By Kim Richters 
 

Daimler AG's commercial-vehicles unit on Thursday unveiled more details about its structure and planned spinoff, saying it wants to improve profitability and reach a double-digit operating margin by 2025.

Daimler Truck, which the car maker wants to spin off to shareholders by the end of the year, said it targets benchmark margins in all of its regions and a return on sales for its industrial operations of more than 10% if market conditions are strong.

Reducing fixed costs, capital expenditure and spending for research and development by 15% by 2025 compared with 2019 should help raise margins, it said.

"Every region must deliver competitive performance and we are willing to implement the measures necessary to achieve this goal. We are willing to take hard decisions to lower our breakeven and raise our performance," said Daimler Truck's Chief Executive Officer Martin Daum as part of the truck maker's strategy day.

Daimler Truck also provided alternative targets for the industrial business's return on sales. It said it would target 6%-7% in a scenario similar to 2020 when the coronavirus pandemic hit operations, and "a normal business year" could lead to 8%-9%.

It will provide more details on financial targets before the planned listing.

At 1341 GMT, shares in Daimler traded 3.1% higher at EUR74.71.

 

Write to Kim Richters at kim.richters@wsj.com

 

(END) Dow Jones Newswires

May 20, 2021 10:04 ET (14:04 GMT)

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