We assume that the Daimler Group’s revenue will continue growing in the years 2013 and 2014. Although uncertainty regarding the future development of our markets tended to increase during the year 2012, we will launch numerous new products in the context of our growth strategy in the coming years. Furthermore, we will increasingly develop the growth markets of Asia, Eastern Europe and Latin America for our products – partially also through local production. The growth we anticipate will probably be driven by all divisions, with the biggest contributions in absolute terms coming from Daimler Trucks and Mercedes-Benz Cars. In regional terms, we assume that growth rates will be above average in the emerging markets and in North America.
The following factors are particularly important for the earnings situation of the Daimler Group in the years 2013 and 2014:
- We will profit from the fact that we can convince our customers also in difficult markets with a large number of new and attractive products and with new technologies, and will thus be able to grow in many cases faster than the overall market.
- Within the context of our growth strategy, we are expanding our production capacities and distribution structures in North America and Eastern Europe, and especially in the BRIC countries. This will enable us to participate in the growth of those markets, although it is connected with substantial expenditure which will lead to corresponding revenue only after a certain delay.
- The currently very high expenditure for our model offensive and innovative technologies will only have a positive impact on revenue after a time lag. In particular the new S-Class and the new generation of the E-Class will not lead to a significant earnings improvement until the second half of the year 2013 and above all in the year 2014.
- By implementing our module strategies in the respective divisions, we will be able to utilize economies of scale across the entire product portfolio, thus making substantial savings especially with regard to production material.
- In addition, we are implementing far-reaching efficiency-enhancing programs in all divisions, whose effects will positively affect earnings already in 2013 and then above all in the following years. With the programs “Fit for Leadership” at Mercedes-Benz Cars, “Daimler Trucks #1” at Daimler Trucks, “Performance Vans 2013” at Mercedes-Benz Vans and “GLOBE 2013” at Daimler Buses, we intend to achieve sustained improvement in earnings of approximately €4 billion in total by the end of 2014. In this way, we are placing our growth strategy on a sound financial base.
We assume that the weakness of major markets will at first continue in the first half of 2013, and therefore anticipate a weaker development of earnings in the first half of the year compared with 2012. But due to the planned new models, the assumptions made for the development of markets important to Daimler and the increasing effects of the efficiency measures that have been initiated, we expect earnings to improve in the second half of 2013 compared with the level of the first half. On the basis of the anticipated recovery in the second half of the year, we currently assume that Group EBIT from ongoing business in the year 2013 will reach the magnitude of the prior year. For Mercedes-Benz Cars, full-year EBIT is expected to be slightly lower than in 2012, while the other automotive divisions should post higher earnings than in the prior year. In 2014 and the following years, we expect an improvement in operating profit for all automotive divisions and for the Group. For Daimler Financial Services, we anticipate a stable development of earnings in the next two years.
In the medium term, we aim to achieve an annual average return on sales in our automotive business of 9% across market and product cycles. This is based on target returns on sales for the individual divisions: 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses. For the Daimler Financial Services division, we have set a target return on equity of 17%. Due to significantly worsened market conditions, the achievement of these profitability targets has become much more challenging for the Group and the individual divisions. We therefore assume that these targets will not be achieved as originally planned in the year 2013, but at a later date. In order to make sure we meet our profitability targets in the long term, we are carrying out far-reaching programs to improve our efficiency and competitiveness in all divisions.
We want our shareholders to participate appropriately in Daimler’s financial success also in the coming years. In setting the dividend, we aim to distribute approximately 40% of the Group’s net profit attributable to the Daimler shareholders. On this basis, the Board of Management and the Supervisory Board will propose the distribution of a dividend of €2.20 per share at the Annual Meeting of the Shareholders to be held on April 10, 2013 (prior year: €2.20). The total dividend paid out will thus amount to €2,349 million (prior year: €2,346 million).
For the years 2013 and 2014, we aim to have liquidity available in a volume appropriate to the general risk situation in the financial markets and to Daimler’s risk profile. We want to continue to cover our funding needs primarily by means of bonds, bank loans, customer deposits in the direct banking business and the securitization of receivables in the financial services business. We assume that we will continue to obtain refinancing at attractive conditions during the planning period. Our goal is to take various measures in order to secure a high degree of financial flexibility.