Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Daimler Truck Holding AG (DTRUY, Financial) reported a solid year with an adjusted EBIT of €4.7 billion and a return on sales of 8.9%.
- The company achieved a strong free cash flow of €3.2 billion in the industrial business, resulting in a net industrial liquidity of €8.6 billion.
- Daimler Trucks North America and Daimler Buses continued to deliver very strong results, with North America maintaining a market leadership position.
- The company is actively pursuing a cost reduction program in Europe, aiming to reduce annual recurring costs by more than €1 billion by 2030.
- Daimler Truck Holding AG (DTRUY) is making progress in zero-emission vehicles, with sales of battery electric trucks and buses increasing by 17% year-over-year.
Negative Points
- The performance of Mercedes Benz Trucks in Europe was impacted by lower demand and challenges in adjusting the cost base to lower volumes.
- The company faced a 12% decrease in unit sales, with significant declines in the European market.
- Financial services impacted Group EBIT negatively by €79 million compared to 2023.
- The company is dealing with ongoing uncertainties related to tariffs and regulatory changes in North America, which could impact future performance.
- Daimler Truck Holding AG (DTRUY) is facing challenges with the infrastructure needed for zero-emission vehicles, particularly the lack of public charging stations in Europe.
Q & A Highlights
Q: In your key regions, North America and Europe, you've got the volumes essentially flat or slightly down, but industrial revenues are expected to increase by 2 to 3 billion. Can you just give us a bit more color on what's driving this increase in the revenue guidance?
A: (Eva Scherger, CFO) In Europe, the market last year was impacted by delayed registrations, but we see backlogs normalizing. Orders have been recovering since the end of Q3 last year, which should help us recover some market shares. We expect the second half of the year to be stronger than the first. In North America, strong orders in Q4 will lead to a good Q1, and we anticipate a recovery of the on-highway business in the second half of the year.
Q: On the integration of the China trucks in India into Mercedes, how can we track the progress of Mercedes trucks in Europe going forward?
A: (Kaan Rswim, CEO) We aim to be transparent about our performance in Europe. We will keep you informed and ensure that you can track our progress. We will update you on our cost down Europe program during the year, and more details will be shared at the Capital Market Day.
Q: In North America, you have reduced your dependency on the highway side through strong growth in vocational, but fleet demand is weak. How do you see the mix implications given the margin guide of 11 to 13%?
A: (Eva Scherger, CFO) In Q1, we expect a good mix towards on-highway heavy-duty business due to large orders received in Q4. The recovery of the on-highway business is on its way, with a positive effect on mix. Our full-year guidance is not dependent on an EPA 27 pre-buy in the second half of the year.
Q: Regarding tariffs and the potential transition back into the US in terms of capacity, how are you preparing for this?
A: (Kaan Rswim, CEO) We have assembly factories in both the US and Mexico and can produce all models in either location. We are preparing for different scenarios and can ramp up more in the US if required. It's too early to pull the levers, but we are prepared and following the tariff situation closely.
Q: Can you give more color on the potential implications of EPA 27 being repealed?
A: (Eva Scherger, CFO) Our engine is well-positioned to comply with EPA 27, so there are no significant impacts on our results. We do not expect any impairments if EPA 27 doesn't come. We are prepared for different scenarios, and it will not significantly affect our guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
