TRATON (8TRA) CMD 2024 summary

Strategic Direction and Transformation

• Transitioning from a collection of brands to an integrated group, focusing on collaboration, modularization, and maintaining brand differentiation, supported by a cross-brand R&D organization of over 10,000 engineers.

• Execution of the 2030 strategy remains the focus, with no new strategy launch, emphasizing delivery on previous commitments and execution towards set targets.

• Responsible behavior, decarbonization, circularity, and human rights are prioritized across all brands.

• Four growth levers: North America expansion, China integration, services & solutions, and Financial Services ramp-up.

• Commitment to internationalization, especially in Asia and Latin America, leveraging local production and partnerships.

Financial Guidance and Targets

• Revenue growth targeted at 20%-40% by 2029, with a return on sales ambition of 9%-11% and a goal to reach net debt zero by 2027 or 2029.

• Dividend policy maintained at a 30%-40% payout ratio, with a focus on deleveraging and improving credit rating.

• Brand-specific RoS targets: Scania ~12-15%, MAN ~9%, International ~11%, Volkswagen Truck & Bus ~10%.

• TRATON Financial Services targets a 16% pre-tax return on equity and >10% CAGR (2024-2029), with total assets to significantly increase by 2029.

• CapEx will peak in the near term due to investments in the modular system, BEV journey, and China plant, with €4 billion allocated to R&D and CapEx for the modular system over five years.

Brand and Business Developments

• MAN achieved 8.2% adjusted RoS in H1 2024, expanded eTruck and eBus portfolio, and increased connected vehicles to over 400,000.

• Volkswagen Truck & Bus exceeded its 8% RoS target, expanded e-mobility in Latin America, and aims for 25,000 long-term unit sales.

• Scania doubled profits over six years, leads in service absorption, and targets 12-15% RoS, with strong BEV and service growth.

• International increased US/Canada market share, delivered S13 powertrain, and targets ~11% RoS with a focus on digital and service-led transformation.

• Financial Services expanded to 67 countries, integrated multi-brand offerings, and supports BEV transition and new business models.