2020 ANNUAL REPORT “For TRATON, sustainable economic growth always includes treating people and nature with respect. We call this the People, Planet, and Performance triad, which will shape the future of our Company.” MATTHIAS GRÜNDLER, CEO of the TRATON GROUP To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information p. 5 p. 6 Electric city Batteries in everyday use The Munich Transport Corporation aims To reduce CO2 emissions, to operate all its buses with zero local Norwegian grocery wholesaler emissions by 2030 and is also relying on ASKO relies on battery-powered Equal opportunities at the wheel the MAN Lion’s City 12E for this purpose. trucks from Scania. Grace Adomako, the woman on our cover, is a bus driver in Accra, the capital city of Ghana. She stands for around 140 other women who have been trained as bus and truck drivers thanks to the support of Scania and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, a German agency p. 7 p. 8 for sustainable development. The aim is to promote equal opportunities in the West African country. p. 4 Pluralism & Inclusion (P&I) Sofia Vahlne, responsible for the P&I Digital, efficient, transparent Assembly 4.0 program at TRATON, talks to conductor RIO is developing a cloud-based platform Volkswagen Caminhões e Ônibus is using Jonathan Nott about how diversity and solution that organizes all processes for Industry 4.0 principles to align production success tie together — in the new TRATON Volkswagen Group Logistics — and the of the new Meteor truck even more podcast “Sustainability Stories.” potential is huge. closely with customer requirements. To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information TRATON 216,251 82,600 Incoming orders (units) Fiscal year 190,180 2020 Sales (units) With its brands MAN, 29 Scania, Volkswagen PRODUCTION AND ASSEMBLY SITES Caminhões e Ônibus, and RIO, the TRATON 22,580 GROUP is one of the Sales revenue Employees (€ million) world’s leading providers (As of December 31, 2020) of transportation solutions. The Group IN aims to reinvent 17 transportation — with COUNTRIES ON its products, its services, Operating result and as a partner to its 4 (€ million) 0.4% Operating return CONTINENTS customers. 81 on sales To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information EQUAL OPPOR- TUNITIES AT THE WHEEL Six months is all it takes to lay the foundation for a new life: in Ghana, the West African Transport Academy is training women to become truck and bus drivers in a bid to ensure greater equality of opportunity between men and women. Scania and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, a German agency for sus- tainable development, founded the vocational training center in 2016, and the demand for a training slot has been enormous from day one. By now, around 140 women have earned a bus or truck license. Many of them did not even have a license to drive a car before they began. Successful completion of the training is a ticket to a fairly paid job. This was also the case for Grace Adomako, who now drives a city bus in Accra, the capi- tal of Ghana. She recalls: “In the beginning, driving a large city bus felt strange, but I really wanted to succeed.” Scania is planning to launch a similar project in neighboring Cote d’Ivoire in 2021 to offer training for both women and men in vehicle maintenance and upkeep as well as operation. → traton.com/equal-opportunities Since successfully completing her training, Grace Adomako has been working as a bus driver in Accra, Ghana’s capital. 3 To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information Pluralism and inclusion (P&I) are now fixed corporate princi- Sustainability Stories — subscribe ples in the TRATON GROUP. This is because actively and pur- to the TRATON podcast now at: posefully including the diverse perspectives, knowledge, and talents of all the employees into an organization’s daily work increases its innovative power. In the new “Sustainabil- ity Stories” podcast, Sofia Vahlne, responsible for P&I at TRATON, and orchestra conductor Jonathan Nott talk about how achieving inclusion in very diverse teams leads to sus- tainable success. traton.com/podcast “ An orchestra is “ I like the descrip- about diversity in tion of pluralism & creative thought. inclusion in musical And it’s up to me to terms. It encapsu- encourage young lates TRATON’s goal: musicians to go to harness the cre- beyond the bound- ative perspectives aries they may that come from our have set for them- great employee di- selves.” versity into perfectly balanced teamwork.” Jonathan Nott is Principal Conduc- Sofia Vahlne is Head of People tor and Artistic Advisor of the Junge Strategy & Labor Relations at Scania Deutsche Philharmonie, a youth and responsible for the Pluralism & orchestra sponsored by the TRATON Inclusion program in the TRATON GROUP. GROUP. 4 To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information kilometers — the max- Together with MAN, the imum range offered by Munich Transport Corporation the current generation (MVG) is testing the use of of the MAN Lion’s City E. all-electric buses in its regular service. 270 electric In more and more cities, electric bus fleets play an important role in providing sustainable local public transportation — this is also the case for the Munich Transport Corporation (MVG). While the company is currently testing the MAN Lion’s City E to city see how suitable e-buses are for everyday use, the head of MVG’s Bus division is already planning further ahead. His goal is to reduce local emissions from the company’s operations to zero by 2030. To achieve this, all diesel vehicles are to be replaced by electric buses. What sounds like a major challenge is actually something that can be tackled already. After all, the MAN Lion’s City E went into series production in October 2020, with the current generation offering a practicable range of 200 to 270 kilometers. And with the new generation of batteries, the range is expected to of all regular service increase to up to 400 kilometers within the next five years. This requirements: that’s would mean that MAN customers could already operate around how much the next 90 percent of all routes electrically — good prospects for all generation of the transportation operators who, like MVG, want to convert their MAN Lion’s City E will be able to handle, fleets to zero-local-emission drive systems in the coming years. with a range of up to 400 kilometers. traton.com/e-buses 90% → 5 To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information When delivering groceries in cities, Norwegian grocery wholesaler ASKO increasingly relies on battery-powered trucks from Scania to reduce CO2 emissions. BATTERIES IN EVERYDAY USE Scania is rigorously driving the shift toward a sustain- able transport system. By 2040, the company plans to equip all the new trucks it produces with fossil-free drive systems. Battery-powered vehicles like the new, medium-duty Scania trucks, which have a range of up to 250 kilometers, play a central role here. Scandinavian grocery wholesaler ASKO is currently testing two of the trucks in Oslo, delivering fresh pro- duce to several supermarkets every day. The charging infrastructure in the Norwegian capital is relatively good, but even so, the ASKO drivers do not need to recharge at all while on the road: thanks to sophisti- cated route planning, one battery charge is enough for an entire day’s trip — with the traction batteries even supplying energy to the air conditioning units in the cargo area. Over the next three years, ASKO plans to acquire a total of 75 additional battery-powered delivery vehicles from Scania, with the aim of operat- ing a completely zero-emission truck fleet in Norway by 2026. → traton.com/everyday-use 6 To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information DIGITAL TRANSPARENT Every day, Volkswagen Group Logistics delivers around 200 million parts to the right place at the right time. This requires close coordination, precise plan- ning, and reliable information. RIO, the digital brand of the TRATON GROUP, is developing a cloud-based platform solution that will enable logistics staff in the Volkswagen Group to master this challenge even more efficiently and cost-effectively in the future. RIO intends to establish its logistics platform as an industry solution, since the newly developed services — including shipment tracking that integrates all parties involved — are attractive for other industries as well. It could provide a great deal of benefits for the manufacturing industry, in particular, with its highly serialized production. And RIO is already working on the next steps. For example, artificial intelligence could enable even more accurate delivery time EFFICIENT forecasts in the future. → traton.com/logistics-platform 7 To Our Shareholders Combined Management Report Operating Units Consolidated Financial Statements Further Information Robots in action: thanks to digital methods, customers’ requests can be integrated into the production process Assem even at the last minute. bly 4.0 Volkswagen Caminhões e Ônibus (VWCO) has added an inno- vative assembly facility for the new Meteor heavy-duty truck to its plant in Resende, Brazil. The production line is based on the principles of Industry 4.0, with extensive connectivity, flexible processes, and the targeted use of big data. The suppliers within the Consórcio Modular also benefit from this development. They remain integrated in the production chain as partners and, together with VWCO, drive the further development of the modules that are installed in the vehicles.