A warm welcome also from my side. Thank you for being with us. As Jörg said, I don't think you want me to repeat the speech. I assume most of you were listening in. To summarize very shortly, it was another solid year for Daimler Truck. We did EUR 4.7 billion in adjusted EBIT and a return on sales of 8.9%. We are really happy about that. 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 in the best way possible. 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.
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. Thank you, Karin. Also from my side, a warm welcome. I also do not 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. 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. In Europe, major markets are expected to remain weak throughout 2025. For the full year, we anticipate, unchanged from last year's guidance, a range of 280,000-320,000 units for the heavy-duty truck market in North America. For the European heavy-duty truck market, we expect a range of 270,000-310,000 units.
In this environment, we expect operationally stable results with an adjusted return on sales in our industrial business between 8% and 10%. With that, we're looking forward to receiving your questions.
Okay, thank you very much, Karin and Eva. Ladies and gentlemen, we will now begin the Q&A session. Let me just mention a few housekeeping notes. For those of you who dial in, I will address the questioners 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 your question in English as well.
For those of you who dial in to this Q&A, the operator will now explain the procedure for registering your questions.
If you wish to ask a question, please press star and one on your telephone keypad. Please press star and two on your telephone keypad if you wish to withdraw the question. One moment, please. We are now registering your questions.
We are starting with the Q&A, and the first one is Robin Wille from DPA. 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? You talk about, or you're talking about Europe, but how badly will Germany be affected from this program? Maybe a second question or one more question. Can we expect results? 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 Karin. At this point in time, and Karin mentioned that during the analyst call, we can only share the level of detail that we shared this morning, also on the cost categories, but not a split of the one or the more than one billion towards these different areas because we are currently still in discussions with the Works Council, and we have not finalized these discussions. It would be premature to disclose any details. We are talking about costs down Europe, but yes, this is a program that will be f ocused 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. At this point in time, when we have started discussions and still in the beginning of the negotiations, I don't want to preempt something by giving away too much details. 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 a few times, is this will not be possible without also affecting personnel. There will be personnel reductions in Europe, as Eva said, mainly in Germany, but also affects a little bit some of our other European operations. At this time, unfortunately, not so much more to share for now.
Next one is Benjamin Wagener from Frankfurter Allgemeine Zeitung.
[Foreign language] Benjamin Wagener. One question about your home market. What are the reasons why the demand in Europe is so low? Is it the general economic situation or your products? You talked once about the over-engineered trucks by Daimler Truck of your brand, Mercedes-Benz. You talked about your other companies have more standard versions. Is that one of the reasons why Mercedes-Benz numbers are so low? Another question about the low-cost program. You talked about personal costs and the reduction of personal reductions. Can you rule out the layoffs for operational reasons? Can you rule out a betriebsbedingte Kündigung?
Maybe I take the first part and then I hand over to you. As Eva said in the conference before, if you look at the total European market last year, it was 312,000, right? EUR 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 in 2023 because we get group sale when we deliver to our partner, but then it takes some time 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.
There is a little bit of delay, and we went into 2024 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 does not look so bad, but if you look at the sales numbers of all the OEMs, they do not necessarily reflect such a strong market. This, we think, has evened out, so it 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 is 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. 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.
Oh, you want me to talk? Okay, I can take that one. If I understand you correctly, you're asking about Zukunftssicherung, I guess, and we are not intending to question this.
One question. The over-engineered trucks, you mentioned this in a speech. Do you think that the Mercedes-Benz trucks are over-engineered because of that they're too expensive for your customers? You're building the best trucks with all your technology, but they are too over-engineered 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 company, which is also something extremely positive 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. I believe we are actually really developing trucks that correspond to our customers' needs.
I think both the eActros 600 and the new Actros L are testaments to that.
Okay, I hope you got it. Next one.
Can you switch off here?
Yes, thanks. Susanne Röder, a freelance and a captive financial expert, is the next one. Go ahead.
Hello, two questions to Karin, if I may. May I take up on the R&D aspect? As you've just said, you've got the best engineers. Can you explain why they are continuously decreasing when at the same time Daimler Truck as such wants to have cutting-edge technology? With all various, could you expand a little bit on that one? 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, what do you mean?
I heard, I think Eva mentioned twice, I think it was Eva, that investment in our costs, R&D costs continuously decreased.
Should I take that one? Just to explain, with R&D, you have to differentiate between the R&D costs that are expensed in the respective years in the profit and loss statements and then the R&D that we capitalize. If we take it together, we're not decreasing it, but the part that is reflected in our profit and loss statement and expensed in the respective year, there was a positive impact in 2024 in Mercedes-Benz Trucks of around EUR 100 million. That was the point. 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. I mean, we started our own financial services company when we built Daimler Truck or when we spun off from the big Daimler. 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. 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.
Obviously the ongoing freight recession in the U.S. and the impact on the credit cycles that that has.
Okay, first one from Outer Space is Ilona Wissenbach von 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 with Mercedes-Benz in Europe. Does it mean that you may relocate production from Germany to India? The second is on the cost down Europe, are you also looking at the factory locations that may be shut down, or can you give a signal of relief to staff in Germany here? A kind of Entwarnung, perhaps at least. I am 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 was it planned already long ago? Thank you.
Thank you. 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. 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. That is definitely something we are 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. 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.
I mean, one of the topics we will definitely talk about is our vocational strategy. It makes just a lot of sense. We were also considering that Charlotte and Cleveland, North Carolina, are pretty easy to travel to, and we want, of course, that we have a lot of participants joining us. I would say those were the backgrounds for why we decided to place our Capital Market Day there.
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?
Yeah, I would say, as I think all companies with a large part of the business in the U.S., we are active in Washington. As we have been with the old administration, we are also with the current administration, both on a federal level, but also on a state level. 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 Jungert from Mannheimer Morgen. Alexander, go ahead.
Yeah, I am Alexander Jungert, Mannheimer Morgen. I hope you can hear me.
We do.
Hi and good morning. I have two questions. The first one is, can you be more specific about your timetable for the saving program and shop cuts? The second one, the Works Council was very unhappy that hardly any information was shared at the works meetings. What do you think about this? Thank you.
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 Betriebsversammlung and to explain the background of why we need to do this and why now. Some might say, 7.5% return on sales in Mercedes, not so bad. You're not a restructuring case. Why are you doing this? This was very important for us in those meetings. The purpose of the meetings was not to share any detailed information that might prelude the discussions and negotiations that are ongoing now. 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.
I think it's not in our interest nor in the interest of the Betriebsrat that this drags on for a very long time. I also want to respect that dialogue. It's very hard to predict, honestly, how much time we need. We are investing the time, we're meeting every week. As soon as there's something to tell, we will for sure share it.
Thank you.
At the moment, there's no more questions from your side. No. And no one from Outer Space. We are basically at the end of this Q&A. Oh, excuse me, Susanne, go ahead.
Just a tiny little add-on. When we talked about over-engineering, that's clarified. Can that also be a reason to try and include BharatBenz more? Because then you would sell more BharatBenzes and not to your competitors that 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 BharatBenz in export markets. Of course, it's a product that was developed for the Indian market. There are developments that we need to do, for instance, to have both right-hand, left-hand drive and so on. It's not like next week. It's a global product, but we will for sure develop in that direction. We do see that BharatBenz can play in the same markets as Mercedes-Benz Trucks because it's very different in terms of price levels and in terms of performance. I think it's products that would complement each other really well.
That is, of course, one of the reasons why we decided to do that segment adjustment to bring those closer together.
Okay, no one from Outer Space, but Benjamin, go ahead.
One question is about your electric trucks. You started with the production of the eActros 600 last year in December. What do you think, how many eActros 600 you will sell this year? In the paper, you said that you sold 4,000 electric trucks and buses. How many long-range electric trucks is in this number? In your presentation, you mentioned a lot of wishes regarding the electric development. You said that the emission fees should link to the infrastructure and to the tolls in Europe. How optimistic are you that these wishes will fulfill and when?
There are a lot of questions. It's good now I have them so I can go through. Yeah, 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 eActros 600 not until late November, early December. That will play a much bigger part this year. I think we haven't disclosed exactly what the targets are for this year. Of course, I can say that I have high hopes on the eActros 600. I think a very important order that we got 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.
From my perspective, it 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. I am 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 administration taking away some of the incentives that would have been there previously. For instance, 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 colleagues on the truck side, having a meeting with Ursula von der Leyen and the most important commissioners when it comes to these topics. I believe we are being listened to and I believe we have a good dialogue. There is a general understanding that it is in all of our interests to have a competitive European industry. I would still say I am quite optimistic about getting this matter pushed through. That being said, it is still good to remind about this because it is so critical for our business. When I have the opportunity, I mention it.
To be honest, there 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 really needs to be speeded up.
Okay, there we are. It looks very much like we are at the end of our Q&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 on our Daimler Truck website. If you have any further questions, do not hesitate to contact the Daimler Truck Communications team. We are at your disposal at any time, even at night if you want to. I wish you all a good day. Until next time. See you. Bye-bye.