“Very strong outlook for 2024”
Daimler Truck delights investors
March 1, 2024, 1:49 p.m
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The world market leader in heavy trucks expects fewer sales this year, but wants to repeat last year’s results. And Daimler Truck reported record figures for last year. Investors pounce on the papers.
The truck manufacturer Daimler Truck achieved record results last year despite missing its sales target. The adjusted operating result (EBIT) rose by more than a third to almost 5.5 billion euros, as the group announced. Revenues increased by ten percent to 55.9 billion euros, although sales only rose by one percent and were therefore weaker than expected to around 526,000 trucks and buses.
Supplier bottlenecks would have prevented even higher sales. However, increased prices and a larger proportion of profitable vehicles drove sales and profits. For 2024, the Swabians expect sales and operating profit to be at the previous year’s level given weaker demand. Analysts at JP Morgan praised the “very strong outlook for 2024”.
“2023 was a record year for Daimler Truck,” explained CEO Martin Daum. The adjusted return on sales in the industrial business climbed by a good two points to 9.9 percent. The company’s profit performance was better than analysts expected. On the stock market, Daimler Truck shares shot up by almost 17 percent, making them the biggest winner in the leading DAX index.
Investors should receive a dividend of 1.90 euros per share for the past year, 60 cents more than the year before. The current two-year share buyback program with a volume of two billion euros should not be a flash in the pan, explained Treasury boss Claus Bässler.
CEO Daum gave a “robust” outlook for the current year: With falling demand in the markets in North America and Europe, sales are likely to shrink to 490,000 to 510,000 units. The markets normalized: the catch-up effect after the delivery backlog during the corona pandemic is ebbing, the weaker economy is slowing down cyclical business. “The current order situation reflects clear signs of normalization – customers order vehicles when they need them instead of reserving them long in advance,” said Daum. There is hardly any scope for further price increases, but the 2023 level can be maintained.
Daimler also wants to make progress with electric commercial vehicles, although sales figures are still at a low level. There are orders for almost 4,600 trucks and buses – after sales of almost 3,500 units last year. “The mass market will only change when there is cost parity and a comprehensive charging infrastructure,” said Daum. The world market leader for heavy trucks reiterated its goals for 2025 of generating a return of more than ten percent in a good market environment.