We continued our trend of profitable growth and once again set new records for unit sales, revenue and earnings. Also, we further increased the funding of our pension plans with a contribution of €3 billion. 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.
2017 – We have delivered the best results in the company’s history. Last year, we succeeded once again in breaking the record set in the previous year: Unit sales, revenue and EBIT are at their highest-ever levels. And we improved our net profit by 24% to 10.9 billion euros.
Highest dividend in the company’s history
We are proud of the best year in the company’s history and we want our shareholders to participate in this success. 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).
Ongoing high liquidity
Our free cash flow from the industrial business in 2017 was affected by the strengthening of the pension plan assets. Without the extraordinary contribution of 3 billion euros to the German pension plan assets, the free cash flow would amount to 5 billion euros – despite significantly higher advance expenditure for new products and technologies. This reflects the increased operating profits of the automotive divisions. The contribution to the pension plan assets also affected the net liquidity of our industrial business, which, however, remains at a very good level.
A further increase in investment in the future of the company
Daimler has increased research and development expenditure in 2017 from the already very high level by another 15% to €8.7 billion. Investment in property, plant and equipment was also increased in 2017 from the already very high level to €6.7 billion (2016: €5.9 billion). Investment in property, plant and equipment primarily flows into production preparations for the new models. Also, the company is preparing for the development of a worldwide production network for electric vehicles and batteries.
What do we expect for 2018?
At the beginning of 2018, the world economy continues to develop with solid growth. It is assumed that this dynamism will also continue as the year progresses. Overall, the world economy should expand in 2018 at a similarly favorable rate as in the previous year, with growth of significantly more than 3%.
Against this backdrop, our divisions’ expectations for the year 2018 are as follows:
- Daimler Group: It is assumed that total unit sales in 2018 can be increased slightly. Group EBIT in 2018 should be in the magnitude of the previous year.
- Mercedes-Benz Cars intends to slightly increase its total unit sales and anticipates EBIT at the prior-year level.
- Daimler Trucks assumes that its total unit sales and EBIT in 2018 will be significantly higher than in the previous year.
- Mercedes-Benz Vans plan for a significant increase in unit sales in 2018. EBIT is expected to be slightly lower than the very high prior-year level. Among other things, this will be due to higher depreciation for the Sprinter model change.
- Daimler Buses anticipates a significant increase in unit sales in 2018. EBIT should also be significantly above the prior-year level.
- Daimler Financial Services expects further growth in contract volume in 2018. EBIT will be in the magnitude of the prior year.
2018: Investements will further increase
Daimler will once again slightly increase its total expenditure for research and development in 2018. The goal is to further strengthen its competitive position against the backdrop of upcoming technological challenges. In order to be able to play a leading role in the far-reaching technological transformation of the automotive industry, Daimler will invest in particular in the increasing electrification of the product portfolio and to the digital connectivity of products and processes along the entire value chain. Also, the investment in property, plant and equipment will once again be significantly increased in the year 2018.