The 10th of December 2021 marked the start of a new era for Daimler Truck which began trading as an independent company, DTG, on the Frankfurt Stock Exchange, opening with a share price of €28 and valuation of €23 billion.
The IPO was supported by BNP PARIBAS, Citigroup, Goldman Sachs, Deutsche Bank, J.P. Morgan, Berenberg, BofA Securities and Landesbank Baden-Württemberg. Baader Bank acts both as designated sponsor in Xetra trading and as a specialist on the Frankfurt Stock Exchange trading venue.
Martin Daum, chairman of the board of management, Daimler Truck Holding AG, said: “For 125 years, our truck and bus business was part of the Daimler Group. As an independent, listed company, we look forward to even more entrepreneurial success in the future. Everyone should benefit from this – our workforce, our customers and, of course, our shareholders.”
Following its spin-off from Daimler AG, Daimler Truck considers itself well positioned for the new era of independence. The listing provides the opportunity to invest directly in the shares of one of the world’s largest commercial vehicle manufacturers. With 40 production facilities worldwide and more than 100,000 employees. Daimler Truck unites seven brands under its umbrella: BharatBenz, Freightliner, Fuso, Mercedes-Benz, Setra, Thomas Built Buses and Western Star.
In preparation for the spin-off, the company has specified its financial ambitions to increase the performance and profitability of the segments. Based on its proven cash generation and strong balance sheet, Daimler Truck received solid investment grade credit ratings ahead of the listing.
S&P Global Ratings (S&P) assigned a long-term issuer credit rating of BBB + (outlook stable) while Moody’s Investor Service (Moody’s) assigned a long-term issuer credit rating of A3 (outlook stable).
S&P’s BBB + / A-2 preliminary long-and short-term issuer rating reflects the agency’s assessment of Daimler Truck having strong market positions in the most profitable markets, U.S. and Europe. In addition, S&P positively noted that Daimler Truck has developed an ambitious profitability roadmap to improve the resilience of its operating performance during industry downturns and is prepared for the energy transition towards zero-emission vehicles.
Moody’s A3 long-term and a Prim-2 short term issuer rating of Daimler Truck reflects the group’s substantial scale as the world’s largest manufacturer of commercial vehicles by revenues; its good diversification with seven individual brands, and leading positions in the US and European markets. Moody’s also mentioned Daimler Truck’s potential to grow margins via efficiency measures, the company’s conservative financial policy and a strong liquidity profile.
Jochen Goetz, CFO of Daimler Truck Holding AG, said: “Daimler Truck is also financially in an incredibly good starting position for our entrepreneurial independence. Our balance sheet is rock solid, and we have already proven in the past how reliably we can generate an attractive cash flow. We are now putting all our energy into fully exploiting our earnings potential and driving forward the transformation to emission-free transport in a focused manner. We want to create sustainable value for our investors as well.”
Daimler Truck aims to achieve a double-digit return on sales in its industrial business by 2025, assuming strong market conditions. Daimler Truck’s business activities are structured into five reporting segments for which the company has formulated concrete return targets for strong market conditions. For example, Daimler Truck is specifically targeting an adjusted return on sales of 12% for the Trucks North America (TN) segment in the event of strong market conditions. For the Mercedes-Benz (MB) segment, the target is 10% adjusted return on sales, for the Trucks Asia (TA) segment 9% and for the Daimler Buses (DB) segment 7.5%. With the new Financial Services business of Daimler Truck (DTFS) as a fifth segment, the company is targeting an adjusted return on equity of 14%.
Daimler Truck Financial Services (DTFS) started business on 1 December 2021 in Australia, Brazil, Japan, Canada, Mexico, South Africa and the USA. In 2022, the financial service provider plans market launches in Argentina, Belgium and the Netherlands, the UK, Italy, Spain and Turkey. By end of 2022 contract portfolio with leasing, financing and insurance is expected to be around €21 billion. In 2023, the planned ramp-up of Germany and France will contribute to further growth. After this launch, DTFS will be one of the world’s largest financial services providers, specialising in serving commercial vehicle customers with approximately 1900 employees in 16 countries. Today, every fourth truck or bus from Daimler is financed or leased via Daimler’s own financial services. In the medium term, DTFS wants to raise this to 30 percent.
Daimler also Truck intends to lead the way to zero-emission transportation even more focused and agile in the future. The development of battery and fuel-cell vehicles will be accelerated with strategically sensible partnerships. For example, battery and fuel cell vehicles are to account for up to 60% of Daimler Truck sales by 2030. From 2039, the company wants to offer only vehicles in the Triad that are CO2-neutral in driving operation. For Daimler Truck, both technologies are compatible and necessary. Purely battery-powered trucks are used in light and heavy distribution transport, for example when it comes to delivering goods in cities. The hydrogen-based fuel cell drive will be indispensable in the CO2-neutral long-distance truck transport of the future.
Ola Källenius, chairman of the board of management, Daimler AG and Mercedes-Benz AG, said: “We are fully focused on building the world’s most desirable cars and leading the way in electromobility and vehicle software. At the same time, the listing of Daimler Truck turns one success story into two. The historic reorganisation to two ‘pure-play’ companies is intended to unleash the full potential of both companies and create decisive added value for all sides. We wish Daimler Truck a successful future and look forward to the beginning of a new era with confidence.”
Daimler Truck expects its shares to be listed in the Regulated Market of the Frankfurt Stock Exchange in the DAX index in the first quarter of 2022.