With a company valuation of between 23 and 25 billion euros, Daimler Truck Holding AG started trading on the stock exchange on Friday.

This means that the commercial vehicle business of the previous Daimler group has finally been split off on the financial markets.

Martin Daum, Chairman of the Board of Management of Daimler Truck, commented: “There is certainly still room for improvement when it comes to the company's valuation.” On the first day of trading, the stock exchange price fluctuated between 28 and 30 euros.

Analysts at Berenberg Bank published a price target of 35 euros for the shares, which corresponds to a market value of 29 billion euros.

At the same time, however, there was talk of company valuations of up to 45 billion euros, which would then be offset by a share price of 59 euros.

Tobias Piller

Editor in business.

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Daimler Truck boss Daum warned that share prices should not be overvalued during the first few days of trading. Some index funds are forced to sell the shares because of their rules. The same goes for the funds oriented towards the luxury sector that had bought Daimler shares with a view to the previous passenger car division of the Daimler Group. A course will not emerge until the beginning of 2022 that is no longer influenced by such initial effects. For the first quarter, Daimler Truck hopes to be included in the list of 40 standard stocks on the Dax, which could then bring new attention and possible purchases of index funds. The split will finally be completed in February with the renaming of the remaining Daimler AG, which is only focused on passenger cars, to Mercedes-Benz Group AG.

In terms of appearance, the split of the previous Daimler group on the stock exchange was nevertheless successful. In purely mathematical terms, the sum of the market capitalization of the future Mercedes-Benz AG and the split-off Daimler Truck Holding AG was significantly higher than the 92 billion euros from Thursday's stock market close. In the sum of 104 billion euros, however, a third of the market valuation of Daimler Truck is counted twice arithmetically, because the future Mercedes-Benz Group initially continues to hold 35 percent of the shares in Daimler Truck.

The separation of the two previous parts of the Daimler group is now intended to create a clearer demarcation from the financial markets. Mercedes-Benz with its passenger cars is rated as a company with luxury products for consumers, while Daimler Truck is rated as a supplier to business customers. Compared with the business development in the passenger car division, there are naturally far more pronounced economic fluctuations in commercial vehicles. Measured against the economic peaks, sales in the economic valley could also shrink by 40 percent, said Daum. However, Daimler Truck promises that even during the most difficult moments of the economy, it will still achieve a 7.5 percent return on sales, which corresponds to around 3 billion euros. In times of good economic activity, the return on sales could then rise well above the 10 percent mark.

When looking at the earnings situation, Daimler Truck still shows a rather mixed picture: the North American business, including with the Freightliner brand, which achieved a return on sales of 11.5 percent in 2019 before the corona crisis and a double-digit margin in 2021, is the profit maker and pearl of earnings target. Commercial vehicles with the Mercedes-Benz star on the European market, which only just broke break-even in 2019, are expected to achieve a margin of just 4.5 percent in 2021. The Asian business, including with the Fuso brand, has so far shown little more profitability, while the bus division has slipped into the red in the current year. The targets for the profit margin have been increased for 2025: North America should reach 12 percent, the European market 10 percent, Asia 9 percent and buses 7.5 percent.The CFO Jochen Goetz also promised a transparent presentation of the development in the individual company divisions for the future.

The business of the newly separated company will be burdened by the shortage of semiconductors until well into 2022, said Goetz.

However, a lot has already been done to lower the breakeven point in the group.

From 2022 onwards, price increases are also expected to have a positive effect on income.