Daimler reports second-quarter 2019 results

STUTTGART, Germany, July 24, 2019 /PRNewswire/ —

• Revenue up 5% to €42.7 billion (Q2 2018: €40.8 billion)
• Group EBIT of minus €1.6 billion (Q2 2018: plus €2.6 billion)
• Net loss of €1.2 billion (Q2 2018: net profit of €1.8 billion)
• Portfolio review and efficiency programs intensified
• Significant improvement of EBIT and free cash flow in second half of year expected

Daimler AG (ticker symbol: DAI) today reported results for the second quarter ended June 30, 2019. The Group’s total unit sales declined by 1% to 822,000 passenger cars and commercial vehicles (Q2 2018: 833,000). Revenue was €42.7 billion (Q2 2018: €40.8 billion), an increase of 5%. Also adjusted for positive exchange-rate changes, revenue was slightly higher than the prior-year level. The Daimler Group posted second-quarter EBIT of minus €1.6 (Q2 2018: plus €2.6) billion. 

“Our second quarter results were mainly impacted by exceptional items of 4.2 billion euros. Therefore, our focus for the second half of this year is on improving our operating performance and cash-flow generation. In general, we are intensifying the Group-wide performance programs and reviewing our product portfolio in order to safeguard future success. At the same time, we are continuing consistently our company transformation,” said Ola Källenius, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.

In the second quarter, earnings weakened to a net loss of €1.2 billion (Q2 2018: net profit of €1.8 billion). Net loss attributable to the shareholders of Daimler AG amounted to €1.3 billion (Q2 2018: net profit of €1.7 billion), leading to a decline in earnings per share to minus €1.24 (Q2 2018: plus €1.61).

Free cash flow and liquidity

In the first six months of 2019, the free cash flow of the industrial business was minus €3.3 billion (Q1-2 2018: plus €1.8 billion). The sharp decrease resulted in particular from higher working capital, as well as a continued high level of investment in future products.

At the Group, investments in property, plant and equipment increased to €3.4 billion

(Q1-Q2 2018: €2.9 billion). Expenses for research and development also increased to €4.7 billion (Q1-Q2 2018: €4.6 billion). Compared with December 31, 2018, net liquidity of the industrial business decreased from €16.3 billion to €6.6 billion. The dividend payment of €3.5 billion (2018: €3.9 billion) to shareholders of Daimler AG as well as the negative free cash flow of the industrial business led to the decrease in net liquidity.

Divisional results

Mercedes-Benz Cars sold 575,639 vehicles in the second quarter, which is 3% fewer than in Q2 2018 (Q2 2018: 590,690). Mercedes-Benz Cars’ revenue decreased by 1% to €22.3 billion (Q2 2018: €22.6 billion) and its EBIT slipped to minus €672 million (Q2 2018: plus €1,901 million). Return on sales was minus 3.0% (Q2 2018: plus 8.4%).

Daimler Trucks showed an increase in unit sales of 2% to 126,474 vehicles in the second quarter (Q2 2018: 123,910). Revenue increased by 14% to €10.5 billion (Q2 2018: €9.2 billion). EBIT was up 33% to €725 million (Q2 2018: €546 million) and return on sales was 6.9% (Q2 2018: 5.9%).

Mercedes-Benz Vans‘ unit sales were flat at 111,118 (Q2 2018: 110,883) vehicles. Revenue was 4% higher at €3.7 billion (Q2 2018: €3.5 billion). EBIT decreased to minus €2,050 million (Q2 2018: plus €152 million) while return on sales fell to minus 56.1% (Q2 2018: plus 4.3%).

Daimler Buses‘ sales grew by 12% to 8,435 units in the second quarter (Q2 2018: 7,522). Revenue increased by 18% to €1.3 billion (Q2 2018: €1.1 billion). EBIT amounted to €106 million (Q2 2018: €66 million), an increase of 61%. Return on sales improved to 8.4% (Q2 2018: 6.1%).

At Daimler Financial Services, new business was almost flat at €18.4 billion in the second quarter (Q2 2018: €18.3 billion). Revenue was 9% higher at €7.1 billion (Q2 2018: €6.6 billion). The division’s EBIT amounted to €431 million (Q2 2018: €66 million), an increase of 553% compared to the prior year. At 12.5%, return on equity was above the figure of 2.1% in the prior-year period.

The workforce

At the end of the second quarter, the Daimler Group employed 304,065 people worldwide (year-end 2018: 298,683, end of Q2 2018: 300,777). Of that total, 177,480 people worked in Germany (year-end 2018: 174,663, end of Q2 2018: 177,082), and 27,220 in the United States (year-end 2018: 26,310, end of Q2 2018: 25,959). The consolidated subsidiaries in China employed 4,503 people at the end of June (year-end 2018: 4,424, end of Q2 2018: 4,332).

Outlook for Daimler and divisions

At Group level, Daimler expects unit sales in 2019 at the previous year number and revenue slightly above the prior year. Mercedes-Benz Cars estimates revenue at the previous year’s level. Mercedes-Benz Vans and Daimler Trucks aim to achieve slightly higher revenue than in 2018. Daimler Buses expects significant revenue growth. Daimler Financial Services anticipates a slight increase in revenue.

Daimler expects Group EBIT in 2019 to be significantly below the prior-year level. The individual divisions expect the following returns in 2019:

–  Mercedes-Benz Cars: a return on sales of 3% to 5%,

–  Daimler Trucks: a return on sales of 7% to 9%,

–  Mercedes-Benz Vans: a return on sales of minus 15% to minus 17%,

–  Daimler Buses: a return on sales of 5% to 7%,

–  Daimler Financial Services: a return on equity of 17% to 19%.

Based on the measures taken, Daimler expects EBIT and free cash flow of the industrial business to improve significantly by the end of the fiscal year compared with the first half. Nevertheless, the anticipated development of earnings in the automotive business as described above will partially have a negative impact. The ongoing high upfront expenditures for new products and technologies as well as the costs for “Project Future” to implement the new Group structure will be a burden. Under these conditions, Daimler expects the free cash flow of the industrial business in financial year 2019 to be significantly lower than in the previous year.

Further information on second-quarter release at:
www.daimler.com//press/q2/19/

Further information from Daimler is available at: 

www.daimler.com

This document contains forward-looking statements that reflect our current views about future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” “can,” “could,” “plan,” “project,” “should” and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates and tariff regulations; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations or of investigations requested by governments and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading “Risk and Opportunity Report” in the current Annual Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.

Daimler at a Glance
Daimler AG is one of the world’s most successful automotive companies. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world’s largest producer of trucks above 6 tons. Daimler Financial Services provides financing, leasing, fleet management, investment products and brokerage of credit cards and insurance, as well as innovative mobility services. The company’s founders, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. As a pioneer of automotive engineering, it is a motivation and commitment of Daimler to shape safely and sustainably the future of mobility. The Group’s focus is on innovative and green technologies as well as on safe and superior automobiles that appeal and fascinate. Daimler consequently invests in the development of efficient drive trains with the long-term goal of locally emission-free driving: from hightech combustion engines about hybrid vehicles to electric drive trains powered by battery or fuel cell. Furthermore, the company follows a consistent path towards intelligent connectivity of its vehicles, autonomous driving and new mobility concepts. This is just one example of how Daimler willingly accepts the challenge of meeting its responsibility towards society and the environment. Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities in Europe, North and South America, Asia, and Africa. Its current brand portfolio includes, in addition to the world’s most valuable premium automotive brand, Mercedes-Benz (Source: Interbrand-Study, 10/4/2018), as well as Mercedes-AMG, Mercedes-Maybach and Mercedes me, the brands smart, EQ, Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses, and Daimler Financial Services’ brands: Mercedes-Benz Bank, Mercedes-Benz Financial Services and Daimler Truck Financial. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2018, the Group sold 3.4 million vehicles and employed a workforce of around 298,700 people. Group revenue amounted to €167.4 billion. Group EBIT amounted to €11.1 billion.

SOURCE Daimler North America – Corporate Communications

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