DTE Energy Company 2021 Series Price & Performance (DTG)

Yes. Thanks, Jorg. Warm welcome also from my side. Thank you for being with us. As Jorg said, I don't think you want me to repeat the speech. I assume most of you were listening in. But to summarize very short [indiscernible] We did €4,700,000,000 in adjusted EBIT. A return on sales of 8.9%. So we are really happy about that And I'm very proud of what the team has accomplished both the employees, but also our partners and dealers who go to work every day, fighting for the business and fighting, to serve our customers. Customers in the best way possible. But of course, and maybe we touch on that with some of the questions, I look at it from two sides because I'm convinced we can do even better as a company, and we are definitely on the path and have the ambition to build the best truck and bus company in the world. Right? Eva? Absolutely, right. I agree. So thank you, Karen, and also from my side, a warm welcome. I also don't want to repeat what I said earlier this morning, but I just want to briefly look into 2025 and what we expect for the current year.

So the key factors that are driving our outlook for 2025 are the ongoing low freight rate environment in The U. S. Which is impacting on highway truck sales, especially in the first half of the year. And in Europe, major markets are expected to remain weak throughout 2025. And for the full year, we anticipate unchanged from last year's guidance, a range of €280,000,000 to 320,000 units for the heavy duty truck market in North America. And for the European heavy duty truck market, we expect a range of 270,000 to 310,000 units. And in this environment, we expect operationally stable results with an adjusted return on sales in our industrial business between eight percent and ten And with that, we're looking forward to receiving your questions.

Okay. Thank you very much, Karin and Eva. Ladies We will now begin the Q and A session. Let me just mention a few house keeping notes. For those of you who dial in, I will address the questionnaires by name, but please be so kind to also introduce yourself and state your media outlet at the beginning. Take your time for your questions and ask them slowly and clearly. For those of you who are present here, please raise your hand for a question. Before you start speaking, please be so kind to press the speaking button at your microphone to ensure that your question is also heard online and press the button again after your question. This whole call is conducted in English, so please be so kind to ask questions in English as well. And for those of you who dial into the Q and A, the operator will now explain the procedure for So we are starting with the Q and A. And first one is Robin Welle from D. Go ahead, Robin. Yes. Thank you.

Probably quite obvious that I have some questions about the efficiency program. Maybe first, you talked about all types of costs, but where do you see the greatest leverage? And talk about or you're talking about Europe, but how badly will Germany be affected from this program? And then maybe a second question or one more question. Can we expect results? And what do employees need to be prepared for? Thank you.

Maybe I'll take the first part on the types of costs and then I hand over to Karen. So at this point in time, and Karen mentioned that during the analyst call, we can only share the level of detail that we shared this morning. So also on the cost categories, but not a split of the one or the more than EUR 1,000,000,000 towards these different areas because we are currently still in discussions with the works Council, and we have not finalized these discussions. So it would be premature to disclose any details. And we are talking about cost down Europe, but yes, this is a program that will be focused on Germany.

Just to add, I mean, they're very reasonable questions. And I think it's the same questions we also get from our internal employees. But at this point in time, when we have started discussion of the negotiations, I don't want to preempt something by by giving away too much details. And as soon as there is some outcome to share, we will for sure do that. Where we have been clear because we got that question, if you times is this will not be possible without also effect personnel. So there will be personnel reductions in Europe as as Eva said, mainly in Germany, but also affects a little bit some of our other European operations. But yes, at this time, unfortunately, not so much more to share for now.

So next one is Benjamin Wagner from Frankfurt, Germany, Seiden. One question about your home market. What are the reasons why the demand in Europe is so low? It a general economic situation? All your products, you talked once about the overengineered trucks by Daimler of your brand Mercedes Benz. So and your other companies have more standard versions. Is that one of the reasons why Mercedes Benz numbers are so low And then another question, about the low cost program. You talked about personal personal costs and the reduction of personal reductions And can you rule out the layoffs for operational reasons? Can you rule out between Sweden and Kundikung?

Maybe I'll take the first part and then I hand over to you. So as Eva said in the conference before, if you look at the total European market last year, was $3.12, right? $312,000 which is actually historically not such a low market However, a lot of the registrations that were in the market in 2024 came from trucks that we had sold already because we get group sale when we deliver to our partner but then it takes some times before they're I mean, many of them go to bodybuilders, and then they're being built and then they get delivered to customers and they get registered. So there is a little bit of delay, and we went into 'twenty four with a very unbalanced situation compared to a normal year, which explains why if you look at the total market in Europe, last year, it doesn't look so bad. But if you look at the sales numbers of all the OEMs, they don't necessarily reflect such a strong market. This we think has evened out. So should be more balanced this year. We did also mention in the speech earlier that we had a slight market share loss during last year.

I think we kept the pricing discipline in a very difficult market. So it was to be anticipated. What's positive and what speaks for this year is that we launched and started production of the new Actros L towards the end of the year. It's having better aerodynamics and a lot of improvements, which gives us 3% better fuel consumption. Also places us in the most, let's say, attractive toll category for the German market. So we do see that the order intake is improving and expecting some better conditions during the year. Both in Europe and specifically also in Germany.

Yes. Okay. I can take that one. If I understand you correctly, you're asking about Sussiitz Plukumsegerung, I guess, and we are not intending to question this.

Too expensive for your customers and you're building the best trucks with all your technology but there are two two overengineered and have too much technology and because of it, they are too expensive for the customers. I think now you're putting words into my mouth. I don't believe that's a quote coming from me, but it is true that I said, I think a couple of years ago, that sometimes we might have developed technology for technology's sake or something like that. Which shows what a strong engineering culture we have in this because I believe we are very innovative and I do believe we have the best engineers in the world in this company. And that's an asset. I do think that with the work we've been doing in the last couple of years, we have a much closer connection today between engineering product management and directly with the customer. So I believe we are actually really developing trucks that correspond to our customers' needs. And I think both the eActra 600 and the new Actra L are testaments to that.

Okay. I hope you got this.

Next one. Can you switch off here in [indiscernible] Freelance and Carvedt. Anzahi is the next one. Go ahead.

Hello. Two questions to Karen, if I may. May I take up on the R and D aspect? And as you've just said, you've got the best engineers. So can you explain why they're continuously decreasing when at the same time Diamond Truck is such wants to have cutting edge technology and with all various could you expand a little bit on that one? And then the second one would be on financial Services. Why are they performing relatively poorly year after year?

Sorry, just on the first question, when you said something is continuously decreasing, with the I heard I think Eva mentioned twice. I think it was Eva that investment in our costs R and D costs continuously decreased Should I take that one? So just to explain, So with R and D, you have to differentiate between the R and D costs that are expensed in the respective years in the profit and loss statements and then the R and D that we capitalize So if we take it together, [indiscernible] but the part that is reflected in our profit and loss state statement and expense in the respective year. There was a positive impact in 2024 in Mercedes Benz trucks of around €100,000,000 So that was the point. And then I was also saying that overall, when talking about cash flow in 2025, our investments are increasing because of the transformation of our industry.

I can take the financial services question. Question. I mean, we started our own financial services company when we built a Daimler truck or when we spun off from the big Daimler. And I would say we're still in the buildup phase of that company. I believe it's extremely important to have captive financial services to support the business. And we see that also when we enter when we look at the markets and also to be truck dedicated to really understand the needs of our customers. With specifically looking on 2024, it's true that the performance went down It's very much related to two specific customers in The U. S. That drive down the result.

And obviously, the ongoing freight recession in The United States and the impact on the credit cycles? [indiscernible] Okay. First one from Autos space is Ilona Wissenburg from Thomson Reuters. Go ahead, Ilona.

Yes, hello. I have three questions. On your integration with India and China.

You explained that this is because of partly common technology relocate production from Germany to India? And the second is on the cost down Europe. Are you also looking at the factory locations that maybe shut down? Or can you give a signal of relief to stuff in Germany here? So kind of Antwanung. Perhaps At Least. And I'm Interested About The U. S. The Capital Markets Day will be in The U. S. Is this kind of a signal to the Trump administration to stress how important America is or it planned already long ago? Thank you.

I think you So I think I will disappoint you unfortunately on the first part of the question because there is not that much I can share at this moment as we are just in the beginning of the discussion with the Works Council. But I will say that, of course, by having this new segmentation, and I mentioned it also in the speech, we have the opportunity to use the global network in a different way. Both when it comes to operations, but also to technology. So that's definitely something we're looking at on how we can optimize that. With regards to the Capital Market Day, I mean, The U. S. Is our single most important market.

So I think it makes a lot of sense to have our Capital Market Day there. We think we have some interesting stuff to show in our Cleveland plant. And I mean one of the top definitely talk about is our vocational strategy. So it makes just a lot of sense. We were also considering that Charlotte and Cleveland, North Carolina are are pretty easy to travel to and we want, of course, that we have a lot of participant joining us. So I would say those were the backgrounds for why we decided to to place our Capital Market Day there.

And perhaps if I may clarify my question. Do you put any effort in lobbying with the U. S. Administration to safeguard your business and all this very confusing tariff plans you described earlier? Which are hard to calculate the effects of?

I would say, as I think all companies with a large part of the business in The U. S, we are old admin administration both on a federal level, but also on a state level So we continue that both to influence what we think is good in the direction of the business and also, of course, to understand the different regulations and so on that's coming out of the administration.

Okay. Next one is Alexander Jung from Manheim and Morgan. Alexander, go ahead.

Yes, Jummert, Mannheim and Morgan. I hope you can hear me.

Hi and good morning. I have two questions. The first one is can you be more specific about your timetable for the saving program than shop cuts? And the second one, the work Council was very unhappy that hardly any information was shared at the Works meetings. What do you think about this Thank you.

Well, I think if I start with the second question, it was very important for the Works Council as well as for us in management to go out and do the betipse, for example, and to explain the back background of why we need to do this and why now. Some might say, well, 7.5% return on sales in Mercedes, not so bad. You're not a restructuring case. Why are you doing this? So this was very important for us in those meetings. And the purpose of the meetings was not to share any detailed information that might prelude the discussions and negotiations that are ongoing now. And in terms of specifics, I think I answered that a few times. Unfortunately, for the moment, not so much specific information to share. We are in discussions, early stage of negotiation We think it's not in our interest nor in the interest of the Bitripsrat that this drags on for a very long time, but I also want to respect that dialogue. And it's very hard to predict honestly how much time we need, but we are investing the time. We're meeting every week and as soon as there's something to tell, we will for sure share it. [indiscernible] at the moment, there is no more question from your side.

No? And no one from outer space. So we are basically at the end of this Q and A. Oh, excuse me, Susanna, go ahead.

A tiny little add on when we talked about overengineering, that's clarified. But can that also be a reason to try and include Barrick Bens more because then you would sell more barrett bends and not to your competitors that are in this might be in this price range. Is that a fair question?

I mean, first of all, I think let's see now. We're in the early days, but I imagine that the combination of Indian and German engineering is something that can be very powerful. That's what we hope for. For sure, we do also see, as I said, more opportunities for Barat Bens in export markets. Of course, it's a product that was developed for the Indian market. So there is developments that we need to do, for instance, to have both right hand, left hand drive and so on. So it's not like next week. It's a global product, but we will for sure develop in that direction. And we do see that Bharat bands can play in the same markets as Mercedes Benz trucks because it's it's very different in terms of price levels and in terms of performance. So I think it's it's products that would complement each other really well. And that's, of course, one of the reasons why we decided to do that segment adjustment to bring those closer together.

Okay. No one from Autodesk, but Ben Yamin, go ahead.

One question is about the your electric trucks. You started with the production of the EATTRIS 600 last year in December. What do you think how how many after 600 you will sell this year? And in the paper you you said that you sold 4,000 electric trucks and buses. How many long range and electric trucks is in this number? And in your presentation, you mentioned a lot of wishes regarding the electric development. You said that the emission fees should link to the [indiscernible] structure and to the tolls in Europe. How optimistic are you that these visitors will fulfill and when?

There are a lot of questions. It's good now. I have them, so I can go through. Yes, we mentioned we sold just over 4,000 electric trucks and buses I think a very small amount were long haul trucks. Because we had the start of production of the 600 not until late November, early December. So that will play a much bigger part this year. I think we haven't disclosed exactly what the targets are for this year, But of course, I can say that I have high hopes on the EACTRA's 600. I think in a very important order that we in the beginning of the year was this one with Amazon. I think they are one of our very good customers and also a forerunner when it comes to e mobility. So from my perspective, gives also confidence that we have a very competitive truck at a right price level, where for certain use cases in certain markets and for certain customers, you even have cost parity with diesel. So I'm very optimistic about the development in Europe. In The U. S, I would say it goes a little bit in another direction as we see the new [indiscernible] previously.

For instance, on there is some uncertainty now what happens with these programs, both on the school bus side, also on the truck side. With regards to the emission and the tolls, I mean, I was in Brussels a few weeks ago together with both automotive CEOs as well as some of my colleague on the truck side. Having a meeting with Ursula von der Leyen and the most important commissioners when it comes to these topics. So I believe we are being listened to and I believe we have a good dialogue And there is a general understanding that it's in all of our interest to have a competitive European industry. So I would still say I'm quite optimistic about getting this matter pushed through. But with that being said, it's still good to remind about this because it's so critical for our business. So when I have the opportunity, I I mention it. And there are, to be honest, might also be the one or other who have not yet understood all the work that needs to be done on the infrastructure side specifically. That that really needs to be speeded up.

Okay. There we are. It looks very much like we are at the end of our Q and A session for today. Thank you very much for taking part. Here on-site and from outer space. The recording of this session will be available available on our Damnatruck website. If you have any further questions, don't hesitate to contact the Damnatar Communications team. We are at your disposal at any time even at night you want to. And I wish you all a good day until next time. See you. Bye bye.