Daimler Trucks Segment To Lead Top Line Growth For Daimler AG?

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Daimler AG (OTCMKTS: DDAIF), whose stock is currently trading at around $52, generates its revenue primarily from its Mercedes-Benz Cars segment which is projected to account for 52.9% of total revenues in 2019, While the Daimler Trucks segment is expected to be the 2nd highest contributor to the Top line at 22.8%. In this note we discuss the revenue segments of Daimler AG, their historical performance, and expected Total Revenue for 2019. You can look at our interactive dashboard analysis ~ Daimler AG’s Revenues: How does Daimler make money? ~ for more details. In addition, here is more Consumer Discretionary data.

Daimler AG Business Model:

What Does Daimler offer:

  • Daimler Group has its headquarters in Stuttgart. The main business of Daimler AG is the development, production, and distribution of cars, trucks, and vans across the globe.
  • With its strong brands, Daimler is active in nearly all of the countries of the world. The company has production facilities in Europe, North and South America, Asia, and Africa. The global networking of its research and development activities as well as its production and sales locations gives Daimler considerable advantages in the international competitive field and also offers additional growth opportunities.

Daimler has 5 Operating Segments:

  • Mercedes-Benz Cars: The division consists of the Mercedes-Benz brand with the Mercedes-AMG, Mercedes-Maybach, and Mercedes me sub-brands, as well as the smart brand and the EQ product and technology brand for electric mobility.
  • Daimler Trucks: The division consists of six brands – Freightliner, Western Star, Mercedes-Benz, FUSO, BharatBenz, and Thomas Built Buses which are well positioned worldwide.
  • Mercedes-Benz Vans: The division is a global supplier of a complete range of vans and related services. Its products range from the Citan small van with a gross vehicle weight of 1.8 metric tons to the Sprinter large van with a gross vehicle weight of up to 5 metric tons.
  • Daimler Buses: The Daimler Buses division with its Mercedes-Benz and Setra brands is the industry leader for buses above 8 metric tons in its most important traditional core markets: the EU 30 region, Brazil, Argentina, and Mexico.
  • Daimler Financial Services: The Daimler Financial Services division supports the sales of the Daimler Group’s automotive brands in approximately 40 countries. Its product portfolio primarily consists of tailored financing and leasing packages for customers and dealers.

What Are The Alternatives?

  • Major competitors are companies like Volkswagen, Toyota Motors, Ford, Tata Motors, and General Motors.

 

Daimler’s Total Revenue has grown by 12.5% between 2016 and 2018, and is expected to grow by 2.2% in 2019:

  • Daimler AG’s total revenues grew from $169.6 billion in 2016 to $190.8 billion in 2018. This represents an increase of approximately 12.5%.
  • We forecast the revenues to be around $195 billion in 2019, reflecting a increase of 2.5% y-o-y, primarily due to the Daimler Trucks segment.

 

Revenue growth of about $21.15 billion over two years to be driven by roughly equal contribution from each of the (1) Mercedes-Benz Cars, (2) Daimler Trucks and (3) Daimler Financial Services divisions:

  • Mercedes-Benz Cars segment saw a fall in revenues due to pricing in 2018 even when total numbers of cars sold were higher than the previous year. In 2019 we expect the segment’s prices to stabilize and volume to increase slightly and consequently report revenue around $103.2 billion.
  • Mercedes-Benz Vans segment saw a fall in revenues due to pricing in 2018 even when total numbers of vans sold were higher than the previous year. In 2019 we expect the pricing to stabilize and volume to increase at a good pace and consequently report revenue around $15.4 billion.
  • Daimler Trucks segment was the only silver lining for the company recording a growth of revenue in 2018 even after a fall in pricing. We estimate the high growth rate to continue and record a revenue of around $44.5 billion.
  • Daimler Buses segment saw a fall in revenues due to pricing in 2018 even when the total numbers of buses sold were higher than the previous year. In 2019 we expect the pricing and volume to increase steadily and consequently report revenue around $5 billion.
  • Daimler Financial Services saw an increase in revenue from $22.9 billion in 2016 to $29.9 billion in 2018. Trefis estimates the segment to report around $26.9 billion in revenues in 2019.

 

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