Car company: Daimler profit drops by 30 percent – dividend is cut

Mercedes Star

StuttgartDaimler must cope with a significant drop in profits. The result for 2018 before interest and taxes (Ebit) is 14.3 billion euros, said the car maker on Wednesday. That is a minus of about 22 percent compared to the previous year.

This is positive

Daimler is not only the leading manufacturer of premium cars, but also the largest commercial vehicle company in the world. Daimler Trucks is the bright spot among the five major business areas of the Group. The truck division of the Swabians was able to increase its turnover last year by a good seven percent to 38.3 billion euros.

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Sales even rose by ten percent to more than 517,000 vehicles. Trucks was the only Daimler division to increase its operating result in 2018. This is positive, although the division, with a profit margin of 7.2 percent, still falls short of the target return of eight percent.

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That turns out negative

Mercedes Benz-Cars, the core brand and pillar of the Daimler business, weakened considerably in the past year. Turnover is slightly down at 93 billion euros, with the operating result dropping by 18 percent. The return on sales is therefore only 7.8 percent, compared to 9.4 percent in the previous year.

Daimler justifies the weak performance of the brand with the star with high inputs for model offensives and innovative technologies, the more complex WLTP certification process as well as negative exchange rate effects and a significant increase in raw material costs.

What happens now

Daimler announces, in view of the weak results, “measures to increase efficiency” to initiate. Details the company did not name.

However, Daimler assumes that sales and sales will increase slightly in 2019. The operating result should also be slightly above the previous year. Daimler is aiming for between six and eight percent of the important return on sales in the Passenger Cars division, which indicates its share of operating profit, compared with 7.8 percent in 2018. As a rule, the Group is aiming for a value of eight to ten percent here.

“We can not and will not be satisfied with that,” said Daimler CEO Dieter Zetsche. “That’s why we started to develop comprehensive countermeasures.” According to information from the Handelsblatt corporate group, Daimler is therefore considering increasing the number of models and engine variants,

Works council chief Michael Brecht had demanded this in Handelsblatt last: “The number of model variants has increased in recent years to 40. This brings excessive complexity into production and development, “said Brecht.

Theme: Daimler

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