Daimler Truck Stock: Mixed Results Trigger Cost-Cutting Plan

Daimler Truck has experienced a challenging fiscal year 2024, with financial indicators showing a downward trend despite slightly exceeding market expectations. The commercial vehicle manufacturer reported a 3 percent revenue decrease to €54.1 billion, surpassing analyst forecasts of €53.7 billion. However, profitability metrics showed steeper declines, with adjusted EBIT falling 15 percent to €4.67 billion and the industrial business margin dropping from 9.9 to 8.9 percent. Particularly concerning was the 21 percent plunge in earnings per share, from €4.62 to €3.64. The European market proved especially problematic, with Mercedes-Benz Trucks suffering a 20 percent sales decline and over 10 percent revenue reduction, resulting in its operating margin shrinking from 10.2 to 7.5 percent. Despite these headwinds, the DAX-listed company plans to maintain its dividend at €1.90 per share and has provided a cautiously optimistic outlook for 2025, projecting industrial segment revenues between €52-54 billion and an adjusted EBIT increase of 5-15 percent.

Billion-Euro Efficiency Initiative Unveiled

In response to persistent European market challenges, Daimler Truck has announced a comprehensive efficiency program aimed at reducing recurring costs by more than €1 billion by 2030. Management acknowledged that previous cost-cutting measures proved insufficient, prompting discussions with the works council about more extensive adjustments. The company's board is simultaneously developing a revised corporate strategy to elevate profitability to industry-standard levels, scheduled for presentation to investors on July 8 in Charlotte, North Carolina. Some organizational restructuring has already begun, with operations in China and India being integrated with Mercedes-Benz Trucks' European and Latin American activities. Fourth-quarter order intake provided a bright spot, climbing 15 percent to 124,046 vehicles, while the bus division performed exceptionally well, doubling its adjusted operating profit to €434 million with an improved margin of 8.3 percent.