FULLTEXT DEL 3 AV 6
Årsredovisning 2023
longer be provided for certain sites. By contrast, a growing number of additions to prop-
erty, plant, and equipment related to the production of battery electric vehicles. The
following table contains a breakdown of taxonomy-aligned capital expenditure:
€ million 2023 2022
Attributable to intangible assets 197 205
Attributable to property, plant, and equipment 221 148
Attributable to assets leased out 87 127
Taxonomy-aligned capital expenditure in the reporting period 505 478
Additions to assets leased out included in capital expenditure represent a considerable
share of total capital expenditure as defined by the EU Taxonomy for the TRATON GROUP.
They mainly contain vehicles sold under a buyback agreement that continue to be
accounted for by the TRATON GROUP under a lease, and therefore only provide limited
information about the extent to which TRATON is investing in electrification. If capitalized
research and development costs relating to BEVs contained in intangible assets were to
be considered in isolation from total capitalized research and development costs, the
share of taxonomy-aligned capital expenditure would be significantly higher.
In 2022, Scania had issued a green bond totaling SEK 3.0 billion to finance investments
in research and development of battery electric vehicles. In the year under review,
€91 million of this was used to finance taxonomy-aligned research and development
activities, of which €46 million was attributable to taxonomy-aligned capital expenditure
and €44 million to taxonomy-aligned operating expenditure. The used bond proceeds
were set in relation to total taxonomy-aligned research and development costs for the
fiscal year in order to allocate them between capital and operating expenditure. Taking
into account the portion of the bond proceeds attributable to taxonomy-aligned capital
expenditure, the adjusted share of taxonomy-aligned capital expenditure in relation to
the total capital expenditure as defined by the EU Taxonomy amounted to 10% in the year
under review.
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4.3 Operating expenditure
Operating expenditure
Substantial
contribution to climate
change mitigation
Compliance
with DNSH
criteria
Compliance
with
minimum
safeguards
Taxonomy-aligned
operating expenditure
2023 € million %1 € million %1 Y/N Y/N € million %1
A. Taxonomy-eligible activities
3.3 Manufacture of low-carbon technologies for transport 1,623 95% 260 15% Y/N Y 236 14%
B. Taxonomy-non-eligible activities 85 5%
Total (A+B) 1,708
1 The per centage amount shown relates to the total operating expenditure as defined by the EU Taxonomy.
Operating expenditure is determined on the basis of noncapitalized research and devel-
opment costs as reported in Note “10. Functional expenses ― Cost of sales” to the
Consolidated Financial Statements as of December 31, 2023. These are calculated by
subtracting capitalized development costs from primary R&D costs. The calculation of
the denominator of the KPI includes the following:
– Maint
enance expenses for owned or leased real estate and other assets
– Expenses attributable to short-term leases (up to twelve months) and not recognized
as right-of-use assets in the balance sheet
The TRATON GROUP’s total operating expenditure as defined by the EU Taxonomy
amounted to €1.7 billion in the year under review.
Economic activity 3.3 accounted for €1.6 billion of this total, or 95% of the TRATON GROUP’s
operating expenditure, which was classified as taxonomy-eligible. In the same way as
capital expenditure, only operating expenditure incurred in direct connection with
taxonomy-eligible economic activities was included here. Operating expenditure related
to taxonomy-non-eligible economic activities, such as the business with engines, power-
trains, and parts deliveries, has therefore not been included in the numerator.
Taking into account the technical screening criteria and the minimum safeguards,
taxonomy-aligned operating expenditure amounted to €236 million, or 14% of the TRATON
GROUP’s operating expenditure in 2023. Where possible, taxonomy-eligible operating
expenditure was allocated directly to BEVs. Operating expenditure that could not be
allocated directly was taken into account ratably using brand-specific allocation keys.
The same allocation keys were used as for capital expenditure. Taking into account the
portion of the bond proceeds attributable to taxonomy-aligned operating expenditure,
the adjusted share of taxonomy-aligned operating expenditure in relation to the total
operating expenditure as defined by the EU Taxonomy amounted to 11% in 2023.
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The change in taxonomy-aligned operating expenditure is due in particular to the fact
that evidence of the DNSH criterion for pollution prevention and control could no longer
be provided for certain sites. By contrast, noncapitalized research and development costs
were increasingly attributable to battery electric vehicles. The following table contains
a breakdown of taxonomy-aligned operating expenditure:
€ million 2023 2022
Taxonomy-aligned operating expenditure from noncapitalized research
and development costs related to battery electric vehicles 1 221 239
Taxonomy-aligned operating expenditure from noncapitalized research
and development costs related to non-battery electric vehicles
– 1
Other taxonomy-aligned operating expenditure 15 11
Total 236 251
1 P revious year adjusted
4.4 Disclosures on the capex plan
Under the EU Taxonomy, taxonomy-aligned capital expenditure in the reporting period
is divided into a) capital expenditure relating to assets or processes already associated
with environmentally sustainable economic activities and b) capital expenditure that is
part of a plan to expand taxonomy-aligned economic activities, or to upgrade taxonomy-
eligible economic activities to taxonomy-aligned economic activities (capex plan). The
capex plan includes the aggregate capital and operating expenditure expected to be
incurred during the reporting period and within the next five years to expand taxonomy-
aligned economic activities or to upgrade taxonomy-eligible economic activities to
taxonomy-aligned economic activities.
In the course of allocation, all taxonomy-aligned additions to assets leased out (primarily
vehicle leases) were entirely taken into account as capital expenditure that is already
associated with environmentally sustainable economic activities, because the underlying
vehicles are already manufactured and taxonomy-aligned. These were therefore not
included in the capex plan. By contrast, taxonomy-aligned additions to intangible assets
and to property, plant, and equipment as well as noncapitalized research and develop -
ment costs were allocated to the capex plan on a pro rata basis with the help of
the
allocation
key. The allocation key compares the ratio of the production volume of
taxonomy-
aligned
vehicles for the reporting period in question with the average pro -
jected taxonomy-aligned production volume under the five-year plan. The proportion
over and above that is allocated to the capex plan. As a result, €402 million of the
taxonomy-aligned capital expenditure and €212 million of the taxonomy-aligned operat-
ing expenditure were required to be allocated to the capex plan in the reporting period.
The total capital expenditure of the capex plan that was incurred in the reporting period
and is expected to be incurred under the five-year plan amounts to €6.7 billion.
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4.5 Table overview according to the EU Taxonomy
TURNOVER
Fiscal year 2023 1 Year Substantial contribution criteria
DNSH criteria
(“Does Not Significantly Harm”)
Economic activities (1) Code (2) Turnover (3) Proportion of turnover,
y
ear 2023 (4)
Climate change mitigation (5) Climate change adaptation (6) Water (7) Pollution (8) Circularity (9) Biodiversity (10) Climate change mitigation (11) Climate change adaptation (12) Water (13) Pollution (14) Circularity (15) Biodiversity (16) Minimum safeguards (17) Proportion of taxonomy-aligned
(A .1) or taxonomy-eligible (A.2)
tur
nover, year 2022 (18)
Category enabling
a
ctivity (19)
Category transitional
a
ctivity (20)
€ million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
3.3 Manufacture of low-carbon
technologies for transport CCM 3.3 439 1% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y/N Y Y Y 1% E –
Turnover of environmentally sustainable
activities (taxonomy-aligned) (A.1) 439 1% 1% –% –% –% –% –% Y Y Y Y/N Y Y Y 1% – –
of which enabling activities 439 1% 1% –% –% –% –% –% Y Y Y Y/N Y Y Y 1% E –
of which transitional activities – –% –% N N N N N N N –% – –
A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
3.3 Manufacture of low-carbon
technologies for transport CCM 3.3 43,646 93% EL N/EL N/EL N/EL N/EL N/EL 93% – –
Turnover of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2) 43,646 93% 93% –% –% –% –% –% 93% – –
A. Turnover of taxonomy-eligible
activities (A.1 + A.2) 44,085 94% 94% –% –% –% –% –% 94% –
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of taxonomy-non-eligible activities 2,787 6%
Total 46,872 100%
1 Abbr eviations used in the table: CCM: climate change mitigation; Y: yes; N: no; N/EL: not eligible; E: enabling activity; T: transitional activity; EL: eligible.
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CAPITAL EXPENDITURE
Fiscal year 2023 Year Substantial contribution criteria
DNSH criteria
(“Does Not Significantly Harm”)
Economic activities (1) Code (2) Capex (3) Proportion of capex,
y
ear 2023 (4)
Climate change mitigation (5) Climate change adaptation (6) Water (7) Pollution (8) Circularity (9) Biodiversity (10) Climate change mitigation (11) Climate change adaptation (12) Water (13) Pollution (14) Circularity (15) Biodiversity (16) Minimum safeguards (17) Proportion of taxonomy-aligned
(A .1) or taxonomy-eligible (A.2)
cape
x, year 2022 (18)
Category enabling
a
ctivity (19)
Category transitional
a
ctivity (20)
€ million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
3.3 Manufacture of low-carbon
technologies for transport CCM 3.3 505 11% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y/N Y Y Y 12% E –
Capex of environmentally sustainable
activities (taxonomy-aligned) (A.1) 505 11% 11% –% –% –% –% –% Y Y Y Y/N Y Y Y 12% – –
of which enabling activities 505 11% 11% –% –% –% –% –% Y Y Y Y/N Y Y Y 12% E –
of which transitional activities – –% –% N N N N N N N –% – –
A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
3.3 Manufacture of low-carbon
technologies for transport CCM 3.3 3,803 86% EL N/EL N/EL N/EL N/EL N/EL 85% – –
Capex of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2) 3,803 86% 86% –% –% –% –% –% 85% – –
A. Capex of taxonomy-eligible
activities (A.1 + A.2) 4,308 98% 98% –% –% –% –% –% 97% –
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of taxonomy-non-eligible activities 106 2%
Total 4,414 100%
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OPERATING EXPENDITURE
Fiscal year 2023 Year Substantial contribution criteria
DNSH criteria
(“Does Not Significantly Harm”)
Economic activities (1) Code (2) Opex (3) Proportion of opex,
y
ear 2023 (4)
Climate change mitigation (5) Climate change adaptation (6) Water (7) Pollution (8) Circularity (9) Biodiversity (10) Climate change mitigation (11) Climate change adaptation (12) Water (13) Pollution (14) Circularity (15) Biodiversity (16) Minimum safeguards (17) Proportion of taxonomy-aligned
(A .1) or taxonomy-eligible (A.2)
ope
x, year 2022 (18)
1
Category enabling
a
ctivity (19)
Category transitional
a
ctivity (20)
€ million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
3.3 Manufacture of low-carbon
technologies for transport CCM 3.3 236 14% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y/N Y Y Y 17% E –
Opex of environmentally sustainable
activities (taxonomy-aligned) (A.1) 236 14% 14% –% –% –% –% –% Y Y Y Y/N Y Y Y 17% – –
of which enabling activities 236 14% 14% –% –% –% –% –% Y Y Y Y/N Y Y Y 17% E –
of which transitional activities – –% –% N N N N N N N –% – –
A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL – –
3.3 Manufacture of low-carbon
technologies for transport CCM 3.3 1,387 81% EL N/EL N/EL N/EL N/EL N/EL 78% – –
Opex of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2) 1,387 81% 81% –% –% –% –% –% 78% – –
A. Opex of taxonomy-eligible
activities (A.1 + A.2) 1,623 95% 95% –% –% –% –% –% 95% –
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex of taxonomy-non-eligible activities 85 5%
Total 1,708 100%
1 P revious year adjusted
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Supplemental Information on Fiscal Year 2023
1. Corporate Governance Statement 1
Corporate governance at TRATON forms the framework for the management and super-
vision of the Company and the Group. Good corporate governance lays the foundations
for responsible leadership and control of our Company and for successful business per-
formance in the long term. At the same time, good corporate governance fosters the
confidence that the financial markets, our investors, customers, business partners, and
employees have in our Company, the Group, and in the work we do.
Our system of corporate governance is determined by applicable laws, our Articles of
Association, internal regulations and guidelines, as well as by national and international
standards of good corporate governance. The German Corporate Governance Code (the
Code) provides recommendations and suggestions for responsible and transparent cor-
porate governance at TRATON in accordance with recognized standards. The contents
of the Corporate Governance Statement required by sections 289f and 315d of the
Handels gesetzbuch (HGB — German Commercial Code) and the recommendations of
the Code are presented in the following.
I. Corporate Governance at TRATON
Both TRATON’s Executive Board and its Supervisory Board have addressed the corporate
governance system and compliance with the recommendations and suggestions
c
ontained in the Code in detail. They are aware that good and transparent corporate
governance that complies with both national and international standards is of central
importance for ensuring responsible management with a long-term focus.
Declaration of Compliance
The Executive Board and Supervisory Board of TRATON SE issued their annual Declaration
of Compliance in December 2023 as follows:
“The Executive Board and Supervisory Board of
TRATON SE declare that the recommen-
dations of the Government Commission on the German Corporate Governance Code as
amended April 28, 2022 (“the Code”), published by the German Federal Ministry of Justice
in the official section of the Bundesanzeiger (the Federal Gazette) on June 27, 2022, were
complied with in the period since the publication of the last regular Declaration of Com-
pliance respectively since the update of the Declaration of Compliance in March 2023
1 The C orporate Governance Statement in accordance with sections 289f and 315d of the Handelsgesetzbuch
(HGB
—
Ger
man Commercial Code) forms part of the combined management report and is not included in
the audit.
and continue to be complied with, except for the recommendations set out below, for
the reasons and periods indicated below:
1.
Recommendation A.3 (Sustainability-related objectives in the risk management and
internal control system) is not fulfilled to the extent that TRATON already has risk
management and internal control systems in place that also take into account selected
sustainability-related objectives. However, given the scope and dynamic nature of
this issue, TRATON has initiated a project that aims to address sustainability aspects
in risk management and internal control systems even more comprehensively in the
future. A departure from recommendation A.3 is therefore being declared as a pre -
cautionary measure until this project has been implemented.
2.
Pur
suant to recommendation B.5, an age limit is to be specified for members of the
Executive Board and disclosed in the Corporate Governance Statement. This was
implemented. In March 2023, the Supervisory Board reappointed Mr. Antonio Roberto
Cortes and thus in this exceptional case exceeded the specified age limit. The Super-
visory Board, however, considers the reappointment of Mr. Cortes to be in the best
interest of the Company. In particular, Mr. Cortes has lead responsibility for the South
American market, which faces significant challenges over the next three years. The
reappointment of Mr. Cortes ensures that the strategy for South America designed
by him can be efficiently and effectively implemented. The Supervisory Board adheres
to the age limit determined for the Executive Board in all other respects. However, it
cannot be ruled out that legal commentators would regard the Company as having
deviated from recommendation B.5 if it had overridden a specific applicable age limit
only once. As a precautionary measure, such a departure is therefore declared.
3.
The recommendation in C.5 (Upper limit of offices for Board members) is not fulfilled
to the extent that in addition to his seat on the Supervisory Board of TRATON SE, the
Chairman of the Supervisory Board discharges one further mandate as Chairman of
the Supervisory Board of VOLKSWAGEN AG, a listed company, as well as having seats
on the Supervisory Board of Dr. Ing. h.c. F. Porsche Aktiengesellschaft, likewise a listed
company, and Bertelsmann SE & Co. KGaA, and is also Chairman of the Board of Man-
agement of Porsche Automobil Holding SE. VOLKSWAGEN AG, Dr. Ing. h.c. F. Porsche
Aktiengesellschaft and TRATON SE do not form a group with Porsche Automobil
Holding SE within the meaning of the German Stock Corporation Act. Nonetheless,
we are of the opinion that the Chairman of the Supervisory Board has sufficient time
available to discharge his mandates.
Supplemental Information
on Fiscal Year 2023 1. Corporate Governance Statement
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4. W ith regard to the recommendation in C.13 (Disclosure in the event of election pro -
posals), the guidelines in the Code are vague and the definitions unclear. A departure
from the Code is therefore being declared as a precautionary measure. Notwithstand-
ing this, the Supervisory Board will make every effort to comply with the requirements
of the recommendation in C.13.
5.
The r
ecommendation in G.13 sentence 1 (Severance cap) is not fulfilled. According to
recommendation G.13 sentence 1, payments made to a member of the Executive Board
due to early termination of their Board activity shall not exceed twice the annual
remuneration (severance cap) and shall not constitute remuneration for more than
the remaining term of the employment contract. It is not clear to the Executive Board
and the Supervisory Board of TRATON SE whether recommendation G.13 sentence 1
only refers to severance payments or also to payments made to a member who has
left the Executive Board that result from a continuing employment contract. In July
2020, Mr. Joachim Drees, among others, left the Executive Board by mutual consent.
The employment contract between Mr. Drees and TRATON SE shall, in agreement with
Mr. Drees, continue following his departure and remain in force — subjec t to earlier
termination by Mr. Drees — f or more than two additional years following the departure
of Mr. Drees.
6.
Mr
. Drees shall accordingly not receive a severance payment but may, under certain
circumstances, receive his contractual remuneration for a period of more than two
years following his departure. This remuneration was also paid out in the period since
the submission of the last Declaration of Compliance. In light of the above, the Exec-
utive Board and Supervisory Board of TRATON SE declare a departure from recom -
mendation G.13 sentence 1 as a precautionary measure.”
The Declaration of Compliance is available on the Company’s website at https://ir.traton.
com/en/corporate-governance.
Swedish Corporate Governance Code
Furthermore, TRATON has published a statement regarding departures by TRATON’s
corporate governance system from the Swedish Corporate Governance Code. It is also
available on the Company’s website at https://ir.traton.com/en/corporate-governance.
The Swedish Corporate Governance Code states that companies that are listed in Sweden
can decide whether to comply with the Swedish code or with the relevant local regula-
tions in the countries where those companies are headquartered. TRATON has decided
to comply with the German Corporate Governance Code and not with the Swedish Cor-
porate Governance Code.
Annual General Meeting
At the Annual General Meeting of a European stock corporation (Societas Europaea),
shareholders exercise their rights in relation to the corporation’s affairs. These include
the shareholders exercising their voting rights, being provided with information, and
entering into a dialogue with the Executive and Supervisory Boards.
TRATON SE’s Annual General Meeting extensively safeguards these shareholder rights.
The notice convening the Annual General Meeting is published in the Bundesanzeiger
(the Federal Gazette) in accordance with the statutory periods and is available as of this
date on TRATON SE’s website along with all reports and proposed resolutions for the
Annual General Meeting.
To make it easier for shareholders to exercise their rights and proxy voting options, they
can authorize a
TRATON employee as a proxy holder in addition to the options to autho-
rize a credit institution, shareholder associations, or other persons.
Procedures of the Executive and Supervisory Boards as well as composition
and procedures of their committees
TRATON SE has a two-tier structure comprising an Executive Board and a Supervisory
Board. Both boards work closely together on behalf of the Company.
The Company’s Executive Board currently has six members. The Executive Board does
not have any committees. For information on its composition, refer to Note “47. Members
of the Executive Board and their appointments” to the Consolidated Financial State -
ments.
The Executive Board is itself responsible for discharging management and operational
functions. Its responsibility extends in particular to the TRATON GROUP’s strategic focus,
which it coordinates with the Supervisory Board. It is also responsible for preparation of
the annual financial statements and interim statements, and ensures compliance with
statutory provisions, official requirements, and internal policies.
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The various tasks of the Executive Board are allocated to the individual Executive Board
functions in accordance with the list of responsibilities. The full Executive Board addresses
all key decisions and measures; the Executive Board’s Rules of Procedure define the
decisions and measures that require the approval of the full Executive Board.
The Executive Board reports to the Supervisory Board regularly, promptly, and compre-
hensively in both written and oral form on all issues of relevance for the Company with
regard to strategy, planning, and the position of the Company, the business performance,
the risk position, risk management, and compliance. The Supervisory Board monitors
how the Executive Board manages the Company. The Supervisory Board is directly
involved in decisions of fundamental importance. The Executive Board also ensures open
and transparent corporate communications.
In line with the Supervisory Board’s age limit stipulation for members of the Executive
Board, appointments of members of the Executive Board should, as a rule, end once
those members have reached the age of 65. An extension by a maximum of three more
years is possible.
In accordance with the requirements of the Aktiengesetz (AktG — German Stock Corpo-
ration Act) and recommendation E.3 of the Code, members of the Executive Board may
undertake secondary activities only with the Supervisory Board’s consent.
No conflicts of interest were reported by members of either the Executive Board or the
Supervisory Board in the year under review.
The Supervisory Board has an oversight and advisory role. Certain important transactions
laid down by law, the Articles of Association, and the Executive Board’s Rules of Procedure
require the Supervisory Board’s approval. For further information on the duties performed
by the Supervisory Board and its cooperation with the Executive Board, refer to the
“Report of the Supervisory Board.”
In line with the Articles of Association, the Company’s Supervisory Board comprises
20 members, with equal numbers of shareholder and employee representatives. The
Company’s Supervisory Board once again has 20 members since the court appointment
of Ms. Ödgärd Andersson as a member of the Supervisory Board on April 4, 2023, and
her election by the Annual General Meeting.
TRATON SE’s Supervisory Board aims, in light of the purpose and size of the Company
and the proportion of its international business activities, to take the following factors
into account for its composition:
– At least three members of the Supervisory Board should be persons who embody the
criterion of internationality to a particularly high degree.
– At least two Supervisory Board positions on the shareholder side are reserved for
persons with no potential conflicts of interest, and who are independent within the
meaning of the Code.
– Any person that sits on a governing body or is involved in an advisory capacity at one
of the Company’s major competitors should not be a member of the Supervisory
Board.
– In addition, proposals for election should not, as a rule, include any persons who have
reached the age of 75 at the time of the election or who have been a member of the
Company’s Supervisory Board for more than 15 years.
All aims have been fulfilled or taken into consideration, respectively.
The shareholder side considers Ms. Andersson, Ms. Macpherson, Dr. Kirchmann, Dr. Schmid,
and Mr. Witter to be independent members of the Supervisory Board in accordance with
the Code.
Furthermore, the Supervisory Board of TRATON SE should collectively possess the fol -
lowing skills and expertise:
– K
nowledge and experience of the Company itself
– L
eadership or oversight experience in other medium-sized or large companies
– Experience in industries that are of importance to the TRATON GROUP, such as the
engineering, automotive, and information technology sectors
– K
nowledge of capital markets
– Human
resources expertise (particularly the search for and selection of members of
the Executive Board, and the succession process) and knowledge of incentive and
remuneration systems for the Executive Board
– E
xpertise in the areas of financial reporting/auditing
– E
xpertise in the areas of law and compliance
– E
xpertise in the sustainability issues important for the Company
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The current implementation status of the skills and expertise profile is shown in the
following qualification matrix:
Members of the
Supervisory Board
Skills and expertise
profile requirements Pötsch Lyngsie AnderssonBechstädtCarlquistCavallo Dr. DössKerner Kilian Dr. KirchmannDr. Kuhn-PiëchLorentzonLuthin MacphersonDr. Dr. PorscheSchmid Schnur SedlmaierWanschWitter
Knowledge and experience of the
Company itself
X X X X X X X X X X X X X
Leadership or oversight experience in
other medium-sized or large companies
X X X X X X X X X X X X X X X X X X
Experience in industries that are of
importance to the TRATON GROUP,
such as the engineering, automotive,
and information technology sectors
X X X X X X X X X X
Knowledge of capital markets X X X X X X X X X X
Human resources expertise (particularly
the search for and selection of members
of the Executive Board, and the succession
process) and knowledge of incentive and
remuneration systems for the Executive
Board
X X X X X X X X X X
Expertise in the areas of financial
reporting/auditing
X X X X X X X
Expertise in the areas of law and compliance X X X X X X X X X X
Expertise in sustainability issues important
for the Company
X X X X X X X X X X X X X
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In line with the requirements of the AktG and the recommendation of the Code,
Mr. Witter (Chairman of the Audit Committee) and Mr. Bechstädt (Deputy Chairman of
the Audit Committee) in particular have expertise in the areas of financial reporting
(including internal control and risk management systems) and auditing. Mr. Witter has
extensive experience in the areas of accounting and auditing, including sustainability
reporting and audits, in particular by virtue of his many years of experience as Chief
Financial Officer of various Volkswagen Group companies and from his time as Chief
Financial Officer of Volkswagen AG (2015 to 2021). Mr. Bechstädt has extensive experience
in the areas of accounting and auditing due to his many years of work in the Group
Finance department of Volkswagen AG, and as a member of the Examination Committee
for Accountants of the Hannover Chamber of Commerce and Industry. This also includes
experience in sustainability reporting/auditing. Of the other members of the Audit Com-
mittee, Ms. Schnur also has experience in these areas due to her membership of audit
committees.
All aims have been fulfilled or taken into consideration, respectively. The resumes of the
members of the Supervisory Board, updated each year, can be viewed at https://traton.
com/en/company/Supervisory-Board.html.
In accordance with section 17 (2) of the SE-Ausführungsgesetz (SEAG — German SE Imple-
mentation Act), women and men must each account for at least 30% of the Supervisory
Board of TRATON SE. As of December 31, 2023, 30% of the members of the Supervisory
Board of TRATON SE on the shareholder side were women: Ödgärd Andersson, Dr. Julia
Kuhn-Piëch, and Nina Macpherson, and 70% were men. On the employee side, 40%
women were represented on the Supervisory Board: Daniela Cavallo, Mari Carlquist, Lisa
Lorentzon, and Karina Schnur, and 60% men on this date. The statutory quotas are there-
fore met by both the shareholder and the employee representatives on the Supervisory
Board.
The Supervisory Board has established two committees — the P residing Committee and
the Audit Committee — on which shareholders and employees are represented equally,
as well as the Nomination Committee, which consists solely of shareholder representa-
tives.
The Presiding Committee prepares the meetings of the Supervisory Board and the res-
olutions of the Supervisory Board, including the resolutions of the Supervisory Board on
Executive Board matters, supports and advises the Chairman of the Supervisory Board,
and, together with the Chairman of the Executive Board, prepares the long-term succes-
sion planning for the Executive Board. In addition, among other things the Presiding
Committee is assigned responsibility for deciding on transactions or measures requiring
approval up to a certain value limit, in place of the Supervisory Board.
The Audit Committee established by the Supervisory Board deals in particular with pre-
paring the decision by the Supervisory Board regarding the adoption of the annual finan-
cial statements and the approval of the consolidated financial statements, monitoring
and the integrity of the financial reporting process, monitoring financial reporting, the
effectiveness of the internal control system, of the risk management system, and of the
internal audit system, and with financial statements audit and compliance. Furthermore,
the Audit Committee submits a reasoned recommendation for the choice of external
auditor to the Supervisory Board, obtains a statement regarding the auditor’s indepen-
dence, deals with the additional services provided by the auditor, drafts the resolution
on issuing the audit engagement letter, and also deals with determining the areas of
emphasis of the audit and agreeing the auditor’s fees.
The Nomination Committee identifies candidates for Supervisory Board positions and
recommends suitable candidates to the Supervisory Board for the latter’s proposals for
election to the Annual General Meeting.
The members of the Presiding Committee are (as of December 31, 2023):
– Hans Diet
er Pötsch (Chairman)
– Mic
hael Lyngsie (Deputy Chairman)
– Daniela C
avallo (until March 20, 2023)
– Jür
gen Kerner
– Gunnar Kilian
– Dr
. Dr. Christian Porsche
– K
arina Schnur (since March 21, 2023)
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The members of the Audit Committee are (as of December 31, 2023):
– F
rank Witter (Chairman)
– T
orsten Bechstädt (Deputy Chairman)
– Dr
. Julia Kuhn-Piëch
– Lisa L
orentzon
– Nina Macpher
son
– K
arina Schnur
The members of the Nomination Committee are (as of December 31, 2023):
– Hans Diet
er Pötsch
– Gunnar Kilian
– Dr
. Dr. Christian Porsche
Further details about the members of the Executive and Supervisory Boards as well as
of the work of the committees can be obtained from the “Report of the Supervisory
Board” and from Notes “48. Members of the Supervisory Board and their appoint -
ments” and “49. Supervisory Board committees” to the Consolidated Financial State -
ments.
Self-assessment of the Supervisory Board
In line with recommendation D.12 of the Code, the Supervisory Board assesses, at regu-
lar intervals, how effectively it as a whole and its committees fulfill their tasks. As part of
the self-assessment, the members of the Supervisory Board receive in advance a detailed
questionnaire that enables them to submit their appraisal of the procedures of the Super-
visory Board and its committees, and make proposals for improvements. The results are
discussed in a following meeting of the Supervisory Board and, if necessary, in further
individual conversations. The results are also used to derive measures for improving the
work of the Supervisory Board. The most recent self-assessment of the Supervisory Board
took place in fiscal year 2023.
Long-term succession planning for the Executive Board
The Supervisory Board’s Presiding Committee works with the Chairman of the Executive
Board to ensure long-term succession planning for the Executive Board. In addition to
the statutory requirements, the requirements of the Code, and the Rules of Procedure
of the Supervisory Board, long-term succession planning considers the criteria laid down
in the diversity concept resolved by the Supervisory Board for the composition of the
Executive Board.
After additionally considering the specific qualification requirements, the Presiding
Committee prepares a requirements profile, if needed, on the basis of which it then
selects the most suitable candidates. After interviewing the candidates, it makes a pro -
posal to the Supervisory Board for resolution. If necessary, the Supervisory Board and
Presiding Committee are supported by external consultants when developing require -
ments profiles and selecting candidates.
Remuneration of the Executive Board and Supervisory Board
The current remuneration system in accordance with section 87a (1) and (2) sentence 1
of the AktG, the last resolution on remuneration in accordance with section 113 (3) of the
AktG, the remuneration report for the past fiscal year, and the audit opinion in accordance
with section 162 of the AktG can be found on our website at https://ir.traton.com/en/
corporate-governance.
Compliance/risk management
The Governance, Risk & Compliance (GRC) function is managed by the Head of GRC/Chief
Compliance Officer of the Group, who reports directly to the Chief Executive Officer of
TRATON SE. GRC is comprised by the Corporate GRC Office at TRATON SE and the decen-
tralized GRC functions at the brands. The Corporate GRC Office of TRATON SE and the
decentralized GRC functions are jointly responsible for compliance and risk management
throughout the entire TRATON GROUP.
The Corporate GRC Office plays a central control and support role in respect of the Group’s
risk management and compliance activities. This includes specifying GRC principles and
uniform minimum standards for the entire Group, as well as giving the brands the nec -
essary flexibility to implement tangible GRC measures, which fit with their respective
organizations and environments. On the one hand, the processes for whistleblowing and
internal investigations are strictly standardized, with a central Investigation Office in
place at TRATON SE. By contrast, GRC communication is primarily embedded at brand
level. The Corporate GRC Office also coordinates IT support systems and takes action to
monitor and continuously improve the Group’s GRC activities in terms of effectiveness
and efficiency.
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The Head of GRC/Chief Compliance Officer reports regularly, at least every quarter, to
the Executive Board of the TRATON GROUP on the Group’s risk exposure as well as on the
current situation and on the GRC function’s main activities. The Governance & Risk Board
(GRB) as well as the Compliance Board (CB) have also been set up at TRATON level. These
enable top-level executives from the entire Group to discuss relevant GRC issues regularly
and in detail.
The GRC functions at brand level are responsible for implementing the compliance man-
agement and risk management systems at each brand. Each brand maintains a GRC
organization, i.e., employees fully assigned to the GRC function. This organization is sup-
ported by a network of employees in the brands’ subsidiaries, who are responsible for
certain GRC activities, in particular risk reports, internal control systems, and compliance.
For a detailed description of TRATON’s risk management system as well as its risk and
opportunity position, refer to the “Report on opportunities and risks” contained in the
Combined Management Report.
The TRATON GROUP GRC functions’ (including the GRC functions within the brands) main
duties include:
– Supporting a risk management process that makes the Group’s key business risks
transparent and ensures a clear line of responsibility for risks and for implementing
risk-reducing measures
– Providing a system for monitoring the effectiveness of internal controls and for taking
the appropriate remedial action where necessary
– Providing and continuously improving a compliance program covering anti-corruption
activities, antitrust law, the prevention of money laundering, and respect for human
rights, based on a comprehensive compliance-related risk assessment
– C
oordinating policy management throughout the TRATON GROUP
– Developing policies for relevant GRC issues, such as how to manage gifts, hospitality,
and invitations to events, how to manage conflicts of interest, preventing money laun-
dering and terrorism financing, and implementing internal investigations
– Tool-based integrity checks for business partners. This relates primarily, albeit not
exclusively, to business partners with sales support functions.
– Providing various training courses to foster awareness and knowledge of GRC-relevant
topics
– A range of different communication activities to strengthen compliance and integrity
in accordance with each of the codes of conduct of the TRATON GROUP and the indi-
vidual brands
– Providing compliance-related advice to all employees at central and local levels (Com-
pliance Helpdesk)
– Providing a whistleblower system, including examining and investigating the tip-offs
received, so that any violations are identified, clarified, and remedied internally at an
early stage. Potential violations include violations that cause significant reputational
damage or have financial consequences, or violations of corporate values and human
rights. An investigation is only launched after a careful examination of the tip-off and
if there are concrete indications of a violation. The responsible departments are
informed so that they can address the issue appropriately and take the necessary
measures to minimize or stop the violations and/or risks.
Further explanations about selected GRC activities, especially in respect of human rights,
are contained in the corresponding section of the Nonfinancial Group Statement.
Transparency and communication
The https://ir.traton.com/en/ page provides shareholders with access to the Company’s
Articles of Association, consolidated financial statements for the TRATON GROUP, the
financial calendar with all the relevant dates, and information about upcoming events.
The Company’s ad hoc releases can also be accessed on TRATON SE’s website at https://
ir.traton.com/websites/traton/English/4000/financial-news.html immediately after
they have been published in compliance with the law.
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Notifications of voting rights pursuant to section 33ff. of the Wertpapierhandelsgesetz
(WpHG — Ger man Securities Trading Act) can be found on the same page, and disclosures
of directors’ dealings in accordance with Article 19 of the European Market Abuse Direc-
tive at https://ir.traton.com/en/corporate-governance. Information on the Executive
Board and Supervisory Board of TRATON SE is available on the Company’s website at
https://traton.com/en/company.html.
The above-mentioned information and documents are available in both German and
English.
Financial reporting
The year-end consolidated financial statements of the TRATON GROUP are prepared by
the Executive Board on the basis of the International Financial Reporting Standards
(IFRSs), while the single-entity financial statements of TRATON SE are prepared in accor-
dance with German GAAP. The Executive Board discusses the half-year financial report
with the Audit Committee prior to its publication.
The publication deadlines set out in recommendation F.2 of the Code are complied with.
II. Other corporate governance practices
TRATON has a Code of Conduct, which is the mandatory guideline on acting with integ-
rity at TRATON and applies equally to all employees — f rom the Executive Board and
managers down to each individual employee. The Code of Conduct focuses on integrity
and the responsibility that each individual has
—
r
esponsibility as a member of society,
as a business partner, and in the workplace. With the aid of practical examples, it also
explains how each individual can live up to this responsibility and behave with integrity,
especially in conflict situations.
Furthermore, TRATON also expects its suppliers and business partners as well as their
employees to act responsibly, comply with applicable laws everywhere and at all times,
and respect core ethical values. TRATON has therefore issued its own Code of Conduct
for Suppliers and Business Partners, which details minimum ethical standards to be met
by TRATON’s suppliers and business partners.
The Code of Conduct as well as the Code of Conduct for Suppliers and Business Partners
are available at https://traton.com/en/governance-risk-compliance/compliance-in -
tegrity-program.html.
Sustainability is an integral component of TRATON’s strategy and is a firmly established
concept within the TRATON GROUP brands. Our Group and our brands take sustainability
to mean understanding and proactively addressing global challenges and recognizing
the opportunities and risks of sustainable development. TRATON takes the expectations
of our customers, of politicians, and of society on board and provides specific answers to
the various challenges posed by sustainable mobility. Wherever we operate in the world,
our goal is to meet the highest standards and partner with companies that are leading
the way in terms of sustainability.
For more information on sustainability, refer to the Company’s website at https://traton.
com/en/sustainability.html.
III. Representation requirement and target for percentage of women
In accordance with section 16 (2) of the SE-Ausführungsgesetz (SEAG — German SE Imple-
mentation Act), TRATON SE’s Executive Board must include at least one woman and one
man. TRATON SE complied with this requirement in the year under review. The Executive
Board consisted of five men and one woman throughout the 2023 reporting period.
Pursuant to section 76 (4) of the AktG, the Executive Board of TRATON SE has likewise set
the following goals for females in the two management levels directly below the Exec -
utive Board in the period until December 31, 2023:
– 2
0% for females in the first management level below the Executive Board
– 3
0% for females in the second management level below the Executive Board
By the end of the December 31, 2023, deadline, this target for the proportion of women
at the first management level below the Executive Board had been exceeded at 33%. At
23%, the target was not met at the second management level below the Executive Board.
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The reasons for falling short of the target at the second management level were organi-
zational and personnel changes: as part of the implementation of Group Industrial Func-
tions, male managers were transferred from MAN Truck & Bus SE to TRATON SE. In addi-
tion, the changes in the areas of responsibility of some central functions in the course of
the TRATON GROUP’s transformation have led to a reassessment of the positions occupied
by predominantly male colleagues, with the result that they have moved up into man -
agement positions. At the same time, some female managers were seconded to our
brands as part of the increased exchange within the TRATON GROUP. One female man-
ager left the Company last year and a vacant management position could not be filled
until January 1, 2024. TRATON acknowledges the importance of diversity as a driver of
innovation and will therefore continue its efforts to foster diversity in management.
The Executive Board has defined the following targets for the proportion of women in
the two management levels below the Executive Board for the period from January 1,
2024, to December 31, 2028:
– 3
0% for females in the first management level below the Executive Board
– 3
0% for females in the second management level below the Executive Board
For the corresponding disclosures by TRATON SE subsidiaries, which are required by
law to set target percentages, refer to the MAN Truck & Bus SE website (https://www.
mantruckandbus.com/en/company/management.html).
IV. Disc losures on the diversity concept for the Executive Board
and the Supervisory Board
A diversity concept for the Executive and Supervisory Boards is to be devised in accor -
dance with section 289f (2) no. 6 of the Handelsgesetzbuch (HGB — German Commercial
Code). This concept is to factor in aspects like age, gender, educational or occupational
background.
The diversity concept for the Supervisory Board comprises the following elements:
– The defined go
als for the composition of the Supervisory Board
– The skills and e
xpertise profile for the Supervisory Board
– The gender quota of 3
0% for the composition of TRATON SE’s Supervisory Board that
is already imposed by law and must therefore be complied with in accordance with
section 17 (2) of the SEAG
The targets defined by the Supervisory Board for its composition and the skills and exper-
tise profile of the Supervisory Board also describe the concept with which the Supervisory
Board strives to achieve a diverse composition. The diversity concept aims to encourage
a good understanding of the organizational and business affairs of TRATON SE through
diversity. This diversity is intended to enable the members of the Supervisory Board to
constructively question the decisions of the Executive Board and to be open to innovative
ideas. All aims have been fulfilled or taken into consideration, respectively.
The proposals for the election of Supervisory Board members by the Annual General
Meeting comply with the statutory requirements and the standards laid down in the
diversity concept. In fiscal year 2023, the Nomination Committee and the Supervisory
Board took into account the diversity concept, the specific targets for the composition
of the Supervisory Board, and the skills and expertise profile, as amended. It should be
noted that the Supervisory Board’s proposals for election can only affect the composition
of the Supervisory Board in respect of the shareholder representatives.
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The Supervisory Board adopted the following diversity concept for the Executive Board:
– Appoint ments of members of the Executive Board should, as a rule, end when those
members reach the age of 65, although an extension by a maximum of three more
years is possible.
– Members of the Executive Board should have long-standing management experience
and contribute as much experience as possible from a range of different activities.
– The Executive Board should collectively have leadership experience in an international
context.
– The Executive Board should collectively possess long-standing experience in the fields
of machinery/vehicle manufacturing, finance, and HR management.
The diversity concept aims to encourage a good understanding of the organizational
and business affairs of TRATON SE through diversity. The Supervisory Board decides which
individual should be appointed to a specific Executive Board position in the interests of
the Company, taking all the circumstances of the individual case into consideration. By
extending the appointment of Mr. Antonio Roberto Cortes to the Executive Board, the
Supervisory Board has, exceptionally, exceeded the age limit defined for the Executive
Board. The reasons for this and the precautionary departure from recommendation B.5
of the Code are set out in section I. of the Declaration of Compliance. In all other respects,
all of the aforementioned criteria have been fulfilled or taken into consideration, respec-
tively.
2. Dependent Company Report
The Executive Board of TRATON SE prepared a report on relationships with affiliated
companies (Dependent Company Report) in accordance with section 312 of the Aktien-
gesetz (AktG — G erman Stock Corporation Act), which concluded with the following
declaration: “We declare that TRATON SE received appropriate consideration for every
legal transaction, or that any disadvantages have been compensated, and that it was not
disadvantaged as a result of taking any measures listed in this report on relationships
with affiliated companies in fiscal year 2023 in accordance with the circumstances known
to us at the time the legal transactions were conducted or the measures taken. There
were no measures we refrained from taking in the reporting period.”
3. T akeover-related disclosures in accordance with sections 289a (1)
and 315a (1) of the HGB
Composition of subscribed capital
Details of the composition of subscribed capital can be found in the notes to the Annual
and Consolidated Financial Statements in Note “28. Equity.”
Significant shareholdings in TRATON SE
TRATON SE’s largest single shareholder is Volkswagen Finance Luxemburg S.A., Strassen,
Luxembourg, a Volkswagen Group company, which holds 89.72% of the share capital.
Disclosures on indirect interests in the capital of TRATON SE that are over the threshold
of 10% of voting rights attributed in accordance with sections 34f of the Wertpapier -
handelsgesetz (WpHG — German Securities Trading Act) are explained in the overview
below:
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===== SIDA 124 =====
Porsche Piech Holding GmbH,
Salzburg, Austria
Dr. Hans-Michel Piëch Mag. Josef Ahorner – Dr. Wolfgang Porsche, born 05/10/1943;
– Dr. Dr. Christian Porsche, born 03/21/1974;
– Dipl.-Design. Stephanie Porsche-Schröder,
born 02/11/1978;
– Ferdinand Rudolf Wolfgang Porsche,
born 04/14/1993;
– Felix Alexander Porsche, born 02/15/1996;
– Gerhard Anton Porsche, born 06/05/1938;
– Dr. Ferdinand Oliver Porsche, born 03/13/1961;
– Mag. Mark Philipp Porsche, born 09/17/1977;
– Kai Alexander Porsche, born 12/14/1964;
– Dr. Geraldine Porsche, born 07/22/1980;
– Ing. Hans-Peter Porsche, born 10/29/1940;
– Peter Daniell Porsche, born 09/17/1973;
– Diana Porsche, born 03/03/1996
– Dr. Wolfgang Porsche, born 05/10/1943;
– Dr. Dr. Christian Porsche, born 03/21/1974;
– Dipl.-Design. Stephanie Porsche-Schröder,
born 02/11/1978;
– Ferdinand Rudolf Wolfgang Porsche,
born 04/14/1993;
– Felix Alexander Porsche, born 02/15/1996
Ferdinand Porsche Familien-Privatstiftung,
Salzburg, Austria
Familie WP Holding GmbH,
Salzburg, Austria
Ferdinand Porsche Familien-Holding GmbH, Salzburg, Austria
Porsche Gesellschaft m.b.H.,
Salzburg, Austria
Dr. Hans-Michel Piëch GmbH,
Vienna, Austria
Ahorner Holding GmbH,
Vienna, Austria
Ferdinand Alexander Porsche GmbH, Grünwald, Munich (district)
Porsche Gesellschaft mit
beschränkter Haftung,
Grünwald, Munich (district)
HMP Vermögensverwaltung GmbH,
Grünwald, Munich (district)
Ahorner GmbH,
Vienna, Austria
Familie Porsche Beteiligung GmbH, Grünwald, Munich (district)
Porsche Automobil Holding SE, Stuttgart
Volkswagen AG, Wolfsburg
Volkswagen Finance Luxemburg S.A., Strassen, Luxembourg
1
1 Dir ect shareholder of TRATON SE
TRATON SE has not been notified of, nor is it aware of, further existing direct or indirect
interests in the capital of the Company that exceed the relevant threshold of 10% or the
relevant thresholds of the WpHG. The free float was 10.28% as of December 31, 2023.
Restrictions on voting rights
Each TRATON share conveys one vote at the Annual General Meeting and is relevant for
determining the shareholders’ interest in the earnings of the Company. This does not
apply to treasury shares held by the Company, which do not convey any rights for the
Company. In cases of section 136 of the Aktiengesetz (AktG — German Stock Corporation
Act), voting rights from the affected shares are excluded by law.
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Statutory provisions and provisions of the Articles of Association
go
verning the appointment and dismissal of the Executive Board and
amendments to the Articles of Association
The appointment and dismissal of members of the Company’s Executive Board is gov -
erned by Articles 39 (2) and 46 of the SE Regulation in conjunction with sections 84 and
85 of the AktG and Article 8 of the Company’s Articles of Association. These state that
the Executive Board must consist of at least two persons. In other respects, the Supervi-
sory Board determines the number of members of the Executive Board. The members
of the Executive Board are appointed for a period of up to five years. If the Executive Board
consists of more than three persons, it must include at least one woman and at least one
man (section 16 (2) of the SE-Ausführungsgesetz (SEAG — German SE Implementation
Act)). Members of the Executive Board may be reappointed. The Supervisory Board is
entitled to revoke the appointment of a member of the Executive Board for cause (Arti-
cle 39 (2) of the SE Regulation, section 84 of the AktG).
Amendments to the Company’s Articles of Association are resolved by the Annual Gen-
eral Meeting and are governed by Article 59 of the SE Regulation, section 51 of the SEAG,
sections 179ff. of the AktG, and the Articles of Association. Unless otherwise required by
law, amendments to the Articles of Association require a majority of two-thirds of the
valid votes cast or, if at least half of the share capital is represented, a simple majority of
the valid votes cast (Article 59(1), (2) of the
SE Regulation in conjunction with section 51
of the SEAG, Article 21 (1) of the Articles of Association). If the law prescribes a capital
majority in addition to a majority of votes for resolutions of the Annual General Meeting,
a simple majority of the share capital represented at the time the resolution is adopted
is sufficient, to the extent permitted by law. The majority requirement set out in section
103 (1) sentence 2 of the AktG remains unaffected.
In accordance with Article 13 (4) of the Company’s Articles of Association, the Supervisory
Board may pass resolutions to amend the Articles of Association that alter only its word-
ing. Additionally, in accordance with Article 5 (3) of the Company’s Articles of Association,
the Supervisory Board is authorized to amend the wording of Article 5 of the Articles of
Association following the complete or partial implementation of the capital increase
from Authorized Capital 2023 or after the expiration of the authorization period, in line
with the scope of the capital increase.
Powers of the Executive Board, in particular to issue new shares and
repurchase shares
The powers of the Executive Board are governed by Article 39 of the SE Regulation in
conjunction with sections 77ff. of the AktG and Article 9 of the Articles of Association of
the Company. These provisions require the Executive Board to manage the Company
independently and to represent the Company both in court and otherwise.
In accordance with Article 5 (3) of the Articles of Association, the Executive Board is
authorized to increase the Company’s share capital on one or several occasions by a total
of up to €200,000,000 by issuing up to 200,000,000 no-par value bearer shares on a cash
and/or noncash basis on or before May 31, 2028, subject to the Supervisory Board’s
approval (Authorized Capital 2023). The dividend entitlement of new shares can be deter-
mined contrary to the provisions of section 60 (2) of the AktG. Shareholders must be
granted preemptive rights unless the Executive Board makes use of one of the following
authorizations to disapply preemptive rights, with the consent of the Supervisory Board.
The new shares may also be underwritten by a credit institution or an entity operating
pursuant to section 53 (1) sentence 1 of the Kreditwesengesetz (KWG — German Banking
Act) or section 53b (1) sentence 1 or (7) of the KWG (financial institution) to be designated
by the Executive Board, or by a consortium of such credit or financial institutions, with
the obligation to offer them for sale to shareholders of the Company. The Executive Board
is authorized, with the consent of the Supervisory Board, to disapply shareholders’ pre -
emptive rights in the following cases:
a)
T
o settle fractions resulting from a capital increase
b) T o the extent necessary to grant holders or creditors of convertible bonds or bonds
with warrants, as well as convertible profit participation rights, issued by the Company
and/or its direct or indirect majority investees a preemptive right to new shares in the
amount to which they would be entitled following the exercise of their options or
conversion rights or after meeting their exercise of option or conversion obligations
c) If the new shares are issued against cash contributions and the issue price of the new
shares is not materially lower than the quoted market price of existing listed shares
of the Company at the date when the issue price is finally determined, which should
be as close as possible to the placement of the shares. However, this authorization to
disapply preemptive rights applies only to the extent that the notional amount of the
share capital attributable to the shares issued with preemptive rights disapplied in
accordance with section 186 (3) sentence 4 of the AktG does not exceed a total of 10%
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===== SIDA 126 =====
of the share capital, meaning neither the share capital existing when this authorization
takes effect, nor the share capital existing at the date when this authorization is exer-
cised. Shares that (i) are sold or issued, with preemptive rights disapplied, during the
term of this authorization up to the date of its exercise on the basis of other authori-
zations in direct application, or application with the necessary modifications, of section
186 (3) sentence 4 of the AktG, or (ii) shares that were issued or will be issued, with
preemptive rights disapplied, to settle bonds or profit participation rights with con -
version or exercise rights or obligations will be counted toward this limit, to the extent
that the bonds or profit participation rights were issued during the term of this autho-
rization up to the date of its exercise, in application, with the necessary modifications,
of section 186 (3) sentence 4 of the AktG.
d) T o the extent that the capital increase is implemented to grant shares against noncash
contributions, in particular for the purposes of acquiring companies, parts of compa-
nies, or investments in companies, or other assets
The Executive Board is also authorized to define further details of the capital increase
and its implementation, with the consent of the Supervisory Board. The Supervisory
Board is authorized to amend the wording of Article 5 of the Articles of Association fol-
lowing the complete or partial implementation of the capital increase from Authorized
Capital 2023 or after the expiration of the authorization period, in line with the scope of
the capital increase.
Additionally, under Article 5 (4) of the Company’s Articles of Association, the Company’s
share capital may also be increased by up to €50,000,000 on a contingent basis through
the issue of up to 50,000,000 bearer shares (no-par value shares) (Contingent Capital
2023). The sole purpose of Contingent Capital 2023 is to issue new shares to the holders/
creditors of bonds which are issued by the Company or by other companies in which the
Company directly or indirectly holds a majority interest up to May 31, 2028, in accordance
with a resolution passed by the shareholders under item 10.2 of the agenda for the meet-
ing of June 1, 2023, in the event that conversion and/or option rights are exercised or
conversion or option exercise obligations are settled or the Company makes use of its
right to grant shares in the Company, either in full or in part, in lieu of payment of the
respective cash amount. The shares are issued at the conversion or option price to be
determined in accordance with the aforementioned resolution. The contingent capital
increase will only be implemented to the extent that conversion rights or options are
exercised or conversion or option exercise obligations are settled, or the Company exer-
cises its right to grant shares of the Company, either in full or in part, in lieu of payment
of the cash amount due, and to the extent that other instruments are not used to settle
the conversion rights or options.
The new shares carry dividend rights from the beginning of the fiscal year in which they
are issued. To the extent permitted by law, the Executive Board may, with the consent of
the Supervisory Board, determine the dividend rights in derogation of the above and of
section 60 (2) of the AktG, including for a fiscal year that has already closed. The Executive
Board is authorized to define further details of the implementation of the contingent
capital increase, with the consent of the Supervisory Board.
In addition, by virtue of the resolution of the Annual General Meeting on June 1, 2023,
the Executive Board may, in the period up to May 31, 2028, acquire treasury shares up to
a total of 10% of the share capital existing at the time of the resolution or, if this value is
lower, of the share capital existing at the time this authorization is exercised. The acquired
shares, together with other treasury shares held by TRATON SE or attributable to it in
accordance with sections 71a ff. of the AktG, may at no time account for more than 10%
of the share capital. The treasury shares acquired on the basis of the authorization
resolved by the Annual General Meeting on June 1, 2023, or an earlier authorization may
be used for any permissible purpose, in particular the purposes specified in the autho -
rization of the Annual General Meeting, with the approval of the Supervisory Board and
with preemptive rights disapplied. In addition, treasury shares may be acquired through
the use of derivatives in the period up to May 31, 2028, on the basis of the further autho-
rization resolved at the Annual General Meeting on June 1, 2023. Acquisitions of shares
using derivatives are limited to a maximum of 5% of the share capital existing at the time
of the resolution by the Annual General Meeting or, if this value is lower, at the time the
authorization is exercised. The acquired shares also count toward the aforementioned
10% limit of the authorization to acquire treasury shares resolved by the Annual General
Meeting. For the relevant details of the authorization to acquire treasury shares, please
refer to the resolutions proposed by the Executive Board and Supervisory Board on
agenda items 11 and 12 of our Annual General Meeting on June 1, 2023, that were pub -
lished in the Bundesanzeiger (the Federal Gazette) on April 17, 2023.
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
126
===== SIDA 127 =====
Material agreements of TRATON SE that are subject to a change of control
as a result of a takeover bid
As of December 31, 2023, TRATON SE had taken out bilateral loan agreements in the
amount of €2.9 billion. The agreements grant the lenders in question the right to termi-
nate the contract in line with standard market practice in the event of a change of control.
A change of control is considered to have occurred if Volkswagen AG no longer holds
more than 50% of the shares or voting rights in TRATON SE, either directly or indirectly.
A syndicated multi-currency revolving credit facility agreement with a bank consortium
with a credit line of €4.5 billion and Schuldscheindarlehen agreements with a total vol-
ume of €700 million are also in place. Both of these grant the lenders the right to termi-
nate the agreements in the event that Volkswagen AG ceases to be a controlling company
of TRATON SE within the meaning of section 17 of the Aktiengesetz (AktG — German Stock
Corporation Act).
TRATON Finance Luxembourg S.A. issued bonds with a total nominal amount of €8.1 billion
and SEK 2.55 billion in 2021, 2022, and 2023. All bonds are guaranteed by TRATON SE. In
the event of a change of control (defined as obtaining any form of direct or indirect legal
or beneficial ownership or any form of direct or indirect legal or beneficial power of
disposition (as described in section 34 of the Wertpapierhandelsgesetz (WpHG — German
Securities Trading Act) for a total of more than 50% of the shares in TRATON SE that carry
voting rights) and subsequent deterioration of TRATON SE’s credit rating within 120 days
of the change of control taking effect, creditors of most of these bonds have the right to
demand that TRATON Finance Luxembourg S.A. buy them back. More detailed informa-
tion on the bonds and their terms can be found on the Company’s website at https://
ir.traton.com/en/bonds/.
In addition, there is a revolving credit facility agreement, among others, in the amount
of €4.0 billion in place with Volkswagen
AG. Although the agreement does not contain
a contractual provision for the event of a change of control over TRATON SE, Volkswagen
AG is authorized to terminate the revolving credit facility agreement at any time and
without cause. In the event that Volkswagen AG ceases to be a direct or indirect con -
trolling company of TRATON SE, it cannot be ruled out that Volkswagen AG exercises this
termination right. Moreover, there are further agreements in place, in particular guaran-
teed credit lines with banks. While these also do not contain a contractual provision for
the event of a change of control over TRATON SE, it cannot be ruled out that the contrac-
tual party in question terminates the agreement in due form and/or requests additional
collateral in the event of a change of control.
Other takeover-related disclosures, in particular compensation
a
greements of the Company
Employees who hold shares in TRATON SE exercise the rights associated with these shares
in the same way as other shareholders in accordance with the statutory provisions and
the provisions of the Articles of Association. The Company has not entered into any com-
pensation agreements with members of the Executive Board or employees in the event
of a takeover bid.
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
127
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CONSOLIDATED
FINANCIAL
STATEMENTS
Consolidated Financial Statements
as of December 31, 2023
128
Inc
ome Statement
129
Stat
ement of Comprehensive Income
130
Balanc
e Sheet
132
Stat
ement of Changes in Equity
134
Stat
ement of Cash Flows
136
Not
es
137
1. Basis of pr
eparation
137
2. Basis of c
onsolidation
139
3. Imp
act of the war in Ukraine
139
4. Ef
fects of climate change
140
5. E
stimates and management’s judgment
141
6. Segment r
eporting
142
7. A
cquisitions
145
8.
Noncur
rent assets and disposal groups
held for sale
146
9. Sales r
evenue
147
10. F
unctional expenses
150
11. O
ther operating income and expenses
151
12. Net int
erest income/net interest expense
152
13. O
ther financial result
152
14. Inc
ome taxes
153
15. E
arnings per share
155
16. Goodwill and imp
airment losses on assets
156
17. Intangible assets
159
18.
P
roperty, plant, and equipment, right-of-use
assets under IFRS 16, and lease liabilities
161
19. A
ssets leased out
165
20. E
quity-method investments
167
21. O
ther equity investments
169
22. Financ
ial services receivables
170
23. O
ther financial assets
172
24. O
ther receivables
172
25. In
ventories
173
26. T
rade receivables
173
27. C
ash and cash equivalents
174
28. E
quity
174
29. Financ
ial liabilities
176
30. O
ther financial liabilities
177
31. O
ther liabilities
178
32.
P
rovisions for pensions and other
post-employment benefits
178
33. O
ther provisions
186
34. Stat
ement of cash flows
187
35.
Significanc
e of financial instruments
for net assets, financial position,
and results of operations
188
36.
Natur
e and extent of risks arising
from financial instruments
202
37. C
apital management
207
38.
C
ontingent liabilities and commitments
207
39.
Litigation/
legal proceedings
208
40.
O
ther financial obligations
211
41.
Relat
ed party disclosures
212
42.
Benefits b
ased on performance shares
(share-based payment)
215
43.
Remuner
ation of the Executive Board
and the Supervisory Board in accordance
with section 314 of the HGB
216
44.
F
ees paid to the auditor of the
consolidated financial statements
216
45. Ger
man Corporate Governance Code
216
46.
E
vents after December 31, 2023
216
47.
Member
s of the Executive Board and
their appointments
217
48.
Member
s of the Supervisory Board and
their appointments
219
49. Super
visory Board committees
222
50.
List of shar
eholdings
223
3
Consolidated Financial Statements Further InformationCombined Management ReportTo Our Shareholders
===== SIDA 129 =====
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2023
Income Statement
of the TRATON GROUP for the period from January 1 to December 31
TRATON GROUP
€ million Note 2023 2022
Sales revenue [9] 46,872 40,335
Cost of sales [10] –37,632 –33,482
Gross profit 9,240 6,853
Distribution expenses –3,604 –3,399
Administrative expenses –1,518 –1,376
Net impairment losses on financial assets –89 –339
Other operating income [11] 1,712 1,207
Other operating expenses [11] –1,978 –1,381
Operating result 3,763 1,564
Share of earnings of equity-method investments 124 97
Interest income [12] 341 184
Interest expense [12] –888 –409
Other financial result [13] –89 123
Financial result –511 –4
Earnings before tax 3,253 1,560
Income taxes [14] –802 –419
current –890 –833
deferred 89 414
Earnings after tax 2,451 1,141
of which attributable to shareholders of TRATON SE 2,451 1,141
of which attributable to noncontrolling interests 0 0
Earnings per share in € (diluted/basic) [15] 4.90 2.28
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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Statement of Comprehensive Income
of the TRATON GROUP for the period from January 1 to December 31
€ million Note 2023 2022
Earnings after tax 2,451 1,141
Pension plan remeasurements recognized in other comprehensive income
Pension plan remeasurements recognized in other comprehensive income, before tax [32] –95 874
Deferred taxes relating to pension plan remeasurements recognized in other comprehensive income 22 –219
Pension plan remeasurements recognized in other comprehensive income, net of tax –72 655
Fair value measurement of other equity investments
Fair value measurement of other equity investments, before tax [35] 19 –527
Deferred taxes relating to the fair value measurement of other equity investments –6 56
Fair value measurement of other equity investments, net of tax 13 –471
Share of other comprehensive income of equity-method investments that will not be reclassified subsequently to profit or loss, net of tax 3 1
Items that will not be reclassified subsequently to profit or loss –56 185
Currency translation differences
Unrealized currency translation gains/losses –15 –254
Transferred to profit or loss 102 53
Currency translation differences, before tax 87 –201
Deferred taxes relating to currency translation differences –3 5
Currency translation differences, net of tax 84 –196
Cash flow hedges
Fair value changes recognized in other comprehensive income [35] 9 46
Transferred to profit or loss [35] –29 15
Cash flow hedges, before tax –20 61
Deferred taxes relating to cash flow hedges 6 –20
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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€ million Note 2023 2022
Cash flow hedges, net of tax –14 42
Cost of hedging
Cost of hedging recognized in other comprehensive income [35] –4 –2
Transferred to profit or loss [35] 10 5
Cost of hedging, before tax 6 3
Deferred taxes relating to cost of hedging –2 –1
Cost of hedging, net of tax 4 2
Share of other comprehensive income of equity-method investments that will be reclassified subsequently to profit or loss, net of tax –3 5
Items that will be reclassified subsequently to profit or loss 70 –147
Other comprehensive income, before tax –4 216
Deferred taxes relating to other comprehensive income 18 –178
Other comprehensive income, net of tax 14 38
Total comprehensive income 2,465 1,179
of which attributable to shareholders of TRATON SE 2,465 1,178
of which attributable to noncontrolling interests 0 0
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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Balance Sheet
Assets of the TRATON GROUP as of December 31, 2023, and December 31, 2022
TRATON GROUP
€ million Note 12/31/2023 12/31/2022
Noncurrent assets
Goodwill [16] 6,083 6,184
Intangible assets [17] 7,114 7,195
Property, plant, and equipment [18] 8,964 8,354
Assets leased out [19] 5,658 6,162
Equity-method investments [20] 1,482 1,328
Other equity investments [21] 235 204
Noncurrent income tax receivables 109 71
Deferred tax assets [14] 2,366 2,274
Noncurrent financial services receivables [22] 7,767 6,560
Other noncurrent financial assets [23] 469 414
Other noncurrent receivables [24] 350 404
40,598 39,150
Current assets
Inventories [25] 7,447 6,574
Trade receivables [26] 3,894 3,348
Current income tax receivables 172 153
Current financial services receivables [22] 5,554 5,061
Other current financial assets [23] 918 695
Other current receivables [24] 1,334 1,340
Marketable securities and investment deposits 53 73
Cash and cash equivalents [27] 1,730 1,439
Assets held for sale [8] – 421
21,101 19,106
Total assets 61,699 58,256
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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Equity and liabilities of the TRATON GROUP as of December 31, 2023, and December 31, 2022
TRATON GROUP
€ million Note 12/31/2023 12/31/2022
Equity [28]
Subscribed capital 500 500
Capital reserves 13,295 13,695
Retained earnings 5,464 2,964
Accumulated other comprehensive income –2,777 –2,791
Equity attributable to shareholders of TRATON SE 16,482 14,368
Noncontrolling interests 6 6
16,488 14,374
Noncurrent liabilities
Noncurrent financial liabilities [29] 14,044 12,485
Provisions for pensions and other post-employment benefits [32] 1,847 1,786
Deferred tax liabilities [14] 681 690
Noncurrent income tax provisions 264 205
Other noncurrent provisions [33] 1,534 1,462
Other noncurrent financial liabilities [30] 2,172 2,652
Other noncurrent liabilities [31] 2,299 1,971
22,842 21,250
Current liabilities
Current financial liabilities [29] 7,660 8,646
Trade payables 5,791 5,518
Current income tax payables 226 236
Current income tax provisions 16 14
Other current provisions [33] 1,993 1,831
Other current financial liabilities [30] 2,115 2,113
Other current liabilities [31] 4,567 4,253
Liabilities directly associated with assets held for sale [8] – 21
22,369 22,632
Total equity and liabilities 61,699 58,256
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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Statement of Changes in Equity
Statement of Changes in Equity 1
of the TRATON GROUP for the period from January 1 to December 31
Accumulated other comprehensive income
Items that will be reclassified subsequently to profit or loss
€ million Subscribed capital Capital reserves Retained earnings
Currency
translation Cash flow hedges
Equity-method
investments
Balance as of 01/01/2022 500 14,295 1,477 –1,984 –20 3
Earnings after tax – – 1,141 – – –
Other comprehensive income, net of tax – – – –196 44 5
Total comprehensive income – – 1,141 –196 44 5
Dividend payout – – –250 – – –
Release of distributable capital reserves – –600 600 – – –
Other changes – – –5 – – 0
Balance as of 12/31/2022 500 13,695 2,964 –2,180 23 8
Balance as of 01/01/2023 500 13,695 2,964 –2,180 23 8
Earnings after tax – – 2,451 – – –
Other comprehensive income, net of tax – – – 84 –10 –3
Total comprehensive income – – 2,451 84 –10 –3
Dividend payout – – –350 – – –
Release of distributable capital reserves – –400 400 – – –
Other changes – – – 0 – 0
Balance as of 12/31/2023 500 13,295 5,464 –2,096 13 5
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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===== SIDA 135 =====
Accumulated other comprehensive income
Items that will not be reclassified subsequently
to profit or loss
€ million
Remeasurements
of pension plans
Equity-method
investments
Other equity
investments
Equity attributable
to shareholders of
TRATON SE
Noncontrolling
interests Total
Balance as of 01/01/2022 –745 –7 –76 13,444 3 13,446
Earnings after tax – – – 1,141 0 1,141
Other comprehensive income, net of tax 655 1 –471 38 0 38
Total comprehensive income 655 1 –471 1,178 0 1,179
Dividend payout – – – –250 – –250
Release of distributable capital reserves – – – – – –
Other changes 0 0 – –5 3 –1
Balance as of 12/31/2022 –90 –6 –547 14,368 6 14,374
Balance as of 01/01/2023 –90 –6 –547 14,368 6 14,374
Earnings after tax – – – 2,451 0 2,451
Other comprehensive income, net of tax –72 3 13 14 0 14
Total comprehensive income –72 3 13 2,465 0 2,465
Dividend payout – – – –350 – –350
Release of distributable capital reserves – – – – – –
Other changes – – – 0 0 0
Balance as of 12/31/2023 –162 –3 –534 16,482 6 16,488
1 See Not e “28. Equity” for more information
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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===== SIDA 136 =====
Statement of Cash Flows
Statement of Cash Flows 1
of the TRATON GROUP for the period from January 1 to December 31
TRATON GROUP
€ million 2023 2022
Cash and cash equivalents as of 01/01
(reported in the balance sheet) 1,439 2,002
Cash and cash equivalents reported separately at the beginning
of the year (assets held for sale)
304 –
Cash and cash equivalents as of 01/01 1,743 2,002
Earnings before tax 3,253 1,560
Income taxes paid –904 –689
Depreciation and amortization of, and impairment losses on,
i
ntangible assets, property, plant, and equipment, and investment
property 2 1,362 1,404
Amortization of, and impairment losses on,
capitalized development costs
2 423 379
Impairment losses on equity investments 2 2 0
Depreciation of and impairment losses on products leased out 2 1,078 1,199
Change in pension obligations 6 –3
Earnings on disposal of noncurrent assets and equity investments 91 139
Share of earnings of equity-method investments –97 –40
Other noncash income/expense 52 91
Change in inventories –885 –1,158
Change in receivables (excluding financial services) –534 –1,169
Change in liabilities (excluding financial liabilities) 714 1,090
Change in provisions 255 –1,432
Change in products leased out –584 –440
Change in financial services receivables –1,647 –1,592
Net cash provided by/used in operating activities 2,583 –660
Investments in intangible assets (excluding capitalized development
costs) and in property, plant, and equipment
–1,522 –1,305
Additions to capitalized development costs –687 –604
TRATON GROUP
€ million 2023 2022
Investments to acquire subsidiaries and other businesses –309 –94
Investments to acquire other investees –74 –26
Proceeds from the disposal of subsidiaries 128 58
Proceeds from the disposal of other investees – 0
Proceeds from the disposal of intangible assets, property, plant,
and equipment, and investment property
79 55
Change in marketable securities and investment deposits 18 154
Change in loans 0 –50
Net cash used in investing activities –2,368 –1,813
Dividend payouts –350 –250
Proceeds from the issuance of bonds 3,757 3,172
Repayment of bonds –2,358 –2,153
Loans extended by Volkswagen AG, Volkswagen International
Lu
xemburg, and Volkswagen Group of America Finance 669 1,950
Loan repayment to Volkswagen AG and Volkswagen International
Luxemburg
–1,720 –1,049
Change in miscellaneous financial liabilities 137 827
Repayment of lease liabilities –263 –281
Net cash provided by/used in financing activities –128 2,216
Effect of exchange rate changes on cash and cash equivalents –100 –2
Change in cash and cash equivalents –13 –259
Cash and cash equivalents as of 12/31 1,730 1,743
Cash and cash equivalents reported separately in the balance sheet
(assets held for sale)
– –304
Cash and cash equivalents as of 12/31
(reported in the balance sheet)
1,730 1,439
1 See Not e “34. Statement of cash flows” for more information
2
Net of imp
airment reversals
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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===== SIDA 137 =====
NOTES
to the Consolidated Financial Statements
1. Basis of pr eparation
Information about the Company and basis of reporting
TRATON SE, Munich, Germany (“the Company,” “TRATON”) is the parent company of the
TRATON GROUP. TRATON is registered in the commercial register at the Munich Local
Court under no. 246068.
With its Scania, MAN, Navistar, and Volkswagen Truck & Bus brands, the TRATON GROUP
is one of the world’s leading manufacturers of commercial vehicles. The Group’s port-
folio consists of light-duty commercial vehicles, trucks, and buses, as well as the sale of
spare parts and customer services. The TRATON GROUP also offers a broad range of finan-
cial services to its commercial vehicle customers.
TRATON SE is a direct subsidiary of Volkswagen Finance Luxemburg S.A., Strassen, Lux -
embourg (Volkswagen Finance Luxemburg). The financial statements of Volkswagen
Finance Luxemburg are published in the Luxembourg Trade and Company Register.
TRATON SE and its subsidiaries are included in the consolidated financial statements of
Volkswagen AG, Wolfsburg (Volkswagen AG), which are published in the company reg -
ister.
The accompanying Consolidated Financial Statements of TRATON SE for the fiscal year
ended December 31, 2023, were prepared in accordance with section 315e (1) of the
Handels
gesetzbuch (HGB — Ger man Commercial Code) and in compliance with the
International Financial Reporting Standards ( IFRSs), as adopted in the European Union.
The fiscal year corresponds to the calendar year. All figures shown are rounded, so minor
discrepancies may arise from addition of these amounts. Comparable prior-year figures
are presented in brackets alongside the figures for the fiscal year under review.
The accompanying Consolidated Financial Statements were audited by
EY GmbH & Co.
KG Wirtschaftsprüfungsgesellschaft, Munich (EY). The Consolidated Financial Statements
were prepared on February 12, 2024, and approved for submission to the Supervisory
Board by means of an Executive Board resolution. The period in which adjusting events
after the reporting period are recognized ended on that date.
Accounting policies
With the exception of certain items, such as financial instruments measured at fair value
through profit or loss or provisions for pensions and other post-employment benefits,
items are measured in the TRATON GROUP on the basis of the historical cost convention.
Starting in fiscal year 2023, the material accounting policies for the individual items of
the consolidated financial statements are explained at the beginning of the correspond-
ing sections in the notes in order to make the individual items easier to understand. An
accounting policy is considered material if the relevant disclosures relate to material
transactions, other events, or conditions and if the accounting required for them is com-
plex, significant judgment or assumptions have been made, TRATON has exercised an
IFRS option, the accounting policy has been applied in the absence of an IFRS that applies
specifically to the case in question in accordance with IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors, or if it has changed compared with the previous
year and this change resulted in a material change to the information in the financial
statements.
New accounting pronouncements applied
TRATON has applied all accounting pronouncements adopted by the EU and required to
be applied for periods beginning on or after January 1, 2023. The changes in accounting
pronouncements do not materially affect the TRATON GROUP’s net assets, financial posi-
tion, or results of operations.
The amendments to IAS 1 Presentation of Financial Statements that have been applica-
ble since January 1, 2023, are intended to make the disclosures on accounting policies
more entity-specific, and hence more decision-useful, by refining the concept of mate -
riality. In view of these amendments, the TRATON GROUP’s disclosures on accounting
policies in the notes have been revised and, in this context, the structure of the notes has
also changed (see first paragraph in the “Accounting policies” section).
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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===== SIDA 138 =====
The TRATON GROUP applies the amendments to IAS 12 Income Taxes regarding minimum
taxation (Pillar 2). For further information, refer to Note “14. Income taxes.”
The TRATON GROUP also considers the requirements of IFRS 17 Insurance Contracts and
the amendments to IAS 12 Income Taxes concerning the recognition of deferred taxes
on leases and decommissioning obligations, and the amendment to IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors, which clarifies the difference
between a change in an accounting policy and a change in an accounting estimate.
New or amended IFRSs not applied
In its 2023 Consolidated Financial Statements, TRATON did not apply the accounting
pronouncements that have already been adopted by the IASB, but were not yet required
to be applied for the fiscal year.
On May 25, 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and
IFRS 7 Financial Instruments: Disclosures that require specific disclosures on supplier
finance arrangements from January 1, 2024. These amendments are designed to increase
the transparency of the supply chain financing business and its impact on an entity’s
liabilities, cash flows, and liquidity risk. Additional disclosures will be required in the
Consolidated Financial Statements for the period ending December 31, 2024.
The other financial reporting standards issued by the IASB but not yet effective are not
expected to materially affect the TRATON GROUP’s consolidated financial statements.
Prior-period information
To improve comparability, certain prior-period information was adjusted to reflect the
current presentation. Additionally, certain prior-period data was revised. If material, the
details of such information are contained in the relevant sections.
Currency translation
The consolidated financial statements have been prepared in euros (€), TRATON SE’s
functional currency. The financial statements of subsidiaries and associates from coun-
tries outside the eurozone are translated into euros in line with the functional currency
concept. For the subsidiaries, the functional currency is based on their primary economic
environment and almost always corresponds to the relevant national currency. For indi-
vidual subsidiaries, the functional currency differs from the local currency and is the euro,
US dollar, and Swedish krona, among others.
Foreign currency transactions in the single-entity financial statements of TRATON SE and
the subsidiaries included in the basis of consolidation are translated at the exchange
rates prevailing at the transaction dates. Foreign currency monetary items are recognized
at the closing date in the balance sheet. The resulting currency translation differences
are recognized in operating result or in financial result, in accordance with their sub -
stance.
Financial statements of foreign entities are translated from their functional currency into
euros using the modified closing rate method, under which balance sheet items (with
the exception of equity) are translated at the closing rate, and income statement items
are translated at weighted average exchange rates for the year. With the exception of
income and expenses recognized in equity, equity is translated at historical exchange
rates. The resulting currency translation differences are recognized as a separate item
in equity until the disposal of the subsidiary.
For an overview of the exchange rates on which currency translation was based and which
had a material impact on the consolidated financial statements, see the “Report on
Economic Position — 2 . Exchange rates” section of the Combined Management Report.
Further InformationConsolidated Financial StatementsCombined Management ReportTo Our Shareholders
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===== SIDA 139 =====
2. Basis of c onsolidation
Accounting policies: basis of consolidation
In addition to TRATON SE, the consolidated financial statements comprise all sig-
nificant subsidiaries, including structured entities, that are controlled directly or
indirectly by TRATON SE. The structured entities largely serve to implement asset-
backed securities transactions to refinance the financial services business and to
securitize receivables.
Material entities whose financial and operating policies TRATON SE can significantly
influence indirectly or directly (associates), or over which TRATON SE shares control
indirectly or directly (joint ventures), are measured using the equity method. Joint
ventures also include entities in which the TRATON GROUP holds a majority of the
voting rights, but whose shareholder agreements stipulate that important deci -
sions may only be resolved unanimously.
Subsidiaries whose business activities have been suspended or whose business
volume is minimal and that are insignificant individually and in the aggregate for
the presentation of a true and fair view of the TRATON GROUP’s net assets, financial
position, and results of operations are not consolidated. They are generally recog-
nized at cost, net of any impairment losses required to be recognized, plus any
reversals of impairment losses required to be recognized. The same applies to
insignificant associates and joint ventures.
All other investees are financial investments.
The list of the TRATON GROUP’s shareholdings within the meaning of section 313 (2)
of the Handelsgesetzbuch ( HGB — Ger man Commercial Code) is presented in Note
“50. List of shareholdings.”
The following affiliated German companies included in the consolidated financial state-
ments of TRATON SE have met the criteria set out in section 264 (3) of the HGB or section
264b of the HGB and have as far as possible exercised the option not to publish annual
financial statements:
– MAN Grundstücksgesellschaft mbH & Co. Epsilon KG, Munich
– MAN Truck & Bus SE, Munich
– MAN Truck & Bus Deutschland GmbH, Munich
– TORINU Verwaltung GmbH & Co. Beta KG, Pullach i. Isartal
– TARONA Verwaltung GmbH & Co. Alpha KG, Pullach i. Isartal
– M A N V
erwaltungs-Gesellschaft mbH, Munich
– MAN Service und Support GmbH, Munich
– KOSIGA GmbH & Co. KG, Pullach i. Isartal
– MAN GHH Immobilien GmbH, Oberhausen
– TB Digital Services GmbH, Munich
– MAN Marken GmbH, Munich
– MAN Brand GmbH & Co. KG, Grünwald
– Scania CV Deutschland Holding GmbH, Koblenz
– SCANIA DEUTSCHLAND GmbH, Koblenz
– SCANIA Vertrieb und Service GmbH, Koblenz
– SCANIA Real Estate Deutschland GmbH, Koblenz
– TRATON Beteiligungsverwaltungs GmbH, Munich
– TRATON Dritte Beteiligungs GmbH, Munich
– MAN Zweite Beteiligungs GmbH, Munich
3. Imp act of the war in Ukraine
The war in Ukraine had a negative impact on the TRATON GROUP’s business in 2022 and
2023. As well as price increases on the energy and commodity markets, shortages of
truck cable harnesses had temporarily led to production stops at MAN in 2022. As a con-
sequence of the war and the sanctions imposed by the EU in this context, the Russian
distribution units of Scania Vehicles & Services and MAN Truck & Bus were sold in fiscal
year 2022, and the Russian financial services business (Scania Finance Russia) was sold
in January 2023. The TRATON GROUP does not have any material subsidiaries or equity
investments in Ukraine.
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Expenses directly related to the effects of the war amounted to €102 million (previous
year: €477 million) in the reporting period and are attributable to currency translation
effects that were recognized in other operating expenses following the sale of the Russian
financial services business. Further information on the sale can be found in Note “8. Non-
current assets and disposal groups held for sale.”
The sale of the Russian business means that the TRATON GROUP is no longer exposed to
any material credit and liquidity risks in that country. However, because certain globally
traded input materials are substantial for the production of our vehicles, it is still neces-
sary for TRATON to monitor the price fluctuation risks for raw materials and energy asso-
ciated with the war and the sanctions imposed. Moreover, the uncertainties arising from
the war in Ukraine in terms of macroeconomic development are also exacerbating the
uncertainties in forecasts and material management estimates and judgments.
4. Ef fects of climate change
In light of climate change and the associated tightening of emissions regulations, the
commercial vehicle industry is continuing its transition to electric mobility. The Executive
Board gives additional emphasis to this transition with the Company’s TRATON Way
Forward strategy. Circularity will play a key role alongside the focus area of decarbonization.
The electrification of our product portfolio is the primary contributor to decarbonization.
Increasing resource efficiency — p articularly by extending life cycles and recycling raw
materials
—
will pla
y an important role for the circular economy.
The financial effect of the transition to a circular economy is currently reflected above
all in the sale of new and remanufactured genuine parts (see Note “9. Sales revenue”),
which means longer life cycles for our vehicles. In terms of decarbonization, the potential
impact of future regulatory requirements in connection with electric mobility plays a
particularly crucial role, especially in the five-year planning and hence in the derivation
of future cash flows for impairment tests. For example, the European Union set targets
to reduce CO2 emissions in Europe at the beginning of 2023 by way of the revised Reg-
ulation (EU) 2019/1242 (CO2 Regulation). The target set for 2025 of reducing CO2 emissions
from heavy-duty commercial vehicles by 15% was confirmed. However, the newly pro -
posed CO2 emissions targets for the same vehicle category are aimed at a reduction of
45% by 2030 (previously 30%) and 65% by 2035, based on a benchmark from the period
from July 2019 to June 2020. In addition, the European Commission is planning to extend
the targets to all medium- and heavy-duty commercial vehicles over 5t, including buses,
although professional and special vehicles will continue to be exempt. The European
Commission has further proposed that all new city buses in Europe should be zero-
emission starting in 2030. If these emissions targets are not met, starting in 2025, there
are to be penalties of €4,250 for every gram of
CO2 emitted per ton-kilometer (tkm) that
exceeds the limits. In addition, China set new targets in mid-2023 for reducing the CO2
emissions of all heavy-duty commercial vehicles. Brazil, too, introduced new rules for
2023 to reduce pollutant emissions produced by heavy-duty commercial vehicles. TRATON
is also affected by the potential further tightening of CO2 and NOx emissions regulations
in the USA. For example, the USA has issued a new NOx regulation, which is expected to
come into force in 2024 or 2027. It is currently also working on further CO2 reduction
targets for the coming years. In April 2023, the US Environmental Protection Agency (EPA)
published a proposal to revise the CO2 requirements from 2027 and introduce a new set
of requirements for the period from 2028 to 2032. At the beginning of 2023, the Califor-
nia Air Resources Board (CARB) adopted the Advanced Clean Fleet Regulation (ACF). The
ACF requires fleet owners to convert their vehicles to zero emissions. Some fleet require-
ments begin in 2024, but vary by industry. In addition to the fleet requirements, the ACF
requires all trucks sold in California to be zero-emission by 2036.
We have set ourselves the target of around half of our annual new sales in the relevant
regions ( EU27+3 region, USA, and Canada) to be zero-emission vehicles by 2030. This
target is subject to the conditions needed to achieve it, such as the expansion of the
corresponding charging infrastructure, being in place. For the period after 2030, we will
continue to monitor the evolution of regulatory requirements and incorporate these into
our planning. The BEV unit sales ratio (excluding MAN TGE vans) across all regions was
still 0.6% (previous year: 0.4%) in 2023. However, TRATON is preparing to ramp up produc-
tion by focusing its development activities on battery electric vehicles. TRATON is also
safeguarding supplies of bought-in components for battery electric vehicles through
long-term orders. The Milence joint venture was established to develop the charging
infrastructure, with TRATON, the Volvo Group, and Daimler Truck committing a financing
volume of €500 million (see Note “40. Other financial obligations”). TRATON had already
invested €44 million (previous year: €5 million) in Milence by the end of 2023.
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It is technically challenging and expensive to adapt commercial vehicles to new emissions
standards. In particular, investments in electric mobility of more than €2 billion are
planned for the years from 2024 to 2028. By contrast, expenditure on combustion engine
technology will be scaled back. The restructuring of the product portfolio continues to
involve capital expenditures on production facilities. No impact on the useful lives of
capitalized development costs or items of property, plant, and equipment was identified
in light of the observation period of regulatory requirements and as a result of the par -
allel production of battery electric vehicles and vehicles with combustion engines in the
next few years. Liabilities resulting from emission limits being exceeded do not currently
play any role. However, the increased development activity in the field of electric mobil-
ity resulted in a corresponding increase in capitalized (intangible assets) and noncapi -
talized (cost of sales) development costs. There are also long-term purchase obligations
to procure batteries (see Note “40. Other financial obligations” and Note “41. Related
party disclosures”).
5. E stimates and management’s judgment
Preparation of consolidated financial statements in accordance with IFRSs requires
assumptions to be made with regard to certain items that affect the carrying amounts
in the balance sheet or income statement and the disclosure of contingent assets and
liabilities. All estimates and assumptions represent the best of management’s knowledge
and belief in order to convey a true and fair view of the Group’s net assets, financial posi-
tion, and results of operations. Nevertheless, actual developments may differ significantly
from expected developments due to uncertainties over which the Group does not have
complete control. This may result in the carrying amounts of the assets and liabilities
concerned having to be adjusted accordingly in subsequent periods. Estimates and man-
agement’s judgment relate primarily to the following matters:
Accounting matter Note Sources of estimation uncertainty
Income taxes 14
Measurement of tax provisions: uncertainty
r
esulting from possible changes in tax legislation,
jurisdiction, and how these are interpreted by
the financial authorities
Goodwill 16
Recoverability of cash-generating units:
estimates of expected cash flows and
discount rate
Intangible assets 17
Amortization of intangible assets:
estimates of useful lives
Property, plant, and
equipment 18
Depreciation of property, plant, and equipment:
estimates of useful lives
Leases 18, 19, 22
TRATON as lessee — measurement of right-of-use
assets: estimates of contractual term in the event
of extension and termination
TRATON as lessor — measurement of assets
leased out/financial services receivables:
e
stimates of residual value at the end of
contractual term
Financial services receivables 22 Measurement: estimates of expected credit losses
Provision for pensions and
other post-employment
benefits 32 Measurement: estimates of actuarial assumptions
Other provisions 33
Recognition and measurement of provisions:
e
stimates of the amount and probability
of occurrence of the obligation as well as of the
discount rate
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6. Segm ent reporting
Accounting policies: segment reporting
The TRATON GROUP’s production and marketing activities are divided into the
Scania Vehicles & Services, MAN Truck & Bus, Navistar Sales & Services, and
Volkswagen Truck & Bus segments. The classification corresponds to the internal
organizational and reporting structure. In order to make decisions about the allo-
cation of resources and the assessment of performance, the results of the units
are regularly reviewed by the Executive Board of
TRATON SE in its role as chief
operating decision maker. As an additional reference, we include the TRATON Oper-
ations business area in the reporting, which corresponds to the consolidated value
of the four vehicle segments allocated to it.
The TRATON Financial Services segment combines the activities of Scania Financial
Services and Navistar Financial Services. Both businesses offer their customers
financing solutions to purchase commercial vehicles and are therefore subject to
the same cyclical fluctuations. They are also extremely similar with regard to cus-
tomer groups and distribution channels, as their mission is to finance the products
of the relevant vehicle segment. The units have a similar business cycle in terms
of their sales revenue development, capital intensity, and long-term financial per-
formance, and are therefore combined in the reporting.
The “Reconciliation” column presents the Corporate Items with the activities and
services of the TRATON Holding (TRATON SE and other investees not allocated to
the segments). In addition, consolidation between the segments and the earnings
effects from purchase price allocations in the event of the acquisition of an indi -
vidual segment are presented here.
In the TRATON GROUP, segment result is calculated on the basis of operating result
(adjusted). Operating result (adjusted) is calculated to ensure the greatest possible
transparency about our business performance by making adjustments to our oper-
ating result. These adjustments concern certain items in the financial statements
that, in the opinion of the Executive Board, can be presented separately to enable
a more appropriate assessment of financial performance. They include, in particular,
costs of restructurings and structural measures as well as one-time events with a
material impact on the TRATON GROUP’s earnings.
Segment financial information is generally presented in accordance with the dis-
closure and measurement policies applied in the preparation of the consolidated
financial statements. As a departure from IFRS 16 Leases, subleasing of buyback
vehicles in the Financial Services segment is always accounted for as an operating
lease.
Sales revenue between the segments is transacted on an arm’s length basis. Depre-
ciation, amortization, and impairment losses relate to intangible assets, property,
plant, and equipment, and assets leased out allocated to the individual divisions.
They also include the depreciation of and impairment losses on right-of-use assets
under IFRS 16. Investments in intangible assets, property, plant, and equipment,
and investment property are reported exclusive of additions to right-of-use assets
under IFRS 16.
Allocation of sales revenue to the regions follows the destination principle. Sales
revenue from hedging transactions is allocated to “Other regions.”
The four vehicle segments develop, produce, and distribute trucks and buses, and offer
related services and spare parts.
With its Scania brand, Scania Vehicles & Services has positioned itself as the premium
innovation leader for sustainable transportation solutions in the TRATON GROUP. Scania
operates globally, especially in Europe, South America, and Asia.
MAN Truck & Bus is the reliable business partner in the truck and bus business whose
objective is to simplify its customers’ business and to offer a full range of solutions, from
light commercial vehicles through heavy-duty trucks. MAN is expanding from its core
market of Western Europe into the growth markets of Eastern Europe and Asia, as well
as the Middle East, Africa, and Latin America.
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Navistar Sales & Services manufactures trucks and school buses and also sells spare
parts, as well as vehicle-specific services. Navistar is mainly active in the USA, Mexico, and
Canada.
Volkswagen Truck & Bus offers excellent value with products that are tailored to growth
markets, especially in Latin America, as well as in Africa and Asia.
TRATON Financial Services offers Scania and Navistar customers financing solutions
such as loans or leases. For customers of MAN Truck & Bus and Volkswagen Truck & Bus,
Volkswagen Financial Services AG, Braunschweig, and its subsidiaries (Volkswagen Finan-
cial Services) provide similar financing solutions outside the TRATON GROUP. A framework
agreement for the gradual acquisition of this financial services business was entered
into in the fiscal year to integrate its key aspects into the TRATON GROUP in the future
(see Note “7. Acquisitions”).
2023 REPORTING SEGMENTS
€ million
Scania
Vehicles &
Services
MAN
Truck & Bus
Navistar
Sales &
Services
Volkswagen
Truck & Bus
TRATON
Financial
Services
Total
segments Recon ciliation
TRATON
GROUP
of which
TRATON
Operations
Total sales revenue 17,878 14,811 11,042 2,477 1,589 47,797 –924 46,872 45,736
Intragroup sales revenue –471 –270 16 –7 –139 –871 871 – –313
External sales revenue 17,407 14,541 11,059 2,469 1,450 46,926 –54 46,872 45,423
Depreciation and amortization –1,047 –1,083 –286 –81 –397 –2,895 85 –2,810 –2,496
Impairment losses –55 – – –2 –2 –58 – –58 –57
Operating result (adjusted) 2,266 1,075 734 217 269 4,561 –527 4,034 4,272
Financial result 934 –28 –113 –167 3 630 –1,140 –511 626
of which share of earnings of equity-method
investments 1 39 – – 1 41 84 124 40
Investments 1 1,127 564 488 91 415 2,685 –93 2,592 2,270
Equity-method investments 112 174 – – 4 290 1,192 1,482 286
1 The aggr egate addition to noncurrent assets (including right-of-use assets under IFRS 16) amounting to €2,867 million was distributed as follows in fiscal year 2023: Scania Vehicles & Services: €1,239 million;
MAN Truck & Bus: €637 million; Navistar Sales & Services: €570 million; Volkswagen Truck & Bus: €94 million; TRATON Financial Services: €420 million, reconciliation: €–93 million.
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The reconciliation of the segment amounts to the corresponding Group amounts is shown
in the following tables:
RECONCILIATION TO THE TRATON GROUP’S SALES REVENUE
€ million 2023 2022
Total sales revenue, total segments 47,797 41,395
External sales revenue of the TRATON Holding 15 12
Effects from purchase price allocation not allocated to the segments –11 –43
Consolidation –929 –1,029
Sales revenue of the TRATON GROUP 46,872 40,335
2022 REPORTING SEGMENTS
€ million
Scania
Vehicles &
Services
MAN
Truck & Bus
Navistar
Sales &
Services
Volkswagen
Truck & Bus
TRATON
Financial
Services
Total
segments Reconciliation
TRATON
GROUP
of which
TRATON
Operations
Total sales revenue 15,316 11,331 10,501 2,952 1,294 41,395 –1,060 40,335 39,554
Intragroup sales revenue –428 –210 –287 –8 –90 –1,023 1,023 – –386
External sales revenue 14,888 11,121 10,215 2,944 1,204 40,372 –37 40,335 39,168
Depreciation and amortization –1,151 –1,163 –270 –61 –448 –3,094 139 –2,954 –2,643
Impairment losses –13 –16 –18 –2 0 –50 16 –34 –50
Operating result (adjusted) 1,315 139 502 309 303 2,568 –497 2,071 2,257
Financial result 27 78 23 –167 0 –40 36 –4 –40
of which share of earnings of equity-method
investments –7 35 – – – 27 70 97 27
Investments 1 905 633 392 122 4 2,056 –27 2,029 2,051
Equity-method investments 101 135 – – – 236 1,093 1,328 236
1 The aggr egate addition to noncurrent assets (including right-of-use assets under IFRS 16) amounting to €2,349 million was distributed as follows in fiscal year 2022: Scania Vehicles & Services: €1,033 million;
MAN Truck & Bus: €738 million; Navistar Sales & Services: €449 million; Volkswagen Truck & Bus: €128 million; TRATON Financial Services: €8 million, reconciliation: €–7 million.
RECONCILIATION TO THE TRATON GROUP’S EARNINGS BEFORE TAX
€ million 2023 2022
Operating result (adjusted), total segments 4,561 2,568
Adjustments in connection with the war in Ukraine –102 –477
Adjustments related to legal proceedings and related measures –89 –17
Adjustments related to restructurings –80 –13
Operating result of the TRATON Holding –135 –124
Earnings effects from purchase price allocation not allocated
to the segments
–290 –317
Consolidation –102 –57
Operating result of the TRATON GROUP 3,763 1,564
Financial result –511 –4
Earnings before tax of the TRATON GROUP 3,253 1,560
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SEGMENT REPORTING BY REGIONS
€ million Germany
EU27+3
(excluding
Germany) USA
North America
(excluding
USA) Brazil
South America
(excluding
Brazil) Other regions Total
2023
Noncurrent assets (excluding financial instruments,
e
quity investments, and deferred taxes) as of 12/31/2023 5,006 12,420 7,266 809 1,805 170 801 28,278
Sales revenue 5,995 18,035 9,578 2,435 4,173 1,333 5,323 46,872
2022
Noncurrent assets (excluding financial instruments,
e
quity investments, and deferred taxes) as of 12/31/2022 5,165 12,294 7,477 782 1,792 176 683 28,369
Sales revenue 4,446 14,312 8,545 1,913 4,765 1,577 4,778 40,335
7. Acquisitions
A
ccounting policies: business combinations
Business combinations are accounted for using the acquisition method of account-
ing. In the course of initial consolidation, assets and liabilities are recognized at
their acquisition-date fair values. If the economic consideration paid for the acqui-
sition is less than the identified net assets, the difference is recognized in profit or
loss in the year of acquisition. Unless otherwise stated, the share of equity directly
attributable to noncontrolling interests at the acquisition date is measured at the
fair value of the net assets (excluding goodwill) attributable to such noncontrolling
interests. Any difference arising due to the acquisition of additional shares of a
subsidiary that has already been consolidated is charged directly to equity.
Business combinations involving entities under common control are accounted
for using the book-value method of accounting. In applying the book-value method
of accounting, the assets acquired and liabilities assumed are carried at the exist-
ing Group carrying amounts from the perspective of Volkswagen AG at the acqui-
sition date. Any difference between the consideration and the aggregate acquired
carrying amounts at the acquisition date is recognized in equity.
On July 12, 2023, companies of the TRATON GROUP and companies of the Volkswagen
Group signed a framework agreement on the acquisition of key aspects of the global
financial services business of MAN and Volkswagen Truck & Bus (VWTB). TRATON Financial
Services will gradually acquire the rights to the future financial services business for MAN
and VWTB customers in 14 countries that was most recently managed by Volkswagen
Financial Services. The existing portfolio will remain with Volkswagen Financial Services.
Transfer of the activities in the individual countries is accounted for as a business com-
bination under common control using the book-value method. On July 19, 2023, TRATON
Financial Services AB, Södertälje, Sweden, paid €275 million into an account at
Volkswagen Bank GmbH, Braunschweig ( VW Bank) for the acquisition, which will be
reported in net cash provided by/used in investing activities. Effective August 1, 2023,
50% of the shares in the joint venture MAN Financial Services (SA) (RF) (Pty) Ltd., Johan-
nesburg, South Africa, were acquired. The €4 million purchase price for the joint venture
is reported in the statement of cash flows under “Investments to acquire other investees.”
The remaining €271 million for transfers in the remaining countries is reported under
“Investments to acquire subsidiaries and other businesses” in the statement of cash
flows. These transfers had not yet been completed as of the reporting date.
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8. Non current assets and disposal groups held for sale
Accounting policies: noncurrent assets and disposal groups
held for sale
Noncurrent assets held for sale include both individual noncurrent assets and
groups of assets, together with liabilities directly associated with those assets (dis-
posal groups), if their carrying amounts will be recovered principally through a
sale transaction rather than through continuing use.
Noncurrent assets classified as “held for sale,” either individually or as part of a
disposal group, are presented separately as “held for sale” in the balance sheet.
They are measured at the lower of their carrying amount and fair value less costs
to sell and are no longer depreciated or amortized. Measurement is based on the
assets and liabilities that will actually be derecognized at the expected date of
disposal. If the total carrying amount of the disposal group exceeds fair value less
costs to sell, an impairment loss is recognized on the assets in the disposal group;
this excludes cash and cash equivalents. Any remaining impairment loss required
to be recognized that is not covered by assets eligible to be impaired is recognized
in other provisions. Amounts of accumulated other comprehensive income allo -
cated to the disposal group attributable to items that will be reclassified subse -
quently to profit or loss and primarily relate to currency translation differences,
cash flow hedges, or cost of hedging, are only recognized in profit or loss upon
disposal. Amounts from items that will not be reclassified subsequently to profit
or loss are reclassified to the TRATON GROUP’s retained earnings upon disposal.
Disposal groups sold in the fiscal year
The sale of the 100% interest in Scania Finance LLC, Scania Insurance LLC, and Scania
Leasing LLC, all with registered offices in the Russian Federation (collectively “Scania
Finance Russia”), to companies in the Volkswagen Group was completed on January 17,
2023, after receipt of all regulatory approvals. The sale price was €400 million. The assets
and liabilities of Scania Finance Russia can be disaggregated as follows as of the disposal
date:
€ million 01/17/2023
Financial services receivables 109
Other receivables and financial assets 9
Cash and cash equivalents 304
Total assets 421
Other liabilities 20
Deferred tax liabilities 1
Total liabilities 21
An expense of €285 million was recognized in connection with the disposal, of which
€184 had already been recognized in fiscal year 2022. Intangible assets and property,
plant, and equipment of Scania Finance Russia were written off in full. In addition, receiv-
ables from financial services were partially written off. Of the total expense in 2022,
€183 million had related to net impairment losses on financial assets and €1 million to
other operating expenses. In addition, negative accumulated other comprehensive
income of €102 million relating to currency translation effects was reclassified to other
operating expenses as of the disposal date. The sale of Scania Finance Russia resulted
in a net inflow of cash amounting to €96 million, which is reported in the “Proceeds from
the disposal of subsidiaries” item in the statement of cash flows. The related assets and
liabilities were allocated to the
TRATON Financial Services segment.
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Disposals completed in the previous year
The TRATON GROUP received a payment of €31 million in the fiscal year as a result of the
sale of International Indústria Automotiva Da América Do Sul Ltda., São Paulo, Brazil
(MWM), a company specializing in diesel engines, to Tupy S.A., Brazil, which was com -
pleted on November 30, 2022. The payment resulted from purchase price adjustments
relating to the closing balance sheet of MWM. For further information about the trans -
action, refer to the TRATON GROUP’s Consolidated Financial Statements as of Decem -
ber 31, 2022.
A total expense of €199 million was reported in fiscal year 2022 for the disposals of
MAN Truck and Bus Rus LLC, Moscow, Russian Federation, and Scania-Rus LLC, Golitsino,
Russian Federation, which had been completed in fiscal year 2022. €151 million of this
amount had related to other operating expenses, €40 million to net impairment losses
on financial assets, and €8 million to tax result. For further information on both disposals,
refer to the TRATON GROUP’s Consolidated Financial Statements as of December 31, 2022.
9. Sales r evenue
Accounting policies: sales revenue
As a rule, sales revenue is only recognized after performance of the work, i.e., on
delivery to and acceptance by the customer, or when the customer has obtained
control over the goods or services. In the case of long-term contracts for services
and service guarantees, sales revenue is recognized on a straight-line basis over
the term of the contract or, if services are not rendered on a straight-line basis,
based on the expected expense trend using the cost-to-cost method. In the case
of prepayments received for these services, the allocated transaction price is rec-
ognized as a contract liability at the date of the original sale transaction and rec -
ognized as sales revenue over the period of the service. If payments are made for
contracts for services to satisfy the performance obligations, the sales revenue
recognized corresponds to the payments.
If a contract contains multiple performance obligations, the transaction price is
allocated to the relevant performance obligations. In the case of contracts in which
service elements are insignificant compared with the sales revenue from the sale
of the vehicle, the residual approach is used to allocate the transaction price. This
does not result in any material differences compared with the revenue based on
relative standalone selling prices. In other cases, the transaction price is allocated
based on the relative standalone selling prices.
Furthermore, certain parts are repurchased at a later date for reconditioning at
TRATON. These result in the recognition of a right-of-return obligation to the cus-
tomer, which is calculated using the expected value method, and of a receivable
under “Other receivables” for the underlying part. Sales revenue is not recognized
in this case.
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A range of measures such as residual value guarantees are offered to third-party
finance providers and end customers in order to support sales. Residual value
guarantees result in a refund liability and are normally calculated on the basis of
the most likely amount.
Discounts, customer rebates, and other sales allowances reduce the transaction
price. Variable consideration is only included in the transaction price to the extent
that it is extremely probable that a subsequent reversal of the sales revenue can
be ruled out.
TRATON uses the practical expedient of accounting for a financing component
only if it is material and if a period of more than one year is expected between the
transfer of the product or service to the customer and the customer payment. No
financing components are accounted for because of the application of this prac -
tical expedient.
If the
TRATON GROUP retains control in addition to the risks and rewards, vehicles
sold with a buyback obligation are accounted for as operating leases. The sale price
obtained on sale of the vehicle is recognized ratably in profit or loss over the term
of the lease, net of the present value of the buyback price. Sales transactions for
which a buyback obligation is not agreed from the outset, with the customer alone
deciding whether to sell the vehicle back at a pre-arranged price, are also accounted
for as operating leases. Based on contractual arrangements and our experience
with such sales, we assume that customers will always make use of their put option.
By contrast, if the significant risks and rewards are transferred to the lessee, the
transaction is accounted for as a finance lease. The vehicle is derecognized from
the TRATON GROUP’s assets leased out and recognized in cost of sales. Additionally,
a receivable is recognized in the amount of the net investment in the lease, which
results in sales revenue being recognized in the amount of the discounted lease
payments. Further information on accounting for operating leases is contained in
Note “19. Assets leased out.” Further information on accounting for finance leases
can be found in Note “22. Financial services receivables.”
The
TRATON GROUP also secured contingent purchase options in order to partic -
ipate in the development of the residual values. This contingent purchase option
results in the recognition of a lease. This is then used to defer the sales revenue
from the sale, which must be allocated over the period of the lease. This leads to
deferred sales revenue in the amount of the calculated lease payments and finan-
cial loss in the amount of the expected residual value.
Income from customer or dealer finance is recognized over the term of the agree-
ment using the effective interest rate method and reported in sales revenue. When
interest-free or low-interest vehicle finance is awarded, sales revenue is reduced
by the interest savings granted.
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Structure of sales revenue
REPORTING PERIOD FROM JANUARY 1 TO DECEMBER 31, 2023
2023 2022
€ million
Scania
Vehicles
&
Services
MAN
Truck &
Bus
Navistar
Sales &
Services
Volks-
w
agen
Truck &
Bus
TRATON
Financial
S
ervices
Recon-
ciliation Total
of which
TRATON
Opera -
tions
Scania
Vehicles
&
Services
MAN
Truck &
Bus
Navistar
Sales &
Services
Volks-
w
agen
Truck &
Bus
TRATON
Financial
S
ervices
Recon-
ciliation Total
of which
TRATON
Opera -
tions
New vehicles 11,672 9,527 7,859 2,258 – –30 31,286 31,224 9,580 6,317 6,861 2,801 – 20 25,579 25,542
Genuine parts 2,703 1,984 2,045 148 – –27 6,853 6,854 2,475 1,800 2,394 121 – –32 6,757 6,759
Used vehicles and third-party products 1,051 682 823 3 25 –1 2,583 2,560 991 707 635 1 18 0 2,353 2,334
Engines, powertrains, and parts deliveries 447 835 – – – –272 1,010 1,010 364 691 287 – – –484 858 858
Workshop services 998 824 – 17 – –1 1,838 1,839 951 803 – 9 – –1 1,763 1,764
Rental and leasing business 678 842 55 – 473 –364 1,684 1,575 767 880 46 – 523 –418 1,798 1,693
Interest and similar income 0 – – – 1,092 –137 956 0 1 – – – 752 –89 665 1
Other sales revenue 328 117 260 50 – –92 664 674 187 133 279 19 – –56 563 603
17,878 14,811 11,042 2,477 1,589 –924 46,872 45,736 15,316 11,331 10,501 2,952 1,294 –1,060 40,335 39,554
Information about the Group’s performance obligations
The Group’s performance obligations primarily comprise sales of trucks, heavy-duty
special-purpose vehicles, buses, light commercial vehicles, and related spare parts, as
well as the provision of repair and maintenance services. In addition to standard statutory
warranties, the TRATON GROUP also offers service guarantees.
In line with standard business practice, payment terms are 30 days, although a payment
term of up to 140 days is granted in certain markets. Customers can decide to purchase
a vehicle by means of financing solutions from TRATON Financial Services or from a
Volkswagen Group subsidiary (e.g., Volkswagen Financial Services). If a third party outside
the TRATON GROUP is used, TRATON normally receives the payment from that party
shortly after the customer has received the vehicle.
Other sales revenue includes revenue from product-related royalties. The reconciliation
contains the TRATON Holding, the effects of purchase price allocations in the event of
the acquisition of an individual segment, and the consolidation adjustments between
the reporting segments and the TRATON Holding.
Sales revenue recognized in the reporting period that was included in contract liabilities
at the beginning of the reporting period (see Note “31. Other liabilities”) amounted to
€1,338 million (previous year: €1,232 million). Sales revenue includes €22 million (previ-
ous year: €37 million) relating to the satisfaction of performance obligations in previous
years.
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ORDER BACKLOG
€ million 2023 2022
Expected timing of revenue recognition
Within one year 21,517 26,287
1 to 5 years 2,382 2,077
More than 5 years 216 188
24,115 28,552
The order backlog under IFRS 15 Revenue from Contracts with Customers resulting in
revenue recognition within one year relates primarily to the delivery of vehicles. Revenue
recognition expected after more than one year relates primarily to long-term service
agreements and extended warranties. The order backlog was reduced by improving
supply shortages and delivery bottlenecks.
10. F unctional expenses
Accounting policies: operating expenses
Operating expenses are recognized when the underlying products or services are
used. Costs of advertising and other distribution expenses are recognized as
incurred.
The production cost incurred to generate sales revenue and the purchase costs of
merchandise are recognized in cost of sales. This item also includes the cost of
additions to warranty provisions for statutory or contractual guarantee obligations
that are recognized when products are sold. Cost of sales includes nonstaff over -
heads and personnel costs, as well as depreciation and amortization applicable to
production. Research and development costs not eligible for capitalization and
amortization on capitalized development costs are also reported in cost of sales.
Corresponding to the presentation of interest and commission income in sales
revenue, interest and commission expenses attributable to the financial services
business are presented in cost of sales.
Cost of sales
Cost of sales of €37,632 million was incurred in the fiscal year ended December 31, 2023.
This includes expenses of €1,060 million (previous year: €794 million) attributable to the
TRATON Financial Services segment.
Research and development costs contained in cost of sales are broken down as follows:
€ million 2023 2022
Primary R&D costs 2,184 1,905
of which capitalized development costs 687 604
Capitalization ratio (in %) 31% 32%
Amortization of, and impairment losses on, capitalized development
costs 423 379
Research and development costs recognized in the income
statement 1,921 1,679
Personnel
The personnel expenses contained in the functional expenses rose by €667 million year-
on-year. This is due primarily to the increase in the number of employees and higher
wages and salaries as a result of inflation.
PERSONNEL EXPENSES
€ million 2023 2022
Wages and salaries 5,555 4,952
Social security, post-employment, and other benefit costs 1,435 1,371
Personnel expenses 6,990 6,323
Post-employment benefit costs amounted to €312 million (previous year: €340 million).
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AVERAGE ANNUAL NUMBER OF EMPLOYEES
2023 2022
Performance-related wage-earners 49,036 46,597
Salaried staff 53,584 53,830
Total number of employees 102,620 100,427
of which in the passive phase of partial retirement 661 546
Vocational trainees 3,054 2,966
Total workforce 105,674 103,393
The increase is primarily attributable to the higher number of employees at Scania and
Navistar.
11. O ther operating income and expenses
2023 2022
€ million
Other
operating
income
Other
operating
expenses
Net in-
come (+)/
n
et
expense (–)
Other
operating
income
Other
operating
expenses
Net in-
come (+)/
n
et
expense (–)
Effects from exchange rate
movements 1,268 1,318 –51 679 726 –47
Income from reversal of
provisions and accruals
100 – 100 111 – 111
Effects from derivatives
not included in hedge
accounting 100 88 12 87 119 –32
Rental and lease income 19 – 19 36 – 36
Effects from disposal of
noncurrent assets 25 10 15 31 12 19
Expenses for litigation
and legal risks
– 230 –230 – 152 –152
Miscellaneous income
and expenses
200 332 –131 263 372 –109
1,712 1,978 –266 1,207 1,381 –174
Foreign exchange gains mainly comprise gains from changes in exchange rates between
the dates of recognition and payment of receivables and liabilities denominated in for -
eign currencies, as well as exchange rate gains resulting from measurement at the clos-
ing rate. Exchange rate losses from these items are included in other operating expenses.
Due to high inflation and the associated stabilizing measures taken by the central banks,
there were substantial currency fluctuations, leading to an increase in income and
expenses from exchange rate movements in fiscal year 2023. The effects of changes in
exchange rates largely canceled each other out within other operating income and
expense.
Litigation and legal risks include expenses of €89 million attributable to civil lawsuits
against Scania Vehicles & Services and MAN Truck & Bus in connection with the EU truck
cases in individual countries.
Income from derivatives not included in hedge accounting is mainly comprised of
exchange rate gains resulting from the fair value measurement of foreign currency deriv-
atives not included in hedge accounting. Foreign exchange losses are included in other
operating expenses. Losses from derivatives not included in hedge accounting are pri-
marily comprised of exchange rate losses from the fair value measurement of foreign
currency derivatives not included in hedge accounting.
Miscellaneous expenses of €102 million were attributable to the disposal of Scania
Finance Russia in the fiscal year under review. For more information, refer to Note “8. Non-
current assets and disposal groups held for sale.” In fiscal year 2022, miscellaneous
expenses of €154 million had been attributable to the disposal of certain noncurrent
assets and disposal groups.
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12. Net int erest income/net interest expense
REPORTING PERIOD FROM JANUARY 1 TO DECEMBER 31
€ million 2023 2022
Interest and similar income 341 184
Interest and similar expenses –703 –358
Interest expenses for lease liabilities –42 –31
Net interest on the net liability for pensions and other
post-employment benefits –87 –70
Unwinding of discount and effect of change in discount rate
on liabilities and other provisions
–55 51
–546 –224
Interest income in the current fiscal year was positively impacted in particular by the
higher interest income from derivatives due to the rise in interest rates.
The increase in interest and similar expenses is primarily due to the increased financing
volume and the general rise in interest rates.
The expense from unwinding discounts and changes in the discount rate resulted almost
exclusively from the change in the maturities of liabilities and provisions, in particular
relating to warranty obligations.
Interest income and expenses contain realized income and expenses from interest rate
derivatives on net liquidity positions.
13. O ther financial result
REPORTING PERIOD FROM JANUARY 1 TO DECEMBER 31
€ million 2023 2022
Other income from equity investments 4 3
Other expenses from equity investments –2 –2
Income and expenses from profit and loss transfer agreements 2 2
Realized income and expenses from loan receivables and
payables in foreign currency –85 189
Income and expenses from remeasurement
of primary financial instruments
–86 487
Income and expenses from changes in the fair value
of derivatives not included in hedge accounting
89 –570
Income and expenses from changes in the fair value
of derivatives included in hedge accounting
–10 15
Other financial result –89 123
The fair value changes from derivatives not included in hedge accounting offset the
currency translation effects of realization and measurement on net financial debt. There
was a residual expense in fiscal year 2023 that is primarily attributable to the devaluation
of Argentinian currency. By contrast, a residual amount had been incurred in the previous
year because the net expense from interest rate swaps was lower than net income from
foreign currency positions in net financial debt as a result of a general rise in interest
rates.
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14. In come taxes
Accounting policies: income taxes
Tax provisions contain obligations under current taxes. A liability is recognized for
other provisions resulting from supplementary tax payments that are due in this
context.
Deferred tax assets for tax loss carryforwards are usually measured on the basis of
future taxable income over a planning period of five fiscal years. Deferred tax assets
that are unlikely to be realized within a clearly predictable period are reduced by
valuation allowances.
The exception introduced in May 2023 by the amendments to IAS 12 means that
deferred taxes in connection with income taxes resulting from enacted or
announced tax law provisions to implement the Model Rules on Global Minimum
Taxation (Pillar 2) published by the OECD are neither recognized nor reported in
the TRATON GROUP.
Estimates and management’s judgment: income taxes
TRATON SE and its subsidiaries operate all over the world and are continuously
audited by the local financial authorities. Changes in tax legislation, jurisdiction,
and how these are interpreted by the financial authorities in the different countries
may result in tax payments that differ from the estimates made in these financial
statements. The measurement of the tax provision is based on the most probable
estimate that this risk materializes. Depending on the individual case, whether
tax-related uncertainties are recognized individually or as part of a group at TRATON
depends on which presentation is better suited to forecasting whether the tax-
related risk materializes. In the case of contracts entailing cross-border goods and
services supplied within the Group, determining the price of the individual prod-
ucts and services is particularly complex because no market prices are available
for the Company’s own products in many cases or because using the market prices
of similar products entails a degree of uncertainty due to lack of comparability. In
these cases, the products and services are priced using recognized standard val-
uation methods, including for tax purposes.
COMPONENTS OF TAX INCOME AND EXPENSE
€ million 2023 2022
Current tax expense (+)/income (–), Germany 54 52
Current tax expense (+)/income (–), outside Germany 836 782
Current income taxes 890 833
of which prior-period expense (+)/income (–) –15 2
Deferred tax expense (+)/income (–), Germany 210 –32
Deferred tax expense (+)/income (–), outside Germany –298 –382
Deferred tax expense (+)/income (–) –89 –414
The statutory corporate income tax rate in Germany for the 2023 assessment period was
15%. Including trade tax and the solidarity surcharge, this produces an aggregate tax rate
of 31.9% (previous year: 31.9%).
The measurement of deferred taxes in the German consolidated tax group as of Decem-
ber 31, 2023, was based on a tax rate of 31.9% (previous year: 31.9%).
The local income tax rates applied to foreign companies vary between 0 and 46%. In cases
of split tax rates, the tax rate applicable to undistributed profits was applied. The deferred
tax expense/income resulting from changes in tax rates amounted to €–4 million (pre -
vious year: €0 million) at Group level in 2023.
The realization of tax loss carryforwards from previous years reduced current income
taxes in 2023 by €363 million (previous year: €112 million).
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The actual income tax expense in the reporting period decreased by €35 million (previ-
ous year: €81 million) due to the utilization of previously unrecognized tax losses and tax
credits from previous periods. Previously unrecognized tax losses and tax credits con -
tributed to a €164 million (previous year: €119 million) reduction in deferred tax expense
in 2023.
TAX LOSS CARRYFORWARDS
€ million 12/31/2023 12/31/2022
Available for an indefinite period 1,789 2,495
Limit on utilization within the next 10 years 666 987
Limit on utilization between 11 and 20 years 1,885 2,072
Total currently unused tax loss carryforwards 4,341 5,554
Indefinite tax loss carryforwards 291 344
Expire within the next 10 years 95 113
Expire between 11 and 20 years 196 764
Total unusable tax loss carryforwards 581 1,222
WRITE-DOWNS OF DEFERRED TAX ASSETS
€ million 12/31/2023 12/31/2022
Deferred tax expense resulting from the write-down
of a deferred tax asset 22 24
Deferred tax income resulting from the reversal
of a write-down of a deferred tax asset
–45 –22
Tax credits granted by various countries amounted to €155 million (previous year:
€171 million) as of December 31, 2023.
NONRECOGNITION OF DEFERRED TAX ASSETS
€ million 12/31/2023 12/31/2022
for deductible temporary differences – –
for tax credits that would expire in the next 20 years 103 135
for tax credits that will not expire 0 8
No deferred taxes were recognized for the retained earnings of €37,228 million (previous
year: €33,537 million) at foreign subsidiaries because these profits are largely expected
to be reinvested in the operations of the companies concerned. As a general rule, distri-
bution would lead to additional income tax expense.
Deferred taxes in respect of temporary differences and tax loss carryforwards of
€527 million (previous year: €1,321 million) were recognized as of December 31, 2023,
without any offsetting deferred tax liabilities in the same amount. The companies con-
cerned are expecting positive taxable income in the future, following losses in the current
or previous fiscal year.
In fiscal year 2023, total deferred taxes of €–11 million (previous year: €168 million) were
recognized directly in other comprehensive income. Changes in deferred taxes classified
by balance sheet item are presented in the statement of comprehensive income.
Global minimum taxation
The Model Rules on Global Minimum Taxation (Pillar 2) published by the OECD have been
enacted or substantially enacted in certain countries in which the TRATON GROUP oper-
ates. The legislation in Germany comes into force for the fiscal year beginning on January
1, 2024. TRATON and the Volkswagen Group both fall within the scope of the enacted or
substantially enacted legislation and have assessed the potential risk in relation to the
global minimum tax.
The assessment of the potential risk from the minimum tax is based on the most recently
available country-by-country reporting and annual financial statements for the Group’s
business units. Based on the assessment, the effective Pillar 2 tax rates are above 15% in
most of the countries in which TRATON operates. However, there is a small number of
countries where the temporary safe harbor does not apply and the effective Pillar 2 tax
rate is below 15%. TRATON does not expect any considerable income tax risk to arise from
Pillar 2 in these countries.
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Deferred taxes classified by balance sheet item
The following recognized deferred tax assets and liabilities were attributable to recog -
nition and measurement differences in the individual balance sheet items and to tax loss
carryforwards:
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets Deferred tax liabilities
€ million 2023 2022 2023 2022
Intangible assets 139 138 1,682 1,694
Property, plant, and equipment,
and assets leased out 102 108 1,697 1,844
Noncurrent financial assets 1 5 6 7
Inventories 53 45 55 104
Receivables and other assets
(including financial services
receivables) 313 310 271 233
Pensions and other
post-employment benefits 521 499 0 3
Liabilities and other provisions 2,573 2,709 153 120
Loss allowances on deferred tax
assets from temporary differences
–2 –4 – –
Temporary differences,
net of loss allowances
3,700 3,808 3,864 4,005
Tax loss carryforwards,
net of loss allowances
1,118 1,197 – –
Tax credits, net of loss allowances 53 34 – –
Value before consolidation
and offset
4,871 5,039 3,864 4,005
of which attributable to
n
oncurrent assets and liabilities 3,822 3,888 3,540 3,688
Offset –3,300 –3,470 –3,300 –3,470
Consolidation 796 705 116 155
Amount recognized 2,366 2,274 681 690
RECONCILIATION OF EXPECTED TO EFFECTIVE INCOME TAX EXPENSE
€ million 2023 2022
Earnings before income tax 3,253 1,560
Expected income tax expense (+)/income (–)
(tax rate: 31.9%; previous year: 31.9%)
1,037 497
Reconciliation:
Effect of different tax rates outside Germany –143 –84
Proportion of taxation relating to:
tax-exempt income –93 –83
expenses not deductible for tax purposes 255 199
effects of loss carryforwards and tax credits –233 –207
Prior-period tax expense and tax risks –22 50
Effect of tax rate changes –4 0
Other taxation changes 5 46
Effective income tax expense (+)/income (–) 802 419
Effective tax rate (in %) 25 27
15. E arnings per share
Accounting policies: earnings per share
Earnings per share are calculated by dividing consolidated earnings after tax attrib-
utable to TRATON SE shareholders by the average number of shares outstanding.
The computation of diluted earnings per share is identical to that of basic earnings
per share because TRATON SE has not issued any financial instruments that could
result in dilutive effects. Dilution may arise in the future if TRATON SE’s contingent
capital is exercised.
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€ million 2023 2022
Earnings after tax (attributable to shareholders of TRATON SE) 2,451 1,141
Number of shares outstanding 500,000,000 500,000,000
Earnings per share (€) 4.90 2.28
TRATON SE’s share capital amounts to €500 million and is composed of 500 million (pre-
vious year: 500 million) no-par value bearer shares.
16. Goodwill an d impairment losses on assets
Accounting policies: goodwill and impairment losses on assets
Goodwill from business combinations is tested for impairment at least once a year.
The goodwill impairment test is usually conducted at segment level on the basis
of value in use. The same applies to indefinite-lived intangible assets (especially
brand names) and intangible assets not yet available for use (in particular capital-
ized development costs prior to the start of series production).
In the case of other intangible assets and property, plant, and equipment, an
impairment test is performed if there are indications of impairment at the report-
ing date.
As a rule, value in use is the present value of the expected future cash flows from
the asset concerned. If no recoverable amount can be measured for an individual
asset, the recoverable amount is determined for the smallest identifiable group of
assets that generate cash flows (cash-generating unit) to which the asset belongs.
If the recoverable amount is less than the carrying amount, an impairment loss is
recognized in profit or loss for the period.
Estimates and management’s judgment: recoverability of
cash-generating units
The impairment testing of nonfinancial assets — espec ially goodwill, brand names,
capitalized development costs, other intangible assets, and property, plant, and
equipment — and equit y-accounted investments, or investments accounted at
cost, require assumptions to be made about future market trends, the future cash
flows to be derived on that basis, and the discount rate to be applied. The cash
flows are derived from the detailed sales and revenue planning for commercial
vehicles, profitability (gross margin) projections for products, and trends in the
service business. They also reflect the transition to electric mobility and the asso -
ciated regulatory timetables (see also Note “4. Effects of climate change”). Esti-
mated cash flows after the end of the five-year planning period are based on a
growth rate of 1% (previous year: 1%) per annum, which also reflects the switch
toward electric mobility.
Management inputs its mid-range expectations into the planning on the basis of
estimates of changes in the development of the economic environment, market
volume, market share, and cost and price trends. The planning is based on past
experience and external sources of information. The planning period is generally
five years.
The TRATON GROUP’s planning is based on the assumption that global economic
output will grow overall in 2024, albeit at a slower pace. The persistently high infla-
tion in many regions and the restrictive monetary policy measures taken by central
banks to rein this in are expected to increasingly dampen consumer spending.
Risks will continue to arise from protectionist tendencies, turbulence in the finan-
cial markets, and structural deficits in individual countries. Growth prospects are
also being negatively impacted by persistent geopolitical tensions and conflicts.
The war in Ukraine and the conflicts in the Middle East pose particular risks. It is
also assumed that both the advanced economies and the emerging markets will
show positive momentum on average, even with below-average growth in gross
domestic product. The global economy is also expected to recover in 2025 and
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continue down a path of stable growth until 2028. This macroeconomic environ-
ment also results in an increased level of uncertainty affecting the calculation of
values in use. Even though the interest rate hikes by central banks in 2023 already
resulted in a slowdown in inflation, it has remained at a high level. We are expect-
ing slightly lower inflationary trends for fiscal year 2024. Starting in 2025, we believe
that the increases in material and personnel costs will return to levels normally
seen in the past, depending on the region. Increases in sales revenue were also
projected because of the rise in costs.
In the commercial vehicle markets relevant to the TRATON GROUP, the Executive
Board is anticipating a slight overall market decline in the period from 2024 to
2028, with varying regional trends. We are anticipating a stable commercial vehi-
cle market in the EU27+3 region, whereas a slight decline is expected in North
America. Market volatility is likely to occur in the years before and after the intro -
duction of new emissions standards in the EU27+3 region and in North America.
We are anticipating a moderate increase in South America in the planning period
following a weak 2023 impacted by the introduction of a new emissions standard
in Brazil. More details on expected industry developments and the forecast for
fiscal year 2024 can be found in the “Report on expected developments” in the
Combined Management Report.
Based on volume and price effects, we are projecting an increase in sales revenue
over the planning period. An expansion in electric mobility is also projected in all
segments in the five-year planning (see also Note “4. Effects of climate change”).
The costs from the transition to electric mobility were included in the cash flows.
At Scania Vehicles & Services, increasing unit sales volumes and the growth of the
Vehicle Services business will also have a positive impact on projected cash flows.
For MAN Truck & Bus, 2023 was the turnaround year, as the positive impact of the
realignment program initiated in 2021 could not be fully leveraged in the previous
year due to the negative consequences of the war in Ukraine. Following a stabili-
zation phase in 2024, the transition to electric mobility will increasingly impact
cash flows from fiscal year 2025 onward.
Another goal is to guide Navistar Sales & Services to new strength. The measures
for doing this range from using the powerful component and technology setup
within the TRATON GROUP and expanding the financial services business, all the
way to further leveraging one of the largest independent dealer and service net -
works in the North American market, to which Navistar already has access.
We are also expecting Volkswagen Truck & Bus to strengthen its market position
in Brazil as well as enter new markets by expanding its global footprint.
Overall, these assumptions led to an expected improvement in operating return
on sales (adjusted) up to 2028 across all cash-generating units to which goodwill
is allocated.
The planning assumptions are adjusted to reflect the current state of knowledge.
When determining the value in use for the impairment test, the following pretax
weighted average cost of capital ( WACC) rates are used, modified if necessary to
reflect country-specific risks:
WACC 2023 2022
Scania Vehicles & Services 12.1% 13.4%
MAN Truck & Bus 12.1% 13.4%
Navistar Sales & Services 12.6% 14.1%
Volkswagen Truck & Bus 17.5% 19.2%
The WACC rates are calculated based on the interest rate for risk-free investments,
the market risk premium, and the cost of debt. Additionally, specific peer group
information on beta factors and the cost of debt are considered. The composition
of the peer groups used to determine beta factors is continuously reviewed and
adjusted if necessary.
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CHANGES IN GOODWILL
€ million 2023 2022
Cost
Balance as of 01/01 6,254 6,242
Currency translation differences –102 0
Additions from business combinations 3 18
Disposals of subsidiaries 0 –6
Balance as of 12/31 6,154 6,254
Depreciation and amortization
Balance as of 01/01 70 69
Other changes 1 1
Balance as of 12/31 70 70
Carrying amount as of 12/31 6,083 6,184
The allocation of goodwill to the segments is shown in the following table:
€ million 12/31/2023 12/31/2022
Goodwill by segment
Scania Vehicles & Services 2,560 2,560
MAN Truck & Bus 222 222
Navistar Sales & Services 2,989 3,101
Volkswagen Truck & Bus 312 301
6,083 6,184
It was not necessary to charge impairment losses on our goodwill. Goodwill and brand
names are not impaired even if the growth forecast for the perpetuity or the discount
rate varies by –/+ 1.0 percentage points. As a result of the transition of the commercial
vehicle industry to electric mobility and the associated uncertainty, the projected cash
flows were also tested for sensitivity in light of the changes considered possible, and
their recoverability was established.
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17. Intan gible assets
Accounting policies: intangible assets
Purchased intangible assets are recognized at cost. The cost of capitalized devel-
opment projects consists of all direct and overhead costs that are directly attrib -
utable to the development process. They are amortized using the straight-line
method from the start of use (e.g., start of production) over the expected life of the
models or technologies developed.
The amortization periods for intangible assets are broken down as follows:
Expected useful lives
Software and licenses 3–5 years
Capitalized development costs 3–15 years
Customer relationships 5–20 years
Brand names indefinite
The indefinite useful life of brand names acquired under business combinations
generally arises from the continued use and maintenance of a brand. Brand names
from business combinations and intangible assets that are not yet available for
use (in particular capitalized development costs prior to the start of series produc-
tion) are also tested for impairment at least once a year in accordance with the
principles of goodwill impairment testing.
Amortization charges and impairment losses in a reporting period are allocated
to the corresponding functions in the income statement and are included in par -
ticular in cost of sales and distribution expenses.
Estimates and management’s judgment: useful life
of intangible assets
Estimates of the useful life of finite-lived intangible assets are based on experience
and reviewed regularly. Where estimates are modified, the residual useful life is
adjusted and an impairment loss is recognized, if necessary.
For further information, see Note “16. Goodwill and impairment losses on assets.”
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CHANGES IN INTANGIBLE ASSETS IN THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2023
2023 2022
€ million Brand names
Customer
relationships
Capitalized
development
costs
Other
intangible
assets Total Brand names
Customer
relationships
Capitalized
development
costs
Other
intangible
assets Total
Cost
Balance as of 01/01 1,732 2,994 6,249 676 11,651 1,761 2,856 5,826 659 11,102
Currency translation differences –27 –76 1 2 –101 –19 138 –143 –12 –36
Additions – – 687 29 717 – – 604 24 629
Additions from business combinations – – – – – – 1 – 2 3
Transfers – – 0 37 37 – – 0 19 19
Disposals 0 – 0 –10 –10 –11 – –34 –16 –60
Disposals of subsidiaries/transfer
to assets held for sale – – – 0 0 – – –5 –2 –7
Other changes in basis of consolidation – – – – – – – – 1 1
Balance as of 12/31 1,705 2,918 6,937 734 12,293 1,732 2,994 6,249 676 11,651
Amortization and impairment
Balance as of 01/01 41 859 3,138 418 4,456 37 603 2,905 383 3,929
Currency translation differences 3 –11 3 3 –2 4 –6 –112 2 –113
Additions to cumulative amortization 0 253 393 58 703 2 262 379 51 693
Additions to cumulative impairment losses – – 31 1 32 – – 0 1 2
Transfers – – – 0 0 – – – –4 –4
Disposals 0 – 0 –9 –9 –2 – –34 –13 –49
Disposals of subsidiaries/transfer
to assets held for sale
– – – –1 –1 – – – –2 –2
Balance as of 12/31 43 1,101 3,564 471 5,179 41 859 3,138 418 4,456
Carrying amount as of 12/31 1,661 1,817 3,373 263 7,114 1,691 2,136 3,111 257 7,195
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The allocation of the brand names to the segments is shown in the following table:
€ million 12/31/2023 12/31/2022
Brand names by segment 1,661 1,691
Scania Vehicles & Services 878 878
Navistar Sales & Services 760 788
TRATON Financial Services 24 24
Impairment losses on capitalized development costs of €31 million were recognized in
cost of sales in fiscal year 2023 in connection with the realignment of the bus business
and the discontinuation of body production for Scania bus chassis at the plant in Słupsk,
Poland. These are attributable to Scania Vehicles & Services.
18. P roperty, plant, and equipment, right-of-use assets under IFRS 16,
and lease liabilities
Accounting policies: property, plant, and equipment, right-of-use
assets under IFRS 16, and lease liabilities
Items of property, plant, and equipment are measured at cost and reduced by
depreciation and, if necessary, impairment losses (for further information, refer
also to Note “16. Goodwill and impairment losses on assets.”)
Items of property, plant, and equipment are depreciated using the straight-line
method ratably over their estimated useful lives. The useful lives of items of prop-
erty, plant, and equipment are periodically reassessed and adjusted if necessary.
Expected useful lives
Buildings 10–50 years
Land improvements 5–33 years
Technical equipment and machinery 3–12 years
Other equipment 3–15 years
Operating and office equipment 3–15 years
The right-of-use assets from contracts in which the TRATON GROUP is a lessee are
reported under “Property, plant, and equipment” in the balance sheet and gener-
ally depreciated over the term of the lease using the straight-line method.
The lease liability is measured by reference to the outstanding lease payments,
discounted using the lessee’s incremental borrowing rate. The lease liability is
subsequently measured using the effective interest rate method reflecting the
lease payments made. Interest expenses from unwinding the discount on lease
liabilities are presented in interest expense in the income statement and in net
cash provided by/used in operating activities in the statement of cash flows. In
addition, the TRATON GROUP exercises the options under IFRS 16 not to recognize
leases for intangible assets and low-value assets, as well as short-term leases, as
leases and instead to recognize the corresponding lease payments as expenses in
the income statement.
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Estimates and management’s judgment: useful lives of noncurrent
assets and measurement of right-of-use assets and lease liabilities
Estimates of the useful life of items of property, plant, and equipment are based
on experience and are reviewed regularly. Where estimates are modified, the resid-
ual useful life is adjusted and an impairment loss is recognized, if necessary. As
part of this review, new estimates were made and the useful life of certain items
of property, plant, and equipment were extended in January 2023. These adjust -
ments in 2023 resulted in a positive effect in the mid tens of millions on operating
result. A positive effect in the mid double-digit millions is also expected for 2024.
Measurement of right-of-use assets from leases and the associated lease liabilities
is based on a best estimate of the exercise of extension and termination options.
This estimate is updated in the event of material changes in the operating envi -
ronment or the contract.
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CHANGES IN PROPERTY, PLANT, AND EQUIPMENT IN THE PERIOD FROM JANUARY 1 TO DECEMBER 31
2023 2022
€ million
Land,
land rights,
and buildings,
including
buildings on
third-party
land
Technical
equipment
and
machinery
Other
equipment,
operating
and office
equipment
Payments on
account
and assets
under
construction Total
Land,
land rights,
and buildings,
including
buildings on
third-party
land
Technical
equipment
and
machinery
Other
equipment,
operating
and office
equipment
Payments on
account
and assets
under
construction Total
Cost
Balance as of 01/01 5,936 5,099 3,276 1,311 15,623 5,593 4,694 3,028 1,334 14,650
Currency translation differences –23 2 9 6 –6 –39 –117 –27 16 –168
Additions 268 137 377 984 1,766 290 191 267 852 1,600
Additions from business combinations 53 1 0 0 55 14 14 14 – 42
Transfers 317 –565 1,108 –897 –37 278 460 126 –889 –24
Disposals –113 –119 –200 –13 –445 –153 –144 –129 –3 –429
Disposals of subsidiaries/transfer to assets
held for sale –1 0 –1 0 –2 –47 –17 –7 0 –71
Other changes in basis of consolidation – – – – – 1 17 3 1 23
Balance as of 12/31 6,438 4,554 4,570 1,391 16,953 5,936 5,099 3,276 1,311 15,623
Depreciation and impairment
Balance as of 01/01 2,009 3,180 2,077 4 7,269 1,817 3,051 1,785 3 6,657
Currency translation differences –3 4 11 0 13 –19 –85 –19 0 –122
Additions to cumulative depreciation 325 329 372 – 1,027 315 325 419 – 1,059
Additions to cumulative impairment losses 8 10 5 2 25 23 1 2 3 29
Transfers –3 –866 868 – 0 0 0 0 – 0
Disposals –60 –106 –173 – –339 –97 –125 –113 – –335
Disposals of subsidiaries/transfer to assets
held for sale
–1 0 –1 – –2 –32 –9 –3 0 –44
Reversals of impairment losses 0 –1 – –2 –3 –1 0 – –2 –3
Other changes in basis of consolidation 0 0 – – 0 1 22 5 – 28
Balance as of 12/31 2,275 2,551 3,159 4 7,989 2,009 3,180 2,077 4 7,269
Carrying amount as of 12/31 4,162 2,004 1,411 1,387 8,964 3,928 1,919 1,200 1,307 8,354
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Impairment losses on property, plant, and equipment amounting to €22 million were
recognized in cost of sales in fiscal year 2023 in connection with the realignment of the
bus business and the discontinuation of body production for Scania bus chassis at the
plant in Słupsk, Poland. These were attributable to Scania Vehicles & Services.
Impairment losses of €29 million on property, plant, and equipment in the previous year
had been mainly attributable to the disposal of the Russian distribution companies of
MAN Truck & Bus and Scania Vehicles & Services.
Right-of-use assets from leases reported in property, plant, and equipment changed as
follows:
2023 2022
€ million
Right-of-use assets
contained in land, land
rights, and buildings,
including buildings on
third-party land
Right-of-use assets
contained in other
equipment, operating
and office equipment
Total right-of-use
assets
Right-of-use assets
contained in land, land
rights, and buildings,
including buildings on
third-party land
Right-of-use assets
contained in other
equipment, operating
and office equipment
Total right-of-use
assets
Cost
Balance as of 01/01 1,530 290 1,822 1,426 266 1,693
Currency translation differences –11 –2 –14 1 –5 –5
Changes in basis of consolidation 18 0 18 –12 0 –12
Additions 165 104 274 244 85 330
Disposals –100 –93 –194 –128 –55 –183
Balance as of 12/31 1,601 299 1,906 1,530 290 1,822
Depreciation and impairment
Balance as of 01/01 491 147 638 381 125 507
Currency translation differences –4 –1 –6 –3 –3 –6
Changes in basis of consolidation –1 – –1 –6 0 –7
Additions to cumulative depreciation 188 84 273 189 78 267
Additions to cumulative impairment losses – – – 1 0 1
Disposals –55 –85 –141 –71 –52 –123
Balance as of 12/31 619 144 764 491 147 638
Carrying amount as of 12/31 982 155 1,142 1,039 144 1,183
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Taking into account future interest payable, the maturity structure of the lease liabilities
reported in financial liabilities is as follows:
€ million 12/31/2023 12/31/2022
Within one year 279 271
In two to five years 789 740
In more than five years 311 368
1,380 1,379
The interest expenses for lease liabilities, the expenses for variable lease payments, and
the expenses for low-value and short-term underlying assets in the year under review do
not materially affect our net assets, financial position, or results of operations. Overall,
leases resulted in cash outflows of €359 million (previous year: €363 million) in the report-
ing period.
The following table shows an overview of potential future cash outflows that were not
included in the measurement of lease liabilities:
€ million 12/31/2023 12/31/2022
Potential future cash outflows due to
extension options 661 705
leases not yet commenced (contractual obligation) 7 2
19. A ssets leased out
Accounting policies: assets leased out
The “Assets leased out” line item reports assets for which the TRATON GROUP is
the lessor. These include in particular vehicles and real estate marketed in the
context of short-term rentals or operating leases, as well as vehicles that continue
to be attributable to the TRATON GROUP as a result of buyback agreements. The
underlying asset is measured at amortized cost, recognized in the TRATON GROUP’s
assets leased out, and depreciated to the calculated residual value over the esti -
mated useful life using the straight-line method. The useful lives underlying depre-
ciation generally correspond to those of items of property, plant, and equipment
used by the entity. Changes to the calculated residual value are taken into account
by adjusting the future depreciation rates. Impairment losses identified as a result
of an impairment test in accordance with IAS 36 Impairment of Assets are recog-
nized. The lease payments received in the period are recognized as income in the
income statement on a straight-line or other systematic basis. Depreciation and
impairment losses are included in functional expenses. Further information on
accounting for operating leases is contained in Note “9. Sales revenue.”
As a general rule, the fair value of investment property is calculated using an
income capitalization approach based on internal data, using internal calculations,
or by external experts (Level 3 of the fair value hierarchy).
Estimates and management’s judgment: recoverability of assets
leased out
The recoverability of the Group’s assets leased out depends in particular on the
residual value of vehicles leased out after the end of the lease term, since this
constitutes a significant portion of the expected cash flows. Forecasting residual
values requires management to make assumptions about the future supply of and
demand for vehicles, as well as vehicle price trends. These assumptions are based
either on qualified estimates or on information published by expert third parties.
Where available, qualified estimates are based on external data and also reflect
additional information available internally, such as values derived from past expe-
rience and current sales data.
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CHANGES IN ASSETS LEASED OUT IN THE PERIOD FROM JANUARY 1 TO DECEMBER 31
2023 2022
€ million
Vehicles
leased out
Investment
property
Other assets
leased out Total
Vehicles
leased out
Investment
property
Other assets
leased out Total
Cost
Balance as of 01/01 9,139 99 41 9,279 9,785 94 44 9,922
Currency translation differences –17 0 0 –18 –5 4 –3 –5
Additions 1,875 1 0 1,877 1,599 0 0 1,599
Additions from business combinations – – 0 0 1 – – 1
Transfers 0 – – 0 –1 3 – 2
Disposals –2,592 0 0 –2,593 –2,234 –1 0 –2,235
Disposals of subsidiaries/transfer to assets held for sale – – – – –6 – – –6
Balance as of 12/31 8,405 100 40 8,545 9,139 99 41 9,279
Depreciation and impairment
Balance as of 01/01 3,045 37 36 3,117 2,926 33 39 2,998
Currency translation differences –9 0 0 –9 –1 0 –3 –4
Additions to cumulative depreciation 1,078 2 0 1,080 1,199 3 0 1,202
Additions to cumulative impairment losses 2 – – 2 1 1 – 2
Transfers 0 – – 0 – 1 – 1
Disposals –1,301 0 0 –1,301 –1,075 0 0 –1,075
Disposals of subsidiaries/transfer to assets held for sale – – – – –4 – – –4
Reversals of impairment losses –2 – – –2 –1 –1 – –2
Balance as of 12/31 2,812 38 36 2,887 3,045 37 36 3,117
Carrying amount as of 12/31 5,593 61 4 5,658 6,095 63 5 6,162
Since new business cannot compensate for expiring contracts, a year-on-year decline
was recorded in vehicles leased out. This reflects the reduced share of business with
buyback agreements in total unit sales.
The “Investment property” item contains land and buildings held for rental or capital
appreciation with a fair value of €100 million (previous year: €103 million). Lease income
from investment property amounted to €5 million (previous year: €22 million) in the
reporting period. The decrease is due to a nonrecurring effect at Navistar in 2022.
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Additional information on operating leases
The following payments are expected in the years shown from outstanding undiscounted
lease payments arising from operating leases:
€ million 12/31/2023 12/31/2022
Within one year 417 473
In one to two years 269 285
In two to three years 194 197
In three to four years 118 115
In four to five years 72 58
In more than five years 35 23
Total lease payments 1,104 1,151
Income from operating leases came to €1,683 million (previous year: €1,829 million).
20. E quity-method investments
Accounting policies: equity-method investments
Equity-method investments include associates and joint ventures. Associates and
joint ventures are initially measured at cost. In subsequent periods, the TRATON
GROUP’s share of earnings generated after acquisition is recognized in the income
statement. Effects from the increase in the share of the equity (for example capital
increases) of entities in which the TRATON GROUP does not participate, or only has
a disproportionately low participation, are also recognized in the share of earnings
of equity-method investments in the income statement. Other changes in the
equity of associates and joint ventures, such as currency translation differences,
are recognized in other comprehensive income. Changes in the interests/noncon-
trolling interests in subsidiaries of equity-method investments are accounted for
directly in equity.
Intercompany profits or losses from transactions by Group companies with asso -
ciates and joint ventures are eliminated ratably in the profit or loss of the Group
companies. If there are indications that the carrying amount may be impaired,
equity-method investments are tested for impairment; any impairment loss is rec-
ognized in the income statement (see Note “16. Goodwill and impairment losses
on assets”). If the reason for impairment ceases to exist at a later date, the impair-
ment loss is reversed to the carrying amount that would have been determined
had no impairment loss been recognized.
Goodwill arising from the acquisition of an associate or a joint venture is included
in the carrying amounts of investments in associates or joint ventures.
Sinotruk
Sinotruk (Hong Kong) Limited, Hong Kong, China (Sinotruk) is one of the largest truck
manufacturers in the Chinese market. Sinotruk’s principal place of business is in Hong
Kong, China. Due to the application of the equity method, taking into account local cap-
ital market regulations relating to the disclosure of financial information for the investee,
a reporting period that differs from the TRATON GROUP’s fiscal year is used to account
for Sinotruk.
The market price of the Sinotruk shares held by TRATON was €1,222 million (previous
year: €903 million) as of December 31, 2023.
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