July 21, 2021 - Daimler today reported its results for the second quarter 2021 and shows strong performance despite semiconductor shortage.
Q2 2020: 541,800
Q2 2020: € 30.2 bn
Q2 2020: € -1,682 mn
Net Profit Group
Q2 2020: € -1,906 mn
Net Liquidity Industrial Bus.
End of Q1 2021: €20.1 bn
Free Cash Flow Industrial Bus.
Q2 2020: € 685 mn
We achieved a strong performance across all divisions in the second quarter. At Mercedes-Benz Cars and Vans, we posted double-digit margins for the third quarter in a row and thus demonstrated the resilience of our business - despite the persistently low availability of semiconductors. The entire industry is currently struggling with longer delivery times, which unfortunately also affect our customers. We are doing what we can to minimize the impact. Given the high demand for our vehicles, delivery to our customers has top priority. Our transformation towards emission-free and software-driven mobility is supported by a high level of free cash flow in the industrial business. We are implementing our strategy at full speed.
The Group’s investments in property, plant and equipment in the second quarter totaled €1.0 billion (Q2 2020: €1.3 billion). Research and development expenditure amounted to €2.4 billion (Q2 2020: €2.3 billion).
The free cash flow of the industrial business was €2,586 million (Q2 2020: €685 million), including important upfront investments in future products. The increase was triggered by operating performance, disciplined and focused capital allocation and a solid cash conversion. The adjusted free cash flow of the industrial business improved to €2,950 million (Q2 2020: €778 million).
The net liquidity of the industrial business increased to €20.9 million at the end of the second quarter, compared to €20.1 billion at the end of the first quarter 2021 and €17.9 billion at year-end 2020. This is mainly a result of the free cash flow from the industrial business.
Sales by the Mercedes-Benz Cars & Vans division increased by 29% to 619,600 vehicles in the second quarter (Q2 2020: 480,800). Revenue was €28.2 billion (Q2 2020: €18.9 billion). EBIT amounted to €3,438 million (Q2 2020: minus €1,125 million) and the return on sales was 12.2% (Q2 2020: minus 5.9%).
Positive effects resulted from the increase in unit sales, a favourable product mix, pricing and ongoing cost measures. Adjusted EBIT reached €3,604 million (Q2 2020: minus €284 million) with the adjusted return on sales at 12.8% (Q2 2020: minus 1.5%).
Cash flow before interest and taxes (CFBIT) was €2,502 million (Q2 2020: €430 million). Adjusted CFBIT amounted to €2,805 million (Q2 2020: €522 million). The adjusted cash conversion rate (CCR) was plus 0.8 (Q2 2020: minus 1.8).
Sales by Mercedes-Benz Cars rose by 27% to 521,200 vehicles in the second quarter (Q2 2020: 408,900). Mercedes-Benz Vans’ sales were up 37% to 98,400 vehicles (Q2 2020: 71,900).
The Daimler Trucks & Buses division showed an increase in unit sales of 91% to 116,800 vehicles in the second quarter (Q2 2020: 61,000). Revenue was €10.0 billion (Q2 2020: €6.2 billion). EBIT amounted to €819 million (Q2 2020: minus €756 million) and the return on sales was 8.2% (Q2 2020: minus 12.2%).
Positive effects resulted from the sales increase in almost all regions, primarily from the market recovery, as well as a higher contribution to earnings from the after sales business, pricing, ongoing cost discipline as well as a contribution from the listing of Proterra, Inc. and the sale of the Campinas plant. Adjusted EBIT was €831 million (Q2 2020: minus €747 million) and adjusted return on sales was 8.3% (Q2 2020: minus 12.0%).
Cash flow before interest and taxes (CFBIT) soared to an inflow of €667 million (Q2 2020: outflow of €121 million). Adjusted CFBIT amounted to an inflow of €693 million (Q2 2020: outflow of €121 million). The adjusted cash conversion rate (CCR) was plus 0.8 (Q2 2020: 0.2).
Unit sales by Daimler Trucks increased by 94% to 112,100 vehicles in the second quarter (Q2 2020: 57,900). Daimler Buses sold 4,700 vehicles, an increase of 52% (Q2 2020: 3,100).
At Daimler Mobility, new business increased by 23% to €17.2 billion in the second quarter (Q2 2020: €14.0 billion), driven by strong sales developments at the industrial business. Contract volume was €150.6 billion at the end of the quarter (end of the first quarter 2021: €152.7 billion/end of 2020: €150.6 billion). Revenue was €6.9 billion (Q2 2020: €6.5 billion). The division’s EBIT amounted to €924 million (Q2 2020: €205 million).
Positive effects resulted from lower credit-risk provisions, a credit provision release of €120 million, lower refinancing costs and improved development of the business operations, as well as from strict cost discipline.
At 23.9%, return on equity was much higher than the 5.6% in the prior-year period. Adjusted EBIT was €930 million (Q2 2020: €313 million) and adjusted return on equity was 24.0% (Q2 2020: 8.6%).
Daimler Truck spin-off on track
Daimler intends to generate value for its shareholders and to raise its profitability by creating two pure-play companies, one focused on cars and vans with the other on trucks and buses. It is intended that a significant majority stake in Daimler Truck will be distributed to Daimler shareholders.
The transaction and the listing of Daimler Truck on the Frankfurt Stock Exchange are on track and expected to be completed before year-end 2021. The project is currently in the preparatory and auditing phase. At an extraordinary general meeting in autumn, Daimler shareholders will have to approve this historic strategic step.