TRATF - Traton SE (TRATF) Q1 2024 Earnings Call Transcript

2024-04-26 17:01:10 ET

Traton SE (TRATF)

Q1 2024 Results Conference Call

April 26, 2024 4:00 AM ET

Company Participants

Ursula Querette - IR

Christian Levin - CEO

Michael Jackstein - CFO

Conference Call Participants

Hemal Bhundia - UBS

Klas Bergelind - Citi

Daniela Costa - Goldman Sachs

Nicolai Kempf - Deutsche Bank

Miguel Borrega - BNP Paribas

Hampus Engellau - Handelsbanken

Michael Aspinall - Jefferies

Daniel Cunliffe - Bernstein, Societe General

Anthony Dick - ODDO BHF

Shaqeal Kirunda - Morgan Stanley

Jose Asumendi - JPMorgan

Presentation

Ursula Querette

Good morning, everyone, and welcome to TRATON's Q1 2024 Earnings Call.

I am Ursula Querette, Head of Investor Relations. As published in our press release early this morning, we had a strong start into the year. And in a minute, we will present to you the respective Q1 financials. I am joined here today by our CEO, Christian Levin; and Dr. Michael Jakstein, our CFO and CHRO. Also present is Camilla Dewoon, Head of Corporate Relations, to handle potential media inquiries during the Q&A session. Christian will kick off the presentation with the key Q1 results and highlights, and we'll wrap it up at the end. Michael will guide you through the financial performance in more detail. As always, the presentation will be followed by a Q&A session, where we are looking forward to questions from financial analysts, investors and media representatives.

Before we start, please be aware of the disclaimer with respect to forward-looking statements. With that, I hand it over to Christian.

Christian Levin

Very good. Thanks, Ursula, and welcome also, from my side to this call. And yes, as you see on the slide, sometimes the numbers speak for themselves. A really strong start into 2024 for the TRATON Group, and just reflecting on our major financial KPIs as you see here on the slide, it's really a robust level of deliveries with more than 81,000 vehicles delivered to customers throughout the group. And this, despite continued disturbances in some of our brands in terms of supply chain and production.

As we already reported back in the full year report, our markets are normalizing, our big markets in Europe and North America, whereas we benefit a really strong bounce back in Latin America, which, of course, benefits both Volkswagen Truck & Bus and Scania. So, a well-balanced market mix that we benefit a lot from. So despite the small decrease in unit sales, as you can see, we are increasing our total revenue, meaning that we have a really good price and mix effect coming in into the result. And this should result then 9.4% of return on sales. That is the highest ever for TRATON Group, and we are, of course, happy about that, filling however that we can do the even better.

We generated positive cash flow. We're coming in at a solid €440 million on the back of this strong earnings, and to hopefully, happiness of our shareholders, we do generate a net profit already in the first quarter on €1.5 per share, which is an increase by 35%. Now this is, of course, the super average of everything, and you will get from Michael much more details into these KPIs, both on TRATON level, but also per brand. But let me kick you off by looking a little bit also into the more operational and strategic highlights of the first quarter. We are on a major transformation journey, and we're driving this forward at the fastest possible pace.

And it's really about two things. One, you can call our internal transformation. We're a young group. We started as a collection of brands, and we have promised each other that we should really grow into together, one group. And that means that we're on an internal transformation journey that is huge.

You can imagine 108,000 employees over many locations. But on top of that, we have the challenge of the industry, which is the external transformation, i.e., digitalization and electrification mainly. So, in Q1, what I'm most proud of is that we have in the end finally come to decide on one or in the organization. We have talked about that ever since the IPO back in 2019, as some kind of a north star. We have managed to come to the decision on one common product system, i.e., let's expand the Scania modular system into a TRATON modular system that is happening....

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