Following good demand for trucks, notably in Europe, we expect Scania to deliver strong operating results in 2018, with an adjusted EBITDA margin of about 12.5% and adjusted free operating cash flow (FOCF) of about Swedish krona (SEK) 6 billion (€0.6 billion). We also expect Scania's balance sheet to remain strong, with only a limited amount of adjusted debt, despite a cash dividend of SEK4.3 billion to Volkswagen Truck&Bus AG in the second quarter of this year. We are affirming our 'BBB+/A-2' ratings on Scania. The stable outlook on Scania reflects that on Scania's ultimate parent, Volkswagen AG (VW), and our expectation that Scania will maintain low debt and positive FOCF (excluding the captive finance operations) in 2018-2020.
