Preisträger 2021 – Large Caps: CFO Harald Wilhelm, Mercedes-Benz Group

The truck business and the passenger car business are ultimately two different businesses. But we deliberately chose the structure to be independent from the day-one valuation. I myself, and all the colleagues who were on the Frankfurt floor, were really nervous. When you get to go onto the floor and ring the bell, and then wait that long moment until the first price comes in, it's a very exciting thing.

Very good. We worked hard towards it. It sounds very technical, but I myself and all the colleagues who physically took part on the Frankfurt floor were really nervous. And when you get to go onto the floor and ring the bell, and then wait that long moment until the first price comes in, it's a very exciting thing.

At the beginning there was a very wide range of estimates. Then a narrower band came relatively quickly, and we had a very pleasing start. Then we were all very relieved. It was a really great moment for everyone, emotional.

Well, that was at the end of the day. I think it was a bit higher, and the days after developed very well. I think we saw more; actually by February 24 it was clearly over 30 euros. And I think that shows the potential. Of course it has now suffered greatly from the geopolitical conditions. I think the colleagues made a great release last week, and I think there is corresponding tailwind going forward. But we also deliberately chose the structure of the spin to be independent from the day-one valuation. In contrast to a carve-out, we consciously focused on the spin so that the upside potential can be fully captured over the road.

Personally, I have to say I am very depressed that something like this can still happen or can happen in these times. But I think it is up to our politicians to take care of the right reactions and decisions. For our part, as a company, our overall assessment of the markets has not fundamentally changed. We still see strong momentum in our key markets in Asia, especially China, and also in the US. Europe is still there, though we might need to be a bit more cautious regarding consumer confidence. But globally, we see no decline in demand for our products. We certainly have to watch out for inflationary trends, that's clear, and the issue of energy supply. But it has not yet translated into a weakening of demand; on the contrary, demand for our products remains very strong. Of course, there are implications for supply chains. I think few people had on their radar that Ukraine, for example, is important for wiring harnesses in the automotive industry. But as you said, February 24 created new facts—terrible for the people in Ukraine. We have some supplies from Ukraine, especially cable sets. We reacted very quickly with plans on the ground to secure the situation. As of today, the impact is limited and we are in the process of reducing it further. So from the current perspective, the impact remains contained. Our teams in the supply chain and in the plants are used to dealing with high volatility and changes, as we see with the chip shortage that's still an issue in 2022, and they are reacting very quickly, which is exactly what is happening now.

First, the truck business and the passenger car business are ultimately two different businesses—different customer structures, different value propositions. The synergies, the overlaps, are rather limited. Second, both companies are going through a massive transformation towards CO2 neutrality and therefore need maximum speed and freedom in capital allocation. So a structure where two companies are independent from each other and have direct capital market access is the better form to accelerate this transformation. Third, from the shareholders' perspective, I would rather have the choice to invest in a truck company or invest in a luxury passenger car company, and not have to take one with the other in a conglomerate. That allows us to cultivate our target shareholder structure much better and it created value for shareholders. It already worked on day one: the Daimler share went down 15%, you got the Daimler Truck share in addition, so net-net the shareholders had about 1 euro more on the first day, and it has developed well since then. The valuation effect at day one or the days after—by far the bigger effect was already before the IPO, since the announcement. Looking at the chart over 2021, on the announcement day, February 3, 2021, we saw a 7-8% increase and then in the days after even more, over 10%. But I think that's not the end of the story. That's why we did not stop there. We are convinced that there is significant potential. The management has laid out a clear plan on the strategy and performance side at two capital market days last year. And importantly, this gives us the ability on the vehicle side, on the Mercedes-Benz side for our luxury passenger cars and premium vans, to deliver a crystal-clear, razor-sharp strategy and performance, and to achieve the corresponding impact at the capital market over the road.

In principle, it started in early 2021. On February 3, we announced that we would examine the spin more closely. At that time, we already concluded that only a majority spin-off came into question. Why was that important? Clear governance, no minority with convoluted governance, but two independent companies with their own governance—independence from each other. That was very important to us. After the announcement, we could roll it out widely. Massive work across all countries, structures, functions, and NTT. We put the A-team on it. The effort required was immense. We hit the next important milestones: in July, the approval from the Board of Management and Supervisory Board to implement the project, which was the prerequisite for the extraordinary general meeting on October 1. We handled that quite well, with the approval rate. Then it was the final sprint until December 10.

The A-team—if you put it that way in English. I think it wasn't quite appropriate to list names, but they were really the whole team that pulled together across all areas. I already said the project team worked 24/7, with weekly project reviews. And it was very important, besides the tight timeline, to make decisions very quickly—this way or that—otherwise the timeframe could not be held. We already set the key features of the spin with the governance in February. That helped a lot on the journey. The other aspect is that I think we succeeded in pulling it through as one team. In such processes, it often happens that two camps form—the old company and the new company—and you get two fronts. We wanted to avoid that and stay as one team.

The topic of a possible split-off of the truck business had been thrown into the discussion by the capital market for some time, so it wasn't completely new. But what I think surprised the market, as seen in the price reaction and many one-on-one conversations with investors, was the stringency in the structure—a majority spin-off of 65 percent, giving the company the freedom to go to market. I think that was seen as very consistent and was appreciated accordingly. From the very beginning, since the announcement, we had full backing from the capital market. As we saw at the general meeting with 99.1 percent approval, that was a happy moment for all of us. Regarding external factors, you asked if the mood could suddenly turn—February 24 is an example; the DAX plunged, and the IPO window closed for other companies. That could have been a challenge. But the spin structure is much more resistant to market conditions compared to an IPO. I don't want to speculate whether we would have done the spin in today's market conditions or not, but we were very happy to have done it in December. The performance of the company and the capital market conditions are much more favorable for a spin than to find the sweet spot for an IPO. That was a key factor.