The truck builder Daimler Thanks to price increases, Truck is unexpectedly well able to absorb the burdens at the beginning of the year. Business is going so well that after the first three months, despite delivery problems and cost increases, the group raised its annual sales targets and therefore also sees better prospects for earnings. “Our positive results in the first quarter show that we are able to stay on course, even in the face of fluctuating conditions,” said Chief Financial Officer Jochen Goetz on Tuesday. The world market leader for heavy trucks continues to benefit from strong demand.
increased by almost 5 percent at the start of trading. Thus, the value continues the positive recovery trend after the crash caused by the outbreak of war in the Ukraine away. The paper fell to EUR 20.29 in March. In mid-January, the price had marked its previous record high at EUR 35.76. The papers started after the demerger from Daimler in December at 28 euros.
Sales and earnings targets increased
After the first quarter, the Daimler management around CEO Martin Daum (62) and CFO Goetz is now assuming revenue of 48 to 50 billion euros for 2022 instead of 45.5 to 47.5 billion. This is mainly due to better sales prices and exchange rate effects. In North America, the most important market for Daimler Trucks, price increases would largely not take effect until the second quarter, Goetz said in a conference call.
Daimler boss Daum had already promised in March that he wanted to turn the price screw on a broad basis and spoke of the biggest price increase ever. Even trucks that have already been ordered would hardly be canceled in the event of subsequent price increases because of the high demand for vehicles, he said.
The better performance in sales means that the consolidated earnings before interest and taxes (EBIT) will probably be slightly better than expected, which should now be at the previous year’s level instead of slightly below it. At the previous year’s level, Daimler Truck means up to 5 percent below or up to 5 percent above the previous year’s figure of 3.36 billion euros. The important operating margin in the vehicle business should remain between 7 and 9 percent.
Daimler exceeds expectations in the first quarter
Things went surprisingly well in the first quarter. The turnover of the Dax group climbed by 17 percent to 10.6 billion euros. That was significantly more than analysts had given the group credit for on average. As already known, Daimler Truck had increased sales by 8 percent to around 109,000 vehicles. Although incoming orders fell slightly compared to the same period last year, they said they were still high. The order book is fuller than ever.
Before interest and taxes and adjusted for special effects, earnings in the first quarter rose by 11 percent to 651 million euros. The important operating margin before special items in the vehicle business was 5.9 percent, 0.4 percentage points below the previous year’s value – the company had announced a cost burden at the beginning of the year due to difficult delivery conditions. Analyst Daniela Costa spoke of unexpectedly high revenues and, as expected, operating margins in the first quarter.
Price increases could only partially compensate for the increased costs in the first three months. On the one hand, the costs for raw materials rose, on the other hand, special freight for the required supplier parts costs a lot of money. According to the company, the scarce semiconductors were diverted in such a way that the shortage of chips was not so serious. The company has taken into account the chip doldrums and the Ukraine war, which Daimler Truck says it is not particularly badly affected by in day-to-day business, in its annual planning with the effects known to date – additional problems could arise from the Covid 19 pandemic and production losses .
The bottom line is that the profit in the months of January to March was 257 million euros, significantly smaller than a year ago with 1.43 billion euros. At that time, the company had credited itself with a high special income. In addition, costs of 170 million euros were incurred this year for the withdrawal from the Russian business. The remaining expenses up to the previously announced 200 million euros will be booked later.