To remain competitive over the long term combined with sustainable profitability, it is essential to be agile and flexible and to continuously develop further. For us, safeguarding Daimler’s future is based on three elements: protecting and increasing the Group’s success, pushing forward with shaping the future for the employees, and ensuring the long-term commitment of investors.
Here are our divisions’ results for the second quarter:
Daimler achieved record unit sales and revenue for a third quarter. Group EBIT amounted to 3.5 billion euros – 14 percent less than in the third quarter of last year. We assume that the Group’s unit sales, revenue and EBIT will increase significantly in full-year 2017.
Daimler sold 824,100 cars and commercial vehicles in the third quarter (+9%), allowing us to set a new record for total unit sales. All the automotive divisions contributed to the best-ever quarterly unit sales, especially Mercedes-Benz Cars with its 55th record month in succession (+6%) and Daimler Trucks with a significant increase in unit sales (+30%).
Group revenue amounted to €40.8 billion in the third quarter – an increase of 6% compared with the third quarter of last year. Adjusted for exchange-rate effects, revenue grew by 8%.
The Daimler Group’s third-quarter EBIT of €3,458 million in 2017 was significantly below the prior-year figure of €4,037 million.
Why didn’t we match the prior-year result for third-quarter Group EBIT? This is partially because earnings were negatively affected by expenses for a vehicle recall (€230 million) and expenses for voluntary service activities in connection with a comprehensive plan for diesel engines (€223 million). Furthermore, advance expenditure for new technologies and future products also had an impact on EBIT. At the Daimler Buses division, the sales increase in Latin America and further efficiency enhancements did not offset negative exchange-rate effects and cost inflation.
- Net profit of €2.3 billion (Q3 2016: €2.7 billion)
- Free cash flow of industrial business of €5.8 billion in first nine months (Q3 2016: €2.6 billion)
- Earnings per share of €2.03 (Q3 2016: €2.43)
The results of the divisions in the 3rd quarter:
In the first nine months of the year 2017, we continued along our successful path and achieved best-ever figures for that period for unit sales, revenue and EBIT.
In the third quarter, the Daimler Group invested €1.5 billion in property, plant and equipment. Most of that amount was invested at the Mercedes-Benz Cars division. The main focus of capital expenditure was on production preparations for the new generation of compact-class cars, especially the new A-Class.
Research and development expenditure at the Daimler Group amounted to €2.3 billion in the third quarter. The Mercedes-Benz Cars division accounted for about three quarters of that total – among other things, to invest in the mobility of the future. Other main areas related to new vehicle models, fuel-efficient drive systems and the intensification of the modular strategy.
Update on allegations of a cartel in the auto industry
Daimler can now say publicly that we have filed a leniency application. We do not know at this point whether or not the European Commission will initiate formal antitrust proceedings. We continue to cooperate fully with the authorities.
What do we expect in the coming months?
At the beginning of the fourth quarter, leading economic indicators suggest that the world economy will maintain its currently favorable rate of expansion. Forecasts for global economic growth in full-year 2017 have meanwhile stabilized at just above 3%.
Our forecasts for the Group and our divisions are as follows:
The Daimler Group: We assume that total unit sales will increase significantly in 2017. On the basis of the expected market developments and the current assessments of the divisions, we assume that Group EBIT will increase significantly once again in 2017.
Mercedes-Benz Cars intends to significantly increase its unit sales and EBIT once again in the full year.
Daimler Trucks anticipates significant growth in unit sales and significantly higher EBIT compared with 2016.
Mercedes-Benz Vans plans a significant increase in unit sales in 2017 and assumes that EBIT will be at the prior-year level.
Daimler Buses expects its unit sales to rise significantly in the year 2017. EBIT is likely to be slightly lower than in 2016.
Daimler Financial Services anticipates significant growth in new business and further growth in contract volume in full-year 2017. EBIT should be significantly above the prior-year level.