Industry News

Traton on track to acquire Navistar

Holding company and owner of heavy vehicle and diesel engine manufacturers, Navistar International Corporation, has agreed to Traton’s takeover proposal.

The transaction is subject to regulatory approvals and the satisfaction of customary closing conditions and is expected to be completed mid 2021.

Navistar stockholders also voted in a recent annual meeting to approve other proposals including two non-binding proposals regarding executive compensation arrangements, the election of Navistar Directors and the ratification of Navistar’s independent registered public accounting firm.

Navistar will file the final vote results for the annual meeting with the US Securities and Exchange Commission on a form 8-K.

Navistar is a holding company with subsidiaries and affiliates that produce International commercial trucks, proprietary diesel engines and IC Bus school and commercial buses.

Despite the market slump caused by the COVID-19 pandemic, the Traton Group ended fiscal year 2020 with a preliminary adjusted operating result of €135 million or approx. $208.5 million (previous year: €1871 million or approx. $2.9 million) and recorded an improved order situation in the second half of the year.

The preliminary adjusted operating return on sales for 2020 was therefore at the top end of the corridor forecast at the end of October 2020 (between –1.0 per cent and 1.0 per cent). At approximately €650 million (approx. $1,004 million), the preliminary net cash flow in the Industrial Business segment was considerably better than expected.

In each of the six months of the second half of the year, Traton Group’s incoming orders were above the respective prior-year month, resulting in a 21 per cent year-on-year increase in incoming orders in the second half of the year. For the year as a whole, incoming orders were only 5.0 per cent lower than in the previous year, at 216,300 orders received. The decline in unit sales also slowed significantly in the second half of 2020. While unit sales were down 5 per cent in the period from July to December 2020, the number of MAN, Scania, and Volkswagen Caminhões e Ônibus (VWCO) brand vehicles sold in the year as a whole declined by 21 per cent to 190,200. The Traton Group’s preliminary sales revenue amounted to €22.6 billion or approx. $34.9 billion (previous year: €26.9 billion or approx. $41.5 billion), a year-on-year decline of 16 per cent.

“The pandemic has been a serious blow to the entire economy,” said Traton CEO, Matthias Gründler.

“We had to close our plants for several weeks and suffer the resulting decrease in unit sales. But through joint efforts we generated an adjusted operating profit even in the corona year. The recovery in the business in the second half of the year makes us optimistic for 2021.”

The truck and the bus market were both hit hard by the effects of the pandemic. Truck registrations in the important European market (EU 27+3 region), were down sharply on the previous year’s level, in the Brazilian market, truck registrations were down considerably year-on-year. In the second half of 2020, however, there was evidence of a noticeable recovery in all significant truck and bus markets of the Traton Group compared with the first half of 2020. The Traton Group’s truck sales decreased by 24 per cent to around 156,400 vehicles in the year as a whole; in addition, 17,600 units of the MAN TGE van were sold, whose unit sales improved by 19 per cent. The Group’s bus sales amounted to 16,200 vehicles, a decrease of 25 per cent.

Scania’s truck sales amounted to 66,900 vehicles, 27 per cent fewer than in the previous year. Bus sales at Scania fell by 33 per cent to around 5,200 vehicles in 2020. In total, Scania’s unit sales were down 28 per cent to 72,100 vehicles. At MAN, truck sales (including MAN TGE vans) declined by 22 per cent to 76,300 vehicles, while the number of buses sold went down by 28$ per cent to 5,300. In total, MAN’s unit sales decreased by 22 per cent, to 81,700 vehicles in 2020. VWCO’s total unit sales were down 12 per cent, at 37,000 vehicles. In the truck business, unit sales amounted to 31,200 vehicles, a decline of 11 per cent, while the bus business contracted by 13 per cent to 5,700 vehicles.

For alternatively powered commercial vehicles, the Traton Group recorded an increase of around 50 per cent in 2020. Overall, 10,100 electric-drive, hybrid-drive, or gas-powered vehicles were sold. Almost 6,000 gas-powered and 3,600 hybrid-drive vehicles were sold in 2020. In terms of electric drives, the MAN eTGE van played an important role. A total of 500 vehicles with electric drive trains were sold.

Production of the Traton brands has so far been stable, despite the effects of the significant increase in COVID-19 cases in Europe since late fall. The hygiene protocols have proved highly effective. In order to ensure that production continues, the Traton brands are in close consultation with their suppliers. Traton pursues a policy of actively monitoring its supply chains so that any potential gaps can be closed quickly.

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