Daimler posts record results once again: unit sales, revenue and EBIT at new highs
Total unit sales at new record of 3.3 million vehicles (+9%)
Group revenue up by 7% to €164.3 billion (2016: €153.3 billion)
Significant increase in Group EBIT of 14% to €14.7 billion (2016: €12.9 billion)
Net profit up by 24% to €10.9 billion
Proposal of highest dividend to date of €3.65 per share
Outlook for 2018: slight growth in unit sales and revenue, EBIT expected to be in the prior-year magnitude
Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “We are acting from a position of strength. Our ambition is unchanged: Daimler belongs at the top.”
Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services: “We have continued our trend of profitable growth and once again achieved record results for unit sales, revenue and earnings. In addition, we have increased the funding of our pension plans with a contribution of €3 billion.”
Daimler AG (ticker symbol DAI) continued consequently along its path of profitable growth in 2017 and once again achieved record levels of unit sales, revenue, Group EBIT and net profit. For the current year, Daimler assumes it will be able to slightly increase its overall unit sales due to the attractive and innovative product portfolio in all divisions, the ongoing positive development of global automotive markets and its strengthening market position. On the basis of the positive development of unit sales, a slight increase in revenue is anticipated. While growth in unit sales and revenue will have a positive impact on the development of earnings, the continuation of very high advance expenditure for the model offensive and innovative technologies will dampen earnings growth, so the company anticipates Group EBIT in the magnitude of the previous year in 2018.
“The Daimler workforce has once again succeeded in breaking the records set in the previous year,” said Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. “Our company stands for stable success in volatile times. But: stability is no justification for still stand. That’s why we are pushing forward with the transformation in all areas at Daimler.”
The Daimler Group achieved EBIT of €14.7 billion in 2017 (2016: €12.9 billion), which surpassed the prior-year figure significantly. Net profit increased to a new record of€10.9 billion (2016: €8.8 billion). Earnings per share increased accordingly to €9.84(2016: €7.97).
Daimler increased its total unit sales in the year 2017 by 9% to 3.3 million vehicles, thus surpassing its growth target. The Mercedes-Benz Cars and Mercedes-Benz Vans divisions exceeded the forecasts made at the beginning of the year by recording significant growth(8% and 12% respectively). Daimler Trucks also posted a significant increase of 13% in unit sales. At the beginning of the year, the division had anticipated unit sales similar to those of the previous year. The sales forecast was successively adjusted as a result of more favorable market developments in some important markets. Unit sales at Daimler Buses were also significantly higher than in the prior year (+9%).
The development of earnings reflects primarily the very good situation of unit sales in the automotive segments. Accordingly, the Mercedes-Benz Cars division increased its earnings due in particular to further growth in unit sales, especially of the SUV models and the newE-Class. Daimler Trucks also significantly improved its earnings compared with the previous year, mainly due to increased unit sales in the NAFTA region and the sale of real estate in Japan. Mercedes-Benz Vans and Daimler Buses achieved EBIT at the prior-year level. EBIT at Daimler Financial Services increased significantly. Exchange-rate effects had a net positive impact on operating profit.
“We have continued our trend of profitable growth and once again set new records for unit sales, revenue and earnings. In addition, we have further increased the funding of our pension plans with a contribution of €3 billion,” said Bodo Uebber, Member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Financial Services. “We have strengthened our core business and created an excellent starting position to master the challenges of the fundamental transformation of the automotive industry that lie ahead of us.”
The Board of Management and the Supervisory Board will propose to the Annual Shareholders’ Meeting to be held on April 5, 2018 that the dividend per share for the 2017 financial year be increased to €3.65 (prior year: €3.25). The dividend distribution will thus increase to the record level of €3.9 billion (2016: €3.5 billion). “We are proud of the best year in the company’s history. We want our shareholders to participate in this success and are proposing the biggest dividend in the company’s history,” said Uebber.
The net liquidity of the industrial business decreased to €16.6 billion at the end of 2017 (2016: €19.7 billion). This decrease is almost entirely explained by an extraordinary contribution of €3 billion to the German pension plan assets of Daimler AG. For the same reason, the free cash flow of the industrial business decreased to €2.0 billion(2016: €3.9 billion). Without this effect, the free cash flow of the industrial business would have been €5.0 billion and thus higher than in the previous year and higher than the dividend distribution in the year 2017, despite a significant increase in advance expenditure for new products and technologies.
In line with the ongoing high level of earnings, Daimler continues to have very sound key financial metrics. This was confirmed by the rating agencies in their publications during the year. In early February 2017, Moody’s raised Daimler’s long-term credit rating from A3 to A2 and the short-term rating from P-2 to P-1. And in November 2017, the Canadian rating agency DBRS also raised the long-term rating from A (low) to A.
Slight workforce growth as expected
At December 31, 2017, the Daimler Group employed a total of 289,321 men and women, which represents an increase of 2% (2016: 282,488). The main reason for the growth was the good business situation worldwide. The number of employees in Germany increased to 172,089 (2016: 170,034). At the end of 2017, the Group had a total of 8,097 apprentices and trainees (2016: 7,960). In 2017, 1,278 young people began their vocational training at Daimler AG (2016: 1,662), and 1,197 were hired after completing their training(2016: 1,448).
Daimler works continuously on consolidating and enhancing its attractiveness as a modern employer – with both employees and job applicants. The employees can take advantage of mobile work, are supported in combining a career with family life, have comprehensive possibilities for training and further training, a broad spectrum of health-care management, competitive remuneration and add-on benefits in line with the market such as a company pension. In addition, the company lets the employees participate in the company’s financial success. In April 2018, Daimler AG will pay its eligible employees an amount of up to €5,700 for financial year 2017 (2016: €5,400).