Daimler CFO Works to Separate Accounts, Debts and People Ahead of Truck Unit Spinoff
By Nina Trentmann
Daimler AG's finance chief is divvying up the car maker's books,
debts and finance workers ahead of the spinoff of the company's
trucks business later this year.
Daimler, the conglomerate behind the Mercedes-Benz luxury brand,
in February said it plans to hand over a majority of shares in its
business that manufactures trucks and buses to shareholders. The
move, which is aimed at boosting the share price, market
capitalization and competitiveness of the two entities, still
requires approval from investors, which Daimler hopes to gain in
Harald Wilhelm, who has been the chief financial officer of the
Stuttgart, Germany-based firm since 2019, is working on the
technical details of the transaction. Daimler hasn't yet disclosed
how many shares will be allocated to each business and how much of
the truck business it wants to keep. "Daimler will retain a
significant minority in the truck unit," Mr. Wilhelm said. The
company will host a strategy event for the truck division next
Daimler began separating its financial accounts in 2018 when it
decided to set up separate legal entities for the different
business units, a process that was completed in October 2019. Mr.
Wilhelm and his team had to create separate financial statements
for those entities for the years 2018, 2019 and 2020, a process
that he described as a "hell of a lot of work."
Mr. Wilhelm, whose counterpart on the trucks side is Jochen
Götz, also has to reallocate the company's obligations, which
largely stem from its financial and mobility services business.
About EUR128 billion, equivalent to $155.8 billion, will be taken
on by the car business, while the remaining EUR25 billion will be
shouldered by the truck business, Mr. Wilhelm said. Both entities
will be equipped with sufficient cash, he said. Daimler's net
liquidity stood at EUR20.1 billion at the end of March.
Another task is to divide the company's finance organization and
to equip the trucks business with its own investor relations and
treasury department. Spinning off the truck business will allow Mr.
Wilhelm to modernize further the finance function of the car
"What sits today at the central and Mercedes level, will be even
further streamlined, integrated and simplified," Mr. Wilhelm said.
This could involve greater use of robotic process automation and
artificial intelligence, as well as changes to budgeting, he said.
Daimler in 2020 introduced a new planning framework which could be
optimized further, according to the company.
Daimler's finance organization, which has about 1,200 employees
globally, will see 20% to 30% of those workers join the truck
business. The company's shared service centers, which are based in
Germany, Spain and the Philippines and employ more than 3,000
people, will continue to work for both entities. "It depends on the
truck entity if they feel comfortable with the level of service,"
Mr. Wilhelm said.
Setting up the new corporate structure was a complex process
that involved dealing with many legal and tax-related questions,
said Daniel Schwarz, a managing director at Stifel Europe Bank AG,
a subsidiary of financial-services company Stifel Financial
Mr. Wilhelm also is in the process of reducing fixed costs, an
effort that began in 2020 and that is supposed to bring down
expenses by more than 20% by 2025. "The finance department is
contributing to this effort, " Mr. Wilhelm said.
Analysts said the company has become more disciplined in its
spending by using equipment longer and relying more on outside
technology providers, among other steps.
The company's shares have appreciated about 27% since the
beginning of the year, and traded at EUR72.36 on Tuesday.
"From Daimler to [ Volkswagen AG] and [ General Motors Co.],
there is better realization that a strong share price is critical
to remain relevant against new entrants," said Philippe Houchois, a
managing director at Jefferies Financial Group Inc., referring to
Tesla Inc. and other electric car makers.
William Boston contributed to this article.
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
May 12, 2021 07:44 ET (11:44 GMT)
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