Daimler Truck shrugs off supply chain issues with rising sales

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Daimler Truck Holding AG overcame supply chain headwinds to increase unit sales during the second quarter of 2022, the company announced on Aug. 11.

The German utility vehicle maker posted reported net profit in euros of $977.9 million, or $1.16 per share, for the three months ending June 30. That compares to $628.4 million, or 75 cents, in the same period a year earlier. Total revenue increased 18% from $10.5 billion to $12.5 billion.

Daimler Truck Group first reported as an independent company earlier this year after its split from Daimler AG. The company began trading as an independent entity on December 10 on the Frankfurt Stock Exchange under the symbol DTG.

Daum

“Let me start with the obvious,” Daimler Truck CEO Martin Daum said on a call with investors. “We all see every day that our environment remains quite volatile. Of course, we are following the various geopolitical developments very closely. Regarding the war in Ukraine, we briefed you on our actions and their impact on our business during our annual earnings call in March. For now, there is nothing to add to this.

Daimler executives mentioned on the previous call that operational exposure in Russia and Ukraine is relatively low, at around 1% of global sales. For this reason, the company at the time did not see much impact from the war. He nevertheless donated humanitarian aid and trucks to help the inhabitants of the region.

“As for the discussion of potential natural gas shortages,” Daum said. “We expect an increase in costs, but no impact on production. In important markets such as Europe and the United States, demand remains strong and our group’s order book remains at a higher level. Today, the limiting factor of our activity is still not demand. The limiting factor is supply and our ability to produce and deliver.

We anticipate an increase in costs, but no impact on production. In important markets such as Europe and the United States, demand remains strong.

Martin Daum, CEO of Daimler AG

Daum added that in the second quarter the company was unable to deliver as many vehicles as it could have without bottlenecks. He noted, however, that unit sales have increased despite these headwinds. Daimler also raised net prices to offset inflationary cost increases, which helped the bottom line.

“Despite these challenges, we have made good underlying progress, even without the positive structural elements recorded,” Daum said. “I am pleased with these results as we are exactly on track to meet our expectations for the full year, with significant improvement over last year. And we are fully in line with our guidance for the year 2022. »

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The report notes that the company increased unit sales, revenue and adjusted earnings before interest and taxes despite continued supply chain constraints and commodity price headwinds. He also noted that revenue growth was supported by positive unit sales, improved net pricing and higher contributions from the aftermarket business as well as positive currency effects.

Daimler noted that its year-over-year sales rose 4% to 120,961 units from 116,845 units. The report pointed out that the company continues to see a strong demand environment and the order book also remains high.

The Truck North America segment recorded a 26% increase in revenue to $5.32 billion from $4.22 billion in the 2021 period. Earnings before interest and taxes increased 19% from from $454.3 million to $540 million. The results are mainly due to an increase in unit sales despite bottlenecks in the supply chains. Mexican unit sales were up 59.2% year over year, Canada was up 22.6% and the United States was up 6%.

Mercedes-Benz segment revenue increased 13% to $5.04 billion from $4.44 billion in the year-ago quarter. Earnings before interest and taxes jumped 114% to $521.6 million from $243.7 million. The report notes that results were driven by a slight increase in unit sales despite supply chain bottlenecks. This is mainly due to the EU30 region, which includes the European Union, the United Kingdom, Switzerland and Norway. Sales in this region increased by 14.6% to 38,392 units in the first half of the year.

The Trucks Asia segment reported that its revenue increased 6% to $1.6 billion from $1.5 billion last year. Earnings before interest and taxes fell 78% from $144.7 million to $32 million. This is explained by an increase in unit sales in the first six months of 2022, which mainly occurred in overseas markets such as Indonesia.

Daimler Buses segment revenue increased 20% to $902.1 million from $751.5 million. Earnings before interest and taxes fell 336% to a loss of $26.9 million from a gain of $11.4 million last year. The report noted that opposing effects within the segment led to a shift in the product mix. The company increased its unit sales in the EU30 region by 14.5%. Mexico achieved a unit sales increase of 11.8%, but sales in Brazil fell 2.6%.