Daimler AG / Key word(s): Change in Forecast
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May 19, 2016
Daimler Trucks changes its outlook for 2016
- EBIT from ongoing business and unit sales by Daimler Trucks now expected to be significantly lower than in 2015
- Markets develop weaker than anticipated
- Unchanged outlook for Group EBIT from ongoing business: slightly above prior-year
Stuttgart, Germany - Due to the sustained negative development of major truck markets, Daimler Trucks is revising its forecast for the year 2016. The division now expects EBIT from the ongoing business and unit sales to be significantly below the very good prior-year levels. Until now, Daimler Trucks had anticipated EBIT from the ongoing business at the prior-year level and a slight decrease in unit sales. In 2015, Daimler Trucks achieved the best earnings in its history of EUR2.7 billion and sales of 502,500 units.
The situation of global truck markets has been difficult for several months and has worsened in recent weeks. In the NAFTA region, there has been no revival of orders received, especially in the heavy-duty segment (Class 8). The overall market for Class 6 to 8 trucks will contract by about 15% in 2016. This can be only partially offset by the market development in Europe. Although demand in Europe is significantly higher than last year, the competitive situation has become much more intense and is influencing market players' pricing. Another factor is that the persistently low price of oil is having a sustained negative impact on demand in the Middle East. Furthermore, the development of markets in Brazil, Indonesia and Turkey is negative. The outlook for those markets has been worsening since the beginning of the year and continues to worsen. The Brazilian market will contract by about 20%, now that the political and thus also economic situation there has deteriorated once again. The same applies to Indonesia, where Daimler Trucks anticipates a decrease of about 15%. Demand in Turkey will also be substantially lower than last year, due not only to purchases being brought forward to 2015, but also to very negative geopolitical conditions.
Against the backdrop of this development, Daimler Trucks will intensify the efficiency actions that are already being taken. In Brazil, further workforce adjustments will have to be made, for which Daimler Trucks has made a voluntary severance offer. In this context, Daimler Trucks anticipates expenses totaling up to EUR100 million as a special reporting item in 2016.
The outlook for Group EBIT from the ongoing business remains unchanged: Daimler continues to assume that Group EBIT from the ongoing business will increase slightly in the year 2016.
Hendrik Sackmann, + 49 711 17 35014, firstname.lastname@example.org Florian Martens, + 49 711 17 41525, email@example.com
19.05.2016 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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Company: Daimler AG
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