(new: further analyst opinion, management statements, share price updated)

LEINFELDEN-ECHTERDINGEN (dpa-AFX) - The commercial vehicle manufacturer Daimler Truck expects surprisingly good business in the new year in view of the gloomy economic situation. Although unit sales are likely to be down on the previous year, which went well, operating profit at Group level is expected to remain at the previous year's level. However, in view of the poor economy, high interest rates and a noticeable drop in orders, the management led by CEO Martin Daum has set itself significantly higher targets than experts had previously expected of the DAX-listed company. The share price climbed rapidly to a record high.

The share jumped 14 percent to 43.07 euros at the top of the Dax. It thus continued its rally of recent weeks. The share price has risen almost 40 percent from its annual low in mid-January. JPMorgan analyst Jose Asumendi described the outlook as "very strong". Nick Housden from the Canadian bank RBC also rated the results from the final quarter as far above expectations, particularly thanks to the good performance of the Mercedes-Benz brand.

In the new year, Daum expects total sales of 55 to 57 billion euros in the middle of the range, roughly the same as in 2023, which he described as a "record year" for the company, which has not been independent for long. Sales are likely to fall from 526,053 vehicles to between 490,000 and 510,000 units, as the company announced on Friday in Leinfelden-Echterdingen near Stuttgart.

The more profitable business in North America is likely to be less affected by the decline than the European region. The Group's incoming orders have been pointing downwards for some time now. Last year, it fell by 18 percent to 426,910 vehicles. Daimler Truck spoke of a "normalized order behavior". The order backlog is normalizing in all regions, the Group said.

Daum described in a press conference that the situation was now returning to the usual level in the industry. During the pandemic, orders had increased far beyond production due to a shortage of parts, and delivery times for customers at haulage companies, construction companies and local authorities increased significantly. The Group is now able to deliver trucks to customers around three months after they are ordered, said Daum. This also enables Daimler Truck to meet demand promptly.

The Board of Management is surprisingly confident about the prospects for returns, even in "continuing difficult economic conditions", according to the Group. In the industrial business - i.e. excluding financial services - Daimler Truck expects a profit margin of 9.0 to 10.5 percent before interest, taxes and special items. On average, analysts had predicted a figure of less than nine percent. Daum is not assuming that the large-scale price increases introduced in 2022 will continue to provide a tailwind this year. Instead, the company must now rely on greater efficiency to offset rising costs.

Overall, earnings before interest and taxes adjusted for special effects are likely to be on a par with the previous year, when they rose by 39% to EUR 5.49 billion. The Group therefore assumes that it will be within a range of minus to plus five percent compared to the previous year. The free cash flow from day-to-day operations should even increase slightly - which means a plus of 10 to 25 percent for Daimler Truck.

The Swabians recorded an unexpectedly strong final quarter in terms of earnings, although they suffered a 10 percent drop in sales in the last three months and thus ultimately fell slightly short of their own sales forecast.

The high-margin business in North America also remained comparatively stable in terms of unit sales, and the Mercedes-Benz truck brand, which is primarily represented in Europe and South America, saw its margins soar. Daimler Truck has been cutting costs at Mercedes-Benz for some time and is benefiting from price increases and a strong spare parts business. This has been reflected in better results for some time now.

Overall, the adjusted operating margin in the vehicle business reached 9.9 percent for the year, 2.2 percentage points higher than in the previous year. Turnover rose by 10 percent to 55.9 billion euros with a slight increase in unit sales. The bottom line for shareholders was a 42 percent increase in profit to 3.78 billion euros.

Shareholders are to receive a dividend increased by 60 cents to 1.90 euros per share. In the current share buyback program of up to 2 billion euros, shares worth 557 million euros were acquired by the end of 2023./men/niw/stk