UBS: Fast Take: European Trucks "EU Truck OEMs show mixed reaction..."

Research evidence excerpt

UBS: Fast Take: European Trucks "EU Truck OEMs show mixed reaction..."

Valuation Method and Risk Statement

The engineering sector is cyclical by nature. Our estimates and the share prices are therefore

likely to be sensitive to changes in expectations for global or regional growth and industrial

activity. Exchange rate fluctuations contribute additional risk to the sector.

Daimler Truck Holding AG:

Daimler Truck operates in cyclical markets and its profitability is sensitive to demand for

transport. Demand for Trucks is sensitive to changes in global economic activity and GDP. The

shares and our forecasts can therefore be sensitive to changes in expectations for economic

activity. FX rates are another factor that can have an impact on profitability. We value Daimler

Truck on a DCF basis.

Knorr-Bremse AG:

We value Knorr-Bremse based on a fair EV/EBIT multiple of 16x applied to our 2027E EBIT.

Demand for both rail and truck supply is sensitive to changes in global economic activity and

GDP. The shares and our forecasts can therefore be sensitive to changes in expectations for

economic activity. FX rates are another factor that can have an impact on profitability. The

company has large exposures to the US dollar and Chinese renminbi. Other company-specific

risks include market share losses to new players, especially in China, and loss of R&D

leadership.

Traton SE:

Traton operates in cyclical markets, and its profitability is sensitive to demand for transport

across the globe. Demand for transport is sensitive to changes in global economic activity and

economic activity. Traton also retains significant connections with VW which places Traton at

risk of any negative events at VW. We value Traton on a DCF basis.

Volvo B: