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July 29, 2019

Traton boosts H1 profit

Traton Group boosted first half operating profit by EUR212m year on year to EUR1bn.

By Olly Wehring

Traton Group boosted first half operating profit by EUR212m year on year to EUR1bn.

Sales revenue rose 7% to EUR13.5bn.

During the first six months of 2019, Traton Group, which now combines all VW's heavy commercial brands, sold 123,336 vehicles worldwide, which was up around 10%.

The level of orders of 120,491 units during the first six months of 2019 was 6% below the same period of 2018, driven by a decline in truck orders in the EU28+2 region, Russia, India, and Turkey as well as lower orders for buses in Mexico, Iran, and Saudi Arabia.

The Industrial Business of MAN Truck & Bus, Scania Vehicles & Services, and Volkswagen Caminhões e Ônibus generated H1 sales revenue of EUR13.3bn (H1, 2018: EUR12.1bn) with an operating profit of EUR1,008m (EUR787m). The significant increase of 10% was due to new vehicle business, driven by strong growth in the truck business. There was slight growth in the after sales business.

Financial Services booked an operating profit of EUR70m (EUR65m) and sales revenue of EUR419m (EUR380m). A larger net portfolio and currency effects positively impacted operating profit, while lower margins and higher operating expenses were offsetting factors.

CFO Christian Schulz said: "We had a strong start to the year and have again improved on our growth of the first quarter. With an operating return on sales of 7.9% for the first half of 2019, we are clearly ahead of the same period last year. Looking ahead to the rest of the year, despite continued worsening economic indicators, we remain confident and reaffirm our targets set for the year. And furthermore, we are fully focused on the launch of the new truck generation at MAN."

During the first half of 2019, MAN Truck & Bus recorded unit sales of 54,028 vehicles (+10%). Sales revenue rose by around 6% to EUR5.5bn. At EUR253m, operating profit in the first half of 2019 was down from the prior-year figure (previous year: EUR285m), which is reflected in an operating return on sales of 4.6% (previous year: 5.5%). The operating profit for the first half of 2018 included earnings of EUR19m from the transfer of the RIO brand to Traton SE.

At 51,524 trucks and buses, Scania delivered more vehicles in the first half of 2019 than in the same period last year (+10%). Sales revenue of the Scania Vehicles & Services operational unit rose by around 13% to EUR7.1bn. As a result of this strong volume growth, operating profit increased by around 34% to EUR828m during the reporting period. This includes a positive currency effect of EUR57m.

VWCO deliveries increased by just over 18% to 20,384 units, with brand sales revenue of EUR860m (EUR674m). VWCO recorded operating profit of EUR18m (EUR13m), which includes the effect of the reversal of a restructuring provision of EUR13m. Operating return on sales was 2.1% (2.0%).

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