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Daimler AG DDAIF

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Morningstar’s Analysis

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Daimler Recovers From COVID-Afflicted Q2 With Impressive Cash Flow in Q3; Raising FVE to EUR 80

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat-rated Daimler reported third-quarter EPS before special items of EUR 2.30, well above the EUR 1.52 CapIQ consensus estimate by 0.78 and EUR 0.69 higher than the EUR 1.61 EPS reported a year ago. Consolidated revenue was down 7% on a 20% decline in commercial truck and buses but jumped 41% from the COVID-hit second quarter. Mercedes-Benz car and van group, or MBCV, and Daimler Mobility Services (includes financial services) revenue each declined 3% from 2019. Unit volume declined 8% compared with last year but skyrocketed 43% sequentially. Even so, MBCV revenue outperformed the 6% decline in MBCV unit volume by 3 percentage points due to a favorable mix of high-end luxury vehicles. Industrial adjusted EBIT margin, excluding Chinese joint ventures, was 8.0% versus negative 5.9% in the second quarter and 240 basis points above the 5.6% reported last year. At Sept. 30, industrial net liquidity was a solid EUR 13.1 billion, sequentially up EUR 3.6 billion. Liquidity was supported by surprisingly strong free cash flow generation of EUR 5.1 billion, attributable to cash conservation measures, a EUR 1.2 billion dividend from China JV BBAC, and EUR 0.6 million from working capital.

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Company Profile

Business Description

Based in Stuttgart, Germany, Daimler makers Mercedes-Benz and Smart cars, commercial trucks and vans, and buses. Brands include Mercedes-Benz, Freightliner, Western Star, Fuso, Setra, and Orion. Daimler Financial Services provides the company's dealers and its customers with vehicle financing. Daimler owns 3% each of Renault and Nissan, 15% of Russian truck maker Kamaz, and 10% of Beijing Automotive Group. Li Shufu, chairman of Chinese automaker Geely Automobile, owns 10% of Daimler. Other major shareholders include Kuwait Investment Authority at 7%, Beijing Automotive group at 5%, and Renault-Nissan Alliance at 3%.

Contact
Mercedesstrasse 137
Stuttgart, 70372, Germany
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 291,770

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