Daimler Annual Shareholders’ Meeting 2013 in Berlin: Dr. Dieter Zetsche reaffirms focus on growth and efficiency

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“Growth and efficiency: Daimler is staying the course” is not only the motto of today’s Annual Shareholders’ Meeting of Daimler AG, but also describes the Group’s strategic focus. Daimler is pursuing the goal of reaching the top of the respective sectors. “We are Daimler. We don’t only want to get better. We want to beat the competition – on a permanent basis,” stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, with regard to the Group’s goals, according to the text of his speech.

“In 2012, Daimler continued to grow,” Zetsche said about the past financial year before an expected number of approximately 5,000 shareholders at the Berlin Trade Fair Center (Berliner Messe). The Group achieved record unit sales and revenue in 2012. Worldwide, 2.2 million vehicles were sold and Group revenue increased by 7% to €114.3 billion (2011: €106.5 billion). Group EBIT amounted to €8.6 billion (2011: €8.8 billion), and Group EBIT from the ongoing business amounted to €8.1 billion (2011: €9.0 billion). Net profit increased to €6.5 billion (2011: €6.0 billion), and value added rose to €4.2 billion (2011: €3.7 billion).

In view of the earnings achieved and the course of business in the year 2012, the Board of Management and the Supervisory Board recommended the distribution of a stable dividend of €2.20 per share (2011: €2.20). This represents a total dividend of approximately €2.35 billion or a distribution ratio of about 40%.

Affirmation of long-term strategy and goals

Zetsche formulated clear objectives for the Daimler Group: “We strive to be a sustainably competitive company that not only produces the S-Class, but which is the S-Class.”

Daimler is pursuing the following specific targets of

- selling at least 1.6 million Mercedes-Benz passenger cars each year as of 2015 and leading the way in the premium segment also in terms of unit sales by 2020,

- consolidating its leading role in the truck sector by selling more than 500,000 units in 2015 and over 700,000 units in 2020, and

- growing also in its other divisions.

In addition to the growth targets, the Group has corresponding profitability goals. In the medium term, it strives to achieve an average return on sales of 9 percent from its vehicle operations across all market and product cycles, with return targets for the individual divisions of 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses. The target for Daimler Financial Services is a return on equity of 17%.

Growth strategies supplemented by efficiency programs

“In order to achieve those goals, we have started the biggest growth program in the company’s history: Daimler is growing — at a faster pace, on a broader scale, and in more markets than ever before,” explained Zetsche at the Annual Shareholders’ Meeting.

The goals are to be achieved on the basis of far-reaching product offensives in all divisions, through expansion of the model ranges, the creation of new segments and close adaptation of products and services to regional customer requirements. Across all of its divisions, Daimler has focused on four strategic growth areas in recent years: strengthening the core business, penetrating new markets, expanding its leadership on green technologies and safety, and implementing new types of mobility concept supported by innovations at the interface between mobility and digital networking.

Zetsche emphasized, however: “We don’t want to grow at any price. Our growth has to be sustainably profitable.” To those ends, the growth strategies of the individual divisions have been supplemented with effective efficiency programs.

In the area of passenger cars, the Fit for Leadership efficiency program is an integral part of the Mercedes-Benz 2020 growth strategy. In the area of trucks, the Global Excellence Strategy that started in 2005 has been reinforced with the initiative Daimler Trucks Number One. Similar programs are in place at the other divisions: Performance Vans 2013 at Mercedes-Benz Vans, Globe 2013 at Daimler Buses and DFS 2020 at Daimler Financial Services. In total, this is expected to improve the Group’s cost position by €4 billion by the end of next year.

For 2013 and the following years, the focus is on the consistent implementation of the defined measures and programs. “The objective for this year is to stay the course, continue our growth and enhance our efficiency,” stated Zetsche.

Unit sales in 2013 – status quo and expectations

Many markets were weaker than expected at the beginning of 2013. That applies in particular to the markets for cars and commercial vehicles in Europe. Nonetheless, in the first three months of this year, the Group sold more cars, vans and buses than in the prior-year period.

First-quarter wholesale shipments by Mercedes-Benz Cars increased compared with last year by 1% (retail 3%). The division expects sales impetus from the very good demand for the compact-class models, as well as from the CLA, the third model in the compact class, the new E-Class and the new S-Class, which will have its world premiere in May. Despite the difficult first quarter, Mercedes-Benz Cars assumes that with expansion of the total car market of 2 to 4 percent, its wholesale shipments will increase in full-year 2013.

Daimler Trucks increased its market shares in the first three months of the year, although wholesale shipments decreased by 6%. Thanks to Daimler Trucks’ global spread and its strong, continuously growing product portfolio, the division anticipates slight growth in wholesale shipments as the year progresses. This development will be supported by the new truck for the construction sector, the Mercedes-Benz Arocs, and the new medium-duty truck, the Mercedes-Benz Atego.

First-quarter wholesale shipments by Mercedes-Benz Vans were slightly higher than in the prior-year period (+3%). The division expects growth impetus from the new generation of the Mercedes-Benz Sprinter, which will be available as of mid-2013. In regional terms, growth prospects are varied: While demand for vans in Western Europe could continue to fall, the division anticipates a slight recovery in China as well as sales stimulus in North and Latin America.

Wholesale shipments by Daimler Buses were better than in the first quarter of last year (+23%). The division also expects an increase in wholesale shipments for the full year compared with 2012. In Europe, there will be contributions to this growth from the new Mercedes-Benz Tourismo and the new Setra TopClass 500. In Mexico, the launch of an all-new product family of five coach variants and city buses is being prepared.

The growth of the vehicle divisions is also reflected by the development of Daimler Financial Services: Its new business once again increased in the first quarter of 2013 compared with the same period of last year. In 2013, the division intends to pass the mark of three million leasing and financing contracts for the first time. Daimler Financial Services sees considerable potential in the expansion of its business with innovative mobility services.

Not much tailwind is anticipated from the markets in the coming months. For Europe in particular, there are no signs of a trend reversal. Daimler will therefore reassess whether its previous market-related assumptions for 2013 are still valid and will provide further information regarding market and earnings expectations for the Group and its divisions for the full year in the first-quarter reporting.

Thanks to new products and the efficiency programs now running, Daimler assumes that earnings in the second half of the year will be higher than in the first half.

Zetsche is confident that these goals will be achieved: “The course we have set is the right one – but we have to follow it. And we will follow it – undeterred by the ups and downs of the markets. Consistently and persistently.”

The full speech document (English version) of Dr. Dieter Zetsche at the Daimler Annual Shareholder's Meeting 2013 --> HERE

Credits: Daimler AG

Copyright © 2013, mercedesgla. All rights reserved.

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The Annual Shareholders’ Meeting of Daimler AG approves dividend of €2.20 per share for 2012

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At the Annual Shareholders’ Meeting of Daimler AG in Berlin on Wednesday, the shareholders approved the distribution of a dividend for the year 2012 of €2.20 per share (prior year: €2.20). The total dividend payout amounts to €2,349 million.

The Annual Shareholders’ Meeting also reelected Ms. Sari Baldauf and Dr. Jürgen Hambrecht as members of the Supervisory Board representing the shareholders for a further five years. Furthermore, the Annual Shareholders’ Meeting elected Ms. Andrea Jung for the first time as a member of the Supervisory Board for five years.

The members of the Supervisory Board representing the employees were elected in March and their period of office begins with the end of the 2013 Annual Shareholders’ Meeting. The members reelected are Erich Klemm, Michael Brecht, Jürgen Langer and Jörg Spies. Elke Tönjes-Werner and Wolfgang Nieke were elected for the first time as members representing the employees. The members of the Supervisory Board representing the trade unions are Jörg Hofmann (as before) and Sabine Maaßen (a new member). Valter Sanches continues to be a member of the Supervisory Board of Daimler AG on the employee side as a trade union member from outside Germany. Dr. Frank Weber was elected to the Supervisory Board for the first time and represents the senior management for the next five-year period. The newly elected members Elke Tönjes-Werner and Sabine Maaßen are the first female members of the Supervisory Board representing the employees. Elections for the Supervisory Board members of the employee side are held every five years.

The actions of the members of the Board of Management were ratified by 98.62% of the votes cast and the actions of the members of the Supervisory Board were ratified by 98.60% of the votes cast.

The Annual Shareholders’ Meeting was held at the Berlin Trade Fair Center (Berliner Messe) and was attended by approximately 5,000 shareholders and shareholder representatives (prior year: 5,700). 29.32% of the share capital was represented.

The dividend will be paid out on April 11, 2013 to all shareholders who held Daimler shares on April 10, 2013.

Credits: Daimler AG

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Daimler Annual Press Conference 2013: Best figures for unit sales and revenue in 2012; Group EBIT of €8.6 billion last year

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Daimler AG (stock-exchange symbol DAI) today presented its preliminary and unaudited figures for the Group and its divisions for the year 2012.

Daimler achieved EBIT of €8.6 billion in 2012 (2011: €8.8 billion). EBIT from the ongoing business amounted to €8.1 billion (2011: €9.0 billion).

“The past financial year was overall a strong year for Daimler with some great achievements, but also with clear potential for improvement. We achieved new records for unit sales and revenue at both the Group and Mercedes-Benz Cars, and launched new products in all divisions to the market, which received excellent response,” stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.

“Notwithstanding our success and the numerous pioneering investments in 2012, it is a fact that we did not reach our own targets for earnings and profitability,” Zetsche pointed out. “To ensure that our future growth is even more profitable, we have implemented detailed measures in all divisions that will further increase our efficiency.”

The Group’s net profit amounted to €6.5 billion (2011: €6.0 billion), including the gain on the sale of 7.5% of the shares of EADS. Earnings per share amounted to €5.71 (2011: €5.32).

Daimler wants its shareholders to participate appropriately in the company’s success once again in 2012. In view of the earnings achieved and the business development in 2012, the Board of Management and the Supervisory Board will propose the distribution of a dividend of €2.20 per share at the Annual Shareholders’ Meeting to be held on April 10, 2013 (prior year: €2.20). This represents a total dividend payout of €2,349 million (prior year: €2,346 million).

“With this dividend continuity, we are emphasizing the attractiveness of our shares and expressing our gratitude to the shareholders for their trust in our company,” stated Bodo Uebber, Member of the Board of Management of Daimler AG for Finance, Controlling and Daimler Financial Services.

Financial year 2012

Despite partially difficult market conditions, the development of earnings reflects ongoing growth in unit sales at Mercedes-Benz Cars and Daimler Trucks. Daimler Buses and Mercedes-Benz Vans posted lower unit sales, however. A shift in the regional structure of unit sales, a less favorable model mix and higher expenses in connection with the expansion of Mercedes-Benz Cars’ product portfolio and the current product offensive at Daimler Trucks also had a negative impact on Group EBIT. In addition, Mercedes-Benz Vans incurred expenses in connection with the impairment of the Chinese joint venture Fujian Benz Automotive Corporation. Daimler Financial Services posted earnings at the prior-year level. The development of exchange rates had an overall positive impact on Group EBIT.

EBIT also includes significantly higher expenses in connection with the compounding of non-current provisions (2012: €543 million; 2011: €225 million).

The repositioning of the European and North American business systems of Daimler Buses, which was decided upon in the first quarter of 2012, resulted in expenses of €155 million. The sale of 7.5% of the shares in EADS resulted in a gain of €709 million in the reporting period.

As previously announced, Daimler further increased its unit sales. Sales of 2.2 million vehicles were 4% higher than in 2011. Mercedes-Benz Cars and Daimler Trucks were responsible for the growth, while the Mercedes-Benz Vans and Daimler Buses divisions did not match their unit sales of the prior year. The Group’s total revenue improved by 7% to €114.3 billion; adjusted for exchange-rate effects, there was an increase of 4%.

The net liquidity of the industrial business amounted to €11.5 billion at December 31, 2012 (2011: €12.0 billion).

The free cash flow of the industrial business amounted to €1.5 billion in 2012. The positive profit contributions of the industrial business were offset by the increase in working capital, defined as the net change in inventories, trade receivables and trade payables, in a total amount of €0.8 billion. High investments in property, plant and equipment and intangible assets as well as capital contributions to Engine Holding and the joint venture of Daimler Trucks in China led to cash outflows. There was an additional effect from first-time pension contributions at EvoBus. Other positive effects resulted from the sale of shares in EADS and MBtech Group.

As of December 31, 2012, the Daimler Group employed a total workforce of 275,087 people. Due to the significant increase in business volumes, the workforce grew by 3,717 persons. While the number of employees in Germany decreased slightly to 166,363 (2011: 167,684), there was growth in the United States to 21,720 (2011: 20,702). At year-end, 14,610 people were employed in Brazil (2011: 14,533) and 11,286 in Japan (2011: 11,479). The number of persons employed by the consolidated subsidiaries in China increased to 2,730 (2011: 2,121). In addition, there were 16,383 (2011: n. a.) persons employed by Daimler’s non-consolidated associated companies in China, of which 9,048 (2011: 7,204) work at Beijing Benz Automotive Corporation (BBAC), 1,543 (2011: 2,003) at Fujian Benz Automotive Corporation (FBAC) and 5,530 (2011: n. a.) at the joint venture Beijing Foton Daimler Automotive (BFDA).

Investments in the future

Based on Daimler’s “Road to Emission-free Mobility” strategy, the main focus of work was in the area of new, extremely fuel-efficient and environmentally friendly drive technologies in all automotive divisions. Work was carried out on optimizing conventional drive technologies as well as on achieving further efficiency improvements through hybridization and with electric vehicles using fuel cells or batteries. In order to further enhance the efficiency of its vehicles, Daimler is also improving other key automotive aspects - from energy management to aerodynamics and lightweight construction. Another focus of activities is on new safety technologies and accident-free driving.

As in the prior year, Daimler therefore invested the very large amount of €5.6 billion in research and development in 2012 (2011: €5.6 billion). Total research and development expenditures at Mercedes-Benz Cars of €3.9 billion once again exceeded the high level of the prior year (2011: €3.7 billion). Daimler Trucks invested €1.2 billion in research and development projects (2011: €1.3 billion).

In 2012, Daimler once again significantly increased its investment in property, plant and equipment to €4.8 billion (2011: €4.2 billion). Of that total, €3.3 billion was invested in Germany (2011: €2.7 billion).

The focus was on extensive capital expenditure on local production facilities, new products and new technologies. One main area within Mercedes-Benz Cars was the expansion of production capacities for the new compact-class models at the Rastatt plant in Germany and at the new plant in Kecskemét, Hungary. In Sindelfingen, Daimler invested in preparations for production of the new S-Class. In Tuscaloosa, USA, and Bremen, Germany, preparations are already under way for production of the new C-Class as of 2014. At Daimler Trucks, the main areas of investment were the new Mercedes-Benz Antos, the new heavy-duty construction-site truck Arocs, and various projects for global harmonization and standardization of engines and main components and for the fulfillment of stricter emission regulations. Daimler also invested in expanding its production capacities in Brazil and at the new plant in India, where trucks of the new BharatBenz brand have been rolling off the production line since mid-2012. At the Mercedes-Benz Vans division, the focus of investment was on the new Citan small van and the successor generation of the Vito goods van and the Viano passenger van. Daimler also invested in the production and marketing of the Sprinter in Argentina and in the expansion and modernization of the sales organization. The main investments at Daimler Buses in 2012 were in new products and the modernization of production facilities.

Details of the divisions

Mercedes-Benz Cars, comprising the brands Mercedes-Benz, Maybach and smart, sold 1,451,600 vehicles in the year under review (2011: 1,381,400), and thus continued to grow. Revenue increased by 7% to a new record of €61.7 billion, although major markets weakened in the second half of 2012.

The division’s EBIT of €4,389 million was below the prior-year figure of €5,192 million. The return on sales was 7.1% (2011: 9.0%).

In an economic environment that became increasingly difficult during the year, unit sales developed well. Mercedes-Benz Cars achieved high growth rates in particular in the segments of compact cars and SUVs. In regional terms, the business in the United States developed very positively. Growth in earnings was also realized by positive exchange-rate effects. There were negative effects on earnings from a shift in the regional structure of unit sales and the changed model mix. Furthermore, EBIT was reduced by expenses for the enhancement of the products’ attractiveness, capacity expansion and advance expenditure for new technologies and vehicles. This negative effect on earnings was only partially offset by ongoing efficiency improvements. In addition, higher expenses arose in connection with the compounding of non-current provisions.

In a difficult market environment, Daimler Trucks was able to further increase its unit sales and revenue, with particularly strong growth in the NAFTA region and Asia. Daimler Trucks sold 462,000 vehicles during in 2012, which is 9% more than in the prior year. Revenue amounted to €31.4 billion (+9%).

The division’s EBIT of €1,714 million was below the prior-year figure (2011: €1,876 million). The return on sales was 5.5% (2011: 6.5%).

Earnings were boosted on the one hand by the positive development of unit sales and revenue in the NAFTA region and Asia. Lower warranty expenses and exchange-rate effects also made a positive contribution. On the other hand, earnings were reduced by the current product offensive and by lower demand in Brazil and Western Europe. The decline in demand was related to weaker economic developments and in Brazil additionally to the introduction of new emission limits as of the beginning of 2012. Furthermore, expenses arose from the compounding of non-current provisions. Earnings for the year include expenses of €70 million due to the natural disaster in Japan and an impairment charge on the investment in Kamaz (€32 million).

Worldwide unit sales by Mercedes-Benz Vans decreased to 252,400 vehicles, due in particular to the difficult market situation in Western Europe (2011: 264,200). Revenue of €9.1 billion was also slightly below the prior-year level (2011: €9.2 billion).

The division achieved EBIT of €541 million in 2012 (2011: €835 million). Its return on sales was 6.0%, compared with 9.1% in the prior year.

The decrease in earnings was partially related to lower levels of unit sales, especially caused by the significantly weaker market in Western Europe. Good product quality was reflected by lower warranty costs. Exchange-rate effects also had a positive impact on earnings. There was an opposing effect from expenses of €64 million in connection with the impairment of the Chinese joint venture Fujian Benz Automotive Corporation. Earnings were additionally reduced by expenses connected with the market launch of the Citan city van and the launch of the new Sprinter in Argentina.

Daimler Buses sold 32,100 buses and bus chassis worldwide in 2012 (2011: 39,700). Revenue decreased accordingly by €0.5 billion to €3.9 billion.

Daimler Buses posted EBIT of -€232 million (2011: €162 million) and a return on sales of -5.9% (2011: 3.7%).

The decrease in earnings was primarily the result of lower sales of bus chassis due to the difficult business situation in Latin America, as well as an unfavorable model mix in the declining European market. There were additional negative effects on earnings from expenses of €155 million for the repositioning of the European and North American business systems and from exchange-rate changes.

Daimler Financial Services’ business developed positively once again in 2012. New business increased by 14% to the new record of €38.1 billion. The division’s contract volume rose by 12% to €80.0 billion. Adjusted for exchange-rate effects, the increase was 13%.

Daimler Financial Services achieved EBIT of €1,292 million in 2012, which is close to its earnings of the prior year (€1,312 million). The division’s return on equity was 21.9% (2011: 25.5%).

A larger contract volume and exchange-rate effects contributed positively to the earnings development. There were opposing effects on earnings from lower interest margins and a normalization of risk costs, which had been unusually low in the prior year. Additional expenses arose in connection with the portfolio expansion.

The reconciliation of the divisions’ EBIT to Group EBIT comprises the proportionate share of the results of Daimler’s equity-method investment in EADS, other gains and/or losses at the corporate level, and the effects on earnings of eliminating intra-group transactions between the divisions.
Daimler’s proportionate share of the net profit of EADS amounted to €307 million (2011: €143 million). In addition, the Group realized a gain of €709 million on the sale of 7.5% of the shares of EADS during the reporting period. At the corporate level, an expense of €113 million was recognized (2011: expense of €588 million). Corporate items in the prior year included in particular litigation expenses and a charge on the impairment of Daimler’s investment in Renault (€110 million).

Outlook

According to current estimates, worldwide demand for automobiles is likely to grow this year by approximately 2 to 4%. This growth should be primarily driven by the ongoing expansion of the Chinese market and a moderate increase in demand in the United States. No impetus is to be expected from the Western European market, however. Demand in Japan will probably decrease significantly, with a perceptible negative impact on the growth of the world market.

Worldwide demand for medium and heavy trucks can be expected to increase perceptibly in 2013. However, this will mainly be driven by the significant recovery in China, which was responsible for a large proportion of the global drop in demand last year. In North America, a decline of 5 to 10% is anticipated as a result of uncertainty about the country’s fiscal problems. For the European truck market, demand is expected to fall by up to 5% due to the ongoing weak economic environment. The Japanese market should be at about the prior-year level, following the expiry of certain special effects in connection with the reconstruction there. A significant recovery of up to 10% is expected for the Brazilian market thanks to better economic prospects and the continuation of favorable financing conditions.

Mercedes-Benz Cars is consistently implementing its “Mercedes-Benz 2020” offensive. Numerous model changes and new products should ensure that the division achieves new records for unit sales in the years 2013 and 2014. A major contribution to this growth is likely to come from the new models in the high-volume compact-car segment. The third model based on the new compact-car architecture will be launched in April 2013: the CLA four-door coupe. Also starting in April, the new E-Class sedan and wagon will be available from Mercedes-Benz dealerships after a thorough upgrade. And as of mid-May 2013, the new E-Class coupes and convertibles will create additional sales impetus. In June 2013, the locally emission-free super sports car SLS AMG Coupe Electric Drive will be launched on the market. In the second half of 2013, Mercedes-Benz expects significant growth in the luxury segment, above all due to the launch of the all-new S-Class. As the most important new model of the year 2013, the new S-Class will set new standards with pioneering innovations for comfortable and safe driving, summarized under the heading of “Mercedes-Benz Intelligent Drive.” In addition, the Mercedes-Benz brand will also continue to profit in 2013 from the great market success of its models in the compact-car and SUV segments.

Within the framework of the long-term “Mercedes-Benz 2020” growth strategy, the product portfolio will be further expanded across all segments in the coming years. In the compact-car segment, a total of five new models will be added to the Mercedes-Benz product portfolio. In parallel, the model offensive will also be continued at the upper end of the automobile spectrum, for example with new models of the coming S-Class and with another SUV model version.

The smart brand expects good chances that the unique two-seater in the highly competitive micro-car segment will defy its advanced model lifecycle also in 2013, and will achieve unit sales in the magnitude of the prior year. The successor model of the two-seater, the new smart four-seater and the electric smart scooter will be presented in 2014.

Daimler Trucks anticipates a slight increase in unit sales in the year 2013 and further growth in 2014, although the development in 2013 will at first be rather moderate or even negative in some key markets due to the ongoing difficult economic situation. The introduction of stricter emission limits in 2014 is expected to cause some purchases to be brought forward to 2013. As a result of its extensive product offensive, Daimler Trucks not only has a complete model range of Euro VI trucks, but is also in a very good starting position in all relevant regions: A highly attractive, innovative product portfolio should allow Daimler to further strengthen its market position worldwide and to increase its share of important markets.

Unit sales should benefit from the complete availability of the Actros and Antos models and from other new models such as the Arocs for the construction sector and the new Atego. The strong North American products like the new Freightliner Cascadia Evolution in combination with the strong Detroit components should also make an important contribution to further growth. With a clear focus on profitable customer segments such as the construction and municipal segments within the framework of its “Vocational Strategy,” the truck division wants to utilize further market potential and extend its market leadership in North America.

The brands Fuso and BharatBenz will also make an important contribution to growth in unit sales in the coming years. The Fuso Canter and its hybrid version, which has been produced also in Europe since 2012, should stimulate additional demand. Fuso will extend its leading position in the field of “green innovation” with the new Canter Eco Hybrid and other technologies. Furthermore, Fuso is developing profitable export markets in the context of its growth offensive. In India, the range of BharatBenz trucks will be expanded to a total of 17 models in the weight classes from 6 to 49 metric tons by the year 2014, and the sales and service network will also be expanded. In Russia and China, Daimler Trucks is gradually intensifying its cooperation with local partners Kamaz and Foton, and is thus creating the right conditions for the further development of those growth markets.

Mercedes-Benz Vans plans to increase its unit sales in the years 2013 and 2014. On the product side, the new Mercedes-Benz Citan should contribute to this growth. Entering the market segment of small vans makes the division a full-range supplier and thus gives it additional growth potential in Europe. As of mid 2013, there will be demand stimulus from the upgraded Sprinter. As part of the “Vans goes global” strategy, Mercedes-Benz Vans is increasingly developing the markets outside Europe. It is therefore intensifying its sales activities especially in North America, Latin America, Russia and China. Furthermore, Mercedes-Benz vans are increasingly produced also locally: in Argentina and China, and production will begin also in Russia with the partner GAZ in the first half of 2013.

Daimler Buses assumes that it will be able to maintain its globally leading position in its core markets for buses above 8 tons with innovative and high-quality new products. Not least due to various major orders in advance of the soccer World Cup in 2014 and the Olympic Games in 2016, a rise in unit sales is anticipated in Brazil for the years 2013 and 2014. In Western Europe the division has launched excellent high-quality products in this stable key market: the new Mercedes-Benz Citaro and the new coach generation, the Setra 500. In order to realize further growth potential and to enhance competitiveness, Daimler Buses started the “GLOBE 2013” growth and efficiency offensive in 2012.

With its “DFS 2020” strategy, Daimler Financial Services aims to achieve further profitable growth in the coming years. Key growth drivers are the expansion of business in Asia, the product offensives of the Daimler Group, and the further development of innovative mobility service packages. Worldwide, Daimler wants to gain larger numbers of young customers, who will be increasingly attracted with new models in the compact class and who are particularly open-minded with regard to financing and leasing offers. Daimler Financial Services sees additional growth opportunities in the field of innovative mobility services, where the service offering will be systematically expanded in the coming years – with and beyond car2go.

On the basis of assumptions concerning the development of automotive markets and the divisions’ planning, the Daimler Group expects to achieve further growth in total unit sales in the years 2013 and 2014.

Daimler assumes that Group revenue will continue growing in the years 2013 and 2014. Although uncertainty regarding the future development of the Group’s markets tended to increase during the year 2012, numerous new products will be launched in the context of the growth strategy in the coming years. Furthermore, the Group will increasingly develop the growth markets of Asia, Eastern Europe and Latin America for its products – partially also through local production. The anticipated growth will probably be driven by all divisions, with the biggest contributions in absolute terms coming from Daimler Trucks and Mercedes-Benz Cars. In regional terms, Daimler assumes that growth rates will be above average in the emerging markets and in North America.

Daimler assumes that the development of major markets will at first remain weak in the first half of 2013, and therefore anticipates a weaker development of earnings in the first half of the year compared with 2012. But due to the planned new models, the assumptions made for the development of markets important to Daimler and the increasing effects of the efficiency measures that have been initiated, earnings are expected to improve in the second half of 2013 compared with the level of the first half. On the basis of the anticipated recovery in the second half of the year, Daimler currently assumes that Group EBIT from the ongoing business in 2013 will reach the magnitude of the prior year. For Mercedes-Benz Cars, full-year EBIT is expected to be slightly lower than in 2012, while the other automotive divisions should post higher earnings than in the prior year. In 2014 and the following years, an improvement in operating profit is expected for all automotive divisions and for the Group. For Daimler Financial Services, a stable development of earnings is anticipated in the next two years.

In the medium term, Daimler aims to achieve an annual average return on sales in its automotive business of 9% across market and product cycles. This is based on target returns on sales for the individual divisions: 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses. For the Daimler Financial Services division, the target for return on equity is 17%. Due to significantly worsened market conditions, the achievement of these profitability targets has become much more challenging for the Group and the individual divisions. Daimler therefore assumes that the targets will not be achieved as originally planned in the year 2013, but at a later date. In order to make sure it meets its profitability targets in the long term, Daimler is carrying out far-reaching programs to improve its efficiency and competitiveness in all divisions.

In the years 2013 and 2014, Daimler plans to spend a total of €10.8 billion on research and development activities and approximately €10.2 billion on property, plant and equipment. This means that research and development investment will remain at the high level of the years 2011 and 2012; capital expenditure on property, plant and equipment will once again exceed the already very high levels of the two previous years.

Due to the anticipated business development, production volumes will continue to grow in the years 2012 and 2013. At the same time, efficiency and thus also productivity will be significantly increased as a result of the programs being carried out in all divisions. Against this backdrop, Daimler assumes that it will be able to achieve its ambitious growth targets with a largely stable workforce. New jobs will tend to be created in the international growth markets.

The special items affecting earnings in the years 2012 and 2011 are listed in the following table:

Credits: Daimler AG

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Dr. Dieter Zetsche at the Annual Shareholders’ Meeting: “Daimler is on the way to its best form.”

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Daimler AG has made an excellent start to the year 2012. “Our company is on the way to its best form, but is not there yet. We are confident we can do more, and that also applies to our share price,” said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, according to the text of his speech to the expected 5,800 shareholders at the International Congress Center (ICC) in Berlin.

In the first three months of the year 2012, the Group once again sold more vehicles than in the same period of last year. Unit sales by Mercedes-Benz Cars in the period of January through March increased by 12% to more than 340,000 units compared with the prior-year period. The division thus achieved its best-ever first quarter and its best-ever monthly unit sales in March. The growth drivers since January have been the C-Class models (plus 27%), the S-Class (plus 18%) and the SUV segment (plus 8%). There was also strong demand for the new B-Class, the first of five cars in the new compact range, with orders received for over 100,000 units to date. Although the B-Class is so far only available in Europe, more than 35,000 cars have already been delivered to customers. In September, the new A-Class will be launched, the second car of the new compact car portfolio.

Global car markets should grow by 4% this year. “At Mercedes, we’re on a roll, and we want to beat that,” said Zetsche and affirmed the unit-sales forecast for Mercedes-Benz Cars. The division assumes that this year it will surpass the unit-sales record it set in 2011.

The Daimler Trucks division was also very successful with its strong product portfolio; according to preliminary figures, it sold about 107,000 vehicles from January through March of this year (plus 20%). A major contribution came from Daimler Trucks North America with growth of 41%. Fuso also continued its positive development in Japan, while unit sales in Europe and Latin America decreased by 5%.

From today’s perspective, the division anticipates further growth in unit sales in 2012. In any case, the new Actros is likely to gain market share in the euro zone. The opening of a new plant in Chennai, India in the next few days will be an important step towards conquering new sales markets. As of the third quarter, trucks will be produced specifically for the Indian market under the “BharatBenz” brand.

The Mercedes-Benz Vans division's core markets developed as follows in the first three months of the year: Unit sales increased by 23% in North America and by 10% in Latin America, despite the upcoming model change for the Sprinter in the latter market. In Europe, however, unit sales decreased by 8%. The division is nonetheless confident for the full year that it will maintain the level of unit sales in the euro zone that it achieved in 2011. As of September, sales will be stimulated by the new Citan city van, following its debut at Germany’s IAA international motor show for commercial vehicles in that month. This new small van targets a segment with a total volume of about 700,000 vehicles per annum, of which Mercedes-Benz Vans intends to take a market share of 4 to 5%.

Daimler Buses sold about 5,000 units in the first quarter, lower than the prior-year number. According to preliminary figures, Daimler Financial Services smoothly continued its business development of 2011 and increased its new business to €8.2 billion in the first quarter of this year. The division’s contract volume remained at a record level.

Based on the divisions’ development, Zetsche affirmed the forecasts for 2012: The Group expects its total unit sales to increase again significantly along with further revenue growth. The target for EBIT from the ongoing business is the high level of the prior year (2011: €9.0 billion).

Achieving sustained growth through innovation

The motto of this year’s Annual Shareholders’ Meeting, “Growth and Innovation,” brings together two topics of fundamental importance for the future of the Daimler Group. By 2020, the annual global vehicle market should have growth by approximately 40 million to about 120 million units. “The question is not whether this growth will take place, but how it can be made sustainable,” said Zetsche. He believes that innovation has the potential to convert growth into prosperity. “Where that occurs, growth will be ecologically compatible and productive for both society and the economy,” explained Zetsche.

The Daimler Group is at the forefront with both of these topics, and has a first-class starting point for sustained innovation and profitable growth. With the Mercedes-Benz 2020 growth strategy, the Mercedes-Benz brand aims to reclaim its position as the leading manufacturer of premium automobiles also in terms of unit sales. Daimler Trucks intends to defend its first place with its Global Excellence strategy. And the other divisions have similar plans to defend or take over the top position.

In 2012 and 2013 alone, the Group will invest €10.9 billion in research and development and €10.6 billion in property, plant and equipment. Daimler will extend its leading role with green technologies. Some examples are the further development of the automobile into a zero-emission vehicle and the digital networking of automobiles to control traffic and reduce congestion.

With internal-combustion engines, the CO2 emissions of Mercedes-Benz Cars’ fleet has been reduced within two vehicle generations by 35% to an average of 150 grams per kilometer. A fleet average of 125 g/km is to be achieved by 2016.

Mercedes-Benz already sells the world’s most economical full-size sedan: the E 300 BlueTEC Hybrid with consumption of 4.2 liters of diesel fuel per 100 kilometers. Starting this summer, the Daimler Group will be the first premium manufacturer to supply an electric car for all: the e-smart.

Affirmation of medium-term goals

At the event in Berlin, Zetsche affirmed Daimler’s medium-term targets for unit sales and earnings: In the year 2015, more than 1.6 million Mercedes-Benz passenger cars, over half a million trucks, more than 400,000 vans and approximately 42,000 buses are to be sold.

As of the year 2013, Daimler aims to achieve an average return on sales in its automotive business of 9%. The targets for the divisions are a return on sales of 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses, and a return on equity of 17% for Daimler Financial Services. Mercedes-Benz Vans and Daimler Financial Services already achieved or surpassed their targets in 2011.

Record year 2011 and a high dividend

Daimler had presented its figures for the year 2011 in February. In its jubilee year, the Group set records for unit sales, revenue, EBIT and net profit. Worldwide, 2.1 million vehicles were sold and total revenue increased by 9% to €106.5 billion (2010: €97.8 billion). Group EBIT amounted to €8.8 billion (2010: €7.3 billion) and the Group’s EBIT from the ongoing business was €9.0 billion (2010: €7.2 billion). Net profit increased to €6.0 billion (2010: €4.7 billion).

In view of the very positive business development, the Board of Management and the Supervisory Board proposed the distribution of a dividend of €2.20 per share at today’s Annual Shareholders’ Meeting. This constitutes a total payout of almost €2.3 billion and a dividend ratio of about 40% in relation to the Group’s net profit. The dividend for the year 2011 is one of the highest in Daimler’s history.


















Credits: Daimler AG

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