Stand-alone Daimler Truck posts big numbers in 1st earnings report

Posting its first financial results as an independent company, Daimler Truck Holding AG said Thursday it sold 20% more trucks and buses in 2021 than a year earlier.

Despite supply constraints that affected major markets in North America and Europe, the Stuttgart, Germany-based manufacturer said it hit its financial targets for the year and remains on track to achieve a double-digit return on sales across its business units by 2025.

The company expects the biggest contributor — 12% — of that future profitability to come from Daimler Truck North America, whose Class 8 Freightliner Cascadia is the market leader. The segment is now known internally as Trucks North America. 

DTNA sold 162,156 units in 2021, up 16% from 139,479 in 2020. Revenues rose 14% to 1.58 billion euros ($1.73 billion) from 1.85 billion euros ($15.2 billion) in 2020.

Successful split-off

Daimler Truck completed its long-anticipated split-off from Daimler AG in December. Earlier this week, it joined the German DAX stock market index, which consists of the 40 major German blue chip companies trading on the Frankfurt Stock Exchange.

“When looking back at the past year from a business perspective I can clearly say: 2021 was an extraordinary year for Daimler Truck and I am very proud of what our global team accomplished,” Martin Daum, chairman of the board of management, said in a press release.

Companywide, Daimler Truck sold 455,400 trucks and buses in 2021 compared to 378,300 a year earlier. Net income was 2.4 billion euros ($2.64 billion) compared to a loss of 131 million euros ($144 million) a year earlier. Total 2021 revenue was 39.8 billion euros ($43.8 billion), up 10% compared to the previous year. 

The first half was stronger than the second when  pressure from semiconductor shortages and scarcity of other parts worsened. Despite the pressures, orders rose 37% to 590,000 units compared to 430,500 units a year earlier.

Cost controls

Daimler Truck kept a lid on costs during the year, reducing capital and research and development expenses by 18% during 2021 toward a goal of a 15% reduction by 2025 compared to 2019. Daimler Truck, like its major competitors, is spending less on internal combustion engines and moving that investment toward electrified vehicles. 

“Going forward, we remain fully committed to the profitability ambitions we’ve set for 2025 and we continue to intensively work on all strategic levers to achieve them,” CFO Jochen Goetz said.

2022 outlook

Daimler Truck expects economic conditions in North America and Europe to normalize in the second half of 2022 despite uncertainty around the COVID pandemic, semiconductor shortages and supply constraints, and the war in Ukraine. 

The North America truck market should be 255,000 to 295,000 units this year, according to Daimler Trucks’ projections. It puts Europe at 240,000 to 280,000 units. It projects its own global sales to range between 500,000 and 520,000 units with revenue between 45.5 billion and 47.5 billion euros.

Daimler Truck suspended its business in Russia shortly after Russia’s invasion of Ukraine. It does not expect additional supply chain disruption because of the war and will book any expenses related to the pullout as a nonoperating charge in Q1.

“In these dramatic weeks, our thoughts are with the people in Ukraine and we hope that this war will end soon,” Daum said. “Looking at 2022, we will focus on the factors we have in our own hands to further unlock our profit potential and lead sustainable transportation.”

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