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TRATON SE
Quarterly Report • Oct 28, 2024
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Quarterly Report
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TRATON
Interim Statement
as of September 30, 2024
4
Material Events
5
Incoming Orders and Unit Sales by Country, TRATON Operations
7
Condensed Income Statement of the TRATON GROUP
9
Segments of the TRATON GROUP
11
Net Cash Flow
12
Capital Expenditures, TRATON Operations
12
Primary Research and Development Costs, TRATON Operations
13
Net Liquidity/Net Financial Debt
14
Report on Expected Developments
Selected Financial Information
15
Income Statement
16
Condensed Statement of Comprehensive Income
Balance Sheet
19
Statement of Cash Flows
Contingent Liabilities and Commitments
21
Segment Reporting
Financial Calendar
It's not individual strength that helps a swarm of birds to thrive, but the fact that they work together toward a common goal. This is also true when it comes to transforming transportation and further underlined by our TRATON purpose: Transforming Transportation Together. For a sustainable world.
TRATON SE is a European stock corporation (Societas Europaea) incorporated under German law and admitted to trading on the Frankfurt Stock Exchange as its primary and the Nasdaq Stockholm as its secondary stock exchange. This interim Statement was prepared in accordance with section 53 of the Exchange Rules for the Frankfurter Wertpapierbörse (FWB). Any deviations from the Guidance Note for Preparing Interim Management Statements issued by the Nasdaq Stockholm are described and explained on our website at www.traton.com. This Interim Statement does not constitute an interim financial report as defined in International Accounting Standard (IAS) 34 interim Financial Reporting and has not been reviewed by an auditor.
This interim Statement contains certain forward-looking statements for the remaining months of fiscal year 2024. A range of known and unknown risks, uncertainties, and other factors may result in the actual results, financial position, development, or performance of the TRATON GROUP differing materially from the estimates given here. Such factors include those that TRATON has described in published reports. These reports are available on our website at www.traton.com. The Company does not assume any obligation to update such forward-looking statements or to adapt them to future events or developments.
The figures relating to net assets, financial position, and results of operations were prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the European Union. All figures shown are rounded, so minor discrepancies may arise from addition of these amounts. Comparable prior-year figures are presented in brackets alongside the figures for the fiscal year under review. The current definition of the key performance indicators can be found in the annual report published for the previous year. This report can be downloaded from our website at www.traton.com/publications.
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
8 Segments of the TRATON GROUP
9 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Material Events
Despite a slight decline in unit sales, the TRATON GROUP generated sales revenue of $€ 35.3$ billion (9M 2023: $€ 34.2$ billion) in the reporting period, up 3\% year-on-year. Operating result (adjusted) was $€ 3.3$ billion (9M 2023: $€ 2.9$ billion), which increased operating return on sales (adjusted) by 0.7 percentage points, from $8.6 \%$ to $9.3 \%$.
IAA Transportation, the leading trade fair for logistics and the transportation sector, was held in Hannover in September 2024. Two TRATON GROUP brands presented a wide range of products during the fair. Scania showcased its versatile fleet, including the Scania Super 460 R, which won the German Green Truck Award. Among the vehicles presented by MAN were the 12-tonne eTCL and the new MAN hTGX with hydrogen-powered engine. The brands also presented digital and financial services, along with services covering all aspects of charging battery electric vehicles.
Navistar Inc. was renamed International Motors, LLC (International) on October 1, 2024. At the same time, the Navistar brand was renamed International and the former Navistar Sales \& Services segment was renamed International Motors.
TRATON took the next steps on its journey to expand the TRATON Financial Services segment into a global captive financial services entity. TRATON Financial Services
acquired rights to the future MAN Financial Services business in several countries and began operations in the reporting period. Following the acquisition of the MAN financing business in Austria by the TRATON Financial Services segment, the TRATON GROUP's financial services receivables increased by approximately $€ 190$ million and liabilities by approximately $€ 170$ million.
In February, the Executive and Supervisory Boards of TRATON SE decided to strengthen Group-wide research and development as well as brand-specific development. To do this, significant parts of the research and development departments of the individual brands are being merged into a cross-brand organization. This new structure will drive forward the development of the TRATON Modular System with the aim of delivering sustainable, efficient, and connected transportation solutions to the market.
At its meeting in February, the Supervisory Board of TRATON SE extended the contracts of TRATON GROUP Executive Board members Alexander Vlaskamp and Mathias Carlbaum by five years, in each case until 2029.
On December 31, 2023, Volkswagen Finance Luxemburg S.A., a wholly owned subsidiary of Volkswagen AG, held 89.72\% of TRATON SE's share capital. In two steps, over the course of the year, Volkswagen Finance Luxemburg S.A. transferred its 89.72\% interest in the share capital of TRATON SE to its wholly owned subsidiary, Volkswagen International Luxemburg S.A.
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Incoming Orders and Unit Sales by Country, TRATON Operations
| Incoming orders | Unit sales | |||||
|---|---|---|---|---|---|---|
| Units | 9M 2024 | 9M 2023 | Change | 9M 2024 | 9M 2023 | Change |
| Total | 189,769 | 189,611 | 0\% | 245,384 | 249,475 | $-2 \%$ |
| of which all-electric vehicles | 2,374 | 1,703 | 39\% | 1,131 | 1,190 | $-5 \%$ |
| BEV unit sales ratio (excluding MAN TGE vans, in \%) | - | - | - | 0.5 | 0.4 | 0.0 pp |
| Trucks | 148,955 | 149,990 | $-1 \%$ | 205,233 | 207,078 | $-1 \%$ |
| EU27r3 | 52,618 | 64,622 | $-19 \%$ | 76,904 | 87,740 | $-12 \%$ |
| of which in Germany | 14,179 | 15,032 | $-6 \%$ | 19,836 | 24,253 | $-18 \%$ |
| North America | 35,831 | 31,688 | 13\% | 61,052 | 59,873 | 2\% |
| of which in the USA/Canada | 28,763 | 26,704 | 8\% | 50,015 | 51,079 | $-2 \%$ |
| of which in Mexico | 7,068 | 4,984 | 42\% | 11,037 | 8,794 | 26\% |
| South America | 43,806 | 34,279 | 28\% | 46,669 | 34,143 | 37\% |
| of which in Brazil | 37,271 | 28,675 | 30\% | 40,142 | 27,077 | 48\% |
| Other regions | 16,700 | 19,401 | $-14 \%$ | 20,608 | 25,322 | $-19 \%$ |
| Buses | 24,253 | 21,095 | 15\% | 20,843 | 22,502 | $-7 \%$ |
| EU27r3 | 5,166 | 4,565 | 13\% | 3,708 | 4,115 | $-10 \%$ |
| of which in Germany | 1,187 | 1,246 | $-5 \%$ | 794 | 1,016 | $-22 \%$ |
| North America | 10,813 | 10,036 | 8\% | 9,017 | 11,785 | $-23 \%$ |
| of which in the USA/Canada | 8,727 | 7,559 | 15\% | 6,603 | 9,231 | $-28 \%$ |
| of which in Mexico | 2,086 | 2,477 | $-16 \%$ | 2,414 | 2,554 | $-5 \%$ |
| South America | 6,307 | 4,671 | 35\% | 6,133 | 4,805 | 28\% |
| of which in Brazil | 5,094 | 3,588 | 42\% | 5,137 | 3,917 | 31\% |
| Other regions | 1,967 | 1,823 | 8\% | 1,985 | 1,797 | 10\% |
| MAN TGE vans | 16,561 | 18,526 | $-11 \%$ | 19,308 | 19,895 | $-3 \%$ |
| EU27r3 | 16,292 | 18,282 | $-11 \%$ | 18,985 | 19,349 | $-2 \%$ |
| of which in Germany | 4,750 | 6,410 | $-26 \%$ | 6,097 | 6,901 | $-12 \%$ |
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Incoming orders were on the previous period's level in the reporting period. It was therefore down slightly year-on-year in the truck business, although regional developments varied greatly. In North America, incoming orders increased significantly due to restrictive order acceptance in the comparative period. There was a strong increase in incoming orders in South America. In Brazil in particular, orders increased sharply in a growing market environment, whereas the previous year's performance in the Brazilian market was significantly negatively impacted by the new emissions regulations that had come into force. A noticeable economic slowdown in the EU27+3 region, especially in Germany, led to a significant decline in incoming orders for trucks. The MAN TGE also recorded a decline in incoming orders. By contrast, incoming orders for buses increased significantly. The primary reasons for this were the positive development of the coach segment in the EU27+3 region and orders for school buses won in South America.
The TRATON GROUP recorded a 2\% year-on-year decline in unit sales in the reporting period, although the downward trend in the first half of 2024 was cushioned by 5\% growth in the third quarter of 2024. Unit sales of trucks declined by $1 \%$. This is due among other factors to the continued reluctance to buy in
the EU27+3 region and a model year change at MAN Truck \& Bus. Unit sales in North America were slightly above the prior-year level. Owing to a fire at the plant of a mirror supplier, a number of trucks were not completed and delivered as planned in the second quarter of 2024. The resulting delivery backlog was eliminated in the third quarter. By contrast, very strong unit sales growth was posted in South America, due primarily to the positive economic development in Brazil. Unit sales of buses recorded a moderate decline compared with the previous year. This was due, on the one hand, to the delayed ramp-up of the new school bus model at International in North America in the first half of the year. On the other hand, tighter regulatory requirements for vehicle software systems in the EU27+3 region led to delays in unit sales of buses. By contrast, unit sales of buses increased in South America.
The book-to-bill ratio in the reporting period was 0.8 (9M 2023: 0.8).
306 (9M 2023: 237) all-electric trucks, 730 (9M 2023: 709) all-electric buses, and 95 (9M 2023: 244) MAN eTGE models were sold in the reporting period. Additionally, 51 (9M 2023: 91) hybrid trucks and 211 (9M 2023: 204) hybrid buses were sold.
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Condensed Income Statement of the TRATON GROUP
| TRATON GROUP | TRATON Operations | TRATON Financial Services | Corporate Items | |||||
|---|---|---|---|---|---|---|---|---|
| € million | 9M 2024 | 9M 2023 | 9M 2024 | 9M 2023 | 9M 2024 | 9M 2023 | 9M 2024 | 9M 2023 |
| Sales revenue | 35,253 | 34,176 | 34,266 | 33,352 | 1,409 | 1,158 | $-423$ | $-334$ |
| Cost of sales | $-27,662$ | $-27,390$ | $-26,962$ | $-26,862$ | $-963$ | $-767$ | 263 | 239 |
| Gross profit | 7,591 | 6,785 | 7,304 | 6,490 | 447 | 391 | $-160$ | $-96$ |
| Distribution expenses | $-2,802$ | $-2,646$ | $-2,447$ | $-2,332$ | $-170$ | $-125$ | $-184$ | $-189$ |
| Administrative expenses | $-1,299$ | $-1,128$ | $-1,130$ | $-1,000$ | $-35$ | $-30$ | $-134$ | $-99$ |
| Other operating result | $-388$ | $-316$ | $-315$ | $-178$ | $-84$ | $-116$ | 11 | $-21$ |
| Operating result | 3,103 | 2,695 | 3,412 | 2,981 | 158 | 119 | $-467$ | $-405$ |
| Operating result (adjusted) | 3,261 | 2,929 | 3,570 | 3,113 | 158 | 221 | $-467$ | $-405$ |
| Operating return on sales (adjusted) (in \%) | 9.3 | 8.6 | 10.4 | 9.3 | 11.2 | 19.1 | - | - |
| Financial result | $-427$ | $-239$ | $-589$ | 855 | $-1$ | 0 | 164 | $-1,094$ |
| Earnings before tax | 2,676 | 2,456 | 2,823 | 3,836 | 156 | 119 | $-303$ | $-1,499$ |
| Income taxes | $-615$ | $-516$ | $-712$ | $-837$ | $-44$ | $-73$ | 140 | 394 |
| Earnings after tax | 2,060 | 1,940 | 2,111 | 3,000 | 112 | 46 | $-163$ | $-1,105$ |
Operating result
The TRATON GROUP increased its sales revenue by $€ 1.1$ billion (3\%) in the reporting period. This growth is attributable in particular to a positive market and product mix and to better unit price realization in the TRATON Operations business area. Sales revenue in the TRATON Financial Services segment increased by $€ 252$ million (22\%) compared with the prior-year period. This was primarily due to a rise in portfolio volume.
The TRATON GROUP's gross profit improved by $€ 806$ million (12\%) in the first nine months of 2024 compared with the prior-year period. This increase is attributable primarily to continued good price management combined with an improved cost structure in the TRATON Operations business area. Higher
research and development costs had a negative impact on gross profit. Gross margin increased by 1.7 percentage points to $21.5 \%$ (9M 2023: 19.9\%) in the TRATON GROUP and by 1.9 percentage points to $21.3 \%$ (9M 2023: 19.5\%) in the TRATON Operations business area.
In the reporting period, the TRATON GROUP's distribution expenses were up $€ 155$ million (6\%) and administrative expenses were up $€ 171$ million (15\%) year-on-year. In both cases, the increase was primarily due to inflation-related cost increases, for example in personnel costs. The ratio of distribution and administrative expenses to sales revenue therefore rose by 0.6 percentage points to $11.6 \%$ (9M 2023: 11.0\%).
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Other operating result declined by $€ 72$ million ( $23 \%$ ) compared with the prioryear period. At TRATON Operations, in particular, expenses attributable to civil lawsuits against Scania and MAN in connection with the EU truck cases in individual countries had a negative impact. The TRATON Financial Services segment was also impacted by higher expenses from bad debt allowances on receivables year-on-year. This was offset in particular by the charges amounting to $€ 102$ million in connection with the sale of Scania Finance Russia in the prior-year period.
Due to the effects described above, the TRATON GROUP's operating result increased by $€ 407$ million ( $15 \%$ ) compared with the prior-year period.
Adjustments to operating result
| Adjustments (€ million) | 9M 2024 | 9M 2023 |
|---|---|---|
| Scania Vehicles \& Services | 102 | 94 |
| of which legal proceedings and related measures | 95 | 20 |
| of which restructuring measures | 7 | 73 |
| MAN Truck \& Bus | 57 | 39 |
| of which legal proceedings and related measures | 57 | 39 |
| TRATON Operations | 159 | 132 |
| TRATON Financial Services | - | 102 |
| TRATON GROUP | 159 | 234 |
Adjustments at TRATON Operations in the reporting period amounted to $€ 159$ million (9M 2023: $€ 132$ million). They include expenses of $€ 151$ million (9M 2023: $€ 59$ million) in connection with civil lawsuits against Scania and MAN as a result of the EU truck cases in individual countries. These were recognized in the course of the updated reassessment of risks. The adjustments also contain $€ 7$ million (9M 2023: $€ 73$ million) in connection with the realignment of the Scania bus business. In the TRATON Financial Services segment, adjustments in the previous year in connection with the sale of Scania Finance Russia had amounted to $€ 102$ million. The TRATON GROUP's operating result (adjusted) therefore rose by $€ 332$ million ( $11 \%$ ) year-on-year.
The TRATON GROUP increased its operating return on sales (adjusted) by 0.7 percentage points to $9.3 \%$ (9M 2023: $8.6 \%$ ). In the TRATON Operations business area, operating return on sales (adjusted) increased by 1.1 percentage points to $10.4 \%$ (9M 2023: $9.3 \%$ ).
Financial result
The TRATON GROUP's financial result declined by $€ 188$ million ( $79 \%$ ) in the first nine months of 2024 compared with the previous year. Currency translation effects on net financial debt were the main driver of the decline, due above all to the devaluation of the Brazilian real versus the euro. By contrast, the higher earnings of the equity-method investment in Sinotruk (Hong Kong) Limited, Hong Kong, China (Sinotruk) had a positive effect.
Taxes
Income taxes rose by $€ 100$ million in the current reporting period. This corresponds to a tax rate of $23 \%$ (9M 2023: $21 \%$ ). The slightly higher tax rate year-on-year is primarily due to the discontinuation of offsetting effects from the recognition of loss carryforwards from previous years.
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Segments of the TRATON GROUP
Scania Vehicles \& Services
| 9M 2024 | 9M 2023 | Change | |
|---|---|---|---|
| Incoming orders (units) | 56,413 | 61,781 | $-9 \%$ |
| Sales (units) | 74,055 | 67,743 | 9\% |
| of which trucks | 70,034 | 64,283 | $9 \%$ |
| of which buses | 4,021 | 3,460 | $16 \%$ |
| Book-to-bill ratio | 0.76 | 0.91 | $-0.15$ |
| Sales revenue (€ million) | 13,911 | 12,646 | 10\% |
| New Vehicles | 9,458 | 8,105 | $17 \%$ |
| Vehicle Services business ${ }^{1}$ | 2,871 | 2,761 | $4 \%$ |
| Others | 1,583 | 1,780 | $-11 \%$ |
| Operating result (adjusted) (€ million) | 1,998 | 1,622 | 376 |
| Operating return on sales (adjusted) (in \%) | 14.4 | 12.8 | 1.5 pp |
| 1 Including genuine parts and workshop services |
Scania Vehicles \& Services recorded a significant decline in incoming orders for trucks compared with the comparative period. This was due in part to the continued reluctance to buy in the EU27+3 region. In South America, order acceptance was highly restrictive in the third quarter of 2024 so as to meet quality requirements when rolling out a new software generation. By contrast, incoming orders for buses increased substantially. Unit sales rose noticeably, driven by the solid order backlog, stable supply chains, and the increase in production volume.
Sales revenue also grew noticeably year-on-year. This growth was mainly attributable to the very strong increase in the New Vehicles business in South America. Scania Vehicles \& Services reported a moderate year-on-year increase in sales revenue in the EU27+3 region. In addition to the volume-related increase in sales revenue, operating result (adjusted) was lifted by a positive price and product mix and by lower product costs. Improved margins also had a positive impact on the result in the Vehicle Services business. By contrast, increased personnel costs negatively affected operating result (adjusted).
MAN Truck \& Bus
| 9M 2024 | 9M 2023 | Change | |
|---|---|---|---|
| Incoming orders (units) | 54,858 | 65,838 | $-17 \%$ |
| Sales (units) | 69,215 | 84,244 | $-18 \%$ |
| of which trucks | 46,275 | 60,718 | $-24 \%$ |
| of which buses | 3,632 | 3,631 | 0\% |
| of which MAN TGE vans | 19,308 | 19,895 | $-3 \%$ |
| Book-to-bill ratio | 0.79 | 0.78 | 0.01 |
| Sales revenue (€ million) | 10,133 | 10,643 | $-5 \%$ |
| New Vehicles | 6,177 | 6,697 | $-8 \%$ |
| Vehicle Services business ${ }^{1}$ | 2,178 | 2,103 | $4 \%$ |
| Others | 1,778 | 1,842 | $-3 \%$ |
| Operating result (adjusted) (€ million) | 751 | 757 | $-5$ |
| Operating return on sales (adjusted) (in \%) | 7.4 | 7.1 | 0.3 pp |
1 Including genuine parts and workshop services
MAN Truck \& Bus recorded a substantial decline in incoming orders in the reporting period compared with the previous year. This was due in particular to weaker demand for trucks in the EU27+3 region. The substantial year-on-year decline in unit sales is mainly attributable to the weak truck market environment in Germany, a truck model year change in the first half of 2024, and catch-up effects in the comparative period. Tighter regulatory requirements for vehicle software systems in the EU27+3 region led to delays in unit sales of buses, particularly in the third quarter of 2024.
Despite the substantial decline in unit sales, sales revenue only fell moderately due to an improved price and product mix, with the result that operating result (adjusted) was almost on a level with the previous year. In addition, MAN benefited from an improved cost structure due to the realignment program completed at the end of 2023, despite lower production capacity utilization.
4 Course of Business
| 4 | Material Events |
|---|---|
| 5 | Incoming Orders and Unit Sales by Country, TRATON Operations |
| 7 | Condensed Income Statement of the TRATON GROUP |
| 9 | Segments of the TRATON GROUP |
| 11 | Net Cash Flow |
| 12 | Capital Expenditures, TRATON Operations |
| 12 | Primary Research and Development Costs, |
| TRATON Operations | |
| 13 | Net Liquidity/Net Financial Debt |
| 14 | Report on Expected Developments |
International Motors (formerly: Navistar Sales \& Services)
| 9M 2024 | 9M 2023 | Change | |
|---|---|---|---|
| Incoming orders (units) | 42,774 | 37,539 | 14\% |
| Sales (units) | 66,772 | 68,176 | $-2 \%$ |
| of which trucks | 59,098 | 57,714 | 2\% |
| of which buses | 7,674 | 10,462 | $-27 \%$ |
| Book-to-bill ratio | 0.64 | 0.55 | 0.09 |
| Sales revenue (€ million) | 8,256 | 8,357 | $-1 \%$ |
| New Vehicles | 6,084 | 5,946 | 2\% |
| Vehicle Services business ${ }^{1}$ | 1,388 | 1,562 | $-11 \%$ |
| Others | 784 | 849 | $-8 \%$ |
| Operating result (adjusted) (€ million) | 564 | 546 | 18 |
| Operating return on sales (adjusted) (in \%) | 6.8 | 6.5 | 0.3 pp |
1 Including genuine parts
International Motors recorded a significant increase in incoming orders in the reporting period compared with the previous year, when incoming orders had been marked by restrictive order acceptance due to limited production capacities resulting from supply bottlenecks. Unit sales were down slightly year-onyear. This was primarily the result of the delayed ramp-up of sales of the new school bus model in the first half of 2024. Temporary delays in the final assembly of trucks due to missing parts caused by a fire at a mirror supplier's production plant in the second quarter of 2024 were eliminated in the third quarter of 2024.
Sales revenue was down slightly year-on-year, mainly due to a decline in the Vehicle Services business, which was negatively impacted by reduced transportation activity in the USA, and this in turn weighed on operating result (adjusted). By contrast, improved unit price realization had a positive impact on operating result (adjusted) and operating return on sales (adjusted).
Volkswagen Truck \& Bus
| 9M 2024 | 9M 2023 | Change | |
|---|---|---|---|
| Incoming orders (units) | 35,745 | 24,891 | 44\% |
| Sales (units) | 35,742 | 29,752 | 20\% |
| of which trucks | 30,214 | 24,711 | 22\% |
| of which buses | 5,528 | 5,041 | 10\% |
| Book-to-bill ratio | 1.00 | 0.84 | 0.16 |
| Sales revenue (€ million) | 2,328 | 1,943 | 20\% |
| New Vehicles | 2,159 | 1,784 | 21\% |
| Vehicle Services business ${ }^{1}$ | 134 | 120 | 12\% |
| Others | 34 | 38 | $-9 \%$ |
| Operating result (adjusted) (€ million) | 278 | 186 | 92 |
| Operating return on sales (adjusted) (in \%) | 12.0 | 9.6 | 2.4 pp |
1 Including genuine parts and workshop services
Volkswagen Truck \& Bus (VWTB) recorded a strong increase in unit sales in the reporting period. This was primarily attributable to lower truck and bus unit sales in the previous year due to the introduction of a new emissions standard, as well as an improved economic situation in the reporting period. In addition to the volume-related increase in sales revenue, improved product positioning and unit price realization in Brazil positively impacted operating result (adjusted) and operating return on sales (adjusted).
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
TRATON Financial Services
| 9M 2024 | 9M 2023 | Change | |
|---|---|---|---|
| Sales revenue (€ million) | 1,409 | 1,158 | $22 \%$ |
| Operating result (adjusted) (€ million) | 158 | 221 | $-63$ |
| Operating return on sales (adjusted) (in \%) | 11.2 | 19.1 | $-7.9 \mathrm{pp}$ |
| Earnings before tax (€ million) | 156 | 119 | 37 |
| Equity (€ million) ${ }^{1}$ | 1,926 | 1,870 | 57 |
| Return on equity (in \%) | 10.9 | 7.9 | 3.1 pp |
1 As of September 30
In the first nine months of 2024, TRATON Financial Services launched the activities of MAN Financial Services in several new markets. In addition, the captive financial services business of International Financial (formerly Navistar Financial Services) was further expanded. As expected, operating result (adjusted) was down year-on-year. The higher costs in connection with the expansion of the financial services business as well as increased refinancing and risk costs, could not be offset by a higher portfolio volume.
Earnings before tax very strongly exceeded the level of the previous year. Earnings before tax in the comparative period had been impacted by negative accumulated other comprehensive income of $€ 102$ million from currency translation effects attributable to Scania Finance Russia, which were reclassified to the income statement upon disposal. This resulted in an increase in the return on equity.
As part of the acquisition of key aspects of the global financial services business of Volkswagen Financial Services for MAN and VWTB, TRATON Financial Services acquired the rights to the future MAN financial services businesses in Spain, Poland, Germany, and South Korea in the first nine months of 2024. Additionally, in Austria, 100\% of the shares of MAN Financial Services GesmbH, Eugendorf, Austria were acquired. The consideration paid amounted to $€ 183$ million. The difference between the consideration paid and the carrying amounts of the net assets as of the acquisition dates, amounting to $€ 168$ million, was deducted from equity. On September 25, €188 million was contributed to TRATON Financial Services AB as an internal Group transaction.
Net Cash Flow
CONDENSED STATEMENT OF CASH FLOWS OF THE TRATON GROUP
| TRATON GROUP | TRATON Operations | TRATON Financial Services | Corporate Items | |||||
|---|---|---|---|---|---|---|---|---|
| € million | 9M 2024 | 9M 2023 | 9M 2024 | 9M 2023 | 9M 2024 | 9M 2023 | 9M 2024 | 9M 2023 |
| Gross cash flow | 4,143 | $-4,001$ | 4,273 | 4,223 | 381 | 451 | $-510$ | $-673$ |
| Change in working capital | $-3,500$ | $-2,379$ | $-1,323$ | $-1,448$ | $-2,612$ | $-1,227$ | 435 | 295 |
| Net cash provided by/used in operating activities | 644 | 1,621 | 2,949 | 2,775 | $-2,230$ | $-776$ | $-75$ | $-378$ |
| Net cash used in investing activities attributable to operating activities | $-1,670$ | $-1,491$ | $-1,605$ | $-372$ | $-49$ | $-683$ | $-16$ | $-437$ |
| Net cash flow | $-1,026$ | 130 | 1,344 | 2,403 | $-2,279$ | $-1,459$ | $-91$ | $-815$ |
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
The TRATON GROUP's net cash used in operating activities declined by $€ 978$ million year-on-year to $€ 644$ million in the first nine months of 2024. This resulted primarily from an increase of $€ 1.1$ billion in cash tied up in working capital, which was mainly due to the higher increase in financial services receivables of $€ 1.4$ billion. By contrast, there was a $€ 143$ million increase in gross cash flow, which above all reflects the $€ 407$ million increase in operating result, together with the $€ 151$ million higher tax payments.
Cash tied up in working capital rose by a total of $€ 3.5$ billion in the reporting period. This primarily reflected the $€ 2.3$ billion increase in financial services receivables resulting from the expansion of the business volume and reported in net cash flow in the TRATON Financial Services segment. An additional factor was the $€ 1.1$ billion increase in inventories within the TRATON Operations business area.
Net cash used in investing activities attributable to operating activities rose by $€ 179$ million year-on-year to $€ 1.7$ billion, which is primarily due to increased investments of $€ 328$ million in property, plant, and equipment, intangible assets, and capitalized development costs. In addition, there had been a positive effect of $€ 96$ million from the sale of Scania Finance Russia in the previous year. This effect was the result of the purchase price payment of $€ 400$ million in the TRATON Operations business area, less the disposal of the cash of Scania Finance Russia of $€ 304$ million, which affected the TRATON Financial Services business area. In the previous year, the payment of $€ 275$ million for the gradual acquisition of key aspects of the global MAN and VWTB financial services business in the TRATON Financial Services business area had an offsetting effect.
In the previous year, the adjustment of the ownership structure of the financial services business had led to a positive effect of $€ 499$ million on net cash used in investing activities and on net cash flow in the TRATON Operations business area. In this context, $€ 547$ million in dividends paid had a negative impact on the net cash used in financing activities in the TRATON Operations business area. These effects were eliminated at the TRATON GROUP level.
Capital Expenditures, TRATON Operations
The increase in capital expenditures from $€ 854$ million to $€ 1.0$ billion in the third quarter of 2024 is largely attributable to Scania Vehicles \& Services, namely the construction of the production site in China, and to investments in connection with the further development of a driver's cab for heavy vehicles at International Motors.
Primary Research and Development Costs, TRATON Operations
Primary research and development costs amounted to $€ 1.7$ billion in the reporting period and were therefore higher than in the prior-year period (9M 2023: $€ 1.6$ billion). The rise is attributable to increased development activities in forward-looking technologies and the development of the TRATON Modular System. Development costs of $€ 627$ million (9M 2023: $€ 493$ million) were capitalized, resulting in a capitalization ratio of $35.9 \%$ (9M 2023: 31.7\%). Research and development costs not eligible for capitalization are included in cost of sales.
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
15 Selected Financial Information
Net Liquidity/Net Financial Debt
NET LIQUIDITY/NET FINANCIAL DEBT OF THE TRATON GROUP
| TRATON GROUP | TRATON Operations | TRATON Financial Services | Corporate Items | |||||
|---|---|---|---|---|---|---|---|---|
| € million | 09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 | 09/30/2024 | 12/31/2023 |
| Cash and cash equivalents | 2,129 | 1,730 | 5,268 | 4,256 | 318 | 246 | $-3,457$ | $-2,772$ |
| Marketable securities, investment deposits, and loans to affiliated companies | 978 | 427 | 271 | 1,653 | 225 | 331 | 482 | $-1,557$ |
| Gross liquidity | 3,107 | 2,157 | 5,539 | 5,909 | 543 | 576 | $-2,975$ | $-4,329$ |
| Third-party borrowings | $-24,873$ | $-21,704$ | $-6,653$ | $-6,527$ | $-16,228$ | $-14,347$ | $-1,992$ | $-830$ |
| Net liquidity/net financial debt | $-21,766$ | $-19,547$ | $-1,114$ | $-617$ | $-15,685$ | $-13,770$ | $-4,967$ | $-5,159$ |
Net financial debt increased by $€ 2.2$ billion to $€ 21.8$ billion during the reporting period, driven primarily by net cash flow. For more information, refer to the "Net Cash Flow" section.
To finance its activities, the TRATON GROUP issued bonds amounting to $€ 5.0$ billion (9M 2023: $€ 2.8$ billion) in the reporting period, including $€ 4.0$ billion (9M 2023: €2.3 billion) issued by TRATON Finance Luxembourg S.A., Strassen, Luxembourg (TRATON Finance) allocated to Corporate Items. In return, repayments totaling $€ 1.7$ billion (9M 2023: $€ 1.5$ billion) were made. Of this amount, $€ 1.0$ billion (9M 2023: €612 million) was attributable to TRATON Finance within Corporate Items and $€ 377$ million (9M 2023: €869 million) to Scania Vehicles \& Services in the TRATON Operations business area. The bond issues and repayments related primarily to the European Medium Term Notes programs.
Additionally, long-term loans of $€ 690$ million (9M 2023: €- million) were taken out with Volkswagen International Finance N.V., Amsterdam, Netherlands, and loan liabilities to Volkswagen Group of America Finance, LLC, Wilmington, USA, grew by $€ 465$ million (9M 2023: €- million). The acquisition of key aspects of MAN's financial services business included the assumption by the TRATON Financial Services segment of a loan from Volkswagen Financial Services AG with a volume of $€ 221$ million (9M 2023: €- million) as of September 30, 2024. Schuldscheindarlehen of $€ 350$ million (9M 2023: €- million) were repaid by TRATON SE.
In addition, miscellaneous financial liabilities decreased by €864 million, due for the most part to the repayment of external loans as well as of commercial paper liabilities, which were primarily allocated to Corporate Items.
TRATON SE placed $€ 650$ million (9M 2023: $€ 250$ million) with Volkswagen AG on a short-term basis.
Additionally, TRATON SE paid out a dividend of $€ 750$ million (previous year: $€ 350$ million) for fiscal year 2023, more than double the dividend in the previous year.
The net financial debt/EBITDA (adjusted) ratio for the TRATON Operations business area including Corporate Items was -1.0 (December 31, 2023: -1.0) as of September 30, 2024. An increase in net financial debt in the TRATON Operations business area including Corporate Items to $€ 6.1$ billion (December 31, 2023: $€ 5.8$ billion) was offset by the increase in EBITDA (adjusted) in the TRATON Operations business area including Corporate Items to $€ 5.9$ billion (December 31, 2023: $€ 5.5$ billion).
4 Course of Business
4 Material Events
5 Incoming Orders and Unit Sales by Country, TRATON Operations
7 Condensed Income Statement of the TRATON GROUP
9 Segments of the TRATON GROUP
11 Net Cash Flow
12 Capital Expenditures, TRATON Operations
12 Primary Research and Development Costs, TRATON Operations
13 Net Liquidity/Net Financial Debt
14 Report on Expected Developments
Report on Expected Developments
Based on the Company's business performance in the first nine months of 2024 and given the unchanged expectations on the whole for the development of the truck and bus markets relevant for the TRATON GROUP, the Executive Board of TRATON SE is confirming the forecast for 2024 published in the 2023 Annual Report and reiterated in the 2024 Half-Year Financial Report for all key performance indicators.
The financial management of the TRATON GROUP was adjusted in the first half of the year. Return on investment (ROI) in the TRATON Operations business area is no longer used for internal management and is therefore no longer considered to be the most important financial key performance indicator. This means that no forecast is being made for this indicator for 2024.
1 This contained effects from the sale of the Russia activities and the adjustment of the ownership structure of the financial services business amounting to $€ 899$ million.
SELECTED FINANCIAL INFORMATION
4 Course of Business
15 Selected Financial Information
15 Income Statement
16 Condensed Statement
of Comprehensive Income
17 Balance Sheet
19 Statement of Cash Flows
21 Contingent Liabilities and Commitments
21 Segment Reporting
23 Financial Calendar
Income Statement
of the TRATON GROUP for the period from January 1 to September 30
| € million | 9M 2024 | 9M 2023 |
|---|---|---|
| Sales revenue | 35,253 | 34,176 |
| Cost of sales | $-27,662$ | $-27,390$ |
| Gross profit | 7,591 | 6,785 |
| Distribution expenses | $-2,802$ | $-2,646$ |
| Administrative expenses | $-1,299$ | $-1,128$ |
| Net impairment losses on financial assets | $-97$ | $-41$ |
| Other operating income | 1,140 | 1,106 |
| Other operating expenses | $-1,431$ | $-1,380$ |
| Operating result | 3,103 | 2,695 |
| Share of earnings of equity-method investments | 207 | 124 |
| Interest income | 344 | 241 |
| Interest expense | $-728$ | $-607$ |
| Other financial result | $-249$ | 3 |
| Financial result | $-427$ | $-239$ |
| Earnings before tax | 2,676 | 2,456 |
| Income taxes | $-615$ | $-516$ |
| current | $-790$ | $-692$ |
| deferred | 175 | 177 |
| Earnings after tax | 2,060 | 1,940 |
| of which attributable to shareholders of TRATON SE | 2,061 | 1,940 |
| of which attributable to noncontrolling interests | $-1$ | 0 |
| Earnings per share in $€$ (diluted/basic) | 4.12 | 3.88 |
4 Course of Business
15 Selected Financial Information
15 Income Statement
16 Condensed Statement
of Comprehensive Income
17 Balance Sheet
19 Statement of Cash Flows
21 Contingent Liabilities and Commitments
21 Segment Reporting
23 Financial Calendar
Contingent Liabilities and Commitments
of the TRATON GROUP as of September 30, 2024, and December 31, 2023
| $€$ million | 09/30/2024 | 12/31/2023 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Liabilities under buyback guarantees | 2,780 | 2,926 | |||||||
| Contingent liabilities under guarantees | 556 | 777 | |||||||
| Other contingent liabilities | 1,011 | 1,133 | |||||||
| 4,346 | 4,835 |
Segment Reporting
of the TRATON GROUP for the period from January 1 to September 30
2024 REPORTING SEGMENTS
| $€$ million | Scania Vehicles \& Services |
MAN Truck \& Bus |
International Motors ${ }^{1}$ | Volkswagen Truck \& Bus | TRATON Financial Services | Total segments | Reconciliation | TRATON GROUP | of which TRATON Operations |
|---|---|---|---|---|---|---|---|---|---|
| Total sales revenue | 13,911 | 10,133 | 8,256 | 2,328 | 1,409 | 36,039 | $-786$ | 35,253 | 34,266 |
| Intragroup sales revenue | $-380$ | $-239$ | $-26$ | $-2$ | $-119$ | $-766$ | 766 | $-298$ | |
| External sales revenue | 13,531 | 9,894 | 8,230 | 2,326 | 1,291 | 35,273 | $-20$ | 35,253 | 33,968 |
| Operating result (adjusted) | 1,998 | 751 | 564 | 278 | 158 | 3,749 | $-488$ | 3,261 | 3,570 |
1 The International Motors segment corresponds to the segment previously reported as Navistar Sales \& Services.
2023 REPORTING SEGMENTS
| $€$ million | Scania Vehicles \& Services |
MAN Truck \& Bus |
International Motors ${ }^{1}$ | Volkswagen Truck \& Bus | TRATON Financial Services | Total segments | Reconciliation | TRATON GROUP | of which TRATON Operations |
|---|---|---|---|---|---|---|---|---|---|
| Total sales revenue | 12,646 | 10,643 | 8,357 | 1,943 | 1,158 | 34,746 | $-571$ | 34,176 | 33,352 |
| Intragroup sales revenue | $-296$ | $-194$ | 12 | $-5$ | $-97$ | $-581$ | 581 | - | $-235$ |
| External sales revenue | 12,350 | 10,449 | 8,369 | 1,937 | 1,061 | 34,165 | 11 | 34,176 | 33,117 |
| Operating result (adjusted) | 1,622 | 757 | 546 | 186 | 221 | 3,331 | $-402$ | 2,929 | 3,113 |
1 The International Motors segment corresponds to the segment previously reported as Navistar Sales \& Services.
Financial Calendar
March 10, 2025
2024 Annual Report
The latest information and dates are available on TRATON SE's website at www.traton.com/financialcalendar.
Munich, October 24, 2024
TRATON SE
The Executive Board
Financial Calendar
March 10, 2025
2024 Annual Report
The latest information and dates are available on TRATON SE's website at www.traton.com/financialcalendar.
Munich, October 24, 2024
TRATON SE
The Executive Board
Publication Details
Published by
TRATON SE
Hanauer Str. 26
80992 Munich
Germany
www.traton.com
Corporate Communications [email protected]
Investor Relations
[email protected]
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Concept and Design
3st kommunikation GmbH, Mainz
Copyright
(c)2024 TRATON SE and 3st kommunikation GmbH
This is a translation of the German original. In the event of discrepancies between the German language version and any translation thereof, the German version will prevail.
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