Traton Reports Operating Profit Slips, Revenue Jumps

Traton HQ
Traton Group

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Traton Group reported operating profit fell 5% and revenue rose 32% in the nine-month period ending Sept. 30 compared with a year earlier, and noted a challenging environment remains.

“It remains impossible to predict the effects of the continuing supply chain bottlenecks, possible energy shortages, and the further course of the war in Ukraine with sufficient certainty,” the company commented in a release.

The Munich-based company, which reports in euros, had the equivalent operating profit of $628.8 million compared with $661.8 million in the 2021 period. (Per-share data were not reported.)

Revenue climbed to $29.4 billion compared with $22.9 a year earlier.

Traton reported significant positive effects from its price and product mix as well as the continued strong growth in the service business, which made a contribution to the company’s success with a share of 22% of total revenue.

Moreover, Traton reported it is reaping the rewards of its strategy to expand its global footprint by entering the North American market with Navistar, its U.S. subsidiary, and its International brand of trucks.

International has a 12.5% year-to-date market share of the U.S. new Class 8 retail market, according to Wards Intelligence.

It sold 217,143 vehicles compared with 195,422 in the 2021 period — of which 181,717 were trucks, a 9% increase.

Financial services revenue increased 37% year-over-year to $963.3 million.

Orders in the period were 256,191 compared with 268,317 a year earlier, a 5% decline.

Of those, truck orders fell 9% to 210,323 compared with 230,531 in the 2021 period.

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Due to high order backlogs accompanied by long delivery times caused by limited components availability, MAN Truck & Bus, Navistar and especially Scania were highly restrictive in their acceptance of truck orders, the company noted. That approach also aimed to ensure that the company takes adequate measures to account for the continued increase in costs, especially for raw materials, energy, bought-in components from outside companies, and logistics services.

“Our current lead times for orders are reaching up to a year,” Traton CEO Christian Levin said in a release. “Because our order backlog is so high, we have become restrictive in our order acceptance. At the same time, customer demand remains strong as their fleets get older and transportation capacity continues to be sought after. Right now, our customers are even placing orders for 12 months down the line.”

He said Traton was making great strides when it comes to modularization and the exchange of state-of-the-art technology between its brands.

Navistar launched the CBE, the groupwide internal combustion powertrain, in August. Scania already uses the 13-liter engine, and MAN will bring it to market in 2024.

“The conversations I had at the IAA Transportation 2022 are also making me optimistic,” Levin said. “Customers showed a lot of interest in the new battery-electric trucks that Scania and MAN presented in Hanover. You can tell that from our order book. Our customers ordered well over 1,600 electric vehicles in the first nine months. And their interest will keep on growing once the development of charging infrastructure gains momentum.”

Traton’s brands include Scania, MAN, Volkswagen Truck & Bus, Navistar and RIO.