Scania AB (publ.)

We anticipate supply chain-related challenges will continue impacting deliveries and order backlog execution throughout 2022. This, coupled with an inflationary scenario characterized by higher input costs, which the company for the time being will adjust with list price increases and the roll-out of the new power train, will likely somewhat dilute the group's historically resilient margins. For 2022 we now anticipate S&P Global Ratings-adjusted EBITDA margin for the industrial business to be at around 10% in 2022, down from 13.2% in 2021, improving to 10.5%-11.5% in 2023 owing to higher prices. Scania experienced a robust recovery in demand in 2021, supported by an improving macroeconomic environment as the pandemic waned, growing e-commerce, and higher freight rates. Despite continued strong demand

...Scania's market position is underpinned by its premium brand positioning, high market share, and demonstrated track-record of profitability. It is one of the most important premium heavy truck producers globally. Scania holds leading positions in Europe and Brazil, with market shares of 15.5% and 15.9%, respectively, that have remained relatively stable over past years. Additionally, thanks to its resilient business model and premium positioning, the company has delivered strong profitability, with adjusted EBITDA margins consistently above 10% over the last few years reaching therefore a net cash position stabilizing thereby the volatility of its credit metrics. Based on that, Scania is one of the most profitable truck makers that we rate. The group's margins are further supported by a high share of stable, service-based revenue, which contributed about 20% of 2021 sales....

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