Outlook

February 11, 2020 - Daimler assumes that Group EBIT in 2020 will be significantly above the level of 2019, which was negatively impacted by various material adjustments.

The focus in the coming years will be on the significant improvement of our margins as well as the cash flow. Our goal is to ensure solid net liquidity to protect the necessary investments, and at the same time, to pay attractive dividends. We will ensure disciplined capital allocation in all areas.

Harald Wilhelm, Member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Mobility

Group unit sales slightly below prior-year level

Daimler expects Group unit sales in the fiscal year 2020 slightly below the prior-year level. Mercedes-Benz Cars, Mercedes-Benz Vans and Daimler Trucks assume a slight decrease in unit sales compared to the previous year. Daimler Buses sees slightly higher sales numbers. At Daimler Mobility new business should weaken slightly, while the contract volume should remain at the prior-year level.

Group revenue at the level of 2019, EBIT significantly above

Group revenue in the fiscal year 2020 is expected to be stable at the level of 2019. At Mercedes-Benz Cars & Vans, revenue should be around the prior-year level. Daimler Trucks & Buses expects a significant revenue decrease. The Daimler Mobility division forecasts revenue at the prior-year level. Daimler assumes that Group EBIT in 2020 will be significantly above the level of 2019, which was negatively impacted by various material adjustments.

Expectations for divisions

  • Mercedes-Benz Cars & Vans: adjusted return on sales of 4-5%
  • Daimler Trucks & Buses: adjusted return on sales of 5%
  • Daimler Mobility: adjusted return on equity of 12%

Significant efficiency measures already initiated in all business areas, such as personnel and material cost savings, portfolio and model adjustments and the further implementation of platform strategies, as well as more stringent capital allocation, should have an initial positive impact on earnings as early as the 2020 fiscal year. These measures will take full effect in subsequent years. Restructuring measures and the initiated job cuts, on the other hand, will have a negative impact on earnings in 2020. Daimler will continue to review all noncore activities in order to focus the financial resources on the businesses with the highest economic potential.

Free cash flow of the industrial business significantly higher than in the previous year

High upfront investments for new products and technologies will continue to have a negative impact on the free cash flow of the industrial business, even though upfront investments should have peaked in 2019. Given these conditions, Daimler assumes that the free cash flow of the industrial business should be significantly higher than in the previous year. Items not yet included are possible expenses related to governmental and legal proceedings. Against the background of an even more targeted capital allocation and prioritization of projects, investments in property, plant and equipment and for research and development in 2020 should remain in the magnitude of the 2019 volume.

The detailed outlook is provided in our online annual report 2019.

Important Notes

This page was revised based on the interim report for the third quarter of 2019 and contains forward-looking statements.

With the guidance for the 2019 financial year, for forecasting the profitability of the divisions, Daimler changed over to using return on sales instead of EBIT for the automotive divisions and return on equity for Daimler Mobility. This creates a link between our expectations for the current financial year and our strategic targets.

Divisional return on sales and return on equity are forecast on the basis of bandwidths.

For the Daimler Group’s EBIT, we retain the current method of a comparative forecast; however, we adjusted the forecast sensitivities:

  • The forecast “at the prior-year level” represents a change compared with the prior-year figure of -5% to +5%.
  • The forecast “slightly above/below the prior-year level” represents a change compared with the prior-year figure of > +/-5%.
  • The forecast “significantly above/below the prior-year level” represents a change compared with the prior-year figure of > +/-15%.

In addition, for both the Group and the divisions, we adjusted the forecast sensitivities for the less volatile reporting parameters unit sales and revenue as follows:

  • The forecast “at the prior-year level” represents a change compared with the prior-year figure of -2% to +2%.
  • The forecast “slightly above/below the prior-year level” represents a change compared with the prior-year figure of > +/-2%.
  • The forecast “significantly above/below the prior-year level” represents a change compared with the prior-year figure of > +/-7.5%.

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