TRATF - TRATON SE (TRATF) Q4 2023 Earnings Call Transcript

2024-03-05 17:45:04 ET

TRATON SE (TRATF)

Q4 2023 Earnings Conference Call

March 5, 2024 04:00 AM ET

Company Participants

Ursula Querette - Head, IR

Christian Levin - CEO

Michael Jackstein - CFO and CHRO

Conference Call Participants

Klas Bergelind - Citi

Hemal Bhundia - UBS

Hampus Engelau - Handelsbanken

Moyo Adebayo - Goldman Sachs

Miguel Borrega - BNP Paribas

Dan Cunliffe - Société Générale

Shaqeal Kirunda - Morgan Stanley

Nicolai Kempf - Deutsche Bank

Jose Asumendi - JPMorgan

Michael Aspinall - Jefferies

Presentation

Operator

Ursula Querette

Good morning everyone and welcome to TRATON's Annual Results Conference 2024. My name is Ursula Querette, and I'm honored to host TRATON's earnings call for the first time today, even more so because today we present you a strong set of results for the fourth quarter and full year 2023.

On a quick personal note, I joined TRATON GROUP in January in my new role as Head of Investor Relations and I am looking forward to being your contact person on the capital market side going forward. I already met some of you virtually or in person and I'm very much looking forward to a more regular exchange in the coming weeks and months.

I am joined here today by our CEO, Christian Levin; and Dr. Michael Jackstein, our CFO and CHRO. Also present is Camilla Dewoon, Head of Corporate Relations to take care of media inquiries.

Christian will kick off the presentation with the key 2023 results and highlights. Michael will then guide you through the financial performance in more detail. In the last section, they will present you our outlook for 2024. 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.

And with that, I hand it over to Christian.

Christian Levin

Wonderful. Thank you, Ursula and also from my side, good morning to everyone. Yes, 2023 was indeed a very successful year for the TRATON Group and I think it's reflected in all the major KPIs that you see on this slide.

With close to 340,000 vehicles delivered, we delivered more vehicle than ever before. It's actually 11% up and that resulted in even higher growth in sales revenue, €47 billion and 16% year-on-year improvement. And with that, you can draw the conclusion that we were also successful in realizing higher pricing.

Adjusted return on sales came in at 8.6%, already very close to our 9% adjusted RoS ambition for 2024 that we launched back at the Capital Market Day in 2022. What we're most proud of is probably the cash flow focus throughout the year that resulted in a stunning €3.6 billion result. And earnings per share finally came in on a more than double level, €4.9, the highest EPS since the IPO of TRATON. So, this success is coming on the back of a strong market tailwind and really high truck demand.

Now, this allowed us to continue to significantly increase production in 2023. But remember, we still struggle with bottlenecks in the supply chains, even though we managed and have managed to build out a much more resilient system compared to 2022.

So, gradually reducing our high order book, especially in Volkswagen Truck & Bus, MAN, and Scania and by that decreasing lead-times that is so important for our customers down to almost normal levels.

But more importantly, this success is based on our strong brands, satisfying our fantastic customers with a strong portfolio of services and products, and our today more than 100,000 TRATONians, all fully committed to growing together as one group.

Moving over to the next slide, where this team effort not only delivered on our financials but also on many of our milestones in our strategy, the so-called TRATON Way Forward.

Four of them on this slide starting with the MAN restructuring, finally successfully executed. And I really want to give praise to the management of MAN that after so many attempts finally carried this home. This is, of course, a crucial step for MAN and its profit margins, but also very important for the entire TRATON Group.

And remember, the full effect will be seen first in the calendar year of 2024 as we still have cost effects in 2023. Now, make no mistake, MAN, of course, continues to focus on costs through continuous improvements as all of our companies are doing....

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