Daimler has seen a faster than expected market recovery and a particularly strong September performance. This, combined with diligent cost discipline, extensive cash preservation measures and further efficiency enhancements means that Industrial Free Cash Flow, Daimler Group EBIT adjusted, Mercedes-Benz Cars & Vans EBIT adjusted, Daimler Trucks & Buses EBIT adjusted and Daimler Mobility EBIT adjusted are all significantly above market expectations for the third quarter of 2020.
The unusually strong Industrial Free Cash Flow in the quarter reflects the extensive cost and cash preservation measures and strong operative performances across all divisions leading to favorable cash-conversion ratios. In addition, the quarter saw the expected receipt of a € 1.2 billion dividend from Daimler’s Chinese joint venture BBAC and a positive contribution from working capital.
“The third quarter shows a very strong performance and provides further proof that we are on the right path to reducing the break-even of our company. At the same time, we continued to seize opportunities from improving markets with the great products of Mercedes-Benz Cars & Vans and Daimler Trucks & Buses. This gives us confidence to push ahead with our work both on the strategic and operational side of the business. We expect positive momentum to continue in the fourth quarter, however with the regular year-end seasonality,” stated Harald Wilhelm, Member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Mobility. The following stated figures for the third quarter 2020 are preliminary and unaudited:
- Industrial Free Cash Flow: € 5,139 million (consensus: € 2,973 million)
Industrial Free Cash Flow adjusted € 5,345 million (consensus: n/a)
- Net Industrial Liquidity: € 13.1 billion (Q2-20: €9.5 billion)
- Daimler Group EBIT: € 3,071 million (consensus: € 1,950 million)
EBIT adjusted: € 3,480 million (consensus: € 2,498 million)
- Mercedes-Benz Cars & Vans EBIT: € 2,118 million (consensus: € 1,320 million)
EBIT adjusted: € 2,417 million (consensus: € 1,782 million)
Return on Sales (RoS) adjusted: 9.4% (consensus: 6.5%)
- Daimler Trucks & Buses EBIT: € 541 million (consensus: € 350 million)
EBIT adjusted: € 603 million (consensus: € 400 million)
Return on Sales (RoS) adjusted: 6.5% (consensus: 4.3%)
- Daimler Mobility EBIT: € 590 million (consensus: € 381 million)
EBIT adjusted: € 602 million (consensus: € 406 million)
Return on Equity (RoE) adjusted: 16.5%
The preliminary results include the following adjustments affecting EBIT:
- Expenses of € 407 million mainly for ongoing efficiency programs and including € 68 million for adjustment and realignment of capacities within the global production network in connection with the intended sale of the car plant in Hambach.
- Total of legal proceedings and related measures for Daimler Group: € 2 million.
Given the development of the third quarter, Daimler also expects a positive impact for the remainder of the year, however with the fourth quarter 2020 to show the usual year-end seasonality pattern. Please note this statement is made under the assumption of no further COVID-19 lockdowns.
Accordingly, Daimler expects to publish an updated guidance for the financial year 2020 together with its quarter results on October 23, 2020.
EBIT, EBIT adjusted, RoS adjusted, RoE adjusted, Industrial Free Cash Flow and Industrial Free Cash Flow adjusted are defined on pp. 64 and 73 of the Daimler Annual Report 2019.