Dieter Zetsche said strong sales from Mercedes-Benz helped to drive Q2 profitability for Daimler AG.
Daimler AG reported its sales increased by 19% to 37.5 billion euros in the second quarter, while earnings before interest and takes increased by 20% to 3.7 billion euros.
The company’s earnings before interest and taxes improved by a substantial 54% to 3.8 billion while net profit rose by 8% to 2.4 billion euros. Prior year’s second quarter’s net profit was positively affected from the remeasurement of the Tesla shares.
“We achieved the targeted margin for Mercedes-Benz Cars in the first half of the year. In all other automotive divisions, we are about to achieve our margin targets,” stated Dr. Dieter Zetsche, chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars.
“We will systematically continue along the path we have taken, in order to fully utilize Daimler’s potential. We will keep our product portfolio young and attractive with further expansion of our model range.”
The significant growth in earnings was primarily driven by the biggest division, Mercedes-Benz Cars, as a result of its ongoing growth in unit sales and the systematic implementation of its “Fit for Leadership” efficiency program.
Daimler Trucks also achieved significant earnings growth. Mercedes-Benz Vans achieved second-quarter earnings at the level of the prior-year period, while Daimler Buses also increased its earnings. At Daimler Financial Services, earnings grew in particular as a result of the increased contract volume. The implemented efficiency actions and changes in currency exchange rates also had a positive impact on the Group’s operating profit.
“As a result of the course we set in the past, we continue to grow profitably and are on the right track to fulfill our forecasts for fiscal year 2015,” stated Bodo Uebber, emmber of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services.
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“The level of margins we have meanwhile reached in the industrial business is clear evidence of the success of our growth strategy. In order to further increase our company value, we will continuously invest in products as well as innovations and technologies. Our efficiency programs will be systematically continued.”
The free cash flow of the industrial business rose in the first half of 2015 by €1.9 billion to €3.4 billion. This strong increase was primarily due to the higher profit contributions from the automotive divisions.
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There was an opposing effect from the higher increase in working capital – in anticipation of further growth in unit sales – in a total amount of €0.6 billion. Increased investment in intangible assets and the capital increases carried out at the Chinese associated companies also reduced the free cash flow.
After the best-ever first half of a year for Mercedes-Benz Cars, unit sales should grow significantly also in full-year 2015 with gains in China and the U.S. This will be driven in part by the new member of the compact-car family, the new generation of the A-Class.
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Daimler Trucks also anticipates a significant increase in unit sales in full-year 2015. In Western Europe, further growth is expected in investment activity, accompanied by rising demand for trucks to replace older models.