Traton Financial Services revenue up 23% as ordering grows despite backlog

Traton Financial Services’ revenue was up 23% annually as a result of the company’s growing sales and investment into expansion, following strong gains in the first half of the year, the company announced today.  

Traton Financial Services recorded 2023 revenue of 1.6 billion euros ($1.7 billion), up 13.3% from $1.4 billion in 2022. The company’s estimated return on equity was 8.4%, up 4.5 percentage points over 2022.  

New-vehicle sales by Munich-based bus and truck manufacturer Traton Group were up 22% year over year to $33.9 million. Traton Financial Services is the financing arm of Traton Group, and sells globally from its German headquarters. 

Order backlog pushes up unit sales  

“We were able to stabilize and increase production in the course of 2023 and gradually reduce our high order backlog,” Traton Chief Executive Christian Levin said in the annual report. 

But Navistar Financial Services, the retail financing division that Traton Financial Services relaunched in October 2023, “consciously remained restrictive in its acceptance of new orders as a result of its very high order backlog, a consequence of pent-up demand,” Levin said.  

The existing backlog pushed North American orders for Traton down. The manufacturer noted in its annual report that it “recorded a sharp decline” in 2023 orders, mainly because “existing uncertainty with regard to economic development and a more difficult financing environment led to demand returning to normal,” following a high volume of orders in 2022.   

Overall, Traton Group received 264,798 orders in 2023, down 21% from 2022, and its total sales revenue was roughly $51 million, up 16% YoY.  

North American orders down, sales up  

For full-year 2023, Traton’s North American sales increased:  

• Truck orders totaled 53,213, down 27% YoY;  
• Truck sales sat at 78,288 units, up 14% YoY; 
• Bus orders were 13,975, down 7% YoY; and 
• Bus sales totaled 15,152, up 9%.  

North America remains a strong market for Traton’s trucking business. Truck sales were up 12% to 42,357 for 2023, representing roughly 23.5% of the company’s overall truck sales.  

The same was true for the bus market. North American bus sales were up 1% YoY and accounted for about 40% of the company’s total 2023 sales.  

Levin said in the annual report that Traton will gain “additional stability” from its financial arm this year. 

“With Traton Financial Services, we took an important step forward in 2023 on our journey to establish a global captive and integrated financial services business,” he said. “This will allow us to offer even better solutions to our customers,” Levin said of Navistar’s relaunch. “Optimizing the Traton Group’s financing setup helps to make our earnings more resilient to the ups and downs of the commercial vehicle markets.”  

Shares of Traton SE [OTCPK:TRATF] were trading at $26.10 at market close today, down 1.91% or 51 cents from market open. Traton has a market capitalization of $14 billion.  

Editor’s note: All amounts have been converted to U.S. dollars.  

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