The first price determined by Daimler Truck on XETRA was EUR 28.00. In the end it went up by 6.34 percent to 29.78 euros. The daily high was 30.66 euros. At its debut on the Frankfurt Stock Exchange, Daimler Truck is worth 23 billion euros. The stock market value is at the lower end of the estimates of analysts who had hoped for up to 40 billion euros. Daimler Truck boss Martin Daum, CFO Jochen Götz and Deutsche Börse boss Theodor Weimer rang the bell of the stock exchange. After the spin-off, Daimler shares lost 13.84 percent to 74.25 euros.
‘New Era’
CEO Martin Daum spoke of a historic day: the truck and bus business was independent and listed for the first time in 125 years. “Today a new era begins for us,” added Daimler CEO Ola Källenius.
Daimler Truck, with more than 100,000 employees, is from its own point of view the world’s largest manufacturer of trucks and buses. He was removed from the Daimler Group at the beginning of the month.
Investors received a portion of the split-off company for every two Daimler shares. The share started at 28 euros and at times climbed to more than 30 euros. In the afternoon it was again 28.20 euros.
Daimler’s own paper was quoted at EUR 74.55, significantly lower than the day before. However, if you take the share prices of both companies together and take into account that investors each received two Daimler papers and one truck paper, the overall price increase resulted.
With the price, Daimler Truck reached a market value of almost 24 billion euros – including the 35 percent stake in the truck shares still held by Daimler AG. This means that Daimler Truck is worth significantly more than the Volkswagen commercial vehicle holding TRATON with around 10.8 billion euros. In comparison with the current DAX members, Daimler Truck is in a good position – Deutsche Bank and Beiersdorf are worth around 23 billion euros, the VW umbrella holding Porsche SE around 26 billion.
Daimler Truck is now to move into the German leading index at the earliest opportunity. For the composition of the index, the value of the freely tradable shares, i.e. the free float, is particularly important. If you subtract only the 35 percent share of Daimler AG in Daimler Truck, Daimler Truck comes to around 15.6 billion euros. MTU (MTU Aero Engines), Covestro and a few other DAX members are rated less highly in terms of their free float.
Daimler Truck CFO Jochen Goetz made it clear that the supply bottlenecks for microchips are likely to have serious effects in the coming year as well. “The shortage in the industry is still there,” he said. “If we didn’t have any bottlenecks in the semiconductor industry, we would see really great years in 2021 and 2022.” The low point for the chip bottlenecks was probably reached between July and the end of September. The demand for vehicles in Europe and North America – the most important markets for the company – is very good.
The split in Daimler is seen as positive in many cases. The group has recognized “that the car and truck business no longer have anything in common,” commented NordLB analyst Frank Schwope. The employee side at Daimler had also approved of the setup with two independent companies.
CEO Källenius said the split should “release the full potential of both companies and create decisive added value for all sides”. He had already announced that he would profile Mercedes-Benz as a luxury brand in automobiles. “We are fully focused on building the world’s most desirable cars and taking the lead in electromobility and vehicle software.” On February 1, the car company is to be renamed Mercedes-Benz Group AG. The focus on the luxury aspect of the traditional brand with the star should be the Returns increase in the coming years.
When he made his decision, Källenius had two “pure play” companies in mind, in which investors could invest in different business models. For example, investors in large conglomerates often apply a valuation discount because the businesses of conglomerates sometimes have little to do with each other, but often have to support each other.
Daimler Truck share for a day already trial in the DAX
After its stock market debut on Friday, Daimler Truck is still aiming for short-term inclusion in the German benchmark index. “Daimler Truck assumes that its shares will be included in the 40-member DAX index on the regulated market of the Frankfurt Stock Exchange at the earliest possible date – probably in the first quarter of 2022”, announced the previous commercial vehicle subsidiary of Daimler AG, which is also listed on the DAX .
Daimler shareholders receive one Daimler Truck share for every two shares booked in their depot. Daimler AG remains the largest shareholder with 35 percent of Daimler Truck. For one day, both Daimler and Daimler Truck are listed in the DAX and EuroStoxx. Such a step is not unusual in the DAX and has happened several times in the past with corporate spin-offs.
Headwind from chip crisis expected
By going public, Daimler Truck wants to act independently and defend its global market leadership in heavy commercial vehicles, decoupled from the previous parent company. “Today a new era begins for us,” said Daimler CEO Ola Källenius, according to a statement on Friday. The reorientation towards two “pure play” companies (Mercedes-Benz and Truck) is intended to “release the full potential of both companies and create decisive added value for all parties,” said the manager.
However, Daimler Truck also expects the semiconductor bottlenecks to have negative effects in the coming year. “The uncertainty will persist until well into 2022, with serious consequences,” said CFO Jochen Goetz to journalists on the occasion of the company’s IPO. Hopefully, the low point for deliveries of chips should have been reached in the third quarter. “The shortage is still there,” added the manager.
The difficult situation is causing problems for the world’s largest truck manufacturer and other companies in the industry, especially in production. The company’s models are in great demand. “Demand in Europe and North America is still very, very strong,” said Goetz. If the bottlenecks did not exist, 2021 and 2022 would be “excellent years”, according to the manager.
The management sees one focus of its work in increasing margins. In many areas in Europe, profitability is not where it should be, said the CFO.
For years, Daimler has lagged behind the sometimes significantly higher-margin companies such as Volvo, Scania or Paccar. If the market conditions are good, double-digit returns should be achieved in the heavy truck business in 2025, affirmed Daimler Truck CEO Martin Daum. “But it’s not that we said that we would stop after reaching 10 percent,” said the manager. But when you have reached this level, you have to consider whether you should not invest in the future of the company. This year, despite chip bottlenecks and high raw material prices, the margin should be 8 percent at best.
Analyst upgrades Daimler
NordLB set the price target for Daimler after the spin-off from Daimler Truck from 96 to 82 euros and left the rating at “Buy”. “With the split into Mercedes-Benz and Daimler Truck, the group is taking into account the fact that the car and truck business no longer have anything in common and that the sum of the parts on the stock exchange could be worth more than that
Daimler Group so far, “wrote analyst Frank Schwope in a study published on Friday.
Dow Jones Newswires / Reuters / Redaktion finanzen.net / dpa (AFX)
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