Short-time work extended: Daimler share up: Daimler operationally posts black in Q1 | despite sales slump message

—The Mercedes-Benz Cars & Vans division achieved a positive margin as did the commercial vehicle division Daimler Buses & Trucks, CFO Harald Wilhelm said in an analyst conference. The Mobility division also achieved a positive margin, but adjusted for credit losses, which are also increasing.

CFO Wilhelm said that further business development is currently not foreseeable due to the pandemic. Daimler operates one day. The company has adjusted its global production and responded to the weak development with short-time work in Germany. The management has reduced its salaries and reduced investments. However, the group is sticking to future projects in order to be ready when business picks up again. With an additional line of credit of EUR 12 billion, the company has secured financial flexibility. Management is currently sticking to its proposal to pay a dividend of EUR 0.90. Wilhelm said that the company was comfortable with the liquidity situation in the industrial business. In China, the business operations have already been restored.

Slump in sales due to corona crisis

Mercedes-Benz Cars posted a 17.8 percent drop in sales to 483,241 in the first quarter. The Mercedes brand alone reportedly posted 477,378 units in the three months, a decrease of 14.9 percent. Sales of the Smart small car decreased by 78.3 percent to 5,863 vehicles.

“The effects of the Corona crisis have already weakened sales significantly in March, which is why we fell short of the targeted figures for the quarter. Nevertheless, we were able to achieve a very good result, especially in Germany,” said Marcus Breitschwerdt, Head of Mercedes -Benz Vans.

In Germany, the decline in sales was comparatively moderate, at 8.8 percent to 64,332 units. In China, the largest market, sales from January to March were 138,960 cars, 20.3 percent below the high level of the previous year.

“We are not losing sight of our goals and are continuing to work on future topics and strategic projects so that we can start all over again after the crisis,” said Britta Seeger, Member of the Board of Management of Daimler AG and Mercedes-Benz AG, responsible for sales. “In China and South Korea, our retail operations have opened completely and we see a significant increase in demand there. That makes us confident.”

Daimler extends short-time work – no losses in the core business

The carmaker Daimler continues to struggle with the massive effects of the coronavirus pandemic. Short-time work is to be extended, but at the same time the group is also laying the groundwork for a restart of production, as announced on Wednesday.

For the majority of car, van and commercial vehicle production and administration, Daimler is now no longer planning to do short-time work only until April 17, but by the end of the month. “With this, the company is reacting to the far-reaching effects of the Corona virus and the resulting increasingly difficult economic and social framework conditions,” it said.

The works council also currently sees no other option. “Nobody wants short-time work. We would all prefer to work and make our contribution to the success of the group,” said General Works Council Chairman Michael Brecht. “But there is currently no alternative to short-time work.”

Production has been largely inactive for about two and a half weeks. Only some particularly important areas are still being worked on. Since the beginning of this week, the employees have been working short-time – previously they had reduced working time accounts or vacations. Daimler does not say how many employees are involved. The car maker has around 170,000 employees in Germany.

Despite prolonged short-time work, Daimler plans to gradually start up some plants again from April 20. The drive technology is to begin, followed by the Sindelfingen and Bremen passenger car plants and the van locations – but all only in one-shift operation and with extensive safety precautions. Production in the bus and truck plants is also scheduled to begin gradually again on April 20. Daimler now has a new plan for the Annual General Meeting, which was originally planned for April 1 and then postponed. Wilhelm announced that it should take place in digital form at the beginning of July.

Daimler is converting annual reports into three divisions

In the future, Daimler AG will report on three rather than five segments in its business figures. That applies from the report for the first quarter of 2020, CFO Harald Wilhelm said in an analyst conference. The new reporting structure should reflect the changed group structure.

Daimler will report on the “Mercedes-Benz Cars & Vans” division in the future. Previously, the passenger car business and the minibuses had been shown separately. Trucks and buses are now also combined in one division, “Daimler Trucks & Buses”. There is also the Daimler Mobility area.

Daimler is also adding new indicators to its reporting, so that in addition to the figures according to US GAAP, adjusted values ​​are also reported. At Group level, there is now adjusted EBIT, which excludes legal disputes, M&A effects and restructuring. There can be huge differences here. If Daimler had reported an EBIT of 4.3 billion euros for 2019, the adjusted EBIT last year was 10.3 billion euros.

CFO Wilhelm explained the big deviation, among other things, with the Takata scandal and the X-Class. Daimler will endeavor not to make the difference between adjusted and unadjusted EBIT too large.

For the automotive segments, in addition to the adjusted EBIT, the Group will also provide adjusted and unadjusted cash flow before deduction of interest and income taxes (CFBIT) as well as an adjusted return on sales (ROS) and finally an adjusted cash conversion rate (CCR). Adjusted EBIT is also added to Daimler Mobility.

In XETRA trading, the Daimler share temporarily went down 1.37 percent to EUR 27.76 – in the afternoon, however, it posted a small increase of 0.36 percent to EUR 28.24.

FRANKFURT (Dow Jones) / STUTTGART (dpa-AFX)

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