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Introduction & Market Context
Daimler Truck Holding (ETR:DTGGe) AG (ETR:DTG) presented its Q1 2025 interim results on May 14, 2025, showcasing a resilient performance despite challenging market conditions. The company’s stock closed at €39.76, up 0.91% on the day of the presentation.
The heavy-duty truck market is experiencing normalization after several strong years, with North America Class 8 market assumptions for 2025 revised down to 260-290k units from the previous 280-320k units. Similarly, the EU30 heavy-duty truck market is expected to reach 270-310k units for the year.
As shown in the following market normalization chart, both key regions are trending toward their long-term averages:
Quarterly Performance Highlights
Daimler (ETR:MBGn) Truck reported solid financial results for Q1 2025 despite headwinds in key markets. Revenue declined 7% year-over-year to €11,558 million, while unit sales fell 8% to 99,812 vehicles. Despite these volume challenges, the company maintained profitability with adjusted EBIT of €1,164 million, down only 4% year-over-year, and earnings per share of €0.99, a minimal 1% decrease.
Notably, the company’s adjusted return on sales for the Industrial Business improved to 9.6%, up 0.3 percentage points from the previous year, demonstrating effective cost management and pricing discipline in a challenging environment.
The following chart provides a comprehensive overview of the Group’s Q1 2025 highlights:
Free cash flow for the Industrial Business declined significantly to €33 million, down 97% year-over-year, primarily due to changes in working capital, higher investments, and increased tax payments. Net industrial liquidity stood at €7,931 million, representing a 7% decrease from the previous quarter.
The cash flow waterfall chart below illustrates the key factors affecting free cash flow:
Segment Performance
Daimler Truck’s segments showed mixed performance in Q1 2025, with North America and Buses outperforming while Mercedes-Benz (OTC:MBGAF) Trucks faced challenges.
Trucks North America delivered an outstanding performance with adjusted EBIT of €778 million, up from €725 million in Q1 2024, and an improved adjusted return on sales of 14.4% (up from 12.5%). This improvement came despite an 8% decrease in unit sales to 38,992 vehicles, highlighting the segment’s strong pricing power and operational efficiency.
As shown in the following EBIT breakdown for Trucks North America, improved sales mix from product and customer structure was a key driver of profitability:
In contrast, Mercedes-Benz Trucks faced significant challenges with adjusted EBIT declining to €238 million from €417 million in Q1 2024, resulting in an adjusted return on sales of 5.4% (down from 8.0%). The segment was impacted by lower volumes, with unit sales decreasing by 18% to 33,446 vehicles.
The following chart details the factors affecting Mercedes-Benz Trucks’ performance:
Trucks Asia showed improvement with adjusted EBIT increasing to €64 million from €55 million in Q1 2024, and adjusted return on sales rising to 5.4% from 4.7%. This positive development was driven by improved net pricing and higher unit sales, which increased by 16% to 24,772 vehicles.
Daimler Buses emerged as a standout performer with adjusted EBIT more than doubling to €126 million from €59 million in Q1 2024, resulting in an impressive adjusted return on sales of 9.4% (up from 5.0%). This strong performance was driven by higher volumes and a favorable sales mix.
The following chart illustrates Daimler Buses’ exceptional performance:
Financial Services maintained stable performance with adjusted EBIT of €55 million, slightly up from €51 million in Q1 2024, though adjusted return on equity decreased to 7.3% from 8.2%.
Strategic Initiatives
Daimler Truck highlighted several strategic initiatives aimed at strengthening its competitive position in a challenging market environment.
In the electrification space, the company secured its largest-ever electric truck order with Amazon (NASDAQ:AMZN) purchasing 202 Mercedes-Benz eActros 600 vehicles. To support the adoption of electric vehicles, Daimler Truck is advancing its TruckCharge initiative, which aims to establish over 3,000 fast-charging points by 2030.
The company is also making progress in hydrogen technology, with successful extreme condition tests of its GenH2 fuel cell truck in the Swiss Alps, and in autonomous driving through its partnership with Torc.
On the cost front, Daimler Truck reached an agreement with its works council on the implementation of the Cost Down Europe program, which is expected to significantly improve the company’s cost structure and competitiveness in the European market.
Revised Outlook & Guidance
In response to the normalizing market conditions, Daimler Truck revised its guidance for 2025. The company now expects Group adjusted EBIT to range between -5% and +5% year-over-year, down from the previous guidance of +5% to +15%.
Unit sales are projected to reach 430-460k vehicles, revised down from the previous 460-480k units. Similarly, revenue guidance for the Industrial Business has been adjusted to €48-51 billion, down from €52-54 billion.
Despite these adjustments, Daimler Truck maintains its adjusted return on sales guidance of 8-10% for the Industrial Business, though it expects free cash flow to decrease by 10-25% compared to the previous year.
The following chart details the revised guidance for the Group and Industrial Business:
For individual segments, Trucks North America is expected to deliver an adjusted return on sales of 11-13%, while Mercedes-Benz Trucks is projected at 5-7%. Trucks Asia and Daimler Buses are forecasted to achieve 4-6% and 8-10% adjusted return on sales, respectively.
The company emphasized that its outlook is "particularly subject to further geopolitical developments and their impact on the global economy," highlighting the uncertain environment in which it operates.
Daimler Truck will hold its Capital Market Day on July 8, 2025, where it is expected to provide more details on its long-term strategy and financial targets.
Full presentation:
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