Daimler Truck CFO: Supply chain still ‘broken’

Daimler Truck Holding AG reported third-quarter profits of more than $1 billion—more than four times its number for the corresponding 2021 quarter—as revenues climbed 47% to $13.9 billion. North American unit sales grew 42% to more that 49,000.

In the three months ended Sept. 30, Germany-headquartered Daimler Truck booked North American revenues of more than $6.3 billion, a jump of 71% from the prior-year period thanks in part to what CFO Jochen Goetz called “a favorable sales mix and especially strong pricing.” The company’s EBIT more than doubled to $760 million and it grew its market share on the continent to 38.5% from 36.4% in 2021’s Q3.

Echoing upbeat comments made recently by a number of U.S. trucking company leaders, Goetz said demand for the company’s vehicles remains very strong. His team has not seen any signs of cancellations or order delays. This is in North America and Europe, he said. Looking ahead, the Daimler team has slightly raised the full-year financial forecasts for its truck group and is not expecting to face any “major” production hiccups due to supply chain problems or natural gas prices.

Goetz said some supply chain stresses, including those around semiconductors, are easing but that doesn’t mean the production environment is close to returning to normal. In recent years, several suppliers have not invested as much in recent years to increase their capacity to scale up with Daimler. This has led to several types of shortages. Goetz described the situation as trying to stop water leaking through holes in a wall. We only have 10 fingers. At some point, however, water is “pouring all over the place.”

“The supply chain is somehow broken. We have many parts we need to discuss [with customers] how we can safeguard the volumes for next year,” he said. “The supply chain will determine in the end the size of the market.”

Goetz also told analysts that many of Daimler’s U.S. customers aren’t yet balking at ordering new trucks because of higher financing costs versus a year ago. He stated that their fleets are getting older, making them more expensive to run.

Shares of Daimler Truck (Ticker: DTG) were essentially flat, around €28.70 in afternoon trading in Frankfurt. Over the past six months, they have risen about 10%, growing the company’s market capitalization to more than €23 billion.