Daimler CEO Zetsche had good news to mark the close of the company's 125th anniversary.
Daimler AG, parent to Mercedes-Benz and Smart, is wrapping up its 125th anniversary with a series of all-times records, the maker has announced, including all-time earnings and revenues.
The German maker posted a net profit of 6 bllion euros, or roughly $8.2 billion, on record sales of 106.5 billion Euros, or $145 billon, last year. Adding to the birthday news, Mercedes-Benz Cars achieved new peaks for unit sales, revenue and earnings before interest and taxes.
Daimler’s truck operations, meanwhile, showed significant improvement in unit sales, revenue and earnings, despite global economic weakness.
After the 9% increase in sales in 2011, however, Daimler is only predicting modest growth, this year. Nevertheless, in regional terms, Mercedes-Benz Cars sees further growth opportunities in 2012 in North America, as well as in China, India and Russia. “Prospects in Western Europe are rather limited, however,” the company said.
But even with concerns about the coming year, Daimler’s chief executive said 2012 is off to a good start.
“The Group achieved its best-ever results in 2011 for unit sales, revenue, EBIT and net profit. All of our divisions contributed to this success,” stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. Above all, Mercedes-Benz Cars also set new records for sales, revenue and EBIT. In its long corporate history, the car division has never performed better than in 2011.
According to Zetsche, last year’s strong performance shows “that with its strong portfolio of cars, trucks, vans, buses and financial services, the Group is strategically very well positioned. We are now putting all of our efforts into continuing this success and achieving our targeted rates of return on a sustained basis as of the year 2013.”
Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans significantly increased their unit sales in most of the major regions, while Daimler Financial Services also profited from the lower cost of risk.
However, special factors connected with the natural disaster in Japan resulted in total charges for the Group of 80 million Euro or $109 million. Insurance compensation has been taken into consideration in calculating this figure. Charges were also recognized from the impairment of Daimler’s equity interests in Renault, which decreased in value by 110 million or $150 million, and the Rusian truckmaker Kamaz, which lost 32 million euro, or $44 million. The impairment charge on the Renault investment is of special interest because both Daimler and Renault/Nissan have expanded their alliance.
Daimler recently announced plans to build engines at a Nissan plant in Tennessee and, as TheDetroitBureau.com first reported, is expected to set up an assembly plant in Mexico alongside a new manufacturing complex Nissan is building in the city of Aguascaliente. (For that story, Click Here.)
Despite the slight drop in equity value, both Zetsche and Renault/Nissan chief executive Carlos Ghosn have expressed support for their existing joint ventures and have held out the possibility of more in the future. However, the impairment charge is likely to bolster the position of skeptics inside Daimler who might question the benefits of expanding the alliance.
Overall Daimler sold a total of 2.1 million vehicles in 2011, surpassing the prior-year figure by 11%. All of the automotive divisions contributed to the increase. Group revenue increased by 9% to euro 106.5 billion; adjusted for exchange-rate effects, there was an increase of 10%.
The generally positive business development led to an increase in the number of persons employed worldwide by Daimler to 271,370 as of December 31 or 11,270 more than at the end of 2010. In Germany, the number of employees increased to 167,684 from 164,026.
Daimler also increased its research and development expenditure to 5.6 billion euro in 2011 from 4.8 billion Euro in 2010. The lion’s share of 3.7 billion went to Mercedes-Benz Cars while 1.3 billion euro went to Daimler Trucks..
Investment in property, plant and equipment amounted to euro 4.2 billion of which euro 2.7 billion euros was invested in Germany The focus of the new capital investment was on local production facilities, new products and new technologies. One of the main areas at Mercedes-Benz Cars was the expansion of production capacities for the successor to the A-/B-Class at the Rastatt plant in Germany and at the new plant in Kecskemet, Hungary. Daimler Trucks made substantial investments in 2011 in the launch of the new Actros heavy truck.
Daimler Financial Services developed very positively in all regions. Worldwide contract volume grew by 13 percent Adjusted for exchange-rate effects, contract volume grew by 12 percent New business increased by 15 percent.