Daimler Truck Shares Climb on Frankfurt Market Debut

By Reuters
Reuters
Reuters
December 10, 2021 Updated: December 10, 2021

FRANKFURT—Shares in Daimler Truck climbed on their Frankfurt market debut on Friday following the commercial vehicle maker’s long-awaited spin-off from Daimler AG.

The split was announced in February and pitched by the two companies as an opportunity to unlock value in both Daimler Truck and the owner of Mercedes-Benz passenger cars and vans.

At 1023 GMT, Daimler Truck shares were trading at 29.88 euros, above their debut price of 28 euros. Daimler shares were up 3.7 percent at 74.83 euros.

“We are certain we will create value,” Daimler CEO Ola Kaellenius said, speaking to an emptier-than-usual hall in Frankfurt as pandemic restrictions limited the number of attendees.

“Trucks and cars have different requirements. We are thus unleashing the full potential of both companies,” he said.

Daimler Truck is targeting double-digit profit margins across the business in 2025, up from an expected 6–8 percent in 2021, with a particular focus on boosting its lagging European sales.

If it hits the double-digit target, it will prioritise investment in future technologies over boosting profits further, Daimler Truck CEO Martin Daum said in a roundtable with journalists after the listing.

“The fact that we still exist is due to two things: because the company has always made money, and there were hard times in between, and secondly, because we always invested in the future,” Daum said.

Daimler AG, soon to be renamed Mercedes-Benz AG, has kept 35 percent of Daimler Truck shares, while 65 percent were spun off on Friday. Shareholders in Daimler received one share in Daimler Truck for every two Daimler shares they owned.

Daimler Truck is now the world’s largest commercial vehicle maker by revenue, but its profit margins lag competitors like Traton’s Scania and Volvo Group’s Volvo Trucks.

Its performance is strongest in North America, where it reported an adjusted return on sales so far this year of 10.8 percent, compared to 7.2 percent in Asia and just 4.5 percent in Europe.

Its focus in coming years will be on boosting sales of electric trucks to 60 percent of all sales by 2030, including hydrogen and battery-electric models.

Meanwhile, Daimler said in a statement last week it had earmarked 60 billion euros in spending for Mercedes-Benz between 2022 and 2026, focused on electrification, digitalisation, and autonomous driving.

($1 = 0.8854 euros)

By Victoria Waldersee and Ilona Wissenbach

Reuters