Daimler AG reported profits increased 48% to $4.8 billion during 2020 in a challenging environment due to the COVID-19 pandemic.
The company’s total unit sales of passenger cars and commercial vehicles decreased by 15%, to 2.84 million units while revenue dropped 11 percent. For the full year, Daimler’s net profit improved to $4.8 billion, compared to $3.2 billion.
However, cutting cost and cash preservation measures and steady performances across all divisions boosted earnings before interest taxes of the Daimler Group by 53 percent.
“The year 2020 was a stress test for just about every company in almost every industry. The Daimler team mastered this test very well,” said Ola Källenius, chairman of the Board of Management of Daimler AG and Mercedes-Benz AG.
Daimler products remain popular
Källenius added Daimler products continue to be in great demand across all major markets and divisions.
“With rapid growth in our xEV sales and the introduction of new products and technologies, we have also taken important steps in terms of electrification and digitalization,” said Källenius, adding the company’s financial results are significantly above market expectations.
“We proved our ability to generate substantial cash flow and to drive the ongoing transformation on our own – even under the adverse circumstances of a pandemic.”
At the Annual General Meeting on March 31, 2021, the Board of Management and the Supervisory Board will propose a dividend of 1.35 euros or $1.62 per share, up from 2019’s dividend of .90 euros or $1.08 per share.
Källenius added, “We are confident that we can maintain positive momentum if current market conditions prevail, accelerating our strategic plans and further enhancing our financial robustness.”
Separation still ready to go
Daimler plans to spin off and list Daimler Truck on Germany’s DAX index. The new Daimler Truck shares will be distributed to current Daimler shareholders. The new company will be just that: a new company. It will have an independent management team, stand-alone corporate governance including an independent Chairman of the Supervisory Board.
“The intended separation of our industrial businesses is designed to unlock the full potential for Mercedes-Benz as the world’s pre-eminent luxury car business,” he said. Additional details will be offered at a separate meeting in the third quarter of this year.
The transaction and the listing of Daimler Truck on the Frankfurt stock exchange is expected to be completed before year-end 2021. In addition, it is also Daimler’s intention to rename itself as Mercedes-Benz at the appropriate time.