|Bid||63.37 x 0|
|Ask||63.39 x 0|
|Day's range||62.78 - 64.12|
|52-week range||36.60 - 77.06|
|Beta (5Y monthly)||1.42|
|PE ratio (TTM)||12.92|
|Forward dividend & yield||2.50 (3.91%)|
|Ex-dividend date||15 May 2020|
|1y target est||N/A|
(Bloomberg Opinion) -- “My chauffeur has difficulty parking our limousine” is the definition of a first-world problem but it’s one Mercedes-Benz was determined to solve with the latest iteration of its top-of-range S-Class saloon. The rear wheels can turn in the opposite direction to those at the front, which gives the hulking vehicle a smaller turning circle. “Wie praktisch!” (How practical!)Mercedes’s parent company, Daimler AG, has shown similarly impressive maneuverability during the pandemic. After delivering an astonishing 5 billion euros ($6 billion) of free cash flow during the July to September quarter, the German luxury car and truck maker has raised its full-year financial outlook. Operating profit is now expected to be about the same as last year’s 4.3 billion euros.True, this is a low bar — 2019 wasn’t a great year for Daimler. But it’s a remarkably resilient performance when many western markets are in recession and Mercedes is having to increase sales of less profitable hybrid and electric vehicles this year to meet Europe’s emissions targets.It’s also a much better outcome than the one investors feared when the company, like peers, shuttered factories in the spring. Some analysts had said Daimler would have to raise capital.An equity raise looks less likely now, provided the pandemic doesn’t get a lot worse. Daimler’s industrial businesses have 13 billion euros of net liquidity and the shares have more than doubled since March. There are signs that BMW AG and Volkswagen AG have done almost as well. BMW’s car sales rose 9% year-on-year in the third quarter and it produced 3.1 billion euros of free cash flow. The three German automakers generated almost 15 billion euros of free cash flow between them during that three-month period, estimates Bernstein analyst Arndt Ellinghorst.Euro zone economic data also show the manufacturing sector is faring much better than services. So what’s gone right for Germany’s automotive export champions?In one respect, their outperformance was almost preordained. French and Italian automakers have what’s called negative working capital: put simply, they try to hold little inventory and settle with their suppliers long after they’ve received payment from dealers. This helps generate cash when revenues are growing, but the effect is reversed when production stops suddenly. Supplier bills come due and cash rushes out the door. More than half of the 6.4 billion euros of cash that France’s Renault SA burned through in the first half of this year was down to working capital. The German carmakers don’t operate like this. Mercedes has in fact generated cash by reducing stocks of unsold cars and trucks and restarting production only gradually. BMW said working capital effects boosted its free cash flow, too, during the third quarter. More surprising has been the quick rebound in demand for luxury cars. Germany’s valued-added tax cut has helped sales at home. But China’s swift recovery from the virus is the biggest factor. Mercedes China sales rose 23% year-on-year in the third quarter. German carmakers’ globe-spanning sales team and assembly plants were considered a problem when investors’ biggest worry was the U.S.-China trade war. The large regional differences in containing the virus make that international presence an advantage. Peugeot SA’s sales, by contrast, are heavily concentrated in Europe.It also helps that Mercedes’s white-collar clientele still have jobs mostly. Some have even more spare cash because they’ve not had so many luxury holidays and expensive meals out this year. Sales of Mercedes sports-utility vehicles, which usually generate higher profit margins, jumped by almost a quarter in the three months to September.For the same reason, the pandemic has had only a modest impact on the company’s enormous car loan and leasing unit. Earlier in the pandemic Mercedes offered customers a payment holiday and warned of a possible rise in credit losses. But most customers have returned to a normal payment schedule. Used car prices have also stabilized.Meanwhile, the sense of urgency created by Covid-19 has given impetus to Daimler’s efforts to cut its bloated costs and curtail wasteful investment. After expanding for years, the Mercedes employee count has declined slightly in 2020. Shareholders will still wonder whether the current performance is sustainable and what Daimler might achieve in a “normal” year. With the virus surging again in Europe and the U.S., it will probably be a while before we find out. But Daimler and its German peers should be able to cope this winter. If only all European companies could say similar.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Daimler AG improved its full-year profit forecast after earnings bounced back last quarter as it posted robust sales in China and cost cuts started to bear fruit at the maker of Mercedes-Benz luxury cars.Daimler now expects earnings before interest and taxes to match the prior-year level, after previously forecasting a drop. The Stuttgart, Germany-based manufacturer anticipates markedly higher industrial free cash flow but also warned that group revenue will decline significantly because of the pandemic.The company’s more upbeat earnings outlook adds to evidence of a global auto industry recovery after manufacturers including BMW AG and Tesla Inc. posted better-than-expected third-quarter figures. Renault SA on Friday reported sales that topped estimates.Daimler navigated the steepest slump since World War II -- triggered by the pandemic -- better than feared mainly because of a swift rebound in China, its largest market. The country is set to be the first to bounce back to 2019 volume levels, albeit only by 2022, according to researchers including S&P Global Ratings.Daimler rose as much as 2.5% in early Frankfurt trading. That helped drive the Stoxx 600 Automobiles & Parts Index to a 1.5% gain, with French tire maker Michelin and Renault among the biggest winners.Chief Executive Officer Ola Kallenius also made progress restoring confidence among investors that his deepened restructuring push is gaining traction after a bumpy start. The CEO wants the luxury-car and truck maker to put less emphasis on volume and more on improving returns in the midst of a costly shift to electric vehicles.Daimler is targeting an adjusted Ebit margin of between 4.5% and 5.5% for the full year at the unit that comprises the car and van operations. The margin goal for the trucks division, one of the world’s largest producers of commercial vehicles, is between 1% and 2%.Read more: Mercedes Maps Out Push to Boost Profits Amid Electric ShiftDaimler noted that its outlook is based on economies in its most important markets averting further lockdowns and normalizing. Countries including Germany and France, where Daimler runs factories, experience record infections and governments are scrambling for an adequate response.Fourth-quarter demand so far has been “encouraging,” and is expected to be higher than last quarter but lower than the prior-year period, Chief Financial Officer Harald Wilhelm said during a call with analysts. Daimler released preliminary results last week that were well above analyst estimates.The company’s main labor union IG Metall and employer association Suedwestmetall urged people to adhere to social distancing and hygiene rules. A further spread of the virus would threaten “the economic survival of companies -- and many jobs,” IG Metall’s regional chief and Daimler supervisory board member Roman Zitzelsberger said Thursday.Daimler shares have declined 1% this year, valuing the company at about 52 billion euros ($61 billion). While the stock has fared better than that of German rivals Volkswagen AG and BMW, Tesla Inc. passed everyone this year to become the world’s most valuable automaker.(Updates with shares in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Uber Technologies (NYSE: UBER) is aiming to expand in Europe through a splashy acquisition, it seems. An article published Wednesday by Reuters cites a report in German business publication Manager Magazin saying that the ridesharing giant is offering over 1 billion euros ($1.2 billion) for Free Now. This is a ridesharing business jointly owned by European auto giants Daimler (OTC: DDAIF) and BMW (OTC: BAMXF).