|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||20.77 - 21.08|
|52-week range||12.77 - 47.73|
|Beta (5Y monthly)||1.82|
|PE ratio (TTM)||N/A|
|Earnings date||30 Jul 2020|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||30 Apr 2020|
|1y target est||84.17|
(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) -- Lee Kun-hee, who transformed Samsung Electronics Co. from a copycat South Korean appliance maker into the world’s biggest producer of smartphones, televisions and memory chips, has died. He was 78.Lee passed away on Sunday with his family by his side, the company said in a statement, without mentioning the cause of death. His family will hold a private funeral. He had been hospitalized since a heart attack in 2014 and was treated for lung cancer in the late 1990s.Lee, who told employees to “change everything except your wife and children” during his drive to foster innovation and challenge rivals such as Sony Corp., was South Korea’s richest person. He had an estimated net worth of $20.7 billion, according to the Bloomberg Billionaires Index. Samsung, the biggest of South Korea’s family-run industrial groups, known as chaebol, has been led by his only son since the heart attack.“Chairman Lee was a true visionary who transformed Samsung into the world-leading innovator and industrial powerhouse from a local business,” the company said. “His legacy will be everlasting.”His son Jay Y. Lee has been the conglomerate’s de facto leader since his father’s hospitalization in 2014, but it isn’t clear whether he will take over his father’s role as had long been anticipated. The younger Lee is currently grappling with two simultaneous legal disputes with South Korean prosecutors over allegations of bribery and corruption related to succession.Lee, who has denied any wrongdoing, was in fact supposed to attend a hearing for one of those court cases Monday, but instead is expected to remain at the hospital with his family. Samsung hasn’t said who will step into the elder Lee’s role as chairman.Samsung, the maker of the Galaxy line of smartphones, has been riding a Covid-era boom in online activity despite the legal clashes. The company also supplies semiconductors for Google’s data centers and Apple Inc.’s iPhone, and is the world’s most advanced maker of displays for TVs, computers and mobile devices.Samsung C&T Corp., the de facto holding company for the group, surged as much as 21%, while Samsung Life Insurance Co. rose as much as 16%. Some units at Samsung Group are expected to raise dividends, according to a note from Korea Investment & Securities. Samsung Electronics shares were little changed.Lee Kun-hee’s heirs now face an estate tax of roughly $10 billion, and paying it may complicate the family’s control of the Samsung conglomerate -- his beneficiaries would likely have to sell some assets to cover the tax — diluting their stake in Samsung. South Korea’s levy of 50% on estates of more than 3 billion won ($2.6 million) is the second-highest among countries in the Organization for Economic Cooperation and Development, after Japan.The Samsung empire includes 62 companies. Although the late Lee owned large chunks of some of the businesses — including 4.2% of Samsung Electronics — they’re not big enough to afford control of the conglomerate. The family depends on informal ties to executives who run related companies, and a lot of that soft power may dissipate with Lee’s death.It was Lee Kun-Hee who built the company into the electronics powerhouse of today, becoming synonymous with the rise of South Korea on a global economic stage.Named one of the world’s 100 most influential people by Time magazine in 2005, Lee began overhauling Samsung Electronics after he saw the company’s products gathering dust in a Los Angeles electronics store, according to “The Lee Kun Hee Story,” a 2010 biography by Lee Kyung-sik. The Suwon, South Korea-based company had become known for cheap, low-quality electronics gear and was in the “second phase of cancer,” sending out 6,000 people to fix products made by 30,000 employees, Lee said in 1993, according to the biography.Why Samsung’s Billionaire Scion Faces Two More Trials: QuickTakeThe company’s makeover started in 1993 when Lee gathered top executives in Germany and laid out a plan, known as the Frankfurt Declaration, to transform Samsung from a second-tier television maker into an industry leader. The company’s new mission: create high-quality products, even if it meant lower sales.Samsung Electronics became the world’s top maker of computer memory chips in 1992, the same year it became the first to develop 64-megabyte DRAM chips, according to the company.Lee was born on Jan. 9, 1942, in Daegu about 240 kilometers (150 miles) south of Seoul, and was raised in the nearby rural district of Uiryeong, according to the company.In 1938, his father Lee Byung-chull opened a four-story grocery store in Daegu that would later become Samsung Group.As a teenager, Lee Kun-Hee liked movies and cars and kept to himself. He took up wrestling and played rugby in high school to fight loneliness. He graduated with a degree in economics from Waseda University in Tokyo and also studied business administration in the U.S. at George Washington University in Washington.In 1971, Lee Byung-chull chose his youngest son to be his successor, and in 1974, the company moved into semiconductors when it acquired a 50% stake in unprofitable Hankook Semiconductor. The business turned profitable in 1988, helped by dynamic random-access memory chips it produced.After the Frankfurt Declaration, Lee required employees to arrive at work at 7 a.m. instead of their usual 8:30 a.m. start, so they could “soak up reform in their slumber,” according to the biography.In 1995, he assembled 2,000 workers to watch him make a bonfire out of 150,000 mobile phones, fax machines and other company products that didn’t meet his quality standards.Lee’s cultural change eventually produced results. Samsung Electronics surpassed Tokyo-based Sony to become the top seller of flat-screen TVs in 2006, the same year its market value exceeded $100 billion.In 2010, Samsung introduced the Galaxy-branded smartphone running Alphabet Inc.’s Android software, which helped it pass Apple as the world’s biggest smartphone maker in 2011 in terms of units sold. By introducing the Galaxy Note in 2011, Samsung created a new product niche known as the phablet, a smartphone-tablet hybrid.Political ControversySamsung became the biggest seller of all mobile phones in 2012, unseating Nokia Oyj, which had been the industry leader for more than a decade. Its success in smartphones then boosted profits at its component businesses, including memory chips, display and processors.Lee’s career was also notable for its setbacks and controversies. An expansion into the car business was unsuccessful. Samsung Motor Inc. rolled out its first automobiles in 1998 and failed to attract buyers. The unit was placed into receivership and Renault SA purchased a majority stake in 2000.Lee was mired in political scandals in the late 1990s after being convicted of paying bribes to former president Roh Tae-woo in 1996. He was pardoned by President Kim Young-sam a year later.In 2009, Lee was found guilty of tax evasion and breach of duty for causing losses at Samsung SDS Co., an information technology services provider, because he knew the company illegally sold bonds with warrants to his son at artificially low prices. He was fined 110 billion won and received a suspended three-year jail sentence.Presidential PardonFour months after the 2009 ruling, South Korea’s then-President Lee Myung-bak pardoned Lee, a member of the International Olympic Committee, so he could help the country’s successful bid to host the 2018 Winter Olympics in Pyeongchang.Lee, who resigned from the board of Samsung Electronics in 2008 amid the controversies, returned as chairman in March 2010, telling employees the business was “facing a real crisis.”“In 10 years, the majority of products that represent Samsung may no longer exist,” he said in a statement announcing his return. “We must have a new start. There is no time to hesitate.”Two months later, Samsung Group said it would invest 23 trillion won to expand in areas such as health care and solar batteries by 2020.Lee’s son, Jay Y. Lee, became vice chairman of Samsung Electronics in December 2012 and his daughter, Lee Boo-jin, is president of Hotel Shilla Co., a Samsung affiliate, raising concerns that the founding family would maintain its grip on the conglomerate at the expense of minority shareholders. That issue lies at the heart of the two legal disputes the younger Lee is now embroiled in.In August 2019, the Supreme Court ordered the retrial of Jay Y. Lee over bribery charges that voided an earlier decision to suspend Lee’s 2.5-year prison sentence. A special prosecutor had indicted the Samsung heir on charges of bribing a friend of former President Park Geun-hye in return for government backing for a merger that helped cement his control over Samsung while his father was hospitalized.In 1967, Lee Kun-hee married Hong Ra-hee. In addition to children Jay Y. and Boo-jin, he had a daughter, Lee Seo-hyun. Another daughter, Lee Yoon-hyung, died in 2005 at age 26.(Updates with share reactions in eighth 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.
Clotilde Delbos, deputy chief executive at Renault, confirmed that the company was “putting an end to some contracts, including the one with Fiat.”