The car makerDaimlerhas in the second quarter Corona crisis not as badly fared as feared despite an operating loss of billions. The loss before interest and taxes was 1.68 billion euros, as the Dax company announced on Thursday evening after the market closed on the basis of preliminary figures in Stuttgart. That was only slightly more than in the same period last year when the minus had been 1.56 billion euros. At that time the group had to increase the provisions for old diesel loads and Takata airbags.
Analysts had expected an even higher minus in the operating result between April and the end of June, Daimler itself had already announced red numbers. The market recovery was stronger than expected, it was now said by the Stuttgart, in June there was even a “strong” development. The share of the group increased on the trading platform Tradegate by one percent.
Also the leading German index Dax Daimler’s surprisingly robust business development gave tailwind. The Dax advanced in early trading by 0.34 percentafter falling the previous day.
“But there is still a lot to do,” said Daimler boss Ola Källenius (51). “We need to continue our systematic efforts to further reduce the company’s break-even point by reducing costs and adjusting capacity.”
Källenius: “We have a complex quarter behind us”
Källenius took a look at the cost structures of the traditional group made a lotafter taking over the helm from longtime Daimler boss Dieter Zetsche (67).
The figures included special charges of 687 million euros in the passenger car and van division for streamlining production and cutting capacities in France, the United States and Mexico. For legal proceedings had toDaimlerspend an additional 53 million euros, that too loss-making car sharing joint venture Your Now With BMWrequired 105 million euros in special costs. Daimler also spent € 129 million on the current savings program.
Adjusted for these factors, the operating loss was EUR 708 million. The vehicle divisions with passenger cars and vans, as well as the trucks and buses, which are also under pressure, were both in red, while financial services, on the other hand, posted some profit.
Daimler was particularly surprised when it came to the inflow of funds from ongoing industrial business – in other words, car and commercial vehicle construction. Here, the group achieved a plus of 685 million euros, analysts had expected billions of dollars in outflows, according to surveys by Daimler. Net liquidity in the industrial business rose from 9.3 to 9.5 billion euros at the end of March in the middle of the year. “We have had a complex quarter. We made proactive decisions regarding costs and expenses and focused intensively on the management of our working capital,” said Källenius.
Complete sales and profit figures only in a week
Daimler has benefited from the extensive use of measures to maintain liquidity, it said. At the same time, working capital developed favorably with demand. In view of the weeks of production and sales breaks on the world markets, carmakers had also put calls to suppliers on hold and requested short-time work for tens of thousands of employees in order to save the cash registers. When demand picks up again, the stocks empty faster. At Daimler, too, financial experts had repeatedly criticized the high need for so-called working capital in the past.
Analysts and shareholders keep a keen eye on so-called free cash flow, i.e. the development of freely available means of payment. Ultimately, they provide information about the current financial strength, which is important for existential security in the crisis – but also about the well-being of possible dividends.
This is one of the reasons why Källenius is currently working hard on cost cutting. In November the Swede, who had been in office for over a year, launched an austerity program that was expected to bring in 1.4 billion euros in annual personnel costs. Personnel manager Wilfried Porth (61) raised the bar again at the weekend: 1.4 billion euros would not be enough, just as the stipulated up to 15,000 job cuts. Daimler has around 300,000 employees worldwide.
Daimler initially did not provide any information on sales and bottom line profit. The full quarterly results are expected to be released on July 23.