Loss less than expected: short-time work and savings save Daimler

The days when Daimler came up with huge billions in profits are over. There is a quarterly minus of two billion euros in the room. The fact that, according to the carmaker's preliminary figures, is lower is also due to government aid measures.

Thanks to short-time work and austerity measures, Daimler has so far come through the corona crisis better than analysts had expected it to. However, according to preliminary figures, there was a loss before taxes and interest (EBIT) of 1.68 billion euros – compared to 1.56 billion euros in the same period last year, as the Stuttgart-based carmaker announced.

The experts surveyed by Daimler had expected an average loss of more than two billion euros. The car division in particular performed better in the quarter than feared. The cost of the tightened corporate restructuring, which was pushed by the new CEO Ola Källenius, and other special effects added up to almost a billion euros. Adjusted EBIT was minus 708 million euros.

Austerity measures and short-time work

Through short-time work, the reduction of travel and marketing costs and the waiver of the managers' salary, Daimler tried to keep the costs under control. In the end, there was even a positive cash inflow (free cash flow) in the industrial business of 685 million euros – a year earlier, Daimler had had to drain 1.3 billion euros. The analysts surveyed had even expected an outflow of 2.1 billion this time.

Källenius' hope is that vehicle sales will increase in June: "With our convincing product portfolio, we were able to take advantage of the opportunities in the market to recover. But there is still a lot to do." Costs would have to be reduced further, capacities adjusted so that Daimler could still be in the black with less sales.

The CEO had already taken the first steps: the Smart plant in Hambach, Lorraine, is to be sold, and the small car is being built in China instead. Now Daimler has also announced cuts for the plant in Tuscaloosa in the USA and the one operated together with Nissan in Aguascalientes, Mexico, which should focus on SUVs. The C-Class is to be withdrawn from Tuscaloosa, as a spokesman said. The GLB off-road vehicle is to be built in Aguascalientes.

More details on July 23

In the second quarter, Daimler booked 687 million euros for the renovation of the plants alone. The carmaker is writing off 105 million euros from its participation in "Your Now", the mobility joint venture with BMW. Especially the car-sharing of "Share Now" (previously Car2Go) has become less attractive in the Corona crisis. In addition, the first effects of the efficiency program decided in the autumn can be seen: the carmaker booked 129 million euros for it.

Daimler plans to publish the full quarterly figures on July 23.