TRATON SE

Overview Key strengths Key risks Strong position as the fifth-largest heavy commercial vehicles manufacturer worldwide (as of the end of 2021, in terms of units sold), holding the No. 1 market position in Europe and South America, and a challenger position in the U.S. market. The recovery and resilience of the group?s relatively weak EBITDA margins of about 6%-7% in 2021-2022 meaningfully depends on TRATON?s ability to implement a better fixed-cost absorption, complete the MAN re-alignment, and successfully introduce the common base engine across its brands, starting from Scania in 2022. Highly strategic subsidiary for its parent company and 89.7% owner, Volkswagen AG (VW), to which it has close links in terms of financing, IT services, and purchasing. This underpins

...After satisfactory nine-month sales results, S&P Global Ratings expects demand drivers will remain moderately supportive heading into 2023, while MAN's realignment and tight price management should strengthen profitability. We also expect solid demand in 2023, supported by fleet aging and replacement needs, as well as catching up effects from 2022 lost production, and we anticipate TRATON will sell 295,000-305,000 in 2022 and 310,000-330,000 units in 2023 (271,608 in 2021). Moreover, the price mix and strong aftermarket services will support TRATON's industrial business revenues to increase to 37 billion-40 billion in 2022 and 38 billion-43 billion in 2023 (from 29.7 billion in 2021) in our base case. We expect profitability to remain pressured in 2022, after MAN experienced a six-week shut down of its truck productions, owing to the shortage of specific components previously produced in Ukraine, and Scania was not able to fully absorb its costs mainly due to lower unit sales and the negative...

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