How Daimler’s New Product Lines And Procurement Mix Are Fuelling A Confident And Profitable Start To 2021

by Des Nnochiri for WBR UK, May 3, 2021

In the words of Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG, “The year 2020 was a stress test for just about every company in almost every industry.”

Yet despite the challenges of financial restrictions, supply chain disruption, and the COVID-19 pandemic, the group’s financial results for year end 2020 are significantly better than expected. Net profit increased by 48% to €4.0 billion, net liquidity of the industrial business reached €17.9 billion (up from €13.1 billion at the end of the third quarter), and Daimler Group expects sales, revenues and Earnings Before Interest and Taxes (EBIT) in 2021 to be significantly above the prior year’s level

The group has three procurement units: Mercedes-Benz Cars Procurement & Supplier Quality, Global Procurement Daimler Trucks & Buses and International Procurement Services. After an exceptionally strong free cash flow in 2020 triggered by various successful measures to reduce costs and safeguard liquidity, for 2021 Daimler anticipates a healthy free cash flow for its industrial business.

According to a company interim report, “Deliveries, revenues and profits increased significantly, particularly thanks to tailwinds in China, a strong product mix and favourable pricing, supported by industrial performance enhancements and cost control.”