Daimler's Dieter Zetsche said the company rode strong sales from Mercedes-Benz to strong profits in the first quarter.
Record sales by Mercedes-Benz Cars and Mercedes-Benz Vans helped Daimler AG double its profits during the first quarter.
“A very successful quarter lies behind us,” said Dieter Zetsche, chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, adding the company continues to implement its strategy for sustainable growth.
“Ahead of us, we have a variety of opportunities for further profitable growth. We do have the right products to take advantage of these opportunities – and the financial strength to make the necessary investments. The latest example: our new S-class. Daimler remains in the fast lane,” Zetsche said.
Daimler reported first-quarter earnings before interest and taxes of 4.01 billion euros in 2017, thus substantially surpassing the prior-year figure of 2.15 billion euros while net income doubled to 2.8 billion euros so earnings per share increased to 2.53 euros
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With sales of 754,300 passenger cars and commercial vehicles, the Daimler Group once again achieved best-ever unit sales in a first quarter with double-digit sales growth of 14% by Mercedes-Benz Cars and 13% Mercedes-Benz Vans. Revenue in the first quarter climbed by 7% to 38.8 billion euros after adjustments for exchange-rate effects.
Mercedes-Benz Cars achieved particularly strong earnings growth, Daimler noted in its first quarter financial report. Its EBIT growth is mainly the result of increased unit sales of the new E-Class and the SUV models.
The Daimler Trucks division significantly improved its earnings, primarily due to the sale of real estate in Japan. Mercedes-Benz Vans and Daimler Buses also achieved significantly higher EBIT than in the prior-year period.
At Daimler Financial Services, earnings grew significantly mainly as a result of increased contract volume. Exchange-rate effects had a positive impact on operating profit at all the divisions.
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The strong financial results boosted Daimler free cash flow in the industrial business to 1.9 billion euros from 300 million euros during the first quarter of 2016. The increase resulted primarily from the positive business performance and the development of working capital. The figure reflects a cash inflow of 300 million euros from the sale of real estate at the Kawasaki site in Japan.
Compared with December 31, 2016, the net liquidity of the industrial business increased by €1.3 billion to €21.1 billion. The increase was mainly due to the positive free cash flow. Opposing effects resulted in particular from the capital increase at Daimler Financial Services AG.
“We made a very good start to the year and once again surpassed our margin targets in the automotive business,” said Bodo Uebber, member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Financial Services.
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“We are very confident for the remainder of the year to achieve our financial as well as our strategic goals. At the same time, we are constantly aware of the political and economic challenges and will continue to act flexibly and cautiously,” Uebber said.