The truck manufacturer Daimler Truck wants to significantly increase sales and profits by the end of the decade.

The company is well on the way to achieving the target set for 2025 of more than ten percent adjusted return on sales in the industrial business, the DAX-listed company announced on Tuesday. The ambition for 2030 is sales growth of 40 to 60 percent compared to 2025 and a return on sales of more than twelve percent. The higher benchmark, like the current one, applies to the scenario of a favorable market environment. "We are ready to take Daimler Truck to the next level by 2030," said Group CEO Martin Daum to the capital market in Boston on the US East Coast. This year, the global market leader for heavy trucks is aiming for an average turnover of 55 billion euros with a return of up to ten percent.

Growth will be driven by the technology strategy with standardized platforms for software and different drive types, more service sales and the market launch of autonomous and emission-free trucks. The Swabians hope that self-driving trucks will generate three billion euros in turnover and over one billion euros in operating profit by 2030. High unit volumes based on standardized technology architecture for diesel and electric drives or software solutions should make the business highly profitable.

In addition, lower costs and investments will stabilize profitability, the Stuttgart-based company further explained. Daimler Truck is less exposed to the ups and downs of the economy than in the past. In future, profits should suffer even less from economic downturns. "Active portfolio management" should also contribute to this - as an example, Daimler refers to the planned merger of the Japanese subsidiary Mitsubishi Fuso with the Toyota division Hino Motors.

SHARE BUYBACK GOES DOWN WELL

On Monday evening, after the close of trading, Daimler Truck announced higher targets for sales, turnover and profit for the current year as well as a share buyback. Strong demand for trucks and higher prices are driving turnover in the industrial business this year to between 54 and 56 billion euros and the adjusted return on sales to between 8.5 and 10.0 percent. That would be one billion euros more revenue than previously expected and one percentage point more return. Last year, turnover amounted to 51 billion euros and the margin was 7.7 percent. The DAX-listed company intends to use the increasing liquidity to buy back its own shares worth up to two billion euros over 24 months from August. This drove the share price up by more than three percent on Tuesday. In future, 40 to 60 percent of the Group's earnings are to be distributed to shareholders in the form of dividends, which will also benefit the former parent company Mercedes-Benz as the main shareholder. Last year, the ratio was 40 percent with a dividend of 1.30 euros.

Despite all the concerns of analysts, the globally weaker economy has not slowed down the cyclical demand for commercial vehicles at Daimler Truck. The truck manufacturer is still working through the backlog of orders from the coronavirus years, when chip shortages affected production, and is already sold out for the current year. The supply chains are stabilizing, the company explained. Daimler Truck has therefore also raised its sales forecast for the year as a whole: at 530,000 to 550,000 vehicles, 20,000 more units are to be sold than previously targeted. From April to June, the Group delivered 131,888 vehicles, nine percent more than in the same period last year.

(Report by Ilona Wissenbach. Edited by Olaf Brenner. If you have any queries, please contact the editorial team at frankfurt.newsroom@thomsonreuters.com)