The Daimler AG (Stock exchange abbreviation: DAI) today released its results for the third quarter ended June 30. September 2019 has been completed. The Group sales increased by 6% to 839.300 (Q3 2018: 794.700) passenger Cars and commercial vehicles. The Sales increased by 8% to 43.3 (Q3 2018: 40,2) billion €. Adjusted for positive exchange rate effects, sales were slightly above the previous year’s level. The Daimler group achieved in the third quarter EBIT 2.7 (Q3 2018: 2,5) billion €, an increase of 8%.
“Strong sales figures for Cars and Vans have supported our financial Performance in the third quarter. To cope with the Transformation in the next few years, we need to increase the efforts, however, still considerable: We must reduce our costs significantly and the Cash Flow to consistently strengthen“ said Ola Källenius, Chairman of the Board of Daimler AG and head of Mercedes-Benz Cars.
The Group results for the third quarter increased 3% to 1.813 (Q3 2018: 1.761) million €. The shareholders of Daimler AG in accordance with the group’s earnings 1.719 (Q3 2018: 1.689) amounted to € million; this led to an increase in the Earnings per share to 1.61 (Q3 2018: 1,58) €.
Free Cash Flow and liquidity
In the first nine months of 2019, the fraud Free Cash Flow of the industrial business minus 0.5 (Q1-3 2018: minus 0.06) in billion €. This is influenced by the Working Capital and the continued high investments in future products. In the group, decreased in the third quarter Investments in property, plant and equipment 1.8 (Q3 2018: 2,1) billion €. The Expenditure for research and development increased to 2.5 (Q3 2018: 2,4) billion €.
The Net liquidity of the industrial business decreased in comparison to 31. December 2018 from € 16.3 billion to € 9.6 billion at the end of the third quarter. This includes the dividend payment of 3.5 (2018: 3.9) billion € to the shareholders of Daimler AG were used, the effects due to the introduction of the lease in the case of participating accounting in accordance with IFRS 16 (€3.2 billion) and Free Cash Flow of the industrial business.
The business fields in the Individual
Sales of Mercedes-Benz Cars for the third quarter increased 8% to 604.700 (Q3 2018: 559.500) Cars. Sales increased by 9% to 23.5 (Q3 2018: 21.7) billion.€. EBIT improved by 4% to 1.423 (Q3 2018: 1.372) million €. The return on sales was 6.0% (Q3 2018: 6,3%).
Daimler Trucks recorded in the third quarter with a Sales decline of 8% on 125.400 (Q3 2018: 136.100) units. Sales increased by 3% to 10.3 (Q3 2018: 10,0) bn €. The EBIT decreased by 9% to 774 (Q3 2018: 850) million €. The return on sales decreased to 7.5% (Q3 2018: 8,5%).
Sales of Mercedes-Benz Vans climbed by 10% to 100.300 (Q3 2018: 91.400) units sold. Sales rose by 15% to 3.5 (Q3 2018: 3.0) billion €. The EBIT increased to 113 (Q3 2018: minus 93) million€. The return on sales was 3.2% (Q3 2018: minus 3.1%).
Daimler Buses increased sales in the third quarter by 16% to 9,000 (Q3 2018: 7.700) units. Sales also rose by 16% to 1.2 (Q3 2018: 1,1) billion €. The EBIT increased by more than Double to 79 (Q3 2018: 30) million€. The return on sales improved to 6.4% (Q3 2018: 2,8%).
In the case of the Daimler Mobility AG (previously Daimler Financial Services) was the new business in the third quarter, with € 18.3 billion, a 10% year-on-year (Q3 2018: € 16.6 billion). Sales increased by 11% to 7.1 (Q3 2018: 6,4) billion €. EBIT rose by 5% to 413 (Q3 2018: 392) million €. The return on equity was 11.9%, slightly below the previous year’s figure of 12.5%.
Employment in the world
At the end of the third quarter, consolidated worldwide 304.680 (year-end 2018: 298.683, Q3 2018: 300.367) employees were in the Daimler-employed. Of 178.097 (year-end 2018: 174.663, Q3 2018: 176.287) were in Germany engaged in the USA there were 27.029 (year-end 2018: 26.310, Q3 2018: 26.079). In the case of the consolidated subsidiaries in China at the end of September 4.427 (year-end 2018: 4.424, Q3 2018: 4.410) employees.
Outlook for Daimler, and business fields
For the year 2019 expects Daimler furthermore, with consolidated sales at the previous year’s level, while sales, a slight increase compared to the previous year is expected. Mercedes-Benz Cars expected sales level of the previous year. Daimler Trucks now expects sales in the order of magnitude of the previous year. Mercedes-Benz Vans and Daimler Mobility strive for a slight increase in sales. Daimler Buses a significant increase in revenues.
As in the report on risks and opportunities reported, Daimler, regulatory requests, investigations, inquiries, orders, and proceedings, and the court suspended proceedings in connection with diesel exhaust emissions. Since legal proceedings are fraught with considerable uncertainties, it is possible that the provisions appear in the context of final decisions in part insufficient. As a result, additional expenses may be incurred, which could have an impact depending on the progress of the procedure a negative impact on the following expectations of return, and especially of the business fields Mercedes-Benz Cars and Mercedes-Benz Vans,. The detailed risk and opportunity report, which contains further explanations of the risks from legal proceedings in connection with diesel exhaust emissions is provided on pages 20 et seq. of the interim report for the third quarter of 2019.
On the Basis of the anticipated market development and the current estimates of the business segments, Daimler assumes that the Group EBIT in 2019, well below the previous year value will be. For the following business fields these return expectations are for the year 2019 to continue:
- Mercedes-Benz Cars: return on sales of 3% to 5%,
- Mercedes-Benz Vans: return on sales of minus 15% to minus 17%,
- Daimler Buses: return on sales of 5% to 7%,
- Daimler Mobility: return on equity of 17% to 19%.
In the field of business for Daimler Trucks has deteriorated in the third quarter, the overall economic development in the Truck core markets of Europe and North America, significantly faster than expected, so that the downturn is already in the fourth quarter of this year, the impact on the earnings of the business unit. Against this Background, Daimler Trucks expects a return on sales of 6% to 8% and a slightly lower heel.
The Free Cash Flow of the industrial business will be impacted by the continued high upfront investments in new products and technologies, as well as the costs for the “project future” for the implementation of the new group structure. Therefore, Daimler assumes that the Free Cash Flow of the industry will be the business in fiscal year 2019, significantly below the previous year’s value.