DaimlerChrysler today published its consolidated financial statements and its divisions’ results for 2002. Group net income excluding one-time effects rose from $0.8 billion to $3.5 billion in 2002. Its results were boosted by a strong profits recovery at its Chrysler division.
Group operating profit excluding one-time effects increased fourfold to $6.1 billion ($7.2 billion including one-time effects) and all company divisions reported higher earnings last year.
“In view of the economic situation, on the whole we are satisfied with the results for 2002. This is one important step on the road to sustainable profitability,” said CEO Jurgen Schrempp at the annual press conference.
Including one-time effects there was an operating profit of $7.2 billion (2001: operating loss of $1.4 billion). Positive one-time effects amounting to $1.1 billion were reported for 2002. These include one-time gains totalling $2.8 billion from the sale of a 49.9% interest in T-Systems (formerly debis SystemHaus) and of a 40% stake in TEMIC. One-time expenses of $0.7 billion were incurred at Chrysler Group (in connection with the turnaround plan announced in February 2001) and there were also one-off expenses of $0.5 billion at the Commercial Vehicles division.
Group net income excluding one-time effects rose from $0.8 billion to $3.5 billion, while earnings per share went up from $0.77 to $3.46. Including one-time effects, net income increased to $4.9 billion, after a net loss of $0.7 billion in the previous year ($4.91 per share after a loss of $0.69 in 2001).
In 2002, DaimlerChrysler Group revenue decreased by 2% to $156.8 billion. Adjusted for changes in the consolidated Group and exchange-rate movements, revenues increased by 1.6%.
DaimlerChrysler employed 365,571 people at the end of last year (Dec. 31, 2001: 372,470). The main reason for this decrease was the implementation of efficiency improvements at Chrysler Group and adjusted production capacity at the Commercial Vehicles division.
The Mercedes Car Group division surpassed the previous year’s results in terms of unit sales, revenues and operating profit. Unit sales worldwide reached 1,232,300 vehicles in 2002 (2001: 1,229,700) and DC said the division was unaffected by generally unfavourable market conditions. Revenues rose by 5% to $52.6 billion (2001: $50.0 billion). Operating profit of $3.17 billion was slightly higher than in the previous year ($3.10 billion).
DC acknowledged that its Chrysler units had to contend with intense competition in North America and that there was a ‘need for generous sales incentives’. However, Chrysler Group achieved an operating profit excluding one-time effects of $1.38 billion (2001: operating loss of $2.29 billion). Operating profit including one-time effects amounted to $0.64 billion (2001: operating loss of $5.54 billion). DC said that the 2002 breakeven target announced in the turnaround plan of February 2001 (excluding one-time effects) was therefore exceeded.
Worldwide, Chrysler Group sold 2.82 million passenger cars, minivans, sport-utility vehicles and light trucks in 2002 (2001: 2.76 million) and the division reported revenues of $63.1 billion, 5% below the previous year’s level of $66.6 billion ‘due to currency-translation effects’. Measured in US dollars, DC said that revenues were at the same level as in the previous year.
The Commercial Vehicles division sold 485,400 trucks, buses and vans worldwide in 2002 (2001: 492,900). The division generated revenues of $29.8 billion as against $30.0 billion in the previous year. Operating profit adjusted for one-time effects of $185 million exceeded the previous year’s figure of $53 million. Including one-time effects there was an operating loss of $360 (2001: operating loss of $539) million.
DC said that one-time charges totalling $544 million arose at various business units in a total amount of $544 million, primarily as a result of structural changes, but also due to a ‘special depreciation of production facilities in the context of the long-term product and production strategy’.
DaimlerChrysler’s Services division reported operating profit excluding one-time effects of $1,011 million, 67% ahead of the previous year.
Looking ahead, DC said that a further increase in political and macroeconomic uncertainty seems likely in 2003, ‘with possible effects on DaimlerChrysler’s business developments’. The company said it plans to achieve higher earnings in 2003 but added that ‘a precondition for this anticipated increase is that conditions remain stable in the most important markets’.