Daimler confident about 2021
on Thursday, Daimler AG reported its results for the fiscal year 2020. The company has been suffering from the pandemic, but the final figures are better than expected, and the company is confident that 2021 will be ‘significantly’ better.
In a challenging environment due to the Covid-19 pandemic, the Group’s total unit sales of passenger cars and commercial vehicles decreased by 15%, to 2,84 million (2019: 3,34 million). Revenue was €154,3 billion (2019: €172,7 billion), a reduction of 11%.
Due to extensive cost and cash preservation measures and strong performances across all divisions, the EBIT of the Daimler Group increased by 53% to €6,6 billion (2019: €4,3 billion). Adjusted EBIT, reflecting the underlying business, was €8,6 billion (2019: €10,3 billion).
“The year 2020 was a stress test for just about every company in almost every industry. The Daimler team mastered this test very well. “Our products continue to be in great demand across all major markets and divisions. With the rapid growth in our xEV sales and the introduction of new products and technologies, we have also taken important steps in electrification and digitalization. Our financial results are significantly above market expectations reflecting substantial progress on cost-efficiencies,” commented CEO Ola Källenius.
Do (much) better in 2021
“We are confident that we can maintain positive momentum if current market conditions prevail, accelerating our strategic plans and further enhancing our financial robustness. The intended separation of our industrial businesses is designed to unlock the full potential for Mercedes-Benz as the world’s pre-eminent luxury car business, committed to leading in electric drive and car software, and Daimler Truck as the world’s largest truck and bus producer and technology leader,” Källenius continued.
Daimler assumes that the global economy will recover strongly in 2021. Based on the expected market development and the divisions’ current assessments, Daimler anticipates Group sales, revenues, and EBIT in 2021 to be significantly above last 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 Daimler divisions expect the following adjusted returns in the year 2021: for Mercedes-Benz Cars & Vans, an adjusted return on sales of 8-10%, for Daimler Trucks & Buses, an adjusted return on sales of 6-7%, and for Daimler Mobility, an adjusted return on equity of 12-13%.
Electrification under st(r)eam
In 2021, Mercedes-Benz Cars will push the electrification strategy further forward and introduce four all-new EV models with the EQS, EQA, EQB, and EQE, as well as increasing the proportion of PHEVs.
Therefore, the division expects European passenger car CO2 emissions to be significantly below the previous year’s number. Last year, thanks to its ‘electrified’ sales, Daimler succeeded in reducing its average CO2 emission ratio from 137 to 104 g/km. By doing so, it avoided huge fines from the EU authorities.
Daimler wants to stay in the driver’s seat regarding the software used in its vehicles. CEO Källenius, therefore, excludes fusions or important acquisitions, but he insists he’s always open to technical cooperation.
At the moment, Daimler is working together with Nvidia on autonomous driving systems for cars, while the truck division is associated with Waymo (Google) and Amazon.
Microsoft is also becoming active in this business. It works already with Volkswagen and now has announced a cooperation with Bosch, the number one supplier in the world and one of Daimler’s preferred partners.
With Microsoft, Bosch is working on new systems for web connectivity, very important concerning real-time updates. At the end of this year, the first prototypes will be ready to go out for testing purposes.