Daimler has posted strong earnings and record sales for 2015, but was met with a fall to its share price after it warned that growth in earnings and profit will slow in 2016.
“2015 was a good year for Daimler,” said CEO Dieter Zetsche. “We know from experience: Getting to the top is hard, but staying at the top is even harder. That’s our ambition: Daimler belongs at the top on a sustained basis.”
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In financial year 2015, the Daimler Group achieved its best ever EBIT of EUR13.5 billion (2014: EUR10.8 billion) and its best EBIT from the ongoing business of EUR13.8 billion (2014: EUR10.1 billion).
Net profit of EUR8.9 billion was 22% up on 2014.
Daimler increased its total revenue by 15% to a record EUR149.5 billion in 2015; adjusted for exchange-rate effects, revenue grew by 9%.
“The development of earnings at the Daimler Group over recent years clearly shows that our strategy is working and that we are growing profitably,” said Bodo Uebber, Daimler’s financial chief. “We increased our EBIT from the ongoing business by over a third compared with 2014; compared with 2010, our earnings have actually almost doubled. And revenue has increased by more than 50% in the past five years.”
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By GlobalDataDaimler significantly increased its total unit sales in 2015. The number of around 2.9 million vehicles sold was 12% higher than in 2014. This growth was primarily driven by the Mercedes-Benz Cars division (+16%) and to a lesser extent by Mercedes-Benz Vans (+9%). At Daimler Trucks, the growth in unit sales of 1% was lower than originally expected, mainly due to weak markets in Latin America and Indonesia, Daimler said.
Mercedes Cars over 2m for the first time
The Mercedes-Benz Cars division (comprising the Mercedes-Benz brand with the sub-brands Mercedes-AMG, Mercedes-Maybach and Mercedes me and the Smart brand), achieved its targeted return on sales in the ongoing business in 2015, Daimler said. Unit sales increased for the sixth consecutive year and passed the two-million mark for the first time with 2,001,400 vehicles sold (+16%). Revenue rose by 14% to EUR83.8 billion. The division’s EBIT for 2015 of EUR8,226 million was a substantial 41% higher than the prior-year figure of EUR5,853 million. Return on sales increased to 9.8% (2014: 8.0%).
Daimler said new models contributed to the higher unit sales of new vehicles. The most important drivers were the new C-Class, the compact cars and increased sales in the SUV segment. Other factors with a positive impact on EBIT were better pricing, efficiency measures and currency effects. However, Daimler said there were opposing effects from expenses for capacity expansion as well as advance expenditure for new technologies and vehicles.
Slower growth in China, Mercedes biggest market
Mercedes-Benz said it expects the Asian markets to be particularly strong drivers of the growth in unit sales in 2016. In the year 2015, China was for the first time the biggest sales market for Mercedes-Benz. However, following strong growth of 41% in 2015, further expansion is planned in 2016, above all with the models produced locally. But Daimler said “the growth rate in China will be more moderate this year”.
Growth rates in car markets in Western Europe and the US are expected to be “significantly lower than the substantial growth of recent years,” Daimler said. It therefore said that the outlook for 2016 is that earnings before interest and taxes from ongoing business would only “increase slightly” in 2016.
“Everything indicates that 2016 will be another good year for Daimler,” Mr. Zetsche said. “But success has to be worked for again and again.”
