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August 11, 2022 9:15 AM, EDT

Daimler Truck Shrugs Off Supply Chain Issues With Rising Sales

DaimlerNew haulage trucks loaded onto a train at the customer delivery center outside the Daimler AG truck factory in Woerth, Germany. (Alex Kraus/Bloomberg News)

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Daimler Truck Holding AG overcame supply chain headwinds to increase unit sales during the second quarter of 2022, the company reported Aug. 11.

The German commercial vehicle manufacturer posted net profit reported in euros of $977.9 million, or $1.16 per share, for the three months ending June 30. That compared with $628.4 million, or 75 cents, during the same time the previous year. Total revenue increased 18% to $12.5 billion from $10.5 billion.



Daimler Truck Group reported for the first time as an independent company earlier this year after its spinoff from Daimler AG. The company began trading as an independent entity Dec. 10 on the Frankfurt Stock Exchange under the symbol DTG. 

Martin Daum

Daum

“Let me start with the obvious,” Daimler Truck CEO Martin Daum said during a call with investors. “We all observe every day that our environment remains quite volatile. We, of course, monitor the various geopolitical developments very closely. As for the war in Ukraine, we informed you about our measures and their impact on our business in our annual results call in March. For now, there’s nothing to add to that.” 

Daimler executives mentioned during the earlier call that operational exposure in Russia and Ukraine is relatively low at about 1% of global sales. Because of that, the company at the time did not see much of an impact from the war. It still donated humanitarian aid and trucks to help people in the region.

“Regarding the discussion about potential shortages of natural gas,” Daum said. “We expect increasing cost, but no impact on production. In important markets like Europe and the U.S., demand remains strong, and our group order backlog remains on a higher level. Today, the limiting factor of our business still is not demand. The limiting factor is supply and our ability to produce and deliver.” 

We expect increasing cost, but no impact on production. In important markets like Europe and the U.S., demand remains strong.

Daimler AG CEO Martin Daum

Daum added that in the second quarter the company could not deliver as many vehicles as it could have without bottlenecks. He noted, though, that unit sales increased despite these headwinds. Daimler also increased net pricing to offset inflationary cost increases, which contributed to bottom line results.

“Despite these challenges, we made good underlying progress, even without the recorded positive structural items,” Daum said. “I am satisfied with those results as we are exactly on track to achieve our expectations for the full year, with the significant improvement compared to last year. And we are fully in line with our 2022 full-year guidance.” 

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The report noted that the company increased unit sales, revenue and adjusted earnings before interest and taxes despite ongoing supply chain constraints and headwinds from raw material prices. It also noted revenue growth was supported by positive unit sales, improved net pricing and higher contributions from aftersales business as well as positive effects from exchange rates. 

Daimler noted its sales year-over-year increased 4% to 120,961 units from 116,845 units. The report highlighted that the company is continuing to see a strong demand environment, and order backlog remains high as well. 

The Truck North America segment reported revenue increased 26% to $5.32 billion from $4.22 billion during the 2021 period. Earnings before interest and taxes increased 19% to $540 million from $454.3 million. The results primarily were due to an increase in unit sales despite bottlenecks in the supply chains. Mexican unit sales increased 59.2% year-over-year, Canada saw an increase of 22.6% and the U.S. increased 6%.

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Revenue in the Mercedes-Benz segment grew 13% to $5.04 billion from $4.44 billion during the prior-year quarter. Earnings before interest and taxes surged 114% to $521.6 million from $243.7 million. The report noted that results were driven by a slight increase in unit sales despite supply chain bottlenecks. This was mainly due to the EU30 region, which covers the European Union, United Kingdom, Switzerland and Norway. Sales in that region rose 14.6% to 38,392 units in the first half of the year. 

The Trucks Asia segment reported that revenue grew 6% to $1.6 billion from $1.5 billion last year. Earnings before interest and taxes declined 78% to $32 million from $144.7 million. This was driven by an increase in unit sales in the first six months of 2022 that mainly occurred in overseas markets such as Indonesia. 

Revenue in the Daimler Buses segment gained 20% to $902.1 million from $751.5 million. Earnings before interest and taxes dropped by 336% to a loss of $26.9 million from a gain of $11.4 million last year. The report noted that opposing effects within the segment led to a change in the product mix. The company increased unit sales in the EU30 region by 14.5%. Mexico achieved an increase in unit sales of 11.8%, but sales in Brazil fell by 2.6%.