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April 26, 2017

Daimler net profit doubles to EUR2,801m in Q1

Daimler has posted upbeat results for the first quarter of the year that show net profit doubled on the back of record sales and revenues. The company also raised its guidance for full-year financial results.

Daimler has posted upbeat results for the first quarter of the year that show net profit doubled on the back of record sales and revenues. The company also raised its guidance for full-year financial results.

The company said that first quarter unit sales were 10% above last year at 754,300 vehicles, with revenues up by 11% to EUR38.8bn.

Group EBIT was 87% above prior-year level at EUR4,008m, with net profit doubled to EUR2,801m.

Dieter Zetsche, Daimler chairman sees further growth ahead: “A very successful quarter lies behind us. Ahead of us, we have a variety of opportunities for further profitable growth. We do have the right products to take advantage of these opportunities – and the financial strength to make the necessary investments. The latest example: our new S-class. Daimler remains on the fast lane.”

Mercedes-Benz Cars’ unit sales increased by 14% to 568,100 vehicles in the first quarter. However, first quarter sales by Daimler Trucks of 94,000 vehicles were 11% lower than in the prior -year period.

Mercedes-Benz Vans increased its unit sales by 13% to 86,800 vehicles -a new record in a first quarter.

Daimler now expects to significantly increase its total unit sales in the year 2017.

Mercedes-Benz Cars

Mercedes-Benz Cars’ unit sales increased by 14% to 568,100 vehicles in the first quarter. The car division set a new record in the reporting period, with best-ever unit sales for the first three months of a year in total and in Europe (+ 8%), China (+43%), Canada (+17%) and Mexico (+18%). The success in Europe was supported by double-digit growth and sales records among others in the United Kingdom (+13%), Belgium (+13%) and Sweden (+13%). In the German market, the division achieved growth of 6%. Mercedes-Benz Cars increased its unit sales also in the United States (+2%).

The car division’s first-quarter revenue increased by 14% to EUR22.7bn and its EBIT of EUR2,234m was substantially higher than the EUR1,395m posted in the prior-year period. Return on sales was 9.8% (Q1 2016: 7.0%). Daimler said the ‘very positive sales development of the new E-Class and the SUV models boosted earnings growth in the first quarter of 2017’. There were also positive exchange-rate effects and the non-cash income effect of EUR183m in connection with new investors in HERE also had a favourable impact on EBIT. Daimler said there were ‘opposing effects from advance expenditure for new technologies and future products’

Mercedes-Benz Cars aims to significantly increase its unit sales and to set another record in 2017. This, it said, will be driven at the Mercedes-Benz brand primarily by the GLC and the GLC Coupe, as well as by the new GLA and the new E-Class Coupe, which, along with the new E-Class Cabriolet presented in March and the E-Class All-Terrain, ‘represent the complete renewal of the E-Class family’. And as of the second quarter, Mercedes said demand will be additionally boosted by the roadster version of the Mercedes-AMG GT. The Smart brand ‘will also make a significant contribution to the sales success of Mercedes-Benz Cars with the electric versions available as of this summer’.

2017 outlook for Daimler

Daimler says it ‘assumes that group revenue will increase significantly in the year 2017’. On the basis of their significant growth in unit sales, the Mercedes-Benz Cars, Daimler Buses, and Daimler Financial Services divisions expect significantly higher revenues than in 2016. Daimler anticipates slight revenue growth for the Mercedes-Benz Vans division and revenue in the magnitude of 2016 for the Daimler Trucks division. In regional terms, Daimler expects the strongest growth in Asia and Europe.

Against the backdrop of further efficiency improvements in the context of the medium- and long-term programs for the structural improvement of business processes, Daimler assumes that its ambitious growth targets can be achieved with only a slight increase in the size of the workforce.

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