Daimler releases preliminary results for Q1 2020

In News, Daimler4 MinutesBy NZ Trucking magazineApril 23, 2020

As a result of the Covid-19 pandemic, market expectations for Daimler‘s first quarter 2020 appear to show a large degree of variation. Against this background Daimler announces the following:

Preliminary figures for the first quarter 2020 are in line with its earlier communicated trend:

  • Daimler Group EBIT: €617mn (Q1-19: €2798mn); adjusted EBIT €719mn (Q1-19: 2310mn) Trend as communicated: margin positive

  • Mercedes-Benz Cars & Vans EBIT: €510mn (Q1-19: €1143mn); adjusted EBIT: €603mn (Q1-19: €1372mn) Trend as communicated: margin positive

  • Daimler Trucks & Buses EBIT: €247mn (Q1-19: €553mn); adjusted EBIT: €247mn (Q1-19: €553mn) Trend as communicated: margin positive

  • Daimler Mobility EBIT: €58mn (Q1-19: €1209mn); adjusted EBIT: €58mn (including Covid-19 related provisions for credit risks of €0.4bn) (Q1-19: €491mn) Trend as communicated: pre-credit risk provisions margin positive

  • Net industrial liquidity: €9.3bn (Q1-19: €11.0bn) Trend as communicated: comfortable level

  • Industrial Free Cash Flow: minus €2.3bn (Q1-19: minus €2.0bn.); adjusted Industrial Free Cash Flow: minus €1.9bn (Q1-19: minus €2,0bn)Trend as communicated: negative

The following two effects that are included in todays‘ preliminary figures do not appear to be reflected in current market expectations:

  • Mercedes-Benz Cars & Vans: Contribution of smart into the joint venture with Geely leading to a positive effect of +€154mn

  • Reconciliation: Impairment on Daimler‘s shareholding in BAIC Motor Corporation Ltd: minus €150mn 

All stated figures are preliminary and unaudited.

Given the continuing effects of the Covid-19 pandemic, Daimler‘s board of management continues to believe that the original forecast for the financial year 2020, as disclosed in connection with annual report 2019, is no longer valid.

The effect of the Covid-19 pandemic on customer demand, supply chains and vehicle production cannot be assessed with the usual degree of detail and certainty, making the re-evaluation of the forecast for the fiscal year 2020 complex. However, Daimler now expects the group‘s total unit sales for 2020 to be below the prior year, with lower unit sales at each of Mercedes-Benz Cars, Mercedes-Benz Vans, Daimler Trucks and Daimler Buses. For Daimler Mobility it expects a lower new business volume for the financial year 2020 compared with 2019.

As a result, the group revenue for the financial year 2020 is expected to be below the prior year.

Given the anticipated market development and the assessment of Daimler‘s divisions, it expects the group EBIT for the financial year 2020 to be below prior year.

The adjusted return on equity of Daimler Mobility for the financial year 2020 will not reach the prior year level.

The decline in the results will lead to a decline in Daimler‘s Industrial Free Cash Flow for 2020.

Having implemented a comprehensive set of cash protection measures and having increased its financial flexibility, Daimler is confident it is well positioned to manage the business, both during and after the Covid-19 pandemic.

The full quarterly results will be published on 29 April 2020.