Financial performance measures

The financial performance measures used at Daimler are oriented towards our investors’ interests and expectations and provide the foundation for our value-based management.


Value added
  2012 2011 12/11
In millions of euros     % change
Daimler Group 4,185 3,726 +12
Mercedes-Benz Cars 2,716 3,775 -28
Daimler Trucks 396 796 -50
Mercedes-Benz Vans 387 690 -44
Daimler Buses -369 23 .
Daimler Financial Services 526 643 -18

Value added. (See table 3.19) For purposes of performance measurement, Daimler differentiates between Group level and divisional level. Value added is one element of the performance measurement system at both levels and is calculated as the difference between the operating result and the cost of capital of the average net assets in that period. (See graphic 3.16)

Daimler AR2012 Value Added1

Alternatively, the value added of the industrial divisions can be determined by using the main value drivers: return on sales (ROS, quotient of EBIT and revenue) and net assets productivity (quotient of revenue and net assets). (See graphic 3.17)

Daimler AR2012 Value Added2

The use of ROS and net assets productivity within the context of a revenue growth strategy provides the basis for a positive development of value added. Value added shows to which extent the Group and its divisions achieve or exceed the minimum return requirements of the shareholders and creditors, thus creating additional value.

Profit measure.The measure of operating profit at divisional level is EBIT and is calculated before interest and income taxes. EBIT hence reflects the divisions’ profit and loss responsibility. The operating profit measure used at Group level is net operating profit. It comprises the EBIT of the divisions as well as profit and loss effects for which the divisions are not held responsible, including income taxes and other reconciliation items.

Net assets. (See tables 3.20 and 3.22) Net assets represent the basis for the investors’ required return. The industrial divisions are accountable for the net operating assets; all assets, liabilities and provisions which they are responsible for in day-to-day operations are therefore allocated to them. Performance measurement at Daimler Financial Services is on an equity basis, in line with the usual practice in the banking business. Net assets at Group level include the net assets of the industrial divisions and the equity of Daimler Financial Services, as well as assets and liabilities from income taxes and other reconciliation items for which the divisions are not held accountable. Average annual net assets are calculated from average quarterly net assets, which are calculated as the average of net assets at the beginning and the end of each quarter.


Net assets (average)
  2012 2011 12/11
In millions of euros     % change
Mercedes-Benz Cars 13,947 11,814 +18
Daimler Trucks 10,987 9,000 +22
Mercedes-Benz Vans 1,284 1,212 +6
Daimler Buses 1,141 1,161 -2
Daimler Financial Services1 5,890 5,147 +14
Net assets of the divisions 33,249 28,334 +17
Investments accounted for using the equity method2 2,408 2,643 -9
Assets and liabilities from income taxes3 -80 -385 +79
Other reconciliation3 808 834 -3
Daimler Group 36,385 31,426 +16
Total equity 
To the extent not allocated to the segments 
3 Industrial business


Net assets of the Daimler Group at year-end
  2012 2011 12/11
In millions of euros     % change
Net assets of the industrial business      
Intangible assets 8,761 8,174 +7
Property, plant and equipment 20,546 19,129 +7
Leased assets 12,163 10,849 +12
Inventories 17,075 16,575 +3
Trade receivables 6,864 7,580 -9
Less provisions for other risks -11,316 -11,967 +5
Less trade payables -8,515 -9,233 +8
Less other assets and liabilities -14,464 -13,954 -4
Assets and liabilities from income taxes 573 24 .
Total equity of
Daimler Financial Services



Net assets 37,840 32,550 +16

Cost of capital. (See table 3.18) The required rate of return on net assets and hence the cost of capital is derived from the minimum rates of return that investors expect on their invested capital. The cost of capital of the Group and the industrial divisions comprises the cost of equity as well as the costs of debt and pension obligations of the industrial business; the expected returns on liquidity and plan assets of the pension funds of the industrial business are considered with the opposite sign. The cost of equity is calculated according to the capital asset pricing model (CAPM), using the interest rate for long-term risk-free securities (such as German government bonds) plus a risk premium reflecting the specific risks of an investment in Daimler shares. The cost of debt is derived from the required rate of return for obligations entered into by the Group with external lenders. The cost of capital for pension obligations is calculated on the basis of discount rates used in accordance with IFRS. The expected return on liquidity is based on money market interest rates. The expected return on the plan assets of the pension funds is derived from the expected interest, dividends and other income generated by the plan assets invested to cover the pension obligations. The Group’s cost of capital is the weighted average of the individually required or expected rates of return; in the reporting period, the cost of capital amounted to 8% after taxes. For the industrial divisions, the cost of capital amounted to 12% before taxes; for Daimler Financial Services, a cost of equity of 13% before taxes was applied.


Cost of capital
  2012 2011
In percent    
Group, after taxes 8 8
Industrial dvisions, before taxes 12 12
Daimler Financial Services, before taxes 13 13

Return on sales. As one of the main drivers of value added, return on sales (ROS) is of particular importance for assessing the industrial divisions’ profitability. The profitability measure for Daimler Financial Services is not ROS, but return on equity (ROE), in line with the usual practice in the banking business.


Reconciliation to net operating profit
  2012 2011 12/11
In millions of euros     % change
Mercedes-Benz Cars 4,389 5,192 -15
Daimler Trucks 1,714 1,876 -9
Mercedes-Benz Vans 541 835 -35
Daimler Buses -232 162 -243
Daimler Financial Services 1,292 1,312 -2
EBIT of the divisions 7,704 9,377 -18
Income taxes1 -1,519 -2,515 +40
Othe reconciliation 911 -622 +246
Net operating profit 7,096 6,240 +14
1 Adjusted for tax effects of interest income