Income statement disclosures
1. Sales revenue
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 recognized as prepayments received on customer contracts at the date of the original sale transaction and recognized 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. Payments to customers related to vehicle sales are recorded as sales deductions.
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 sales 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 customer, 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.
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 practical 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. The present values of the buyback prices are reported under other financial liabilities, and income not yet recognized in profit or loss is reported under other liabilities. 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. Further information on accounting for operating leases is contained in Note 11. Assets leased out.
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 inventory 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 finance leases can be found in Note 14. Financial services receivables.
Income from customer or dealer finance or finance leases is recognized over the term of the agreement 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.
Structure of sales revenue
Reporting period from January 1 to December 31, 2025
| 2025 | 2024 | |||||||||||||||
| € million |
Scania Vehicles & Services |
MAN Truck & Bus |
International Motors |
Volks- wagen Truck & Bus |
TRATON Financial Services |
Reconciliation | Total |
of which TRATON Opera- tions |
Scania Vehicles & Services |
MAN Truck & Bus1 |
International Motors |
Volks- wagen Truck & Bus |
TRATON Financial Services |
Reconciliation | Total |
of which TRATON Opera- tions |
| New vehicles | 11,696 | 8,783 | 5,924 | 2,549 | – | –46 | 28,906 | 28,941 | 12,883 | 8,383 | 8,263 | 2,698 | – | –76 | 32,151 | 32,202 |
| Vehicle Services Business | 4,020 | 2,928 | 1,645 | 173 | – | –40 | 8,727 | 8,742 | 3,839 | 2,902 | 1,860 | 179 | – | –32 | 8,747 | 8,751 |
| Genuine parts | 2,808 | 2,011 | 1,645 | 158 | – | –27 | 6,596 | 6,599 | 2,770 | 2,033 | 1,860 | 161 | – | –31 | 6,793 | 6,795 |
| Workshop services | 1,212 | 917 | – | 15 | – | –13 | 2,131 | 2,143 | 1,069 | 868 | – | 18 | – | –1 | 1,954 | 1,955 |
| Other sales revenue1 | 2,230 | 2,384 | 599 | 46 | 2,188 | –1,027 | 6,419 | 4,854 | 2,185 | 2,367 | 994 | 42 | 1,932 | –944 | 6,574 | 5,230 |
| Used vehicles and third-party products | 962 | 626 | 215 | 3 | 15 | 0 | 1,820 | 1,806 | 911 | 707 | 638 | 1 | 30 | –9 | 2,277 | 2,256 |
| Engines, powertrains, and parts deliveries | 445 | 839 | – | – | – | –362 | 922 | 922 | 441 | 787 | – | – | – | –300 | 929 | 929 |
| Rental and leasing business | 557 | 764 | 46 | – | 638 | –471 | 1,534 | 1,367 | 603 | 784 | 42 | – | 503 | –402 | 1,529 | 1,428 |
| Interest and similar income | – | – | 0 | – | 1,535 | –151 | 1,385 | 0 | 0 | – | 0 | – | 1,399 | –168 | 1,231 | 0 |
| Other sales revenue1 | 265 | 156 | 338 | 43 | – | –44 | 758 | 758 | 230 | 90 | 314 | 41 | – | –66 | 608 | 617 |
| 17,945 | 14,095 | 8,169 | 2,768 | 2,188 | –1,113 | 44,052 | 42,536 | 18,907 | 13,652 | 11,116 | 2,918 | 1,932 | –1,052 | 47,473 | 46,182 | |
1 Prior-period amount adjusted to reflect the current presentation, see Segment reporting
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 the TRATON 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 TRATON Holding, the Group R&D industrial function, 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 prepayments received on customer contracts at the beginning of the reporting period (see Note 23. Other liabilities) amounted to €1,579 million (previous year: €1,339 million). Sales revenue includes €–53 million (previous year: €14 million) relating to the satisfaction of performance obligations in previous years.
Order backlog
| € million | 2025 | 2024 |
|---|---|---|
| Expected timing of revenue recognition | ||
| Within one year | 13,114 | 15,671 |
| 1 to 5 years | 2,554 | 2,559 |
| More than 5 years | 263 | 229 |
| 15,931 | 18,459 | |
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 decreased despite a significant year-on-year increase in incoming orders. This was primarily due to a lower order intake in relation to unit sales (see 4. Results of operations in the Combined Management Report).
2. Functional 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 overheads and personnel costs, as well as depreciation and amortization applicable to production. Research & development costs not eligible for capitalization and amortization of 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.
Distribution expenses relate primarily to nonstaff overheads and personnel expenses, as well as depreciation and amortization applicable to distribution. Administrative expenses primarily contain nonstaff overheads and personnel expenses, as well as depreciation and amortization applicable to administration.
Cost of sales
Cost of sales of €35,630 million (previous year: €37,373 million) was incurred in the fiscal year ended December 31, 2025. This includes expenses of €1,491 million (previous year: €1,315 million) attributable to the TRATON Financial Services segment. It also includes expenses of €60 million (previous year: €– million) related to additional US tariffs imposed under Section 232.
Research & development costs contained in cost of sales are broken down as follows:
| € million | 2025 | 2024 |
|---|---|---|
| Primary R&D costs1 | 2,742 | 2,469 |
| of which capitalized development costs1 | 1,215 | 976 |
| Capitalization ratio (in %)1 | 44.3 | 39.5 |
| Amortization of, and impairment losses on, capitalized development costs | 620 | 530 |
| Research & development costs recognized in the income statement | 2,148 | 2,022 |
1 Since fiscal year 2025, primary R&D costs no longer include capitalized borrowing costs. The previous year’s indicator was adjusted accordingly.
Human Resources
The personnel expenses contained in the functional expenses rose by €311 million year-on-year. This increase is primarily a result of the increase in the workforce and wage and salary increases.
Personnel expenses
| € million | 2025 | 2024 |
|---|---|---|
| Wages and salaries | 6,097 | 5,924 |
| Social security | 1,314 | 1,208 |
| Post-employment, and other benefit costs | 393 | 361 |
| Personnel expenses | 7,804 | 7,493 |
Average annual number of employees
| 2025 | 2024 | |
| Performance-related wage-earners | 48,589 | 49,321 |
| Salaried staff | 59,166 | 56,558 |
| Total number of employees | 107,755 | 105,879 |
| of which in the passive phase of partial retirement | 880 | 797 |
| Vocational trainees | 3,485 | 3,216 |
| Total workforce | 111,240 | 109,095 |
The increase is primarily attributable to the higher number of employees at Scania Vehicles & Services and MAN Truck & Bus.
3. Other operating income and expenses
| € million | 2025 | 2024 | ||||
|---|---|---|---|---|---|---|
| Other operating income | Other operating expenses | Net income (+)/net expense (-) | Other operating income | Other operating expenses | Net income (+)/net expense (-) | |
| Effects from exchange rate movements | 858 | –991 | –133 | 1,225 | –1,151 | 73 |
| Income from reversal of provisions and accruals | 76 | – | 76 | 60 | – | 60 |
| Effects from derivatives not included in hedge accounting | 145 | –67 | 79 | 61 | –154 | –93 |
| Rental and lease income | 23 | – | 23 | 17 | – | 17 |
| Effects from disposal of noncurrent assets | 43 | –21 | 23 | 28 | –11 | 17 |
| Expenses for litigation and legal risks | – | –305 | –305 | – | –308 | –308 |
| Miscellaneous income and expenses | 241 | –374 | –134 | 287 | –290 | –3 |
| 1,386 | –1,758 | –372 | 1,678 | –1,915 | –237 | |
Foreign exchange gains mainly comprise gains from exchange rate movements between the dates of recognition and payment of receivables and liabilities denominated in foreign currencies, as well as exchange rate gains resulting from measurement at the closing rate. Exchange rate losses from these items are included in other operating expenses.
Litigation and legal risks include expenses attributable to civil lawsuits against Scania Vehicles & Services and MAN Truck & Bus in connection with the EU truck cases in individual countries (see Note 32. Litigation/legal proceedings).
Gains or losses from derivatives not included in hedge accounting are primarily comprised of exchange rate gains or losses from the fair value measurement of foreign currency derivatives not included in hedge accounting.
Miscellaneous income includes claims for damages amounting to €54 million (€100 million), particularly warranty costs from external suppliers.
Miscellaneous expenses include costs of €42 million (previous year: €– million) related to restructurings at Scania Vehicles & Services.
4. Net interest income/expense
Reporting period FROM January 1 to December 31
| € million | 2025 | 2024 |
|---|---|---|
| Interest income1 | 235 | 317 |
| Interest and similar income1 | 235 | 317 |
| Interest expense1 | –656 | –808 |
| Interest and similar expenses1 | –430 | –596 |
| Interest expenses for lease liabilities | –51 | –44 |
| Net interest on the net liability for pensions and other post-employment benefits | –87 | –80 |
| Unwinding of discount and effect of change in discount rate on liabilities and other provisions | –88 | –87 |
| Interest result | –421 | –490 |
1 Prior-year period adjusted, see Note Basis of preparation — Accounting policies — Prior-period information
Both interest income and interest expense declined due to the decrease in the general interest rate level in the current fiscal year, despite an increase in the financing volume.
Interest income and expenses contain realized income and expenses from interest rate derivatives on net liquidity positions.
In the previous year, interest income included higher interest income from tax refunds.
5. Other financial result
Reporting period FROM January 1 to December 31
| € million | 2025 | 2024 |
|---|---|---|
| Other income from equity investments | 3 | 2 |
| Other expenses from equity investments | –34 | –1 |
| Income and expenses from profit and loss transfer agreements | 2 | 2 |
| Realized income and expenses from loan receivables and payables in foreign currency | –141 | 356 |
| Income and expenses from remeasurement of primary financial instruments | –550 | –524 |
| Income and expenses from changes in the fair value of derivatives not included in hedge accounting | 524 | –120 |
| Income and expenses from changes in the fair value of derivatives included in hedge accounting | 0 | –5 |
| Expenses related to arbitration proceedings for the MAN SE merger squeeze-out | – | –96 |
| –196 | –387 | |
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 2025 that is mainly due to the appreciation of the euro against the US dollar. There was a much higher residual expense in the previous year that was mainly due to the appreciation of the euro against the Brazilian real.
6. Income 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, in some cases up to ten fiscal years. Deferred tax assets that are unlikely to be realized within a clearly predictable period are reduced by valuation allowances.
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 products 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 valuation methods, including for tax purposes.
Components of tax income and expense
| € million | 2025 | 2024 |
|---|---|---|
| Current tax expense (+)/income (–), Germany | 32 | –65 |
| Current tax expense (+)/income (–), outside Germany | 696 | 1,043 |
| Current income taxes | 728 | 978 |
| of which prior-period expense (+)/income (–) | –10 | –97 |
| Deferred tax expense (+)/income (–), Germany | 16 | 121 |
| Deferred tax expense (+)/income (–), outside Germany | –264 | –333 |
| Deferred tax expense (+)/income (–) | –249 | –212 |
The statutory corporate income tax rate in Germany for the 2025 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 was based on a tax rate of 31.9% (previous year: 31.9%) for differences between the carrying amount of an asset in the balance sheet and its tax base that will reverse in the short term. For long-term temporary differences, the company-specific tax rate at the time of their reversal was applied.
The local income tax rates applied to foreign companies vary between 0 and 45% (previous year: 0 and 45%). In cases of split tax rates, the tax rate applicable to undistributed profits was applied. The deferred tax income resulting from changes in tax rates amounted to €13 million (deferred tax expense previous year: €7 million) at Group level in 2025.
An amendment to the German Corporate Income Tax Act was passed in July 2025. As a result, the corporate income tax rate will be gradually reduced from 15 to 10%, starting in 2028. This led to income of €17 million from the measurement of deferred tax assets and deferred tax liabilities of the German subsidiaries in the fiscal year ended December 31, 2025.
The realization of tax loss carryforwards from previous years reduced current income taxes in 2025 by €93 million (previous year: €165 million).
The actual income tax expense in the reporting period decreased by €2 million (previous year: €1 million) due to the utilization of previously unrecognized tax losses and tax credits from previous periods. Previously unrecognized tax losses and tax credits contributed to a €9 million (previous year: €29 million) reduction in deferred tax expense in 2025.
Deferred taxes are recognized for interest carryforwards to the extent that it is probable that the interest carryforward can be used in the future. Unused interest carryforwards amount to €745 million (previous year: €718 million). Interest carryforwards of €532 million (previous year: €528 million) can be used for an indefinite period, while €213 million (previous year: €191 million) must be used within the next ten years.
Tax loss carryforwards
| € million | 12/31/2025 | 12/31/2024 |
|---|---|---|
| Available for an indefinite period | 2,669 | 1,622 |
| Limit on utilization within the next 10 years | 1,520 | 1,347 |
| Limit on utilization between 11 and 20 years | 569 | 1,119 |
| Total currently unused tax loss carryforwards | 4,758 | 4,088 |
| Indefinite tax loss carryforwards | 209 | 237 |
| Expire within the next 10 years | 357 | 128 |
| Expire between 11 and 20 years | 301 | 252 |
| Total unusable tax loss carryforwards | 867 | 617 |
Write-downs of deferred tax assets
| € million | 12/31/2025 | 12/31/2024 |
|---|---|---|
| Deferred tax expense resulting from the write-down of a deferred tax asset | 84 | 8 |
| Deferred tax income resulting from the reversal of a write-down of a deferred tax asset | 0 | –2 |
Tax credits granted by various countries amounted to €170 million (previous year: €177 million) as of December 31, 2025.
No recognition of deferred tax assets on tax credits
| € million | 12/31/2025 | 12/31/2024 |
|---|---|---|
| for tax credits that would expire in the next 20 years | 42 | 84 |
| for tax credits that will not expire | 2 | 0 |
No deferred taxes were recognized for the retained earnings of €43,362 million (previous year: €39,494 million) at foreign subsidiaries because these profits are largely expected to be reinvested in the operations of the companies concerned. As a general rule, distribution would lead to additional income tax expense.
For companies that incurred a loss in the current or prior period, the TRATON GROUP recognized deferred tax assets as of December 31, 2025, that exceeded the deferred tax liabilities by €1,006 million (previous year: €284 million). Of this amount, €767 million (previous year: €0) is attributable to companies in the USA consolidated tax group and €233 million (previous year: €275 million) is attributable to companies in the TRATON SE consolidated tax group. The amounts mainly include loss carryforwards and deductible temporary differences. Recognition is based on the availability of sufficient taxable profits in the following fiscal years, among other things. These are substantiated by the business plans.
The overall analysis concludes that the companies in question will generate sufficient taxable income that can be used to offset the previously unused tax losses and deductible temporary differences.
In fiscal year 2025, total deferred taxes of €72 million (previous year: €–40 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 introduction of the global minimum tax (Pillar 2) does not result in any substantial burdens for the TRATON GROUP. The current tax expense in connection with Pillar 2 income taxes amounts to €2 million (previous year: €2 million). The TRATON GROUP has applied the deferred tax recognition and disclosure exception in the context of Pillar 2 income taxes.
Deferred taxes classified by balance sheet item
The following recognized deferred tax assets and liabilities were attributable to recognition and measurement differences in the individual balance sheet items and to tax loss carryforwards:
Deferred tax assets and liabilities
| € million | Deferred tax assets | Deferred tax liabilities | ||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Intangible assets | 248 | 213 | 1,642 | 1,731 |
| Property, plant, and equipment, and assets leased out | 142 | 109 | 1,597 | 1,570 |
| Noncurrent financial assets | 0 | 2 | 13 | 10 |
| Inventories | 102 | 61 | 45 | 77 |
| Receivables and other assets (including financial services receivables) | 376 | 324 | 511 | 415 |
| Pensions and other post-employment benefits | 456 | 542 | 2 | 2 |
| Liabilities and other provisions | 3,192 | 3,204 | 511 | 554 |
| Loss allowances on deferred tax assets from temporary differences | – | – | – | – |
| Temporary differences, net of loss allowances | 4,516 | 4,456 | 4,322 | 4,358 |
| Tax loss carryforwards/ interest carryforwards, net of loss allowances | 1,130 | 1,084 | – | – |
| Tax credits, net of loss allowances | 125 | 92 | – | – |
| Value before consolidation and offset | 5,771 | 5,633 | 4,322 | 4,358 |
| of which attributable to noncurrent assets and liabilities | 4,313 | 4,271 | 3,761 | 3,846 |
| Offset | –3,893 | –3,781 | –3,893 | –3,781 |
| Consolidation | 675 | 752 | 84 | 95 |
| Amount recognized | 2,552 | 2,604 | 512 | 672 |
Reconciliation of expected to effective income tax expense
| € million | 2025 | 2024 |
|---|---|---|
| Earnings before income tax | 2,024 | 3,569 |
| Expected income tax expense (+)/income (–) (tax rate: 31.9%; previous year: 31.9%) | 646 | 1,138 |
| Reconciliation: | ||
| Effect of different tax rates outside Germany | –48 | –239 |
| Proportion of taxation relating to: | ||
| tax-exempt income | –242 | –285 |
| expenses not deductible for tax purposes | 159 | 214 |
| effects of loss carryforwards and tax credits | 34 | –84 |
| Prior-period tax expense and tax risks | –19 | –42 |
| Effect of tax rate changes | –13 | 7 |
| Other taxation changes | –37 | 57 |
| Effective income tax expense (+)/income (–) | 479 | 766 |
| Effective tax rate (in %) | 24 | 21 |
7. Earnings per share
Accounting policies: earnings per share
Earnings per share are calculated by dividing consolidated earnings after tax attributable 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.
| € million | 2025 | 2024 |
|---|---|---|
| Earnings after tax (attributable to shareholders of TRATON SE) | 1,547 | 2,804 |
| Number of shares outstanding | 500,000,000 | 500,000,000 |
| Earnings per share (€) | 3.09 | 5.61 |
TRATON SE’s share capital amounts to €500 million and is composed of 500 million (previous year: 500 million) no-par value bearer shares.