Daimler AG continues to operate successfully this year. “We are on a path of profitable growth,” said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, according to the text of his speech today to approximately 5,200 shareholders at the International Conference Center in Berlin.
“We announced that we would emerge from the crisis with a lot of torque. We have kept our word: Actual developments were even more positive than expected,” explained Zetsche.
In the first three months of 2011, the Daimler Group once again sold more vehicles than in the prior-year period. First-quarter unit sales by the Mercedes-Benz Cars division grew by 12% compared with the first quarter of 2010.
This growth is being driven by nearly all automobile classes. Unit sales of the S-Class were up by 24% and of the E-Class by 18%. Meanwhile, the product offensive started by Mercedes-Benz Cars in 2010 is beginning to peak. The launch of the new-generation C-Class and the new SLK in early 2011 will be followed in autumn by the new M-Class and by the new B-Class, the first of four new models in the compact segment.
From today’s perspective, the Group anticipates unit sales of more than 1.2 million automobiles solely of Mercedes-Benz brand in the full year. Including smart, unit sales should exceed 1.3 million. “We want to make our anniversary year a record year as well,” stated Zetsche. With their inventions 125 years ago, Gottlieb Daimler and Carl Benz laid the foundations for the present Daimler Group.
The Daimler Trucks division sold 90,000 vehicles in the first quarter, representing an increase of 27% over the prior-year period. In Europe, unit sales grew above all in Germany, France and Turkey. Unit sales by Trucks NAFTA increased by 32%, while increases were also recorded in Latin America.
The volume of orders received by Daimler Trucks in the first quarter of 2011 was 65% above the prior-year level. With the exception of Japan, the upswing should accelerate in all major markets in the coming months. The NAFTA market in particular is developing more positively than was assumed at the beginning of the year. Daimler now anticipates market growth of 30-35%.
With an increase in unit sales of 16%, Mercedes-Benz Vans also achieved strong growth in the first quarter. At Daimler Buses, the development of major markets in the first quarter was weaker than in the prior-year period. But the division expects to produce significantly more buses in the second half of the year than in the first. Daimler Financial Services expanded its new business by 11% and its contract volume at the end of March was 3% higher than a year earlier.
Zetsche also talked about the potential impact on global economic growth of the events in Japan: which are still hard to assess. The same applies to the political unrest in parts of the Arab world.
“For more than a month now, the world has been trying to come to terms with the terrible threefold disaster that struck Japan: First there was the earthquake, then the tsunami, and finally major serious problems at the nuclear power plant in Fukushima. And the full consequences cannot yet be predicted,” stated Zetsche. “The situation has shocked and greatly affected all of us.” With regard to the impact on operations outside Japan, Daimler has so far not seen any noteworthy impact on production.
From today’s perspective, the Group continues to assume that global automotive markets will continue to expand significantly in 2011. Against this backdrop, Zetsche affirmed the forecasts for 2011: On the basis of the current situation, the Group expects revenue in full-year 2011 to be higher than in the prior year. From today’s perspective, EBIT from the ongoing business should be significantly higher than the very good result of €7.2 billion achieved in 2010.
In the coming years, Daimler intends to further strengthen its profitability and to stabilize it at a high level. The Chairman of the Board of Management confirmed the Group’s return targets, which are to be attained on a sustained basis as of 2013. Daimler aims to achieve an annual average return on sales in the automotive business of 9% across all market and product cycles. This figure is based on return targets for the individual divisions of 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses. For the Daimler Financial Services division, the Group aims to achieve a return on equity of 17%.
Zetsche has no doubt that the structural upheaval in the automotive industry will continue after the economic crisis: “The focus of regional growth is shifting to Asia and we are experiencing a technological paradigm shift toward electric mobility.” He believes it is necessary to play a role in shaping this “dual transformation” without neglecting the core business and without putting all of one’s eggs in one basket in a volatile world.
Daimler has always given this structural task top priority. By 2015 at the latest, the Mercedes-Benz brand is to pass the annual sales mark of 1.5 million cars. Daimler Trucks aims to sell half a million vehicles annually as of 2013. The Group’s planning therefore focuses on significantly expanding sales of cars and commercial vehicles both inside and outside the triad markets (Western Europe, North America and Japan).
Daimler has also made further progress with the fuel consumption of its vehicles with conventional drive systems. Despite the traditionally high proportion of large automobiles in the Group’s model mix, the CO2 emissions of the car fleet sold in Europe were reduced in 2010 to an average of 158 grams per kilometer.
In 2011, the fleet’s CO2 value will be reduced significantly once again. The combination of new, highly efficient engines and the new 7-speed automatic transmission with a start-stop system reduces fuel consumption by up to 31%, depending on the model.
A large number of other measures will help the Group not only to meet the limits set by the European Union for 2015, but to undercut them.
By 2016, Daimler intends to undertake a further reduction in CO2 emissions to achieve an average of 125 grams per kilometer for the entire car fleet. Vehicles with hybrid drive, a combination of internal-combustion engine and electric motor, will make an increasing contribution to meeting this target.
Daimler presented its figures for the year 2010 in February. Last year was a good year for the automotive industry, and for Daimler it was an excellent year. The Group sold a total of 1.9 million vehicles in 2010. That was 22% more than the prior-year level, which was affected by the global economic and financial crisis. Group revenue increased by 24% to €97.8 billion. Group EBIT amounted to €7.3 billion (2009: minus €1.5 billion) and net profit was €4.7 billion (2009: net loss of €2.6 billion).
In view of the very positive business development, the Board of Management and the Supervisory Board recommends to the shareholders at today’s Annual Meeting that a dividend of €1.85 per share be paid out. This constitutes a total distribution of approximately €2 billion and a dividend ratio of 40% of the Group’s net profit.
Source: Daimler AG