TRATON SE Q3 2024 Earnings Report

Overview

TRATON SE, a key player in the automotive industry, announced its Q3 results for 2024, reporting a 5% increase in vehicle deliveries and revenue from the previous year. The earnings call on October 30, 2024, led by Ursula Querette, Christian Levin, and Dr. Michael Jackstein, underlined the company's recovery from supply disruptions and a focus on electric vehicle (EV) technology.

Despite a challenging global truck market, TRATON reported stable order intake and growth in South America, achieving a return on sales of 9.6% and a strong net cash flow of €1.3 billion, with earnings per share rising to €1.45.

Key Takeaways

• TRATON delivered 85,000 vehicles in Q3 2024, a 5% increase.
• Revenue for Q3 reached nearly €12 billion, also a 5% increase year-over-year.
• Order intake was stable, with 64,000 vehicles, a 9% sequential rise.
• New product developments include electric and biofuel trucks.
• Growth is expected in South America, while a decline in the European truck market is projected.

Company Outlook

• A challenging global truck market is anticipated for 2025, particularly in Europe and North America.
• TRATON's full-year outlook for 2024 is unchanged, with sales expected to be flat or slightly down.
• The adjusted return on sales for the full year is projected between 8% and 9%.

Bullish and Bearish Highlights

Bearish Highlights

• Margins for MAN dropped to 5.6% due to weak European demand.
• Full-year margin expectations for International may see only a slight uptick.
• High inventory levels require careful management moving forward.

Bullish Highlights

• Scania meets order intake expectations despite reduced production in Europe.
• Positive pricing in Latin America supports margins.
• TRATON continues its commitment to dividend payouts, currently at 31% ratio.

Challenges

• Increased capital expenditures may affect net cash flow guidance.
• Software compliance with EU regulations has led to higher working capital needs.
• Market demand for battery electric vehicles is low, complicating production efforts.

Q&A Highlights

• Customer hesitancy is impacting market dynamics.
• The service business growth faces supply chain issues but expected to expand.
• TRATON maintains a balance of production rates across different truck classes.

TRATON SE's performance in Q3 reflects its resilience in a challenging market, driven by strategic investments in EV technology and effective management of supply chain disruptions as the company adapts to evolving market conditions.

Full transcript – TRATON SE (8TRA) Q3 2024
Ursula Querette: Good morning, everyone, and welcome to TRATON's Third Quarter 2024 Earnings Call. I’m Ursula Querette, Head of Investor Relations at TRATON SE. Joining me today are Christian Levin, our CEO; and Dr. Michael Jackstein, CFO and CHRO. Today, we'll discuss key results, financial performance, and our outlook.

Christian Levin: Thank you very much, Ursula. In Q3, we achieved 85,000 vehicle sales, up 5% year-over-year, reflecting a catch-up from earlier supply constraints. Our revenue grew by 5%, reaching nearly €12 billion, with cash flow at €1.3 billion.

Michael Jackstein: Overall, we remain cautious. The European market shows signs of difficulty. We aim for a full-year adjusted return on sales of 8%-9%, but expect increasing working capital needs due to the ongoing situation with supply chains.

Ursula Querette: Thank you, Christian and Michael, for your insights. Let's open the floor for questions.