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Introduction & Market Context
Daimler Truck Holding (ETR:DTGGe) AG (ETR:DTG) presented its Q2 2025 interim results on August 1, 2025, showcasing the company’s ability to maintain profitability despite challenging market conditions. The heavy-duty truck market has normalized in key regions, with North America and Europe showing signs of stabilization after strong performance in previous years.
The company’s presentation, delivered by CEO Karin Rådström and CFO Eva Scherer, highlighted Daimler (ETR:MBGn) Truck’s resilience in maintaining its adjusted return on sales at 9.3% despite a 5% year-over-year decline in unit sales.
Market data presented in the slides indicates a normalization trend in both North America and Europe. The North American Class 8 market assumption for 2025 stands at 280,000 units, with Daimler Truck maintaining a substantial 41.1% market share. Similarly, the EU30 heavy-duty truck market is projected at 310,000 units for 2025, with the company holding a 15.3% share.
As shown in the following chart of heavy-duty truck market trends:
Quarterly Performance Highlights
Daimler Truck reported solid financial results for Q2 2025, maintaining profitability despite declining sales volumes. The company achieved an adjusted EBIT of €1,118 million, representing a modest 4% year-over-year decrease, while revenue from industrial business declined 6% to €11,767 million.
The following slide summarizes the key financial metrics for the quarter:
Unit sales decreased by 5% year-over-year to 106,715 vehicles, with the book-to-bill ratio remaining stable at 83%. This indicates that while new orders have slowed, they remain proportional to current sales levels, suggesting a controlled market adjustment rather than a sharp downturn.
Notably, the company’s earnings per share (EPS) saw a significant decline of 61% year-over-year to €0.36. This represents a substantial drop from the €0.99 EPS reported in Q1 2025, indicating increased pressure on profitability as the year progresses.
Free cash flow from industrial business showed improvement, reaching €20 million, a €305 million increase year-over-year. However, net industrial liquidity decreased by 25% quarter-over-quarter to €5,926 million, down from €7.9 billion reported at the end of Q1 2025.
The company’s order intake and unit sales across segments can be seen in the following detailed breakdown:
Detailed Financial Analysis
A closer examination of Daimler Truck’s financial performance reveals significant regional variations. The company’s overall adjusted EBIT decreased by €50 million to €1,118 million in Q2 2025, with different segments showing contrasting results.
The following waterfall chart illustrates the factors contributing to the change in adjusted EBIT:
Trucks North America, traditionally the company’s strongest segment, experienced the most significant decline, with EBIT dropping by €219 million. This was partially offset by a strong performance from Mercedes-Benz (OTC:MBGAF) Trucks, which improved its EBIT contribution by €129 million. Smaller positive contributions came from Trucks Asia (+€8 million), Daimler Buses (+€31 million), and Financial Services (+€11 million).
The North American segment’s performance deterioration is particularly noteworthy, as shown in the detailed breakdown:
Trucks North America saw its adjusted return on sales decline from 14.6% in Q2 2024 to 12.9% in Q2 2025, with EBIT falling from €875 million to €657 million. This decline occurred alongside a 20% reduction in unit sales (from 48,246 to 38,580) and a 15% decrease in revenue (from €6,006 million to €5,086 million).
One bright spot in the company’s portfolio is the growth in Zero Emission Vehicles (ZEV). While still representing a small portion of overall sales, ZEV unit sales increased to 1,991 in Q2 2025, up from 1,461 in the same period last year, demonstrating progress in the company’s electrification strategy.
Strategic Initiatives
Daimler Truck outlined several strategic initiatives aimed at strengthening its market position and future-proofing the business. The company highlighted both completed actions and upcoming priorities in its execution roadmap.
The following slide details the company’s execution focus:
Among the completed initiatives, Daimler Truck emphasized the agreement on "Cost Down Europe," which aims to reduce costs by more than €1 billion. This aligns with information from the Q1 2025 earnings call, where the company announced plans to implement significant cost reductions in Europe by 2030.
Other key strategic developments include the formation of a strong Japanese global company through the integration of Mitsubishi Fuso and Hino Motors, and the establishment of a new software joint venture called "Coretura" with Volvo (OTC:VLVLY) Group. These partnerships are designed to enhance the company’s technological capabilities and geographic reach.
The company also secured a major contract for Mercedes-Benz Arocs logistics trucks in the growing defense sector, launched the Mercedes-Benz Axor for the Brazilian market, and delivered its 200,000th BharatBenz truck in India, demonstrating its continued focus on emerging markets.
Forward-Looking Statements
Looking ahead, Daimler Truck’s management outlined several key priorities for the remainder of 2025 and beyond. These include the operationalization of the "Simpler. Faster. Stronger." initiative, implementation of a leaner headquarters structure, and determining a strategic approach for the Chinese market.
For 2026, the company plans to deliver the first tangible impacts from its Cost Down Europe program, strengthen its pay-for-performance model, enhance its Financial Services division, and update its autonomous driving strategy.
The longer-term goal, targeted for 2030 at the latest, is to achieve industry-leading profit margins. This aligns with the company’s Q1 2025 guidance, which projected an adjusted EBIT ranging from -5% to +5% year-over-year and a return on sales between 8% and 10% for the full year 2025.
While Daimler Truck maintained its adjusted return on sales at 9.3% in Q2, the significant drop in EPS and the challenges in the North American market may put pressure on the company’s ability to meet its full-year targets. The success of its cost reduction initiatives and strategic partnerships will be crucial in navigating the normalizing market conditions.
As of July 31, 2025, Daimler Truck’s stock closed at €42.95, showing minimal change (+0.07%) and trading near its 52-week high of €45.04, suggesting that investors remain confident in the company’s ability to manage through the current market normalization.
Full presentation:
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