Daimler Truck hosted a Capital Market Day prior to its intended stock market listing in December 2021, revealing profitability ambitions for each segment.
In addition, Daimler Truck’s management board, led by CEO Martin Daum, presented further strategic and technological objectives.
Following the supportive general meeting, the company is planning its listing on the Frankfurt stock exchange for December 10. Subsequently, Daimler Truck expects to qualify for the DAX – the group of Germany’s most valuable listed companies – in the first quarter of 2022.
“We have a clear ambition for Daimler Truck: We’re committed to achieving higher profitability and to going full speed to win the race to zero emissions," Daum said. "We can’t wait to make our company even stronger. Ahead of the planned public listing, we are ready for independence and for unlocking our full value potential."
At the Capital Markets Day, Daimler Truck CFO Jochen Goetz reiterated the Group’s commitment to improve profitability and create value for shareholders. Daimler Truck’s ambition is to achieve more than 10 percent Return on Sales (Industrial Business, adjusted) by 2025, assuming strong market conditions. Based on its “every segment must deliver” approach, Daimler Truck’s top management today announced margin range ambitions for its individual segments reflecting different macroeconomic conditions. In a 2025 scenario with strong market conditions, Daimler Trucks North America (DTNA) is aiming for a 12 percent adjusted Return on Sales, Mercedes-Benz for 10 percent, Truck Asia (TA) aims for an adjusted 9 percent Return on Sales and Daimler Buses for 7.5 percent. With Daimler Truck’s new Financial Services business the company is aiming for 14 percent adjusted Return on Equity. The company is working to improve resilience by significantly lowering the break-even point, thus to be able to achieve at least an adjusted 6 to 7 percent Return on Sales in the Industrial Business in 2025, even in adverse market conditions.
Daimler Truck’s focus on resetting profitability is already gaining momentum. Consequently, 2021 adjusted Return on Sales is expected to be between 6 and 8 percent, despite semiconductor shortages and rising raw material prices. In the course of the Capital Markets Day, the company also announced that given the progress already made, Daimler Truck aims to achieve its target to reduce fixed cost by 15 percent compared to 2019 as early as 2023 - two years earlier than announced in May at the Strategy Day. For 2022 the Group assumes an adjusted Return on Sales of the Industrial Business between 7 and 9 percent.
“By maintaining discipline on capital expenditures, optimizing our capital allocation and improving our profitability we aim to continue generating strong free cash flows,” Goetz said. “This will be a strong basis for investments in new technologies and strengthening our balance sheet even further. At the same time we are targeting for a dividend payout ratio policy of 40 percent.”
Source: Daimler Truck
