Daimler Q2 preliminary results in red ink but beat expectations

Following a better than expected market recovery and a strong June performance, Daimler Group said its adjusted EBIT, Mercedes-Benz Cars & Vans adjusted EBIT and Industrial Free Cash Flow for the second quarter of 2020 were "all above market expectations"."

"Daimler's deployment of extensive cash preservation measures [read: cost cuts – ed] plus the favourable demand-driven development of working capital combined to deliver positive industrial free cash flow in the second quarter," the automaker said in a statement.

"This has been a complex quarter," said management board chairman Ola Kaellenius.

"We took proactive decisions on costs and spending and focused intensely on working capital management.

"We were then able to seize opportunities allowed by the market recovery, thanks to our compelling product line-up.

"We also announced key strategic partnerships in electrification and vehicle software during the quarter that position us well for the future. But, there is still much to do.

With understatement (see the loss figures below), he added: "Our systematic efforts to lower the breakeven of the company by reducing costs and adjusting capacity will need to continue."

Preliminary and unaudited financial details announced included:

Free cash flow: EUR685m (consensus: negative EUR2,106m)
Net liquidity: EUR9.5bn (Q1 2020: EUR9.3bn)
Group EBIT: EUR1,682m loss (consensus: EUR2,069m loss)
Adjusted EBIT: EUR708m loss (consensus: EUR1,719m loss)
Mercedes-Benz Cars & Vans EBIT: EUR1,125m loss (consensus: EUR1,400m loss)
Adjusted EBIT: EUR284m loss (consensus: EUR1,050m loss)
Daimler Trucks & Buses EBIT: EUR756m loss (consensus: EUR823m loss)
Adjusted EBIT: EUR747m loss (consensus: EUR823m loss)
Daimler Mobility EBIT: EUR205m profit (consensus: EUR258m profit)
Adjusted EBIT: EUR313m profit (consensus: EUR258m profit)

The preliminary results include the following adjustments affecting EBIT:

Mercedes-Benz Cars & Vans

Expenses of EUR687m for initiated streamlining of global production network and 'capacity adjustments' related to Hambach, Tuscaloosa and Aguascalientes factories
Expenses of EUR53m for legal proceedings and related measures

Daimler Mobility