Daimler Truck shares rise on its debut on the Frankfurt market

  • Daimler Truck shares rise after split from Daimler AG
  • The truck maker ends the day with a valuation of 24.6 billion
  • Aims to boost lagging European margins

FRANKFURT, Dec 10 (Reuters) – Daimler Truck (DTGGe.DE) reached a valuation of 24.6 billion euros ($27.83 billion) at the close of trading on its first day of trading on Friday, leaving Daimler shareholders (DAIGn.DE) in better condition as a result of the long-awaited listing.

The truck and bus maker, the world’s largest by revenue, saw its shares rise only slightly from the opening price of 28 euros over the course of the day, and Daimler’s share price, adjusted for the spin-off, rose 2.87% to 74.25 euros. .

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

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Daimler AG, soon to be renamed Mercedes-Benz AG, has kept 35% of Daimler Truck’s shares, while 65% was spun off. Daimler shareholders received one Daimler Truck share for every two Daimler shares they owned.

“We are confident that we will create value,” said Daimler CEO Ola Kaellenius, speaking to a more empty hall in Frankfurt as pandemic restrictions limited the number of attendees.

“Trucks and cars have different requirements. In this way, we are unleashing the full potential of both companies,” he said.

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

If it hits the double-digit target, it will prioritize investing in future technologies rather than further boosting profits, Daimler Truck CEO Martin Daum said in a roundtable discussion with reporters after the listing.

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

Daimler Truck is now the world’s largest commercial vehicle maker by revenue, but its profit margins lag behind competitors such as Traton’s Scania (8TRA.DE) and Volvo Group’s Volvo Trucks (VOLVb.ST).

Its performance is strongest in North America, where it reported a year-to-date adjusted return on sales of 10.8%, compared to 7.2% in Asia and just 4.5% in Europe.

Its focus in the coming years will be to increase electric truck sales to 60% of all sales by 2030, including hydrogen and battery electric models.

In the meantime, Daimler will focus on positioning itself as a leader in the luxury electric vehicle market, Kaellenius said.

($1 = 0.8838 euros)

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Reporting by Victoria Waldersee, Ilona Wissenbach; Edited by Miranda Murray, Mark Potter and Louise Heavens

Our standards: the Thomson Reuters Trust Principles.

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