.scania.com/se)

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