TRATON (8TRA) Pre-Close Call Presentation summary

Market situation and recent trading

• European truck market expected to decline 5–15% in 2025, with no trend reversal seen in Q3 after a Q2 slowdown in orders.

• North American market projected to drop 7.5–17.5% in 2025, with ongoing freight recession and tariff uncertainty; sharper decline anticipated in H2.

• South American market outlook mixed: Brazil faces high inventories and tight credit, while other countries show strong growth.

• Order intake continues to grow year-over-year, but no significant impact yet from German stimulus or European defense ramp-up.

Key topics and regulatory impacts

• US tariffs: Surcharges implemented to offset cost increases, but new tariffs, including Section 232, are expected to impact margins further in H2 2025.

• Section 232 introduces a 25% tariff on heavy trucks made outside the US from October 2025; financial impact remains uncertain.

• China production facility set to open, targeting up to 1,000 units in 2025 and 10,000 in 2026, with significant investment expensed this year.

• New management reporting will reallocate R&D costs by brand, slightly benefiting Scania's margin at the expense of MAN and International.

Brand developments

• Scania and MAN margins pressured by lower volumes, strong SEK, and China project expenses; capacity adjustments underway but not fully realized.

• MAN's Q3 margin hit by lower fixed cost absorption and weak European market, but bus segment is performing well.

• International faces challenging H2 with negative tariff impacts and worsening Brazilian market; production has been reduced.