Munich (Reuters) - Significant progress at MAN is making the commercial vehicle holding company Traton more confident.

The Volkswagen subsidiary explained on Wednesday that the cost-cutting measures and the restructuring of the bus division are paying off at the Munich-based truck manufacturer, which has been in crisis for a long time. In addition, the situation at the suppliers is easing. In the first nine months, MAN increased its adjusted operating return on sales to 7.1 (previous year: 1.0) percent. "We are certain that this is sustainable," said Traton CFO Michael Jackstein in a conference call. The MAN management still sees room for improvement. Traton CEO Christian Levin was less satisfied with the return on sales of 11.5 percent at the successful sister company Scania: "I'm not so happy about that. We could have done better."

However, the strong sales and profit growth in the first nine months is sufficient for the truck and bus group to raise its forecast for the year. The adjusted operating return on sales is expected to be between 7.5 and 8.5 percent this year. "We are aiming for the upper end of the range," emphasized Jackstein. Traton had previously expected 7.0 to 8.0 percent. In 2024, the Group could achieve its target of a nine percent return for the first time, said Levin. After the first three quarters of 2023, the return on sales was above the forecast at 8.6% (2022: 4.7%), while adjusted operating profit more than doubled to EUR 2.92 billion (previous year: EUR 1.35 billion).

The reasons for the improved figures were higher capacity utilization in production following an improvement in the supply of parts, greater economies of scale due to increased sales and price increases. In 2022, MAN production came to a standstill for six weeks. "The significant increase in prices for energy, raw materials and other supplier parts was offset by price measures," the statement said. From January to September, sales of trucks and buses rose by 15 percent to almost 250,000, while turnover even increased by 20 percent to 34.2 billion euros. For the year as a whole, however, the expectation remains that sales and turnover will each increase by five to 15 percent. That would be 320,000 to 350,000 vehicles and a turnover of 42.3 to 46.3 billion euros.

This is because the order situation is deteriorating - especially in Europe, which is hitting MAN harder than Scania. In Europe, the weak economy has unsettled customers, while in Brazil a new emissions regulation is dampening demand. However, CEO Levin speaks of a "normalization" of incoming orders after customers had ordered more than they needed for a long time due to delivery difficulties. The delivery time is still six months, said CFO Jackstein. At just under 190,000, orders at the end of September were a good quarter down on the previous year.

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