Nice tache

Nice 'tache

Strange old mix the Daimler annual results presentation. It starts off boastful, goes on at greater length than most other people being boastful, then morphs into quite a likeable and co-operative question and answer session.

All of this is presided over by chairman Dieter Zetsche – a man who has obviously never given a thought to the possibility of his being kidnapped for ransom. If he had, he would have done something to alter an appearance so distinctive that he would stand out in an international convention of film extras: bald head, grey hair to ear-height, rimless glasses and a mouth-obscuring, snow-shovel shaped, pure white moustache.

It is still less than a year since Daimler formally got its divorce from Chrysler (and watched in amusement as Fiat climbed into bed with its discarded spouse). Like so many divorcees in their first year, the Daimler financials have been hugely painful though it was the global economy rather than the division of the wedding presents that caused the swing from EUR1.4bn to a loss of EUR2.6bn.

That has meant that open-handed generosity goes on hold this year for the first time in 14 years: there is no dividend. The share-price declined 5% on that news. There will be a dividend next year, no question, said Zetsche and that will be permitted by profits of around EUR3bn. That had analysts squeaking with horror. How can you give that number without a forecast of units or revenue, they wanted to know. In other words, how can they take that number as their own when they have to show the workings in their spreadsheets for prospective investors?

Because we can.

The boasting began with the report of sales of 1.1 million Mercedes, Smart and Maybach cars. “Our new S-Class was number one in the segment even though a competitor launched a new model in the period. We had the most growth in the segment in Q4.”  There has long been a habit of not naming the competitor down the road in Munich unless there be some strong liquor to hand to rinse the mouth out.

They were proud of the commercial vehicle sales: “Just as the best cyclists show their strength when the course is uphill so with the commercial vehicle industry. We have had very difficult times and our success has set us apart.”

Confidence that there will be a modest three or four percent rise in sales this year is built up from a four point plan of action: new products, better technology, new markets and efficiency gains. The latter is always there in every car-makers game plan but these boys have credibility. During last year Daimler took EUR5bn out of costs despite finding EUR85 million to keep suppliers afloat.  Much of it was from asking staff to work short-time.

There was also an admission that they had allowed the number of development engineers and more particularly test cars to “explode”. Now they have combined programmes so that they get the same results with less cost.

On product, there will be a very aggressive programme to get the entire fleet down to 140gms (on average) within two years through electrification and fuel cell. They are working with energy companies to push networks of charging stations.

Zetsche was obviously prepared for the Toyota question: “Of course we should not gloat,” he said.

Go on then....

“We watch these developments very closely...we are seeing, I think, our processes work well...we watch carefully for things where we can learn.”

There is some moderation of the Daimler superiority – something that may have arisen from its own quality cock-up when taxi-drivers the world over chopped in the new E-class and bought used Mercs of the previous generation. Toyota did not gloat then either. It just set about generating a cock-up of its own.

After a humbling and exhausting year on the uphill cycle chase, focus and effort are very obviously the qualities for Daimler to retain in the year ahead.

Rob Golding

GERMANY: Daimler stays upbeat despite '09 loss

Bernhard for board
 

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