The Daimler Group achieved EBIT of €8.6 billion in 2012 (2011: €8.8 billion). (See table 3.11 and graphic 3.12)
|EBIT by segment|
|In millions of euros||% change|
|Daimler Financial Services||1,292||1,312||-2|
The development of earnings reflects further increases in unit sales at Mercedes-Benz Cars and Daimler Trucks, despite partially difficult market conditions. Unit sales by Daimler Buses and Mercedes-Benz Vans decreased, however. A shift in the regional structure of unit sales, a less favorable model mix and higher expenses in connection with the expansion of the product portfolio at Mercedes-Benz Cars and the current product offensive at Daimler Trucks also had an impact on Group EBIT. In addition, Mercedes-Benz Vans incurred expenses in connection with the impairment of the Chinese joint venture Fujian Benz Automotive Corporation. Daimler Financial Services achieved earnings at the prior-year level. The development of currency exchange rates had an overall positive effect on Group EBIT.
EBIT also includes significantly higher expenses from the compounding of non-current provisions as well as effects from lower discount rates (2012: €543 million; 2011: €225 million).
The repositioning of the European and North American business systems of Daimler Buses, which was decided upon in the first quarter of 2012, resulted in expenses of €155 million. The sale of 7.5% of the shares in EADS resulted in a gain of €709 million in the reporting period.
In 2011, charges of €80 million were recognized at Daimler Trucks and Daimler Financial Services in connection with the natural disaster in Japan. Group EBIT for that year also included charges from the impairment of Daimler’s investments in Renault (€110 million) and Kamaz (€32 million).
The special items affecting earnings in the years 2012 and 2011 are listed in table 3.13.
|Special items affecting EBIT|
|In millions of euros|
|Impairment of investment in Kamaz||-||-32|
|Natural disaster in Japan||-||-70|
|Impairment of joint venture Fujian Benz Automotive Corporation||-64||-|
|Daimler Financial Services|
|Natural disaster in Japan||-||-10|
|Impairment of investment in Renault||-||-110|
|Gain on the sale of EADS shares||+709||-|
Mercedes-Benz Cars posted EBIT of €4,389 million, which is lower than the prior-year result of €5,192 million. The division’s return on sales was 7.1% (2011: 9.0%). (See graphic 3.14)
In an economic environment that became increasingly difficult during the year, unit sales developed well. We achieved high growth rates in particular in the segments of compact cars and SUVs. In regional terms, our business in the United States developed very positively. Growth in earnings was also realized by positive exchange-rate effects. There were negative effects on earnings from a shift in the regional structure of unit sales and the changed model mix. Furthermore, EBIT was reduced by expenses for the enhancement of our products’ attractiveness, capacity expansion and advance expenditure for new technologies and vehicles. This negative effect on earnings was only partially offset by ongoing efficiency improvements. In addition, the compounding of non-current provisions and effects from changes in interest rates led to higher expenses.
EBIT of €1,714 million reported by Daimler Trucks was lower than in the prior year (2011: €1,876 million). The division’s return on sales was 5.5% (2011: 6.5%). (See graphic 3.14)
Earnings were boosted on the one hand by the positive development of unit sales and revenue in the NAFTA region and Asia. Lower warranty expenses and exchange-rate effects also made a positive contribution. On the other hand, earnings were reduced by the current product offensive and by lower demand in Brazil and Western Europe. The decline in demand was related to weaker economic developments and in Brazil additionally to the introduction of new emission limits as of the beginning of 2012. Expenses arose from the compounding of non-current provisions and from the effects of interest-rate changes. Earnings for the previous year include expenses of €70 million due to the natural disaster in Japan and an impairment charge on the investment in Kamaz (€32 million).
Mercedes-Benz Vans achieved EBIT of €541 million in 2012 (2011: €835 million). The division’s return on sales was 6.0%, compared with 9.1% in the prior year. (See graphic 3.14)
The decrease in earnings was partially related to lower levels of unit sales, especially caused by the significantly weaker market in Western Europe. Good product quality was reflected by lower warranty costs. Exchange-rate effects also had a positive impact on earnings. There was an opposing effect from expenses of €64 million in connection with the impairment of the Chinese joint venture Fujian Benz Automotive Corporation. Earnings were additionally reduced by expenses connected with the market launch of the Citan city van and the launch of the new Sprinter in Argentina.
Daimler Buses posted EBIT for the year of minus €232 million (2011: plus €162 million). The division’s return on sales was minus 5.9% (2011: plus 3.7%). (See graphic 3.14)
The decrease in earnings was primarily the result of lower sales of bus chassis due to the difficult business situation in Latin America as well as an unfavorable model mix in the declining European market. There were additional negative effects on earnings from expenses of €155 million for the repositioning of the European and North American business systems and from exchange-rate changes.
Daimler Financial Services achieved EBIT of €1,292 million in 2012, which is close to its earnings of the prior year (€1,312 million). The division’s return on equity was 21.9% (2011: 25.5%). (See graphic 3.15)
A larger contract volume and exchange-rate effects contributed positively to the earnings development. There were opposing effects on earnings from lower interest margins and a normalization of risk costs, which had been unusually low in the prior year. Additional expenses arose in connection with the portfolio expansion. Prior-year earnings included allowances for bad debts in connection with the natural disaster in Japan (€10 million).
The reconciliation of the divisions’ EBIT to Group EBIT comprises our proportionate share of the results of our equitymethod investment in EADS, other gains and/or losses at the corporate level, and the effects on earnings of eliminating intra-group transactions between the divisions.
Daimler’s proportionate share of the net profit of EADS amounted to €307 million (2011: €143 million). In addition, the Group realized a gain of €709 million on the sale of 7.5% of the shares of EADS during the reporting period. At the corporate level, an expense of €113 million was recognized (2011: expense of €588 million). Corporate items in the prior year included in particular litigation expenses and a charge on the impairment of our investment in Renault (€110 million).
The elimination of intra-group transactions resulted in income of €8 million in 2012 (2011: expense of €177 million).