Daimler Truck Increases Full-Year Guidance

Daimler Truck CEO Martin Daum says, “Daimler Truck is doing very well.” (Joe Howard/Transport Topics)

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BOSTON — Daimler Truck is updating its sales and financial guidance for the year and launching a share buyback program for its investors, moves the company said are buoyed by its business momentum and a desire to “make our shareholders fully benefit from our successful development.”

During a Capital Market Day event on July 11, Daimler reported second-quarter sales gains across its business units and boosted full-year guidance based on the strength of global sales across the first half of the year.

For Daimler Truck North America, the company in a news release said Q2 global sales rose 9% to 131,888 units compared with 120,961 a year ago. That includes sales of 50,618 units for DTNA, up 14.7% from 44,124 units sold in the year-ago period. Daimler Buses saw Q2 sales jump 21.8% to 6,181 units compared with 5,075 a year ago, while Daimler’s Asia division reported a 9.2% sales gain to 40,097 units compared with 36,704 last year. Mercedes-Benz saw Q2 sales jump 1.1% to 39,236 units from 38,812 last year.

“Daimler Truck is doing very well,” said Martin Daum, CEO of the Germany-based manufacturer. “We are increasing our guidance for 2023.”

#DaimlerTruck increases full-year guidance for 2023 & announces #ShareBuyback

➡ We're increasing our adjusted return on sales guidance to a range of 8.5% to 10% (previously 7.5% to 9%)
➡ We'll conduct a share buyback program, beginning August 2023

👉 https://t.co/XKC9uM97eP pic.twitter.com/GUfrGvoWry — Daimler Truck AG (@DaimlerTruck) July 10, 2023

For DTNA, Daimler raised its full-year sales growth forecast to a range of 11% to 13%, up from a previous range of 10% to 12%, but left unchanged unit sales guidance of 190,000 to 210,000 units. For Daimler Buses, it lifted the growth range to 3% to 5% from an earlier 2% to 4%, with unit sales guidance unchanged at 20,000 to 25,000 units. Sales growth for Daimler Trucks Asia rises to 4% to 6% from an earlier range of 3% to 5% on unit sales guidance that increases to a range of 160,000 to 180,000 units from an earlier expectation of 150,000 to 170,000 units. The Mercedes-Benz unit is now expected to see a sales gain of 8% to 10%, up from earlier guidance of 7% to 9%. Sales are expected to jump to 155,000 to 175,000 units, up from an earlier forecast of 150,000 to 170,000 units. Overall, Daimler lifted its unit sales guidance to 530,000 to 550,000 units for the year, up from a previous range of 510,000 to 530,000 units.

As a result of these higher forecasts, Daimler is lifting revenue guidance for its Industrial Group — which includes those manufacturing units — to between 56 billion euros and 58 billion euros, up from an earlier forecast of between 55 billion euros and 57 billion euros. Its adjusted Return on Sales guidance for the business for financial year 2023 increases to a range of 8.5% to 10%, up from earlier guidance of 7.5% to 9%.

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During a Capital Market Day event on July 11, Daimler reported second-quarter sales gains across its business units and boosted full-year guidance. (Daimler AG)

Daimler also raises its ROS outlook for each industrial segment. The adjusted guidance for DTNA is up to a range of 11% to 13% from a previous range of 10% to 12%, while for Daimler Buses the adjusted ROS target is up to 3% to 5% from an earlier 2% to 4%. Daimler Trucks Asia is now expected to reach adjusted ROS of 4% to 6% from an earlier range of 3% to 5%, while Mercedes-Benz is now forecast to report adjusted ROS of 8% to 10%, previously 7% to 9%.

The main drivers for the increases, Daimler said, are stronger core markets accompanied by an improving supply chain situation, robust pricing and strong development of its services business.

Daimler added it remains focused on “self-help measures, notably the reduction of fixed costs and capital spent as well as the increase of service revenues.”

The company added that it has improved its resilience and aims to “further reduce the impact of cyclical downturns on future results.” Overall, Daimler Truck said it is on track to achieve its goal of 10% adjusted ROS by 2025 for the Industrial Business in favorable conditions.

“Looking beyond 2025, we see multiple growth opportunities in our industry and we are fully equipped to exploit these opportunities,” said Jochen Goetz, CFO of Daimler Truck. “This should translate into a 40% to 60% increase in revenues between 2025 and 2030 and an above 12% adjusted return on sales for the Industrial Business in sunny conditions. At the same time, we will be relentlessly focused on cost discipline and smart capital allocation.”

The company also announced the launch of a share buyback program. Beginning in August, shares worth up to 2 billion euros are intended to be acquired on the stock exchange over a period of up to two years, and will subsequently be canceled. The program was voted during a November 2021 shareholder meeting, and applies to acquisition of a maximum of 10% of the company’s share capital until Oct. 31, 2026.