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Yahoo
15-05-2025
- Automotive
- Yahoo
Daimler Truck Holding AG (DTRUY) Q1 2025 Earnings Call Highlights: Strong Revenue and Strategic ...
Revenue: 11.6 billion from industrial business. Units Sold: 99,800 units. Adjusted Group EBITDA: 1.2 billion. Adjusted Return on Sales: 9.6% for industrial business. Earnings Per Share (EPS): 0.99. Free Cash Flow: 33 million in industrial business. Net Industrial Liquidity: 7.9 billion at quarter-end. Adjusted EBIT: 1.2 billion, a 4% decline year-over-year. Trucks North America Adjusted EBIT: 778 million with a 14.4% return on sales. Mercedes-Benz Trucks Adjusted EBIT: 238 million with a 5.4% return on sales. Trucks Asia Adjusted EBIT: 64 million with a 5.4% return on sales. Daimler Buses Adjusted EBIT: 126 million with a 9.4% return on sales. Financial Services Adjusted EBIT: Increased to 55 million. Industrial Net Liquidity: 7.9 billion, down from 8.6 billion in Q4. Unit Sales Decline: 8% decrease to 99,800 units. Incoming Orders: Declined 3% year-over-year to 103,000 units. Zero Emission Vehicles Sold: 759 units year-to-date. Heavy Duty Market Share in North America: 41.9%. Heavy Duty Market Share in Europe: 14.2%. Adjusted EBIT for Industrial Business: 1.1 billion, a 4% decline year-over-year. Adjusted Return on Equity for Financial Services: Decreased from 8.2% to 7.3%. Net Investments: 380 million in property, plant, and equipment and intangible assets. Adjusted Free Cash Flow: 143 million after adjustments. Warning! GuruFocus has detected 3 Warning Signs with DTRUY. Release Date: May 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Daimler Truck Holding AG (DTRUY) reported strong Q1 2025 results with revenues of $11.6 billion and an adjusted group EBITDA of $1.2 billion. The company achieved a significant milestone with Amazon placing its largest ever order for electric trucks, totaling 202 Mercedes-Benz E Atra 600 vehicles. Daimler Truck Holding AG (DTRUY) successfully tested its next-generation Gen H2 fuel cell truck in the Swiss Alps, demonstrating its power and zero-emission performance. The company announced a major initiative to establish Europe's largest semi-public charging network for electric trucks, aiming for over 3,000 fast charging points by 2030. Daimler Truck Holding AG (DTRUY) maintained a strong competitive position in North America with a class 8 market share of 41.9% despite market headwinds. The North American class 6 to 8 market declined by 5% year-over-year, impacting unit sales and incoming orders. The heavy-duty market in North America saw a 10% decline year-over-year, contributing to a challenging market environment. Daimler Truck Holding AG (DTRUY) experienced an 8% decline in overall unit sales and a 3% decline in incoming orders year-over-year. The company faced increased macroeconomic uncertainties, particularly in North America, affecting demand and market dynamics. Daimler Truck Holding AG (DTRUY) revised its full-year outlook for financial services, lowering the expected return on equity from 8-10% to 6-8% due to ongoing credit challenges. Q: Have you seen an increase in orders in North America in May, and what is driving the expected profitability in Q2? A: We have observed a stall in momentum with many customers adopting a wait-and-see approach. Despite this, we believe market demand remains and are focused on executing our strategy. Smaller fleets are currently ordering, and we expect orders to pick up in Q2. Our Q2 profitability is largely secured due to a filled production program and a strong order book from Q1. (Eva Scherer Scherer, CFO) Q: What is the potential impact of Section 232 tariffs on your North American operations? A: We are not overly concerned about Section 232 as we believe it would be difficult to assert that trucks made in Mexico threaten US national security. We expect USMCA to continue, potentially with stricter requirements, which we can adapt to. Our flexible production network allows us to manage costs efficiently. (Eva Scherer Scherer, CFO) Q: Can you explain the decline in EU30 heavy-duty market share and whether it is temporary? A: The decline is due to low order intakes last year, impacting current unit sales and market share. We expect improvement with the rollout of new products like the E Across L. We prioritize profitability over market share and are not engaging in excessive discounting. (Eva Scherer Scherer, CFO) Q: How are you managing flexibility in Trucks North America if orders do not pick up? A: We have labor agreements that allow us to adjust capacity and wages. In Mexico, we can reduce wages if we close down for a week. We have not released people yet, managing with shutdown days. We are prepared to adjust capacities in the second half if necessary. (Eva Scherer Scherer, CFO) Q: What are the drivers behind the strong margins in North America, and how sustainable are they? A: The strong margins are driven by a favorable mix, with more sales to smaller fleets and fewer medium-duty trucks. We expect this mix to normalize in Q2 but still remain strong. Pricing has been a net positive and is expected to continue positively impacting margins. (Eva Scherer Scherer, CFO) Q: Can you provide more details on the cost reduction program in Europe and its expected impact? A: The cost reduction program will have an impact in fiscal 2025, but not a major one. We will provide details on the ramp-up of savings at the Capital Markets Day. The program aims to close the performance gap with our best-performing peers. (Eva Scherer Scherer, CFO) Q: How are tariffs impacting your business, and what is your inventory situation? A: Tariffs had a minor impact on Q1 P&L but created market uncertainty, particularly in the US. We have considered current tariffs in our full-year guidance. Inventory levels are high but slightly decreasing, with a temporary increase due to new product ramp-ups. (Eva Scherer Scherer, CFO) Q: What is the status of your electrification efforts, and how is the market responding? A: We have 11 electric truck and bus models in production. The Amazon deal for 202 E Atra 600 trucks is a testament to our strong product offering. The US market for electric trucks is currently low, but we are monitoring regulatory changes to determine the right timing for new models. (Eva Scherer Scherer, CFO) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-03-2025
- Automotive
- Yahoo
Hydrogen hopes shudder amid spate of bankruptcies
Hydrogen trucking startups have faltered, leaving legacy manufacturers to determine whether the energy source has a long-term future in hauling cargo. Three startups that built fuel cell systems or upfitted them into commercial vehicles — Nikola Corp., Hyzon Motors Inc. and Quantron AG ― have all declared bankruptcy over the past six months. Nikola, which sold more than 200 fuel cell trucks last year, cited adverse market and macroeconomic conditions when it filed Chapter 11 bankruptcy last month. Those companies had hoped to follow in the path of Tesla as novel zero-emission vehicle plays, said Sam Abuelsamid, vice president of market research at Telemetry Agency. Sign up for the weekly Automotive News Mobility Report newsletter for the latest developments at the intersection of transportation and technology. Amid a higher-interest rate climate and a shift in venture-capital interest toward artificial intelligence, 'there was just no way to raise the capital needed to hang on until they were self-sustaining,' he said. Collectively, the companies' troubles represent a setback to hopes that hydrogen could mature into a clean energy source, particularly in the heavy-duty vehicle applications, in which fuel cell technology offers shorter fueling times and longer ranges compared with battery-electric counterparts. Legacy manufacturers retain a keen interest in hydrogen. Toyota Motor Corp. unveiled its third-generation fuel cell system in February. The company intends to introduce it in heavy-duty commercial vehicles across the globe. Hyundai Motor Corp. has 30 of its Xcient-branded fuel cell trucks operating in the Bay Area and 21 more were deployed in December at the manufacturer's Metaplant America in Georgia. Backed by $237 million in government funding, Daimler Truck AG intends to test 100 of its GenH2 trucks on German roads starting at the end of 2026. Volvo Trucks is developing trucks with combustion engines that run on hydrogen. On-road testing is expected to begin next year. Some of those manufacturers remain bullish on utilizing fuel cells in passenger vehicles, although that tiny market is shrinking. Global fuel-cell EV sales reached a peak of 20,704 vehicles sold in 2022, according to SNE Research statistics. Total sales tumbled to 12,866 in 2024, a drop the firm attributed to dwindling sales of the Hyundai Nexo in the Korean market. Hyundai anticipates unveiling a revamped Nexo this year and expanding its fuel cell commercial vehicle lineup. Toyota has produced its Mirai since 2014, though sales have been scant. Approximately 28,000 have been sold across 30 countries, the automaker said in February. On the trucking side, Those manufacturers can rely on sales of their existing diesel trucks and their dealership networks to fund fuel cell developments, said Conrad Layson, senior alternative propulsion analyst at AutoForecast Solutions. But startups and legacy players alike will be hamstrung by the lack of hydrogen infrastructure across the U.S., he said. The startups 'were on the right path,' Layson said. 'But the biggest challenge remains infrastructure.' Only 54 public hydrogen fueling stations exist in the U.S., according to Department of Energy records. Only six of those cater to medium- or heavy-duty vehicles, according to a July 2024 report from Resources for the Future, a nonprofit research and policy firm. But the lack of stations is only one part of the shortfall. Distribution represents a more underappreciated and nettlesome challenge, Layson said. The nation's pipeline networks require new coatings and fittings to reliably carry hydrogen, and those enhancements are 'nonexistent,' he said. 'In order to make hydrogen economically viable, you have to engage in a massive upgrading and replacement of the existing gas pipe network through the country,' he said. Countries such as China and South Korea have made building out hydrogen networks national priorities. China intends to have approximately 1,200 hydrogen stations online by the end of the year, with a concentration along freight corridors, according to Interact Analysis. South Korea has 159 and Japan has 161, according to the firm's estimates. Infrastructure projects in the more fledgling. In October 2023, the Energy Department awarded $7 billion in funding to seven U.S. regions expected to form 'Hydrogen Hubs,' clusters of infrastructure designed to support hydrogen supply and demand in multiple industries. Yet hydrogen's broad prospects under the Trump administration remain a question mark — and dependent on the fate of a tax credit included in the Inflation Reduction Act known as 45V. The credit is worth as much as $3 per kilogram of clean hydrogen produced. But 'most folks who would otherwise apply for this credit will wait until there is less uncertainty,' said Alan Krupnick, a Resources for the Future senior fellow. 'I think the financial community is also probably waiting for uncertainties to be resolved.' The industry has sought to keep the tax credit. On Feb. 18, dozens of organizations and companies, including General Motors and Hyundai, signed a letter to congressional leadership that said 45V is 'essential' for President Trump's 'bold energy dominance agenda.' Billions in potential investments could be at risk from uncertainty surrounding the future of 45V, the letter said, and jobs could shift from the U.S. to other countries. 'We need to ensure that we do not miss this hydrogen moment,' the letter said. The moment has been fleeting for the likes of Nikola, Hyzon and Quantron. In many ways, their struggles parallel those of startups in the light-duty EV space such as Rivian and Lucid, Abuelsamid said. They all went public at a time investors' appetite in zero-emission technology 'almost completely dried up,' he said. 'Their timing was terrible.' Rivian and Lucid found suitors. Volkswagen will invest as much as $5.8 billion in Rivian in a new joint venture focused on software development. The deal closed in November. Lucid received $1.5 billion from Saudi Arabia's Public Investment Fund in August. Such benefactors have been harder to come by in the commercial-vehicle sector, in part because sales volumes are lower, and the ability to achieve economies of scale are more difficult, Abuelsamid said. 'As a result, the ability to reach breakeven is more difficult,' he said. Trucking is not the only transportation sector where hydrogen hopes have been dashed by recent headwinds. Universal Hydrogen, a startup developing conversion kits that would allow aircraft to run on hydrogen fuel, closed in June after depleting its funding. More recently, in February, global manufacturer Airbus said it has delayed plans to develop a hydrogen-powered aircraft until the middle of next decade. Have an opinion about this story? Tell us about it and we may publish it in print. Click here to submit a letter to the editor.
