Daimler AG (ticker symbol DAI) achieved further growth in unit salesand revenue despite difficult conditions in 2018. Group EBIT and net profit reached solid levels. For the current year, Daimler assumes that unit sales will increase slightly due to the attractive model portfolios in all divisions and the ongoing positive development of worldwide automotive markets. Based on the expected sales development, slight revenue growth is anticipated. Earnings will be adversely affected by ongoing high advance expenditure for the model offensives and innovative technologies. Additional factors will be a significant increase in raw-material costs and exchange-rate effects. In a still volatile environment, the Group anticipates a slight increase in Group EBIT for the full year.
“For Daimler, 2018 was a year of strong headwinds – with the ongoing diesel debate, the changeover to the new WLTP test method and the global trade dispute. All of this is reflected in our financial results and our share price. Nonetheless, we faced those headwinds and made substantial progress on key areas for the future. That was not least the result of our strong core business,” said Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.
The Group achieved EBIT of €11.1 billion in 2018, which is significantly below the prior-year level (2017: €14.3 billion). Net profit decreased to €7.6 billion (2017: €10.6 billion). In the previous year, net profit was boosted by €1 billion due to the one-time effect of the US tax reform. Earnings per share decreased to €6.78 (2017: €9.61).
Daimler increased its unit sales in 2018 by 2.4% to 3.4 million vehicles, thus achieving its growth target. The Daimler Trucks division (+10%), Mercedes-Benz Vans (+5%) and Daimler Buses (+8%) confirmed the unit-sales forecasts made at the beginning of the year 2018. With a sales increase of 0.4% Mercedes-Benz Cars was setting a new record. Despite difficult conditions, the division sold a total of 2,382,800 vehicles (2017: 2,373,500). . With unit sales of 2,252,800 vehicles, the Mercedes-Benz brand was once again the strongest-selling premium brand in the automotive industry (2017: 2,238,000).
Due to difficult political and economic conditions as well as various extraordinary expenses in the divisions, the development of earnings in the year 2018 did not reflect the ongoing strong demand for vehicles. The significant increase in EBIT at the Daimler Trucks division did not offset significant decreases in earnings at the other divisions. Above all, the Mercedes-Benz Cars and Mercedes-Benz Vans divisions did not achieve their earnings of the previous year. In both divisions, earnings were reduced by, among other things, advance expenditure for new technologies and vehicles, increased raw-material prices, expenses in connection with ongoing legal proceedings and measures taken for diesel vehicles. At Daimler Trucks, higher unit sales in the NAFTA region were the main driver of the earnings improvement. On the other hand, an unfavorable product mix had a negative impact on earnings at Daimler Buses. Daimler Financial Services’ earnings were significantly lower than in the previous year mainly as a result of expenses from the conclusion of the Toll Collect arbitration proceedings.
Please click here to view the full press release.