Daimler has posted record figures for unit sales and EBIT adjusted for special items in the second quarter of 2016.
In the second quarter of this year, worldwide unit sales increased to 761,300 passenger cars and commercial vehicles, up 7% on last year.
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In the first half of the year, 1.445m vehicles were delivered, which is also 7% more than in the prior-year period. Group revenue increased by 3% to EUR38.6bn (US$42.61bn) in the second quarter. Adjusted for exchange-rate effects, revenue grew by 5%. Group EBIT for the second quarter amounted to EUR3,258m (Q2 2015: EUR3,718m). Group EBIT adjusted for special items reached its highest level so far of EUR3,973m (Q2 2015: EUR3,764m). Net profit rose to EUR2,452m (Q2 2015: EUR2,372m). Net profit attributable to the shareholders of Daimler increased to EUR2,429m (Q2 2015: EUR2,269m) and earnings per share rose to EUR2.27 (Q2 2015: EUR2.12).
“We are starting the second half of the year with record unit sales and will systematically continue along our path. The development of earnings once again shows that our company is extremely well positioned in all areas and that our long-term strategy is paying off on a sustained basis,” said Dr. Dieter Zetsche, chairman of the board of management of Daimler and head of Mercedes-Benz Cars. “We are ensuring Daimler’s long-term success with our global presence, our broad-based product portfolio across all divisions and our systematic development of mobility services. At the same time, we continue to set standards for safety, sustainability and technology leadership.”
“We continue to grow profitably and are well on the way to achieving our forecasts for the full year. We intend to make 2016 into another successful year for Daimler,” said Bodo Uebber, member of the board of management of Daimler responsible for finance and controlling and Daimler Financial Services. “However, the markets remain volatile. That makes it even more important for us to strengthen our financial performance and make targeted investments in the future.”
Unit sales by the Mercedes-Benz Cars division increased by 9% to 546,500 vehicles in the second quarter of 2016. The car division set another record in the past three months. In Europe, Mercedes-Benz Cars sold 13% more vehicles than in the prior-year period, also setting a new record. Particularly strong growth of over 20% was achieved in France, Belgium, Sweden and Poland. In Germany, 7% more cars of the Mercedes-Benz and smart brands were sold in the months of April through June. Mercedes-Benz Cars also set a new record in China, its biggest market (+29%). Unit sales in the US were slightly lower than in the second quarter of last year.
Revenue increased by 5% to EUR22.1bn. The division’s second-quarter EBIT of EUR1,410m was significantly lower than the EUR2,227m achieved in the prior-year period. The return on sales was 6.4% (Q2 2015: 10.5%). Earnings decreased primarily due to special items such as expenses in connection with Takata airbags, net expenses from the measurement of inventories and the settlement in connection with a patent dispute. Earnings were also reduced by lower unit sales of the Mercedes-Benz S-Class, the model change of the E-Class, the regional sales structure, higher advance expenditures for new technologies and vehicles, and falling discount rates. Higher unit sales in the SUV segment had a positive impact, however.
Daimler Trucks’ unit sales decreased to 108,300 vehicles in the second quarter (Q2 2015: 125,100). In the EU30 region (European Union, Switzerland and Norway), Daimler Trucks achieved growth of 13% to 20,400 vehicles. In Germany, the core market, 8,300 trucks were sold (Q2 2015: 7,600). In Turkey, lower demand due to the introduction of the Euro VI emission standard in 2016 caused sales to decrease to 3,100 units (Q2 2015: 6,600). The weakening of demand in the NAFTA region had an impact on unit sales, which decreased to 40,600 vehicles (Q2 2015: 49,400). Daimler Trucks continued to strengthen its market leadership in Classes 6-8 and achieved a market share of more than 40%. The development of unit sales in Latin America was negative due to the generally weak market there. In Brazil, the main market, sales fell to 3,000 units (Q2 2015: 4,400). Sales in Indonesia also decreased for market-related reasons to 5,600 units (Q2 2015: 9,500). Sales in the Middle East decreased to 3,900 units (Q2 2015: 7,600). In Japan, unit sales grew by 6% to 11,000 vehicles. Sales of 3,900 trucks in India were higher than in the prior-year quarter (Q2 2015: 3,000). Sales of Auman trucks by the Chinese joint venture BFDA increased by 12% to 21,300 units.
Global demand forecast to rise
Daimler was upbeat on prospects for global demand and said that at the beginning of the third quarter, “there are many indications that the world economy will continue along its course of expansion with growth rates below their long-term trends”. At present, world gross domestic product (GDP) is growing at a year-on-year rate of nearly 2.5% and growth for the full year is expected to be of that magnitude.
According to recent assessments, Daimler said worldwide demand for cars is likely to increase from its high level by about 3% in 2016. As in the previous year, the biggest contribution to this global growth should come from the Chinese market, which is “likely to grow again significantly”. But the expected increase in demand will be largely due to state stimulus, Daimler said. For the US market for cars and light trucks, Daimler anticipates a “volume in the magnitude of last year”. Slight growth is anticipated for the Western European car market. This growth should continue to take place on a relatively broad basis, whereby the greatest need to catch up exists in markets such as Italy, France and Spain.
Uncertainty in the United Kingdom following the referendum result in favor of exit from the European Union is likely to primarily affect the British market, Daimler said. Only a slight impact is to be expected on the overall market of Western Europe.
In Japan at best, stabilisation of demand is to be expected following the significant market correction of 2015. Prospects for the large emerging markets remain mixed. In India, market growth is likely to remain solid. In Russia, however, the ongoing recession is “likely to cause another significant drop in car sales.”
See also: Mercedes sets new first half records
