MAN SE, Daimler Target Earnings Growth on Truck Sales in Brazil, Russia

MAN SE, Europe’s third-biggest truckmaker, said it will raise full-year forecasts next month and Daimler AG, the world’s biggest, said profit will recover because of growth in emerging markets such as Brazil and Russia.

MAN will increase its return-on-sales target when third- quarter earnings figures are released in October, Chief Financial Officer Frank Lutz said at a press briefing in Hanover, Germany. Daimler said its truck division will probably achieve an earnings before interest and taxes target of about 1 billion euros ($1.3 billion), rebounding from a loss in 2009.

The Daimler Trucks unit’s eight-month deliveries rose 33 percent, jumping 68 percent in Latin America and 76 percent in Indonesia while eastern European sales more than doubled “from a very low level,” it said. MAN’s forecasts now seem “rather conservative,” as orders have exceeded sales every month in 2010, and “the curve is pointing clearly upwards, both in Europe and abroad,” Lutz said at the Hanover Trucks Show.

“We’re experiencing an upswing” in the commercial-vehicle market, Andreas Renschler, head of Daimler Trucks, said during a separate press conference today at the trade show.

MAN fell 0.3 percent to 77.76 euros at the 5:30 p.m. close of trading in Frankfurt. Daimler gained 0.3 percent to 45.64 euros.

Brazil GDP

Brazil’s gross domestic product may expand by more than 7 percent this year, Finance Minister Guido Mantega said on Sept. 3. Growth in China may average 8 percent a year until 2020, according to estimates by Qing Wan, an economist at Morgan Stanley. That compares with European Central Bank forecasts that the euro region’s economy will expand 1.4 percent to 1.8 percent in 2010.

Lutz and Renschler said their companies will provide more specific operating-profit forecast figures with third-quarter results. Munich-based MAN said in July that it was targeting revenue growth of more than 10 percent and a return on sales, or operating profit as a proportion of revenue, matching the 6 percent of the first half.

Revenue at MAN may total about 15 billion euros, Lutz said, up from 12 billion euros last year. The current forecast for return on sales is at least 6 percent, he said.

‘Clear Improvement’

“We expect a clear improvement in profitability, and that should also continue into 2011,” Lutz said today.

The truckmaker has seen “no signs” that Volkswagen AG, its biggest shareholder, plans to raise the stake, Lutz said. Europe’s biggest carmaker, which owns 29.9 percent of MAN and 71 percent of the voting rights in Sweden’s Scania AB, said in April that cooperation between the commercial-vehicle manufacturers will probably increase “step by step.”

Daimler, which is also the world’s second-largest luxury- auto maker, is including light commercial vehicles in a cooperation project it set up in April with French car manufacturer Renault SA, Renschler said. The companies and Renault’s Japanese partner, Nissan Motor Co., have said they will develop conventional engines and electric-powering systems for small cars.

Renschler predicted yesterday that industrywide deliveries of heavy vehicles will grow by more than 50 percent by 2015 because of emerging markets. Daimler said today that its eight- month truck sales in Brazil, Russia, India and China rose 64 percent. Those countries, and the so-called Next 11 emerging markets, accounted for 40 percent of Daimler’s deliveries in the period compared with 30 percent in all of 2009.

The division’s U.S. unit will be profitable this year, even as the market fails to match the German company’s growth predictions, Renschler said.

MAN’s deliveries will rise to a record 115,000 to 120,000 trucks this year, Chief Executive Officer Georg Pachta-Reyhofen said today. That compares with 40,535 vehicles sold last year, when deliveries dropped 58 percent. Sales in Brazil may jump by 50 percent to 60,000 trucks, he said.

To contact the reporter on this story: Andreas Cremer in Hanover, Germany, via acremer@bloomberg.net.

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net.

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