Scania reports 2023 growth in sales, progress on sustainability

Scania says 2023 was another year where geopolitical and macroeconomic instability had an impact on the business environment. However, According to Scania, the company was able to navigate through this, reaching over 200B SEK ($19.5B USD) sales revenue in 2023 — doubling its sales revenue in just seven years.

Summary of the full year 2023

Scania Group net sales grew by 28 percent to SEK 204.1 billion (159.2).
Adjusted operating income reached SEK 26.0 billion (14.0) and adjusted operating margin was 12.7 percent (8.8).
Deliveries increased by 13 percent to 96,727 vehicles, whereof Zero Emission Vehicles (ZEV) amounted to 246 units (262).
Revenue from the service business increased by 11 percent adjusted for currency.
Order intake increased by 2 percent to 84,080 vehicles.

Summary of the Q4 2023

Scania Group net sales grew by 21 percent to SEK 60.0 billion (49.7).
Adjusted operating income reached SEK 7.4 billion (5.3) and adjusted operating margin was 12.3 percent (10.7).
Deliveries increased by 8 percent to 28,984 vehicles, whereof Zero Emission Vehicles amounted to 57 units (115).
Revenue from the service business increased by 6 percent adjusted for currency.
Order intake decreased by 5 percent to 22,299 vehicles.

The company says demand for its products and services remained high in 2023, although in some key markets it decreased from previously very high levels. Scania says it managed to stabilize the vehicle order-to-delivery flow significantly and increased deliveries by 13 percent compared to 2022. Earnings reached record levels, positively impacted by higher vehicle and service volume, a strong price and product mix and currency effects, according to Scania, while inflation, higher raw material prices and some remaining supply chain disturbances impacted earnings negatively.

Scania adds that vehicle deliveries increased by 8 percent and the service business grew by 6 percent in local currency in Q4, compared with the same period last year. At the same time, the company says vehicle order intake in Q4 decreased by 5 percent, reflecting more normal demand levels in some of Scania’s key markets in Europe.

“Like many other businesses, Scania is adapting to a world where the ‘new normal’ means uncertainty and constant disturbances,” said Scania Chief Executive Officer Christian Levin. “While we managed to stabilize 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.”

Sustainability milestones and challenges

The company tells us there were many milestones in its progress towards a sustainable transport system in 2023, including: 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 decarbonization targets into formal requirements.

However, every big transformation comes with challenges. Scania was the first in the industry to commit to the Science Based Targets and set global targets for 2025 to create accountability and make these goals actionable. While Scania says it is well on its way to reaching the scope 1 and 2 targets, at a decrease of 42 percent towards the goal of 50 percent by 2025, decarbonizing the rolling fleet where the lion’s share of carbon emissions come from is more challenging. Within scope 3, when Scania’s vehicles are in use, the company says the aim is to achieve a 20 percent reduction by 2025 — currently the reduction is just below 3 percent since base year 2015. A changed sales mix resulted in a negative development of the KPI reported in 2023, according to Scania, which adds that the reported scope 3 reduction is based on 2022 volumes as the input data builds on the vehicles being in use. Scania believes the full impact of initiatives like Scania’s Super powertrain is not yet coming through in the KPI reported for 2023.

The 2025 scope 3 target remains a challenge but guides positive change, according to the company. In 2024, Scania will focus efforts on driver efficiency, optimizing vehicle specifications, promoting renewable fuels and expanding electrified solutions, to continue making progress with its emission reduction targets.

“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 decarbonization here and now,” says Levin.