Daimler confident for 2021

Rhea-AI Summary

Daimler AG reported a robust financial performance for 2020, with net profit soaring by 48% to €4.0 billion. Despite a 15% decrease in total unit sales, the group achieved an EBIT of €6.6 billion, a 53% increase compared to 2019. The company proposed a dividend of €1.35 per share, up from €0.90 the previous year. Daimler plans to spin-off its truck division, intending for a majority listing by year-end 2021. The outlook for 2021 remains optimistic, with expectations of significantly higher sales and revenues, although semiconductor shortages may impact initial production.

Positive

• Net profit increased by 48% to €4.0 billion compared to €2.7 billion in 2019.
• EBIT rose by 53% to €6.6 billion, demonstrating strong cost management.
• Proposed dividend increased to €1.35 per share, signaling financial strength.
• Plans to spin-off Daimler Truck, potentially unlocking shareholder value.

Negative

• Total unit sales decreased by 15%, from 3.34 million to 2.84 million.
• Revenue declined by 11% to €154.3 billion from €172.7 billion in 2019.
• Daimler Trucks experienced a 27% drop in unit sales and a significant EBIT reduction.

STUTTGART, Germany, Feb. 18, 2021 /PRNewswire/ --

• Financial results 2020 significantly better than expected amid COVID-19 challenges
• Net profit increased by 48% to €4.0 billion (2019: €2.7 billion)
• Net liquidity of the industrial business of €17.9 billion (end of Q3 2020: €13.1 billion/end of 2019: €11.0 billion)
• Dividend proposed of €1.35 per share (2019: €0.90)
• Daimler Group expects sales, revenues and EBIT in 2021 to be significantly above the prior-year's level
• Intention to spin-off Daimler Truck with majority listing on the stock exchange

Daimler AG (ticker symbol: DAI) today reported its results for the fiscal year 2020 ended December 31, 2020. In a challenging environment due to the COVID-19 pandemic, the Group's total unit sales of passenger cars and commercial vehicles decreased by 15%, to 2.84 million (2019: 3.34 million). Revenue was €154.3 billion (2019: €172.7 billion), a reduction of 11%. Due to extensive cost and cash preservation measures and strong performances across all divisions, EBIT of the Daimler Group increased by 53% to €6.6 billion (2019: €4.3 billion). Adjusted EBIT, reflecting the underlying business, was €8.6 billion (2019: €10.3 billion). The figures are based on audited financial statements. The reporting structure and previous year's figures have been adjusted to reflect the newly formed Group divisions.

"The year 2020 was a stress test for just about every company in almost every industry. The Daimler team mastered this test very well. Our products continue to be in great demand across all major markets and divisions. With rapid growth in our xEV sales and the introduction of new products and technologies, we have also taken important steps in terms of electrification and digitalization. Our financial results are significantly above market expectations reflecting substantial progress on cost-efficiencies. In addition, we have achieved a significant margin improvement based on strong product mix and pricing - especially in the second half of the year. We proved our ability to generate substantial cash flow and to drive the ongoing transformation on our own - even under the adverse circumstances of a pandemic," said Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG.

In 2020, net profit improved to €4.0 billion (2019: €2.7 billion). Net profit attributable to the shareholders of Daimler AG amounted to €3.6 billion (2019: €2.4 billion), leading to an increase in earnings per share to €3.39 (2019: €2.22). At the Annual General Meeting on March 31, 2021, the Board of Management and the Supervisory Board will propose a dividend of €1.35 per share (2019: €0.90). The total payout will therefore amount to €1.4 billion (2019: €1.0 billion).

"We are confident that we can maintain positive momentum if current market conditions prevail, accelerating our strategic plans and further enhancing our financial robustness. The intended separation of our industrial businesses is designed to unlock the full potential for Mercedes-Benz as the world's pre-eminent luxury car business, committed to leading in electric drive and car software, and Daimler Truck as the world's largest truck and bus producer and technology leader," said Källenius.

Daimler plans to spin-off and list Daimler Truck. It is intended that a significant majority stake in Daimler Truck will be distributed to Daimler shareholders. Daimler Truck will have a fully independent management, stand-alone corporate governance including an independent Chairman of the Supervisory Board, and is targeted to qualify for listing on Germany's blue-chip DAX index. The transaction and the listing of Daimler Truck on the Frankfurt stock exchange is expected to be completed before year-end 2021. In addition, it is also Daimler's intention to rename itself as Mercedes-Benz at the appropriate time. All further details about the intended spin-off will be presented to shareholders at an extra-ordinary shareholder meeting in Q3 2021 in order to obtain their mandatory approval for the plan.

Investments, free cash flow and liquidity

In 2020, at the Group, investments in property, plant and equipment decreased by 20% to €5.7 billion (2019: €7.2 billion). Research and development expenditure was €8.6 billion (2019: €9.7 billion) – a reduction of 11%. The free cash flow of the industrial business amounted to €8.3 billion (2019: €1.4 billion). The adjusted free cash flow of the industrial business was €9.2 billion (2019: €2.7 billion). The net liquidity of the industrial business improved to €17.9 billion (end of Q3 2020: €13.1 billion/end of 2019: €11.0 billion).

Divisional results

Sales by the Mercedes-Benz Cars & Vans division decreased by 13% to 2,461,800 vehicles (2019: 2,823,800). Revenue was €98.6 billion (2019: €106.9 billion). EBIT amounted to €5,172 million (2019: minus €109 million) and return on sales was 5.2% (2019: minus 0.1%). Adjusted EBIT was €6,802 million (2019: €6,151 million) and adjusted return on sales was 6.9% (2019: 5.8%). Cash flow before interest and taxes (CFBIT) was €7,048 million (2019: €598 million). Adjusted CFBIT amounted to €7,917 million (2019: €1,939 million). The adjusted cash conversion rate (CCR) was 1.2 (2019: 0.3).

Sales by Mercedes-Benz Cars slipped by 13% to 2,087,200 vehicles (2019: 2,385,400). Mercedes-Benz Vans' sales were down 15% to 374,600 (2019: 438,300). In 2020, the average CO2 emissions of the new car fleet in Europe (EU28 - European Union, United Kingdom, Norway and Iceland) are expected to reach 104 g/km (2019: 137 g/km NEFZ, including vans registered as passenger cars). With this, the 2020 CO2 targets in the European Union have been met.

Daimler Trucks & Buses division showed a decrease in unit sales of 27% to 378,500 vehicles (2019: 521,100). Revenue was €34.7 billion (2019: €44.4 billion). EBIT amounted to €525 million (2019: €2,672 million) and return on sales was 1.5% (2019: 6.0%). Adjusted EBIT was €678 million (2019: €2,672 million) and adjusted return on sales was 2.0% (2019: 6.0%). Cash flow before interest and taxes (CFBIT) was €2,513 million (2019: €2,654 million). Adjusted CFBIT came in at €2,513 million (2019: €2,654 million). The adjusted cash conversion rate (CCR) was 3.7 (2019: 1.0). Sales by Daimler Trucks fell by 27% to 358,300 vehicles (2019: 488,500). Daimler Buses sold 20,100 vehicles (2019: 32,600) – a decrease of 38%.

At Daimler Mobility, new business decreased by 9% to €67.8 billion (2019: €74.4 billion). Contract volume was €150.6 billion (end of 2019: €162.8 billion). Revenue was €27.7 billion (2019: €28.6 billion). The division's EBIT amounted to €1,436 million (2019: €2,140 million). At 9.8%, return on equity was lower than the figure of 15.3% in the prior year. Adjusted EBIT was €1,595 million (2019: €1,827 million) and adjusted return on equity was 10.9% (2019: 13.1%).

Outlook for Daimler and divisions

With the expected rise in availability of effective vaccines to combat the COVID-19 virus and in the absence of further unexpected pandemic-related setbacks, Daimler assumes that the global economy will recover strongly in 2021. Based on the expected market development and the current assessments of the divisions, Daimler anticipates Group sales, revenues and EBIT in 2021 to be significantly above the prior-year's level. Although bottlenecks in the semiconductor industry will impact sales mainly in the first quarter it is currently anticipated that lost production volume can be compensated for by the end of the year.

The divisions expect the following adjusted returns in the year 2021:

• Mercedes-Benz Cars & Vans: adjusted return on sales of 8 – 10%
  
  
• Daimler Trucks & Buses: adjusted return on sales of 6 – 7%
  
  
• Daimler Mobility: adjusted return on equity of 12 – 13%.

The business plan of Daimler covers the full year 2021 and is based on the existing Group structure, including Daimler Trucks & Buses. The spin-off of Daimler Truck, including significant parts of the related financial services business, will be examined before the end of 2021. Before the spin-off, Daimler will reclassify Daimler Truck as discontinued operations. The expected considerable positive effects in the second half of the year cannot be reliably determined at present.

The adjusted cash conversion rate (ratio of cash flow to EBIT) for the Mercedes-Benz Cars & Vans division in 2021 is expected to be between 0.7 and 0.9 and for Daimler Trucks & Buses between 0.8 and 1.0. After exceptionally strong free cash flow in 2020 triggered by various successful measures to reduce costs and safeguard liquidity in the wake of the COVID-19 pandemic, Daimler for 2021 anticipates a healthy free cash flow of the industrial business on a normalized level. CFBIT adjusted from the industrial divisions is expected to be on the prior-year-level. However, free cash flow adjusted includes higher tax payments and therefore will be below last year's figure. Additionally, the reported free cash flow includes the payments agreed in September 2020 in the context of the settlement with the US regulators in civil law proceedings relating to diesel emissions. Therefore, Daimler expects reported free cash flow to be significantly below 2020's figure.

In 2021, Mercedes-Benz Cars will push the xEV strategy forward and introduce four all-new EV models with the EQS, EQA, EQB and EQE as well as increase the proportion of PHEVs. Therefore, the division expects European passenger car CO2 emissions to be significantly below previous year's number.

Link to capital market presentation on full year 2020:
http://www.daimler.com/fullyear2020

Pictures of the Annual Results Conference 2020 will be available here:
https://media.daimler.com

Further information from Daimler is available at:
www.media.daimler.com and www.daimler.com

This document contains forward-looking statements that reflect our current views about future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "can," "could," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, pandemics, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates and tariff regulations; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations or of investigations requested by governments and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading "Risk and Opportunity Report" in the current Annual Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.

Daimler at a glance
Daimler AG is one of the world's most successful automotive companies. With its Mercedes-Benz Cars & Vans, Daimler Trucks & Buses and Daimler Mobility divisions, the Group is one of the leading global suppliers of premium and luxury cars and one of the world's largest manufacturer of commercial vehicles. Daimler Mobility offers financing, leasing, fleet management, investments, insurance brokerage as well as innovative mobility services. The company founders, Gottlieb Daimler and Carl Benz, made history by inventing the automobile in 1886. As a pioneer of automotive engineering, Daimler sees shaping the future of mobility in a safe and sustainable way as both a motivation and obligation. The company's focus therefore remains on innovative and green technologies as well as on safe and superior vehicles that both captivate and inspire. Daimler continues to invest systematically in the development of efficient powertrains – from high-tech combustion engines and hybrid vehicles to all-electric powertrains with battery or fuel cell – with the goal of making locally emission-free driving possible in the long term. The company's efforts are also focused on the intelligent connectivity of its vehicles, autonomous driving and new mobility concepts as Daimler regards it as its aspiration and obligation to live up to its responsibility to society and the environment. Daimler sells its vehicles and services in nearly every country of the world and has production facilities in Europe, North and South America, Asia and Africa. In addition to Mercedes-Benz, the world's most valuable luxury automotive brand (source: Interbrand study, 20 Oct. 2020), and Mercedes-AMG, Mercedes-Maybach, Mercedes-EQ and Mercedes me, its brand portfolio also includes commercial vehicle brands Mercedes-Benz Trucks Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses as well as the brands of Daimler Mobility: Mercedes-Benz Bank, Mercedes-Benz Financial Services, Daimler Truck Financial and Athlon. The company is listed on the Frankfurt and Stuttgart stock exchanges (ticker symbol DAI). In 2020, the Group had a workforce of around 288,500 and sold 2.8 million vehicles. Group revenues amounted to €154.3 billion and Group EBIT to €6.6 billion.

Figures for the 4th quarter and full year 2020
Daimler Group	Q4	Q4	Change	FY	FY	Change
	2020	2019	20/19	2020	2019	20/19
Sales, in units	881,550	910,163	-3%	2,840,402	3,344,951	-15%
Revenue, in millions of €	46,621	47,127	-1%	154,309	172,745	-11%
EBIT, in millions of €	4,598	383	-	6,603	4,313	+53%
EBIT adjusted, in millions of €	5,151	2,377	+117%	8.641	10,276	-16%
Net profit, in millions of €	3,589	-11	-	4,009	2,709	+48%
Earnings per share (EPS), in €	3.26	-0.10	-	3.39	2.22	+53%
Dividend proposed, in €	-	-	-	1,35	0,90	+50%
Employees (December 31)	288,481	298,655	-3%	288,481	298,655	-3%
Net liquidity (industrial business, December 31), in millions of €	17,855	10,997	+62%	17,855	10,997	+62%
Free cash flow (industrial business), in millions of €	4,751	1,890	+151%	8,259	1,368	+504%
Free cash flow (industrial business) adjusted, in millions of €	4,894	2,946	+66%	9,155	2,709	+238%
Mercedes-Benz Cars & Vans	Q4	Q4	Change	FY	FY	Change
	2020	2019	20/19	2020	2019	20/19
Sales, in units	760,895	779,724	-2%	2,461,884	2,823,818	-13%
Sales Mercedes-Benz Cars, in units	641,146	649,826	-1%	2,087,232	2,385,432	-13%
Sales Mercedes-Benz Vans, in units	119,749	129,898	-8%	374,652	438,386	-15%
Revenue, in millions of €	30,613	30,854	-1%	98,576	106,897	-8%
EBIT, in millions of €	3,669	62	-	5,172	-109	-
EBIT adjusted, in millions of €	4,066	1,763	+131%	6,802	6,151	+11%
Return on Sales (RoS), in %	12.0%	0.2%	+11.8%pts	5.2%	-0.1%	+5.3%pts
Return on Sales (RoS) adjusted, in %	13.3%	5.7%	+7.6%pts	6.9%	5.8%	+1.1%pts
Cash Flow Before Interest and Tax (CFBIT), in millions of €	3,730	1,749	+113%	7,048	598	-
Cash Flow Before Interest and Tax (CFBIT) adjusted, in millions of €	3,855	2,805	+37%	7,917	1,939	+308%
Cash Conversion Rate (CCR) adjusted	0.9	1.6	-	1.2	0.3	-
Daimler Trucks & Buses	Q4	Q4	Change	FY	FY	Change
	2020	2019	20/19	2020	2019	20/19
Sales, in units	120,655	130,439	-8%	378,518	521,133	-27%
Sales Daimler Trucks, in units	113,795	120,745	-6%	358,349	488,521	-27%
Sales Daimler Buses, in units	6,860	9,694	-29%	20,169	32,612	-38%
Revenue, in millions of €	10,497	11,191	-6%	34,671	44.429	-22%
EBIT, in millions of €	493	447	+10%	525	2.672	-80%
EBIT adjusted, in millions of €	575	447	+29%	678	2.672	-75%
Return on Sales (RoS), in %	4.7%	4.0%	+0.7%pts	1.5%	6.0%	-4.5%pts
Return on Sales (RoS) adjusted, in %	5.5%	4.0%	+1.5%pts	2.0%	6.0%	-4.0%pts
Cash Flow Before Interest and Tax (CFBIT), in millions of €	1,577	1,123	+40%	2,513	2,654	-5%
Cash Flow Before Interest and Tax (CFBIT) adjusted, in millions of €	1,577	1,123	+40%	2,513	2,654	-5%
Cash Conversion Rate (CCR) adjusted	2.7	2.5	-	3.7	1.0	-
Daimler Mobility	Q4	Q4	Change	FY	FY	Change
	2020	2019	20/19	2020	2019	20/19
Revenue, in millions of €	7,271	7,534	-3%	27,699	28,646	-3%
New business, in millions of €	18,965	20,411	-7%	67,786	74,377	-9%
Contract volume (December 31), in millions of €	150,553	162,843	-8%	150,553	162,843	-8%
EBIT, in millions of €	584	87	+571%	1,436	2,140	-33%
EBIT adjusted, in millions of €	623	384	+62%	1,595	1,827	-13%
Return on Equity (RoE), in %	16.2%	2.4%	+13.8%pts	9.8%	15.3%	-5.5%pts
Return on Equity (RoE) adjusted, in %	17.3%	10.5%	+6.8%pts	10.9%	13.1%	-2.2%pts

 

The figures are based on audited financial statements. The reporting structure and previous year's figures have been adjusted to reflect the newly formed Group divisions.

 

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SOURCE Daimler North America - Corporate Communications

FAQ

What were Daimler's financial results for the fiscal year 2020?

Daimler reported a net profit of €4.0 billion for 2020, a 48% increase from 2019.

How does the spin-off of Daimler Truck affect shareholders?

The spin-off is expected to unlock value for shareholders by allowing Daimler Truck to operate independently and potentially list on the DAX index.

What is the proposed dividend per share for Daimler in 2021?

Daimler proposed a dividend of €1.35 per share for 2021, up from €0.90 in 2019.

What impact did COVID-19 have on Daimler's sales in 2020?

Daimler's total unit sales decreased by 15% in 2020 due to the challenges posed by the COVID-19 pandemic.

What are Daimler's sales expectations for 2021?

Daimler expects sales, revenues, and EBIT in 2021 to be significantly above the prior year's level.