Thursday 22 October 2015

Daimler AG continues its growth

Daimler AG continued with its strategy and again set new records for unit sales and revenue in the third quarter. With sales of 720,000 cars and commercial vehicles, the company sold 13 per cent more vehicles between July and September than in the prior-year period.
Group EBIT amounted to €3,661 million in the third quarter (-2 per cent). The prior-year period was positively affected in particular by the sale of the stake in Rolls-Royce Power Systems Holding GmbH (RRPSH), resulting in a gain of €1,006 million.

But Group EBIT from the ongoing business increased significantly by 31 per cent to €3,657 million. Net profit amounted to €2,415 million (Q3 2014: €2,821 million). Net profit attributable to the shareholders amounted to €2,385 million (Q3 2014: €2,735 million), giving earnings per share of €2.23 (Q3 2014: €2.56).

The free cash flow of the industrial business in the first nine months of 2015 amounted to €4.8 billion (Q1-Q3 2014: €6.8 billion). The first nine months of 2014 included proceeds of €2.4 billion from the sale of the stake in RRPSH.

Compared with December 31, 2014, the net liquidity of the industrial business increased from €17.0 billion to €19.5 billion. The increase mainly reflects the free cash flow of €4.8 billion.

Daimler said it used “attractive conditions” in the international money and capital markets for refinancing in the first nine months of 2015. In that period, Daimler had a cash inflow of €13.9 billion from the issuance of bonds (Q1-Q3 2014: €10.1 billion), and bonds were redeemed in an amount of €8.5 billion (Q1-Q3 2014: €9.0 billion).

At the end of the third quarter of 2015, Daimler had 286,248 employees worldwide (end of 2014: 279,972). Of that total, 172,561 were employed in Germany (end of 2014: 168,909) and 24,588 in the US (end of 2014: 22,833). The consolidated companies in China had 3,027 employees at the end of September (end of 2014: 2,664).

Third-quarter unit sales by Mercedes-Benz Cars increased 18 per cent to 508,400 vehicles. This made the past quarter the best so far in terms of unit sales. Main growth drivers in Western Europe (+19 per cent) were the United Kingdom (+25 per cent), Italy (+28 per cent) and Spain (+38 per cent). In Germany, unit sales increased by 11 per cent in a highly competitive market. Mercedes-Benz Cars set new records for unit sales in the US with growth of 5 per cent and in China with an increase of 39 per cent. Revenue rose by 11 per cent to €20.7 billion.

Daimler Trucks’ Trucks’ unit sales increased compared with the third quarter of last year by 2 per cent to 128,500 vehicles. Sales developed very positively in the NAFTA region, Western Europe and Japan. The division achieved growth of 19 per cent in the NAFTA region with sales of 52,200 trucks – a new record. In Western Europe, Daimler Trucks increased its unit sales by 12 per cent, while a decrease of 37 per cent was recorded in Latin America due to the significant market slump in Brazil. In this environment, Daimler Trucks was able to take over the market leadership in Brazil in the medium- and heavy-duty segment. Unit sales in Asia were 6% lower than in the prior-year quarter. Revenue rose significantly to €9.7 billion (+14 per cent).

Mercedes-Benz Vans increased its unit sales to 75,700 vehicles in the period under review, a new record for a third quarter (Q3 2014: 72,200). Unit sales in Western Europe increased by 2 per cent to 48,100 vehicles. The division’s unit sales grew at double-digit rates in Spain, the Netherlands, Italy and Belgium. In Germany, unit sales were 6 per cent lower than in the prior-year period. The main drivers of the 21 per cent growth in unit sales in Eastern Europe were Russia (+22 per cent) and Turkey (+15 per cent).

Mercedes-Benz Vans continued along its growth path also in the NAFTA region (+18 per cent), while unit sales decreased by 3 per cent in the difficult market environment in Latin America. Revenue of €2.8 billion was also significantly higher than in the prior-year period (Q3 2014: €2.5 billion). The division’s operating profit of €193 million significantly surpassed the prior-year earnings of €176 million. The return on sales of 7.0 per cent was the same as in the third quarter of last year.

Daimler Buses sold 7,400 buses and bus chassis worldwide in the third quarter of 2015 (Q3 2014: 8,600). The significant decrease primarily reflects the weak business with bus chassis in Latin America (-26 per cent). Growth primarily in Germany (+9 per cent), the United Kingdom (+81 per cent) and Turkey (+13 per cent) due to increased demand for complete buses only partially offset the drop in unit sales of bus chassis in Brazil.

The Daimler Group’s research and development spending in the third quarter of this year amounted to €1.6 billion (Q3 2014: €1.4 billion), of which €0.5 billion was capitalized (Q3 2014: €0.3 billion). More than two thirds of the research and development spending was at the Mercedes-Benz Cars segment. The main areas were new vehicle models, particularly fuel-efficient and environmentally friendly drive systems, and new safety technologies.

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