Daimler Truck Hldg S/Adr

Good morning, ladies and gentlemen. My name is Christian Herrmann. I'm head of investor relations and Daimler Truck. I warmly welcome you to our annual results conference. Thank you very much for joining us today. Today's presentation material can be found on the Daimler Truck investor relations website. On our request, as always, this conference will be recorded. The replay will also be available as an on-demand webcast in the investor relations section of the Daimler Truck website. We are hosting this conference today jointly for investors, analysts, as well as for the media community. Therefore, Jörg, I'm very happy to have you with me today.

Thank you, Christian, and a very good morning from my side as well. My name is Jörg Hove. I'm the head of global communications at Daimler Truck. Let me briefly tell you what to expect today. First, our CEO and interim CFO, Martin Daum, and Klaus Besler. And Klaus Baeser, our Vice President, Treasury and Tax and Acting Head of Finance and Controlling, will present our business results of the 2023 financial year and provide an outlook for 2024. This will take about roughly 40 minutes, and there will be a simultaneous translation into German. Afterwards, there will be two Q&A sessions, one for analysts and investors, and one for media representatives. Active participants in the Q&A calls already received their personalized access data with their registration. And now let's start with welcoming our speakers, Martin Daum and Klaus Baessler. Martin and Klaus, the stage is yours.

Thank you. Hello, everyone, and welcome to our annual result conference. In the next hour, we will give you a comprehensive overview of our business figures for the past year, and I would like to start with a series of numbers that we are particularly proud of. In 2023, our unit sales grew modestly by 1%, limited by supply constraints. Our group revenue grew strongly by 10%. Our adjusted group EBIT grew very strongly by 39%. And the free cash flow of the industrial business even grew by 61%. This means in 2023 Daimler Truck once more achieved truly profitable growth. And this again means with our performance in 2023, we made another big step towards unlocking the full profit potential of our great company. This is underlined by the following two figures. In 2023, Daimler Truck achieved an adjusted group EBIT of 5.5 billion euros and an adjusted return on sales in our industrial business of 9.9%. This marks not only a significant improvement compared to the prior year, but also a new record profitability for our company. We are therefore very pleased with our 2023 results and I would like to thank our entire Daimler Truck Team for the great work. However, I want to address one issue right away. We could have achieved even higher financial results if we would have engaged in opportunistic pricing. In 2023, demand often exceeded supply and we could have taken advantage of this situation. Yet we deliberately decided against it because we are convinced customer trust is key for the long-term success of a company. Therefore, we do not want to risk this trust. We rather want to strengthen it. Our very positive 2023 results are obviously due to several success factors. But in my view, one factor stands out. We have consistently been working on our challenges. You know that in recent years, some of our businesses were facing serious headwinds. Our bus business, for example, and our business in Brazil. Our management teams therefore closely analyzed these businesses and took the right measures to strengthen the product lineup and the cost position. Now this offer is paying off. Our bus business and our Brazilian business can now perform significantly better in any market environment. I can therefore clearly say, in 2023, all segments of our industrial business improved their profitability significantly. All segments are delivering. Trucks North America once again achieved a strong return on sales driven by higher unit sales, which could have been even higher without the existing supply constraints. Mercedes-Benz Trucks made further considerable brokers and, like Trucks North America, has already reached the profitability ambition we set for 2025. Tax Asia has significantly improved its performance towards the target level despite still facing adverse conditions in key markets such as China and Indonesia. Regarding Daimler buses, the figures clearly show bus is back. In the aftermath of COVID-19, we made this business even stronger and can now take full advantage of the coach market recovery. Financial services successfully established itself in 70 markets around the globe. Going forward, it can now leverage our industrial business to increase its profitability. So across our businesses, you see the same story again and again. Either our segments have already reached our 2025 profitability ambition or they are moving towards it with strong momentum. Now let me provide you with an update on all our self-help measures and its three main components. First, let's talk about the development of our service revenue. We are making further brokers. Between 2019 and 2023, we have achieved 18% growth by leveraging our existing after-sales business and by starting and growing new service opportunities. We are confident in achieving our growth ambitions of 25% by 2025, which will make our business less cyclical and Daimler Truck more resilient. We are fully on track here. Let me give you one specific example. In Europe, own retail is an important pillar of our strategy. And just today, we celebrate the opening of our own retail facility right here in Stuttgart. The new site is perfectly prepared for the future of transportation right from the start with high-voltage workshop equipment and all the requirements for repair and maintenance of hydrogen-powered vehicles. Second, a key lever to increase our resilience, the development of our fixed cost. By the end of 2022, we achieved a reduction of 8% compared to 2019. However, by the end of 2023, this figure deteriorated to only minus 6% versus 2019. The main reasons for this were headwinds coming from spin-off related IT spending. To be very clear, we are not satisfied with our brokers and we are working hard to get back on track. The fixed cost task remains a challenge. The spin-off is more expensive than anticipated. But we are working relentlessly to make Daimler Truck more efficient. We believe the money is spent wisely to create a more efficient standalone process landscape. Consequently, our ambition remains the same, a fixed cost reduction of 15% between 2019 and 2025. And third, the development of CapEx and R&D. As announced at our Capital Market Day, we have a very clear plan to grow our business significantly between 2025 and 2030. To execute this plan, we are now ramping up our investments in new businesses like battery cells. To reiterate, these investments are fully integrated in our active portfolio management approach. They must have a clear business case and attractive returns on capital. Even with these additional investments, We achieved a reduction of 3% by the end of 2023 compared to 2019. On a more like-to-like comparison with the 2019 scope excluding these investments and the extraordinary high inflation in excess of 2%, we have reduced capex and R&D by roughly 12%. We continue to strictly prioritize zero-emission technology, large profit pools, and return on capital employed. Therefore, we have increased our R&D spending for zero-emission technology and other additional businesses. We are maintaining our overall spending discipline to ensure we do not jeopardize the growth opportunities in our business in the future. Now let's have a quick look at the development of our key markets in 2023. The North American heavy duty market increased year over year by 7% to 331,000 units, a very robust development and a very high level. Due to significant supplier constraints in the US, particularly in the second half of the year, we could not leverage this market growth as much as we wanted to. Consequently, our market share decreased from 40% in 2022 to 39.1% in 2023. In 2024, we expect the markets to slightly decrease from this high level by minus 3 to minus 16. At the same time, we are confident in increasing our market share, especially in the vocational segment with our all-new Western Star trucks. Our order intake for 2024 looks very promising. The European heavy-duty market saw an even stronger increase in 2023, rising 15% through 342,000 units. However, our market share has decreased year over year, dropping from 20% in 2022 to 19% in 2023. In 2024, the market volume in Europe is expected to increase by minus 12 to minus 24 percent, a slightly bigger decline than in North America. As reported in January, group unit sales increased from 520,000 units in 2022 to 526,000 units in 2023, despite supply issues in key regions. The Trax North America segment contributed to this increase with a 4% rise to 195,000 units. Trax Asia saw an increase of 3% to 161,000 units. And Daimler Buses experienced a strong sales increase of 9% to 26,000 units. Only the Mercedes segment saw a drop in sales by 5% to 159,000 units, attributed to a weak market development in Brazil following the Euro 6 introduction. Unit sales in the fourth quarter of 2023 decreased from 155,000 units in Q4 of 2022 to 140,000 units, a drop of almost 10%. This decline was primarily due to supply chain issues in North America and market weakness in Indonesia. The overall order situation in 2023 saw a significant decrease of 18% year-over-year on group level. This decrease is attributed to the fulfillment of pent-up demand in our major regions throughout 2022 and 2023. Consequently, the current order situation reflects the clear signs of a normalization, as indicated in our last disclosure call for the third quarter of 2023. Customers are now ordering the vehicles when they need them, rather than reserving slots far in advance. Nevertheless, we are satisfied with the current order intake for the running Q1 and the following Q2. For North America, we are almost sold out for the first half of the year. At Mercedes-Benz, we are sold out for the first quarter and we are able to adjust production with our existing flexibility measures if needed. With that, I would like to hand over to you, Klaus, for a deep dive into our financials.