Vienna Martin Daum and Jochen Goetz have been disappointing as management duo at Daimler Truck for years. The CEO and CFO of the world’s largest truckmaker have never delivered the promised returns since 2019. Now, however, it has become clear that this was less due to their supposed inability than to a restrictive structure within the Daimler group, according to financial circles.
Since the industrial conglomerate was split into the car giant Mercedes-Benz and the truck arm Daimler Truck at the end of 2021, things have been going much better for Daum and Goetz. In the first year as an independent company on the stock exchange, Daimler Truck was able to increase its operating profit adjusted for special effects to four billion euros, as the company announced on Friday. This corresponds to an increase of 55 percent compared to the previous year.
In 2022, sales increased by more than a quarter to around 50.9 billion euros. This results in a return of 7.7 percent, after 6.1 percent previously. The Swabians haven’t been this profitable for a long time, at least not in the past 20 years. The shareholders are therefore to receive a dividend of EUR 1.30 per share.
Mercedes-Benz Trucks: strong result of the core brand
The margin gap to major rival Volvo Trucks has narrowed by three percentage points. This is also due to the fact that the Swedes had to cope with a decline in profitability in 2022. At the same time, Daimler Truck has made significant progress.
In particular, the core brand Mercedes-Benz Trucks, under the leadership of Karin Radström, surprised with strong results. Sales of the division, in which the business in Europe and Latin America is bundled, climbed by a quarter to 20.2 billion euros. Radström’s team was able to more than double its operating profit from 770 million euros to 1.6 billion euros. The division’s margin shot up from 4.8 to 8.1 percent.
>> Read about this: “I’m far from finished here” – How Karin Radström is turning Mercedes-Benz Trucks inside out
Only in North America did things go better for Daimler Trucks. Here sales shot up from 15.8 to 22 billion euros. This corresponds to an increase of a whopping 40 percent. Operating profit increased by more than 900 million euros to 2.4 billion euros. Trucks North America’s return on sales is currently 10.8 percent.
Business in Asia, on the other hand, was disappointing. Despite an increase in sales and turnover of nine percent each, the operating profit collapsed by 60 percent to 171 million euros. The margin of the Trucks Asia division, which includes the Japanese brand Fuso, fell from 7.2 to 2.6 percent.
There is a positive trend reversal in the bus business. The division, which is experiencing severe turbulence, especially with its coaches, as a result of the corona pandemic, is at least back in the black. After a loss of 77 million, a small operating profit of 14 million euros is on the books for 2022.
Truck builder expects further growth in 2023
All in all, Daimler Truck sees itself in a good position. “In terms of earning power, we have achieved or even exceeded all of the key goals that we had set ourselves at the beginning of the year,” writes CEO Martin Daum to the shareholders. 2022 was a year the experienced truck manager had never experienced in his career.
“Supply was consistently lower than demand, so we were able to deliver significantly fewer vehicles than our customers would have liked to take from us,” explains Daum. “Without this restriction, our group result would have been noticeably better.” At the same time, the limited offer also had a decisive advantage: Daimler Truck was able to pass on historically high price surcharges averaging ten percent to its customers.
For the current year, the Group is preparing for further good business. Sales should increase significantly to between 55 and 57 billion euros. A plus is also expected for operating profit; the adjusted return on sales in the industrial business is likely to be between 7.5 and nine percent and thus higher than in 2022. On the stock exchange, however, the papers fell by around three percent in a weak environment on Friday morning.
With agency material
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