TRATON (8TRA) Q2 2024 earnings summary

Executive summary

• Sales revenue for H1 2024 rose 2% year-over-year to €23.4 billion, with Q2 revenue nearly stable at €11.6 billion, and adjusted operating result up 7% to €2.1 billion, despite a 5% decline in unit sales to 160,110 vehicles.

• Order intake grew to nearly 59,000 vehicles in Q2, up 4% year-over-year, but incoming orders for H1 were stable at 125,416 units, reflecting strong demand in South America and normalization in Europe and North America.

• Temporary supply chain disruption at Navistar (mirror supplier fire) significantly impacted North American deliveries and cash flow, with most affected trucks expected to be delivered in H2.

• Strategic progress included advances in electrification, charging infrastructure, modular engine rollout, and expansion of TRATON Financial Services, as well as uplisting to the MDAX index.

• Dividend payout more than doubled to €750 million in Q2, totaling €1.50 per share.

Financial highlights

• Adjusted operating result for H1 2024 was €2.1 billion, up 7% year-over-year, with adjusted return on sales at 9.1% (+0.4 pp), and Q2 adjusted return on sales at 8.8%.

• Gross margin was stable at 21.2% in Q2 and improved to 21.5% for H1, up from 19.9% year-over-year.

• Net cash flow for TRATON Operations was negative €374 million in Q2, mainly due to the Navistar issue and dividend payout, with H1 net cash flow dropping sharply to €64 million.

• Net debt increased by €1.2 billion in H1, reaching €21.6 billion, mainly due to working capital build-up and capex.

• Earnings per share at €1.17 in Q2, down €0.20 year-over-year; H1 earnings per share at €2.67, up from €2.48.

Outlook and guidance

• 2024 guidance confirmed: unit sales and sales revenue expected to change by -5% to +10% versus 2023, with adjusted operating return on sales forecast at 8.0–9.0% for the Group and 9.0–10.0% for TRATON Operations.

• Net cash flow for TRATON Operations expected between €2.3–2.8 billion; capex and R&D to see moderate to sharp increases.

• Truck market forecast unchanged: normalization expected in Europe and North America, continued strength in South America.

• Return on equity for TRATON Financial Services forecast at 7.0–10.0%.