Daimler Truck Holding Ag · XETR:DTG
Daimler Truck — Investor Day (November 2021)
102 slides from Daimler Truck's investor day presentation, Nov 11, 2021
Slide 1: Daimler Truck Capital Market Day
Daimler Truck Capital Market Day November 11, 2021
Slide 2: Important information
Important information In this presentation (together with any additional or supplementary materials, the “Presentation”) the “Company” means Daimler Truck Holding AG. Prior to the proposed spin-off transaction, the Daimler trucks and buses business (“Daimler Trucks & Buses”) and the related financia
Slide 3: Agenda
AGENDA DAIMLER TRUCK | Martin Daum TECHNOLOGY | Andreas Gorbach FINANCIAL PERFORMANCE | Jochen Goetz Q&A I MERCEDES-BENZ | Karin Rådström TRUCKS NORTH AMERICA | John O’Leary TRUCKS ASIA | Karl Deppen DAIMLER BUSES | Till Oberwoerder FINANCIAL SERVICES | Stephan Unger ESG | Martin Daum FINANCIAL GUID
Slide 4: Daimler Truck: Ready for Independence
DAIMLER TRUCK READY FOR INDEPENDENCE Martin Daum 4
Slide 5: Ready for independence
READY FOR INDEPENDENCE On track with transactional and operational separation ATTRACTIVE TRULY INDEPENDENT PRIME LISTING FINANCIAL PROFILE SPIN-OFF OF €46BN1 PUBLIC TRADING 65% STAKE REVENUE BUSINESS EXPECTED TO COMMENCE ON DEC 10, 2021 INDEPENDENT SOLID INVESTMENT DAX QUALIFICATION GOVERNANCE GRADE
Slide 6: Stronger as an independent company
STRONGER AS AN INDEPENDENT COMPANY Focused on maximizing our potential INCREASED AGILITY AND FOCUS EXECUTION OF LEADS TO FASTER DECISION MAKING TRUCK SPECIFIC STRATEGIC PLANS INCREASED FOCUS ON PROFITABILITY: TARGETED INVESTMENTS IN PIVOT TOWARDS HEAVY DUTY AND TRUCK INDUSTRY SPECIFIC INNOVATIONS PR
Slide 7: Raising performance and unlocking value
RAISING PERFORMANCE AND UNLOCKING VALUE We aim to reset profitability and lead the way to zero emissions 1 CLEAR 2 AMBITIOUS 3 LEADING FINANCIAL SEGMENT BRANDS AMBITIONS BENCHMARKS AND SCALE 1 4 ACCELERATE 5 GROW 6 FOCUS ON TECHNOLOGY SERVICES CULTURE AND LEADERSHIP RAPIDLY LEADERSHIP 7
Slide 8: Clear financial ambitions
1 CLEAR FINANCIAL AMBITIONS Our financial ambitions 2025 to unlock full potential INDUSTRIAL BUSINESS MARKET Structurally more ENVIRONMENT profitable business Lower break-even FIXED COST -15% VS. 2019 point with lower fixed cost and higher service revenue CAPEX / R&D -15% VS. 2019 share Prepared for
Slide 9: Daimler Truck: focused on value creation
1 DAIMLER TRUCK: FOCUSED ON VALUE CREATION Committed to lifting performance and delivering strong shareholder returns STRONG CASH ▸ Transformation into a higher return on capital CONVERSION and very strong FCF business ATTRACTIVE DIVIDEND ▸ ~40% pay-out ratio1 STRONG BALANCE SHEET ▸ Solid investment
Slide 10: Ambitious segment benchmarks
2 AMBITIOUS SEGMENT BENCHMARKS Clearly defined financial ambitions in sunny scenario for each segment TRUCKS FINANCIAL MERCEDES-BENZ TRUCKS ASIA DAIMLER BUSES NORTH AMERICA SERVICES RoS ambition1 RoS ambition1 RoS ambition1 RoS ambition1 RoE ambition2 12% 10% 9% 7.5% 14% ¹ By 2025; adjusted 2 After
Slide 11: Leading brands and scale
3 LEADING BRANDS AND SCALE Platform, powertrain and system commonality LEADING POSITION TAPPING BENEFITS OF ACROSS KEY REGIONS1 SCALE AND TECHNOLOGY ► Engineering and procurement #1 NORTH AMERICA Class 6-8 synergies ► Technology leadership #1 EU-30 MDT/HDT ► Global R&D hubs BRAND Autonomous Driving:
Slide 12: Accelerate technology leadership
4 ACCELERATE TECHNOLOGY LEADERSHIP Determined to lead the way to zero emissions OUR STRATEGIC TECHNOLOGY …TRANSLATING INTO LEVERS… CLEAR BENEFITS TECHNOLOGY BUSINESS AMBITIOUS NEW REVENUE TCO PATH SET FOR ROADMAP COST MODELS TO LEADERSHIP IN ZERO FOR ZEV OBJECTIVES DRIVE SERVICES THE NEW EMISSIONS I
Slide 13: Strategic partnerships in key technologies
4 STRATEGIC PARTNERSHIPS IN KEY TECHNOLOGIES Key partnerships accelerating technological development and sharing costs BEV FCEV 13
Slide 14: Transforming our business: growing services rapidly
5 TRANSFORMING OUR BUSINESS: GROWING SERVICES RAPIDLY Translating long-term customer relationships into recurring revenues to reduce cyclicality and drive higher margins ~50%1 ~35%1 ~30%1 TODAY2 MID-TERM2 20302 VEHICLE VEHICLE ADVANCED SALE OPERATION SERVICES SERVICE EXCELLENCE 2ND LIFE SOLUTIONS ZE
Slide 15: The Daimler Truck management team
6 FOCUS ON CULTURE AND LEADERSHIP The Daimler Truck management team KARIN RÅDSTRÖM KARL DEPPEN1 JOHN O’LEARY STEPHAN UNGER Head of Mercedes-Benz Head of Asia Head of North America Head of Financial Services ANDREAS GORBACH JÜRGEN HARTWIG JOCHEN GOETZ MARTIN DAUM Head of Truck Technology Head of Huma
Slide 16: Focus on culture and leadership
6 FOCUS ON CULTURE AND LEADERSHIP Faster decision making and emphasis on business performance CULTURAL CHANGE UNDERWAY GENERATIONAL FOCUS ON TALENT STRENGTHENED CHANGE IN BOARD DEVELOPMENT ENTREPRENEURSHIP BOARD EMPHASIS ON STRONG REMUNERATION PERFORMANCE COMMITMENT GEARED TO CREATING CULTURE TO ESG
Slide 17: Technology: Leading the way to zero emissions
TECHNOLOGY LEADING THE WAY TO ZERO EMISSIONS Andreas Gorbach 17
Slide 18: Our technology roadmap is clear
OUR TECHNOLOGY ROADMAP IS CLEAR And we are making significant progress in all areas POWER TO DRIVE INTELLIGENCE TO DRIVE #1 RAMP DOWN #2 ZEV: ACCELERATE #3 DEVELOP COMMON CURRENT DIESEL BOTH PURE ELECTRIC E/E-PLATFORM AND POWERTRAIN AND H2 SOLUTIONS OPERATING SYSTEM Manage the BEV and FCEV The futur
Slide 19: Diesel ramp down
1 DIESEL RAMP DOWN: ACTIVELY MANAGING THE END OF AN ERA Partnering, scaling and ramp down of investment TRANSITION TO ZEV OUR STRATEGIC LEVERS WITHIN NEXT 10-20 YEARS PARTNERING STAGE 1: Ramping down MEDIUM DUTY engines with Cummins – HUGE DIFFERENCES IN we disinvest completely TRANSPORTATION TASKS
Slide 20: ZEV dual track: BEV and fuel cell
2 ZEV DUAL TRACK: BOTH BEV AND FUEL CELL WILL BE NEEDED We are committed to delivering the best-fitting product for the customers’ use case eActros eActros LongHaul GenH2 Truck LIGHTER LOADS HEAVIER LOADS SHORTER DISTANCES LONGER DISTANCES 20 Titel der Präsentation | Datum
Slide 21: Transition to ZEV: accelerating our plans
2 TRANSITION TO ZEV: WE ARE ACCELERATING OUR PLANS High potential variability in timing – we are preparing for any outcome ZERO-EMISSION VEHICLES UP TO 60% ▸ Develop competitive products tailored to customer needs ZEV 100% 100% INFRASTRUCTURE ICE ZEV ▸ Kick start initiatives for BEV and H2 charging
Slide 22: Early ZEV launches, accelerating pace
2 WE STARTED EARLY WITH ZEV LAUNCHES AND ARE ACCELERATING AT HIGH PACE Mercedes-Benz eActros now in series-production – Freightliner eCascadia is launched next 2021 2021 2022 2018 2024 2027 2021 2022 2022 2017 22
Slide 23: ZEV: supporting charging infrastructure
2 ZEV: SUPPORTING CHARGING AND KICK-STARTING INFRASTRUCTURE Customer support, depot charging solutions, high speed roadside networks CUSTOMER AND DEPOT CHARGING PUBLIC ROADSIDE CHARGING EUROPEAN H2 INFRASTRUCTURE ▸ Daimler Truck charging management ▸ European high-performance ▸ Germany and charging
Slide 24: Truck operating system as core of the vehicle
3 TRUCK OPERATING SYSTEM AS CORE OF THE VEHICLE Software architecture development for our next generation trucks and service offerings HARDWARE- SOFTWARE- WHAT WE DO BASED BASED ▸ Fewer computing units and layers, delinked software cycles ▸ >600 software engineers in our Bangalore innovation hub NEX
Slide 25: Maximum focus on commonality and global scale
MAXIMUM FOCUS ON COMMONALITY AND GLOBAL SCALE Today with conventional technologies and tomorrow with software and e-Mobility GLOBAL SCALE AND HIGH EFFICIENCY ▸ Strong global network along the value chain ▸ High speed of innovation CONVENTIONAL POWERTRAIN ▸ Develop one time – deploy many times MECHAT
Slide 26: Financial Performance: Delivering on our ambitions
FINANCIAL PERFORMANCE DELIVERING ON OUR AMBITIONS Jochen Goetz 26
Slide 27: Historical financial performance
HISTORICAL FINANCIAL PERFORMANCE Profitability below benchmark and in need of improvement INDUSTRIAL BUSINESS REVENUE 42.5 44.9 34.8 - in bn. € - 2018A 2019A 2020A 5.9 5.8 INDUSTRIAL BUSINESS SALES k units 548 522 378 EBIT ADJUSTED mill. € 2,524 2,600 655 ROS ADJUSTED 1.9 CCR ADJUSTED 0.7x 0.9x 3.8x
Slide 28: Clear 2025 ambitions for Daimler Truck
CLEAR 2025 AMBITIONS FOR DAIMLER TRUCK Our financial ambitions to unlock full potential INDUSTRIAL BUSINESS MARKET Structurally more ENVIRONMENT profitable business Lower break-even FIXED COST -15% VS. 2019 point with lower fixed cost and higher service revenue CAPEX / R&D -15% VS. 2019 share Prepar
Slide 29: The path to our 2025 profitability ambition
THE PATH TO OUR 2025 PROFITABILITY AMBITION Driven by self-help measures INDUSTRIAL BUSINESS ROS ADJUSTED KEY INITIATIVES - in % - ▸ Improving aftersales and new service revenue opportunities ▸ Contribution margin uplift due to product 10.0 cost reduction and mix ▸ Increasing pivot towards heavy dut
Slide 30: 2025 financial ambitions: every segment must deliver
2025 FINANCIAL AMBITIONS: EVERY SEGMENT MUST DELIVER Aiming for higher margins and greater resilience in down-cycles ADJUSTED ROS/ROE - in % - DAIMLER TRUCKS MERCEDES-BENZ TRUCKS ASIA DAIMLER BUSES FINANCIAL TRUCK (IB1) NORTH AMERICA SERVICES2 >10% 12% 10% 9% 7.5% 14% 8-9% 9-10% 8-9% 7-8% 4-6% 10-12
Slide 31: Underlying progress made in 2021
UNDERLYING PROGRESS MADE IN 2021 Improvements obscured by semi-conductor impact INDUSTRIAL BUSINESS DEVELOPMENT ▸ Semi-conductor shortage materially SALES 522 450-470 - in k units - burdens volume, mix and contribution 6-8 ▸ Raw material cost increase ROS ADJUSTED - in % - 5.8 ▸ Significant fixed co
Slide 32: What happened in 2021: segment overview
WHAT HAPPENED IN 2021: SEGMENT OVERVIEW Progress at Mercedes-Benz and Trucks Asia towards 2025 ambitions ADJUSTED ROS/ROE TRUCKS FINANCIAL MERCEDES-BENZ TRUCKS ASIA DAIMLER BUSES NORTH AMERICA SERVICES1 2019A: 11.5% 2019A: 0.4% 2019A: 2.3% 2019A: 6.1% 2019A: 12.4% 2021A: 10.8% 2021A: 4.5% 2021A: 7.2
Slide 33: Significant fixed cost reduction ahead of schedule
SIGNIFICANT FIXED COST REDUCTION AHEAD OF SCHEDULE Learn from 2020; make savings permanent; push further INDUSTRIAL BUSINESS FIXED COST REDUCTION AMBITION AIM TO REDUCE BREAK-EVEN EXPECTED EARLIER – NOW 2023 POINT SIGNIFICANTLY Fixed cost Break-even point - in € - - in units - -15% BY 2023 ∼ -20% BY
Slide 34: Active portfolio management
AIM TO ENHANCE FUTURE PROFITABILITY BY ACTIVE PORTFOLIO MANAGEMENT Increasing pivot towards heavy duty and rationalization of line-up ACTIVE PORTFOLIO MANAGEMENT FOCUS ON PERFORMANCE DECISIONS ALREADY TAKEN ▸ Clear picture on financial and ▸ Performance-based capital strategic performance of allocat
Slide 35: Transforming our business: growing services rapidly
TRANSFORMING OUR BUSINESS: GROWING SERVICES RAPIDLY Translating long-term customer relationships into recurring revenues to reduce cyclicality and drive higher margins ~50%1 ~35%1 ~30%1 TODAY2 MID-TERM2 20302 VEHICLE VEHICLE ADVANCED SALE OPERATION SERVICES SERVICE EXCELLENCE 2ND LIFE SOLUTIONS ZERO
Slide 36: Strong net liquidity and rating
STRONG NET LIQUIDITY AND RATING SOLID RATING - in bn. € - ACTUALS YTD ACTUALS YTD ACTUALS YTD Dec 31, 2020 Sep 30, 2021 illustrative S&P: BBB+ MOODY’S: A3 Sep 30, 20211 DAIMLER TRUCK “Daimler Truck has developed an “Its good diversification with seven Equity ratio 17% 22% - ambitious profitability r
Slide 37: Uses of cash
USES OF CASH Committed to balance sheet optimization DIVIDEND PAYOUT OF1 ∼40% RAMP UP OF FINANCIAL SERVICES STRENGTHEN BALANCE SHEET TARGETED R&D FOCUSED ON NEW TECH AND SERVICES 1 Of net profit, covered by industrial FCF. From Financial Year 2022 onwards. Financial Year 2021 dividend paid by Daimle
Slide 38: Adjusted RoS ambition of more than 10%
ADJUSTED ROS AMBITION NEW PRODUCT-LED GROWTH OF MORE THAN 10%1 - IN CHINA, VOCATIONAL EVERY SEGMENT MUST DELIVER AND BUS NORTH AMERICA AIM TO ACHIEVE FIXED COST AIM TO SIGNIFICANTLY REDUCE REDUCTION BY 2023 BREAK-EVEN POINT PERFORMANCE-BASED PROVEN CASH GENERATION WITH CAPITAL ALLOCATION FURTHER UPS
Slide 39: Q&A I
Q&A I 39
Slide 40: Mercedes-Benz: Rebuilding profitability
MERCEDES-BENZ REBUILDING PROFITABILITY Karin Rådström 40
Slide 41: Mercedes-Benz: rebuilding profitability
MERCEDES-BENZ: REBUILDING PROFITABILITY Strong market position in key markets and strong product portfolio STRONG MARKET POSITION ACROSS REGIONS … … AND PRODUCT PORTFOLIO KEY MARKETS Actuals 2019 #1 BRAND BRAZIL1 #1 BRAND EU-301 HEAVY DUTY TRUCKS MDT/HDT MDT/HDT Finland Russia Kassel Mannheim Wörth
Slide 42: Progress evident: rebuilding profitability underway
PROGRESS EVIDENT: REBUILDING PROFITABILITY UNDERWAY Significant fixed cost reductions and measures to raise contribution margin VEHICLE SALES REVENUE - in k units - - in bn. € - 149 145 16.7 16.8 118 13.8 11.8 102 2018A 2019A 2020A 2021A 2018A 2019A 2020A 2021A YTD Sep YTD Sep EBIT ADJUSTED ROS ADJU
Slide 43: Multiple strategic levers for turnaround
MULTIPLE STRATEGIC LEVERS FOR TURNAROUND Ambition to increase profitability to 10% adjusted RoS – restructuring already paying off INDUSTRIAL BUSINESS ROS ADJUSTED MAIN LEVERS TO FILL GAP TO AMBITION - in % - 1 Focused on fixed cost reduction INDEPENDENT OF TRUCK MARKET CONDITIONS 10.0 2 Contributio
Slide 44: Fully focused on fixed cost reduction
1 FULLY FOCUSED ON FIXED COST REDUCTION Strong progress: aiming for ~50% of communicated net cost savings already by YE 2021 INDUSTRIAL BUSINESS ROS ADJUSTED PERSONNEL COST REDUCTION PROGRAM - in % - ▸ Net ambition 2023: reduction of € 280 million vs. 2019 – targets backed with concrete measures ▸ E
Slide 45: Contribution margin push
2 CONTRIBUTION MARGIN PUSH Measurable improvement of contribution margins to date – halfway to our 2025 ambition! INDUSTRIAL BUSINESS ▸ Reduced complexity: number of base models with low volumes ROS ADJUSTED reduced from 140 to 100 - in % - PORTFOLIO ▸ Purchased parts (low runners) to be further red
Slide 46: Services growth
3 SERVICES GROWTH Incremental RoS increase from systematic measures to drive aftermarket and services growth INDUSTRIAL BUSINESS ▸ Strengthen service and own retail network: expansion of network ROS ADJUSTED to ~50 own retail and service locations in 2025 - in % - ▸ Improved processes for parts avai
Slide 47: Customer satisfaction
4 CUSTOMER SATISFACTION Determined to re-establish product, sales and service leadership ▸ New MB Trucks strategy with top priority on customer satisfaction CURRENT AMBITION ▸ Management meetings with customers to listen to expectations ORGANIZATION ▸ Sales and Marketing re-organized: strengthened r
Slide 48: Mercedes-Benz summary
FOCUS ON CONTRIBUTION MARGIN FIXED COST REDUCTION PUSH CUSTOMER SATISFACTION SERVICES GROWTH PRIORITY DEVELOP OUR PEOPLE AND DRIVE CONVERSION TO ZEV ACT AS ONE TEAM 48
Slide 49: Trucks North America: From strong to stronger
TRUCKS NORTH AMERICA FROM STRONG TO STRONGER John O’Leary 49
Slide 50: Daimler Truck North America: undisputed industry leader
DAIMLER TRUCK NORTH AMERICA: UNDISPUTED INDUSTRY LEADER On-highway business presents a very clear framework for off-highway vocational success LEADING POSITION… 1 …STRONG FOUNDATIONS… ….RIGHT PRODUCT PORTFOLIO #1 On-highway 807k+ Uncompromised large/mega fleets CASCADIAS BUILT2 customer focus On-hig
Slide 51: Consistently strong financial performance
CONSISTENTLY STRONG FINANCIAL PERFORMANCE Double-digit profit record VEHICLE SALES REVENUE - in k units - - in bn. € - 193 204 19.4 17.1 139 13.8 115 11.2 2018A 2019A 2020A 2021A 2018A 2019A 2020A 2021A YTD Sep YTD Sep EBIT ADJUSTED ROS ADJUSTED - in mill. € - - in % - 2,237 10.7 11.5 10.8 1,821 1,2
Slide 52: Relentless focus on profitability
RELENTLESS FOCUS ON PROFITABILITY Clear measures to further improve margins INDUSTRIAL BUSINESS ROS ADJUSTED MAIN LEVERS TO FILL GAP TO AMBITION - in % - 12.0 1 Maintain strict cost discipline 11.5 2 Capture vocational growth and continue investment in core product INDEPENDENT OF TRUCK 3 Further dev
Slide 53: Maintain strict cost discipline
1 MAINTAIN STRICT COST DISCIPLINE Disciplined cost control intended to achieve high RoS in North America ▸ Practical investment philosophy FIXED COST DEVELOPMENT PRAGMATIC PRODUCT ▸ Targeted / disciplined investment in ICE portfolio INVESTMENT ▸ Accelerating investment in practical advanced technolo
Slide 54: Capture vocational growth and continue investment in core product
2 CAPTURE VOCATIONAL GROWTH AND CONTINUE INVESTMENT IN CORE PRODUCT Replicating the on-highway success in the attractive vocational market CONSUMER CENTRIC PRODUCTS 3 All-new vocational vehicles launching between 2020-2022 ► Trucks co-developed with clients ► Customer-centric industry-leading R&D 1,
Slide 55: Our services strategy for North America
3 OUR SERVICES STRATEGY FOR NORTH AMERICA Committed to keeping our customers on the road 24/7 AFTERMARKET SERVICE ▸ Growing dealer rooftops: +30 locations & +500 bays in next 18 months DEALER Franchised dealer and ▸ Increasing direct partnerships with large customers for service parts NETWORK 1,153
Slide 56: Strengthen connected vehicle services
4 STRENGTHEN CONNECTED VEHICLE SERVICES Employ connectivity expertise to drive the global industry transformation ▸ Expertise in connectivity, infrastructure and data analytics CENTER OF 300k Connected Trucks North America vehicles in operation1 EXCELLENCE ▸ In-plant activated & validated digital ve
Slide 57: Leader in autonomous trucking
5 LEADER IN AUTONOMOUS TRUCKING Driving transformation through best-in-class autonomous trucking solutions TORC 1 Pioneering redundant, scalable L4 truck platform ▸ First OEM/autonomous vehicle tech company partnership enters 3rd year ▸ Co-creating hub-to-hub use cases with customer feedback 2 Integ
Slide 58: Leading the industry move towards ZEV
6 LEADING THE INDUSTRY MOVE TOWARDS ZEV Proactively guiding our customers through the ZEV transition ▸ State-of-the-art purpose-built BEV offerings – start of production in 2022 ▸ Complementary hydrogen fuel cell propulsion system via cellcentric 1 mill. Battery electric miles accumulated1 ▸ Launche
Slide 59: Trucks North America summary
UNRELENTING CUSTOMER FOCUS UNPARALLED CUSTOMER SERVICE ▸ Our trucks based on our clients’ needs ▸ Maximize uptime for clients ▸ Industry leading resale values ▸ Strong financial service offerings ▸ Consumer-centric industry leading R&D ▸ Growing dealer rooftops DISCIPLINED COST CONTROL VOCATIONAL ST
Slide 60: Trucks Asia: Opportunity and growth
TRUCKS ASIA OPPORTUNITY AND GROWTH Karl Deppen 60
Slide 61: Daimler Truck Asia: opportunity and growth
DAIMLER TRUCK ASIA: OPPORTUNITY AND GROWTH Leveraging true Asian footprint and Daimler Truck technology LEADING POSITION… …STRONG FOUNDATIONS… ….LOCALIZED FULL PORTFOLIO 1 Renowned and true Top 3 Japan local brands HEAVY DUTY #1 1 Indonesia Balance of markets TRUCKS 2 China Proven recurring #1 HDT i
Slide 62: Progress evident: strong improvement in 2021
PROGRESS EVIDENT: STRONG IMPROVEMENT IN 2021 Volume recovery and impact of cost improvement measures INDUSTRIAL BUSINESS VEHICLE SALES REVENUE - in k units - - in bn. € - 189 6.7 6.6 153 5.6 110 103 4.4 2018A 2019A 2020A 2021A 2018A 2019A 2020A 2021A YTD Sep YTD Sep EBIT ADJUSTED ROS ADJUSTED - in m
Slide 63: Relentless focus on profitability
RELENTLESS FOCUS ON PROFITABILITY Clear measures to further improve margins INDUSTRIAL BUSINESS ROS ADJUSTED MAIN LEVERS TO FILL GAP TO AMBITION - in % - 1 Strengthen Fuso position 9.0 2 Optimize cost structure 3 Seize attractive growth opportunity in India 2.3 4 Deepen position in China INDEPENDENT
Slide 64: Strengthen Fuso position and optimize cost structure
1&2 STRENGTHEN FUSO POSITION AND OPTIMIZE COST STRUCTURE Continued cost optimization and expanding downstream capacity to drive profitability ▸ Improve net pricing/mix AIMING FOR DOWNSTREAM1 ▸ Achieve “Net Zero” variable cost efficiency PROFITS TO COVER 100% OF ▸ Expand insourcing of profitable serv
Slide 65: Capture attractive growth opportunity in India
3 CAPTURE ATTRACTIVE GROWTH OPPORTUNITY IN INDIA Expand network coverage and services to accelerate market share gains MARKET SHARE1 ▸ BharatBenz renowned local brand with leading technology India >9t | in % 9.1 ▸ Enlarge local network coverage (ongoing) 6.0 5.8 PROFITABLE ▸ Expand service business
Slide 66: Deepen position in China
4 DEEPEN POSITION IN CHINA First mover advantage supporting a focused localization strategy WORLD’S LARGEST HDT MARKET1 Domestic HDT market | in k units STRONG BASE SETUP – POWERFUL PARTNERSHIP ► JV Partner Foton – one of the largest truck manufacturers in China 1,550 1,400 ► 50:50 JV – BFDA3 with s
Slide 67: First-mover advantage in e-mobility
FIRST-MOVER ADVANTAGE IN E-MOBILITY eCanter - a global sustainability leader 1 FUSO: TRUCK ELECTRIFICATION PIONEER CUSTOMER Last mile Long-haul Construction Owner/Operator AND ► 3rd Gen truck planned in 2022 INDUSTRY VERTICALS 2 LEADING TCO FOR NEXT eCANTER1 Customized Vehicle Parts and Service ► Ac
Slide 68: Trucks Asia summary
STRENGTHEN FUSO POSITION OPTIMIZE COST STRUCTURE ▸ Fixed cost reduction to support benchmark profitability ▸ High fixed cost coverage by recurring revenue ▸ Optimized mix of HDT and LDT business ▸ Further fixed cost reduction ▸ Downstream business (Service/FS) improvement ▸ “Net zero” variable cost
Slide 69: Daimler Buses: Long-established market leadership
DAIMLER BUSES LONG-ESTABLISHED MARKET LEADERSHIP Till Oberwoerder 69
Slide 70: Daimler Buses: global market leader
DAIMLER BUSES: GLOBAL MARKET LEADER #1 in all core markets through full customer focus NO.1 IN OUR KEY MARKETS Actuals 2019 ▸ Direct sales, service and spare parts – from one single customer touchpoint EUROPE BRAZIL MEXICO 27.5% market share1 53.8% market share1 37.8% market share1 FULL LINE ▸ Cover
Slide 71: High degree of commonality between truck and bus
HIGH DEGREE OF COMMONALITY BETWEEN TRUCK AND BUS Maximizing synergies with Trucks – many realized, more to follow POWERTRAIN PLATFORM NEW TECHNOLOGIES PURCHASING COMMON COMPONENTS CUSTOMER SERVICE AND PARTS PLANTS AND G&A FUNCTIONS FINANCIAL SERVICES 71
Slide 72: Financial performance: anticipating recovery post pandemic
FINANCIAL PERFORMANCE – ANTICIPATING RECOVERY POST PANDEMIC The global bus market has been heavily impacted by the COVID-19 pandemic VEHICLE SALES REVENUE - in k units - - in bn. € - 28 30 4.4 4.6 3.4 19 13 2.0 2018A 2019A 2020A 2021A 2018A 2019A 2020A 2021A YTD Sep YTD Sep EBIT ADJUSTED ROS ADJUSTE
Slide 73: Coach segment to recover post-COVID
COACH SEGMENT TO RECOVER POST-COVID Long-established market leadership provides solid basis for successful recovery HISTORICALLY ATTRACTIVE POSITION IN DAIMLER BUSES IS READY TO CAPITALIZE ON HIGH-MARGIN EU-30 COACH MARKET… EXPECTED MEDIUM-TERM MARKET RECOVERY ▸ Differentiated two-brand strategy Mar
Slide 74: Increased robustness through cost optimization and focus on growth
INCREASED ROBUSTNESS THROUGH COST OPTIMIZATION AND FOCUS ON GROWTH Clearly defined measures to reach 7.5% adjusted RoS INDUSTRIAL BUSINESS ROS ADJUSTED MAIN LEVERS TO FILL GAP TO AMBITION - in % - 1 Growing in North America 7.5 6.1 2 Clear commitment to ZEV products 3 Service strategy INDEPENDENT OF
Slide 75: Growing in North America
1 GROWING IN NORTH AMERICA Focused re-entry into currently untapped North American coach market with a product offering specifically developed for US customers DAIMLER BUSES MARKET SHARE IN WE LISTENED TO OUR CUSTOMERS… PRIVATE MOTORCOACH MARKET1 - in % - New coach product specifically developed to
Slide 76: Clear commitment to ZEV products
2 CLEAR COMMITMENT TO ZEV PRODUCTS Based on successful and established eCitaro market presence >650 eCitaro sold GLOBAL ZEV BUS MARKET OUR WAY FORWARD – E-MOBILITY ROLL-OUT EXPECTED TO INCREASE RAPIDLY IN UPCOMING YEARS CITY SEGMENT 45%1 Share of Market in Germany ▸ eChassis in 2022 ▸ 3rd generation
Slide 77: Our services strategy for bus
3 OUR SERVICES STRATEGY FOR BUS Evolving bus market offers new opportunities beyond CO2-neutrality INCREASING SERVICE POTENTIAL THROUGH... ▸ Increase penetration rate of service contracts TRADITIONAL ▸ Implement initiatives for parts growth (Reman, regional strategies) ▸ Push sales of charging infra
Slide 78: Bold structural cost measures
4 BOLD STRUCTURAL COST MEASURES Reducing break-even point and increasing resilience to market volatility DECREASE FIXED COST AIMING TO MAKE DAIMLER BUSES MORE RESILIENT € -300 mill. (by 2025) THROUGH STRUCTURAL ACTIONS ▸ Personnel cost reduction ▸ Maximize efficiencies out of global production footp
Slide 79: Daimler Buses summary
LEADER IN ATTRACTIVE SEGMENTS MAXIMIZING TRUCK SYNERGIES ▸ Leading positions with tangible opportunities ▸ High degree of commonality between Truck and Bus, to realize full potential others to follow RECOVERY IN COACH POST COVID-19 PRODUCTS ▸ Recovery essential for reaching 7.5% adjusted RoS ▸ Dedic
Slide 80: Financial Services: Driving enduring customer relationships
FINANCIAL SERVICES DRIVING ENDURING CUSTOMER RELATIONSHIPS Stephan Unger 80
Slide 81: Driving enduring customer relationships
DRIVING ENDURING CUSTOMER RELATIONSHIPS DAIMLER TRUCK FINANCIAL SERVICES IS POWERING ▸ Increased sales of trucks and buses TRUCK AND ▸ Active lifecycle management of the vehicles DEALERS BUS BRANDS ▸ More services around trucks and buses ▸ Contribution to profit and cash flow of Daimler Truck DTFS C
Slide 82: Daimler Truck Financial Services at a glance
DAIMLER TRUCK FINANCIAL SERVICES AT A GLANCE Well diversified €21bn. Truck and Bus portfolio1 with strong finance and lease products WAVE 1 (€16bn.) TOTAL PORTFOLIO1 Transfer prior to Day-1 OVERALL: €21bn. BY PRODUCT BY REGION Lease Asia Wholesale 8% 14% 19% WAVE 2 (€5bn.) EU & LatAm 27% 59% North T
Slide 83: Strong foundation for portfolio growth
STRONG FOUNDATION FOR PORTFOLIO GROWTH Excellent acquisition quality paired with conservative and proven risk governance model HIGH QUALITY ACQUISITIONS… …SUPPORTED BY CLEAR RISK GOVERNANCE QUALITY OF ACQUISITIONS NET CREDIT LOSSES Policies and - in % - Guidelines 0.82 EXCELLENT AND VERY GOOD Busine
Slide 84: Strengths, challenges and opportunities
DAIMLER TRUCK FINANCIAL SERVICES Leveraging deep experience and unique customer access to drive service growth ambition OUR STRENGTHS OUR CHALLENGES OUR OPPORTUNITIES ▸ Significant scale ▸ Not yet taking full advantage ▸ Full dedication on truck and bus ▸ Well-positioned captive finance of global sc
Slide 85: Key levers to increase share of wallet
DAIMLER TRUCK FINANCIAL SERVICES Key levers to increase our share of wallet GETTING STARTED: DELIVER DAY-1 ACCELERATE THE CORE GROW SERVICES CONQUER NEW MARKETS IMPLEMENT EFFICIENCY (PORTFOLIO-BASED) (FEE-BASED) (PORTFOLIO- & FEE-BASED) ENABLERS ▸ Penetration rates ▸ Fleet and rental ▸ New markets i
Slide 86: Financial services as enabler of service growth ambitions
FINANCIAL SERVICES AS ENABLER OF SERVICE GROWTH AMBITIONS Tailor-made finance and lease products and introduction of fully integrated and customer-centric solutions E- / EQUIPMENT LEASE FINANCING FLOORPLAN RENT BATTERY LEASE INFRASTRUCTURE AND FINANCING FINANCING DYNAMIC CONNECTED FINANCE LEASE INSU
Slide 87: 3-wave portfolio transfer
3-WAVE PORTFOLIO TRANSFER TO ENSURE OPERATIONAL EXCELLENCE Strong growth through staggered portfolio transfer/ramp up and fully focused on operational excellence from Day-1 3-WAVE PORTFOLIO TRANSFER/RAMP UP… …AND COUNTRY OPERATION BUILD-OUT - in bn. € - Cost Income Ratio – in % - 153 Ramp up Optimiz
Slide 88: Diversified sources of funding
DIVERSIFIED SOURCES OF FUNDING Conservative capital structure based on solid “Investment Grade” credit rating and balanced funding mix going forward STRONG EQUITY RATIO … … AND BALANCED FUNDING MIX WITH CLEAR FUNDING STRATEGY LEVERAGE (Debt/Equity) ~10 ~10 Bank Loans CAPITAL Strengthen global footpr
Slide 89: Clear and attractive financial ambitions
CLEAR AND ATTRACTIVE FINANCIAL AMBITIONS Profitability ambition of >14% RoE adjusted – closing gap to best-in-class competitors CLEAR FINANCIAL AMBITIONS AND ATTRACTIVE RETURNS close gap to EQUITY Self-funded growth from 2025 onward best-in-class competitors ADJUSTED ROE - in % - 5-7 >14 >30% net pa
Slide 90: Financial services summary
STRONG CAPTIVE BUSINESS OPERATIONAL EXCELLENCE ▸ Leading full-service CV financing provider ▸ Staggered transfer and ramp up of portfolio ▸ Unique customer insights ▸ Focus on cost optimization from Day-1 ▸ Attractive low risk future growth STRONG FOUNDATION FOR GROWTH ENABLER OF SERVICES GROWTH ▸ H
Slide 91: Sustainability: On our way to CO2-neutral transport
SUSTAINABILITY ON OUR WAY TO CO2-NEUTRAL TRANSPORT AND A SUSTAINABLE BUSINESS Martin Daum 91
Slide 92: Innovation leadership and sustainability
INNOVATION LEADERSHIP AND SUSTAINABILITY “For all who keep the world moving” – enabling sustainable transportation OUR COMMITMENTS FOR THE FUTURE ▸ Zero-emission products VISIONARY, INDUSTRY ▸ Carbon-neutral production LEADING COMPANY ENVIRONMENT ▸ Resource consumption and supply chain ▸ Traffic and
Slide 93: Environment: our path to CO2-neutral road transportation
ENVIRONMENT: OUR PATH TO CO2-NEUTRAL ROAD TRANSPORTATION We are committed to the targets of the Paris Climate Agreement AMBITION HYDROGEN-POWERED SERIES- CO2-NEUTRAL FOR SECOND PRODUCTION TRANSPORT HALF OF THE FUEL-CELL TRUCKS AND BUSES WORLDWIDE DECADE H2 by 2022 by 2030 by 2039 by 2050 SERIES PROD
Slide 94: Environment: decarbonization and beyond
ENVIRONMENT: DECARBONIZATION AND BEYOND We want to drive the industry transformation – also in production and resource consumption CARBON-NEUTRAL ▸ CO2-neutral production plants: in Europe by 2022, India and USA by 2025 and rest of world by 2039 PRODUCTION GOALS ▸ Renewable electricity: in all produ
Slide 95: Social: societal impact through corporate responsibility
SOCIAL: SOCIETAL IMPACT THROUGH CORPORATE RESPONSIBILITY We are meeting our responsibility towards society and the environment TRAFFIC AND PRODUCT SAFETY OUR TEAM CORPORATE RESPONSIBILITY ACCIDENT-FREE DRIVING COMMITTED EMPLOYER TRANSPARENT SUPPLY CHAIN ▸ Setting benchmark safety ▸ Diversity, fairne
Slide 96: Governance: sustainability is guiding our leadership
GOVERNANCE: SUSTAINABILITY IS GUIDING OUR LEADERSHIP Our corporate governance forms the basis of our daily business OUR COMMITMENT OUR GOVERNANCE BODY OUR NEXT STEPS ▸ Commitment to best-practice ▸ 80% independent members1 ▸ Transparent ESG reporting governance and disclosure ▸ Highly experienced an
Slide 97: Financial Guidance: Delivering on our ambitions
FINANCIAL GUIDANCE DELIVERING ON OUR AMBITIONS Jochen Goetz 97
Slide 98: Market assumption 2021 and 2022
PERFORMANCE: MARKET ASSUMPTION 2021 AND 2022 Underlying demand very strong, but 2022 likely to be supply-constrained again HEAVY DUTY TRUCK MARKET1 2021 2022 NORTH AMERICA Significant increase On prior-year level EU-30 Significant increase On prior-year level 1 Source: Company estimate 98
Slide 99: Daimler Truck assumption 2021 and 2022
PERFORMANCE: DAIMLER TRUCK ASSUMPTION 2021 AND 2022 - in bn. € - 2021 2022 REVENUE 37 to 39 Significant increase EBIT 3.4 to 3.8 Slight decrease EBIT ADJUSTED 2.3 to 2.7 Significant increase ROS ADJUSTED (IB) 6 to 8% 7 to 9% FCF (IB) 1.5 to 2.0 Slight decrease INVESTMENT PP&E 0.9 to 1.0 On prior-yea
Slide 100: Segment assumption for 2021
PERFORMANCE: SEGMENT ASSUMPTION FOR 2021 TRUCKS NORTH MERCEDES-BENZ TRUCKS ASIA DAIMLER FINANCIAL AMERICA BUSES SERVICES UNIT SALES - in units - 160 to 170k 140 to 150k 140 to 150k 17 to 18k € 5 to 6 bn. (new business1) ROS/ROE (ADJUSTED) 9 to 11% 4 to 6% 6 to 8% -4 to -2% 5 to 7% (RoE) - in % - 1 P
Slide 101: Our mission as an independent company is clear
OUR MISSION AS AN INDEPENDENT COMPANY IS CLEAR ACCELERATING FOCUS ON READY FOR LEADING BRANDS FINANCIAL SHAREHOLDER INDEPENDENCE AND TECHNOLOGY PERFORMANCE RETURNS INTENSIFY INCREASE TARGET VALUE CUSTOMER FOCUS PROFITABILITY CREATION RIGHT CULTURE PURSUE EXPAND MARGINS ROBUST BALANCE RIGHT GOVERNANC
Slide 102: Q&A II
Q&A II 102