February 18, 2021 - Daimler assumes that economic conditions in the most important markets continue to normalize and in particular that no further setbacks occur as a result of the COVID-19 pandemic. Based on this, Daimler expects that the significant unit-sales reductions recorded in the first nine months due to the COVID-19 pandemic will only be partially offset by the end of the year.
With the expected rise in availability of effective vaccines to combat the COVID-19 virus and in the absence of further unexpected pandemic-related setbacks, Daimler assumes that the global economy will recover strongly in 2021. Based on the expected market development and the current assessments of the divisions, Daimler anticipates Group sales, revenues and EBIT in 2021 to be significantly above the prior-year’s level. Although bottlenecks in the semiconductor industry will impact sales mainly in the first quarter it is currently anticipated that lost production volume can be compensated for by the end of the year. The divisions expect the following adjusted returns in the year 2021:
- Mercedes-Benz Cars & Vans: adjusted return on sales of 8 – 10%
- Daimler Trucks & Buses: adjusted return on sales of 6 – 7%
- Daimler Mobility: adjusted return on equity of 12 – 13%.
The business plan of Daimler covers the full year 2021 and is based on the existing Group structure, including Daimler Trucks & Buses. The spin-off of Daimler Truck, including significant parts of the related financial services business, will be examined before the end of 2021. Before the spin-off, Daimler will reclassify Daimler Truck as discontinued operations. The expected considerable positive effects in the second half of the year cannot be reliably determined at present.
The adjusted cash conversion rate (ratio of cash flow to EBIT) for the Mercedes-Benz Cars & Vans division in 2021 is expected to be between 0.7 and 0.9 and for Daimler Trucks & Buses between 0.8 and 1.0. After exceptionally strong free cash flow in 2020 triggered by various successful measures to reduce costs and safeguard liquidity in the wake of the COVID-19 pandemic, Daimler for 2021 anticipates a healthy free cash flow of the industrial business on a normalized level. CFBIT adjusted from the industrial divisions is expected to be on the prior-year-level. However, free cash flow adjusted includes higher tax payments and therefore will be below last year's figure. Additionally, the reported free cash flow includes the payments agreed in September 2020 in the context of the settlement with the US regulators in civil law proceedings relating to diesel emissions. Therefore, Daimler expects reported free cash flow to be significantly below 2020's figure.
In 2021, Mercedes-Benz Cars will push the xEV strategy forward and introduce four all-new EV models with the EQS, EQA, EQB and EQE as well as increase the proportion of PHEVs. Therefore, the division expects European passenger car CO2 emissions to be significantly below previous year’s number.