TRATON SE

Overview Key strengths Key risks Solid position in the heavy commercial vehicle manufacturing industry, as the No. 2 worldwide (as of November 2024, in terms of units sold). Competitive pressures and increasingly stringent carbon emissions regulation could affect the product portfolio and sales mix, and ultimately threaten profit margins. Highly strategic subsidiary for its parent company and 89.7% owner, Volkswagen AG (VW; BBB+/Stable/A-2), to which it has close links in terms of financing, IT services, and purchasing. This underpins our rating on TRATON one notch below the rating on VW, independently of TRATON?s stand-alone credit profile. Capital expenditure is likely to remain high to meet stringent environmental targets and evolving technology shifts, at 5.5%-6.5% of industrial net sales in the

...TRATON SE's 2024 S&P Global Ratings-adjusted EBITDA margins will be similar to 2023, despite worsening market conditions. The full effect of realignment of the MAN brand, coupled with strict policies on pricing, will support stabilization of TRATON's S&P Global Ratings- adjusted EBITDA margin at 9.5%-10.5% in 2024, compared with 10.2% in 2023 and 6.9% in 2022. We expect flattish sales in 2024 at 42 billion-43 billion, with price mix offsetting lower volumes. The company's truck orders in Europe declined by 19% in the first nine months of 2024 to 52,618 units, suggesting for a further normalization in 2025. We forecast that global sales of heavy-duty trucks (HDTs) will increase globally by low single digits to about 1.95 million units in 2025, up from 1.93 million units expected for 2024. The market continues to normalize in Europe, with a declining trend, and is recovering moderately in North America and Asia-Pacific (APAC). (For further information, see "2025 Global Outlook For Heavy-Duty...

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